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What changed in YELP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of YELP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+450 added−433 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-27)

Top changes in YELP INC's 2024 10-K

450 paragraphs added · 433 removed · 335 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

94 edited+25 added−35 removed98 unchanged
Biggest changeAccordingly, we believe our initiatives designed to deliver more value to advertisers through more and higher-quality ad clicks, as well as through product-driven customer support improvements, will also drive margin expansion over the long term. • Our Self-serve and Multi-location channels are more margin-accretive than Local sales; as a result, we expect that our plans to drive sales through these sales channels will also help improve our margins over time as revenue from these channels makes up an increasing percentage of our total advertising revenue. • In addition to providing our employees with increased flexibility and reducing our reliance on the San Francisco Bay Area, operating on a distributed basis has allowed us to reduce our real estate footprint, which we expect to continue to benefit margin going forward.
Biggest changeAccordingly, we believe our initiatives designed to deliver more value to advertisers by improving the quality of Services leads and further optimizing advertisers’ budgets will also drive margin expansion over the long term. • Operating on a distributed basis has allowed us to reduce our real estate footprint, which we expect to continue to benefit margin going forward.
The software regularly evaluates each review and, as a result, its analysis can change over time as new data becomes available; reviews that were previously recommended may become not recommended, and reviews that were previously not recommended may be restored to recommended status. • Machine Learning, AI and Large Language Models .
The software regularly evaluates each review and, as a result, its analysis can change over time as new data becomes available; reviews that were previously recommended may become not recommended, and reviews that were previously not recommended may be restored to recommended status. • AI, Machine Learning and Large Language Models .
With misinformation and deceptive behavior common across the Internet, we have prioritized combating this sort of conduct since our earliest days to maintain user trust and level the playing field for hard-working businesses that earn their great reputations honestly. Our industry-leading trust and safety measures include investments in both technology and human moderation: Recommendation Software .
With misinformation and deceptive behavior common across the Internet, we have prioritized combating this sort of conduct since our earliest days to maintain user trust and level the playing field for hard-working businesses that earn their great reputations honestly. Our industry-leading trust and safety measures include investments in both advanced technology and human moderation: Recommendation Software .
Among other obligations under the GDPR, businesses are required to make contractual privacy, data protection and data security commitments; give detailed disclosures about how they collect, use and share personal information; maintain adequate security measures; notify regulators and affected individuals of certain personal information breaches; meet extensive governance and documentation requirements; and honor individuals’ rights to their personal information.
Among other obligations under the GDPR and UK GDPR, businesses are required to make contractual privacy, data protection and data security commitments; give detailed disclosures about how they collect, use and share personal information; maintain adequate security measures; notify regulators and affected individuals of certain personal information breaches; meet extensive governance and documentation requirements; and honor individuals’ rights to their personal information.
We offer free access to certain basic information through our publicly available APIs as well as paid access to broader sets of content and data for consumer-facing enterprise use. We typically enter into multi-year license agreements with paying Yelp Fusion customers, with rates determined based on the type and volume of usage.
We offer free trial access to certain basic information through our publicly available APIs as well as paid access to broader sets of content and data for consumer-facing enterprise use. We typically enter into multi-year license agreements with paying Yelp Fusion customers, with rates determined based on the type and volume of usage.
The breadth and depth of our high-quality content is the result of our significant investments over nearly two decades in both developing communities of users as well as providing a great consumer experience that enables and encourages consumers to share their everyday business experiences through reviews, photos, videos and other content.
The breadth and depth of our high-quality content is the result of our significant investments over two decades in both developing communities of users as well as providing a great consumer experience that enables and encourages consumers to share their everyday business experiences through reviews, photos, videos and other content.
Item 1. Business. Company Overview Since Yelp’s founding nearly 20 years ago, our mission has remained the same — to connect consumers with great local businesses. Over that time, we have built one of the best-known Internet brands in the United States.
Item 1. Business. Company Overview Since Yelp’s founding 20 years ago, our mission has remained the same — to connect consumers with great local businesses. Over that time, we have built one of the best known Internet brands in the United States.
One of the Foundation’s missions is to promote a culture of philanthropy among Yelp employees and, to that end, the Foundation offers up to $1,000 per person in matching donations each year to charitable organizations made by our regular full-time employees.
One of the Foundation’s missions is to promote a culture of philanthropy among Yelp employees and, to that end, the Foundation offers up to $1,000 per person in matching donations each year to eligible charitable organizations made by our regular full-time employees.
The bidding algorithms used in our auction system are designed to prioritize spending advertiser budgets efficiently and maximize ad clicks to optimize the value we deliver to advertisers, while our proprietary ad delivery technology is designed to determine the most relevant ads to display to consumers to drive fulfillment. 1 Table of Contents Our Growth and Margin Strategy We believe that the investments we made in our strategic initiatives have led our business to new highs in recent years, and see further opportunities to build upon this success and deliver even greater value to both consumers and advertisers over the long term.
The bidding algorithms used in our auction system are designed to prioritize spending advertiser budgets efficiently and maximize ad clicks to optimize the value we deliver to advertisers, while our proprietary ad delivery technology is designed to determine the most relevant ads for consumers to drive fulfillment. 1 Table of Contents Our Growth and Margin Strategy We believe that the investments we made in our strategic initiatives have led our business to new highs in recent years, and see further opportunities to build upon this success and deliver even greater value to both consumers and advertisers over the long term.
We endeavor to have a positive impact on the diverse communities in which people use Yelp by using our platform to raise awareness, promote economic opportunity for those in need and support organizations that serve local communities.
We endeavor to have a positive impact on the communities in which people use Yelp by using our platform to raise awareness, promote economic opportunity for those in need and support organizations that serve local communities.
We plan to continue expanding our suite of full-funnel ad products tailored to these advertisers and attribution solutions to drive revenue growth in our Multi-location sales channel in 2024. Customer Success Our customer success teams support existing advertisers through account management and retention initiatives as well as engage advertisers with the goal of increasing their overall spend.
We plan to continue expanding our suite of full-funnel ad products tailored to these advertisers and attribution solutions to drive revenue growth in our Multi-location sales channel in 2025. Customer Success Our customer success teams support existing advertisers through account management and retention initiatives as well as engage advertisers with the goal of increasing their overall spend.
We also offer customized coaching resources to provide individual support and develop critical skills, as well as regular, ongoing training in compliance and workplace conduct matters to all employees. 15 Table of Contents Seasonality and Cyclicality Our business is affected by seasonal fluctuations in Internet usage and advertising spending, as well as cyclicality in economic activity: Seasonality .
We also offer customized coaching resources to provide individual support and develop critical skills, as well as regular, ongoing training in compliance and workplace conduct matters to all employees. 14 Table of Contents Seasonality and Cyclicality Our business is affected by seasonal fluctuations in Internet usage and advertising spending, as well as cyclicality in economic activity: Seasonality .
As of December 31, 2023, approximately 9% of the reviews submitted to our platform had been removed. Coordination with Law Enforcement . We regularly cooperate with law enforcement and consumer protection agencies to investigate and identify businesses and individuals who may be engaged in false advertising or other deceptive practices relating to reviews.
As of December 31, 2024, approximately 9% of the reviews submitted to our platform had been removed. Coordination with Law Enforcement . We regularly cooperate with law enforcement and consumer protection agencies to investigate and identify businesses and individuals who may be engaged in false advertising or other deceptive practices relating to reviews.
Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 16 Table of Contents
Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 15 Table of Contents
These companies may use these advantages to offer products similar to ours at a lower price, develop different products to compete with our current solutions and respond more quickly and effectively than we do to new or changing opportunities, technologies, standards or client requirements.
These companies may use these advantages to offer products similar to ours at a lower price, develop different products or partner with our competitors to compete with our current solutions, and respond more quickly and effectively than we do to new or changing opportunities, technologies, standards or client requirements.
Consumers trust us for the more than 260 million ratings and reviews available on our platform of businesses across a broad range of categories. This consumer trust is the foundation of our business, from which we are able to empower other businesses to succeed.
Consumers trust us for the more than 280 million ratings and reviews available on our platform of businesses across a broad range of categories. This consumer trust is the foundation of our business, from which we are able to empower other businesses to succeed.
Multi-location Ad Products We offer a range of ad products designed for multi-location advertisers, including: Showcase Ads, which showcase and feature limited-time offers, new products or promotions in relevant search results; Spotlight Ads, which highlight special offers and promotions related to seasonal or other special events in a carousel directly on the Yelp app home screen; and Yelp Audiences, which extends campaign reach to our high-intent audience off platform.
Multi-location Ad Products We offer a range of ad products designed for multi-location advertisers, including: Showcase Ads, which showcase and feature limited-time offers, new products or promotions in relevant search results; Spotlight Ads, which highlight special offers and promotions related to seasonal or other special events on Yelp business pages in a prominent carousel directly on the Yelp app home screen; and Yelp Audiences, which extends campaign reach to our high-intent audience off platform.
We have also developed industry-leading content moderation practices to maintain the quality and integrity of our content. For example, our recommendation software and other machine learning algorithms are designed to surface the most useful and trustworthy information on our platform for consumers.
We have also developed industry-leading content moderation practices to maintain the quality and integrity of our content. For example, our recommendation software and other tools, including machine learning algorithms, are designed to surface the most useful and trustworthy information on our platform for consumers.
We use advanced machine learning and AI to power and enhance features across our platform. Deep learning neural networks model user behavior to select the most relevant ads to display and predict which photo shown in an ad will generate the most clicks.
We use AI, including machine learning, to power and enhance features across our platform. Deep learning neural networks model user behavior to select the most relevant ads to display and predict which photo shown in an ad will generate the most clicks.
Yelp Knowledge Through partnerships with companies such as Sprinklr and Chatmeter, our Yelp Knowledge program offers business owners local analytics and insights through access to our historical data and other proprietary content. Our Yelp Knowledge partners pay us license fees for access to Yelp Knowledge content.
Yelp Fusion Insights (formerly Yelp Knowledge) Through partnerships with companies such as Sprinklr and Chatmeter, our Yelp Fusion Insights program offers business owners local analytics and insights through access to our historical data and other proprietary content. Our Yelp Fusion Insights partners pay us license fees for access to Yelp Fusion Insights content.
To maintain our vibrant culture and address any areas of employee concern, we conduct annual employee engagement surveys covering a wide range of topics including: manager effectiveness; feedback and recognition; company confidence; inclusion and belonging; learning and development; and remote work issues such as managing remotely, manager and team support, employee well-being in a remote environment, and remote growth and connection opportunities.
To maintain our vibrant culture and address any areas of employee concern, we conduct regular employee engagement surveys covering a wide range of topics including: manager effectiveness; feedback and recognition; company confidence; inclusion and belonging; learning and development; and remote work issues such as managing remotely, manager and team support, employee well-being in a remote environment, and remote connection opportunities.
For a discussion of our results for the year ended December 31, 2023, see the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” included under Part II, Item 7 of this Annual Report.
For a discussion of our results for the year ended December 31, 2024, see the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” included under Part II, Item 7 of this Annual Report.
Verified License Verified License is a badge that appears on Yelp business pages as a paid upgrade for certain eligible licensed businesses, primarily in our home and local services subcategories.
Verified License Verified License is a badge that appears on Yelp business pages as a paid upgrade for certain eligible licensed businesses, primarily in our Home and Local Services categories.
For example, if our models predict that relevant consumer traffic will meaningfully decrease for a period of time during an ad campaign, our bidding algorithms will dynamically allocate advertiser budget around that period to avoid spending a 6 Table of Contents disproportionate amount of the budget while supply is constrained.
For example, if our models predict that relevant consumer traffic will meaningfully decrease for a period of time during an ad campaign, our bidding algorithms will dynamically allocate advertiser budget around that period to avoid spending a disproportionate amount of the budget while supply is constrained.
The application and interpretation of these laws and regulations are often uncertain, and they could be interpreted and applied in ways that harm our business. They may also conflict with other rules, be interpreted and applied inconsistently (including from country to country) and in ways that are at odds with our current policies and practices.
The application and interpretation of these laws and regulations are often uncertain, and they could be interpreted and applied in ways that harm our business. They may also conflict with other rules, be interpreted and 11 Table of Contents applied inconsistently (including from country to country) and in ways that are at odds with our current policies and practices.
We also established the Yelp Elite Squad to provide recognition to users who are active in the Yelp community and consistently contribute high-quality content. 7 Table of Contents In addition to encouraging reliable content and fair play from the outset, our communities serve as additional layers of oversight.
We also established the Yelp Elite Squad to provide recognition to users who are active in the Yelp community and consistently contribute high-quality content. In addition to encouraging reliable content and fair play from the outset, our communities serve as additional layers of oversight.
Through these activities, we believe our Community Management team helps us increase awareness of our platform and grow avid communities who are willing to contribute content to our platform. We plan to continue these community development efforts in 2024. Yelp Elite Squad Our Community Managers’ responsibilities include engaging with our most passionate users — Yelp Elite Squad members.
Through these activities, we believe our Community Management team helps us increase awareness of our platform and grow avid communities who are willing to contribute content to our platform. We plan to continue these community development efforts in 2025. Yelp Elite Squad Our Community Managers’ responsibilities include engaging with our most passionate users — Yelp Elite Squad members (“Yelp Elites”).
In 2011, our Board approved the contribution and issuance to the Foundation of 520,000 shares of our common stock to fund grants to local non-profit organizations that are actively engaged in supporting community and small business growth. The Foundation held 160,000 shares as of December 31, 2023, which represented less than 1% of our outstanding common stock.
In 2011, our Board approved the contribution and issuance to the Foundation of 520,000 shares of our common stock to fund grants to local non-profit organizations that are actively engaged in supporting community and small business growth. The Foundation held 132,000 shares as of December 31, 2024, which represented less than 1% of our outstanding common stock.
To conduct an average of 19 million auctions per day, we predict demand for 16 million ad categories and distinct time intervals to set bid pricing and pacing, then optimize bids 96 times per day per advertiser. • Infrastructure .
To conduct an average of nearly 18 million auctions per day, we predict demand for 16 million ad categories and distinct time intervals to set bid pricing and pacing, then optimize bids 96 times per day per advertiser. • Infrastructure .
Our competitors may enjoy competitive advantages, such as greater name recognition, longer operating histories, substantially greater market share, established marketing relationships with, and access to, large existing user bases and substantially greater financial, technical and other resources.
Some of our competitors enjoy competitive advantages, such as greater name recognition, longer operating histories, substantially greater market share, established marketing relationships with, and access to, large existing user bases and substantially greater financial, technical and other resources.
Our targeting software leverages neural networks that evaluate more than 4,000 signals about the user, business and search context to make sure consumers see the right ad at the right time and drive ad clicks. • Auction System . We use an auction system to determine the price we charge advertisers for ad clicks.
Our targeting software leverages neural networks that evaluate more than 4,000 signals about the user, business and search context to make sure consumers see the right ad at the right time and drive ad clicks. 6 Table of Contents • Auction System . We use an auction system to determine the price we charge advertisers for ad clicks.
This technology, together with content moderation by our User Operations team and other consumer protection efforts, helps us detect and mitigate attempts to manipulate ratings and reviews. As of December 31, 2023, approximately 74% of the reviews submitted to our platform were recommended. • A strong brand and a large consumer audience .
This technology, together with content moderation by our User Operations team and other consumer protection efforts, helps us detect and mitigate attempts to manipulate ratings and reviews. As of December 31, 2024, approximately 76% of the reviews submitted to our platform were recommended. • A strong brand and a large consumer audience .
We may also be subject to laws that require us to publish statements that accurately and fairly describe how we handle personal information and choices individuals have about the way we handle their personal information. • Liability for Third-Party Action .
We are also subject to laws that require us to publish statements that accurately and fairly describe how we handle personal information and choices individuals have about the way we handle their personal information. • Liability for Third-Party Action .
For additional information, see the section titled “ R isk Factors—Our business is subject to complex and evolving U.S. and foreign regulations and other legal obligations related to privacy, data protection and other matters.
For additional information, see the section titled “ Risk Factors—Our business is subject to complex and evolving U.S. and foreign regulations and other legal obligations related to privacy, data protection and other matters.
