Yelp Inc. (YELP, Financial) reported its first quarter financial numbers on April 29 after the market close. Much to the dismay of investors, the company suffered a loss of $0.02 a share, or $1.3 million loss. For the same period last year, Yelp reported a loss of $0.04 a share or $2.6 million. As the report was released, shares saw a fall of 14% in extended trading Wednesday.
Q1 stats
A loss of 2 cents per share or $1.3 million was reported while analysts expected a profit of $0.01. If stock option expense was to be excluded, income totaled to $0.10 a share. The revenue reported for the quarter was $118.5 million, which again was not up to the estimates made by Wall Street. 17 analysts estimated the revenue to be around $119.4 million, according to a data surveyed by Zack Investment Research. The local advertising revenue reported was $98.6 million. Most of the revenue of the company is generated from the local advertising wherein accounts increased to 90,200, a 43% increase. The San-Francisco based company saw around 142 million unique monthly visitors for the first quarter. Interestingly, this is almost a 7.6% increase as compared to the number of Unique Monthly Visitors last year for the same quarter. Though it was a mere substantial increase, the fourth quarter last year saw a 13% increase. The increasing use of smartphones has proved to be beneficial to the company given that desktop usage has stagnated. Unique monthly visitors on mobiles have increased by 29% to 79 million. Users accessing Yelp through PC’s have reduced by 3% to 80 million. Overall, unique visitors increased by 8% to 142 million. The quarter also saw around 6 million reviews being posted on Yelp. Hence, the overall number of reviews now stands at 77 million.
Sales rose 55% to $118.5 million for the quarter, less than the projected $120 million. Jeremy Stoppelman, CEO of Yelp said that the company will constantly strive to increase user engagement and drive awareness. He also said that Yelp will strive to grab the opportunity of capturing the large local advertising market. A couple of months back, Yelp had completed a deal to acquire Eat24.com for $134 million. Eat24.com is a food delivery & takeout service with around twenty-thousand restaurants. Last year, the local online review company also launched their websites in Japan, Argentina and Mexico. The company also set its base in Europe after it acquired Kritik and CityVox.
Investor’s Woes
Investors are not very happy with the first quarter results and that has reflected in the fall of shares. Moreover, Yelp expects revenue to be around $131-$134 million for the second quarter ended June. Analysts had expected the revenue to be much higher of around $136.8 million. The 2015 yearly revenue expected by the company is $574-$579 million while analysts expected $578.8 million. The adjusted earnings expected for the year is $102-$105 million, compared to the $106 million estimates.
The Earnings per Share for the fiscal quarter ended June 2014 reported was 4 cents while that of September 2014 was 5 cents. EPS for the fiscal quarter ended December 2014 was 9 cents, a 28.57% surprise as compared to analysts’ forecast of 7 cents. Comparing these records over the year, one could safely say that growth was on the cards. However, the reported first quarter results this year was a final blow. Since the start of 2015, shares have fallen almost 6%. One can only wait and see how the company responds to the low performance and takes effective measures to bring about a drastic change.
