Earnings

Yelp Narrows 2026 Outlook After Advertising Drag

The Tip Desk · November 11, 2026 · 3 min read

Third-quarter net revenue was $371 million, $1 million above the high end of the company's outlook range, as other revenue reached a record $34 million.

Yelp Inc. (YELP) reversed two quarters of modest year-over-year growth, with net revenue down 1% to $371 million in the third quarter ended September 30, 2026. The figure sat $1 million above the high end of the company's outlook range.

Advertising remained the drag. Advertising revenue fell 6% from a year earlier, with Services advertising down 2% to $238 million and Restaurants, Retail & Other advertising down 13% to $99 million. The company said Services results reflected a decrease in ad clicks from those categories, partially offset by a higher average cost-per-click. It attributed the Restaurants, Retail & Other decline to lower ad clicks and average CPC, citing a challenging operating environment for those businesses and, to a lesser extent, competitive pressures from food ordering and delivery providers.

Ad clicks decreased 8% year over year while average CPC increased 2%, which the company said was primarily due to softer consumer demand. Total paying advertising locations decreased 1% to 509,000. Services locations were down 1%, while Restaurants, Retail & Other locations increased 3%, largely driven by multi-location advertisers. Average revenue per location decreased moderately.

Other revenue increased 82% year over year to a record $34 million, or an annual run rate of $136 million. That growth rate slowed from 98% in the second quarter, when other revenue was $33 million. The company said the increase was attributable to the inclusion of revenue from Hatchify Inc. (Hatch), as well as significant growth in data licensing and food ordering. Chief financial officer David Schwarzbach said other revenue was gaining traction toward a target of $250 million.

Net income decreased 12% to $35 million, or $0.63 a share, from $39 million, or $0.61 a share, a year earlier. Net income margin decreased one percentage point to 9%. Adjusted EBITDA decreased 6% to $92 million, $17 million above the high end of the company's outlook range, with Adjusted EBITDA margin down one point to 25%.

Hatch annual run-rate revenue reached approximately $37 million in the quarter, up 55% year over year and 6% quarter over quarter. The company said it integrated GPT-Live-1 into Hatch’s voice AI in the third quarter and deepened Hatch’s integration with ServiceTitan. Yelp Host total calls handled reached a 2.5 million annual run rate in October, up 15x from October 2025. The company said food orders via Yelp Host grew more than 6x from June to October.

Yelp Assistant generated approximately 10% of Request-a-Quote projects in the quarter and contributed to overall project growth of approximately 10% year over year. The company said it expanded Yelp Assistant’s restaurant booking capabilities with an OpenTable integration and added a Calendly integration for booking service professionals.

Cash provided by operating activities was $100 million in the third quarter. The company ended the quarter with cash and cash equivalents of $120 million and repurchased approximately 1.0 million shares at an aggregate cost of $25 million.

For full-year 2026, Yelp now expects net revenue of $1.455 billion to $1.460 billion, a narrower range than the $1.460 billion to $1.470 billion outlook it issued after the second quarter. Adjusted EBITDA is now expected at $320 million to $325 million, versus a prior range of $315 million to $325 million. The company said it anticipates economic headwinds for consumers and local businesses will persist in the near term.

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