As in past years, advertising accounted for the vast majority of our revenue during the year ended December 31, 2023, contributing 95% of our revenue, which was fairly consistent with the years ended December 31, 2021 and 2022. We recognize revenue from our business listing and advertising products, including advertising sold by partners, as advertising revenue.
As in past years, advertising accounted for the vast majority of our revenue during the year ended December 31, 2024, contributing 96% of our revenue, which was fairly consistent with the years ended December 31, 2022 and 2023. We recognize revenue from our business listing and advertising products, including advertising sold by partners, as advertising revenue.
Based on historical trends, our revenue is typically lowest in the first quarter and increases sequentially through the third quarter. Fourth quarter revenue is typically similar to the third quarter as well as to the first quarter of the subsequent year.
Based on historical trends, our revenue in a particular year is typically lowest in the first quarter of that year and increases sequentially through the third quarter. Fourth quarter revenue is typically similar to the third quarter as well as to the first quarter of the subsequent year.
Because we receive, store and process personal information and other user data, including credit card information in certain cases, we are subject to numerous data privacy and security obligations, including federal, state, local and foreign laws, regulations, guidance and industry standards, that restrict the collection, storing, use, retention, processing and disclosure of personal information and other user data.
Because we receive, store and process personal information and other user data, including payment information in certain cases, we are subject to numerous data privacy and security obligations, including federal, state, local and foreign laws, regulations, guidance and industry standards, that govern the collection, storing, use, retention, processing and disclosure of personal information and other user data.
Our competitors consist of companies that help businesses — particularly businesses in our strategically important Services categories and, to a lesser extent, restaurants category — connect and engage with consumers, including: • online search engines and directories, including those incorporating AI technologies, such as Google and ChatGPT, as well as traditional, offline business guides and directories; • online and offline providers of consumer ratings, reviews and referrals, such as TripAdvisor, as well as social media platforms and features where consumers are increasingly searching for and posting information about local businesses, such as TikTok and Snap Map; • providers of online marketing and tools for managing and optimizing advertising campaigns, such as Google, Instagram and TikTok, as well as various forms of traditional offline advertising, including radio, direct marketing campaigns, yellow pages and newspapers; • restaurant reservation and seating tools, such as OpenTable and Resy, as well as food ordering and delivery services; and • home and/or local services-related platforms and offerings, such as Angi.
Our competitors consist of companies that help businesses — particularly businesses in our strategically important Services categories and, to a lesser extent, restaurants category — connect and engage with consumers, including: • online search engines and directories, including those incorporating AI technologies, such as Google and OpenAI, as well as traditional, offline business guides and directories; • online and offline providers of consumer ratings, reviews and referrals, such as TripAdvisor, as well as social media platforms and features where consumers are increasingly searching for and posting information about local businesses, such as TikTok and Reddit; • providers of online marketing and tools for managing and optimizing advertising campaigns, such as Google, Instagram and, increasingly, food ordering and delivery services that also offer online advertising, such as DoorDash; • providers of various forms of traditional offline advertising, including radio, direct marketing campaigns, yellow pages and newspapers; • restaurant reservation and seating tools, such as OpenTable and Resy, as well as food ordering and delivery services; and 10 Table of Contents • home and/or local services-related platforms and offerings, such as Angi and Thumbtack.
In addition, our distributed operations allow us to access and attract great talent from a more diverse pool of candidates across North America and Europe.
In addition, our distributed operations allow us to access and attract great talent from a wider pool of candidates across North America and Europe.
For example, our Local customer success team helps educate local business owners about how using Yelp can benefit their businesses, including by helping them create, update and familiarize themselves with their Yelp business pages. Our Multi-location customer success team is responsible for managing campaign performance by suggesting ad content and helping optimize to improve campaign performance. Self-serve Sales .
For example, our Local customer success team helps educate local business owners about how using Yelp can benefit their businesses, including by helping them create, update and familiarize themselves with their Yelp business pages. Our customer success teams are also responsible for managing campaign performance by suggesting ad content and helping optimize to improve campaign performance. Self-serve Sales .
In addition to its size, our audience has high purchase intent and is generally affluent — we estimate that over 55% of our audience has annual household income of more than $100,000. • A broad-based local advertising platform and sophisticated advertising technology .
In addition to its size, our audience has high purchase intent and is generally affluent — as of December 2024, we estimate that over 50% of our audience has annual household income of more than $100,000. • A broad-based local advertising platform and sophisticated advertising technology .
These conditions have had, and may continue to have, a significant adverse impact on our business and revenue; we expect that our business will continue to be significantly negatively affected for the duration of the current adverse macroeconomic conditions as well as any future recessionary period or protracted economic downturn.
These adverse conditions have negatively impacted their advertising spending with us and have had, and may continue to have, a significant adverse impact on our business and revenue. We expect that our business will continue to be significantly negatively affected for the duration of the current adverse macroeconomic conditions as well as any future recessionary period or protracted economic downturn.
In addition to taking direct corrective action — such as recategorizing businesses to appropriately reflect their services, as in the example above — if we identify or confirm any such issues through our investigations, we typically pursue one or more of the courses of action described below (each of which we may also employ on a stand-alone basis).
In addition to taking direct corrective action — such as recategorizing businesses to appropriately reflect their services or closing user accounts, as in the example above — if we identify or confirm any attempts to mislead consumers or similar issues through our investigations, we typically pursue one or more of the courses of action described below (each of which we may also employ on a stand-alone basis).
We believe that multi-location advertising budgets represent a significant growth opportunity and this channel has been a focus of our strategic investments in recent years as we expanded our products and attribution capabilities to meet the needs of these advertisers.
We believe that multi-location advertising budgets, particularly in our Services categories, represent a significant growth opportunity and this channel was a focus of our strategic investments in recent years as we expanded our products and attribution capabilities to meet the needs of these advertisers.
Certain competitors could also use strong or dominant positions in one or more markets to gain competitive advantage against us in markets in which we operate. 10 Table of Contents We believe our ability to compete successfully for users, content, and advertising and other customers depends upon many factors both within and beyond our control, including: • the popularity, usefulness, ease of use, performance and reliability of our products and services compared to those of our competitors; • our ability, in and of itself as well as in comparison to the ability of our competitors, to develop new products and services and enhancements to existing products and services; • the quantity, quality and reliability of our content, including its breadth, depth and timeliness; • our ad targeting and measurement capabilities, and those of our competitors; • the size, composition and level of engagement of our consumer audience relative to those of our competitors; • our marketing and selling efforts, and those of our competitors; • the pricing of our products and services relative to those of our competitors; • the actual or perceived return our customers receive from our products and services relative to returns from our competitors; • the frequency and relative prominence of the ads displayed by us or our competitors; • acquisitions or consolidation within our industry, which may result in more formidable competitors; and • our reputation and brand strength relative to our competitors.
We believe our ability to compete successfully for users, content, and advertising and other customers depends upon many factors both within and beyond our control, including: • the popularity, usefulness, ease of use, performance and reliability of our products and services compared to those of our competitors; • our ability, in and of itself as well as in comparison to the ability of our competitors, to develop new products and services and enhancements to existing products and services; • the quantity, quality and reliability of our content, including its breadth, depth and timeliness; • our ad targeting and measurement capabilities, and those of our competitors; • the size, composition and level of engagement of our consumer audience relative to those of our competitors; • our marketing and selling efforts, and those of our competitors; • the pricing of our products and services relative to those of our competitors; • the actual or perceived return our customers receive from our products and services relative to returns from our competitors; • the frequency and relative prominence of the ads displayed by us or our competitors; • acquisitions or consolidation within our industry, which may result in more formidable competitors; and • our reputation and brand strength relative to our competitors.
Removal of Reviews . We regularly remove reviews from our platform that we believe violate our terms of service, including, without limitation: reviews that do not reflect a first-hand consumer experience; content that has been bought, sold or traded; and reviews that are posted by someone we believe to be affiliated with the reviewed business.
We regularly remove reviews, photos and other content from our platform that we believe violate our terms of service, including, without limitation: reviews that do not reflect a first-hand consumer experience; 8 Table of Contents content that has been bought, sold or traded; AI-created reviews; and reviews that are posted by someone we believe to be affiliated with the reviewed business.
European data protection laws including the GDPR also restrict the transfer of personal information from Europe to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information.
European data protection laws including the GDPR and UK GDPR also restrict the transfer of personal information from Europe to the United States and most other countries unless the parties to the transfer have implemented specific safeguards or adhere to transfer frameworks that aim to protect the transferred personal information.
We have long focused on building a diverse team of innovators and problem solvers who can bring their whole professional selves to work, which we believe positions our employees to relate to and solve the diverse needs of consumers and businesses. 12 Table of Contents As of December 31, 2023, we had 4,713 * employees globally across the following teams: * Excludes employees on leave as of December 31, 2023.
We have long focused on building a team of innovators and problem solvers who can bring their whole professional selves to work, which we believe positions our employees to relate to and solve the needs of consumers and businesses. 12 Table of Contents As of December 31, 2024, we had 5,116 * employees globally across the following teams: * Includes employees on leave as of December 31, 2024.
In September 2023, we published an index that regularly lists the latest compensated activity and suspicious review activity alerts we have placed on Yelp business pages, making it easier for regulators to identify businesses that may have participated in suspicious or deceptive review activity. 8 Table of Contents Legal Action .
In 2023, we started publishing an index that regularly lists the latest compensated activity and suspicious review activity alerts we have placed on Yelp business pages, making it easier for regulators to identify businesses that may have participated in suspicious or deceptive review activity. Legal Action .
We advertise our career opportunities on premier job boards and aggregators in addition to running targeted brand campaigns that enable us to connect with diverse talent pools. We maintain an active voice on social media through our Life at Yelp channel, which highlights employee testimonials regarding their Yelp experiences.
We advertise our career opportunities on premier job boards and aggregators in addition to running targeted brand campaigns. We maintain an active voice on social media through our Life at Yelp channel, which highlights employee testimonials regarding their Yelp experiences.
For information about our cybersecurity risk management, strategy and governance practices, see the section titled “ Cybersecurity .” Maintaining the Integrity of Our Content Providing access to useful and reliable information to help inform consumers’ spending decisions is critical to our mission of connecting people with great local businesses.
For information about our cybersecurity risk management, strategy and governance practices, see the section titled “ Cybersecurity ” included under Part I, Item 1C of this Annual Report. Maintaining the Integrity of Our Content Providing access to useful and reliable information to help inform consumers’ spending decisions is critical to our mission of connecting people with great local businesses.
In addition, employees participated in virtual volunteer events in partnership with various nonprofit organizations. The Yelp Foundation . The Yelp Foundation (the “Foundation”), a non-profit organization established by our Board in 2011, directly supports consumers and local businesses in the communities in which we operate.
In addition to participating in virtual volunteer events in partnership with various nonprofit organizations, Yelp employees made a difference in 2024 through the Yelp Foundation (the “Foundation”), a non-profit organization established by our Board in 2011 that directly supports consumers and local businesses in the communities in which we operate.
As of December 31, 2023, approximately 74% of the reviews submitted to our platform were recommended by our automated software and approximately 18% were not recommended but still accessible on secondary pages.
As of December 31, 2024, approximately 76% of the reviews submitted to our platform were recommended by our automated software and approximately 15% were not recommended but still accessible on secondary pages.
Although they do not factor into a business’s overall star rating, we provide access to reviews that are not recommended because they provide additional perspectives and information on reviewed businesses and reviewers, as well as transparency as to the efficacy of our recommendation software. Community .
Although they do not factor into a business’s overall star rating, we provide access to reviews that are not recommended to provide transparency regarding reviewed businesses and reviewers as well as the efficacy of our recommendation software. 7 Table of Contents Community .
These laws generally give residents of such states the ability to access and require deletion of their personal information and opt out of certain personal information sharing, restrict the use of cross-contextual advertising and restrict the retention of personal information.
These laws generally give residents of such states the ability to access and require deletion of their personal information, opt out of certain personal information sharing, and opt out of cross-contextual advertising, profiling and automated decision making.
As of the beginning in 2024, our Multi-location sales team sells to any businesses with 10 or more locations, which consist of larger mid-market businesses, national businesses and non-location-based brand advertisers. Our Local sales team sells to smaller mid-market and franchise businesses.
Multi-location Sales Our Multi-location sales team sells to any businesses with 10 or more locations, which consist of larger mid-market businesses, national businesses and non-location-based brand advertisers.
Delivering Profitable Growth We believe our strategic investments in product development, together with our distributed workforce, have positioned us well to drive profitable growth and leverage over the long term: • Retention improvements benefit our margins.
Delivering Profitable Growth We believe our product-led strategy, together with our distributed workforce and disciplined expense management, have positioned us well to drive profitable growth and leverage over the long term: • Retention improvements benefit our margins.
There are also regular Congressional efforts to restrict the scope of the protections available to online platforms under CDA 230, and our current protections from liability for third-party content in the United States could decrease or change as a result.
There are also regular legislative and regulatory efforts to restrict the scope of the protections available to online platforms under CDA 230, and our current protections from liability for third-party content in the United States could decrease or change as a result. Claims and legislation applicable to user-generated content also regularly arise in other jurisdictions.
The competitive advantages we have established over nearly two decades, together with the product-led business model and improved cost structure we have implemented in recent years, provide us with the opportunity for consistent, long-term growth in this market. We have: • A proven engine to generate and recommend trusted content .
The competitive advantages we have established over two decades, together with our product-led business model and disciplined expense management, provide us with the opportunity for long-term profitable growth in this market. We have: • A proven engine to generate and recommend trusted content .
Other We generate other revenue through subscription services, licensing payments for access to Yelp data, other non-advertising arrangements and other non-advertising, non-transaction arrangements. Beginning in the three months ending March 31, 2024, other revenue will also include transactions revenue. Yelp Guest Manager Yelp Guest Manager is a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues.
Other We generate other revenue through subscription services, licensing payments for access to Yelp data, transactions and other non-advertising arrangements. Yelp Guest Manager Yelp Guest Manager is a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues.
When people take to a business’s Yelp page to express their views after the business receives increased public attention, our User Operations team may temporarily disable the posting of content to the page and publish a public attention alert as they investigate and remove content that violates our policies.
When people take to a business’s Yelp page to express their views after the business receives increased public attention, our User Operations team may temporarily disable the posting of content to the page and publish a public attention alert as they investigate and remove content that violates our policies. • Public attention alerts: this type of consumer alert informs consumers when a business gains public attention for either being accused of, or the target of, racist behavior.
These products are backed by a scaled and extensible advertising technology platform. To establish the price of an individual ad click on our platform, we run an auction for each advertising unit displayed to a consumer on our website or mobile app, which resulted in an average of 19 million auctions per day in 2023.
These products are backed by a scaled and extensible advertising technology platform. To establish the price of an individual ad click, we run an auction for each advertising placement, which resulted in an average of nearly 18 million auctions per day in 2024.
Our Self-serve platform allows businesses to purchase and manage their advertising products directly from our website or the Yelp for Business app. Businesses can purchase Yelp Ads and business page upgrades directly through our Self-serve platform.
Our Self-serve platform allows businesses to purchase and manage their advertising products directly from our website or the Yelp for Business app. Businesses can purchase Yelp Ads and business page upgrades directly through our Self-serve platform. The convenience of our Self-serve platform has helped us reduce our reliance on sales and customer support headcount.
In 2020, we expanded this category of alert to add new notifications informing consumers when a business gains public attention for either being accused of, or the target of, racist behavior. • Suspicious review activity : this alert informs consumers if we have uncovered a disproportionate number of positive reviews submitted from the same IP address, which can indicate a concerted effort to inflate the business’s overall star rating on Yelp.
In 2024, only two public attention alerts were escalated to a business accused of racist behavior alert. • Suspicious review activity : this alert informs consumers if we have uncovered a disproportionate number of positive reviews submitted from the same IP address, which can indicate a concerted effort to inflate the business’s overall star rating on Yelp.
Our advertising products help businesses of all sizes reach a large audience, advertise their products and drive conversion of their services. Our performance in 2023 — which included record annual revenue and profitable growth — demonstrates that our product-led strategy can drive durable growth.
