Q1 2024 Yelp Inc Earnings Call

Operator: Good afternoon. My name is Brianna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Yelp Inc. Q1 2024 earnings conference call. Please note that this call is being recorded. All lines have been placed on mute to prevent any background noise.

Good afternoon, My name is briana and I'll be your conference operator today at this time I would like to welcome everyone to the Yelp, Inc. Q1, 2024 earnings conference call.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, please press star 1 a second time. I will now turn today's call over to Josh Willis, Yelp Investor Relations. Please go ahead.

Josh Willis: Please note that this call is being recorded.

Josh Willis: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Josh Willis: If you would like to ask a question. Please press star followed by the number one on your telephone keypad.

Josh Willis: To withdraw your question. Please press star one a second time.

Operator: I will now turn todays call over to Josh Willis Yelp Investor Relations. Please go ahead.

Josh Willis: Good afternoon, everyone, and thank you for joining us on Yelp's first quarter 2024 earnings conference call. Joining me today are Yelp's Chief Executive Officer, Jeremy Stoppelman, Chief Financial Officer, David Schwarzbach, and Chief Operating Officer, Jed Nachman.

Josh Willis: Good afternoon, everyone and thank you for joining us on Europe's first quarter 2024 earnings conference call.

Josh Willis: Joining me today are you.

Josh Willis: Chief Executive Officer, Jeremy Stoppelman.

Josh Willis: Chief Financial Officer, David Schwartzberg, and Chief operating Officer Jed Nachman.

Josh Willis: We published a showholder letter on our investor relations website and with the SEC and hope everyone had a chance to read it. We'll provide some brief opening comments and then turn to your questions. Now, I'll read our St. Barbara State.

Josh Willis: Published a shareholder letter on our Investor Relations website, and with the SEC and hope everyone had a chance to read it.

Josh Willis: We will provide some brief opening comments and then turn to your questions.

Josh Willis: Now I'll read our safe Harbor statement.

Josh Willis: We'll make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. In addition, we are subject to a number of risks that may significantly impact our business and financial results.

Josh Willis: We will make certain statements today that are forward looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward looking statements reflect our opinions only as of the date of this call and we undertake no obligation to revise or publicly release the results of any revision to these forward looking statements.

Josh Willis: In light of new information or future events.

Josh Willis: In addition, we are subject to a number of risks that may significantly impact our business and financial results.

Josh Willis: Please refer to our SEC filings, as well as our shareholder letter, for a more detailed description of the risk factors that may affect our results. During our call today, we may discuss adjusted EBITDA, adjusted EBITDA margin, and free cash flow, which are non-GAAP financial measures. These measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with generally accepted accounting principles. In our shareholder letter released this afternoon, and our filings with the SEC, each of which is posted on our investor relations website, you will find additional disclosures regarding these non-GAAP financial measures, as well as historical reconciliations of GAAP net income loss to both adjusted EBITDA and adjusted EBITDA margin, and a And with that, I will turn the call over to Jeremy.

Josh Willis: Please refer to our SEC filings as well as our shareholder letter for a more detailed description of the risk factors that may affect our results.

Josh Willis: During our call today, we may discuss adjusted EBITA, adjusted EBITA margin and free cash flow, which are non-GAAP financial measures. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with generally accepted accounting principles.

Jeremy: Our shareholder letter released this afternoon, and our filings with the SEC each of which is posted on our Investor Relations website, you will find additional disclosures regarding these non-GAAP financial measures as well as historical reconciliations of GAAP net income loss to adjusted EBITA and adjusted EBITA margin and a historical record.

Jeremy: Filiation of GAAP cash flow from operating activities to free cash flow.

Josh Willis: And with that I will turn the call over to Jeremy.

Jeremy Stoppelman: Thanks Josh, and welcome everyone. As we approach 20 years of helping people connect with great local businesses, I am proud of the impact Yelp has had on the many communities we serve. We continue to lean into our strategic focus on services categories, and we have already seen momentum in our efforts to deliver the best home services experience for consumers and pros. In the first quarter, net revenue increased by 7% year over year to $333 million. Net income was $14 million, reflecting a 4% margin.

Jeremy: Thanks, Josh and welcome everyone. As we approached 20 years of helping people connect with great local businesses I am proud of the impact to help has had on the many communities. We serve we continue to lean into our strategic focus on services categories, and we have already seen momentum in our efforts to deliver the best home services experience for consumer.

Jeremy Stoppelman: And pros.

Jeremy Stoppelman: In the first quarter net revenue increased by 7% year over year to $333 million.

Jeremy Stoppelman: Net income was $14 million, reflecting a 4% margin and adjusted EBITDA increased by 19% year over year to $64 million, representing a 19% margin.

Jeremy Stoppelman: And adjusted EBITDA increased by 19% year over year to $64 million, representing a 19% margin. These results reflect our efforts to improve profitability even as we continue to invest in our strategic growth initiatives. While businesses in our restaurant, retail, and other categories continue to face a challenging operating environment in the first quarter, home services was again a standout performer, with approximately 15% year-over-year revenue growth. Advertising revenue in our services categories grew 11% year over year.

Jeremy Stoppelman: These results reflect our efforts to improve profitability, even as we continue to invest in our strategic growth initiatives.

Jeremy Stoppelman: While businesses in our restaurant retail and other categories continued to face a challenging operating environment in the first quarter home services was again, a standout performer with approximately 15% year over year revenue growth.

Jeremy Stoppelman: Advertising revenue in our services categories grew 11% year over year.

Jeremy Stoppelman: Request-to-quote projects increased by approximately 20% year-over-year in the first quarter, reflecting early positive results from our acquisition of services projects through search engine marketing, as well as continued strength from organic consumer demand. In key categories like movers, we have seen significant increases in request-to-quote projects and ad clicks, as well as a meaningful decline in average CPCs. These promising results were largely driven by our paid project acquisition efforts, and as a result, we plan to continue investing to capture more of the large market opportunity in services.

Jeremy Stoppelman: Request, a quote projects increased by approximately 20% year over year in the first quarter, reflecting early positive results from our acquisition of services projects through search engine marketing as well as continued strength from organic consumer demand in key categories like movers, we have seen significant increases in request a quote.

Jeremy Stoppelman: <unk> and AD clicks as well as a meaningful decline in average Cpc's. These promising results were largely driven by our paid project acquisition efforts and as a result, we plan to continue investing to capture more of the large market opportunity in services as.

Jeremy Stoppelman: As we continue to execute against our robust product roadmap, we introduced more than 15 new features and updates in April. One standout in services is our new LLM-powered Yelp Assistant. This conversational AI can more accurately interpret a consumer's needs, collect relevant project information in a user-friendly way, and deliver an even more targeted lead to service pros.

