Yelp (NYSE:YELP) executives emphasized record full-year revenue and continued profitability in 2025, while outlining a stepped-up investment plan for 2026 focused on artificial intelligence, new business tools, and expanding the company’s data licensing reach. Management also acknowledged a challenging operating environment for restaurants, retail, and other (RR&O) categories that continued to weigh on advertising locations and revenue trends.
Full-year 2025 results: Services strength offsets RR&O pressure
CEO Jeremy Stoppelman said Yelp delivered “record net revenue and strong profitability” in 2025, driven by services and an “accelerated pace of product innovation.” For the year, Yelp reported net revenue of $1.46 billion, up 4% year-over-year. Net income increased 10% to $146 million, representing a 10% net income margin, while diluted earnings per share rose 19% to $2.24. Adjusted EBITDA increased 3% to $369 million, or a 25% Adjusted EBITDA margin.
On engagement and marketplace activity, the company said total ad clicks decreased 7% year-over-year, driven primarily by macro pressures and, to a lesser extent, reduced spending on paid project acquisition in 2025 compared with 2024. Average cost per click increased 10% year-over-year, which management attributed to higher advertiser demand in services categories and fewer clicks overall. Total paying advertising locations declined 3% year-over-year, as softness in RR&O offset growth in services, though Yelp said average revenue per location reached an annual record.
Stoppelman also highlighted growth in “other revenue,” which rose 17% year-over-year, driven by transaction, subscription, and data licensing revenue. Yelp users contributed 22 million new reviews in 2025, bringing cumulative reviews to 330 million. App unique devices declined 2% year-over-year, which management tied to consumers visiting restaurants less frequently.
Q4 results: Revenue down slightly as RR&O declines continue
CFO David Schwarzbach reported fourth-quarter net revenue declined 1% year-over-year to $360 million, which he said was $2 million above the midpoint of Yelp’s outlook range. Net income fell 10% to $38 million, representing a 10% margin. Adjusted EBITDA declined 15% to $86 million, $7 million above the midpoint of the outlook range, with a 24% margin.
Schwarzbach said services advertising revenue increased 3% year-over-year in the quarter to $231 million, while RR&O revenue declined 12% to $107 million. Paying advertising locations decreased 5% year-over-year to 496,000, driven by lower RR&O locations and flat services locations in the quarter.
AI strategy: Yelp Assistant, business tools, and powering the broader AI ecosystem
Management repeatedly framed AI as central to Yelp’s future product and growth strategy. Stoppelman said the company launched more than 55 new products and features in 2025, “many powered by AI,” and outlined three strategic initiatives for 2026:
- Reconceiving the Yelp consumer experience around “answers and actions.” Yelp introduced natural language search, AI-powered business highlights, and expanded Yelp Assistant to RR&O business pages in 2025. Stoppelman said Yelp plans to expand Yelp Assistant in 2026 to function across categories and entry points, with testing beginning in the fourth quarter and a full rollout expected by the end of the first quarter. On the call, he added that the launch would begin toward the end of Q1.
- AI tools to help local businesses operate more efficiently. Yelp introduced Yelp Host, an AI-powered call answering service for restaurants, which Stoppelman said has answered more than 190,000 calls and handled thousands of reservations since launch. He said Yelp plans upgrades in 2026, including the ability to take food orders over the phone. Yelp also closed its acquisition of Hatch, which management described as an AI lead management platform for service professionals, and said its focus in lead management is shifting from Yelp Receptionist to supporting Hatch’s growth.
- Extending Yelp’s reach through data licensing as AI-driven search evolves. Stoppelman said the value of Yelp’s first-party data—including 330 million reviews, nearly 500 million photos, and more than 8 million business listings—is becoming increasingly clear. He noted strong demand for data licensing products and said Yelp recently signed an agreement with OpenAI.
In response to analyst questions, Stoppelman said services demand has “softened a bit,” with the impact more pronounced in RR&O but also “spilled over to services somewhat.” He said Yelp is “leaning in” on Yelp Assistant, describing it as a fully monetized Request to Quote experience and positioning it as a way to drive engagement, including through higher-frequency categories like restaurants that may eventually lead users to services categories.
On the OpenAI agreement, Stoppelman called it an important milestone and said Yelp’s local-intent content is valuable for AI-driven search experiences. He added that the deal’s financial impact would be reflected in “other revenue,” where data licensing is recorded, and noted other revenue growth accelerated in the fourth quarter, rising about 30% to 33% year-over-year.
Capital allocation, expense discipline, and 2026 guidance
Schwarzbach highlighted share repurchases and expense management as key themes over the past five years. He said Yelp reduced its fully diluted share count from 86 million to 67 million between December 31, 2021 and December 31, 2025, a 22% reduction, which he said contributed to EPS growth. For 2025, he cited net income of $146 million, cash flow from operations of $372 million, and record free cash flow of $324 million.
Yelp repurchased $292 million of shares in 2025 at an average purchase price of $33.29 per share, including $88.5 million in the fourth quarter. As of December 31, 2025, the company had $38.8 million remaining under its existing authorization. Schwarzbach said the board authorized an additional $500 million for repurchases in February 2026.
On cost structure, Schwarzbach said headcount remained approximately flat year-over-year in 2025. Excluding the newly integrated Hatch team, he said Yelp expects headcount growth to remain approximately flat again in 2026, citing operational efficiency supported by AI. He also discussed a shift in compensation mix, stating stock-based compensation (SBC) as a percentage of revenue declined by 2 percentage points year-over-year in 2025, and that SBC as a percentage of revenue in December 2025 fell below 8%. Yelp reiterated its expectation to reduce SBC expense to less than 6% of revenue by the end of 2027.
For 2026, management said it expects many of the same trends that characterized 2025 to persist, continuing to negatively impact advertising revenue, with services and other revenue expected to drive performance while RR&O remains pressured. Yelp guided to first-quarter 2026 net revenue of $350 million to $355 million and full-year net revenue of $1.455 billion to $1.475 billion. For profitability, Yelp guided to first-quarter Adjusted EBITDA of $58 million to $63 million, reflecting seasonal expense increases, and full-year Adjusted EBITDA of $310 million to $330 million, driven by investments in AI transformation, paid traffic acquisition, and Hatch operations.
Asked about RR&O stabilization, COO Jed Nachman cited a weakened consumer and high input costs as key pressures for restaurants. He said Yelp believes dining will return over time and pointed to investments in Yelp Assistant and momentum in Yelp Host, including planned food-ordering capabilities, as part of Yelp’s approach to supporting restaurants and pursuing a large addressable market.
Regarding Hatch’s profitability, Schwarzbach said Yelp’s near-term focus is on accelerating Hatch’s top-line growth rather than margin, with profitability expected to converge toward typical SaaS margin profiles over time. He said the acquisition’s operating expense impact is reflected in Yelp’s full-year Adjusted EBITDA guidance.
About Yelp (NYSE:YELP)
Yelp is a digital platform that connects consumers with local businesses through user-generated reviews, ratings and multimedia content. The company’s flagship offerings include the Yelp website and mobile applications for iOS and Android, where users can search for and discover restaurants, shops, service providers and other points of interest. In addition to crowd-sourced reviews and photographs, Yelp provides business profile pages featuring hours, contact information, menus and direct messaging capabilities.
Yelp generates revenue primarily through advertising services sold to small and medium-sized enterprises.