Our advertising products help businesses of all sizes reach a large audience, advertise their products and drive conversion of their services. Our performance in 2024 — which included record annual revenue and profitable growth — demonstrates the profitability of our broad-based local advertising platform.
For example, the European Union’s General Data Protection Regulation (“GDPR”) imposes comprehensive privacy, data protection and data security obligations on businesses and imposes significant penalties for non-compliance.
For example, the European Union’s General Data Protection Regulation (“GDPR”) and its equivalent in the United Kingdom (“UK GDPR”) impose comprehensive privacy, data protection and data security obligations on businesses as well as significant penalties for non-compliance.
These behind-the-scenes looks at top-rated businesses often include interacting with business owners, hearing their unique stories and engaging with other locals in their community; however, as users of our service, Yelp Elites do not receive compensation for their contributions. 9 Table of Contents Intellectual Property We rely on federal, state, and international statutory, common law and other legal rights, as well as contractual restrictions, to protect our intellectual property.
These behind-the-scenes looks at top-rated businesses often include interacting with business owners, hearing their unique stories and engaging with other locals in their community; however, as users of our service, Yelp Elites do not receive compensation for their contributions.
These features are primarily available through partner integrations, the largest of which — by both transaction volume and revenue — is our partnership with Grubhub, which allows consumers to place food orders for pickup and delivery through Yelp. We recognized revenue from these sources on a net basis as transactions revenue through December 31, 2023.
Transactions We offer features and consumer-interactive tools to facilitate transactions between consumers and the local businesses they find on Yelp. These features are primarily available through partner integrations, the largest of which — by both transaction volume and revenue — is our partnership with Grubhub, which allows consumers to place food orders for pickup and delivery through Yelp.
When a consumer enters a search on our app, these technologies determine the most relevant ads to show and serve those ads alongside the organic search results, typically in less than half a second.
We use proprietary ad targeting and delivery technologies that are designed to quickly target and display hyper-relevant advertisements to users of our platform. When a consumer enters a search on our app, these technologies determine the most relevant ads to show and serve those ads alongside the organic search results, typically in less than half a second.
Claims and legislation applicable to user-generated content also regularly arise in other jurisdictions. 11 Table of Contents Regulatory frameworks related to the processing of personal information are also evolving and generally becoming increasingly stringent. In the United States, several states have introduced comprehensive privacy, data protection and data security legislation.
Regulatory frameworks related to the processing of personal information are also evolving and generally becoming increasingly stringent. In the United States, several states have introduced comprehensive data privacy, data protection and data security legislation, such as the California Consumer Privacy Act.
Similarly, we designed our Yelp for Business app to make it easier for businesses to engage with their customers and manage their presence on Yelp. Currently available for iOS and Android, this app provides businesses with daily metrics reports, page view analytics and leads data, as well as the ability to manage quote requests and opportunities in Nearby Jobs.
Currently available for iOS and Android, this app provides businesses with daily metrics reports, page view analytics and leads data, as well as the ability to manage quote requests and opportunities in Nearby Jobs. Businesses can also purchase, customize and manage Yelp Ads through the Yelp for Business app. • Ad Delivery .
These marks are material to our business and essential to our brand identity as they enable others to easily identify us as the source of the services offered in connection with these marks.
Our trademark registration efforts have focused on gaining protection for the word mark “Yelp” and the Yelp burst logo, among others. These marks are material to our business and essential to our brand identity as they enable others to easily identify us as the source of the services offered in connection with these marks.
As a result, in 2024 we plan to invest in the areas set forth below, each of which we believe represents its own long-term opportunity and which together we believe will drive long-term sustainable and profitable growth. Revenue Growth • Provide the most trusted local search and discovery platform.
As a result, in 2025 we plan to invest in the areas set forth below, each of which we believe represents its own long-term opportunity and which together we believe will drive long-term sustainable and profitable growth. Revenue Growth • Lead in Services. We aim to create a best-in-class Services experience for consumers and service professionals in 2025.
Their voices helped make Yelp what it is today, and we started the Yelp Elite Squad to recognize these passionate individuals, signal our trust in them and their contributions, and encourage similar beneficial activities in our communities. Beyond having well-written reviews, high-quality photos and a detailed personal profile, Yelp Elite Squad members are active evangelists for their Yelp communities.
Their voices helped make Yelp what it is 9 Table of Contents today, and we started the Yelp Elite Squad to recognize these passionate individuals, signal our trust in them and their contributions, and encourage similar beneficial activities in our communities.
Business Highlights Businesses in eligible categories can pay to highlight up to six attributes that make their business unique, such as “Family Owned” or “Pet Friendly.” 3 Table of Contents Portfolio Portfolio allows businesses to showcase their work or services to prospective customers through a collection of projects.
The badge indicates that we have verified the business’s trade license and confirmed it was in good standing as of a certain date, allowing businesses to distinguish themselves as licensed and helping consumers make confident decisions when selecting businesses for their projects. 3 Table of Contents Business Highlights Businesses in eligible categories can pay to highlight up to six attributes that make their business unique, such as “Family Owned” or “Pet Friendly.” Portfolio Portfolio allows businesses to showcase their work or services to prospective customers through a collection of projects.
Revenue from direct Local sales has historically comprised the largest share of advertising revenue and was driven by growth in Local sales headcount. While it still represents nearly half of our advertising revenue, we have become less reliant on Local sales headcount to drive growth as we have increased our focus on our more margin-accretive Self-serve and Multi-location channels.
While it still represents nearly half of our advertising revenue, we have become less reliant on Local sales headcount to drive growth as a result of our investments in our more margin-accretive Self-serve and Multi-location channels in recent years. This has allowed us to optimize the size and compensation structure of the Local sales team accordingly.
Our Products and Services Advertising We offer a range of free and paid advertising products to businesses of all sizes, including the products listed below, which provide the ability to deliver targeted advertising to our large and high-intent audience.
We also plan to expand the use of AI in our business operations to drive efficiencies, reflecting our commitment to driving leverage in the business through our product-led strategy. 2 Table of Contents Our Products and Services Advertising We offer a range of free and paid advertising products to businesses of all sizes, including the products listed below, which provide the ability to deliver targeted advertising to our large and high-intent audience.
Neural network-based systems also support our content moderation efforts by proactively removing video content that may be inappropriate. We use large language models (“LLMs”) to better understand user intent in search queries and enhance our search capabilities, including by determining the most relevant information from reviews to display in the business highlights that appear in search results.
We use large language models (“LLMs”) to better understand user intent in search queries and enhance our search capabilities, including by determining the most relevant information from reviews to display in the business highlights that appear in search results. LLMs also play an important role in analyzing user-generated content to protect consumers and business owners from malicious or harmful content.
In 2023, the Foundation again matched Yelp employee donations made to a wide range of charitable organizations, including those focused on the causes that mattered most to our employees: international relief; youth development; pediatric research; international emergency response; and disaster preparedness and relief.
In 2024, the Foundation again matched Yelp employee donations made to a wide range of charitable organizations, including those focused on the causes that mattered most to our employees: education; human services; international affairs and national security; health; and arts, culture and humanities.
Our trusted content forms the basis for our business and has made Yelp a leading resource for consumers to confidently search for and discover great local businesses across categories.
We also plan to continue improving the efficiency of our performance marketing spend to acquire small and medium-sized business (“SMB”) advertisers. • Transform the consumer experience. Our trusted content forms the basis for our business and has made Yelp a leading resource for consumers to confidently search for and discover great local businesses across categories.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain.
Biggest changeDuring the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. For example, our effective tax rates could be adversely affected by changes in the valuation of our deferred tax assets and liabilities, or by changes in relevant tax, accounting and other laws, regulations, principles and interpretations.
We may acquire or invest in other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results. We may also be unable to realize the expected benefits and synergies of any acquisitions or investments.
We may acquire or invest in other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders, or otherwise disrupt our operations and harm our operating results. We may also be unable to realize the expected benefits and synergies of any acquisitions or investments.
In order to realize the expected benefits and synergies of any acquisition that is consummated, we must meet a number of significant challenges that may create unforeseen operating difficulties and expenditures, including: • integrating operations, strategies, services, sites and technologies of an acquired company; • managing the post-transaction business effectively; • retaining and assimilating the employees of an acquired company; • retaining existing customers and strategic partners, and minimizing disruption to existing relationships, as a result of any integration of new personnel or departure of existing personnel; • difficulties in the assimilation of corporate cultures; • implementing and retaining uniform standards, controls, procedures, policies and information systems; and • addressing risks related to the business of an acquired company that may continue to impact the business following the acquisition.
In order to realize the expected benefits and synergies of any acquisition that is consummated, we must meet a number of significant challenges that may create unforeseen operating difficulties and expenditures, including: • integrating the operations, strategies, services, sites and technologies of an acquired company; • managing the post-transaction business effectively; • retaining and assimilating the employees of an acquired company; • retaining existing customers and strategic partners, and minimizing disruption to existing relationships, as a result of any integration of new personnel or departure of existing personnel; • difficulties in the assimilation of corporate cultures; • implementing and retaining uniform standards, controls, procedures, policies and information systems; and • addressing risks related to the business of an acquired company that may continue to impact the business following the acquisition.
Further, if our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment, business partner, acquiror or service provider could be negatively impacted.
Further, if our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, ability to attract or retain employees, and attractiveness as an investment, business partner, acquiror or service provider could be negatively impacted.
Even if we experience no significant shutdown or no critical data is lost, obtained or misused in connection with an attack, the occurrence of such attack or the perception that we are vulnerable to such attacks may harm our reputation, degrade the user experience, cause loss of confidence in our products or result in financial harm to us.
Even if we experience no significant shutdown or no critical data is lost, obtained or misused in connection with an attack, the occurrence of such an attack or the perception that we are vulnerable to such attacks may harm our reputation, degrade the user experience, cause loss of confidence in our products or result in financial harm to us.
Changes to CDA 230 or new interpretations of its application, whether the result of legislative or judicial action, could also cause us to remove more content from our platform, particularly critical consumer commentary, in response to takedown demands that may or may not be legitimate, which would negatively affect the quality and quantity of information available through our service.
Changes to CDA 230 or new interpretations of its application, whether the result of legislative, administrative or judicial action, could also cause us to remove more content from our platform, particularly critical consumer commentary, in response to takedown demands that may or may not be legitimate, which would negatively affect the quality and quantity of information available through our service.
Our industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data, or to disrupt our ability to provide our services. Any failure to prevent or mitigate security breaches could expose us to the risk of loss or misuse of private user and business information, which could result in potential liability and litigation.
Our industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data, or to disrupt our ability to provide our services. Any failure to prevent or mitigate security breaches could expose us to the risk of loss or misuse of private user and business information, which could result in liability and litigation.
For example, there have been ongoing legislative efforts to restrict the scope of the critical liability protections afforded to online platforms like ours under CDA 230, which could increase our content moderation costs and our exposure to liability in connection with the publication of third-party content, including user-generated reviews.
For example, there have been ongoing efforts to restrict the scope of the critical liability protections afforded to online platforms like ours under CDA 230, which could increase our content moderation costs and our exposure to liability in connection with the publication of third-party content, including user-generated reviews.
In addition to the factors discussed in these Risk Factors and elsewhere in this Annual Report, factors that may cause volatility in our share price include: • the impact of the current adverse macroeconomic conditions, as well as the timing and pace of the recovery; • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operating and financial results; • actual or anticipated changes in our growth rate relative to our competitors; • repurchases of our common stock pursuant to our stock repurchase program, which could also cause our stock price to be higher that it would be in the absence of such a program and could potentially reduce the market liquidity for our stock; • announcements of changes in strategy; • announcements of technological innovations or new offerings by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; • additions or departures of key personnel; • actions of securities analysts who cover our company, such as publishing research or forecasts about our business (and our performance against such forecasts), changing the rating of our common stock or ceasing coverage of our company; • investor sentiment, including that of derivatives traders, with respect to us or our competitors, business partners and industry in general; • any disruption to the proper operation of our network infrastructure or compromise of our security measures; • any failure to maintain effective controls or difficulties encountered in their implementation or improvement; • reporting on our business by the financial media, including television, radio and press reports and blogs; • fluctuations in the value of companies perceived by investors to be comparable to us; • changes in the way we measure our key metrics; • sales of our common stock; • changes in laws or regulations applicable to our solutions; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; and 37 Table of Contents • general economic and market conditions such as recessions or interest rate changes.
In addition to the factors discussed in these Risk Factors and elsewhere in this Annual Report, factors that may cause volatility in our share price include: • the impact of the current adverse macroeconomic conditions, as well as the timing and pace of the recovery; • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operating and financial results; • actual or anticipated changes in our growth rate relative to our competitors; • repurchases of our common stock pursuant to our stock repurchase program, which could also cause our stock price to be higher that it would be in the absence of such a program and could potentially reduce the market liquidity for our stock; • announcements of changes in strategy; • announcements of technological innovations or new offerings by us or our competitors; 37 Table of Contents • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; • additions or departures of key personnel; • actions of securities analysts who cover our company, such as publishing research or forecasts about our business (and our performance against such forecasts), changing the rating of our common stock or ceasing coverage of our company; • investor sentiment, including that of derivatives traders, with respect to us or our competitors, business partners and industry in general; • any disruption to the proper operation of our network infrastructure or compromise of our security measures; • any failure to maintain effective controls or difficulties encountered in their implementation or improvement; • reporting on our business by the financial media, including television, radio and press reports and blogs; • fluctuations in the value of companies perceived by investors to be comparable to us; • changes in the way we measure our key metrics, such as our new methodology for measuring traffic to our website; • sales of our common stock; • changes in laws or regulations applicable to our solutions; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; and • general economic and market conditions such as recessions or interest rate changes.
Similarly, if application marketplaces change their policies — or interpretations of their policies — in a manner that adversely impacts the way in which we offer our services, or how we or our partners collect, use and share data from users, our ability to maintain and expand our base of advertisers will be harmed.
If application marketplaces change their policies — or interpretations of their policies — in a manner that adversely impacts the way in which we offer our services, or how we or our partners collect, use and share data from users, our ability to maintain and expand our base of advertisers will be harmed.
Uncertainty regarding the application and interpretation of existing laws and regulations due to court challenges or evolving legislation may also result in a significantly greater compliance burden for us.
Uncertainty regarding the application and interpretation of existing laws and regulations due to court challenges, evolving legislation or regulator interpretation may also result in a significantly greater compliance burden for us.
Responding to and resolving any future litigation, investigations, settlements or other regulatory actions may require significant time and resources, and could diminish confidence in, and the use of, our products.
Responding to and resolving any current or future litigation, investigations, settlements or other regulatory actions may require significant time and resources, and could diminish confidence in, and the use of, our products.
In addition to the other risk factors discussed in this section, factors that may contribute to the volatility of our operating results include: • the impact of macroeconomic conditions, including the current uncertain economic environment, as well as the resulting effect on consumer spending at local businesses and the level of advertising spending by local businesses; • changes in advertiser budgets or their ability to pay for our products, including due to the impact of adverse macroeconomic conditions; • changes in consumer behavior with respect to local businesses, including as a result of adverse macroeconomic conditions; • changes in the products we offer and the market acceptance of those products and online advertising solutions generally; • changes or updates to our business strategies; • changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition; • changes in the markets in which we operate, such as the wind down of our international sales and marketing operations to focus on our core markets of the United States and Canada; • cyclicality and seasonality, which has become more pronounced since we transitioned to non-term contracts and may become further pronounced as our growth rate slows; • the effects of changes in search engine placement and prominence; • the adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, such as the repeal of Internet neutrality regulations in the United States; • the success of our sales and marketing efforts; • adverse litigation judgments, settlements or other litigation-related costs, including the costs associated with investigating and defending claims; • interruptions in service and any related impact on our reputation; • changes in our tax rates or exposure to additional tax liabilities; • new accounting pronouncements or changes in existing accounting standards and practices; and • the effects of natural or man-made catastrophic events.