Jeremy Stoppelman: As we continue to execute against our robust product roadmap, we introduced more than 15, new features and updates in April one standout in services as our new LLM Howard Yelp assistant this conversational AI can more accurately interpreted a consumer's needs collect relevant project information.

Jeremy Stoppelman: And in a user friendly way and deliver an even more targeted lead to service pros.

Jeremy Stoppelman: We also see a broad set of opportunities to bring our trusted content to consumers in new ways. This includes our Yelp Fusion AI API, a new LLM-powered solution enabling partners to tap into Yelp's trusted content. This tool enhances discovery on third-party platforms through natural language search across our broad range of categories, including both services and RRNO, expanding Yelp's reach and utility across the web. We believe these new offerings, along with dozens of other AI-powered initiatives on our web map, will transform how consumers and businesses connect on Yelp.

Jeremy Stoppelman: We also see a broad set of opportunities to bring our trusted content to consumers in new ways. This includes our yelp fusion AI API, a new <unk> powered solution, enabling partners to tap into yelps trusted content.

Jeremy Stoppelman: This tool enhances discovery on third party platforms through natural language search across our broad range of categories, including both services and are now expanding <unk> reach and utility across the web. We believe these new offerings along with dozens of other AI powered initiatives on our roadmap will transform how consumer.

Jeremy Stoppelman: <unk> and businesses connect on Yelp.

Jeremy Stoppelman: In summary, Yelp's first quarter results marked a solid start to the year, and I continue to be excited about the depth and breadth of our robust product roadmap, particularly in services. Overall, we remain confident in our strategy to drive long-term, profitable growth and shareholder value. With that, I'll turn it over to David. Thanks, Jeremy.

Jeremy Stoppelman: In summary, <unk> first quarter results marked a solid start to the year and I continue to be excited about the depth and breadth of our robust product roadmap, particularly in services overall, we remain confident in our strategy to drive long term profitable growth and shareholder value with that I'll turn it over to David.

David Schwarzbach: Thanks, Jeremy. In the first quarter of 2024, we saw net revenue increase by 7% year-over-year to $333 million. Our net income for the quarter was $14 million, or $0.20 per share, improving from a net loss of $1 million in the first quarter of 2023 and reflecting a 4% margin. Adjusted EBITDA increased by 19% year-over-year to $64 million, which was $12 million above the high end of our outlook range, representing a 19% margin.

David: Thanks, Jeremy and the first quarter of 2024, we saw net revenue increased by 7% year over year to $333 million.

David Schwarzbach: Net income for the quarter was $14 million or <unk> 20 per share improving from a net loss of $1 million in the first quarter of 2023 and.

David Schwarzbach: And reflecting a 4% margin.

David Schwarzbach: Adjusted EBITDA increased by 19% year over year to $64 million, which was $12 million above the high end of our outlook range, representing a 19% margin.

David Schwarzbach: This growth was driven by solid performance in our services categories; advertising revenue and services increased by 11% year-over-year to $203 million, led by strength in home services, where revenue grew by approximately 15% year-over-year. Investments in Request to Quote drove an approximately 20% year-over-year increase in Request to Quote projects, underscoring the effectiveness of our product-led strategy and early progress in our efforts to acquire projects through paid search. Advertisers also responded positively to our improved matching services in the first quarter, as reflected by a 6% year-over-year increase in pain advertising locations in these categories, even as our overall pain advertising locations decreased by 4% year-over-year.

David Schwarzbach: This growth was driven by solid performance in our services categories advertising revenue and services increased by 11% year over year to $203 million led by strength in home services, where revenue grew by approximately 15% year over year invest.

David Schwarzbach: Investments in request a quote drove an approximately 20% year over year increase in request a quote projects.

David Schwarzbach: Underscoring the effectiveness of our product line strategy and early progress in our efforts to acquire projects through paid search.

David Schwarzbach: Advertisers also responded positively to our improved matching services in the first quarter.

David Schwarzbach: As reflected by a 6% year over year increase in paying advertising locations in these categories, even as our overall paying advertising locations decreased by 4% year over year.

David Schwarzbach: Advertising revenue from our restaurants, retail, and other categories grew a modest 1% year-over-year to $114 million in the quarter. This reflects the challenging operating environment facing businesses in these categories, characterized by elevated input costs, inflationary pressures, and an inability to pass along higher costs to consumers.

David Schwarzbach: Advertising revenue from our restaurants retail and other categories grew a modest 1% year over year to $114 million in the quarter.

David Schwarzbach: This reflects the challenging operating environment facing businesses in these categories characterized by elevated input cost inflationary pressures.

David Schwarzbach: Ability to pass along higher cost to consumers. Additionally.

David Schwarzbach: Additionally, we may be seeing impacts from trends associated with off-cabin dining and delivery. Multi-allocation revenue increased by approximately 5% year-over-year in the first quarter, also attributable to softness in R&D. We are actively working on enhancing the Request to Growth Experience to enable more multi-location services businesses to benefit from this valuable feature. For example, we're in the process of launching an API that aims to streamline the tracking of leads and enhance conversion rates for enterprise customers by connecting directly to their customer relationship software.

David Schwarzbach: Additionally, we may be seeing impacts from the trends associated with off premise dining and delivery.

David Schwarzbach: Multilocation revenue increased by approximately 5% year over year in the first quarter also attributable to softness in R&R.

David Schwarzbach: Actively working on enhancing the request a quote experience.

David Schwarzbach: To enable more multi location services businesses to benefit from this valuable feature for example, we are in the process of launching an API that haynes to streamline the tracking of weeds and enhanced conversion rates have priced customers by connecting directly to their customer relationship software.

David Schwarzbach: Our ad system continues to deliver valuable clicks to advertisers in the first quarter. We saw an 8% year-over-year increase in ad clicks across all categories, while average cost per click declined by 1%, with more substantial decreases in services, reflecting the increased value we delivered to these advertisers in the quarter. We believe our improved ad formats and lower CPCs contributed to year-over-year increases in our retention rate for non-term advertisers' budgets in the first quarter.

David Schwarzbach: Our AD system, we continue to deliver valuable clicks to advertisers in the first quarter.

David Schwarzbach: We saw an 8% year over year increase in adequate across all categories, while average cost per click declined by 1% with more substantial decreases in services, reflecting the increased value we delivered to these advertisers in the quarter.

David Schwarzbach: We believe our improved AD formats, and lower CPC has contributed to year over year increases in our retention rate for non term advertisers budgets in the first quarter.

David Schwarzbach: Improvements to the ad purchase flow, along with enhancements in our advertiser marketing, resulted in another record quota for customer acquisition in our self-serve channel. Seltzer channel revenue has increased at a compound annual growth rate of approximately 25% since the first quarter of 2021. We also continue to identify opportunities to work with other platforms, like Facebook and Firefox, to tap into searches with local intent that start off on Yelp, with the goal of matching our advertisers with an even larger, high-intent audience.

