YELP INC

The following table sets forth our results of operations for the periods presented (in thousands, except percentages). The period-to-period comparison of financial results is not necessarily indicative of the results of operations to be anticipated for the full year 2025 or any future period.

(1)Percentage changes may not recalculate using the rounded numbers presented in this table.

Three and Six Months Ended June 30, 2025 and 2024

Net Revenue

Advertising. We generate advertising revenue from the sale of our advertising products — including business page upgrades and performance-based advertising in search results and elsewhere on our platform — to businesses of all sizes, from single-location local businesses to multi-location national businesses (“Yelp Ads”). Advertising revenue also includes revenue generated from the resale of our advertising products by certain partners and monetization of advertising inventory through third-party ad networks, as well as revenue generated from RepairPal. We present advertising revenue on a disaggregated basis for our high-level category groupings, Services and RR&O.

Advertising revenue for the three and six months ended June 30, 2025 increased 4% and 6% year over year, respectively, as a result of increases in revenue from Services businesses, partially offset by decreases in revenue from RR&O businesses. The increases in Services revenue were driven by growth in revenue from Yelp Ads, due to increases in average CPC, partially offset by decreases in ad clicks, as well as the addition of revenue from RepairPal. Revenue from RepairPal contributed approximately two percentage points of the year-over-year growth in total advertising revenue in each of the three and six months ended June 30, 2025.

Other. We generate other revenue through non-advertising contracts, such as our subscription services, which include our Yelp Guest Manager product, and through our Yelp Fusion and Yelp Fusion Insights programs, which provide Yelp content and data for a fee. Other revenue also includes revenue from various transactions with consumers. We generate revenue from such transactions through our partnership integrations, which are mainly revenue-sharing arrangements that provide consumers with the ability to place food orders for pickup and delivery through third parties directly on Yelp. We earn a fee for acting as an agent for transactions placed through these integrations, which we record on a net basis and include in revenue upon completion of a transaction.

Other revenue for the three and six months ended June 30, 2025 increased compared to the prior-year periods primarily due to increases in revenue from our Yelp Guest Manager, Yelp Fusion Insights and Yelp Fusion programs. These increases were partially offset by a lower volume of food takeout and delivery orders.

Trends and Uncertainties of Net Revenue. Net revenue increased in the three months ended June 30, 2025 compared to the three months ended March 31, 2025 primarily due to increased advertiser demand in Services categories. While we expect our strategic initiatives will continue to drive momentum, we anticipate macroeconomic challenges and their impacts on advertiser demand to offset, with net revenue remaining approximately flat in the three months ending September 30, 2025.

Costs and Expenses

Cost of Revenue (exclusive of depreciation and amortization). Our cost of revenue consists primarily of website infrastructure expense, which includes website hosting costs and employee-related costs (including stock-based compensation expense) for the infrastructure teams responsible for operating our website and mobile app, and excludes depreciation and amortization expense. Cost of revenue also includes third-party advertising fulfillment costs, credit card processing fees and revenue share payments, which primarily consist of payments to RepairPal referral partners.

Cost of revenue for the three and six months ended June 30, 2025 increased compared to the prior-year periods, primarily due to:

•increases in website infrastructure expense of $1.5 million and $3.7 million, respectively, as a result of maintaining and improving our infrastructure;

•increases in revenue share payments of $1.4 million and $2.7 million, respectively, due to our acquisition of RepairPal;

•increases in merchant credit card processing fees of $0.8 million and $1.6 million, respectively, due to increases in advertising revenue; and

•increases in advertising fulfillment costs of $0.7 million and $3.3 million, respectively, largely attributable to the expanded efforts to syndicate advertising budgets on third-party sites. For the three-month period, the increase was partially offset by a decrease in Yelp Audiences spend.

We expect cost of revenue to increase on an absolute dollar basis in 2025 compared to 2024, primarily due to our acquisition of RepairPal.

Sales and Marketing. Our sales and marketing expenses primarily consist of employee-related costs (including sales commission and stock-based compensation expenses) for our sales and marketing employees. Sales and marketing expenses also include business and consumer acquisition marketing, community management, as well as allocated workplace and other supporting overhead costs.

Sales and marketing expenses for the three and six months ended June 30, 2025 decreased compared to the prior-year periods, primarily due to:

•decreases in marketing and advertising costs of $7.2 million and $12.0 million, respectively, mainly driven by decreased spending on acquiring Services projects through paid search, partially offset by increases in costs for business owner marketing; and

•decreases in workplace operating costs of $3.5 million and $3.9 million, respectively, primarily due to reductions in our leased office space.

These decreases were partially offset by increases in sales and marketing employee-related costs of $5.1 million and $8.8 million, respectively, primarily resulting from higher average headcount in sales and marketing roles.

