Credit: Yelp.

Yelp (NYSE:YELP) has had a tough year so far, with shares down more than 50% after failing to impress the market with each of its past three earnings reports. But Wednesday after the market close, the local-business-review specialist offered its first pleasant surprise of the year, with solid third-quarter 2015 results.

Let's take a closer look at what Yelp accomplished this quarter:

Yelp results: The raw numbers

 

Q3 2015 Actuals

Q3 2014 Actuals

Growth (YOY)

Revenue

 $143.6 million

 $102.5 million

 40.1%

Adjusted Net Income

 $2.7 million

 $10.9 million

 -75.4%

Adjusted EPS

 $0.03

 $0.14

 -78.6%

Data Source: Yelp.

What happened with Yelp this quarter?

  • Both revenue and earnings beat expectations; consensus estimates predicted an adjusted net loss of $0.09 per share on revenue of $141.4 million.
  • Yelp remained unprofitable based on generally accepted accounting principles; GAAP net loss was $8.1 million, or $0.11 per share.
  • Adjusted earnings before interest, taxes, depreciation, and amortization fell 37.8%, to $12.5 million.
  • Cumulative reviews increased 35% year over year, to 90 million
  • App Unique Devices increased 20% year over year, to 20 million. 
  • Page views grew 40% year over year.
  • 70% of all page views came from Yelp's mobile app.
  • As of September 2015, comScore data ranked Yelp as one of the world's top 25 mobile web and app properties.
  • 89 million monthly unique visitors on mobile, up 22% year over year.
  • 79 million monthly unique visitors on desktop, down 2% year over year.
  • Local advertising rose 36% year over year, to $115.9 million.
  • Transactions revenue skyrocketed to $12 million from $1.3 million in the same year-ago period, driven by Yelp's acquisition of online food ordering specialist Eat24 in the first quarter.
  • Brand advertising increased 4% year over year, to $9 million. Remember, three months ago, Yelp announced plans to phase out its brand advertising product by the end of 2015, which should enable it to better focus on local ads and improving the customer experience.
  • "Other" revenue was flat year over year, at $6.7 million, primarily consisting of partnership arrangements.
  • International revenue contributed about 2% of total sales.

What management had to say 
Yelp CEO Jeremy Stoppelman praised the company's execution during the quarter, stating: "Consumers are increasingly discovering our app, which represents approximately 70% of engagement across our entire ecosystem. We believe that our highly engaging app, combined with our native local advertising products that generate high ROI for our customers, strongly positions us to capture the large market opportunity."

Yelp CFO Rob Krolik added: "We are pleased with our 40% year over year revenue growth. We are investing in the business through our marketing programs and continued sales team growth as we work to achieve our goal of becoming the leading destination for consumers connecting with great local businesses."

Looking forward 
For the current quarter Yelp anticipates revenue of $149.5 million to $154.5 million, up 38% year over year at the midpoint, and roughly in line with consensus estimates. Adjusted EBITDA should be $20 million to $24 million. 

For the full year, Yelp now sees revenue of $545.5 million to $551.5 million, or growth of 45% over last year at the midpoint, which -- given Yelp's Q3 beat -- is slightly above Wall Street's expectations for 2015 revenue of $545.9 million. Full-year adjusted EBITDA should be in the range of $72  million to $76 million.

In the end, it appears Yelp is finally reading the same review -- if not a slightly more optimistic one -- than the market holds for its business in the near term. Of course, Yelp still has plenty of work to do to continue building its business, solidify its leadership position, and achieve sustained profitability over the long term. But for now, I think investors are right to cautiously celebrate this report as a good step in the right direction.

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.