Investor Deck Q3 2013

Transcription

1 Investor Deck Q

2 Safe Harbor 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, future financial position, future revenue, projected growth and expenses, opportunities, prospects, the effects of growth in use of mobile devices and plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as believe, may, will, estimate, forecast, guidance, continue, anticipate, intend, could, would, project, plan, expect or the negative or plural of these words or similar expressions. The Company has based these forward-looking statements largely on its estimates of its financial results and its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward looking statements are subject to a number of risks, uncertainties and assumptions, including the fact that we have a short operating history in an evolving and competitive industry, that our growth rate may not be sustainable, that we rely on traffic to our website from search engines like Google, Yahoo! and Bing, our ability to generate and maintain sufficient high quality content from our users, our ability to monetize our mobile app effectively, our ability to maintain, protect and enhance our brand, possible negative publicity about us, our ability to manage acquisitions of new businesses, solutions and technologies, that growth in use of our mobile app and mobile website as substitutes for our website on personal computers, the efficacy of our technology filter, our ability to maintain and expand our base of advertisers and our ability to expand effectively into new markets, including internationally. These risks and uncertainties may also include those described in the Company s most recent Form 10-Q or 10-K filed with the Securities and Exchange Commission. New risks emerge from time to time. It is not possible for Company management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in these slides and the accompanying oral presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Any forward-looking statement speaks only as of its date. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this presentation, to conform these statements to actual results or to changes in the Company s expectations. 2

3 Mission 3

4 Positive Feedback Loop Community Revenue Consumer Traffic Reviews 4

5 Markets Underway Review Growth Relative to Community Manager Start 1000 bubble size = adult metro population International Domestic 100 log scale Growth in Reviews relative to CM Start Years since CM Start Note: Includes reviews from Integrated Qype markets (Ireland, Italy, Spain, France and UK); growth in reviews and years since CM start updated as of 9/30/13 Source: N. American and Australian city populations taken from government census data; European city populations taken from Eurostat. 5

6 Large Market Opportunity Local Businesses Local Ad Spend Worldwide Total Online and Offline 73M $133B US + Western Europe + Canada + AU 53M Online $26B Yelp: 1.3M* * Number of cumulative claimed local business locations as of Sep 30, 2013 Sources: IDC worldwide SMBs as of 2009; Australian Government, Department of Innovation, Industry, Science and Research as of June 2009; Canadian Small Business Report as of 2010; US Census Bureau as of 2008; BIA Kelsey for 2013 projected local ad spend 6

7 Key Focus Areas Mobile International Expansion Closing the Loop 7

8 Mobile 8

9 Mobile Amplifies the Local Opportunity 11.2M unique devices using the app* 62% searches coming from mobile** 27M clicks for directions*** 19M calls to businesses*** 12 70% % % 20 Millions 6 40% 30% Millions % % 5 0 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 0% 0 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 App Usage** (M) % Searches on Mobile Phone Calls Directions * App usage based on number of unique devices on a monthly average basis in Q ** In Q *** Phone calls are defined as clicks to calls from the app, directions defined as clicks for directions from the app; based on Q Note: Metrics above do not include Qype searches 9

10 Continued Mobile Development 25% of New Reviews Coming from Mobile* 46% of Ad Impressions Nearby Feature with More Personalization * As of the end of Q Note: Ad impressions data for Q

11 International Expansion 11

12 New Market Launches 111 total markets (51 int l) 5 new markets in Q3 13 As of Sep 30,

13 Rapid International Growth Cumulative Reviews* Unique Visitors** Revenue 129% y/y 3.6M 98% y/y 21.5M 680% y/y $3.0M 1.6M 10.8M $0.4M Q3'12 Q3'13 Q3'12 Q3'13 Q3'12 Q3'13 *International review metrics include integrated Qype markets: Ireland, Italy, Spain, Brazil, UK (~375k) and France (~600k) **Source: Google Analytics, average number of monthly unique visitors over a given three-month period 13

