While many social-media companies have reported a digital-advertising downturn, Yelp Inc. managed to fight through it and increase its expectations for the full year.
Yelp YELP, +17.53% produced record revenue for a fourth consecutive quarter, and Chief Financial Officer David Schwarzbach told MarketWatch on Thursday that the strong ad-sales trend has continued early in the current quarter.
“We did see strong advertiser demand through July, driven by our high-intent, more-affluent audience and ad sales that are measurable by a click,” Schwarzbach said in an interview.
Yelp reported second-quarter net income of $8 million, or 11 cents a share, compared with a net income of $4.2 million, or 5 cents a share, in the same quarter a year ago. Net revenue was $298.9 million, up 16% from $257.2 million last year.
Analysts polled by FactSet expected a net loss of a penny a share on revenue of $284 million. Yelp shares gained about 5% in after-hours trading immediately following the release of the results, after falling 1.3% to $32.34 in regular trading.
Record advertising revenue from Yelp’s Services businesses ($174 million), as well as a year-over-year surge in revenue from Restaurants, Retail & Other businesses ($109 million) led the results.
Yelp also raised its annual net revenue guidance of between $1.18 billion and $1.2 billion in 2022. Analysts were forecasting $1.15 billion, according to FactSet.
The results offered a contrast to disappointing financial numbers from Alphabet Inc.’s GOOGL, -0.85% GOOG, -0.78% Google, Facebook parent company Meta Platforms Inc. META, -0.74%, Snap Inc. SNAP, +0.24% and Twitter Inc. TWTR, +1.42%. Those companies, who are also dependent on advertising, blamed a toxic mix of inflation, supply-chain constraints, the war in Ukraine and rising commodity prices for weaker-than-expected numbers.
Yelp’s stock has slipped 11% so far in 2022; the broader S&P 500 index SPX, -0.35% is down 13%.