Yelp Losses Widen In Q3 Despite Growth
Yelp on Tuesday reported a 68% increase in revenue to $61.2 million in the third quarter, with strong growth again lifting sales. The local ratings and reviews service posted a loss of $2.3 million, or four cents a share, compared to a loss of $2 million, or three cents a year ago.
Wall Street analysts, on average, had expected Yelp to report a loss of one cent on revenue of $59.4 million.
Like Facebook, Yelp has ramped mobile advertising quickly in the last year. Nearly half (46%) of Yelp’s local ads were shown on mobile devices in the third quarter, up from 40% in the prior quarter. And 62% of searches in the quarter took place in mobile, across its app and mobile Web site.
Underscoring its growing mobile focus, Yelp during the quarter had added long requested features, including the ability to write and post reviews from devices.
Yelp said active local business accounts, or the total of businesses that advertise with the local ratings and review service, rose 61% to 57,200 in the second quarter. The company had about 117 million monthly active users globally, up 41% from a year earlier. Those growth rates were roughly comparable to those in the prior quarter.
The company also continued its expansion efforts, extending its service to four new markets in the U.S. and another in Brazil. Yelp now has a presence in 111 markets total on five continents, in part through its acquisition last year of European rival Qype.
On the e-commerce front, Yelp in July began allowing users to complete transactions and orders directly within its app and through its Web site. More than half (51%) of Yelp users make local purchase decisions after visiting the site, according to Nielsen findings released in June.
For the current quarter, Yelp projects revenue in the range of $66 million to $67 million, representing growth of about 62% from the year-earlier period.
Buoyed by a stock price that has more than doubled in the last six months, Yelp separately announced Tuesday that it plans to sell about $250 million in a secondary offering. Proceeds will go to additional working capital, as well as possibly funding further acquisitions.