14 Closing the Loop 14

15 Compelling ROI When do Yelp users buy?* $23,000 Average Annual Revenue Lift from Advertising on Yelp Compared to $8,000 for Non-Advertisers** *How long after you visit Yelp do you typically make a purchase from a business you found on Yelp? Source: Nielsen Survey fielded 3/29/13-4/15/13 **Source: Boston Consulting Group Survey conducted Nov

16 Dashboard for Businesses to Measure Success 16

17 Yelp Platform: From Discovery to Transaction 17

18 Plentiful Opportunities 18

19 Compelling Metrics* Cumulative Reviews Unique Visitors* Active Local Biz Accts M 42% y/y 47.3M 84M 41% y/y 117M 61% y/y 57.2K 35.5K Q3'12 Q3'13 Q3'12 Q3'13 Q3'12 Q3'13 Note that the review and active local business accounts metrics for Q include integrated Qype markets: Ireland, Italy, Spain, France, the UK and Brazil 1 number of active local business accounts from which we recognized revenue during the period * Per Google Analytics, average number of monthly unique visitors over a given three-month period 19

20 Growth Across All Sources of Revenue ($M) $150 Other Brand Local $137.6M $125 $100 $83.3M $75 $61.2M $50 $25 $25.8M $47.7M $36.4M $ Q3'12 Q3'13 20

21 Significant Operating Leverage $9 Adj. EBITDA ($M) % Adj. EBITDA Margin $8 13% $7 11% $6 10% Adj. EBITDA ($M) $5 $4 $3 $2 $1 $1.6 $2.2 $1.8 $3.2 $7.8 $8.1 8% 6% 5% 3% 2% Adj. EBITDA Margin % $0 -$1 ($1.0) 0% -2% -$2-3% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Note: See Appendix for reconciliation to GAAP Net Loss for the periods presented 21

22 Cohort Analysis Local Revenue U.S. Market Cohort Number of Yelp Markets (1) Average Cumulative Reviews As of Sep 30, 2013 (2) Year-Over-Year Growth in Average Cumulative Reviews (3) Average Local Advertising Revenue Q (4) Year-Over-Year Growth in Average Local Advertising Revenue (5) Cohort 6 3,396 35% $3,832 57% Cohort % $954 74% Cohort % $213 99% (1) A Yelp market is defined as a city or region in which we have hired a Community Manager. (2) Average cumulative reviews is defined as the total cumulative reviews of the cohort as of September 30, 2013 (in thousands) divided by the number of markets in the cohort. (3) Year-over-year growth in average cumulative reviews compares the average cumulative reviews as of September 30, 2013 with that of September 30, (4) Average local advertising revenue is defined as the total local advertising revenue from businesses in the cohort over the three-month period ended September 30, 2013 (in thousands) divided by the number of markets in the cohort. (5) Year-over-year growth in average local advertising revenue compares the local advertising revenue in the three-month period ended September 30, 2013 with that of the same period in

23 Appendix 23

24 Appendix: Adjusted EBITDA Reconciliation ($M) Q1'12A Q2'12A Q3'12A Q4'12A 2012A Q1'13A Q2'13A Q3'13A Adjusted EBITDA Bridge Net Income/(Loss) ($9.8) ($2.0) ($2.0) ($5.3) ($19.1) ($4.8) ($0.9) ($2.3) + Tax & Other Expenses Depreciation and Amortization Stock Based Compensation Restructuring and Integration Contribution to The Yelp Foundation Adjusted EBITDA ($1.0) $1.6 $2.2 $1.8 $4.6 $3.2 $7.8 $8.1 24

25 Appendix: Wide Breadth of Business Categories Distribution of Reviewed Businesses Travel & Hotel 4% Nightlife 4% Auto 4% Health 6% Other 12% Shopping 23% Arts, Entertainment & Events 7% Restaurants 20% Beauty & Fitness 9% Home & Local Services 11% Note: As of Sep 30, 2013; Includes some businesses that have only received reviews that have been filtered or have been removed 25

26 Appendix: Case Study Philadelphia Reviews by Metro / Philadelphia (Cumulative) Thousands 600 Revenue (in thousands) $2, $1, $ * $0 *Forecasted based on Q

27 Appendix: Local Advertising Example 27