In addition to the other risk factors discussed in this section, factors that may contribute to the volatility of our operating results include: • the impact of macroeconomic conditions, including the current uncertain economic environment, as well as the resulting effect on consumer spending at local businesses and the level of advertising spending by local businesses; • changes in advertiser budgets or their ability to pay for our products, including due to the impact of adverse macroeconomic conditions; • changes in consumer behavior with respect to local businesses, such as increased demand for food delivery; • changes in the products we offer and the market acceptance of those products and online advertising solutions generally; • changes or updates to our business strategies; • changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition; • changes in the markets in which we operate, such as the wind down of our international sales and marketing operations to focus on our core markets of the United States and Canada; • cyclicality and seasonality, which has become more pronounced since we transitioned to non-term contracts and may become further pronounced as our growth rate slows; • the effects of changes in search engine placement and prominence; 30 Table of Contents • the adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, such as the repeal of Internet neutrality regulations in the United States; • the success of our sales and marketing efforts; • adverse litigation judgments, settlements or other litigation-related costs, including the costs associated with investigating and defending claims; • interruptions in service and any related impact on our reputation; • changes in our tax rates or exposure to additional tax liabilities; • new accounting pronouncements or changes in existing accounting standards and practices; and • the effects of natural or man-made catastrophic events.
If we fail to manage our hiring needs effectively, our efficiency and ability to meet our forecasts, as well as employee morale, productivity and retention, could suffer, and our business and operating results could be adversely affected. 21 Table of Contents We face intense competition in rapidly evolving markets, and expect competition to increase in the future.
If we fail to manage our hiring needs effectively, our efficiency and ability to meet our forecasts, as well as employee morale, productivity and retention, could suffer, and our business and operating results could be adversely affected. 20 Table of Contents We face intense competition in rapidly evolving markets, and expect competition to increase in the future.
Litigation may become necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others. For example, we may incur significant costs in enforcing our trademarks against those who attempt to imitate our “Yelp” brand.
Litigation may become necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others. For example, we may incur significant costs in enforcing our trademarks against those who attempt to imitate our “Yelp” brand and our copyrights against infringement.
For these and other reasons, the calculations of our desktop unique visitors and mobile website unique visitors may not accurately reflect the number of people actually visiting our website. We are continually seeking to improve our ability to measure these key metrics, and regularly review our processes to assess potential improvements to their accuracy.
For these and other reasons, the calculations of our desktop unique devices and mobile website unique devices may not accurately reflect the number of people actually visiting our website. We are continually seeking to improve our ability to measure these key metrics, and regularly review our processes to assess potential improvements to their accuracy.
It is not possible for us to predict the remaining duration of the current adverse macroeconomic conditions, or the duration or magnitude of the resulting adverse impact on our business. We expect that our business would continue to be significantly adversely affected for the duration of any recessionary period or protracted economic downturn.
It is not possible for us to predict the remaining duration of the current adverse macroeconomic conditions, or the duration or magnitude of the resulting adverse impact on our business. We expect that our business will continue to be significantly adversely affected for the duration of any recessionary period or protracted economic downturn.
Any of these or other factors could result in a reduction in demand for our products, which would negatively affect our revenue and operating results. 18 Table of Contents Our strategy to grow our business may not be successful and may expose us to additional risks.
Any of these or other factors could result in a reduction in demand for our products, which would negatively affect our revenue and operating results. 17 Table of Contents Our strategy to grow our business may not be successful and may expose us to additional risks.
For example, because our traffic metrics are based on users with unique identifiers, an individual who accesses our website from multiple devices with different identifiers may be counted as multiple unique visitors, and multiple individuals who access our website from a shared device with a single identifier may be counted as a single unique visitor.
For example, because our traffic metrics are based on users with unique identifiers, an individual who accesses our website from multiple devices with different identifiers may be counted as multiple unique devices, and multiple individuals who access our website from a shared device with a single identifier may be counted as a single unique device.
Any resulting negative publicity could adversely affect our reputation and brand, regardless of whether the internal resources expended and expenses incurred in connection with such inquiries and their resolutions are material. 36 Table of Contents The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.
Any resulting negative publicity could adversely affect our reputation and brand, regardless of whether the internal resources expended and expenses incurred in connection with such inquiries and their resolutions are material. The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.
We will continue to monitor the developments and assess any impacts on our long-term tax planning and consolidated financial statements. In addition, the taxing authorities in the United States and other jurisdictions where we do business regularly examine our income and other tax returns. The ultimate outcome of these examinations cannot be predicted with certainty.
We will continue to monitor the developments and assess any impacts on our long-term tax planning and consolidated financial statements. 34 Table of Contents In addition, the taxing authorities in the United States and other jurisdictions where we do business regularly examine our income and other tax returns. The ultimate outcome of these examinations cannot be predicted with certainty.
For example, laws in Germany may impose significant fines for failure to comply with certain content removal and disclosure obligations. If we elect or are compelled to remove content from our platform, our products and services may become less useful to consumers and our traffic may decline, which would have a negative impact on our business.
For example, laws in Germany may impose significant fines for failure to comply with certain content removal and disclosure obligations. If we elect or are compelled to remove content from our platform, our products and services may become less useful to consumers and our traffic may be harmed, which would have a negative impact on our business.
For example, our failure or perceived failure to comply with applicable laws and regulations may result, and in some cases has resulted, in inquiries and other proceedings and actions against us by governments, regulations or others.
For example, our failure or perceived failure to comply with applicable laws and regulations may result, and in some cases has resulted, in inquiries and other proceedings, lawsuits and actions against us by governments, regulators or others.
For example, competitors may use their substantial financial resources to secure positions as the default or exclusive option in web browsers, mobile devices or other potential sources of traffic and app downloads, as Alphabet Inc., the parent company of Google, pays for Google to be the default search engine in Apple’s Safari browser.
For example, competitors have used, and may in the future use, their substantial financial resources to secure positions as the default or exclusive option in web browsers, mobile devices or other potential sources of traffic and app downloads, as Alphabet Inc., the parent company of Google, pays for Google to be the default search engine in Apple’s Safari browser.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the New York Stock Exchange and other applicable securities rules and regulations.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the New York Stock Exchange LLC (“NYSE”) and other applicable securities rules and regulations.
Even if we were able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. 32 Table of Contents Additionally, the Credit Agreement utilizes Secured Overnight Financing Rate (“SOFR”) or various alternative methods to calculate the amount of accrued interest on any loans.
Even if we were able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. Additionally, the Credit Agreement utilizes Secured Overnight Financing Rate (“SOFR”) or various alternative methods to calculate the amount of accrued interest on any loans.
Moreover, our strategy to grow our business involves significant risks and executing on it may prove more difficult than we currently anticipate. 31 Table of Contents Our revenue has also been significantly negatively impacted as businesses reduced their advertising spending as a result of adverse macroeconomic conditions.
Moreover, our strategy to grow our business involves significant risks and executing on it may prove more difficult than we currently anticipate. Our revenue has also been significantly negatively impacted as businesses reduced their advertising spending as a result of adverse macroeconomic conditions.
We may also need to improve our operational, financial and management systems and processes to support our large and distributed workforce, which may require significant capital expenditures and allocation of valuable management and employee resources, as well as subject us to the risk of over-expanding our operating infrastructure.
We may also need to improve our operational, financial and management systems and processes to support our large and distributed workforce, which may require significant capital expenditures and allocation of valuable management and employee 22 Table of Contents resources, as well as subject us to the risk of over-expanding our operating infrastructure.
Although we use these systems and services in a manner designed to achieve high reliability and minimize risk, large-scale outages affecting our service providers could negatively impact our ability to maintain the full functionality of our systems. 27 Table of Contents • Catastrophic Occurrences .
Although we use these systems and services in a manner designed to achieve high reliability and minimize risk, large-scale outages affecting our service providers could negatively impact our ability to maintain the full functionality of our systems. • Catastrophic Occurrences .
We also cannot assure you that the value we ultimately derive from such traffic and downloads would exceed the cost of acquisition. 19 Table of Contents Other factors that could adversely affect our traffic and user engagement include, but are not limited to: • our reliance on Internet search engines ; • other adverse macroeconomic conditions and their negative impact on consumer spending at local businesses ; • if users have difficulty installing, updating or otherwise accessing our platform as a result of actions by us or third parties that we rely on to distribute our products, such as application marketplaces and device manufacturers ; • if users engage with other products, services or activities as an alternative to our platform; • if we fail to introduce new and improved products or features that users find engaging, or we introduce new products or features that do not effectively address consumer needs or otherwise alienate consumers; • the quantity and quality of the content contributed by our users, as well as the perceived distribution of such content across the categories of businesses on our platform ; • increasing competition in the market for information regarding local businesses ; • our ability to manage and prioritize information to ensure users are presented with content that is relevant and helpful to them, including through the effective operation of our automated recommendation software; • technical or other problems that negatively impact the availability and reliability of our platform or otherwise affect the user experience, including as a result of infrastructure performance problems and security breaches ; • if users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of the advertising we display; • the adoption of any laws or regulations that adversely affect the growth, popularity or use of our platform or the Internet in general, such as the repeal of Internet neutrality regulations in the United States; • any actions taken by companies with significant market power in the broadband and Internet marketplace that degrade, disrupt or increase the cost of user access to our products and services; and • if we do not maintain our brand image or our reputation is damaged .
Other factors that could adversely affect our traffic and user engagement include, but are not limited to: • our reliance on Internet search engines ; 18 Table of Contents • other adverse macroeconomic conditions and their negative impact on consumer spending at local businesses ; • if users have difficulty installing, updating or otherwise accessing our platform as a result of actions by us or third parties that we rely on to distribute our products, such as application marketplaces and device manufacturers ; • if users engage with other products, services or activities as an alternative to our platform; • if we fail to introduce new and improved products or features that users find engaging, or we introduce new products or features that do not effectively address consumer needs or otherwise alienate consumers; • the quantity and quality of the content contributed by our users, as well as the perceived distribution of such content across the categories of businesses on our platform ; • increasing competition in the market for information regarding local businesses ; • our ability to manage and prioritize information to ensure users are presented with content that is relevant and helpful to them, including through the effective operation of our automated recommendation software; • technical or other problems that negatively impact the availability and reliability of our platform or otherwise affect the user experience, including as a result of infrastructure performance problems and security breaches ; • if users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of the advertising we display; • the adoption of any laws or regulations that adversely affect the growth, popularity or use of our platform or the Internet in general, such as the repeal of Internet neutrality regulations in the United States; • any actions taken by companies with significant market power in the broadband and Internet marketplace that degrade, disrupt or increase the cost of user access to our products and services; and • if we do not maintain our brand image or our reputation is damaged .
For example, it can be difficult to train thousands of sales employees across multiple offices according to the same business standards, practices and laws, and we 23 Table of Contents have been the subject of lawsuits alleging that we have failed to do so.
For example, it can be difficult to train thousands of sales employees across multiple offices according to the same business standards, practices and laws, and we have been the subject of lawsuits alleging that we have failed to do so.
For example, in 2018, we discovered a software error that caused our 30 Table of Contents previously reported claimed local business locations metric to be overstated for the third quarter of 2017 through the first quarter of 2018, and revised them accordingly.
For example, in 2018, we discovered a software error that caused our previously reported claimed local business locations metric to be overstated for the third quarter of 2017 through the first quarter of 2018, and revised them accordingly.
We are subject to numerous domestic and foreign laws and regulations that involve matters central to our business, including laws regarding privacy, data protection, data security, user-generated content and consumer protection, among others, as described in more detail under the section titled “ Business—Government Regulation .” For example, we are subject to numerous laws around the world that restrict the collection, use, storing, processing and disclosure of personal information and other user data.
We and the third parties with whom we work are subject to numerous domestic and foreign laws and regulations that involve matters central to our business, including laws regarding privacy, data protection, data security, user-generated content and consumer protection, among others, as described in more detail under the section titled “ Business—Government Regulation .” For example, we are subject to numerous laws around the world that restrict the collection, use, storing, processing and disclosure of personal information and other user data.
If we lose the ability to use a domain name, whether due to trademark claims, failure to renew the applicable registration or any other cause, we may be forced to market our products under a new domain name, which could cause us substantial harm or cause us to incur significant 29 Table of Contents expense in order to purchase rights to the domain name in question.
If we lose the ability to use a domain name, whether due to trademark claims, failure to renew the applicable registration or any other cause, we may be forced to market our products under a new domain name, which could cause us substantial harm or cause us to incur significant expense in order to purchase rights to the domain name in question.
We operate in a rapidly evolving industry, and many laws and regulations that impact our business are being proposed, are still evolving or are being tested in courts, which adds to the complexity of operating our business.
We operate in 35 Table of Contents a rapidly evolving industry, and many laws and regulations that impact our business are being proposed, are still evolving or are being tested in courts, which adds to the complexity of operating our business.
Our business could be adversely affected if we are required to change our current policies, practices or the design of our platform, products or features based on new laws, regulations or judicial interpretations. For example, the European Union recently enacted the Digital Services Act (“DSA”), which includes extensive new obligations for online platforms related to content moderation and transparency.
Our business could be adversely affected if we are required to change our current policies, practices or the design of our platform, products or features based on new laws, regulations or judicial interpretations. For example, in 2022, the European Union enacted the Digital Services Act (“DSA”), which included extensive new obligations for online platforms related to content moderation and transparency.
Similarly, regulatory frameworks for privacy issues and behavioral advertising are currently in flux worldwide and are trending toward more restrictive obligations.
Regulatory frameworks for privacy issues and behavioral advertising are also currently in flux worldwide and are trending toward more restrictive obligations.
In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation and bylaws.
In such instance, we 39 Table of Contents would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation and bylaws.
For example, we do not phase out or remove dated reviews, and consumers may view older reviews as less relevant or reliable than more recent reviews.
Similarly, we do not phase out or remove dated reviews, and consumers may view older reviews as less relevant or reliable than more recent reviews.
For example, 35 Table of Contents in addition to giving residents expansive rights related to their personal information, various state privacy laws restrict the “sale” of personal information, allow users to opt out of targeted advertising and, in certain states, require the adoption of universal opt-out signals for targeted advertising and the sale of data.
For example, in addition to giving residents expansive rights related to their personal information, various state privacy laws govern the “sale” of personal information, allow users to opt out of targeted advertising and, in certain states, require the adoption of universal opt-out signals for targeted advertising and the sale of data.
Aspects of the DSA and other new and emerging laws concerning content moderation and transparency, including in the United States, remain unclear and we may be required to modify our policies and practices further in an effort to comply with them.
Aspects of the DSA, OSA and other new and emerging laws concerning content moderation and transparency, including at the state and federal levels in the United States, remain unclear and we may be required to modify our policies and practices further in an effort to comply with them.
Although our revenues have grown over time, increasing from $12.1 million in 2008 to $1.34 billion in 2023, our revenue growth rate has declined in certain recent periods as a result of a variety of factors, including the maturation of our business.
Although our revenues have grown over time, increasing from $12.1 million in 2008 to $1.41 billion in 2024, our revenue growth rate has declined in recent periods as a result of a variety of factors, including the maturation of our business.
We cannot assure you that these investments will be successful. Even if we are able to integrate the operations of any acquired company successfully, we may not realize the full benefits of synergies, cost savings, innovation and operational efficiencies that may be possible from the transaction, or we may not achieve these benefits within a reasonable period of time.
Even if we are able to integrate the operations of any acquired company successfully, we may not realize the full benefits of synergies, cost savings, innovation and operational efficiencies that may be possible from the transaction, or we may not achieve these benefits within a reasonable period of time.
Failure to address these risks and difficulties adequately could harm our business and cause our operating results to suffer. If we default on our credit obligations, our business, revenue and financial results could be harmed.
Failure to address these risks and difficulties adequately could harm our business and cause our operating results to suffer. 32 Table of Contents If we default on our credit obligations, our business, revenue and financial results could be harmed.
The DSA introduces “trusted flaggers” with rights to expedited decisions on the reports they make to platforms, mandates an appeals process for content moderation decisions and gives consumers the right to challenge those decisions with out-of-court settlement bodies. Fines for failing to comply with the DSA can reach 6% of worldwide annual turnover.
