Yelp(NYSE) YELP

Yelp Inc. helps people find local businesses and read reviews. It lets businesses show ads to customers ready to buy. Users can book tables or order food through the app.

How Yelp Makes Money

• Advertising Services: Performance-based ads sold through cost-per-click auctions where businesses pay only when a user interacts with their ad; generated $342.5 million in revenue in the three months ended June 30, 2026.
• Services Categories: Advertising solutions for home, auto, and professional businesses; accounted for $241.0 million in revenue during the second quarter of 2026.
• Restaurants and Retail: Ad placements for dining, shopping, and beauty brands; brought in $101.5 million in revenue in the three months ended June 30, 2026.
• Subscription Software: Business tools like Yelp Guest Manager and Yelp Host that manage waitlists and reservations; included in the other revenue segment which grew 98% year over year in the second quarter of 2026.
• Data Licensing: Access to platform content through application programming interface (API) programs; powers local search results for third-party platforms like ChatGPT and Apple Maps.

Strategic Growth and AI

• Acquired Hatch on Feb. 2, 2026, for approximately $271.2 million to integrate artificial intelligence-powered voice and communication tools into its business offerings.
• Partnered with OpenAI in 2026 to provide ratings and reviews for local search experiences within the ChatGPT ecosystem.
• Launched Yelp Assistant in 2026, an artificial intelligence tool that handled 10% of Request-a-Quote projects during the second quarter.
• Expanded Yelp Host capabilities in 2026 by adding commission-free food ordering and OpenTable reservation features.

What Makes Yelp Unique

The platform uses a cost-per-click auction system to connect purchase-oriented consumers with local business advertisers. Strategic investments in artificial intelligence now automate customer interactions through voice services and personalized search tools.

Key Financial Results

• Net revenue was $375.5 million in the three months ended June 30, 2026, up 1% year over year.
• Other revenue reached $33.0 million in the three months ended June 30, 2026, up 98% year over year.
• Net income was $31.7 million in the second quarter of 2026, compared to $44.1 million in the second quarter of 2025.
• Free cash flow was $106.2 million for the six months ended June 30, 2026, compared to $132.5 million in the prior-year period.
• Market capitalization was $1.4 billion in the second quarter of 2026, down 38.3% year over year.

Company Evolution

Yelp has shifted from a simple review site to a broad platform for business advertising and automated customer service. Its recent focus on artificial intelligence and data licensing is diversifying its revenue beyond traditional local ads.