Yelp Inc.

Hello and welcome to the Yelp second quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. I will now turn the conference over to Mr. James Milne, Senior Vice President, Finance and Investor Relations. Please go ahead.

Good afternoon, everyone, and thanks for joining us on Yelp. second quarter 2023 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 a shareholder letter on our investor relations website and with the SEC, and I 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 findings 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 reconfigurations of GAAP net income with both adjusted EBITDA and adjusted EBITDA margins. And with that, I will turn the call over to Jeremy.

Thanks, James, and welcome, everyone. Yelp delivered a number of record results in the second quarter, a testament to our increased product velocity and consistent execution across the company. We grew net revenue by 13% year over year to a record $337 million, representing the ninth consecutive quarter of double-digit growth. We delivered this performance while also expanding net income margin and adjusted EBITDA margin by two percentage points each from the prior year period. Yelp's elevated pace of product innovation continues to strengthen the company for the long term. In the second quarter, we leaned into our roadmap to deliver value to advertisers. As a result, businesses spent more on Yelp than ever before across categories. Advertising revenue from services businesses increased 15% year-over-year with approximately 25% year-over-year growth in the home services category. Advertising revenue from restaurants, retail, and other businesses increased by 11% year-over-year. Our portfolio of down funnel ad products continued to resonate with SMB and multi-location advertisers and we made progress against our initiative to drive sales through our most efficient channels. Self-serve and multi-location maintain their strong year-over-year growth rates of approximately 25% and 15% respectively. As a result, these channels together accounted for the majority of our advertising revenue at 51% for the first time. Turning to product, AI continues to present new opportunities to enhance the product experience for consumers and advertisers alike. After upgrading our infrastructure over the past year, we've been able to leverage neural networks to determine the most useful content to display to consumers on the home feed, as well as to provide them with better targeted ads, which improve the overall performance of our ad system. With a robust pipeline of projects for the remainder of 2023 and beyond, I continue to be excited about the opportunities ahead. In summary, Yelp delivered another standout performance in the second quarter with faster revenue growth than many of our advertising peers. I'm incredibly proud of the execution demonstrated by the entire Yelp team, which has enabled us to deliver consistently strong results. As we look ahead, we remain focused on growing revenue through our strong product pipeline and delivering shareholder value over the long term. With that, I'd like to turn it over to David.