David Schwarzbach: Improvements to the <unk> purchase flow along with enhancements in our advertiser marketing drove another record quarter for customer acquisition and our self serve channel.

David Schwarzbach: So I'll sort of channel revenue has increased at a compound annual growth rate of <unk>.

David Schwarzbach: <unk>, 25% since the first quarter of 2021.

David Schwarzbach: We also continue to identify opportunities to work with other platforms like Facebook and Firefox to tap into searches with local intent, let's start off of Yelp with the goal of matching our advertisers with an even larger high intent audience.

David Schwarzbach: Turning to expenses, in our first quarter, we continued to be disciplined in our allocation of resources while focusing on opportunities that have the potential to drive incremental returns. This resulted in an improvement of our adjusted EBITDA margin by 2 percentage points year over year. We also reduced stock-based compensation expense to 13% of revenue, a two-percentage point decrease from last year, and believe we are on track to reduce it below 8% by the end of 2025.

David Schwarzbach: Turning to expenses in our first quarter, we continued to be disciplined in our allocation of resources, while focusing on opportunities that have the potential to drive incremental returns. This resulted in an improvement of our adjusted EBITDA margin by two percentage points year over year.

David Schwarzbach: We also reduced stock based compensation expense to 13% of revenue a two percentage point decrease from last year and believe we are on track to reduce it below 8% by the end of 2025.

David Schwarzbach: We continue to expect the number of shares subject to Employee Equity Awards granted in 2024 to be approximately 65% lower than in 2023. Returning capital to shareholders through share repurchases continues to be a key element of our capital allocation strategy. In the first quarter, we repurchased $62.5 million worth of shares at an average purchase price of $40.95 per share. As of March 31st, 2024, we had $519 million remaining under our existing repurchase authorization.

David Schwarzbach: We continue to expect the number of shares subject to employee equity awards granted in 2024 will be approximately 65% lower than in 2023.

David Schwarzbach: Returning capital to shareholders through share repurchases continues to be a key element of our capital allocation strategy.

David Schwarzbach: In the first quarter, we repurchased $62 $5 million worth of shares at an average purchase price of $40 95 per share.

David Schwarzbach: As of March 31, 2024, we.

David Schwarzbach: We had $519 million remaining under our existing repurchase authorization. We plan to continue repurchasing shares in 2024 subject to market and economic conditions.

David Schwarzbach: We plan to continue repurchasing shares in 2024, subject to market and economic conditions. Turning to our outlook, as Jeremy shared, we are confident in our strong portfolio of initiatives to drive long-term growth. We expect net revenue to be in the range of $350 million to $355 million for the second quarter. For the full year, we are reaffirming our guidance and expecting net revenue to be in the range of $1.42 billion to $1.44 billion as our services initiatives gain traction.

David Schwarzbach: Turning to our outlook as Jeremy shared we are confident in our strong portfolio of initiatives to drive long term growth. We expect net revenue will be in the range of $350 million to $355 million for the second quarter for the full year, we are reaffirming our guidance and expect net revenue to be in the range of $1 42 billion to $1.

David Schwarzbach: $44 billion as our services initiatives gain traction.

David Schwarzbach: Turning to margin, we expect second-quarter cash expenses to increase from the first quarter, largely driven by incremental marketing investments, particularly in paid project acquisition. The early positive results from our paid search program have given us the confidence to expand our investments in this area, which we believe can drive project growth over the long term. We now expect to spend $40 million or more on services project acquisition in 2024. As a result, we anticipate second quarter adjusted EBITDA will be in the range of $70 million to $75 million. We are also narrowing our 2024 adjusted EBITDA guidance to between $315 million and $325 million to reflect this increased investment.

David Schwarzbach: Turning to margin, we expect second quarter cash expenses to increase from the first quarter, largely driven by incremental marketing investments, particularly in paid project acquisition.

David Schwarzbach: The early positive results from our paid search program has given us the confidence to expand our investments in this area, which we believe can drive project growth over the long term.

David Schwarzbach: And now expect to spend $40 million or more on services project acquisition in 2024 as a result, we anticipate second quarter adjusted EBITDA will be in the range of 70 million to $75 million. We're also narrowing our 2024 adjusted EBITDA guidance to $315 million to 325 million.

David Schwarzbach: To reflect this increased investment.

David Schwarzbach: Prices in our cost-per-click model are set through an auction, as compared to the cost-per-lead model. In the past, we have found that when we deliver more clicks for a given amount of the advertising budget, average TPCs decline. In turn, as advertisers see more value, they generally increase spend over time. However, there is typically a significant lag between a decline in CPC and an increase in our budget.

David Schwarzbach: Prices in our cost per click model are set through an auction as compared to the cost per lead model in the past we have found that when we deal with the more clicks for a given amount of advertising budget average CPC decline in turn as advertisers seem more value. They generally increased spend over time.

David Schwarzbach: However, there is typically a significant lag between the decline in CPC and an increase in AD budget given the dynamics of this interaction as well as the fact that we remain at an early stage in our paid acquisition initiative, we have not reflected any potential related revenue generic guidance for 2024.

David Schwarzbach: Given the dynamics of this interaction, as well as the fact that we remain at an early stage in our paid project acquisition initiative, we have not reflected any potential related revenue in our guidance for 2024, in clothing. Yelp's first quarter results reflect our multi-year focus on product innovation and the application of AI across our business. We are proud of our team's ability to execute against our strategic initiatives, particularly the work being done to unlock even greater value for consumers and service providers. We have continuing confidence in our ability to innovate, grow, and drive shareholder value over the long term. With that said, operator, please open up the line for questions.

Speaker Change: In closing <unk>.

David Schwarzbach: <unk> first quarter results reflect our multi year focus on product innovation and the application of AI across our business. We are proud of our team's ability to execute against our strategic initiatives, particularly the work being done to unlock even greater value for consumers and service because.

David Schwarzbach: We are continuing confidence in our ability to innovate grow and drive shareholder value over the long term.

Speaker Change: With that operator, please open up the line for questions.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star followed by the number one on your telephone keypad to raise your hand and join the queue. To withdraw your question, please press star 1 again. If you have dialed in via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on you when asking your question. Again, please press star 1 to join the queue. Our first question comes from Jason Kreyer with Craig Hallam. Please go ahead. Thank you.

Speaker Change: Thank you we will now begin the question and answer session.

Operator: If you have dialed in and we'd like to ask a question. Please press star followed by the number one on your telephone keypad to raise your hand and joined the Q.

Operator: To withdraw your question. Please press star one again.

Operator: If you have dialed in via loud speaker on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.

Operator: Again, Please press star one to join the queue.

Jason Michael Kreyer: Our first question comes from Jason <unk> with Craig Hallum. Please go ahead.