The DSA introduced “trusted flaggers” with rights to expedited decisions on the reports they make to platforms, mandated an appeals process for content moderation decisions and gave consumers the right to challenge those decisions with out-of-court settlement bodies. Fines for failing to comply with the DSA can reach 6% of worldwide annual turnover.
Our competitors may enjoy competitive advantages, such as greater name recognition, longer operating histories, substantially greater market share, large existing user bases and substantially greater financial, technical and other resources.
Some of our competitors enjoy certain competitive advantages, such as greater name recognition, longer operating histories, substantially greater market share, large existing user bases and substantially greater financial, technical and other resources.
Since we implemented our stock repurchase program in July 2017, our Board has authorized the repurchase of up to an aggregate of $1.95 billion of our common stock, of which $554.7 million remained available as of February 20, 2024 and which does not have an expiration date.
Since we implemented our stock repurchase program in July 2017, our Board has authorized the repurchase of up to an aggregate of $1.95 billion of our common stock, of which $304.7 million remained available as of February 18, 2025 and which does not have an expiration date.
Although none of the disruptions we have experienced to date have had a material effect on our business, any future disruptions could lead to interruptions, delays or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or other confidential information.
Although none of the disruptions we have experienced to date have had a material impact on our business, any future disruptions could lead to interruptions, delays or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personal information or confidential information.
Furthermore, the stock markets have recently experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In some cases, these fluctuations often have been unrelated or disproportionate to the operating performance of those companies.
Furthermore, in recent periods of macroeconomic uncertainty, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In some cases, these fluctuations have been unrelated or disproportionate to the operating performance of those companies.
Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and operating results. Some of our products contain open source software or incorporate AI, each of which may pose particular risks to our business.
Any litigation of this nature, regardless of outcome or merit, 29 Table of Contents could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and operating results. Some of our products contain open source software, each of which may pose particular risks to our proprietary software and solutions.
We are also increasingly incorporating AI and AI-generated content into our platform, products and services, including using it to recommend relevant content to our users, summarize content and enhance our advertising products and systems, among other things.
We are increasingly incorporating AI and AI-generated content into our platform, products and services, including using it to recommend relevant content to our users, facilitate transactions, summarize content, and enhance our advertising products and systems, among other uses.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our Board to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our Board, the Chair of our Board or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our Board; • prohibit cumulative voting in the election of directors; • provide that vacancies on our Board may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our Board or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws and certain provisions of our amended and restated certificate of incorporation. 38 Table of Contents These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board, which is responsible for appointing the members of our management.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our Board to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our Board, the Chair of our Board or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our Board; • prohibit cumulative voting in the election of directors; • provide that vacancies on our Board may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our Board or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws and certain provisions of our amended and restated certificate of incorporation.
Adverse macroeconomic conditions may make this more difficult, particularly when such macroeconomic conditions disproportionately affect the SMBs on which we rely, as was the case with the economic impact of the COVID-19 pandemic. Many businesses 17 Table of Contents continue to face supply chain issues, rising commodity prices, and inventory and labor shortages.
Adverse macroeconomic conditions may make this more difficult, particularly when such macroeconomic conditions disproportionately affect the SMBs on which we rely, as was the case with the economic impact of the COVID-19 pandemic. Many businesses continue to face supply chain issues, inflation, inventory and labor shortages, and an increased cost of labor.
For example, new products may fail to generate sufficient revenue, operating margin or other value to justify the investments we made in them, which is a particular risk for new products that are unproven or that are outside of our historical core business.
For example, new products may fail to generate sufficient revenue, operating margin or other value to justify the investments we made in them, which is a particular risk for new products that are unproven or that are outside of our historical core business. We will also face industry challenges to our strategic focus on our Services business.
For example, we phased out our brand advertising products in part because demand in the brand advertising market shifted toward products disruptive to the consumer experience. Any decisions we make that prioritize consumers may 26 Table of Contents negatively impact our relationship with existing or prospective advertisers.
For example, in 2015, we phased out the brand advertising products we offered at that time in part because demand in the brand advertising market had shifted toward products disruptive to the consumer experience. Any decisions we make that prioritize consumers may negatively impact our relationship with existing or prospective advertisers.
Furthermore, taxing authorities in various jurisdictions worldwide have enacted or proposed new tax laws, rules and regulations directed at taxing the digital economy and multinational entities.
Furthermore, taxing authorities in various U.S. states as well as other jurisdictions worldwide have enacted or proposed new tax laws, rules and regulations directed at taxing the digital economy and multinational entities.
In addition, we have historically relied on the integration of our content into Apple Maps to drive a significant amount of traffic to our website and downloads of our application.
In addition, we have historically benefited from the integration of our content into Apple Maps driving a significant amount of traffic to our website and downloads of our application.
Our business is subject to complex and evolving domestic and foreign laws, regulations and other obligations related to privacy, data protection, data security and other matters. Our actual or perceived failure to comply with such laws, regulations and obligations could harm our business.
Our business is subject to complex and evolving domestic and foreign laws, regulations and other obligations related to privacy, data protection, data security and other matters. Our actual or perceived failure to comply with such laws, regulations and obligations (or that of the third parties with whom we work) could harm our business.
If our security measures are compromised, or if our platform is subject to attacks that degrade or deny the ability of users to access our content, users may curtail or stop use of our platform.
If our security measures, or those of the third parties with whom we work, are compromised, or if our platform is subject to attacks that degrade or deny the ability of users to access our content, users may curtail or stop use of our platform.
For example, in 2023 economic uncertainty and inflationary pressures, as well as concerns related to severe weather and the prevalence of respiratory illnesses, contributed to consumer use of our mobile app and web traffic to our platform remaining below pre-pandemic 2019 levels. This impact was particularly pronounced in certain geographies within the United States and in our RR&O categories.
For example, in 2024, economic uncertainty and inflationary pressures contributed to consumer use of our mobile app and web traffic to our platform remaining below pre-pandemic 2019 levels. This impact was particularly pronounced in certain geographies within the United States and in our RR&O categories.
We cannot assure you that the value we ultimately derive from any such additional traffic would exceed the cost of acquisition, and the resulting increase in marketing expense may in turn harm our operating results.
If they fail to drive sufficient traffic to our platform, we may need to increase our marketing spend to acquire additional traffic. We cannot assure you that the value we ultimately derive from any such additional traffic would exceed the cost of acquisition, and the resulting increase in marketing expense may in turn harm our operating results.
In addition, certain rights related to AI technologies and AI-generated content, including those granted under copyright laws, have not been fully addressed by U.S. courts or by federal or state laws or regulations.
In addition, certain legal issues related to use of AI technologies and AI-generated content, including issues arising under copyright law, have not been fully addressed by U.S. courts or by federal or state laws or regulations.
Any future debt financing we secure could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all.
Any future debt financing we secure could involve restrictive covenants relating to our capital raising 33 Table of Contents activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
These conditions have had , and may continue to have, a significant adverse impact on our business and revenue; for example, we believe these macroeconomic pressures were responsible for weakness in advertiser demand in our RR&O categories in the second half of December 2023 and into 2024.
These conditions have had , and may continue to have, a significant adverse impact on our business and revenue; for example, we believe these macroeconomic pressures have been responsible for the weakness in advertiser demand in our RR&O categories we have been 16 Table of Contents experiencing since late December 2023.
If we do not comply with these requirements, which these third parties generally retain discretion to interpret, we could lose access to such products and services, which would harm our business. We also publish privacy policies, marketing materials and other statements, such as compliance with certain third-party certifications, regarding data privacy and security.
While we believe we comply with these requirements, these third parties generally retain discretion to interpret them and may discontinue our access to such products and services, which would harm 36 Table of Contents our business. We also publish privacy policies, marketing materials and other statements, such as compliance with certain third-party certifications, regarding data privacy and security.
For example, Apple has made certain changes to its products and data use policies in connection with changes to its iOS operating system that reduce our ability to target and measure advertising across third-party platforms. Key web browsers, including Chrome, Safari and Firefox, have also indicated that they will no longer support third-party tracking cookies by the end of 2024.
For example, Apple has made certain changes to its products and data use policies in connection with changes to its iOS operating system that reduce our ability to target and measure advertising across third-party platforms. Key web browsers, including Safari and Firefox, disable certain third-party tracking cookies by default.
In addition, government authorities could also initiate legal or regulatory actions against us in connection with such incidents, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices. 28 Table of Contents Failure to protect or enforce our intellectual property rights could harm our business and results of operations.
In addition, government authorities could also initiate legal or regulatory actions against us in connection with such incidents, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices.
We cannot guarantee that any resulting increase in demand for our products or improvement in retention will offset lower prices or otherwise generate sufficient revenue to justify our investments. Our plans to leverage advanced technologies such as AI to drive advertiser value and consumer engagement also pose particular risks to our business.
We cannot guarantee that any resulting increase in demand for our products or improvement in retention will offset lower prices or otherwise generate sufficient revenue to justify our investments. Our plans to leverage AI in our product initiatives and business operations also pose particular risks to our business , as further detailed below.
However, the volume of traffic and app downloads has declined following certain changes to the display of our content in Apple Maps and we expect it to continue to decline over time.
However, the volume of traffic and app downloads from this source has declined following certain changes to the display of our content in Apple Maps and it may continue to decline in the future.
Although we take steps to exclude such activity and, as a result, do not believe it has had a material impact on our reported metrics, our efforts may not successfully account for all such activity.
Although we take steps to exclude such activity and, as a result, do not believe it has had a material impact on our reported metrics, our efforts may not successfully account for all such activity. There are also inherent challenges in measuring usage across our large user base.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business may be harmed. We may have exposure to greater than anticipated tax liabilities.
We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business may be harmed.
In some instances, 34 Table of Contents we may elect or be compelled to remove the content that is the subject of such claims, or may be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims.
We expect claims like these to continue, and potentially increase in proportion to the amount of content on our platform. In some instances, we may elect or be compelled to remove the content that is the subject of such claims, or may be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims.
You should not rely on the revenue growth of any prior quarterly or annual period, or the net income we realize in certain periods, as an indication of our future performance.
Our failure to achieve an adequate growth rate will adversely affect our business and results of operations. You should not rely on the revenue growth of any prior quarterly or annual period, or the net income we realize in certain periods, as an indication of our future performance.
Whether or not our trademark applications are denied, third parties may claim that our trademarks infringe their rights. As a result, we could be forced to pay significant settlement costs or cease the use of these trademarks and associated elements of our brand. Doing so could harm our brand recognition and adversely affect our business.
As a result, we could be forced to pay significant settlement costs or cease the use of these trademarks and associated elements of our brand. Doing so could harm our brand recognition and adversely affect our business.
Although we have developed systems and processes that are designed to protect our data and prevent data loss and other security breaches, the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, often are not recognized until launched against a target or long after, and may originate from less regulated and more remote areas around the world.
Although we have developed systems and processes that are designed to protect our data and prevent data loss and other security breaches, the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, often are not recognized until launched against a target or long after, and may originate from sources that cannot be meaningfully deterred or prosecuted, such as sophisticated nation states and nation-state-supported actors.
In addition, our processes and controls may not comply with evolving standards for identifying, measuring and reporting ESG metrics, including ESG-related disclosures that may be required of public companies by the SEC and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals or ability to achieve such goals in the future.
In addition, our processes and controls may not comply with evolving standards for identifying, measuring and reporting ESG metrics, including ESG-related disclosures that may be required of businesses of our size by regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals or ability to achieve such goals in the future. 26 Table of Contents Risks Related to Our Technology and Intellectual Property Our business is dependent on the uninterrupted and proper operation of our technology and network infrastructure.
Search engines have made changes in the past to their ranking algorithms, methodologies and design layouts that have reduced the prominence of links to our platform and negatively impacted our traffic, and we expect they will continue to make such changes from time to time in the future. 20 Table of Contents We may not know how or otherwise be in a position to influence search results or our treatment in application marketplaces.
Search engines have made changes in the past to their ranking algorithms, methodologies and design layouts that have reduced the prominence of links to our platform and negatively impacted our traffic, and we expect they will continue to make such changes from time to time in the future.
For example, users may be unwilling to contribute content as a result of concerns that they may be harassed or sued by the businesses they review, instances of which have occurred in the past and may occur again in the future. 24 Table of Contents Consumers also may not find the content on our platform to be valuable if they do not perceive it as relevant, helpful or reliable.
For example, users may be unwilling to contribute content as a result 23 Table of Contents of concerns that they may be harassed or sued by the businesses they review, instances of which have occurred in the past and may occur again in the future.
This may divert the attention of our management and employees from other aspects of our business operations, and there can be no assurance that we will be able to continue to realize the intended benefits of any given partnership.
This may divert the attention of our management and employees from other aspects of our business operations, and there can be no assurance that we will be able to continue to realize the intended benefits of any given partnership. 21 Table of Contents It is possible that third-party providers and strategic partners may not be able to devote the resources we expect to the relationships.
The pursuit of potential future acquisitions or investments may divert the attention of management and in many cases causes us to incur expenses in identifying, investigating and pursuing transactions, whether or not they are consummated. Acquisitions that are consummated could result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our results of operations.
The pursuit of potential future acquisitions or investments may divert the attention of management and in many cases causes us to incur expenses in identifying, investigating and pursuing transactions, whether or not they are consummated.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see the section titled “ Risk Factors — If our security measures are compromised, or if our platform is subject to attacks that degrade or deny the ability of users to access our content, users may curtail or stop use of our platform. ” 40 Table of Contents Governance Our Board oversees the Company’s aggregate risk profile and risk management process.
Biggest changeFor a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see the section titled “ Risk Factors—If our security measures are compromised, or if our platform is subject to attacks that degrade or deny the ability of users to access our content, users may curtail or stop use of our platform. ” 41 Table of Contents Governance Our Board oversees the Company’s aggregate risk profile and risk management process.
Our Chief Technology Officer and members of the Engineering Security team typically meet twice annually with the Audit Committee to review the Company’s significant cybersecurity threats and risks, as well as the processes the Company has implemented to address them. The Chair of the Audit Committee, in turn, reports to the full Board.
Our Chief Technology Officer and members of the Engineering Security team typically meet bi-annually with the Audit Committee to review the Company’s significant cybersecurity threats and risks, as well as the processes the Company has implemented to address them. The Chair of the Audit Committee, in turn, reports to the full Board.
Item 1C. Cybersecurity. Risk Management and Strategy Computer viruses, malware, phishing attacks, denial-of-service attacks and similar cybersecurity threats present a common and constantly evolving risk in our industry. Accordingly, we have incorporated the assessment and management of material risks from cybersecurity threats into our overall risk management process.
Item 1C. Cybersecurity. Risk Management and Strategy Computer viruses, malware, phishing attacks, denial-of-service attacks and other cybersecurity threats present a common and constantly evolving risk in our industry. Accordingly, we have incorporated the assessment and management of material risks from cybersecurity threats into our overall risk management process.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal executive offices in North America are currently located at 350 Mission Street, San Francisco, California, where we lease office space pursuant to a lease agreement that expires in 2030. We also lease office space in Canada and Europe.
Biggest changeItem 2. Properties. Our principal executive offices in North America are currently located at 350 Mission Street, San Francisco, California, where we lease office space pursuant to a lease agreement that expires in 2030 and includes an option for early termination in 2028 that we are reasonably certain to exercise. We also lease office space in Canada and Europe.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough the results of litigation and claims cannot be predicted with certainty, we currently do not believe that the final outcome of any of these matters will have a material effect on our business, financial position, results of operations or cash flows. Item 4. Mine Safety Disclosures. Not applicable. 41 Table of Contents PART II
Biggest changeAlthough the results of litigation and claims cannot be predicted with certainty, we currently do not believe that the final outcome of any of these matters will have a material effect on our business, financial position, results of operations or cash flows. 42 Item 4. Mine Safety Disclosures. Not applicable. 43 Table of Contents PART II
Item 3. Legal Proceedings. For information regarding material legal proceedings in which we are involved, see “Legal Proceedings” in Note 13, “ Commitments and Contingencies ,” of the Notes to Consolidated Financial Statements included in this Annual Report, which is incorporated herein by reference. We are also subject to legal proceedings arising in the ordinary course of business.