We expect sales and marketing expenses to remain relatively consistent on an absolute dollar basis in 2025 compared to 2024 as the expenses associated with the additional headcount from the acquisition of RepairPal are offset by the reduction in spend on acquiring Services projects through paid search. However, we expect sales and marketing expenses to decrease as a percentage of net revenue.

Product Development. Our product development expenses primarily consist of employee-related costs (including bonuses and stock-based compensation expense, net of capitalized employee-related costs associated with capitalized website and internal-use software development) for our engineers, product management and corporate infrastructure employees. In addition, product development expenses include allocated workplace and other supporting overhead costs.

Product development expenses for the three and six months ended June 30, 2025 decreased compared to the prior-year periods, primarily due to decreases in employee-related costs of $3.1 million and $10.4 million, respectively, resulting from lower average headcount in product development roles and more employee-related costs being capitalized.

We expect product development expenses to increase on an absolute dollar basis in 2025 compared to 2024, but remain relatively consistent as a percentage of net revenue.

General and Administrative. Our general and administrative expenses primarily consist of employee-related costs (including bonuses and stock-based compensation expense) for our executive, finance, user operations, legal, people operations and other administrative employees. Our general and administrative expenses also include our provision for credit losses, certain consulting and professional services costs, including litigation settlements, as well as allocated workplace and other supporting overhead costs.

General and administrative expenses for the three and six months ended June 30, 2025 increased compared to the prior-year periods, primarily due to increases in general and administrative employee-related costs of $1.5 million and $3.2 million, respectively, primarily driven by higher cost of labor partially offset by lower average headcount in general and administrative roles.

For the six-month period, the year-over-year increase was also attributable to:

•expenses in connection with an indemnification obligation assumed in the RepairPal acquisition of $5.2 million; and

•an increase of $1.2 million in consulting costs.

These increases were partially offset by a decrease in our provision for credit losses of $1.4 million primarily due to lower customer delinquencies, partially offset by the increase in net revenue.

We expect general and administrative expenses to increase on an absolute dollar basis in 2025 compared to 2024 to support our business, but remain relatively consistent as a percentage of net revenue.

Depreciation and Amortization. Depreciation and amortization expense primarily consists of depreciation on computer equipment, software, leasehold improvements, capitalized website and internal-use software development costs, and amortization of purchased intangible assets.

Amortization expense for the three and six months ended June 30, 2025 increased by $2.1 million and $4.2 million, respectively, from the prior-year periods, mainly as a result of intangible assets acquired in the RepairPal acquisition. See Note 7, “Acquisition,” of the Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 in this Quarterly Report for further details.

Other Income, Net

Other income, net consists primarily of the interest income earned on our cash, cash equivalents and marketable securities, research and development tax credits, the portion of our sublease income in excess of our lease cost, accretion of discounts and amortization of premiums on investments, credit facility fees, foreign exchange gains and losses and, in the three and six months ended June 30, 2024, the release of a reserve related to a one-time payroll tax credit.

Other income, net for the three and six months ended June 30, 2025 decreased compared to the prior-year periods primarily due to the release of a $3.1 million reserve related to a one-time payroll tax credit in the prior-year periods, as well as decreases in interest income of $1.6 million and $3.5 million, respectively, as a result of lower cash, cash equivalents, and marketable securities balances and lower federal interest rates.

Provision for Income Taxes

Provision for income taxes consists of: federal and state income taxes in the United States and income taxes in certain foreign jurisdictions; deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Provision for income taxes for the three and six months ended June 30, 2025 increased from the prior-year periods primarily due to increases in profit before tax in the current-year periods as well as increases in the discrete tax expense primarily related to stock-based compensation and uncertain tax positions.

As of December 31, 2024, we had approximately $139.6 million in net deferredtax assets (“DTAs”). As of June 30, 2025, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that some or all of these DTAs will not be realized. Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance may be required to reduce our DTAs, which would materially increase our expenses in the period in which we recognize the allowance and have a materially adverse impact on our condensed consolidated financial statements. The exact timing and amount of the valuation allowance recognition are subject to change on the basis of the net income that we are able to actually achieve. We will continue to evaluate the possible recognition of a valuation allowance on a quarterly basis.

In July 2025, the congressional bill known as the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which, among other things, restored certain favorable corporate tax provisions, including permitting full expensing of domestic research and development expenses. We are currently assessing the OBBBA’s impact on our consolidated financial statements; however, based on our preliminary analysis, we expect our cash tax payments for the remainder of 2025 to be reduced by approximately $25 million to $35 million. We currently do not expect the OBBBA to have a material impact on our 2025 estimated annual effective tax rate calculated in accordance with accounting principles generally accepted in the United States (“GAAP”).