Yelp are reporting earnings later today, and this one will be interesting to watch. The competition in the ad business is stiff as local ad segments has become more attractive to competitors like Google, TripAdviser and Facebook to name a few.
They have all increased their focus on local advertising in recent years, but despite that, Yelp reported positive EPS for the first time since its IPO. It`s estimated to see EPS to come in at $0,05 vs Wall Street`s $0,03.
That`s much better than last year, which was lower at -$0,04. Revenue is estimated to be $99,4M vs Wall Street`s slighly lower estimate of $98,9M, and that would be a whopping 62% increase YoY. Not bad for a 5B market cap company.
Yelp had about 68 million mobile unique visitors in the second quarter, and that`s up 51%. The growth factor is in their expansion in Japan, Mexico, Hong Kong, Portugal, Argentina and Chile, which will boost their ad revenue. 40% of all new reviews and more than 50% of Yelp`s total ad impression came from mobile devices. It`s expected to see the trend to continue.
Yelp is challenged by Google`s algorithmic change this summer, but despite that, Yelp`s traffic increased. The international traffic grew 80% YoY last quarter to 31 million unique monthly visitors. Another challenge is Angie`s list. Google is likely to offer them a buyout offer, but Amazon or Home depot is also on the retailers list for a possible acquisition in the future.
Angie`s list`s shares plunged today, reported a bigger than expected quarterly loss and they reported a fewer paid members. They lose market share and subscribers because they charges their customers fees to access reviews and ratings, which is free on Yelp. They have had to slash membership fees over the past few years, and has failed to turn into profit since their IPO in 2011. Angie`s list in founded in 1996, which is one of the tech companies that survived the dot-com bubble in 2000.
Yelp is scheduled to release its earnings results after the bell today.
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Ket Garden
Shiny bull 