Cal: Thank you. This is Cal on behalf of Jason. First question for me: any learnings, anything new in Q1 that you saw as you continue to ramp that paid search budget? And, you know, what opportunities do you see for further efficiencies as you continue to ramp up?

Operator: Thank you. This is Kyle on for Jason first question for me just wondering any learnings anything new in Q1 that you saw as you continue to ramp that paid search budget and what opportunities do you see for further efficiencies as you continue to ramp that.

Jeremy Stoppelman: Hey there, Cal. This is Jeremy.

Cal: Hey, Eric this is Jeremy.

Jeremy Stoppelman: And I can take that.

Jeremy Stoppelman: I can take that. We were really pleased as we expanded our paid budget there. You know, this is a moment we've been building towards over a multi-year period, really leaning into services, and in particular, request to quote, and it seems like it's paying off. In Q4, we had some test budget, and then Q1 was really about getting that to a more significant scale.

Jeremy Stoppelman: We were really pleased.

Jeremy Stoppelman: We expanded our paid budget there.

Jeremy Stoppelman: This is a moment we've been building towards over a multiyear period really leaning into services and in particular request a quote.

Jeremy Stoppelman: And it seems like it's paying off Q4, we had some test budget in Q1 was really about getting that.

Jeremy Stoppelman: More significant scale.

Jeremy Stoppelman: And I think if you look at our project volume you can see that the needle had been moved.

Jeremy Stoppelman: And I think if you look at our project volume, you can see that the needle has been moved. And I would say, you know, a portion of that is our paid efforts. And then, of course, a portion of that is leaning into product and engineering enhancements and features. And I think the results, the early results, are really looking great. 20% year over year project volume, you know, clicks, ad clicks are up, CPCs are down, you know, especially in these categories where we've added paid budget.

Jeremy Stoppelman: And I would say a portion of that is our our paid efforts and then of course, a portion of that is leading into product and engineering enhancements and features and I think the results. The early results are really looking great 20% year over year project volume.

Jeremy Stoppelman: Clicks AD clicks or CPC were down.

Jeremy Stoppelman: Especially in these categories, where we've added paid budget.

Jeremy Stoppelman: And I think from a headroom standpoint, we're just getting started. It's still early for us. There are a lot of optimizations that we can continue to make, friction that we can take out. And then, of course, there's the amount of money that we can put into it. So I think we're on the offense on this one. I'm really excited to see how it plays out across the year and in the years ahead.

Jeremy Stoppelman: And I think from a headroom standpoint, we're just getting started.

Jeremy Stoppelman: They'll early for us there's a lot of optimizations that we can continue to make friction that we can take out and then of course there is the amount of budget that we tend to put into it. So I think we're on the offense on this one I'm really excited to see how it plays out across the year and in the years ahead.

Jeremy Stoppelman: And then last one for me, just wanted to touch on the Yelp assistant. Could you provide some more color on what you're seeing as far as reducing that consumer friction? You know, I know it's early, but just curious what you're seeing in terms of reducing that friction point and increasing those conversions?

Speaker Change: Great and then last one from me just wanted to touch on the Yelp assistant.

Jeremy Stoppelman: Could you provide some more color on what youre seeing as far as reducing consumer friction I know, it's early but just curious what youre seeing in terms of reducing that friction point increase from those conversion rates.

Jeremy Stoppelman: Sure, I can take that one, too. You know, LLMs are a really important part of what we're doing. And we've been, of course, incorporating AI capabilities for many, many years. I think Yelp Assistant reflects something that just, frankly, wasn't possible a few years ago. It's a really exciting way for consumers to interact with Yelp. When they have a project in mind, they can talk to a friendly assistant that guides them through the process, collects all the relevant information, and then ultimately asks them if they'd like to submit that project and get multiple quotes on it.

Speaker Change: Sure I can take that one too.

Jeremy Stoppelman: Hello, Ms are really important part of what we're doing.

Jeremy Stoppelman: And we've been of course, incorporating AI capabilities for many many years I think youll assistant reflect something that just frankly wasn't possible a few years ago, It's a really exciting way for consumers to interact with yelp when they have a project in mind. They can talk to a friendly assistant that guides them through the process.

Jeremy Stoppelman: <unk> all the relevant information and then ultimately asked them if they'd like to submit the project and get multiple quotes on it we've added it to the project tab.

Jeremy Stoppelman: We've added it to the project tab as a first step within the app, and we're seeing great results there. It does seem to resonate with consumers. And we'll be evaluating and testing different entry points, you know, all over the mobile web, desktop web, as well as the app, to make sure that we're able to leverage it to the maximum.

Jeremy Stoppelman: First step within the App and we're seeing great results there.

Jeremy Stoppelman: Does seem to resonate with consumers and we'll be evaluating and testing different entry points.

Jeremy Stoppelman: All over the mobile web or desktop web as well as app.

Jeremy Stoppelman: To make sure that we're able to leverage it to the maximum.

Cal: Perfect. Very appreciated. Thank you.

Speaker Change: Perfect I appreciate it thank you.

Eric Sheridan: Our next question comes from Eric Sheridan with Goldman Sachs. Please go ahead. Thanks so much.

Cal: Our next question comes from Eric Sheridan with Goldman Sachs. Please go ahead.

Eric Sheridan: Thanks so much for taking the questions, maybe two if I could. We saw the announcement with Perplexity and were just kind of curious if you could give us some sense of how that relationship might evolve and grow and what the scope might be for additional types of partnerships when you think about the rise of AI as a consumer facing technology to an increasing amount in the years ahead. The secondary comment you made about competition for ad dollars in the local space with some of the delivery providers and the like, can you go a little bit deeper in what you're seeing there in terms of teasing out either the cyclicality versus maybe some of the competitive dynamic that was putting some pressure on that business? Thank you.

Eric Sheridan: Thanks, so much for taking the questions maybe two if I could we saw the announcement with perplexity and just kind of curious if you could give us some sense of how.

Eric Sheridan: How is that relationship might evolve and grow and what the scope might be for additional type partnerships. When you think about the rise of AI is consumer facing.

Eric Sheridan: Two an increasing amount in the years ahead.

Eric Sheridan: The secondary comment you made about <unk>.

Eric Sheridan: Competition for AD dollars in the local space with some of the delivery providers and the like can you go a little bit deeper in what youre seeing there in terms of teasing out either the cyclicality versus maybe some of the competitive dynamic that was putting some pressure on that business. Thank you.

Eric Sheridan: Okay.

Jeremy Stoppelman: All right, I can take a stab at the first question there. Maybe Jed can jump in on the second one. So excited to see the Perplexity partnership happen. They're obviously an early innovator trying to push search forward. And I think the important takeaway is that when a company trying to deliver a great search experience is in need of great local content, they turn to Yelp. And so that's an exciting validation for us. Certainly, there is a lot of activity in the AI space in general and the data licensing space in general, and our door remains open.

