Investor Presentation Fourth Quarter 2017 FORWARD-LOOKING STATEMENTS These slides and the accompanying oral presentation contain forward-looking statements. All statements other than statements of historical facts contained in these slides and the accompanying oral presentation, including statements regarding Yelp Inc.'s ("Yelp" or the "Company") future operations, expected financial results and future financial position, future revenue, the strategic partnership with Grubhub (including its anticipated timi ...

Summary of Yelp (YELP) Conference Call - May 29, 2025 Company Overview - **Company**: Yelp (YELP) - **Industry**: Online review and local services platform Key Points Evolution of Business Model - Transition from a sales headcount-driven growth model to a product-driven growth model, focusing on product delivery and leveraging emerging technologies like AI and large language models [4][5] - Approximately two-thirds of revenue now comes from services, marking a significant shift from the traditional focus on restaurant and retail reviews [5] Services Business Performance - Services grew at approximately 11% each quarter in 2024, with a 14% growth in Q1 2025, partly due to the acquisition of RepairPal [6][7] - Home services have been a major driver of growth, with enhancements in the "Request Quote" feature allowing better matching of consumers with service providers [7][8] - Expansion into other service categories, including auto services through the RepairPal acquisition, is expected to drive further growth [8][20] Multi-Location Services Strategy - Focus on mid-market and enterprise customers to increase advertising revenue from services [12][13] - Development of APIs and lead management systems to support enterprise customers across multiple locations [13][14] Challenges in Restaurant and Retail Sector - The restaurant and retail segment has faced challenges due to rising input costs and inability to pass these costs onto consumers, resulting in a 3% decline in Q1 2025 [24][25] - Competition from food delivery platforms and retail ad networks has increased, impacting advertising budgets [28][29] - Yelp is enhancing consumer experience and ad matching technology to retain advertiser interest [26][30] Traffic and Engagement Insights - Experimentation with paid traffic acquisition led to increased project generation but did not result in higher ad budgets from advertisers, prompting a pullback in spending [31][33] - Focus on ROI-driven strategies to ensure that advertising budgets are effectively utilized [34] AI Integration and Future Outlook - AI is viewed as a significant opportunity, with investments in Yelp Assistant and other AI-driven features to enhance user experience and service matching [35][36] - Plans to leverage AI for improving call handling and customer engagement [37][38] Macroeconomic Sensitivity - The restaurant and retail business is more cyclical and sensitive to economic downturns, while the services business has a significant non-discretionary component [41][42] - Service professionals tend to increase advertising during economic slowdowns to maintain business [42] Revenue Guidance and Margin Outlook - Revenue guidance for Q2 2025 indicates a slowdown, with expectations for acceleration in the second half of the year [44] - Factors contributing to margin pressure include increased data spending for AI products, the lower gross margin from RepairPal, and fluctuations in employee-related expenses [48][51] Conclusion - Yelp is focused on delivering value to both consumers and advertisers, with a strong emphasis on enhancing product offerings and leveraging AI technologies to drive future growth [43][52]

Core Viewpoint - The S&P 500 has entered positive territory for the year, highlighting a focus on value stocks with independent catalysts for recovery, specifically mentioning Yelp as an overlooked opportunity [1]. Company Insights - Yelp is identified as a stock that has potential for rebound, suggesting it may be undervalued in the current market [1]. - The author has a beneficial long position in Yelp shares, indicating confidence in the stock's future performance [2]. Analyst Background - The analyst has extensive experience covering technology companies and has worked in Silicon Valley, providing a strong foundation for insights into industry trends [1]. - The analyst has been contributing to Seeking Alpha since 2017 and has been featured in various web publications, indicating a recognized presence in the investment community [1].

Core Insights - The 2025 "Must-Eat List" by Dianping has been announced, covering 3,146 restaurants across 144 cities and regions, with significant growth in both domestic and international locations [1][2] - The restaurant industry in China is experiencing a recovery, with a focus on local flavors and value-for-money offerings, as indicated by the increasing number of non-chain and long-established local eateries [1][2] Group 1: Overview of the 2025 "Must-Eat List" - The list includes 3,146 restaurants, with 1,700 new entries compared to last year, and features 116 domestic cities and 28 international cities [1] - Key trends include a strong emphasis on "local characteristics," "freshly prepared," and a significant representation of non-chain restaurants, which account for over 50% of the list [1][2] - The average consumer spending in the restaurant sector is stable at around 75 yuan, with nearly 80% of restaurants priced under 100 yuan per person [1] Group 2: Emerging Cities and Restaurant Composition - New cities such as Jieyang, Quzhou, Linyi, and Baotou have seen over 40% of their user traffic coming from outside the area, indicating a growing interest in these locations as culinary destinations [2] - Over 70% of the new entrants are street food vendors, with nearly 40% being local establishments that have been in business for over 10 years [2] - The list has expanded to include 15 new international cities, reflecting a growing trend of users exploring culinary options in regions like Japan, Southeast Asia, and Europe [2] Group 3: Impact and Future Prospects - The "Must-Eat List" has become a significant driver for restaurant growth, with online traffic for newly listed merchants in new cities increasing by over 50% following the announcement [3] - The platform will continue to rigorously select restaurants during the public announcement period to ensure quality and authenticity [3]

Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Yelp's unaudited Q1 2025 financials, with revenue up 8% to $358.5M and net income up 72% to $24.4M [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly increased to $985.2M, liabilities rose to $257.2M, and stockholders' equity decreased to $728.0M Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$985,203** | **$983,567** | | Total Current Assets | $527,711 | $516,879 | | Goodwill | $133,809 | $130,980 | | **Total Liabilities** | **$257,185** | **$239,598** | | Total Current Liabilities | $182,394 | $154,974 | | **Total Stockholders' Equity** | **$728,018** | **$743,969** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net revenue increased 8% to $358.5M, with net income rising significantly to $24.4M and diluted EPS reaching $0.36 Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $358,534 | $332,752 | | Total costs and expenses | $329,074 | $321,535 | | Income from operations | $29,460 | $11,217 | | Net income attributable to common stockholders | $24,391 | $14,154 | | Diluted net income per share | $0.36 | $0.20 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow rose to $98.0M; investing used $12.0M, financing used $81.7M, including stock repurchases Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $97,995 | $72,855 | | Net cash used in investing activities | $(12,003) | $(6,402) | | Net cash used in financing activities | $(81,713) | $(83,834) | | Change in cash, cash equivalents and restricted cash | $4,931 | $(17,866) | - The company repurchased $**62.5 million** of common stock in both Q1 2025 and Q1 2024[36](index=36&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail RepairPal acquisition ($81.2M), $268.3M stock repurchase authorization, and 14% Services revenue growth - On November 26, 2024, the Company acquired auto services platform RepairPal, Inc. for a preliminary total purchase consideration of $**81.2 million** The acquisition is intended to accelerate efforts in the Services categories[61](index=61&type=chunk)[62](index=62&type=chunk) - The RepairPal acquisition resulted in $**30.8 million** of goodwill and $**53.6 million** of intangible assets, primarily business relationships and developed technology[64](index=64&type=chunk) - As of March 31, 2025, $**268.3 million** remained available for stock repurchases under the board's authorized program The company repurchased $**62.5 million** of stock in Q1 2025[86](index=86&type=chunk)[87](index=87&type=chunk) Net Revenue by Product Line (in thousands) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Advertising Revenue:** | | | | Services | $231,576 | $203,288 | | Restaurants, Retail & Other | $110,425 | $114,350 | | **Total Advertising** | **$342,001** | **$317,638** | | Other | $16,533 | $15,114 | | **Total Net Revenue** | **$358,534** | **$332,752** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 8% revenue growth to $358.5M, driven by Services, and adjusted EBITDA growth to $84.9M [Overview](index=26&type=section&id=Overview) Q1 2025 net revenue reached $358.5M, net income $24.4M, and adjusted EBITDA $84.9M, with Services growth - Strategic initiatives for revenue growth include: Leading in Services, Driving advertiser value, and Transforming the consumer experience[112](index=112&type=chunk)[113](index=113&type=chunk) - Services revenue grew **14%** YoY, driven by Home and Auto Services, including contributions from the newly acquired RepairPal[113](index=113&type=chunk) - The company is enhancing its platform with AI, including Yelp Assistant with photo recognition and AI-powered business summaries leveraging LLMs[113](index=113&type=chunk) [Key Metrics](index=27&type=section&id=Key%20Metrics) Ad clicks decreased 3% while average CPC increased 9%, with total paying advertising locations down 3% to 517K Year-over-Year Change in Ad Clicks and Average CPC | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Ad Clicks | (3)% | 8% | | Average CPC | 9% | (1)% | Paying Advertising Locations (in thousands) | Category | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Services | 261 | 252 | 3% | | Restaurants, Retail & Other | 256 | 278 | (8)% | | **Total** | **517** | **530** | **(3)%** | - The decrease in ad clicks was primarily driven by macroeconomic pressures in RR&O categories and reduced spend on paid search for Services projects[120](index=120&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Total net revenue rose 8% to $358.5M, with income from operations up 163% to $29.5M due to controlled expenses Q1 2025 vs Q1 2024 Results of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total net revenue** | **$358,534** | **$332,752** | **$25,782** | **8%** | | Cost of revenue | $34,828 | $27,355 | $7,473 | 27% | | Sales and marketing | $146,284 | $147,791 | $(1,507) | (1)% | | Product development | $83,905 | $91,227 | $(7,322) | (8)% | | General and administrative | $51,707 | $45,232 | $6,475 | 14% | | **Total costs and expenses** | **$329,074** | **$321,535** | **$7,539** | **2%** | | **Income from operations** | **$29,460** | **$11,217** | **$18,243** | **163%** | - Cost of revenue increased primarily due to higher advertising fulfillment costs, website infrastructure expense, and revenue share payments related to the RepairPal acquisition[136](index=136&type=chunk)[143](index=143&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA significantly increased to $84.9M (24% margin), and Free Cash Flow rose to $87.5M in Q1 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $24,391 | $14,154 | | Adjustments (Taxes, Other income, D&A, SBC, etc.) | $60,553 | $50,302 | | **Adjusted EBITDA** | **$84,944** | **$64,456** | | Net revenue | $358,534 | $332,752 | | **Adjusted EBITDA margin** | **24%** | **19%** | Reconciliation of Net Cash from Operations to Free Cash Flow (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $97,995 | $72,855 | | Purchases of property, equipment and software | $(10,531) | $(6,987) | | **Free cash flow** | **$87,464** | **$65,868** | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity includes $222.0M cash, $102.4M marketable securities, and $111.0M available credit, sufficient for needs - As of March 31, 2025, the company had $**222.0 million** in cash and cash equivalents and $**102.4 million** in marketable securities[160](index=160&type=chunk) - The company has a $**125.0 million** senior secured revolving credit facility, with $**14.0 million** of letters of credit outstanding and $**111.0 million** available[162](index=162&type=chunk)[163](index=163&type=chunk) - Material cash requirements include $**38.3 million** for operating leases and approximately $**167.5 million** for purchase obligations, primarily website hosting[166](index=166&type=chunk)[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks, including interest rate, foreign exchange, and inflation, remain materially unchanged from year-end 2024 - The company's primary market risks include interest rate, foreign exchange, and inflation, which have not changed materially since year-end 2024[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[179](index=179&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2025[180](index=180&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) A $15.0M settlement for the CIPA Action was approved, and other legal proceedings are not expected to be material - On April 10, 2024, the Superior Court granted final approval of a $**15.0 million** settlement for the California Invasion of Privacy Act (CIPA) Action, resolving all claims against the company[75](index=75&type=chunk) - The company does not believe the final outcome of any other ordinary course legal matters will have a material effect on its business or financial position[184](index=184&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report - No material changes have occurred to the risk factors set forth in the company's Annual Report[185](index=185&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 1.7M shares for $62.5M in Q1 2025, with $268.3M remaining for future repurchases Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased (thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | January 2025 | 638 | $39.66 | | February 2025 | 114 | $35.44 | | March 2025 | 937 | $35.39 | - As of May 2, 2025, $**238.7 million** remained available under the company's $**1.95 billion** stock repurchase authorization[186](index=186&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) CTO Sam Eaton and board member Dan Jedda entered Rule 10b5-1 trading plans for future stock sales - On February 20, 2025, CTO Sam Eaton entered into a Rule 10b5-1 trading plan for the potential sale of up to approximately **63,116 shares**[189](index=189&type=chunk) - On March 6, 2025, board member Dan Jedda entered into a Rule 10b5-1 trading plan for the potential sale of up to **4,258 shares**[190](index=190&type=chunk)

