Image source: Yelp

What: Shares of Yelp (NYSE:YELP) I were up 18.3% as of 11:00 a.m. EST Friday after the local business review specialist announced better-than-expected first-quarter 2016 results.

So what: Quarterly revenue climbed 34% year over year, to $158.6 million, and would have risen 42% had it not been for Yelp's strategic decision last year to phase out its display advertising product in favor of focusing on its more promising local ad products. To be sure, local advertising accounts grew 34% year over year, to roughly 121,000, cumulative reviews grew 31% year over year, to $102 million, and average monthly app unique devices increased 32%, to 21 million.

Trending toward the bottom line, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $13 million. And based on generally accepted accounting principles (GAAP), that translated to a net loss of $15.5 million, or $0.20 per share. On an adjusted (non-GAAP) basis, which adds perspective by excluding items like stock-based compensation and amortization, net income was $6.0 million, or $0.08 per share. 

By comparison, Yelp's guidance provided last quarter called for lower Q1 revenue of $154 million to $157 million, and adjusted EBITDA of $10 million to $12 million.

Yelp CEO Jeremy Stoppelman called it a "great start to the year," then elaborated, "With a mobile review contributed every two seconds on average in the quarter, our fresh, relevant review content is what makes Yelp a destination for consumers looking to find and transact with great local businesses. Our sizable, purchase-oriented traffic makes us the perfect place for local businesses to advertise and positions us well to capture the significant opportunity as local ad dollars continue to shift online."

Now what: For the current quarter, Yelp expects revenue of $167 million to $171 million, the midpoint of which represents growth of 26% on a year-over-year basis. Second-quarter adjusted EBITDA should be $21 million to $25 million. Analysts, for their part, were modeling revenue near the low end of Yelp's guidance range.
Finally for the full-year 2016, Yelp now expects revenue of $690 million to $702 million, or growth of roughly 27% over 2015, and adjusted EBITDA of $93 million to $105 million. For perspective, both ranges are increases from Yelp's previous guidance provided three months ago, which called for revenue of $685 million to $700 million, and adjusted EBITDA of $90 million to $105 million.
In the end, I can't find anything not to like about this solid beat and raise from Yelp. As the company continues to invest for growth in these early stages of its story, I think shareholders have every right to celebrate these results.