Yelp Inc.

Good afternoon. Thank you for attending today's Yelp fourth quarter and full year 2022 earnings conference call. My name is Megan and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to James Milne, Senior Vice President of Finance and Investor Relations. James, please go ahead.

Good afternoon, everyone, and thanks for joining us on Yelp's fourth quarter and full year 2022 earnings conference call. Joining me today are Yelp's Chief Executive Officer, Jeremy Stoppelman, Chief Financial Officer, David Schwarzbach, and Chief Operating Officer, Jed Nockman. 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 in 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 GAAP 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 delivered one of the strongest revenue growth performances among our advertising and marketplace peers in 2022. Our performance ad products and high intent audience generated robust advertiser demand across a broad range of categories, both on and off Yelp. Net revenue increased by 16% year over year to a record $1.2 billion in 2022. We delivered this performance with net income of $36 million and adjusted EBITDA of $270 million. These results demonstrate the strength and durability of Yelp's ad platform and the ability of our team to execute under a range of difficult conditions to deliver excellent results. Underlying our record top line, our product-led strategy drove a number of other record results in 2022. We achieved record paying advertising locations and average revenue per location for the year. In services, we succeeded in differentiating the product experience and increasing monetization and lead quality, resulting in greater value to service pros. We believe Yelp gained market share in 2022 as advertising revenue from services businesses grew 14% year over year to a record $694 million. The home services category was particularly strong, with year over year growth of approximately 20%. Since 2019, revenue from this category has compounded at an annual growth rate of nearly 20%. Advertising revenues from restaurants, retail, and other businesses increased by 17% year over year to $441 million, driven by growth in paying advertising locations. We continue to deliver value to advertisers in these categories by enhancing our suite of ad products designed to deliver high intent clicks both up and down the funnel and on and off Yelp. On the consumer side of our business, traffic remained below pre-pandemic levels as the macro environment contributed to softer consumer demand. App unique devices of 33 million were flat compared to 2021. Despite this backdrop, we made early progress on the consumer focused initiative we announced at the beginning of 2022. We reduced friction from the review writing process, which helped our trustworthy content grow by 21 million new reviews in 2022. This resulted in more than 265 million cumulative reviews as of December 31st, up 9% from 2021. In addition, our early work with large language models suggests there are a number of near-term applications that we can leverage to enhance the consumer experience on Yelp. We deliver value to our advertisers through our sophisticated ad system. This best-in-class technology is able to respond dynamically to changes in supply and demand to efficiently match consumers with advertisers. While ad clicks for the year declined by 8% from 2021, a year that had benefited from reopening tailwind and elevated consumer spending, Advertiser demand remained robust as we executed against our roadmap of ad system improvements and average CPC increased by 27% year over year. We also made progress on our initiative to drive sales through the most efficient channels. Self-serve and multi-location channels each grew approximately 25% year over year to record levels in 2022. Together, these channels represented approximately 48% of advertising revenue in 2022 up four percentage points from 21. Looking back over the last year, the Yelp team has made tremendous progress across all of our strategic initiatives. Our investments in product have not only delivered record revenue, but also strengthened Yelp's position as a leader in local with trusted content and sophisticated ad tech. As a result, we plan to expand upon each of our initiatives to drive profitable growth in 2023 and over the long term by continuing to invest in growing quality leads and monetization in services, driving sales through the most efficient channels, delivering more value to advertisers, and enhancing the consumer experience. At their core, these initiatives aim to continue to differentiate Yelp from peers in bringing increased value to local consumers and advertisers. We believe that our consistent execution in these areas in 2022 has positioned Yelp better than ever to drive long-term profitable growth. With that, I'd like to turn it over to David.