Q1 2023 Yelp Inc Earnings Call
Jeremy Stoppelman: --and high intent audience continue to generate robust advertiser demand in the first quarter. New revenue increased by 13% year over year to $312 representing a record for the sixth quarter in a row. We delivered this performance with a net loss of $1 million and adjusted EBITDA of $54 million.
Jeremy Stoppelman: In the first quarter, we leaned into our roadmap to deliver value to advertisers across our key categories. These efforts resulted in the recent launch of Yelp guarantee which provides consumers with even greater confidence when hiring service growth.
These efforts resulted in the recent launch of Yelp guarantee which provides consumers with even greater confidence when hiring service growth.
Jeremy Stoppelman: Advertising revenue growth from services businesses accelerated from the fourth quarter of 2022 to 15% year-over-year. The home services category was particularly strong, with 25% year-over-year revenue growth. Advertising revenue from restaurants, retail, and other businesses increased by 10% year over year.
Home services category was particularly strong with 25% year over year revenue growth advertising revenue from restaurants retail and other businesses increased by 10% year over year.
Jeremy Stoppelman: Our portfolio of down funnel AD products resonated with S&B and multi location advertisers in the first quarter and we continue to make progress against our initiatives to drive sales through our most efficient channels.
Jeremy Stoppelman: Self serve revenue increased by approximately 25% year-over-year and multi location revenue increased by approximately 15% year-over-year.
Jeremy Stoppelman: After increasing our investment in the consumer experience in 2022, our teams hit the ground running in 2023 by introducing a number of exciting new products and feature updates that make Yelp even more engaging and useful for users.
Jeremy Stoppelman: We've rolled out new ways for consumers to contribute to and interact with our trusted content, including interactive review topics suggestions of video review format and new review reaction.
Jeremy Stoppelman: AI presents a great opportunity to enhance our search and discovery experiences for consumers. Leveraging our rich first party data set, we improved our search suggestions and applied LLM technology to surface even more relevant review highlights in the first quarter. We also added a surprise me feature to assist with restaurant discovery.
Jeremy Stoppelman: These updates represent the most significant product momentum we've had on the consumer side of our business in recent years and we continue to have a robust pipeline of projects for the remainder of 2023 and beyond.
Jeremy Stoppelman: In summary, Yelp's standout performance in the first quarter with faster revenue growth than many of our advertising peers demonstrates the value of our broad based local AD platform. I'm incredibly proud of the Yelp team, which has established a track record of consistent execution. With our strong results and significant product innovation in the first quarter, I am confident in our ability to drive long term profitable growth. With that, I'd like to turn it over to David.
Long term profitable growth with that I'd like to turn it over to David.
David A. Schwarzbach: Thanks Jeremy. First quarter net revenue increased by 13% year-over-year to $312 million, $2 million above the high end of our outlook range.
David A. Schwarzbach: Adjusted EBITDA increased by 12% year-over-year to $54 million, $4 million above the high end of our outlook range. Topline growth was predominantly driven by an increase in average revenue per location and to a lesser extent an increase in paying advertising locations which reached 554,000.
The $54 million.
$4 million above the high end of our outlook range.
Topline growth was predominantly driven by an increase in average revenue per location and to a lesser extent an increase in paying advertising locations. Which reached 554000. In services.
Which reached 554000. In services.
In services.
David A. Schwarzbach: In services, AD revenue increased by 15% year over year to a record $184 million, driven by balanced growth across paying advertising locations and average revenue per location. In RR [inaudible] AD revenue increased by 10% year over year to $114 million, driven by growth in average revenue per location but partially offset by a decrease in paying advertising locations as restaurants and retailers continue to face elevated input cost. Recent volatility in our AD clicks and average CPC metrics further moderated in the first quarter. AD clicks increased by 1% year-over-year, while average CPC's increased by 14% year-over-year.
Driven by balanced growth across paying advertising locations and average revenue per location. <unk> no AD revenue increased by 10% year over year to $114 million driven by growth in average revenue per location. Partially offset by a decrease in paying advertising locations as restaurants and retailers continue to face elevated input cost <unk>. Recent volatility in our AD clicks in average CPC metrics further moderated in the first quarter. AD clicks increased by 1% year over year, while average cpc's increased by 14% year over year.
