Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Quarterly sales jumped 67% year over year to $102.5 million, which translated to net income of $3.6 million, or $0.05 per share. Adjusted EBITDA also rose almost 150% to $20.1 million. Analysts were only looking for net income of $0.03 per share on sales of $99 million.
Yelp's average monthly unique visitors grew 19% year over year to 139 million, helping drive cumulative reviews up 41% year-over-year to 67 million. Within that, mobile users grew 46% year over year to 73 million, and roughly 45% of all new reviews during the quarter were submitted through a mobile device. Meanwhile, active local business accounts grew by 51% over last year to 86,200.
For the current quarter, however, Yelp sees net revenue in the range of $107 million-$108 million, representing decelerating growth of 52% compared to the same year-ago period. That's well short of the $110.96 million analysts were modeling.
Now what: That said, Yelp CFO Rob Krolik later explained Q3 revenue from their strategic agreement with YP drove "Other" segment revenue a much higher-than-expected 158% to $8 million. As a result, they decided to "realign the partnership for everyone's benefit," which meant reducing "Other" segment revenue in Q4 to $7 million. What's more, it's worth noting Yelp's raised full-year guidance calls for revenue of $375 million-$376 million, the mid-point of which is slightly above expectations -- and that's ignoring the possibility Yelp could be playing it safe with a conservative number.
In the end, that makes Yelp's "disappointing" guidance look much less so.
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Yelp. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.