Yelp Stock Gains as Q3 Earnings and Revenues Surpass Estimates

Yelp Inc. YELP shares gained 2.5% during Thursday’s extended trading session after the company reported better-than-expected third-quarter 2025 results. The company’s third-quarter earnings increased 8.9% year over year to 61 cents per share, beating the Zacks Consensus Estimate by 29.79%. The robust bottom-line performance was mainly driven by higher revenues and a lower share count.

Yelp’s revenues rose 4% year over year to $376 million and surpassed the consensus mark by 2.29%. The year-over-year improvement was driven primarily by growth in advertising revenues from Services businesses.

Yelp’s Q3 in Detail

Yelp’s advertising revenues (94.9% of total revenues) rose 4% year over year to $357 million, primarily boosted by an increase in revenues from Yelp ad products and, to some extent, the addition of revenues from the RepairPal Network. The rise in Yelp ad product revenues was mainly driven by the year-over-year growth in average CPC, partially offset by a decrease in ad clicks. Our model estimate for Advertising revenues was pegged at $336 million.

Yelp Inc. Price, Consensus and EPS Surprise

Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote

Advertising revenues from the Services business grew 6.9% year over year to $243.8 million, mainly due to strong demand from advertisers. The Restaurants, Retail & Other (“RR&O”) division’s revenues decreased 2.4% year over year to $113.5 million. This decline in the segment was due to persistent macroeconomic headwinds that have further challenged restaurant and retail businesses, reducing demand for Yelp’s services in the RR&O category. Other revenues increased 17% to $19 million.

Our model estimates for Services, RR&O and Other revenues were pegged at $216.5 million, $119.6 million and $15.7 million, respectively. Total Paying Advertising Locations declined 3% year over year to 517,000. Per our model, Paying Advertising Locations were pegged at 524,000.

Total costs and expenses jumped 3% year over year to $323 million. Yelp’s third-quarter adjusted EBITDA fell 3% year over year to $98 million. The adjusted EBITDA margin decreased to 26% in the third quarter from 28% in the year-ago quarter.

Yelp’s Balance Sheet & Cash Flow

As of Sept. 30, 2025, Yelp’s cash, cash equivalents and short-term marketable securities were $334 million without any debt.

The company generated an operating cash flow of $131.5 million and a free cash flow of $118.9 million in the third quarter. In the first nine months of 2025, it generated operating and free cash flows of $287.5 million and $251.4 million.

Yelp’s FY25 & Q4 Guidance

Yelp updated its guidance for full-year 2025. The company now anticipates revenues between $1.460 billion and $1.465 billion, instead of the previous range of $1.465-$1.475 billion. Adjusted EBITDA is now expected in the range of $360-$365 million against the $350-$360 million band projected previously. The Zacks Consensus Estimate for full-year 2025 revenues is pegged at $1.47 billion.

The company also initiated guidance for the fourth quarter. For the fourth quarter of 2025, Yelp anticipates revenues between $355 million and $360 million. Adjusted EBITDA is projected in the band of $77-$82 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $371.5 million.

Yelp’s Zacks Rank and Stocks to Consider

Currently, Yelp carries a Zacks Rank #4 (Sell).

Reddit Inc. RDDT, DocuSign DOCU and Amphenol APH are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Reddit, DocuSign and Amphenol each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Reddit’s full-year 2025 earnings is pegged at $2.35 per share, revised upward by 23.7% over the past seven days and suggests a year-over-year increase of 170.6%. Reddit shares have soared 13.1% year to date.

The Zacks Consensus Estimate for DocuSign’s fiscal 2026 earnings has moved northward by 5 cents over the past 60 days to $3.69 per share, calling for an increase of 3.9% year over year. DocuSign shares have plunged 22.5% year to date.

The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $3.22 per share from $3.03 per share 30 days ago, implying 70.4% year-over-year growth. Amphenol shares have surged 98.9% year to date.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research