<unk> no AD revenue increased by 10% year over year to $114 million driven by growth in average revenue per location. Partially offset by a decrease in paying advertising locations as restaurants and retailers continue to face elevated input cost <unk>. Recent volatility in our AD clicks in average CPC metrics further moderated in the first quarter. AD clicks increased by 1% year over year, while average cpc's increased by 14% year over year.
Partially offset by a decrease in paying advertising locations as restaurants and retailers continue to face elevated input cost <unk>. Recent volatility in our AD clicks in average CPC metrics further moderated in the first quarter. AD clicks increased by 1% year over year, while average cpc's increased by 14% year over year.
Recent volatility in our AD clicks in average CPC metrics further moderated in the first quarter. AD clicks increased by 1% year over year, while average cpc's increased by 14% year over year.
AD clicks increased by 1% year over year, while average cpc's increased by 14% year over year.
David A. Schwarzbach: Turning to expenses, first quarter expenses increased from the fourth quarter of 2022 in part due to a number of seasonal expense drivers, including payroll taxes and marketing spend as well as relatively low employee attrition.
David A. Schwarzbach: Compared to the first quarter of 2022, total costs and expenses increased by 13% largely reflecting our hiring efforts in 2022. While employee attrition has been trending lower than anticipated, we expect head count to be approximately flat year-over-year by the end of 2023.
While employee attrition has been trending lower than anticipated, we expect head count to be approximately flat year over year by the end of 2023.
David A. Schwarzbach: We further reduced our real estate footprint in the first quarter and incurred an impairment charge of approximately $4 million related to abandonment of the right of use assets and lease hold improvements of a portion of our San Francisco Office space.
A portion of our San Francisco Office space.
David A. Schwarzbach: We now expect the office space reductions we have completed to date will contribute an aggregate of approximately $26 million to $28 million of annual GAAP expense savings in 2023 and 2024, of which we realized approximately $6 million in the first quarter. We also remain focused on reducing stock based compensation as a percentage of revenue to less than 8% by the end of 2025.
Of which we realized approximately $6 million in the first quarter. We also remain focused on reducing stock based compensation as a percentage of revenue to less than 8% by the end of 2025.
David A. Schwarzbach: To achieve this, we are focusing our product development hiring efforts outside of the Bay area, particularly in the UK and Canada as well as adjusting our overall mix of compensation.
David A. Schwarzbach: Returning capital to shareholders through share repurchases remains an important element of our overall capital allocation strategy. In the first quarter, we repurchased $50 million worth of shares at an average purchase price of $29.40. As of March 31st, 2023, we had $232 million remaining under our existing share repurchase authorization. We plan to continue repurchasing shares throughout the remainder of the year, subject to market and economic conditions.
As of March 31st, 2023, we had $232 million remaining under our existing share repurchase authorization. We plan to continue repurchasing shares throughout the remainder of the year, subject to market and economic conditions.
We plan to continue repurchasing shares throughout the remainder of the year subject to market and economic conditions.
David A. Schwarzbach: Turning to our outlook, we expect net revenue will be in the range of $320 million to $330 million in the second quarter as our product led initiatives continue to drive robust advertiser demand. For the full year, we are raising our outlook range and now expect net revenue to be in the range of $1.295 billion to $1.315 billion, reflecting our first quarter outperformance balanced against continued macro uncertainties.
The full year, we are raising our outlook range and now expect net revenue to be in the range of $1 $2 95 billion to. 2131 5 billion.
2131 5 billion.
David A. Schwarzbach: Turning to margin, we expect second quarter expenses to be relatively consistent with the first quarter as lower payroll tax expense will be offset by lower than expected employee attrition and higher sales commission, reflecting strong advertiser acquisition trends. As a result, we anticipate adjusted EBITDA will grow sequentially to be in the range of $60 million to $70 million in the second quarter.
<unk> acquisition trends as a result, we anticipate adjusted EBITDA will grow sequentially to be in the range of $60 million $70 million in the second quarter.
David A. Schwarzbach: In the second half of the year, we expect expenses will decrease from the first half due to seasonality, including lower sales and marketing expenses in the fourth quarter. Together, with our expected revenue growth, we anticipate adjusted EBITDA will be in the range of $290 million to $310 million for the full year.
The $310 million for the full year.
David A. Schwarzbach: In closing, Yelp's first quarter results demonstrate the strength and resiliency of our broad based local advertising platform and product led strategy. We continue to be pleased with the execution of our teams, which has enabled us to deliver strong financial performance in the face of ongoing macro uncertainties and gives us continued confidence in our ability to drive shareholder value over the long term.
