Boston, MA 05/01/2014 (wallstreetpr) – Yelp Inc (NYSE:YELP)’s price has gone down from $101.75 per share to $54.88 since March 2014 as the Company lowers its FY2014 guidance compared to analysts’ estimates. The stock recovered marginally and closed at $58.32 on April 30, despite the positive increase over revenue and adjusted EBITDA in its first quarter ended March 31, 2014.
During first quarter 2014, Yelp integrated with Yahoo local search and built advertising partnership with YP and extended the existing relationships with Apple Maps and Bing. It helped the Company to expand its services across geographies and increase the number of visitors. So, during 1Q2014, average monthly unique visitors grew by 30% year over year to ~132 million because of 52% year over year increase in mobile visitors to ~61 million. As a result of high growth in local business accounts (+65%), local business revenue increased significantly that increase the overall net revenue by 66% year over year to $76.4 million.
Solid growth in the top line was due to increasing momentum over the business that improved Yelp Inc (NYSE:YELP)’s operating profit. Adjusted EBITDA rose to $8.5 million in 1Q2014 from $3.2 million in the first quarter 2013. However, higher change in income tax continues to report lower net income.
Yelp continues to invest in product innovation and geographic expansion to create large future opportunity for local business. Recent partnership with YP will enhance Yelp’s business by enabling the access for large advertisers’ base and a broad range of products for local businesses. In addition, high growth in the international reviews (+210%) and traffic (+95%) will further increase the market for Yelp’s global operations.
Considering the above opportunities, the Company expects positive growth and upgrades its financial guidance for FY2014. Yelp Inc (NYSE:YELP) expects 57% year over year increase in net revenue to a range of $363 – $367 million with adjusted EBITDA of $56 to $60 million.