Speaker Change: Alright, so it can take a stab at the first question there maybe Jed can jump in on the second one.

Jeremy Stoppelman: Excited to see the perplexity.

Jed: Partnership happen.

Jeremy Stoppelman: There are obviously, a early innovator trying to push search forward and I think the important takeaway is that when a company trying to deliver a great search experience is indeed, a great local content they turn to yellow.

Jed: And so that's exciting validation for us.

Jeremy Stoppelman: Certainly theres a lot of activity in the AI space in general and the data licensing space in general.

Jed: And our door remains open we're having lots of conversations that we do as a reminder, have a pretty sizable data licensing business with a whole variety of different partners.

Jeremy Stoppelman: We're having lots of conversations, and we do, as a reminder, have a pretty sizable data licensing business with a whole variety of different partners in a whole wide array of different industries. We do see AI licensing as a potentially new area. And in fact, we just released in our spring product release the Yelp Fusion AI API, which delivers a conversational search experience, essentially. So that's new to the market. Conversations are happening, and we're excited to see what innovators do with that, bringing Yelp content all over the web and into interesting new AI applications.

Jeremy Stoppelman: In a whole wide array of different industries, we do see.

Jeremy Stoppelman: Licensing is a potentially new area and in fact, we just released in our spring product release, the Yelp fusion AI, API, which delivers a conversational search experience essentially so that's new to the market conversations are happening and we're excited to see what innovators do with that Greenfield.

Jeremy Stoppelman: Content, all over the web and into interesting new AI applications.

Joseph R. Nachman: This is Jed. I can take the second question on competition. You know, certainly in the first quarter, we saw some continued pressure in the restaurant retail and other categories. Businesses in these categories remain really cautious given the macroeconomic factors, including labor input costs and not being able to pass through some of the inflationary pressures to the consumer because those days have ended. And then, you know, a marginal impact from the broader industry shifts to off-premise, certainly when you look at some of the delivery platforms and the kind of pay-to-play that happens on those platforms.

Jeremy Stoppelman: And this is Jed I can take that.

Jeremy Stoppelman: The second question on competition certainly in the first quarter. We saw some continued pressure in the restaurant retail and other categories.

Joseph R. Nachman: Businesses in these categories remain really cautious given the macroeconomic factors, including labor input costs and not being able to pass through some of the inflationary pressures to the consumer.

Joseph R. Nachman: Those days have ended.

Joseph R. Nachman: And then a marginal impact from the broader industry shifts to off premise certainly when you look at some of the delivery platforms.

Joseph R. Nachman: And kind of the pay to play that happens on those platforms at the margin. We believe theres some of that those dollars going over to those platforms, but largely it's it's a macro impact.

Joseph R. Nachman: You know, at the margin, we believe there are some of those dollars going over to those platforms, but largely, it's a macro impact. You know, at some point, we do believe that R&O will come back. We don't really have the conviction as to the specific timing, given the market conditions.

Joseph R. Nachman: At some point, we do believe that <unk> will come back.

Joseph R. Nachman: We don't really have the conviction as to the specific timing given given the market conditions in China.

Joseph R. Nachman: It's hard to tell.

Sergio Roberto Segura: We are well-positioned, however, to take advantage when some of the underlying economic drivers improve. You know, we're recruiting for the opportunity as well as continuing to innovate, you know, via the product side. And in the meantime, you know, stepping back broadly, we're laser-focused on the opportunity and services and believe that we're in a really strong position to take share. You know, specifically around the enterprise, we believe that we're somewhat under-penetrated and have really started to implement initiatives and invest in services for the enterprise, including better ways to integrate with the CRM and lead management systems on the client side, you know, in order to drive more And that's certainly going to be impacted by our new services project acquisition strategy as well.

Joseph R. Nachman: We are well positioned however to take advantage by some of the underlying economic drivers improve staffing against the opportunity as well as continuing to innovate.

Sergio Roberto Segura: The product side.

Sergio Roberto Segura: And then in the meantime.

Sergio Roberto Segura: Stepping back broadly we're laser focused on the opportunity in services and believe that we're in a really strong position to take share specifically around the enterprise. We believe that we're somewhat underpenetrated in half.

Sergio Roberto Segura: We started to implement initiatives and invest in services for the enterprise.

Sergio Roberto Segura: Including better ways to integrate with that.

Sergio Roberto Segura: CRM and lead management systems on the client side.

Sergio Roberto Segura: In order to drive more <unk> adoption.

Sergio Roberto Segura: And that's certainly going to be impacted by our new services project acquisition strategy as well.

Speaker Change: Thank you.

Sergio Roberto Segura: Our next question comes from Sergio Segura with KeyBank. Please go ahead.

Sergio Roberto Segura: Our next question comes from Sergey <unk> with Keybanc. Please go ahead.

David Schwarzbach: Great, thanks for taking the questions. Yeah, so the high end of the EBITDA guide was lowered after EBITDA for this quarter was above expectations, and then the revenue outlook for the year was also unchanged. I guess, can you just walk us through what gives you confidence in stepping up the investment for this year without, you know, seeing those revenue returns that are contemplated in your outlook for 2024? That's the first question. And then second, on R&R&O, you talked about some weakness you saw last quarter. I guess, how did the softness play out versus your expectations? And then, a month into this quarter, how are the trends in that segment relative to what you saw in the first quarter? Thank you.

Sergio Roberto Segura: Great. Thanks for taking the question yet too.

David Schwarzbach: So the high end of the EBITDA guide was lowered after EBITDA. This quarter was above expectation and then the revenue outlook for the year was also unchanged I guess can you just walk us through what gives you confidence in stepping up the investment for this year without seeing those revenue return that is that.

David Schwarzbach: That is.

David Schwarzbach: Contemplated in your outlook for 2024, that's the first question and then second on R&R No you talked about some weakness you saw last quarter I guess, how did the softness play out versus your expectations and then month into this quarter how are trends in that segment relative to what you saw in the first quarter.

David Schwarzbach: Hey, Sergio. It's David. Thanks for the question. So first, obviously, we have the increased span in Q1. We went from 2 million at the end of Q4 to 7 million. And what we saw in the categories where we are, buying projects with movers as an example, was that we saw significant increases in projects, we saw significant increases in clicks, and we saw meaningful declines in cost per click down the path. When we have been able to deliver more value in the way that we think about values, more clicks at better prices, which is what we are seeing in movers in the first quarter.

David Schwarzbach: Yes, it's David Thanks for the question so.

David Schwarzbach: First obviously, we have the increased spend in Q1.

David Schwarzbach: We went from $2 million at the end of Q4 to $7 million and what we saw in the categories, where we are.

David Schwarzbach: Buying projects.

David Schwarzbach: With movers as an example is that we saw significant increases in projects. We saw significant increases in clicks and we saw meaningful declines and cost per click.

David Schwarzbach: Now in the past.

