Yelp Inc. has recently released its 10-Q report, providing a detailed insight into its financial performance and operations. The company operates a platform that connects consumers with local businesses in the United States and internationally, covering various categories such as restaurants, shopping, beauty and fitness, health, home, local, auto, professional, pets, events, real estate, and financial services. Yelp provides free and paid advertising products to businesses, enabling them to deliver targeted advertising to a large and high-intent audience. It also offers other services like Yelp Guest Manager, Yelp Knowledge program, and Yelp Fusion.
In the second quarter of 2024, Yelp's net revenue was $357.0 million, representing a 6% increase from the same period in 2023. The company recorded a net income of $38.0 million and adjusted EBITDA of $91.1 million in the same quarter. For the six months ended June 30, 2024, Yelp's net revenue was $689.8 million, up 6% from the same period in 2023, with a net income of $52.2 million and adjusted EBITDA of $155.6 million.
Yelp's strategic investments in product and marketing have continued to drive progress on its revenue growth initiatives. Advertising revenue from Services businesses increased by 11% year over year, reaching 65% of total advertising revenue in the second quarter. The Home Services category remained particularly strong, with revenue growth of approximately 15% year over year. Additionally, improvements to the Request-a-Quote flow and acquisition of Services projects through paid search led to a sequential increase in year-over-year project growth from approximately 20% in the first quarter to approximately 35% in the second quarter.
The company's advertising revenue by category shows that Services revenue maintained double-digit growth, while revenue from Restaurants, Retail & Other (RR&O) categories reflected ongoing operating challenges facing businesses in these sectors. Despite the expectation of continued RR&O headwinds, Yelp anticipates net revenue to increase sequentially in the third quarter of 2024.
Yelp regularly reviews key metrics to evaluate its business, including ad clicks and average cost per click (CPC). In the three and six months ended June 30, 2024, advertising revenue grew 6% year over year, primarily due to year-over-year increases in ad clicks driven by improvements to matching capabilities and the acquisition of Services projects through paid search. Average CPC decreased slightly in the same periods, reflecting increased value delivered to advertisers.
The number of paying advertising locations decreased by 6% in the three months ended June 30, 2024, compared to the prior-year period. While paying advertising locations in the Services categories increased year over year, those in the RR&O categories decreased, reflecting the challenging operating environment facing businesses in these sectors.
Yelp's financial performance indicates a continued focus on driving revenue growth and delivering value to both consumers and businesses, despite challenges in certain categories. The company's strategic investments in product and marketing have contributed to its overall revenue growth and position in the local, digital advertising market. Following these announcements, the company's shares moved -0.1%, and are now trading at a price of $33.47. If you want to know more, read the company's complete 10-Q report here.