Item 3. Legal Proceedings. For information regarding material legal proceedings in which we are involved, see “Legal Proceedings” in Note 14, “ Commitments and Contingencies ,” of the Notes to Consolidated Financial Statements included in this Annual Report, which is incorporated herein by reference. We are also subject to legal proceedings arising in the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table summarizes our stock repurchase activity for the three months ended December 31, 2023 (in thousands except for price per share): Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program October 1 - October 31, 2023 596 $ 42.34 596 $ 106,423 November 1 - November 30, 2023 208 $ 44.60 208 $ 97,159 December 1 - December 31, 2023 342 $ 45.35 342 $ 81,659 (1) Between its initial authorization in July 2017 and November 2022, our Board authorized us to repurchase up to an aggregate of $1.45 billion of our outstanding common stock.
Biggest changeIssuer Purchases of Equity Securities The following table summarizes our stock repurchase activity for the three months ended December 31, 2024 (in thousands except for price per share): Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program October 1 - October 31, 2024 739 $ 34.29 739 $ 367,919 November 1 - November 30, 2024 234 $ 36.21 234 $ 359,449 December 1 - December 31, 2024 734 $ 39.07 734 $ 330,759 (1) Since the initial authorization of our stock repurchase program in July 2017, our Board has authorized us to repurchase up to an aggregate of $1.95 billion of our outstanding common stock, including $500.0 million authorized on February 13, 2024, of which $304.7 million remained available for future repurchases on February 18, 2025.
The information under “Performance Graph” is not deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act, and is not to be incorporated by reference in any 42 Table of Contents filing of Yelp under the Securities Act or the Exchange Act, whether made before or after the date of this Annual Report and irrespective of any general incorporation language in those filings.
The information under “Performance Graph” is not deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act, and is not to be incorporated by reference in any 44 Table of Contents filing of Yelp under the Securities Act or the Exchange Act, whether made before or after the date of this Annual Report and irrespective of any general incorporation language in those filings.
Performance Graph We have presented below the cumulative total return to our stockholders during the period from December 31, 2018 through December 31, 2023 in comparison to the NYSE Composite Index and NYSE Arca Tech 100 Index.
Performance Graph We have presented below the cumulative total return to our stockholders during the period from December 31, 2019 through December 31, 2024 in comparison to the NYSE Composite Index and NYSE Arca Tech 100 Index.
Market Information Our common stock, par value $0.000001 per share, is listed on the New York Stock Exchange LLC (“NYSE”) under the symbol “YELP.” Stockholders As of the close of business on February 20, 2024, there were 31 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock, par value $0.000001 per share, is listed on the NYSE under the symbol “YELP.” Stockholders As of the close of business on February 18, 2025, there were 32 stockholders of record of our common stock.
The actual timing and amount of repurchases depend on a variety of factors, including liquidity, cash flow and market conditions. See the section titled “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Stock Repurchase Program .” (2) Average price paid per share includes costs associated with the repurchases.
See the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Stock Repurchase Program .” (2) Average price paid per share includes costs associated with the repurchases but excludes the 1% excise tax accrued on our share repurchases, net of shares issued, as a result of the Inflation Reduction Act of 2022.
Removed
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Added
The actual timing and amount of repurchases depend on a variety of factors, including liquidity, cash flow and market conditions.
Removed
On February 13, 2024, our Board authorized a $500.0 million increase to our stock repurchase program, bringing the total amount of repurchases authorized under our stock repurchase program since its inception to $1.95 billion. We repurchased $27.0 million of shares subsequent to December 31, 2023, resulting in approximately $554.7 million remaining available for future repurchases on February 20, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2023 2022 $ Change % Change (1) Consolidated Statements of Operations Data: Net revenue by product: Advertising revenue by category: Services $ 793,112 $ 693,810 $ 99,302 14 % Restaurants, Retail & Other 483,406 440,593 42,813 10 % Advertising 1,276,518 1,134,403 142,115 13 % Transactions 13,008 14,063 (1,055) (8) % Other 47,536 45,040 2,496 6 % Total net revenue 1,337,062 1,193,506 143,556 12 % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) 114,229 105,705 8,524 8 % Sales and marketing 556,605 514,927 41,678 8 % Product development 332,570 305,561 27,009 9 % General and administrative 212,431 164,108 48,323 29 % Depreciation and amortization 42,184 44,852 (2,668) (6) % Total costs and expenses 1,258,019 1,135,153 122,866 11 % Income from operations 79,043 58,353 20,690 35 % Other income, net 26,039 8,425 17,614 209 % Income before income taxes 105,082 66,778 38,304 57 % Provision for income taxes 5,909 30,431 (24,522) (81) % Net income attributable to common stockholders $ 99,173 $ 36,347 $ 62,826 173 % (1) Percentage changes are calculated based on rounded numbers and may not recalculate exactly due to rounding.
Biggest changeYear Ended December 31, 2024 2023 $ Change % Change (1) Consolidated Statements of Operations Data: Net revenue by product: Advertising revenue by category: Services $ 879,092 $ 793,112 $ 85,980 11 % Restaurants, Retail & Other 469,928 483,406 (13,478) (3) % Advertising 1,349,020 1,276,518 72,502 6 % Other (2) 63,044 60,544 2,500 4 % Total net revenue 1,412,064 1,337,062 75,002 6 % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) 123,684 114,229 9,455 8 % Sales and marketing 585,978 556,605 29,373 5 % Product development 325,992 332,570 (6,578) (2) % General and administrative 184,958 212,431 (27,473) (13) % Depreciation and amortization 40,407 42,184 (1,777) (4) % Total costs and expenses 1,261,019 1,258,019 3,000 — % Income from operations 151,045 79,043 72,002 91 % Other income, net 31,915 26,039 5,876 23 % Income before income taxes 182,960 105,082 77,878 74 % Provision for income taxes 50,110 5,909 44,201 748 % Net income attributable to common stockholders $ 132,850 $ 99,173 $ 33,677 34 % (1) Percentage changes are calculated based on rounded numbers and may not recalculate exactly due to rounding.
We may be required to draw down funds from our revolving credit facility or seek additional funds through equity or debt financings to respond to business challenges associated with the uncertain macroeconomic environment or other challenges, including the need to develop new features and products or enhance existing services, improve our operating infrastructure or acquire complementary businesses and technologies.
We may be required to draw down funds from our credit facility or seek additional funds through equity or debt financings to respond to business challenges associated with the uncertain macroeconomic environment or other challenges, including the need to develop new features and products or enhance existing services, improve our operating infrastructure or acquire complementary businesses and technologies.
The 2023 credit facility includes a $25.0 million letter of credit sub-limit, a $25.0 million bilateral letter of credit facility and an accordion option, which, if exercised, would allow us to increase the aggregate commitments by up to $250.0 million, plus additional amounts if we are able to satisfy a leverage test, subject to certain conditions.
The credit facility includes a $25.0 million letter of credit sub-limit, a $25.0 million bilateral letter of credit facility and an accordion option, which, if exercised, would allow us to increase the aggregate commitments by up to $250.0 million, plus additional amounts if we are able to satisfy a leverage test, subject to certain conditions.
We may not realize 46 Table of Contents the full benefits of synergies, innovation and operational efficiencies that may be possible from a corporate transaction; similarly, if our relationships with partners deteriorate, we could suffer increased costs and delays in our ability to provide consumers and advertisers with our content or services. Seasonality .
We may not realize the full 48 Table of Contents benefits of synergies, innovation and operational efficiencies that may be possible from a corporate transaction; similarly, if our relationships with partners deteriorate, we could suffer increased costs and delays in our ability to provide consumers and advertisers with our content or services. Seasonality .
Some of these limitations are: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us; • adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation; • adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as material litigation settlements, impairment charges and fees related to shareholder activism; 54 Table of Contents • free cash flow does not represent the total residual cash flow available for discretionary purposes because it does not reflect our contractual commitments or obligations; and • other companies, including those in our industry, may calculate adjusted EBITDA and free cash flow differently, which reduces their usefulness as comparative measures.
Some of these limitations are: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us; • adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation; • adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as material litigation settlements, impairment charges, acquisition and integration costs, and fees related to shareholder activism; • free cash flow does not represent the total residual cash flow available for discretionary purposes because it does not reflect our contractual commitments or obligations; and • other companies, including those in our industry, may calculate adjusted EBITDA and free cash flow differently, which reduces their usefulness as comparative measures.
We also expect that our revenue will grow year over year in 2024 as our initiatives gain traction; however, we expect revenue in the first quarter of 2024 to be slightly down sequentially, reflecting seasonal trends and the macroeconomic challenges facing our RR&O categories. Factors Affecting Our Performance Macroeconomic Conditions .
We also expect that our revenue will grow year over year in 2025 as our initiatives gain traction; however, we expect revenue in the first quarter of 2025 to be slightly down sequentially, reflecting seasonal trends and the macroeconomic challenges facing our RR&O categories. Factors Affecting Our Performance Macroeconomic Conditions .
A full discussion of 2021 items and year-over-year comparisons between 2022 and 2021 can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.
A full discussion of 2022 items and year-over-year comparisons between 2023 and 2022 can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.
The 2023 credit facility provides us with the ability to access backup liquidity to fund working capital and for other capital requirements, as needed. As of December 31, 2023, we were in compliance with all covenants and there were no loans outstanding under the 2023 credit facility.
The credit facility provides us with the ability to access backup liquidity to fund working capital and for other capital requirements, as needed. As of December 31, 2024, we were in compliance with all covenants and there were no loans outstanding under the credit facility.
We believe that our existing cash, cash equivalents and marketable securities, together with any cash generated from operations, will be sufficient to meet our material cash requirements in the next 12 months and beyond, including: working capital requirements; our anticipated repurchases of common stock pursuant to our stock repurchase program; payment of taxes related to the net share settlement of equity awards; payment of lease costs related to our operating leases; the potential payment of a higher amount of income taxes in 2024 and beyond due to, among other things, the requirement to capitalize and amortize certain research and development expenses under the Tax Act and the other factors discussed in “ —Results of Operations— Provision for Income Taxes ” above; and purchases of property, equipment and 56 Table of Contents software and website hosting services.
We believe that our existing cash, cash equivalents and marketable securities, together with any cash generated from operations, will be sufficient to meet our material cash requirements in the next 12 months and beyond, including: working capital requirements; our anticipated repurchases of common stock pursuant to our stock repurchase program; payment of taxes related to the net share settlement of equity awards; payment of lease costs related to our operating leases; the potential payment of a higher amount of income taxes in 2025 and beyond due to, among other things, the requirement to capitalize and amortize certain research and development expenses under the Tax Act and the other factors discussed in “ —Results of Operations— Provision for Income Taxes ” above; and purchases of property, equipment and software and website hosting services.
Consumers trust us for the more than 260 million ratings and reviews available on our platform of businesses across a broad range of categories, while businesses advertise with us to reach our large audience of purchase-oriented and generally affluent consumers.
Consumers trust us for the more than 280 million ratings and reviews available on our platform of businesses across a broad range of categories, while businesses advertise with us to reach our large audience of purchase-oriented and generally affluent consumers.
We believe our decision to maintain distributed operations will provide even greater flexibility to our employees, who now have the opportunity to relocate within the countries where we operate so they can live where they want to live and work where they will feel most effective, and will allow us to access and attract great talent from a more diverse pool of candidates across North America and Europe.
We believe our decision to maintain distributed operations will provide even greater flexibility to our employees, who now have the opportunity to relocate within the countries where we operate so they can live where they want to live and work where they will feel most effective, and will allow us to access and attract great talent from a wider pool of candidates across North America and Europe.
We expect cost of revenue to increase on an absolute dollar basis in 2024 compared to 2023. Sales and Marketing. Our sales and marketing expenses primarily consist of employee costs (including sales commission and stock-based compensation expenses) for our sales and marketing employees.
We expect cost of revenue to increase on an absolute dollar basis in 2025 compared to 2024. Sales and Marketing. Our sales and marketing expenses primarily consist of employee costs (including sales commission and stock-based compensation expenses) for our sales and marketing employees.
For further information on these and our other significant accounting estimates, see Note 2, “ Summary of Significant Accounting Policies , ” of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report. Revenue Recognition —We generate revenue from the sale of advertising products, transactions with consumers and other revenue sources, which correspond to our major product lines.
For further information on these and our other significant accounting estimates, see Note 2, “ Summary of Significant Accounting Policies ,” of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report. Revenue Recognition —We generate revenue from the sale of advertising products and other revenue sources, which correspond to our major product lines.
The cost of capital associated with any additional funds sought in the future might be adversely impacted by the effects of macroeconomic conditions on our business. Additionally, amounts deposited with third-party financial institutions exceed the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits, as applicable.
The cost of capital associated with any additional funds sought in the future might be adversely impacted by the effects of macroeconomic conditions on our business. Additionally, amounts deposited with third-party financial institutions exceed the 59 Table of Contents Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits, as applicable.
Looking ahead, we see further opportunities to build upon the success of these strategic initiatives and deliver even more value to both consumers and advertisers by investing in our 2024 strategic initiatives.
Looking ahead, we see further opportunities to build upon the success of these strategic initiatives and deliver even more value to both consumers and advertisers by investing in our 2025 strategic initiatives.
However, this estimate is based on a number of assumptions that may prove to be materially different and we could fully utilize our available cash, cash equivalents and marketable securities earlier than presently anticipated . We are not able to reasonably estimate the timing of future cash flows related to $35.4 million of uncertain tax positions.
However, this estimate is based on a number of assumptions that may prove to be materially different and we could fully utilize our available cash, cash equivalents and marketable securities earlier than presently anticipated . We are not able to reasonably estimate the timing of future cash flows related to $44.0 million of uncertain tax positions.
We generate revenue from various transactions with consumers, primarily through our partnership integrations, which are mainly revenue-sharing arrangements that provide consumers with the ability to place food orders for pickup and delivery through third parties directly on Yelp.
We generate revenue from such transactions through our partnership integrations, which are mainly revenue-sharing arrangements that provide consumers with the ability to place food orders for pickup and delivery through third parties directly on Yelp.
Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance may be required to reduce our DTAs, which would materially increase our expenses in the period in which we recognize the allowance and have a materially adverse impact on our consolidated financial statements.
Therefore, unless we are able to 56 Table of Contents generate sufficient taxable income from our operations, a substantial valuation allowance may be required to reduce our DTAs, which would materially increase our expenses in the period in which we recognize the allowance and have a materially adverse impact on our consolidated financial statements.
We have funded all repurchases to date and expect to fund any future repurchases with cash and cash equivalents available on our consolidated balance sheet. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
We have funded all repurchases to date and expect to fund any future repurchases with cash and cash equivalents available on our consolidated balance sheet. 60 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
We capitalize our costs to develop software when: 58 Table of Contents preliminary development efforts are successfully completed; management has authorized and committed project funding; and it is probable that the project will be completed and the software will be used as intended.
We capitalize our costs to develop software when: preliminary development efforts are successfully completed; management has authorized and committed project funding; and it is probable that the project will be completed and the software will be used as intended.
The following section also includes information regarding 2023 and 2022 and year-over-year comparisons between these periods.
The following section also includes information regarding 2024 and 2023 and year-over-year comparisons between these periods.
For additional details regarding the 2023 credit facility, see Note 1 3 , “ Commitments and Contingencies ” of the Notes to Consolidated Financial Statements. Material Cash Requirements Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “ Risk Factors ” in this Annual Report.
For additional details regarding the credit facility, see Note 1 4 , “ Co mmitments and Contingencies ” of the Notes to Consolidated Financial Statements. Material Cash Requirements Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “ Risk Factors ” in this Annual Report.
Although the opportunity presented by our Multi-location channel is a strategic priority, we continue to rely heavily on SMBs that often have limited advertising budgets, may view online advertising products like ours as experimental and unproven, and are disproportionately impacted by macroeconomic conditions. Our Ability to Attract and Retain Talent .
Although the opportunity presented by multi-location Services businesses remains a strategic focus, we continue to rely heavily on SMBs that often have limited advertising budgets, may view online advertising products like ours as experimental and unproven, and are disproportionately impacted by macroeconomic conditions. Our Ability to Attract and Retain Talent .
