Yelp Inc.

Thank you for standing by. At this time, I would like to welcome everyone to today's Q4 2025 Yelp Incorporated Earnings Conference 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'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. And I would now like to turn the call over to Josh Willis. Investor Relations Manager, Josh.

Good afternoon, everyone, and thank you for joining us on Yelp's fourth quarter and full year 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 Nockman. We've 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 adjusted EBITDA, adjusted EBITDA margins, 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 has been posted on our investor relations website, you will find additional disclosures regarding these non-GAAP financial measures, as well as historical reconciliations of GAAP net income or loss to both adjusted EBITDA and adjusted EBITDA margin, and a historical reconciliation of GAAP cash flows from operating activities to free cash flow. And with that, I will turn the call over to Jeremy.

Thanks, Josh, and welcome, everyone. Yelp delivered record net revenue and strong profitability in 2025, driven by our focus on services and accelerated pace of product innovation. We introduced more than 55 new products and features, many powered by AI, as we continue to transform the experience for consumers and businesses. Overall, in 2025, net revenue increased by 4% year over year to $1.46 billion. We grew net income by 10% year over year to $146 million, representing a 10% net income margin. This resulted in 19% year-over-year growth in diluted earnings per share to $2.24. Adjusted EBITDA increased by 3% year-over-year to $369 million, representing a 25% adjusted EBITDA margin. Underlying our results, the operating environment for RRO categories remain challenging. with revenue from these businesses declining 6% year-over-year to $444 million. At the same time, services drove our business performance, with advertising revenue from businesses in these categories up 8% year-over-year to a record $948 million due to the strength in advertising demand and reflecting record revenue per location. Excluding projects acquired through our paid search initiative, Request a Quote projects increased approximately 15% year over year, driven by improvements to the flow and increased adoption of Yelp Assistant. Our AI chatbot continued to resonate with consumers in 2025, with Request a Quote project submissions through Yelp Assistant up more than 400% year over year, representing approximately 5% of all Request a Quote projects during the year. Total ad clicks decreased 7% year-over-year, driven primarily by macro pressures and, to a lesser extent, reduced spend on paid project acquisition in 2025 compared to 2024. Average cost per click increased 10% year-over-year, reflecting growth in advertiser demand in our services categories and fewer clicks overall. Total paying advertising locations decreased 3% year-over-year as softness in R&O offset growth in services, while average revenue per location reached an annual record. Other revenue accelerated significantly, up 17% year-over-year, driven by growth in transaction, subscription, and data licensing revenue. We also continued to grow our review content in 2025. Yelp users contributed 22 million new reviews, bringing cumulative reviews to 330 million. App unique devices were down 2% year-over-year as consumers visited restaurants with reduced frequency. Over the past year, we meaningfully increased our focus on transforming Yelp with AI. We believe combining our authentic human-generated content with advanced AI presents a significant opportunity to redefine how people connect with local businesses. We plan to build on our progress by investing in three strategic initiatives in 2026. First, we are reconceiving the Yelp experience to focus on delivering answers and actions. We set the stage for this in 2025 by introducing natural language search, launching AI-powered business highlights and expanding Yelp Assistant to RR&O business pages. We plan to further expand Yelp Assistant in 2026 to function across categories and entry points with the goal of making local discovery and task completion seamless. We began testing this comprehensive experience in the fourth quarter and expect to fully roll it out by the end of the first quarter. To further close the loop between discovery and action, We expanded our food ordering network by adding hundreds of thousands of new restaurants through our DoorDash partnership and integrated RepairPal's booking system into Yelp. Second, we are delivering AI tools that help service pros and other local businesses grow, operate, and succeed. Building on years of investment in delivering value to our advertisers, our focus is shifting toward becoming an even more valuable partner for businesses by helping them operate more efficiently through AI-powered tools. In 2025, we introduced Yelp Host, our AI-powered call answering service for restaurants, which has answered more than 190,000 calls and handled thousands of reservations since launch. In 2026, we plan to roll out further upgrades, including the ability to take food orders over the phone. To accelerate our broader strategy, we recently closed our acquisition of Hatch, a leading AI lead management platform for service pros. With this acquisition, we've now shifted our focus and lead management from Yelp receptionist to supporting the rapid growth of Hatch. Lastly, we are further extending our reach to power local discovery across the AI ecosystem. As search evolves towards AI, we believe the value of our first party data, including 330 million reviews, nearly 500 million photos, and more than 8 million business listings is becoming increasingly clear. In 2025, we saw strong demand for our data licensing products, and we recently signed an agreement with OpenAI. We believe we are well positioned to be the essential partner providing trusted local content and enabling actions whenever consumers are making local decisions. In summary, our focus on product innovation and a differentiated services experience once again drove our results in 2025. Looking ahead, we are confident in our ability to transform Yelp with AI in ways that play to the strengths of our business. We plan to increase our investments in 2026, inclusive of our recent acquisition of Hatch, to capitalize on this opportunity and deliver long-term sustainable growth. With that, I'll turn it over to David.