Yelp Q4 Earnings Beat Estimates, Stock Dips on Tepid Sales Guidance

Yelp Inc. YELP reported better-than-expected fourth-quarter 2025 results. The company’s fourth-quarter earnings of 61 cents per share surpassed the Zacks Consensus Estimate by 29.1%. On a year-over-year basis, earnings declined 1.6% from the year-ago quarter’s earnings of 62 cents.

Yelp’s revenues decreased 1% year over year to $360 million but outpaced the consensus mark by 0.5%. The year-over-year decline was primarily due to a fall in advertising revenues, partially offset by strong growth in the other business.

Despite reporting better-than-expected fourth-quarter results, shares of Yelp fell 3.7% during Thursday’s extended trading session on the company’s tepid sales guidance for the first quarter of 2026.

Yelp’s Q4 in Detail

Yelp’s advertising revenues (94% of total revenues) declined 2% year over year to $338 million, primarily due to a decrease in ad clicks. Our model estimate for advertising revenues was pegged at $339.9 million.

Advertising revenues from the Services business grew 2.9% year over year to $231.4 million, mainly due to strong demand from advertisers. The Restaurants, Retail & Other (“RR&O”) division’s revenues plunged 11.6% year over year to $106.8 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 jumped 33% to $22 million.

Our model estimates for Services, RR&O and Other revenues were pegged at $228.3 million, $111.7 million and $18 million, respectively. Total Paying Advertising Locations declined 5% year over year to 496,000. Our model estimate for Paying Advertising Locations was pegged at 515,000.

Total costs and expenses increased 1% year over year to $311 million. Yelp’s fourth-quarter adjusted EBITDA plunged 15% year over year to $86 million. The adjusted EBITDA margin decreased to 24% in the fourth quarter from 28% in the year-ago quarter.

Yelp’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, Yelp’s cash, cash equivalents and short-term marketable securities were $319 million without any debt.

The company generated an operating cash flow of $84.5 million and a free cash flow of $72.3 million in the fourth quarter. In 2025, it generated operating and free cash flows of $372 million and $323.7 million.

Yelp Initiates Q1 and FY26 Guidance

Yelp initiated its guidance for the first quarter and full-year 2026. For the first quarter, Yelp anticipates revenues between $350 million and $355 million, which fell short of the Zacks Consensus Estimate of $360.4 million as well as the year-ago quarter’s revenues of $359 million. First-quarter adjusted EBITDA is projected in the band of $58-$63 million, which is way below $85 million reported in the year-ago quarter.

For 2026, the company anticipates revenues between $1.455 billion and $1.475 billion. This compares with 2025 revenues of $1.465 billion and the Zacks Consensus Estimate of $1.5 billion. Adjusted EBITDA is expected in the range of $310-$330 million, which is way lower than the 2025 level of $369 million.

Yelp’s Zacks Rank and Stocks to Consider

Currently, Yelp carries a Zacks Rank #3 (Hold).

Micron Technology MU, Amphenol APH and Analog Devices ADI are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Micron Technology sports a Zacks Rank #1 (Strong Buy) at present, while Amphenol and Analog Devices each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has moved northward by 32 cents in the past seven days to $33.22 per share, implying 300.7% year-over-year growth. Micron Technology shares have soared 332.8% over the past year.

The Zacks Consensus Estimate for Amphenol’s 2026 earnings has been revised upward by 23 cents over the past 30 days to $4.32 per share, calling for an increase of 29.3% year over year. Amphenol shares have surged 107.2% over the past year.

The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has moved upward by 9 cents over the past 30 days to $9.97 per share, indicating a year-over-year increase of 28%. Analog Devices shares have rallied 58.3% over the past year.

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

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