Yelp Conference Call Commentary
During the conference call, YELP commented that mobile remains a top priority and focus and that the company is very encouraged with the trends it is seeing. On average, 6.3 million mobile devices accessed YELP per month during the quarter, which is up 80% from a year ago. In terms of monetization, YELP says that mobile is even better than on the web, and it is already monetizing this traffic. It says that the performance of ads is actually better than on the internet.
Regarding its expansion into new markets, YELP said it is now in 80 markets and that it added 11 new cities in the quarter, 8 of which were international. Later this year, the company is planning on launching a European sales force to support its growth in that geography. Overall, YELP says that there are 180 markets in the U.S. with over 250,000 people — which it believes is a good benchmark for markets it wants to be in — and says that there are more than 1,000 of these markets in the world. Over the long-term, it would like to consider all of these markets, but in the near-term, mangement stated that it is difficult forecast how many it will enter. Generally speaking, the company says that it wants to grow at a healthy clip, but not outgrow themselves.
From a longer-term perspective, YELP says that it is striving to achieve 30-35% adjusted EBITDA margins. In the shorter term, though, the company will continue to invest in new markets and will remain focused on growing the topline. This suggests that sales & marketing expense will remain elevated in coming quarters. For this quarter, sales & marketing, as a percent of sales, was 69% compared to 68% a year ago.