Stock Repurchases . Since July 2017, our Board has authorized us to repurchase up to an aggregate of $1.95 billion of our outstanding common stock, $554.7 million of which remained available as of February 20, 2024 and which does not have an expiration date.
Stock Repurchases . Since July 2017, our Board has authorized us to repurchase up to an aggregate of $1.95 billion of our outstanding common stock, $304.7 million of which remained available as of February 18, 2025 and which does not have an expiration date.
Conversely, growth in average CPC paired with a negative or lower growth rate in ad clicks would indicate we charged more without delivering more ad clicks; we would expect this to have a negative impact on retention unless we are able to increase the value we deliver through higher performing ad clicks. 47 Table of Contents The following table presents year-over-year changes in our ad clicks and average CPC for the periods presented (each expressed as a percentage): Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Ad Clicks 9% (7)% 5% (8)% Average CPC 4% 23% 9% 27% In the three and twelve months ended December 31, 2023, advertising revenue grew 11% and 13% year over year, respectively, due to year-over-year increases in both ad clicks and average CPC.
Conversely, growth in average CPC paired with a negative or lower growth rate in ad clicks would indicate we charged more without delivering more ad clicks; we would expect this to have a negative impact on retention unless we are able to increase the value we deliver through higher performing ad clicks. 49 Table of Contents The following table presents year-over-year changes in our ad clicks and average CPC for the periods presented (each expressed as a percentage): Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Ad Clicks 5% 9% 6% 5% Average CPC —% 4% —% 9% In each of the three and twelve months ended December 31, 2024, advertising revenue grew 6% year over year due to year-over-year increases in ad clicks.
While we believe our largest growth opportunity will be to monetize a greater portion of our existing traffic, rather than to grow traffic generally, we are also investing in a broad set of consumer initiatives to support the long-term growth of our traffic and business.
While we believe our largest growth opportunity will be to monetize a greater portion of our existing traffic, rather than to grow traffic generally, we are also investing in a broad set of consumer initiatives to support the long-term growth of our traffic and business. We use the metrics set forth below to measure each of our traffic streams.
We had $14.1 million of letters of credit under the sub-limit primarily related to lease agreements for certain office locations, which are required to be maintained and issued to the landlords of each facility, and $110.9 million remained available under the 2023 credit facility as of December 31, 2023.
We had $14.0 million of letters of credit under the sub-limit primarily related to lease agreements for certain office locations, which are required to be maintained and issued to the landlords of each facility, and $111.0 million remained available under the credit facility as of December 31, 2024.
See Note 9 , “ Leases , ” of the Notes to Consolidated Financial Statements for further detail; • a litigation settlement loss contingency of $11.0 million incurred in 2023 in connection with the agreement to settle a class action lawsuit asserting claims under the California Invasion of Privacy Act (the “CIPA Action”).
See Note 10 , “ Leases ,” of the Notes to Consolidated Financial Statements for further detail; • an $11.0 million loss contingency recorded in 2023 in connection with the agreement to settle a putative class action lawsuit asserting claims under the California Invasion of Privacy Act (the “CIPA Action”).
For example, macroeconomic factors, such as the current inflationary pressures and labor and supply chain challenges, have had a predominant negative impact on RR&O paying advertising locations in recent quarters.
For example, macroeconomic factors, such as the current inflationary pressures and labor and supply chain challenges, have had a predominant negative impact on RR&O paying advertising locations over the past year.
Our cash requirements related to purchase obligations consisting of non-cancelable agreements to purchase goods and services required in the ordinary course of business — primarily website hosting services — are approximately $214.5 million, of which approximately $90.1 million is expected to be paid within the next 12 months.
Our cash requirements related to purchase obligations consisting of non-cancelable agreements to purchase goods and services required in the ordinary course of business — primarily website hosting services — are approximately $181.2 million, of which approximately $91.3 million is expected to be paid within the next 12 months.
Our actual results could differ from those estimates. We consider the estimates discussed below to be critical as we believe that the assumptions and estimates associated with these policies have the greatest potential impact on our consolidated financial statements.
We consider the estimates discussed below to be critical as we believe that the assumptions and estimates associated with these policies have the greatest potential impact on our consolidated financial statements.
However, our GAAP tax rate is impacted by a number of factors that are not in our direct control and that are subject to quarterly variability, which limits our visibility into the applicable rate for future fiscal periods.
However, our GAAP tax rate is impacted by a number of factors that are not in our direct control and that are subject to quarterly variability, which limits our visibility into the applicable rate for future fiscal periods. Non-GAAP Financial Measures Our consolidated financial statements are prepared in accordance with GAAP.
As of December 31, % Change 2023 2022 Active Claimed Local Business Locations 7,056 6,321 12% Results of Operations The following table sets forth our results of operations for 2023 and 2022 (in thousands, except percentages). The period-to-period comparison of financial results is not necessarily indicative of future results.
As of December 31, % Change 2024 2023 Active Claimed Local Business Locations 7,736 7,056 10% 53 Table of Contents Results of Operations The following table sets forth our results of operations for 2024 and 2023 (in thousands, except percentages). The period-to-period comparison of financial results is not necessarily indicative of future results.
The total lease obligations are partially offset by our future minimum rental receipts to be received under non-cancelable subleases of $27.1 million. See Note 9, “ Leases ,” of the Notes to Consolidated Financial Statements for further detail on our operating lease obligations.
The total lease obligations are partially offset by our future minimum rental receipts to be received under non-cancelable subleases of $18.3 million. See N ote 10 , “ Leases ,” of the Notes to Consolidated Financial Statements for further detail on our operating lease obligations.
We cannot predict the remaining duration of these conditions, or the duration or magnitude of any resulting adverse impacts on our traffic, and we expect that our traffic levels will continue to fluctuate with consumers’ level of confidence. We use the metrics set forth below to measure each of our traffic streams.
We cannot predict the remaining duration of these conditions, or the duration or magnitude of any resulting adverse impacts on our traffic, and we expect that our traffic levels will continue to fluctuate with consumers’ level of confidence.
Years Ended December 31, 2023 and 2022 Net Revenue Advertising. We generate advertising revenue from the sale of our advertising products — including Yelp Ads and business page upgrades — to businesses of all sizes, from single-location local businesses to multi-location national businesses.
We generate advertising revenue from the sale of our advertising products — including Yelp Ads and business page upgrades — to businesses of all sizes, from single-location local businesses to multi-location national businesses.
We currently estimate that our effective GAAP tax rate (before discrete items) for 2024 and beyond will be in the range of 24% to 28%.
We continue to estimate that our effective GAAP tax rate (before discrete items) for 2025 will be in the range of 24% to 28%.
Depreciation and amortization expense decreased in 2023 compared to 2022, primarily due to a decrease in depreciation expense of leasehold improvements, furniture and fixtures from asset retirements related to lease abandonment and expirations as well as certain other assets becoming fully depreciated since the prior-year period.
Depreciation expense decreased $3.2 million in 2024 compared to 2023, primarily due to a decrease in depreciation expense of leasehold improvements from asset retirements related to lease abandonments and expirations as well as certain other assets becoming fully depreciated since the prior-year period.
The following table presents the number of cumulative reviews as of December 31, 2023 and 2022 (in thousands): As of December 31, % Change 2023 2022 Reviews 287,364 265,288 8% Traffic Traffic to our website and mobile app has three components: mobile devices accessing our mobile app, visitors to our non-mobile optimized website, which we refer to as our desktop website, and visitors to our mobile-optimized website, which we refer to as our mobile website.
The following table presents the number of cumulative reviews as of December 31, 2024 and 2023 (in thousands): As of December 31, % Change 2024 2023 Reviews 308,100 287,364 7% 51 Table of Contents Traffic Traffic to our website and mobile app has three components: mobile devices accessing our mobile app, devices accessing our non-mobile optimized website, which we refer to as our desktop website, and devices accessing our mobile-optimized website, which we refer to as our mobile website.
For example, new products and initiatives may fail to generate sufficient revenue, operating margin or other value to justify the investments we made in them, which is a particular risk for new products and initiatives that are unproven or that are outside of our historical core business, such as our planned acquisition of Services leads through SEM.
For example, new products and initiatives may fail to generate sufficient revenue, operating margin or other value to justify the investments we made in them, which is a particular risk for new products and initiatives that are unproven or that are outside of our historical core business, such as our plans to expand our use of AI throughout our platform and business operations.
Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as material litigation settlements, impairment charges and fees related to shareholder activism. Adjusted EBITDA margin .
Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items that management determines are not indicative of ongoing operating performance, such as material litigation settlements, impairment charges, acquisition and integration costs, and fees related to shareholder activism. 57 Table of Contents Adjusted EBITDA margin .
We lease office facilities under operating lease agreements that expire from 2024 to 2031. Our cash requirements related to these lease agreements are $94.9 million, of which $42.7 million is expected to be paid within the next 12 months.
We lease office facilities under operating lease agreements that expire from 2025 to 2031. Our cash requirements related to these lease agreements are $46.6 million, of which $22.2 million is expected to be paid within the next 12 months.
Other Income, Net Other income, net consists primarily of the interest income earned on our cash, cash equivalents and marketable securities, research and development tax credits, the portion of our sublease income in excess of our lease cost, accretion of discounts and amortization of premiums on investments, credit facility fees and foreign exchange gains and losses.
Other Income, Net Other income, net consists primarily of the interest income earned on our cash, cash equivalents and marketable securities, research and development tax credits, the portion of our sublease income in excess of our lease cost, accretion of discounts and amortization of premiums on investments, credit facility fees, foreign exchange gains and losses, and, in the year ended December 31, 2024, the release of a reserve related to a one-time payroll tax credit.
During the year ended December 31, 2023, we repurchased on the open market 5,626,851 shares for an aggregate purchase price of $200.0 million. The actual timing and amount of repurchases remain subject to a variety of factors, including liquidity, cash flow and market conditions.
During the year ended December 31, 2024, we repurchased on the open market 6,686,518 shares for an aggregate purchase price of $250.9 million. The actual timing and amount of repurchases remain subject to a variety of factors, including liquidity, cash flow and market conditions.
Drive Sales through Our Self-Serve and Multi-location Channels • By prioritizing investments in our Self-serve and Multi-location channels, we have significantly shifted our go-to-market mix toward our most efficient channels in recent years. In 2023, revenue from these channels together accounted for approximately 50% of total advertising revenue, a two percentage point increase from 2022.
Drive profitable growth through our most efficient channels • By prioritizing investments in our Self-serve and Multi-location channels, we have significantly shifted our go-to-market mix toward our most efficient channels in recent years. In 2024, revenue from these channels together accounted for approximately 50% of our total advertising revenue, a significant expansion from approximately 30% in 2018.
While we do not believe that there is a reasonable likelihood of material change in our estimates, factors including obsolescence, the pace of changes in technology, changes in the expected use of the software, competition and other economic factors could require us to change the estimated useful life, which would result in a change to the amount of amortization that we record on our consolidated statements of operations.
While we do not believe that there is a reasonable likelihood of material change in our estimates, factors including obsolescence, the pace of changes in technology, changes in the expected use of the software, competition and other economic factors could require us to change the estimated useful life, which would result in a change to the amount of amortization that we record on our consolidated statements of operations. 61 Table of Contents Business Combinations— We account for acquisitions of entities that consist of inputs and processes that have the ability to contribute to the creation of outputs as business combinations.
Because traffic to and user engagement on our platform together impact the number of ads we are able to show as well as the value of those ads to businesses, such negative impacts on consumer activity may also make it more difficult to convince existing and prospective advertisers that our products offer them a material benefit and generate a competitive return relative to other alternatives.
Because traffic to and user engagement on our platform together impact the number of ads we are able to show as well as the value of those ads to businesses, such negative impacts on consumer activity may also make it more difficult to convince existing and prospective advertisers that our products offer them a material benefit and generate a competitive return relative to other alternatives. 47 Table of Contents It is not possible for us to predict the remaining duration of the ongoing adverse macroeconomic conditions or the duration or magnitude of any resulting adverse impact on our business.
As of December 31, 2023, 287.4 million reviews had been submitted to our platform, of which 262.8 million reviews were available on business pages, including 51.4 million reviews that were not recommended, and 24.6 million reviews had been removed from our platform, either by us for violation of our terms of service or by the users who contributed them.
As of December 31, 2024, 308.1 million reviews had been submitted to our platform, of which 281.8 million reviews were available on business pages, including 46.9 million reviews that were not recommended, and 26.3 million reviews had been removed from our platform, either by us for violation of our terms of service or by the users who contributed them.
The United States continues to face widespread macroeconomic uncertainties, including labor disruptions, inflation and recessionary concerns. These challenging macroeconomic conditions have had, and may continue to have, a significant adverse impact on our business and results of operations.
The United States continues to face widespread macroeconomic uncertainties, including labor shortages, inflation and recessionary concerns, which may be exacerbated by proposed tariffs and changes to U.S. immigration policy. These challenging macroeconomic conditions have had, and may continue to have, a significant adverse impact on our business and results of operations.
As part of our business strategy, we may decide to expand our product offerings and grow our business through the acquisition of complementary businesses or technologies, as well as through partnerships.
As part of our business strategy, we may decide to expand our product offerings and grow our business through the acquisition of complementary businesses or technologies, as well as through partnerships. For example, in November 2024, we acquired RepairPal to expand our offerings in the Auto Services category.
The following is a reconciliation of net cash provided by operating activities to free cash flow for the periods presented (in thousands): Year Ended December 31, 2023 2022 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow: Net cash provided by operating activities $ 306,280 $ 192,309 Purchases of property, equipment and software (26,847) (31,979) Free cash flow $ 279,433 $ 160,330 Net cash used in investing activities $ (54,684) $ (126,144) Net cash used in financing activities $ (246,778) $ (237,532) Liquidity and Capital Resources Sources of Liquidity Our principal sources of liquidity are our cash and cash equivalents, marketable securities and cash generated from operations.
The following is a reconciliation of net cash provided by operating activities to free cash flow for the periods presented (in thousands): Year Ended December 31, 2024 2023 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow: Net cash provided by operating activities $ 285,815 $ 306,280 Purchases of property, equipment and software (37,347) (26,847) Free cash flow $ 248,468 $ 279,433 Net cash used in investing activities $ (77,266) $ (54,684) Net cash used in financing activities $ (303,802) $ (246,778) 58 Table of Contents Liquidity and Capital Resources Sources of Liquidity Our principal sources of liquidity are our cash and cash equivalents, marketable securities and cash generated from operations.
(2) Represents the loss contingency recorded in connection with our agreement to settle the CIPA Action. Note that this amount does not include any legal fee reimbursements that we expect to receive related to this matter; we do not adjust for legal fees and related reimbursements, which we consider to be part of our ongoing operations.
Note that this amount does not include any legal fee reimbursements that we expect to receive related to this matter; we do not adjust for legal fees and related reimbursements, which we consider to be part of our ongoing operations.
Net cash used in financing activities during the year ended December 31, 2023 increased compared to 2022 primarily due to an increase in taxes paid related to the net share settlement of equity awards as well as the payment of issuance costs for the 2023 credit facility, partially offset by an increase in proceeds from stock option exercises during the year ended December 31, 2023 compared to 2022.
Net cash used in financing activities during the year ended December 31, 2024 increased compared to 2023 primarily due to an increase in repurchases of our common stock and a decrease in proceeds from stock option exercises, partially offset by a decrease in taxes paid related to the net share settlement of equity awards during the year ended December 31, 2024 compared to 2023.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 306,280 $ 192,309 Net cash used in investing activities $ (54,684) $ (126,144) Net cash used in financing activities $ (246,778) $ (237,532) Operating Activities.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 285,815 $ 306,280 Net cash used in investing activities $ (77,266) $ (54,684) Net cash used in financing activities $ (303,802) $ (246,778) Operating Activities.
As of December 31, 2023, we had cash and cash equivalents of $313.9 million and marketable securities of $127.5 million. Cash and cash equivalents consist of cash, money market funds and investments with original maturities of three month or less. Our cash held internationally as of December 31, 2023 was $43.9 million.