We continue to be pleased with the execution of our teams, which has enabled us to deliver strong financial performance in the face of ongoing macro uncertainties and gives us continued confidence in our ability to drive shareholder value over the long term.
David A. Schwarzbach: With that operator, please open up the line for questions.
Operator: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure the device is on mute.
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Operator: Our first question today comes from Colin Sebastian with Baird. Your line is open.
Colin Alan Sebastian: Thanks, good afternoon. I have a couple of questions. First off, looking at the trend lines in CPC's and clicks [inaudible] converge a bit, it looks like at least on track to converge over the next couple of quarters, is that the right way to think about it and are your initiatives there still continuing to try to drive higher impression volumes and lower prices? And then on the home services, just trying to understand perhaps the disparity between the Request a Quote and overall home services strength and the acceleration there if you could talk about maybe the dynamic between those two factors. Thank you.
First off looking at the trend lines in Cpc's and clicks as they can.
Converge a bit.
It looks like at least on track to converge over the next couple of quarters is that the right way to think about it and are your initiatives, they're still continuing to try to drive.
Higher impression volumes and lower prices and then on the home services, just trying to understand perhaps the disparity between the request a quote.
And overall home services strength. Acceleration there if you could talk about maybe the dynamic between those two factors. Thank you.
Acceleration there if you could talk about maybe the dynamic between those two factors. Thank you.
David A. Schwarzbach: Hey Colin, it's David. Starting off on CPCs and clicks, we were definitely pleased to see clicks and CPCs moderate and for clicks to return to growth in the first quarter. As you know, advertisers provide us with budget and then we run an auction defined market price for a given visitor at a given time, in a given category, in a given geography, and we are focused on ensuring that we're delivering value to advertisers and optimizing the deployment of their budget. So we have made significant investments, as you can tell from these results, in continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So we do believe that we have a significant roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction to optimize the price and the number of clicks. So that will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that they not only stay with us, but they increase their budget. And on one point, we continue to see very strong revenue per paying advertising locations, average revenue per paying advertising locations in the first quarter, so we think that continues to reflect value that we're delivering.
Clicks and CPC is moderate and for <unk> to return to growth. In the first quarter. As you know. Advertisers provide us with budget and then we run an auction defined market. Price for a given visitor. At a given time in a given category in a given geography, and we are focused on ensuring that we're delivering value to advertisers. Optimizing the deployment of their budget. So we have made. Made significant investments as you can tell from these results and continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So. We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
In the first quarter. As you know. Advertisers provide us with budget and then we run an auction defined market. Price for a given visitor. At a given time in a given category in a given geography, and we are focused on ensuring that we're delivering value to advertisers. Optimizing the deployment of their budget. So we have made. Made significant investments as you can tell from these results and continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So. We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
As you know. Advertisers provide us with budget and then we run an auction defined market. Price for a given visitor. At a given time in a given category in a given geography, and we are focused on ensuring that we're delivering value to advertisers. Optimizing the deployment of their budget. So we have made. Made significant investments as you can tell from these results and continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So. We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Advertisers provide us with budget and then we run an auction defined market. Price for a given visitor. At a given time in a given category in a given geography, and we are focused on ensuring that we're delivering value to advertisers. Optimizing the deployment of their budget. So we have made. Made significant investments as you can tell from these results and continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So. We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Price for a given visitor.
At a given time in a given category in a given geography, and we are focused on ensuring that we're delivering value to advertisers. Optimizing the deployment of their budget. So we have made. Made significant investments as you can tell from these results and continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So. We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Optimizing the deployment of their budget. So we have made. Made significant investments as you can tell from these results and continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So. We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Made significant investments as you can tell from these results and continuing to refine the mechanism by which we have done those auctions and all of the data that we ingest in order to ensure that we're doing it as efficiently as possible. So. We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
We do believe that we have. Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Ken. Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Roadmap of additional initiatives to continue to drive value, but I just want to underscore that we will continue to allow the auction. Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Optimized. And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
And number of clicks so. That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
That will play out over the coming quarters and of course, we believe that delivering value to advertisers is fundamental to ensuring that day. They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
They not only stay with. With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
With us, but they increased increase their budget. And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
And on one point, we continue to see very strong. Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
Revenue per paying advertising locations average revenue per paying advertising locations. In the first quarter. So we think that continues to reflect value that we're delivering.
