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Investing.com — Yelp Inc (NYSE:YELP) shares spiked in early U.S. trading on Friday after resiliency in the crowdsourced review platform’s advertising business helped it post better-than-expected top and bottom line results in the fourth quarter.
Revenue during the three months until the end of December climbed by 13% to $309.1 million, topping consensus forecasts of $306M. Meanwhile, adjusted earnings before interest, tax, depreciation and amortization grew by just under a fifth to $80.4M, slightly above analysts’ estimates of $79M.
On an annual basis, adjusted core income expanded by 10% year-on-year to $270M on net revenues of $1.2B, marking record levels. Both figures beat projections as well.
The group said the returns were driven by strong demand from advertisers despite headwinds from price inflation and flagging customer expenditures, with home service providers in particular boosting sales. This trend was partly offset by a decrease in ad clicks, which Yelp said stemmed from a tough comparison to 2021, when spending boomed after the loosening of most COVID-era restrictions.
“These results demonstrate the strength of our broad-based local advertising platform and the momentum across our strategic initiatives. In 2023, we plan to continue our disciplined investments to drive shareholder value over the long term,” said Chief Financial Officer David Schwarzbach in a statement.
Yelp predicts that it will report revenue of between $300M to $310M and adjusted core profit of $40M to $50M in the current quarter. Analysts at Credit Suisse called the outlook “conservative,” adding that it is likely reflective of broader economic pressures and weaker seasonal demand.
For the 2023 fiscal year, Yelp sees net revenue in the range of $1.29B to $1.31B and adjusted core earnings in the $290M to $310M band, largely in line with forecasts.