As of December 31, 2024, we had cash and cash equivalents of $217.3 million and marketable securities of $100.6 million. Cash and cash equivalents consist of cash, money market funds and investments with original maturities of three month or less. Our cash held internationally as of December 31, 2024 was $54.0 million.
The following table presents our advertising revenue by category for the periods presented (in thousands, except percentages): Three Months Ended December 31, % Change Year Ended December 31, % Change 2023 2022 2023 2022 Services $ 203,140 $ 178,292 14% $ 793,112 $ 693,810 14% Restaurants, Retail & Other 124,231 115,692 7% 483,406 440,593 10% Total Advertising Revenue $ 327,371 $ 293,984 11% $ 1,276,518 $ 1,134,403 13% Paying Advertising Locations Paying advertising locations comprise all business locations associated with a business account from which we recognized advertising revenue in a given month, excluding business accounts that purchased advertising through partner programs other than Yelp Ads Certified Partners, averaged over a given three- or twelve-month period.
The following table presents our advertising revenue by category for the periods presented (in thousands, except percentages): Three Months Ended December 31, % Change Year Ended December 31, % Change 2024 2023 2024 2023 Services $ 224,840 $ 203,140 11% $ 879,092 $ 793,112 11% Restaurants, Retail & Other 120,798 124,231 (3)% 469,928 483,406 (3)% Total Advertising Revenue $ 345,638 $ 327,371 6% $ 1,349,020 $ 1,276,518 6% Paying Advertising Locations Paying advertising locations comprise all business locations associated with a business account from which we recognized advertising revenue in a given month, excluding RepairPal business locations as well as business accounts that purchased advertising through partner programs other than Yelp Ads Certified Partners, averaged over a given three- or twelve-month period.
Adverse macroeconomic conditions have historically been particularly challenging for the SMBs on which we rely and any protracted economic downturn would have significant negative effects on our business. Investment in Growth .
Adverse macroeconomic conditions have historically been particularly challenging for the SMBs on which we rely and any protracted economic downturn would have significant negative effects on our business. Investment in Growth . In 2025, we plan to invest in our strategic initiatives to lead in Services, drive advertiser value and transform the consumer experience.
Adjusting for these non-recurring items in 2023, we expect general and administrative expenses to increase in 2024 compared to 2023 to support the continued growth of our business and remain relatively consistent as a percentage of net revenue in 2024 compared to 2023. Depreciation and Amortization.
We expect general and administrative expenses to increase slightly on an absolute dollar basis in 2025 compared to 2024 to support the continued growth of our business, but remain relatively consistent as a percentage of net revenue. Depreciation and Amortization.
App users generate a substantial majority of activity on Yelp, including the page views and ad clicks that we monetize, and we expect that traffic to our website will fluctuate and generally decline over time.
App users generate a substantial majority of activity on Yelp, including the page views and ad clicks that we monetize.
Because the numbers of desktop unique visitors and mobile website unique visitors are therefore based on unique identifiers, an individual who accesses our desktop website or mobile website from multiple devices with different identifiers may be counted as multiple desktop unique visitors or mobile website unique visitors, as applicable, and multiple individuals who access our desktop website or mobile website from a shared device with a single identifier may be counted as a single desktop unique visitor or mobile website unique visitor.
As a result, an individual who visits our website from multiple devices with different identifiers may be counted as multiple unique devices or unique visitors, as applicable, and multiple individuals who visit our website from a shared device with a single identifier may be counted as a single unique device or unique visitor.
See Note 1 3 , “ Commitments and Contingencies , ” of the Notes to Consolidated Financial Statements for further detail; and • an increase in employee costs of $10.6 million, primarily driven by higher cost of labor.
See Note 1 4 , “ Commitments and Contingencies ,” of the Notes to Consolidated Financial Statements for further detail; and • a decrease in employee costs of $5.3 million, primarily driven by lower average headcount.
Other income, net increased in 2023 compared to 2022, primarily driven by $12.4 million of higher interest income due to increased federal interest rates. 53 Table of Contents Provision for Income Taxes Provision for income taxes consists of: federal and state income taxes in the United States and income taxes in certain foreign jurisdictions; deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Provision for Income Taxes Provision for income taxes consists of: federal and state income taxes in the United States and income taxes in certain foreign jurisdictions; deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
We currently calculate desktop unique visitors as the number of “users,” as measured by Google Analytics, who have visited our desktop website at least once in a given month, averaged over a given twelve-month period.
Prior to 2024, we calculated our desktop and mobile web traffic metrics based on the number of “users,” as measured by Google Analytics, who had visited our desktop website and mobile website, respectively, at least once in a given month, averaged over a given twelve-month period. We referred to these metrics as desktop unique visitors and mobile web unique visitors.
Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.
See Note 1 4 , “C ommitments and Contingencies ,” of the Notes to Consolidated Financial Statements in this Annual Report for additional information. Free Cash Flow . Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.
In the year ended December 31, 2023, our net revenue was $1.34 billion, up 12% from the year ended December 31, 2022 and 30% from the year ended December 31, 2021, and we recorded net income of $99.2 million and adjusted EBITDA of $330.5 million.
In the year ended December 31, 2024, our net revenue was $1.41 billion, up 6% from the year ended December 31, 2023 and 18% from the year ended December 31, 2022, and we recorded net income of $132.9 million and adjusted EBITDA of $358.0 million.
However, we expect sales and marketing expenses to decrease as a percentage of net revenue in 2024 compared to 2023. Product Development. Our product development expenses primarily consist of employee costs (including bonuses and stock-based compensation expense, net of capitalized employee costs associated with capitalized website and internal-use software development) for our engineers, product management and corporate infrastructure employees.
Our product development expenses primarily consist of employee costs (including bonuses and stock-based compensation expense, net of capitalized employee costs associated with capitalized website and internal-use software development) for our engineers, product management and corporate infrastructure employees. In addition, product development expenses include allocated workplace and other supporting overhead costs.
As we enter 2024, we expect that our expenses will increase from the fourth quarter of 2023 to the first quarter of 2024, reflecting our cash compensation adjustments and incremental marketing investments, particularly for acquiring Services leads through SEM, as well as a seasonal increase in expenses from payroll taxes and benefits.
As we enter 2025, we expect that our expenses will increase from the fourth quarter of 2024 to the first quarter of 2025, primarily reflecting a seasonal increase in expenses from payroll taxes and benefits.
Short-term fluctuations in paying advertising locations may also reflect the acquisition or loss of single advertising accounts associated with large numbers of locations, or the pausing/restarting of advertising campaigns by such multi-location advertisers. 48 Table of Contents The following table presents the number of paying advertising locations for the periods presented (in thousands, except percentages): Three Months Ended December 31, % Change Year Ended December 31, % Change 2023 2022 2023 2022 Services 245 231 6% 239 231 3% Restaurants, Retail & Other 299 314 (5)% 316 327 (3)% Total Paying Advertising Locations 544 545 —% 555 558 (1)% Paying advertising locations decreased in the three and twelve months ended December 31, 2023 compared to the prior-year periods largely due to a few lower-spend enterprise advertisers that turned off their advertising spend during 2023.
Short-term fluctuations in paying advertising locations may also reflect the acquisition or loss of single advertising accounts associated with large numbers of locations, or the pausing/restarting of advertising campaigns by such multi-location advertisers. 50 Table of Contents The following table presents the number of paying advertising locations for the periods presented (in thousands, except percentages): Three Months Ended December 31, % Change Year Ended December 31, % Change 2024 2023 2024 2023 Services 250 245 2% 252 239 5% Restaurants, Retail & Other 271 299 (9)% 274 316 (13)% Total Paying Advertising Locations 521 544 (4)% 526 555 (5)% Total paying advertising locations decreased in the three and twelve months ended December 31, 2024 compared to the prior-year periods, as the decreases in paying advertising locations in our RR&O categories were partially offset by increases in paying advertising locations in our Services categories over the same periods.
As a result, although our traffic has recovered from its lowest levels in 2020, it has remained below our pre-pandemic 2019 traffic. 49 Table of Contents Economic uncertainty and inflationary pressures, among other macroeconomic concerns, continued to negatively impact consumer traffic in 2023 compared to 2019.
For example, although our traffic has recovered from its lowest levels during the pandemic in 2020, it has remained below our pre-pandemic 2019 traffic levels due to ongoing economic uncertainty and inflationary pressures, among other macroeconomic concerns.
The decrease in the provision for income taxes in 2023 compared to the prior year was primarily due to a tax benefit related to 2022 federal and state tax provision to return adjustments.
The increase in the provision for income taxes in 2024 compared to the prior year was primarily driven by an increase in profit before tax as well as a decrease in the discrete tax benefits related to the federal and state tax provision to return adjustments.
Cost of revenue increased in 2023 compared to 2022, primarily as a result of: • an increase in merchant credit card processing fees of $2.9 million, primarily due to the increase in advertising revenue; • an increase in advertising fulfillment costs of $2.7 million largely attributable to the expansion of Yelp Audiences; and • an increase in website infrastructure expense of $2.1 million, primarily as a result of higher labor costs associated with maintaining and improving our infrastructure.
Cost of revenue also includes third-party advertising fulfillment costs and credit card processing fees. Cost of revenue increased in 2024 compared to 2023, primarily as a result of an increase in website infrastructure expense of $8.8 million, primarily as a result of investments in maintaining and improving our infrastructure as well as higher cost of labor.
As of December 31, 2023, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that some or all of these DTAs will not be realized.
As of December 31, 2024, we had approximately $139.6 million in net deferred tax assets (“DTAs”). As of December 31, 2024, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs.
The following is a reconciliation of net income to adjusted EBITDA, as well as the calculation of net income margin and adjusted EBITDA margin, for the periods presented (in thousands, except percentages): Year Ended December 31, 2023 2022 Reconciliation of Net Income to Adjusted EBITDA: Net income $ 99,173 $ 36,347 Provision for income taxes 5,909 30,431 Other income, net (26,039) (8,425) Depreciation and amortization 42,184 44,852 Stock-based compensation 173,451 156,090 Litigation settlement (1)(2) 11,000 — Asset impairment (1) 23,563 10,464 Fees related to shareholder activism (1) 1,252 — Adjusted EBITDA $ 330,493 $ 269,759 Net revenue $ 1,337,062 $ 1,193,506 Net income margin 7 % 3 % Adjusted EBITDA margin 25 % 23 % (1) Recorded within general and administrative expenses on our consolidated statements of operations.
The following is a reconciliation of net income to adjusted EBITDA, as well as the calculation of net income margin and adjusted EBITDA margin, for the periods presented (in thousands, except percentages): Year Ended December 31, 2024 2023 Reconciliation of Net Income to Adjusted EBITDA: Net income $ 132,850 $ 99,173 Provision for income taxes 50,110 5,909 Other income, net (1) (31,915) (26,039) Depreciation and amortization 40,407 42,184 Stock-based compensation 158,193 173,451 Litigation settlement (2)(3) — 11,000 Asset impairment (2) 5,914 23,563 Acquisition and integration costs (2) 1,266 — Fees related to shareholder activism (2) 1,168 1,252 Adjusted EBITDA $ 357,993 $ 330,493 Net revenue $ 1,412,064 $ 1,337,062 Net income margin 9 % 7 % Adjusted EBITDA margin 25 % 25 % (1) Includes the release of a $3.1 million reserve related to a one-time payroll tax credit in the year ended December 31, 2024.
Advertising revenue also includes revenue generated from the resale of our advertising products by certain partners and monetization of advertising inventory through third-party ad networks.
Advertising revenue also includes revenue generated from the resale of our advertising products by certain partners and monetization of advertising inventory through third-party ad networks, as well as revenue from the RepairPal Network. We present advertising revenue on a disaggregated basis for our high-level category groupings, Services and RR&O.
We expect product development expenses to increase in 2024 compared to 2023 to support our product initiatives. We expect product development expenses as a percentage of net revenue to remain relatively consistent in 2024 compared to 2023. General and Administrative.
We expect product development expenses to remain relatively consistent on an absolute dollar basis in 2025 compared to 2024, but decrease as a percentage of net revenue as our distributed operations provide leverage. 55 Table of Contents General and Administrative.
Our product and marketing efforts contributed to another year of record Self-serve customer acquisition in 2023, which drove annual revenue growth of approximately 20% year over year in this channel. For example, we continued to enhance the onboarding and business owner experience through in-product recommendations, such as photo-upload and service offering prompts.
Our product and marketing efforts contributed to another year of record Self-serve customer acquisition in 2024, which drove annual revenue growth of approximately 15% year over year in this channel.
We calculate app unique devices as the number of unique mobile devices using our mobile app in a given month, averaged over a given twelve-month period. Under this method of calculation, an individual who accesses our mobile app from multiple mobile devices will be counted as multiple app unique devices.
Prior to 2024, we calculated app unique devices as the number of unique mobile devices using our mobile app in a given month, averaged over a given twelve-month period.
Other revenue increased in 2023 compared to 2022, primarily driven by the continued growth of our Yelp Fusion and Yelp Knowledge programs. Trends and Uncertainties of Net Revenue.
Other revenue increased in 2024 compared to 2023, primarily due to the continued growth of our Yelp Fusion, Yelp Guest Manager and Yelp Fusion Insights programs, partially offset by a lower volume of food takeout and delivery orders. 54 Table of Contents Trends and Uncertainties of Net Revenue.
Other Revenue. We generate revenue through our subscription services, including our Yelp Guest Manager product. We also generate revenue through our Yelp Fusion and Yelp Knowledge programs, which provide access to Yelp data for a fee, as well as other non-advertising partnerships. Beginning in the three months ending March 31, 2024, other revenue will also include transactions revenue.
Advertising revenue increased in 2024 compared to 2023, primarily driven by a 6% increase in ad clicks. Other. We generate other revenue through non-advertising contracts, such as our subscription services, which include our Yelp Guest Manager product, and through our Yelp Fusion and Yelp Fusion Insights programs, which provide Yelp content and data for a fee.
General and administrative expenses increased in 2023 compared to 2022, primarily due to: • an increase in our provision for doubtful accounts of $15.7 million due to higher customer delinquencies and higher advertising revenue; • an increase in impairment charges of $13.1 million related to our leased office spaces.
General and administrative expenses decreased in 2024 compared to 2023, primarily due to: • a decrease in impairment charges of $17.7 million related to our leased office spaces.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed6 unchanged
Biggest changeHowever, adverse macroeconomic conditions, including the current inflationary environment, have had, and may continue to have, a negative impact on consumer demand as well as the ability and willingness of advertisers to spend on our products and services. These factors could harm our business, financial condition or results of operations.
Biggest changeHowever, adverse macroeconomic conditions, including the current inflationary environment, have had, and may continue to have, a negative impact on consumer demand as well as the ability and willingness of advertisers to spend on our products and services. These factors have harmed, and could continue to harm, our business, financial condition and results of operations.
These risks include primarily interest rate, foreign exchange risks and inflation, and have not changed materially from the market risks we were exposed to in the year ended December 31, 2022. Interest Rate Fluctuation The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk.
These risks include primarily interest rate, foreign exchange risks and inflation, and have not changed materially from the market risks we were exposed to in the year ended December 31, 2023. Interest Rate Fluctuation The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk.
Our cash and cash equivalents consist of cash and money market funds. We do not have any long-term borrowings. Because our cash and cash equivalents have relatively short maturities, their fair values are relatively insensitive to interest rate changes. Our marketable securities comprise fixed-rate debt securities issued by U.S. corporations, U.S. government agencies and the U.S.
Our cash and cash equivalents consist of cash and money market funds. We do not have any long-term borrowings. Because our cash and cash equivalents have relatively short maturities, their fair values are relatively insensitive to interest rate changes. 62 Table of Contents Our marketable securities comprise fixed-rate debt securities issued by U.S. corporations, U.S. government agencies and the U.S.
Treasury; as such, their fair value may be affected by fluctuations in interest rates in the broader economy. We believe a 59 Table of Contents hypothetical 100 basis point increase in interest rates as of December 31, 2023 would not have a material impact on our marketable securities portfolio.
Treasury; as such, their fair value may be affected by fluctuations in interest rates in the broader economy. We believe a hypothetical 100 basis point increase in interest rates as of December 31, 2024 would not have a material impact on our marketable securities portfolio.

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