In the first quarter. So we think that continues to reflect value that we're delivering.
Jeremy Stoppelman: Hey, Colin, this is Jeremy. I'll take a stab at your second question around home services. I appreciate you calling that out. that was a real bright spot in Q1. We saw revenue up 25% year-over-year and in the services category and more broadly it was 15% year-over-year, so we're feeling really great about advertiser demand. Clearly they are seeing that our leads are high quality, our down funnel that the consumers that they are interacting with our motivated. But that said, we're also working on the product side to continually improve our offering both on the AD matching side, which is underlying Request a Quote, but then also on Request a Quote itself streamlining things. You may have seen our product announcements in there with password list login so that reduces friction. There is also a really big initiative that we've started rolling out called Yelp guaranteed where we stand behind service providers, advertisers, and help them close that business with consumers by offering a Yelp guarantee. You can imagine this could particularly help a newer business that maybe hasn't had the chance to build up their reputation in the same way as someone more established. So we do have a lot of investments in that area to continue to grow the overall number of Request a Quote. Obviously macro plays a role here, and I think if you look across the peer group of companies there are soft trends out there, but even despite the overall consumer demand I think we're making really good progress on the product side and we're certainly seeing the demand from businesses remained quite strong and gaining share there.
Hey, Jon this is Jeremy. I'll take a stab at your second question around home services.
I'll take a stab at your second question around home services.
I appreciate you calling that out that was a real bright spot in Q1.
We saw revenue up 25% year over year and in the services category and more broadly it was 15% year over year. So we're feeling really great about advertiser demand clearly they are seeing that our leads are high quality are down funnel that the consumers that they are interacting with our motivated but that said.
<unk>.
We're also working on the product side to continually improve our offering both on the AD matching side, which is underlying request a quote but then also on request a quote itself streamlining things you may have seen our product announcements in there with password list login. So that reduces friction. There is also a really big initiative that we've started.
Rolling out called Yelp guaranteed where we stand behind service providers advertisers and help them close that business with consumers by offering maybe I'll guarantee you can imagine. Particularly help a newer business and maybe hasnt had the chance to build up their reputation in the same way as someone more established so we do have a lot of investments in that area to continue to grow. The overall number of request a quote is obviously macro plays a role here and I think if you look across the peer group of companies there is soft. Trends out there, but even despite the overall consumer demand I think we're making really good progress on the product side and we're certainly seeing the demand from businesses remained quite strong and gaining share there. Yeah.
Particularly help a newer business and maybe hasnt had the chance to build up their reputation in the same way as someone more established so we do have a lot of investments in that area to continue to grow. The overall number of request a quote is obviously macro plays a role here and I think if you look across the peer group of companies there is soft. Trends out there, but even despite the overall consumer demand I think we're making really good progress on the product side and we're certainly seeing the demand from businesses remained quite strong and gaining share there. Yeah.
Trends out there, but even despite the overall consumer demand I think we're making really good progress on the product side and we're certainly seeing the demand from businesses remained quite strong and gaining share there. Yeah.
Yeah.
Colin Alan Sebastian: Thanks Jeremy, thanks David.
Operator: As a reminder, to ask any further questions, please press star one on your telephone keypad now. We now turn to Justin Patterson with Keybanc Capital Markets. Your line is open.
Now turning to adjusted <unk> passion with Keybanc capital markets. Your line is open.
Sergio Roberto Segura: Thank you. This is Sergio Segura on for Justin and we had two questions. Thanks for the color in the letter about product initiatives. I am wondering if you could talk about which products you are most excited about in 2023 maybe from a revenue perspective, which ones are expected to provide the most growth there. And then secondly, just on the self serve channel you noted strength in record customer acquisition in that channel, I was hoping you could talk about your expectations later in the year. Do you think we can expect continued strength there [inaudible] macro? Thank you.
On a revenue perspective, which ones are expected to.
Provide the most growth there and then secondly. Just on the self serve channel you noted strength in record customer acquisition in that channel I was hoping you could talk about your expectations.
Just on the self serve channel you noted strength in record customer acquisition in that channel I was hoping you could talk about your expectations.
Later in the year, but you can. We expect continued strength there. That would be macro thank you.
We expect continued strength there. That would be macro thank you.
That would be macro thank you.