David Schwarzbach: When we have been able to deliver more value in a way that we think about values more clicks that better pricing, which is what we are seeing in movers in the first quarter.

David Schwarzbach: In time, we see that ad budget increase. But it takes time, because the mechanism for us is very much through the auction system where we're adding consumers, and then those advertisers are seeing higher quality leads, more valuable leads for the price that they're paying, and then they adjust their budget over time.

David Schwarzbach: In time, we see that AD budget increases, but it takes time because the mechanism for us is very much through the auction system, where we're adding consumers.

David Schwarzbach: Consumers and then those advertisers are seeing higher quality leads more valuable leads for the price that theyre paying and then they adjust their budget over time now obviously, we want to drive.

David Schwarzbach: Now, obviously, we want to drive good economic returns, but the time frame between when you actually spend and when that shows up in the budget has been elongated in the past. But I just want to emphasize that broadly, when we've done this in the past, we have seen it show up in the ad budget. So we'll look forward to sharing with you updates, obviously, when we get to the Q2 call and the Q3 call.

David Schwarzbach: Good economic returns, but the timeframe between when you actually spend and when that shows up in budget has been elongated in the past, but I just want to underscore.

David Schwarzbach: In terms of the guidance, because of the strong early results that we saw in the first quarter, we wanted to provide insight into how we were going to spend through the year and the fact that we did intend to absorb some of the EBITDA into paid project acquisition. I do want to underscore that we think overall that the broad efforts that we've made over the past several years to drive efficiency still continue.

David Schwarzbach: Broadly when we've done this in the past we have seen it show up in AD budget. So we'll look forward to sharing with you updates obviously when we get to the Q2 call in the Q3 call in terms of the guidance because of the strong early results that we saw in the first quarter, we wanted to provide insight.

David Schwarzbach: Into how we were going to spend through the year and the fact that we did intend to absorb some of the EBITDA.

David Schwarzbach: Into paid project acquisition I do want to underscore that we think overall the broad efforts that we've made over the past several years to drive efficiency still continue and justice.

David Schwarzbach: And just as a couple of important points, obviously, we achieved a 25% adjusted EBITDA margin. In 2023, if you look at Q1 expenses, they're only up 1% compared to Q1 of last year. So in Q4 this year, overall expenses were up just 1% compared to Q1. We think that we've given ourselves the capacity to make this type of investment. But again, I just want to underscore that we continue to drive efficiency in order to give ourselves this type of operational flexibility.

David Schwarzbach: A couple of important points, we obviously achieved that 25% adjusted EBITDA margin.

David Schwarzbach: In 2023, if you look at Q1 expenses. They are only up 1% compared to Q1 of last year. So in Q4. This year overall expenses up just 1% compared to Q1, we think that we've given ourselves capacity to make this type of investment, but again I just want to underscore that we continue to drive.

David Schwarzbach: Efficiency in order to give ourselves this type of operational flexibility.

Joseph R. Nachman: And this is Jen. I can take the second question. Yeah, in terms of R&R, our R&O weakness in the first quarter was a continuation of what we, you know, started to see in the fourth quarter and as we call it. And in terms of moving into the second quarter, you know, our expectations are reflected in the guide. It's I think it's important to mention, too, that we're seeing the RNO impact on both local as well as the multilocal channel. And obviously, you know, multilocation takes the brunt of that to get to the rep.

David Schwarzbach: And this is Jen I can take the second question.

Joseph R. Nachman: In terms of R&R R&R weakness in the first quarter. It was a continuation from what we started to see in the <unk>.

Joseph R. Nachman: Fourth quarter and as we mentioned in the fourth quarter call.

Jen: And in terms of moving into the second quarter, our expectations are reflected in the guide.

Speaker Change: It's I think it's important to mention too that we're seeing the impact in both local as well as on the multi channel and obviously multilocation can take the part of that given the revenue mix.

Sergio Roberto Segura: Very helpful. Thank you both.

Speaker Change: Very helpful. Thank you both.

John Colantoni: Our next question comes from John Colantoni with Jeffreys. Please go ahead.

Speaker Change: Our next question comes from John calling Tony with Jefferies. Please go ahead.

John Colantoni: Thanks for taking my questions. I wanted to zoom in a little bit on the SEM efforts. You know, I think return profiles in general across SEMs are often dependent on repeat behavior since that initial paid click isn't profitable. For Yelp specifically, how would you characterize the initial return profile and payback of SEM, or how would you characterize the initial return profile and payback of search engine marketing, and you know, how those KPIs translate into revenue and profitability in the near and long term?

John Colantoni: Okay.

John Robert Colantuoni: Thanks for taking my questions I wanted to zoom in a little bit on the <unk> efforts.

John Colantoni: Yes, I think were return profiles in general.

John Colantoni: Across SCM sort of often dependent on repeat behavior since that initial paid click isn't profitable for you specifically.

John Colantoni: How would you characterize the initial return profile and payback of SCM or how would you characterize the initial return profile and payback of SCM and how those kpis translate into revenue and profitability.

John Colantoni: In the near and long term thanks.

John Colantoni: Thanks.

Jeremy Stoppelman: John This is Jeremy.

Speaker Change: I can take that.

John Colantoni: Yes.

John Colantoni: We're ramping projects paid projects here, we do believe we have a unique take a unique approach to this space.

Jeremy Stoppelman: Hi John. This is Jeremy.

John Colantoni: Obviously it has a really strong brand, we're very cross category.

Jeremy Stoppelman: I can take that. Yes, as we're ramping projects, paid projects here, we do believe we have a unique take, a unique approach to this space. You know, Yelp obviously has a really strong brand. We're very cross-category.

Jeremy Stoppelman: And so unlike other players I may maybe have invested.

Jeremy Stoppelman: Significantly in this space, we have the reason to talk to consumers.

Jeremy Stoppelman: <unk> of wide variety of different use cases, and so I think that does give us a very unique advantage and continuing that conversation and I think certainly to provide outsized economics right. We're going to have to drive repeat behavior right. Now. It's obviously very early we just got out of a tough quarter in Q4, and we're ramping in Q.

Jeremy Stoppelman: And so, unlike other players that maybe have invested significantly in this space, we have a reason to talk to consumers about a wide variety of different use cases. And so I think that does give us a very unique advantage in continuing that conversation. And I think certainly to provide outsized economics right, we're going to have to drive repeat behavior. Right now, it's obviously very early.

Jeremy Stoppelman: We just got out of a test quarter in Q4, and we're ramping up in Q1. And so, you know, I think we can say for sure that the early metrics are looking good, with projects being up 20%, ad clicks being up as well, and CPCs being down. So that's what we wanted to see out of the gate.

Jeremy Stoppelman: And so what we're looking at and working with it is sort of very early data, but I think we can say for sure that the early metrics are looking good with projects being up 20%.

