Yelp Inc.

Hello and welcome to Yelp's first quarter 2025 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. And if you would like to ask a question, please press star one on your telephone keypad. I would now like to turn the conference over to Kate Krieger, Director of Investor Relations. You may begin.

Good afternoon, everyone, and thanks for joining us on Yelp's first quarter 2025 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 a 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. will 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 of 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 may have discussed adjusted EBITDA, adjusted EBITDA margin, and free cash flow, which are non-GAAP financial measures. Thank you for joining us. And with that, I will turn the call over to Jeremy.

Thanks, Kate, and welcome, everyone. Led by continued strength in our services business, Yelp delivered 8% year-over-year revenue growth and strong profitability in the first quarter. We generated $359 million of net revenue while expanding net income margin by 3 percentage points and adjusted EBITDA margin by 4 percentage points from the prior year period. Our product-led strategy has continued to strengthen our business, and we recently rolled out 15 new features and updates. We continue to see a divergence in category performance in the first quarter. The operating environment for businesses in our restaurant, retail, and other categories remain challenging, and RRO revenue declined by 3% year-over-year as a result. At the same time, our services categories, where we focused our product efforts, drove continued momentum. Services revenue increased by 14% year-over-year, making it the 16th consecutive quarter of double-digit year-over-year growth. Request-to-quote projects increased by approximately 10% year-over-year, primarily as a result of improvements to the request-to-quote flow and adoption of Yelp Assistant, even as our spend on acquiring projects through paid search was significantly lower than in the prior year period. Excluding projects acquired through paid search, request-to-quote projects increased by more than 15% year-over-year in the quarter. To help make the hiring experience even smoother, we recently enhanced Yelp Assistant by adding AI-powered photo recognition. We also introduced response quality badges to highlight service pros who consistently provide helpful replies to project requests. In addition, we have increased our focus on multi-location services businesses this year and announced an integration with workflow automation platform Zapier. Leveraging Yelp's Leads API, the integration directly connects Yelp to over 800 CRM platforms and lead management tools. More broadly, our product and engineering teams continue to leverage AI to transform the way consumers connect with great local businesses across categories. During the first quarter, we introduced several improvements to our matching algorithms and experimented with themed ad formats to deliver greater value to our advertisers. At the same time, our consumer teams continued the expansion of AI-powered business summaries and made progress bringing Yelp Assistant to other categories and entry points. We recently announced two upcoming AI-powered call answering services, one for service pros, and another for restaurants to help business owners manage incoming calls like booking reservations and collecting project details. Our research has found that consumer phone calls are a critical lead source, yet many go unanswered. There's a clear opportunity to provide additional value to local businesses and we see these products as a strong solution. In summary, our focus on services continues to strengthen our business and we remain excited by the opportunities ahead to drive profitable growth and shareholder value over the long term. With that, I'll turn it over to David.