Yelp's expansion, results get rave reviews
SAN FRANCISCO (MarketWatch) -- Expansion efforts into new markets helped
Yelp (YELP) rose as much as 24%, to $23.47 a share following the company's late-Wednesday report. During the quarter, Yelp said its expenses climbed to $34.6 million from $20.8 million a year ago as the company spent more to launch its review service in markets such as Norway, Finland, Denmark, and Madison, Wisc. The company now offers ratings and reviews in 90 markets around the world.
Yelp's share gains countered recent declines in the social-media sector from the likes of
Yelp, however, saw its local-based information strategy pay off with better-than-expected results in the quarter ended June 30. The company reported a loss of $2 million, or 3 cents a share, on revenue of $32.7 million, compared with losses of $1.2 million, or 8 cents a share, on $19.6 million in sales in the same period a year ago.
Analysts surveyed by FactSet Research had forecast Yelp to lose 6 cents a share on $30.7 million in revenue.
Local advertising accounted for $25.3 million of Yelp's sales in the quarter, nearly double from a year ago. Heath Terry, of Goldman Sachs, said in a research note that "monetization remains very early stage, particularly in the mobile and international segments." Terry has a neutral rating and $27-a-share target price on Yelp's stock.
The growth in mobile usage of Yelp was cited by the company as one of the drivers of its revenue gains. The company said its mobile apps were used on 7.2 million mobile devices, on a monthly average basis, during the quarter, up from 6.1 million devices in the first quarter of the year.
Yelp also said that for its third quarter, it expects to report sales of $34.5 million to $35.5. million, while analysts had forecast $34.4 million in revenue.