Jeremy Stoppelman: With AD clicks being up as well and CPC is being down. So that's what we wanted to see out of the gate and then I guess the other thing I'd point to is that <unk> historically had been very product and engineering, driven we invest a lot in R&D and I think that allows us to provide our consumer experience across our app.

Jeremy Stoppelman: And then I guess the other thing I'd point to is that, you know, Yelp historically has been very product and engineering driven. We invest a lot in R&D. And I think that allows us to provide a consumer experience across our app, across the web, across the mobile web that will be and, frankly, is unparalleled in the space. I think Yelp Assistant is a fantastic example of that. No one else has anything like that in the space period.

Jeremy Stoppelman: Across the web across mobile web that will be and frankly is unparalleled in the space I think yelp assistant is a fantastic example of that no. One else has anything like that in the space period. We are the innovator there and I think you can expect to see more.

Josh Beck: You know, we are the innovators there, and I think you can expect to see more goodness just like that in the future. Thank you. Our next question comes from Josh Beck with Raymond James. Please go ahead.

Josh Beck: Good news just like that in the future.

Josh Beck: Thank you.

Josh Beck: Our next question comes from Josh Beck with Raymond James. Please go ahead.

Josh Beck: Our next question comes from Josh Beck with Raymond James. Please go ahead.

Josh Beck: Hi, This is Jason Patel on for Josh back Thanks for taking our question.

Josh Beck: Any color you can share around consumer engagement and the impact around monetization of services and what metrics are you tracking managing towards in terms of improving churn results.

Jeremy Stoppelman: This is Jeremy. You know, on the services side, we've obviously been investing significantly in, you know, our product. I think a great example that I just talked about is Yelp Assistant, where we're trying to be really innovative there, and the response we're seeing from consumers is positive. It's within the project tab in the app.

Jeremy Stoppelman: This is Jeremy.

Jeremy Stoppelman: On the services side, we've obviously been investing significantly.

Jeremy Stoppelman: Significantly in.

Jeremy Stoppelman: Our product I think a great example of that.

Jeremy Stoppelman: I just talked about is yelp assistant where we're trying to be really innovative there and the response, we're seeing from consumers is positive.

Jeremy Stoppelman: Within the project tab in the App.

Jeremy Stoppelman: We continue to invest in streamlining our request a quote functionality, making that easier for folks to use I also think it's important to reflect on the business owner side of the equation I think theres a lot of opportunity there as well thinking about making it even easier for businesses to reply and provide good.

Jeremy Stoppelman: You know, we continue to invest in streamlining our request-to-quote functionality, making that easier for folks to use. I also think, you know, it's important to reflect on the business owner side of the equation. I think there's a lot of opportunity there as well. Thinking about making it even easier for businesses to reply and, you know, provide good correspondence back to consumers, whether it's quotes or improving the responses, I think is going to be a really great opportunity for us, and one that also lends itself to AI improvements as well.

Jeremy Stoppelman: Correspondence back to consumers, whether it's quotes or improving that responses I think is going to be a really great opportunity for us and one that also lends itself to AI improvements as well. So we will keep you posted as we continue to make improvements, but we've come a long way and I think thats reflected in the excellent.

Jeremy Stoppelman: So we'll keep you posted as we continue to make improvements, but, you know, we've come a long way, and I think that's reflected in the excellent project performance. You know, request-to-quote projects being up 20% shows we're doing some things right, and again, part of that is the paid projects that we're driving, and part of that is the continued innovation and streamlining of our services, features, and functionality.

Jeremy Stoppelman: Project performance.

Jeremy Stoppelman: Quest <unk> projects being up 20% shows we're doing some things right and again part of that is the <unk> projects that were driving and part of that is the continued innovation and streamlining of our services features and functionality.

David Schwarzbach: And I can add, this is David. On the monetized connections front, there are two things happening. One is that we continue to make improvements and drive increased monetization of connections. And we continue to make progress on that in the first quarter, and as we acquire leads through paid search or from Yelp traffic, you are going to see that metric move because you're adding. Obviously, when we bring someone in, we want to see clicks to make the economics work.

Jeremy Stoppelman: And I can add this is David on the monetize connections Brian there are two things happening one is we continue to make improvements.

David Schwarzbach: And drive increased monetization of connections and we continue to make progress on that in the first quarter.

David Schwarzbach: And as we acquire leads through paid search.

David Schwarzbach: Or from a half yield traffic.

David Schwarzbach: So you're going to see both the numerator and the denominator increasing, and that's going to increase the percentage there, but we are seeing strength in both. And just to say the obvious, if we get better and better at monetizing connections, that makes it all the more valuable to bring additional projects onto Yelp. So there's a positive loop there. And we'll provide more updates as we go through the year on the progress that we're making.

David Schwarzbach: You are going to see that metric move because you are adding obviously when we bring someone and we want to see clicks to make the economics work, so youre going to see both the numerator and denominator, increasing and thats going to increase the percentage there.

David Schwarzbach: But we are seeing strength in both and just to say the obvious if we get better and better at monetizing connections that makes.

David Schwarzbach: It all the more valuable to bring additional projects on <unk>. So there is a positive loop. There. So we'll provide more updates as we go through the year on the progress that we're making and then of course, we gave to monetize connection number annually. So.

David Schwarzbach: And then, of course, we give the monetized connection number annually. So when we get to the Q4 call in 2025, we'll give you the numbers there. But both saw strength in the first quarter, driven by those product improvements and through the projects that we

David Schwarzbach: When we get to the Q4 call in 2025, we will give you the numbers there, but both saw strength in the first quarter driven by those product improvements and through the projects that we were purchasing.

Speaker Change: Got it thank you very much.

Jan Lee: Again, if you would like to ask a question, please press star 1. Our next question comes from Jan Lee with Evercore. Please go ahead.

David Schwarzbach: Again, if you would like to ask a question. Please press star one.

Jian Li: Our next question comes from John Lee with Evercore. Please go ahead.

Jan Lee: Great, thanks for taking the question. First, I want to just double-click on your comment on the CPC. You know, you're leaning into investment, you're seeing conversion, but the CPC is pretty muted. Is it just the nature of the current ad market condition? Or is there anything you're doing on your ad tech side that's really improving targeting? And maybe even kind of talk about what you're seeing in the competitive intensity of this ad bidding in the services sector specifically, you know, outside of the day-to-day volatility. Thanks.

Jian Li: Great. Thanks for taking the question first of all I wanted to just double click on your comment on the CPC.

Jan Lee: Many of them to investment Youre seeing conversion, but the CPC is pretty muted.

Jan Lee: Just the nature of kind of the current AD market condition or is there anything youre doing on your AD Tech side, Thats really improving targeting in.

Jan Lee: And maybe you can kind of talk about what youre seeing in the competitive intensity of this aberdeen into service as a sector specifically.

Jan Lee: Outside of the day to day volatility thanks.