Jeremy Stoppelman: Alright. I can take a stab at your first question here. This is Jeremy again, thanks Sergio. The product initiatives that I'm most excited about in 2023, well, we obviously listed a whole bunch of things that launched in Q1 and that's just Q1. So we're really just getting started here. Product velocity I would say is outstanding, really proud of the product and engineering team coming out of the gate this year really strong. And I think that's reflected in some of the projects that you see there, Yelp Guaranteed on top of the list very exciting reducing friction with password with log and adding video to the review flow I mean, the list goes on so I won't rattle them off, but certainly if you haven't dove in there take a look at that. Beyond that, there continue to be themes, areas that we have considerable investment. And as far as what can have impact we've always seen really great return from investing in our AD Tech stack, so making ads more efficient, better matching, where it's better for consumers, but creates inventory out of thin air. So there is a lot of leverage in that area and we keep finding more and more opportunities.
It can take a stab at your first question here. This is Jeremy again, thanks Sergio.
Products.
Initiatives that I'm most excited about in 2023, well, we obviously listed a whole bunch of things that launched in Q1 and Thats. Just Q1. So we're really just getting started here product velocity I would say is outstanding really proud of the product and engineering team coming out of the gate. This year really strong and I think that's reflect.
And some of the projects that you see their yelp guaranteed on top of the list very exciting reducing friction with password with log and adding video to the review flow I mean, the list goes on it's I won't rattle them off but certainly if you haven't dove in there.
Take a look at that.
There continue to be themes areas that we have considerable investment.
far as what can have impact we've always seen really great return from investing in our AD Tech stack, so making ads more efficient, better matching, where it's better for consumers, but creates inventory out of thin air. So there is a lot of leverage in that area and we keep finding more and more opportunities.
Jeremy Stoppelman: I think it's also worth noting the way that we're investing is not just quarter to quarter or even year to year. We do have a pipeline that extends over multiple years. So we're thinking about things on what can we deliver next quarter, but then we're also thinking about what are we going to deliver in 2024 and we have projects even go beyond that. So it's really an overall portfolio approach. And now we have a several quarter track record of delivering revenue growth led by product and engineering. So we feel really great about where we're at. And I think also if you look at the employee retention side, like we're keeping a lot of our senior folks. The market for engineering labor has really changed dramatically and that means we have well trained people that have been around Yelp that know how to operate executing and I think that's part of what's behind all the innovation you are seeing today.
And now we have a several quarter track record of delivering revenue growth led by product and engineering. So we feel really great about where we're at and I think also if you look at the employee retention side is like we're keeping a lot of our senior folks. The market for. For engineering Labor has really changed dramatically and that means we have well trained people that have been around yelp that know how to operate executing and I think thats part of whats behind all the innovation you are seeing today.
The market for. For engineering Labor has really changed dramatically and that means we have well trained people that have been around yelp that know how to operate executing and I think thats part of whats behind all the innovation you are seeing today.
For engineering Labor has really changed dramatically and that means we have well trained people that have been around yelp that know how to operate executing and I think thats part of whats behind all the innovation you are seeing today.
Jed Nachman: Great. And this is Jed Sergio, I can take that question on self serve. Obviously overall, we're really pleased with the results in the self serve channel during the first quarter. 25% year over year growth was a standout there. I'd say as a part of our product and engineering growth strategy we continue to improve on that self serve offering, improving the conversion flows, demonstrating the value without the need to engage with the salesperson. We experimented with some various push strategies and email strategies over the quarter, which showed some positive retention results and spend results. And we've also focused on delivering value to advertisers through high quality ad clicks, and we talk about that quality a lot and it's one thing to get an ad click, but we want to make sure those customers actually feel the impact of that as click. As Jeremy mentioned, we do have a strong pipeline. We not only have things that we're going to be working on in the near term but a pretty broad toolbox to go after over the coming quarter. So we feel really strong about where we stand with the self service channel.
I'd say as a part of our product and engineering growth strategy. We need to improve on that self serve offering.
We need to improve on that self serve offering.
Improving the conversion flows demonstrating the value without the need to engage with the salesperson, we experimented with some various push strategies and email strategies over the quarter, which showed some positive retention results and spend results.
And we've also focused on delivering value to advertisers through high quality ad clicks.
When we talk about that quality a lot and it's one thing to get an accurate, but we want to make sure those customers actually feel the impact of that AD click.