Core Insights - Yelp Inc. reported a strong first-quarter 2025 performance with earnings jumping 80% to 36 cents per share, exceeding the Zacks Consensus Estimate by 16.1% [1] - The company's revenues increased 8% year over year to $359 million, surpassing the consensus mark by 1.8%, primarily driven by growth in advertising revenues from Services businesses [2] Financial Performance - Advertising revenues, which constitute 95.2% of total revenues, rose 8% year over year to $342 million, mainly due to increased revenues from Yelp ad products and the RepairPal Network [3] - Advertising revenues from the Services business grew 14% year over year to $232 million, while the RR&O division saw a decline of 3% to $110 million due to macroeconomic challenges [4] - Total costs and expenses increased 2% year over year to $322 million, with adjusted EBITDA climbing 32% year over year to $85 million, resulting in an adjusted EBITDA margin increase to 24% from 19% [6] Balance Sheet and Cash Flow - As of March 31, 2025, Yelp had cash, cash equivalents, and short-term marketable securities totaling $324 million with no debt [7] - The company generated an operating cash flow of $98 million and free cash flow of $87.5 million in the first quarter [7] Guidance - Yelp updated its full-year 2025 revenue guidance to a range of $1.465 billion to $1.485 billion, with adjusted EBITDA expected between $345 million and $365 million [8] - For the second quarter of 2025, Yelp anticipates revenues between $362 million and $367 million, with adjusted EBITDA projected in the range of $84 million to $89 million [9]

Core Insights - Yelp reported revenue of $358.53 million for Q1 2025, a year-over-year increase of 7.8% and an EPS of $0.36 compared to $0.20 a year ago, exceeding Zacks Consensus Estimates [1] - The revenue surprise was +1.85% against the consensus estimate of $352.02 million, while the EPS surprise was +16.13% against the consensus estimate of $0.31 [1] Financial Performance Metrics - Yelp's shares returned -0.6% over the past month, while the Zacks S&P 500 composite increased by +11.3% [3] - The company has a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3] Advertising Metrics - Total Paying Advertising Locations were 517 thousand, slightly below the estimated 521.75 thousand [4] - Paying Advertising Locations for Restaurants, Retail & Other were 256 thousand, compared to the estimated 264 thousand [4] - Paying Advertising Locations for Services were 261 thousand, exceeding the estimated 256.67 thousand [4] - Net revenue from Advertising was $342 million, surpassing the average estimate of $335.97 million, with a year-over-year change of +7.7% [4] - Net revenue from Other services was $16.53 million, above the average estimate of $16.12 million, reflecting a year-over-year change of +9.4% [4] - Advertising revenue from Services was $231.58 million, exceeding the average estimate of $219.77 million, with a year-over-year change of +13.9% [4] - Advertising revenue from Restaurants, Retail & Other was $110.43 million, below the average estimate of $115.50 million, showing a year-over-year change of -3.4% [4]

Core Insights - Yelp reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and showing an increase from $0.20 per share a year ago, representing an earnings surprise of 16.13% [1] - The company generated revenues of $358.53 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.85% and increasing from $332.75 million year-over-year [2] - Yelp has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Financial Performance - The earnings surprise for the previous quarter was 21.57%, with actual earnings of $0.62 per share compared to an expected $0.51 [1] - The current consensus EPS estimate for the upcoming quarter is $0.55, with projected revenues of $371.85 million, and for the current fiscal year, the estimate is $2.15 on revenues of $1.47 billion [7] Market Position - Yelp shares have declined approximately 8.2% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The Zacks Industry Rank places the Internet - Content sector in the bottom 26% of over 250 Zacks industries, indicating potential challenges for stock performance [8] Future Outlook - The sustainability of Yelp's stock price movement will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current estimate revisions trend for Yelp is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]

Financial Data and Key Metrics Changes - Yelp reported an 8% year-over-year revenue growth, generating $359 million in net revenue, with net income increasing by 72% to $24 million, representing a 7% margin [5][11] - Adjusted EBITDA rose by 32% year-over-year to $85 million, reflecting a 24% margin, exceeding expectations by $15 million [11][14] - The company expanded its net income margin by three percentage points and adjusted EBITDA margin by four percentage points compared to the prior year [5] Business Line Data and Key Metrics Changes - Services revenue increased by 14% year-over-year to $232 million, marking the sixteenth consecutive quarter of double-digit growth [11][12] - Revenue from restaurants and retail (RR and O) declined by 3% year-over-year to $110 million, with a decrease in paying advertising locations to 517,000 [12][13] - Ad clicks also fell by 3% year-over-year, primarily due to macro pressures in the RR and O categories [12] Market Data and Key Metrics Changes - The operating environment for businesses in the restaurant and retail sectors remains challenging, contributing to the decline in RR and O revenue [6] - Despite the challenges in RR and O, services categories showed strong momentum, with a 10% increase in Request to Quote projects year-over-year [6][7] Company Strategy and Development Direction - Yelp's product-led strategy continues to strengthen the business, with recent rollouts of 15 new features and updates [5] - The company is focusing on enhancing the hiring experience through AI-powered tools and integrating with platforms like Zapier to connect with over 800 CRM systems [8] - Yelp is investing in AI technologies to improve consumer interactions and is excited about the potential of Yelp Assistant to transform user experiences [9][38] Management's Comments on Operating Environment and Future Outlook - Management noted that while the first quarter showed resilience, macroeconomic uncertainties have increased, impacting advertiser sentiment [20][22] - The company expects second-quarter net revenue to be between $362 million and $367 million, with full-year revenue guidance widened to $1.465 billion to $1.485 billion [17][18] - Management remains optimistic about long-term shareholder value creation despite current macro challenges [18] Other Important Information - Yelp repurchased $62.5 million worth of shares in the first quarter, with $268 million remaining under the existing repurchase authorization [14] - The company aims to reduce stock-based compensation as a percentage of revenue to less than 8% by the end of 2025 [13] Q&A Session Summary Question: Can you discuss trends in advertiser sentiment and vertical performance? - Management indicated that services performed well with 14% year-over-year growth, while RR and O advertisers are more cautious due to macro uncertainties [20][21] Question: What are the drivers of CPC growth? - CPC growth was driven by robust advertiser demand in services, while RR and O faced softer trends leading to fewer clicks [29][30] Question: Can you elaborate on the AI strategy and its impact? - Management highlighted the potential of AI in enhancing user experience and lead generation, with new features like photo recognition and intelligent matching being developed [41][42] Question: What are the engagement trends across mobile and web? - Engagement trends showed macro pressure in RR and O, but strong growth in services, with project volume increasing by 15% year-over-year [48][49]

Financial Data and Key Metrics Changes - Yelp reported an 8% year-over-year revenue growth, generating $359 million in net revenue, with net income increasing by 72% to $24 million, representing a 7% margin [5][11] - Adjusted EBITDA rose by 32% year-over-year to $85 million, reflecting a 24% margin, exceeding expectations by $15 million [11][14] - The company expanded its net income margin by three percentage points and adjusted EBITDA margin by four percentage points compared to the prior year [5] Business Line Data and Key Metrics Changes - Services revenue increased by 14% year-over-year to $232 million, marking the sixteenth consecutive quarter of double-digit growth [11][12] - Revenue from restaurants and retail (RR and O) declined by 3% year-over-year to $110 million, with a decrease in paying advertising locations to 517,000 [12][13] - Ad clicks also fell by 3% year-over-year, primarily due to macro pressures in the RR and O categories [12] Market Data and Key Metrics Changes - The operating environment for businesses in the restaurant and retail sectors remains challenging, contributing to the decline in RR and O revenue [6] - Despite the challenges in RR and O, services categories showed strong momentum, with a 10% increase in Request to Quote projects year-over-year [6][7] Company Strategy and Development Direction - Yelp's product-led strategy continues to strengthen the business, with recent rollouts of 15 new features and updates [5] - The company is focusing on enhancing the hiring experience through AI-powered tools and integrating with platforms like Zapier to connect with over 800 CRM systems [8] - Yelp is investing in AI technologies to improve consumer interactions and enhance service offerings, including upcoming AI-powered call answering services [9][46] Management's Comments on Operating Environment and Future Outlook - Management noted that while the first quarter showed resilience, macroeconomic uncertainties have increased, impacting advertiser sentiment [20][22] - The company expects second-quarter net revenue to be in the range of $362 million to $367 million, with full-year revenue guidance modestly widened to between $1.465 billion and $1.485 billion [17][18] - Management remains optimistic about long-term shareholder value creation despite current macro challenges [18] Other Important Information - Yelp repurchased $62.5 million worth of shares in the first quarter, with $268 million remaining under the existing repurchase authorization [14] - The company aims to reduce stock-based compensation as a percentage of revenue to less than 8% by the end of 2025 and less than 6% by the end of 2027 [13][14] Q&A Session Summary Question: Can you discuss trends in advertiser sentiment and vertical performance? - Management indicated that services performed well with 14% year-over-year growth, while RR and O advertisers are more cautious due to macro uncertainties [20][21] Question: What are the drivers of CPC growth? - CPC growth was driven by robust advertiser demand in services, while RR and O faced headwinds leading to fewer clicks [29][30] Question: Can you elaborate on the AI strategy and its impact on CPCs? - Management highlighted the potential of AI in enhancing consumer interactions and improving lead quality, which could support CPC increases [41][42] Question: What are the engagement trends across mobile and web? - Engagement trends showed macro pressure in RR and O, but strong growth in services, with project volume increasing by 15% year-over-year [48][49]