Shares of Yelp (YELP 2.13%) were getting a 1-star rating from investors after the review site posted another underwhelming earnings report. The company essentially matched estimates in its fourth-quarter earnings report, but issued weak guidance for 2024.
As of 1:11 p.m. ET, shares were down 13.6%.
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Nothing to yelp about
Yelp's results for the quarter were mostly in line with analyst expectations. Revenue in the period rose 11% to $342.4 million, which edged out the consensus at $341.3 million.
Growth in 2023 was broad-based, with the help of categories like home services and self-serve ads, and the company rolled out 60 new product features and updates.
The company saw solid growth on the bottom line as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 20% to $96.1 million, and the company reported a generally accepted accounting principles (GAAP) profit per share of $0.37, up from $0.28 in the quarter a year ago, though that missed estimates by a penny.
CFO David Schwarzbach said, "Investments in our long-term strategic initiatives have led to multiple records as local advertisers continued to see the value of Yelp's high-intent audience in 2023."
Slower growth ahead
Despite the solid results in 2023, Yelp expects both revenue and profit growth to decelerate in 2024. Its outlook called for revenue of $1.42 billion-$1.44 billion, up 7% from 2023, and worse than the consensus of $1.46 billion. It also expects adjusted EBITDA of $315 million-$335 million, the midpoint of which is slightly below the $330 million it reported in 2023.
Management noted investment in its services initiatives in the forecast. Yelp deserves credit for achieving steady, growing GAAP profitability, but it's understandable why the stock is down, given the weak forecast for 2024.