David Schwarzbach: Yeah, thanks for the question. This is David.

Jan Lee: Yes. Thanks for the question this is David.

David Schwarzbach: So.

David Schwarzbach: So One thing, one dynamic at play here is obviously we report the blended change in CPCs now, obviously that consists broadly of services and restaurant, retail, and other, and then obviously there are subcategories for each of those. And what we have seen, I just want to start with the paid project acquisition piece, what we have seen is meaningful reductions in the. And we're very encouraged by that. But we also saw declines in CPCs greater than minus 1% in services broadly.

David Schwarzbach: One thing the one dynamic at play here is obviously we report.

David Schwarzbach: The blended change and CPC now.

David Schwarzbach: Obviously that consist broadly it services and restaurant retail and other and then obviously there are subcategories.

David Schwarzbach: Each of those and what we have seen I just wanted to start with the paid project acquisition piece, while we have seen as meaningful reductions in <unk>.

David Schwarzbach: Subcategories, where we are purchasing projects.

David Schwarzbach: Very encouraged by that but we also saw.

David Schwarzbach: Declines in CPC is greater than the minus 1%.

David Schwarzbach: In services broadly, that's really coming from the continuous improvement in the HUD matching technology, which itself is a combination of better information from the consumer as well as continued improvement in the algorithm plus obviously, having those service pros.

David Schwarzbach: That's really coming from the continuous improvement in the ad matching technology, which itself is a combination of better information from the consumer, as well as continued improvement in the algorithm, plus obviously having those service pros available to us. So we've made progress on that front as well, and we're very pleased. I just point out overall, we went from TPC growing 4% in the fourth quarter to minus 1% in the first quarter. That's still a very meaningful move in aggregate.

David Schwarzbach: Available to us so we've made progress on that front as well and we're very pleased I'd just point out overall, we win from.

David Schwarzbach: TPC is growing 4%.

David Schwarzbach: In the fourth quarter to minus 1% in the first quarter, that's still a very meaningful move in aggregate and that has been very much driven on the services side, where you have much smaller number of clicks, so super happy with that in terms of like.

David Schwarzbach: And that is being very much driven on the services side where you have much smaller number of clicks. So super happy with that in terms of like, Bidding intensity for these types of projects, you know, obviously we are targeting a return on those projects and we've been so far pleased by the price that we're able to acquire projects at and to the point where we're willing to increase spend in 24 obviously to the 40 million dollars or more so very pleased overall with that and I think just to you know maybe to as a final comment When we make improvements, as Jeremy's talked about, with something like Yelp Assistant, and we really get better and better at engaging the consumer, creating a great experience for them, we obviously want to see them come back.

David Schwarzbach: Bidding intensity for.

David Schwarzbach: For these types of projects.

David Schwarzbach: <unk>.

David Schwarzbach: Obviously, we are targeting a return on those projects and we've been so far pleased by the price that we're able to acquire projects right.

David Schwarzbach: And to the point, where we're willing to increase spend in 'twenty, four obviously to the $40 million or more so very pleased overall with that.

David Schwarzbach: And I think just maybe as a final comment.

David Schwarzbach: When we make improvements as Jeremy talked about with something like Yelp assistant and we really get better and better at engaging the consumer create integrate experience for them. We obviously want to see them come back, but we're also getting more information about the specific job they have that really helps us.

David Schwarzbach: But we're also getting more information about the specific job they have that really helps us with the matching. And that increased information translates quite directly into improved CPCs, which in turn results in better cost-per-lead economics for service pros. So we're happy overall with the progress that we're making, and I just emphasize there are actually lots and lots of projects underway and a lot of room yet to go on continuing to grow.

David Schwarzbach: With the matching and that increased information translates quite directly into improved cpc's, which in turn.

David Schwarzbach: <unk> and better cost per lead economics for service promise. So we're happy overall with the progress that we're making and I just to underscore there's actually lots and lots of projects underway and a lot of room, yet to go on continuing to improve that.

Jan Lee: Great, it's super helpful. And maybe just to follow up, you know, you shared your general share buyback expectations. That's really helpful. But, you know, given your leaning into investment, and it sounds like there's still a lot of like ring shoots, product innovations that are in the pipeline, is there anything that we should consider in the near-term cadence of share buybacks, any, I guess, near-term changes to our capital allocation? Thanks for that question. So

Speaker Change: Great that's super helpful and maybe just a follow up.

Speaker Change: Yes Sandy.

Speaker Change: Ken I would like to share buyback.

Speaker Change: That's really helpful. But you know given your leaning into investments and it sounds like there's still a lot of.

Speaker Change: Like Green shoots.

Speaker Change: Product innovation, that's in our pipeline is there anything that we should consider in the near term cadence of share buybacks any.

Speaker Change: I guess near term changes to our capital allocation.

Speaker Change: Thanks for that question so.

David Schwarzbach: In the first quarter, we did buy back $62.5 million of stock. We had been quite consistently buying $50 million in prior quarters. So we saw an opportunity to, in the first quarter, return additional capital, and we also generated 66 million dollars in free cash flow, and we ended the quarter with 421 million dollars in cash.

Speaker Change: In the first quarter, we did buyback $62 5 million of stock we had been quite consistently.

David Schwarzbach: In prior quarters $50 million. So we saw an opportunity to in the first quarter return additional capital.

David Schwarzbach: And we also in the first quarter generated $66 million in free cash flow and we ended the quarter with $421 million in cash as you know we're committed to returning capital in excess of our target cash balance.

David Schwarzbach: As you know, we're committed to returning capital in excess of our target cash balance. Our perspective on that has not changed. And we remain committed to doing that. So I think the I just go back to a comment I made earlier: we think that we have continued to drive real efficiency at Yelp over the past several years. And again, I just point out overall expenses being only up 1% in the first quarter of 2024 compared to 2023 as a reflection of that. So we are creating the capacity to invest at the same time that we're still driving what we think are strong economics for the business.

David Schwarzbach: Our perspective on that has not changed and we remain committed to doing that so I think the.

David Schwarzbach: I'd just go back to a comment I made earlier, we think that we have continued to drive.

David Schwarzbach: Real efficiency at Yelp over the past several years and again I'd just point out overall expenses being only up 1% in the first quarter of 2024 compared to 2023 is a reflection of that so we are creating the capacity to invest at the same time that we're still driving what we think are strong economic.

David Schwarzbach: For the business.

Speaker Change: Awesome. Thank you Tom.

Operator: There are no further questions in the queue. This will conclude today's conference call. Thank you all for your participation, and you may now disconnect.

Speaker Change: There are no further questions in the queue. This will conclude today's conference call. Thank you all for your participation and you may now disconnect.

Operator: Yeah.

Speaker Change: Thank you.

Operator: Yeah.

Operator: Yeah.

Operator: Okay.

Operator: