In the first quarter of 2022, our strategic investments in product and marketing drove further progress on our revenue growth initiatives:
Table of Contents
Key Metrics
Ad Clicks
The following table presents year-over-year changes in our ad clicks for the periods indicated (expressed as a percentage):
The following table presents year-over-year changes in our average CPC for the periods indicated (expressed as a percentage):
Advertising Revenue by Category
Our advertising revenue comprises revenue from the sale of our advertising products, including the resale of our advertising products by partners and syndicated ads appearing on third-party platforms.
Table of Contents
Our Services categories consist of home, local, auto, professional, pets, events, real estate and financial services. Our Restaurants, Retail & Other categories consist of restaurants, shopping, beauty & fitness, health and other.
The following table presents our advertising revenue by category for the periods indicated (in thousands, except percentages):
Restaurants, Retail & Other 102,974 81,300 27% Total Advertising Revenue $ 263,237 $ 221,987 19%
Paying Advertising Locations By Category
The following table presents the number of paying advertising locations by category during the periods indicated (in thousands, except percentages):
Table of Contents
Critical Accounting Policies and Estimates
We believe that the assumptions and estimates associated with revenue recognition, website and internal-use software development costs, the incremental borrowing rate used with respect to leases, business combinations, allowance for doubtful accounts, income taxes and stock-based compensation expense have the greatest potential impact on our consolidated financial statements. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report.
Results of Operations
(1) Percentage changes are calculated based on rounded numbers and may not recalculate exactly due to rounding.
(2) Please refer to ” -Key Metrics-Ad Revenue by Category ” for information on a methodology change adopted in 2021.
Three Months Ended March 31, 2022 and 2021
Net Revenue
Table of Contents
Cost of revenue for the three months ended March 31, 2022 increased compared to the prior-year period, primarily due to:
•an increase in website infrastructure expense of $4.1 million as a result of higher traffic;
•an increase in advertising fulfillment costs of $3.2 million, primarily driven by the expansion of Yelp Audiences; and
•an increase in merchant credit card fees of $0.9 million due to a higher volume of transactions associated with the increase in advertising revenue.
We expect cost of revenue to increase on an absolute dollar basis in 2022 compared to 2021.
Sales and marketing expenses for the three months ended March 31, 2022 increased compared to the prior-year period due to:
•an increase in marketing and advertising costs of $8.3 million, primarily reflecting our investment in consumer marketing; and
•an increase of $7.5 million in employee costs due to higher average sales headcount as compared with the prior-year period.
Table of Contents
These increases were partially offset by a decrease in allocated workplace operating costs of $2.6 million due to reductions in our amount of leased office space, which began at the end of the first quarter of 2021 and continued throughout the remainder of the year.
Depreciation and Amortization. Depreciation and amortization expense primarily consists of depreciation on computer equipment, software, leasehold improvements, capitalized website and software development costs, and amortization of purchased intangible assets.
Other Income, Net
Benefit from Income Taxes
Table of Contents
Non-GAAP Financial Measures
•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 restructuring costs; and
•other companies, including those in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Adjusted EBITDA. 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 restructuring costs.
Adjusted EBITDA margin. Adjusted EBITDA margin is a non-GAAP financial measure that we calculate as adjusted EBITDA divided by net revenue.
Table of Contents
The following is a reconciliation of net loss to adjusted EBITDA, as well as the calculation of net loss margin and adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages):
Liquidity and Capital Resources
Sources of Cash
Table of Contents
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 $57.7 million, of which approximately $42.7 million is expected to be paid within the next 12 months.
© Edgar Online, source Glimpses


Leave a Reply

Your email address will not be published. Required fields are marked *