Local business platform Yelp (NYSE: YELP) met Wall Street’s revenue expectations in Q4 CY2025, but sales were flat year on year at $360 million. On the other hand, the company’s full-year revenue guidance of $1.47 billion at the midpoint came in 2.8% below analysts’ estimates. Its GAAP profit of $0.61 per share was 13.9% above analysts’ consensus estimates.
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Yelp (YELP) Q4 CY2025 Highlights:
- Revenue: $360 million vs analyst estimates of $359.6 million (flat year on year, in line)
- EPS (GAAP): $0.61 vs analyst estimates of $0.54 (13.9% beat)
- Adjusted EBITDA: $85.69 million vs analyst estimates of $80.98 million (23.8% margin, 5.8% beat)
- EBITDA guidance for the upcoming financial year 2026 is $320 million at the midpoint, below analyst estimates of $357.5 million
- Operating Margin: 13.6%, down from 14.8% in the same quarter last year
- Free Cash Flow Margin: 20.1%, down from 31.6% in the previous quarter
- Market Capitalization: $1.43 billion
“Yelp delivered record net revenue and strong profitability in 2025, driven by growth in Services and product innovation, with more than 55 new features and updates introduced in the year,” said Jeremy Stoppelman, Yelp's co-founder and chief executive officer.
Company Overview
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE: YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Yelp grew its sales at a tepid 7.1% compounded annual growth rate. This was below our standard for the consumer internet sector and is a tough starting point for our analysis.
This quarter, Yelp’s $360 million of revenue was flat year on year and in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Cash Is King
Although EBITDA is undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.
Yelp has shown robust cash profitability, driven by its attractive business model that enables it to reinvest or return capital to investors while maintaining a cash cushion. The company’s free cash flow margin averaged 19.9% over the last two years, quite impressive for a consumer internet business.
Taking a step back, we can see that Yelp’s margin expanded by 8.7 percentage points over the last few years. This shows the company is heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.
Yelp’s free cash flow clocked in at $72.27 million in Q4, equivalent to a 20.1% margin. This result was good as its margin was 3.5 percentage points higher than in the same quarter last year, building on its favorable historical trend.
Key Takeaways from Yelp’s Q4 Results
We enjoyed seeing Yelp beat analysts’ EBITDA expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 6.2% to $21.40 immediately following the results.
Yelp underperformed this quarter, but does that create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