There is as Jeremy mentioned, we do have a strong pipeline. Not only have things that we're going to be working on in the near term but. A pretty broad. Toolbox to go after over the coming quarter. So we feel really strong about where we stand with the with the self service channel.
Not only have things that we're going to be working on in the near term but.
A pretty broad.
Toolbox to go after over the coming quarter. So we feel really strong about where we stand with the with the self service channel.
Operator: As a reminder, if you would like to ask a question or rejoin the queue, please press star one on your telephone keypad now.
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Operator: We have no further. We have a follow up question from Justin Patterson. Please go ahead.
We have a follow up question from Justin Patterson. Please go ahead.
Justin Patterson: Great. Thank you very much. I'd love to talk a little bit more about the new Yelp Guarantee product. It seems like something that could be pretty meaningful in terms of both the user experience and the advertiser, so I'd love to hear any initial learnings you have from that one. Thank you.
We'd love to talk a little bit more about <unk>. The new Yelp guaranteed products, it seems like something that could be pretty meaningful in terms of. Both the user experience and the advertiser, So I'd love to hear any initial learnings you have from that one thank you.
The new Yelp guaranteed products, it seems like something that could be pretty meaningful in terms of.
Both the user experience and the advertiser, So I'd love to hear any initial learnings you have from that one thank you.
Jeremy Stoppelman: Hi, there Justin. This is Jeremy. Yelp Guarantee, we're really excited about it, it's been in development for a while. We're now in a number of different markets with it rolling out nationwide this summer. And I think what you're pointing to is exactly right, Yelp getting involved in the sense of standing behind businesses, and saying hey, if you go through Request a Quote you're going to have a great experience, and we're guaranteeing that up to $2,500. I think it really it adds value to both sides of the marketplace. And I think early results that we've seen from it in very early testing are that yes it resonates with consumers and it should resonate with business owners as well. So it's early days obviously, and really the way I would think about it is it's an enhancement to our Request a Quote offering. Fundamentally, it's not some totally new different direction, it's simply part of our effort to make Request a Quote are better and better experience for consumers and business owners.
Jeremy.
Yeah, you don't guarantee we're really excited about it it's been in development for a while.
We're now in a.
<unk> of different markets with it rolling out nationwide. This summer and I think what you're pointing to is exactly right yelp getting involved in the sense of standing behind businesses, and saying Hey, If you go through request a quote you're going to have a great experience.
We're guaranteeing that up to $2500 I think it really it adds value to both sides of the marketplace and I think early results that we've seen from it in very early testing are they yes.
It resonates with consumers and it should resonate with business owners as well so it's early days obviously.
And really the way I would think about it is it's an enhancement to our request a quote offering. Fundamentally it's not something totally new different direction, it's simply part of our effort to make request a quote are better and better experience for consumers and business owners.
Fundamentally it's not something totally new different direction, it's simply part of our effort to make request a quote are better and better experience for consumers and business owners.
Justin Patterson: Got it. And then just a quick follow up for David, looking at gross margin, there are some nice sequential progression within there. Anything unique driving that this quarter?
Got it and then just a quick follow up for David.
Looking at gross margin there are some nice sequential progression within there.
Anything unique driving that this quarter.
David A. Schwarzbach: Thanks for the question Justin. I wouldn't say anything unique. Obviously, we have to be very disciplined about expenses and we are continuing to balance between investment and delivering adjusted EBITDA. One of the things that we've said many times is we believe that our product led strategy will enable us to drive margin expansion over the long term. And once again, what you saw in the first quarter was as revenue performed better we were able to flow that through to adjusted EBITDA. So and we've seen that in a number of quarters in '22 and even in '21. So overall very pleased I think with the overall approach that we've taken in and definitely pleased with the results for the first quarter.
To be very disciplined about expenses and we are continuing to balance between invest.
Investment and delivering adjusted EBITDA, one of the things that we've said many times those we believe that our product.
Our strategy will enable us to drive margin expansion over the long term and once again, what you saw in the first quarter was as revenue performed better or we were able to flow that through to adjusted EBITDA. So and we've seen that in a number of quarters in 'twenty, two and even in 'twenty. One. So overall very pleased I think with.
The overall approach that we've taken in and definitely pleased with the results for the first quarter.
Justin Patterson: Okay, great. Thank you both.
Operator: We have no further questions, so this concludes our Q&A on today's conference call. Thank you for your participation. You may now disconnect your lines.
Thank you for your participation you may now disconnect your lines. [music]. Yes. [music].
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