Yelp Grew Net Revenue 67% in Second Quarter, Lost $2 Million

By Devon Glenn 

Yelp might not be profitable yet, but the local search and review service’s efforts at global expansion and enhancements to its mobile apps have helped increase net revenues to $32.7 million and have left room for growth, according to the company’s analysis of its second quarter 2012 financial results.

The company shared the quarter’s highlights in a statement to investors:

  • Net revenue was $32.7 million in the second quarter of 2012, reflecting 67% growth in net revenue from the second quarter of 2011
  • Cumulative reviews grew 54% year over year to more than 30 million
  • Average monthly unique visitors grew 52% year over year to more than 78 million
  • Active local business accounts grew 113% year over year to approximately 32,000
  • Net loss in the second quarter of 2012 was $(2.0) million or $(0.03) per share, compared to a net loss of $(1.2) million, or $(0.08) per share, in the second quarter of 2011. Adjusted EBITDA for the second quarter of 2012 was approximately $1.6 million, compared to$649,000 for the second quarter of 2011.

Based in San Francisco, Yelp ventured into new markets this quarter including Denmark, Finland, Norway, and Madison, Wisconsin. The company is now active in 90 markets worldwide. Yelp also opened a London office to increase sales efforts in the UK.

However, “virtually no revenue has come from overseas market,” said Yelp CFO Rob Krolik in a quarterly earnings call. “In fact, we are only generating revenue in 3 out of our 17 countries that we operate in, which we see as an opportunity.”

On mobile, Yelp’s development team added new features including check-in comments and likes, photos that turn up in all search results, an “About Me” tab for user profiles, and check-in visualizations on the iPad.

The service reaches 7.2 million unique mobile devices every month. On July 26, the company reported that 40 percent of all Yelp searches come from mobile apps.

“Yelp’s second quarter performance highlights the underlying power of our model,” explained Jeremy Stoppelman, Yelp’s chief executive officer in a statement.  “By focusing almost singularly on cultivating rich, authentic local content, we have created a unique platform that is rapidly becoming the de facto local search engine for connecting consumers with great local businesses.”