Shares of the world's largest business review site Yelp (NYSE:YELP) were down sharply, falling by 10% in aftermarket trade after the company delivered a healthy Q4 2015 earnings beat but failed to impress on one key profitability metric: EBITDA. Yelp reported fourth quarter revenue of $153.7M, good for 39.9% Y/Y growth and $1.3M better than the consensus on Wall Street while its non-GAAP EPS of $0.11 was $0.14 better than estimates and represented a huge 42.1% Y/Y drop. On a GAAP basis, Yelp reported a net loss of $22.2M or EPS of -$0.29. Meanwhile, Yelp's EBITDA (earnings before interest, taxes, depreciation, and amortization), a closely watched profitability metric for the company, fell 30.1% to $17.5M and thus failed to meet the company's guidance of $20M-$24M for the quarter.
Local Advertising revenue grew 36% Y/Y to $125.9M while Transaction Revenue clocked in at $14M from $1.4M from the prior year's comparable quarter courtesy of Yelp's acquisition of Eat24 in 2015. Other revenues remained flat year over year at $6.8M. Yelp's cumulative reviews grew 34% Y/Y to 95M. Yelp's user device mix was a mixed bag with desktop users declining 4% Y/Y to 74.6M while mobile users grew 14.2Y/Y to 65.9M.
Upbeat Revenue/Earnings Guidance, Weak EBITDA
Yelp said that it expects Q1 2016 revenue of $154M-$157M, good for 31%Y/Y growth at the mid-point and above a Wall Street consensus of $154.4M. Yelp said that it expects full-year revenue to clock in at $685M-$700M, good for 26% Y/Y growth at the mid-point and above Wall Street consensus of $687.4M.
Yelp issued weak EBITDA guidance that once again disappointed. The company said that it expects Q1 2016 EBITDA of $10M-$12M and full-year EBITDA of $90M-$105M. Although the company's full-year EBITDA will be good for 41% Y/Y growth, it probably won't be good enough to push the company out of the red zone where it has languished for years, thus the negative reaction by the market.
