Yelp Inc.

Good afternoon and welcome to the Yelp second quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to James Milne, Senior Vice President of Finance and Investor Relations. Please go ahead.

Good afternoon, everyone, and thanks for joining us on Yelp's second quarter 2021 earnings conference call. Joining me today are Yelp's Chief Executive Officer, Jeremy Stoppelman, Chief Financial Officer, David Schwarzbach, and Chief Operating Officer, Jed Nachman. We published the shareholder letter on our investor relations website and with the SEC and hope everyone had a chance to read it. We'll provide some brief opening comments and then turn to your questions. Now I'll read our safe harbor statement. We'll make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. In addition, we are subject to a number of risks that may significantly impact our business and financial results. Please refer to our SEC filings as well as our shareholder letter for a more detailed description of the risk factors that may affect our results. During our call today, we'll discuss adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. These measures should not be considered an isolation from or as a substitute for financial information prepared in accordance with generally accepted accounting principles. In our shareholder letter released this afternoon and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures as well as historical reconciliations of gap net income to both adjusted EBITDA and adjusted EBITDA margin. And with that, I will turn the call over to Jeremy.

Thanks, James, and welcome, everyone. Yelp had a strong quarter. Net revenue growth was 52% from the second quarter of 2020, resulting in positive net income of $4 million. Adjusted EBITDA grew to a record $64 million, representing a 25% adjusted EBITDA margin. Underlying this performance, Yelp of 2021 looks very different than it did when we began implementing our strategic initiatives in 2019. We've elevated the pace of product innovation and made tremendous progress. Advertising revenue from our services categories and self-serve channel, as well as our non-term contract retention rate, all reached record highs in the second quarter. These results are a testament to the resilience and creativity of all of our teams. Their consistent execution of our multi-year strategy has transformed Yelp into a structurally stronger business. Consumers continue to come to Yelp to connect with great local businesses through trusted content and reviews. We were pleased by the rate at which our users returned to Yelp in the second quarter. For example, diners seated via Yelp were up 70% from the first quarter and 45% from the second quarter of 2019. Even bile public health restrictions remained in place in several of our historically strongest metros. The services category has been an area of strength for us throughout the pandemic, and this continued in the second quarter. Consumer requests via Request a Quote grew nearly 30% from the first quarter and more than 50% year over year. Our advertisers are also seeing greater value from their spend with more high intent clicks at a lower average cost. We were pleased to see our ongoing advertising platform investments pay off in the second quarter as average CPCs declined by 20% and ad clicks increased by 87% compared to the prior year period. Combined with our increased pace of product innovation over the last two years, we saw strong momentum in our revenue initiatives. Advertising revenue from services businesses in the second quarter was 23% higher than in the second quarter of 2019, while revenue from our self-serve and multi-location channels represented approximately 45% of total advertising revenue. In summary, the progress on our strategic initiatives paved the way for our financial performance to surpass pre-COVID levels. Second quarter net revenue was up 4% from the second quarter of 2019, while adjusted EBITDA margin was up 3 percentage points. We remain focused on continuing to build momentum in our initiatives, and we are excited about the long-term opportunity ahead. With that, I'd like to turn it over to David.