Yelp Inc.

After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Kate Krieger, Director of Investor Relations. Please go ahead.

Good afternoon everyone, and thanks for joining us on Yelp's second quarter 2025 earnings conference call. Joining me today are Yelp's Chief Executive Officer, Jeremy Stoppleman, 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. 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 may discuss -dee-da, -dee-da margin, and free cash flow, 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 Investor Relations website, we will find additional disclosures regarding these non-GAAP financial measures as well as historical reconciliations of GAAP net income or loss to -dee-da, GAAP net income margin to -dee-da margin, and GAAP cash flows from operating activities to free cash flow. And with that, I will turn the call over to Jeremy.

Thanks, Kate, and welcome, everyone. Yelp delivered record net revenue and strong profitability in the quarter. We generated $370 million of net revenue while expanding net income margin by one percentage point and adjusted EBITDA margin by two percentage points from the prior year period. We remained focused on our product-led strategy and rolled out a number of AI-powered updates in the quarter. Underlying our top-line results, services revenue increased by 8% year over year and drove our business performance. At the same time, the operating environment for businesses in our restaurant, retail, and other categories remained challenging, and our R&O revenue declined by 5% year over year. We are continuing to deepen our focus on services, excluding projects acquired through our paid search initiative. -to-quote projects increased by approximately 10% year over year, driven by improvements to the request flow and our AI chatbot, Yelp Assistant, which maintains strong momentum. Project submissions through Yelp Assistant increased by more than 400% year over year. As we roll out additional entry points, including by making it available to logged-out users, we expect to drive continued growth. To reduce friction and make the Service Pro experience even smoother, we are providing advertisers with new tools to better manage their leads on Yelp. In the second quarter, we added a number of new labels and filters to the business owner's inbox to help Service Pros sort and respond to consumer requests more quickly. In addition, our integration with workflow automation platform Zapier has been particularly well-received with strong early adoption across both SMB and multi-location customers. More broadly, our product and engineering teams continued to leverage AI to transform the way consumers connect with great local businesses. In the second quarter, we continued to make progress towards our launch of Yelp Assistant across all categories. We also recently initiated live testing of Yelp Host, our AI-powered call answering service for restaurants. We're encouraged by the early results and look forward to beginning similar testing with Yelp Receptionist, our services tailored version, later this year. Beyond the Yelp platform, we believe trusted content will be a differentiator in an AI-powered world, and we have seen strong demand for our data licensing products as a result. AI search API calls have accelerated, increasing by 20 times over the past year and 10 times in just the last two months. We also continue to onboard new licensing partners. Together, these developments contributed to an increase in annual run rate revenue related to AI search to more than $10 million over the last two months. This momentum reflects Yelp's value as an essential partner in emerging AI-powered search products. In summary, our focus on services and AI products continue 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.