Shares are skyrocketing by 8.26 percent to $23.19 in after-hours trading, following the company’s strong Yelp first quarter 2016 earnings.
The iconic local business review company today announced financial results for the first quarter ended March 31, 2016, setting off the trading frenzy.
The big news has to do with net revenue, which amounted to $158.6 million in the first quarter of 2016, reflecting 34 percent growth over the first quarter of 2015. Excluding brand advertising revenue, to account for the elimination of Yelp’s display advertising product in 2015, net revenue grew 42 percent. That’s compared to the first quarter of 2015.
According to the announcement, the company experienced a net loss in the first quarter of 2016 of $15.5 million, or 20 cents per share. That’s compared to a net loss of $1.3 million, or 2 cents per share, in the first quarter of 2015. But strong Yelp first quarter 2016 earnings and growth in usage seem to be turning this trend around, according to The Street.
Regarding site usage, Yelp announced that cumulative reviews, app unique devices and local advertising accounts increased 31, 32 and 34 percent respectively year over year, contributing to its growth.
“We had a great start to the year with local revenue growth accelerating to 40 percent year over year,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “We hit a major milestone in the first quarter, surpassing 100 million cumulative reviews. With a mobile review contributed every two seconds on average in the quarter, our fresh, relevant review content is what makes Yelp a destination for consumers looking to find and transact with great local businesses.”
Looking ahead to the second quarter of 2016, Yelp expects net revenue to be in the $167 million to $171 million range, representing growth of approximately 26 percent compared to the midpoint of the second quarter of 2015.
For the full year following strong Yelp first quarter 2016 earnings, the company expects net revenue to be somewhere between $690 million and $702 million. This represents growth of around 27 percent compared to the full year 2015 at the midpoint.