While Yelp is famous for helping people pick restaurants or nail salons, it sees the potential for ads in businesses like H&R or Starbucks. Yelp also reported Q2 earnings on Thursday, which indicated revenue from various multi-location customers to have increased by 21% on a YoY basis. Yelp is now gunning for more of these customers. Yelp’s CFO Baker said that momentum in this segment was the most vital factor for its profits this year. Multi-location enterprises are those which have over 5 locations.
Yelp’s shares went up by 5.1% on Friday. This company has faced problems ever since the IPO in 2012, due to competition from Facebook and Google. Yelp’s stock fell monumentally when it announced that zero new ad customers had been added during Q3. The firm hired Evercore for defending the firm against activist investors who have demanded for a sale and board reshuffle. To prevent more of these calls from popping up, a 5-year revenue & EBITDA target has been set, 3 new members have been inducted into the board and a $250M share buyback scheme has been authorized.
At the moment, over 25% of the firm’s advertising revenue comes from its multi-location customers. The rest is from small businesses. Yelp’s net Q2 revenue stood at $247M. It is more around 5% from 2018’s Q2 figures. This was mostly driven by an increase in advertising revenue, stated the firm in its letter. Advertising is responsible for most of its revenue, with transactions and such services also contributing a small chunk. Features like Verified License & Business Highlights have seen a great response. Yelp’s business ads resemble search listings and appear at the top of search results, with an ‘Ad’ indicator. Yelp has now identified over 250 accounts it is attempting to get more business from, H&R, Under Armour, Hilton, Olive Garden, Target, Starbucks and McDonald’s are all being actively courted.