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 Nine Months Ended September 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 nine months ended September 30, 2025 increased 4% and 5% 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 nine months ended September 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 Places API (formerly Yelp Fusion) and Yelp Insights API (formerly 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 nine months ended September 30, 2025 increased compared to the prior-year periods primarily due to increases in revenue from our Yelp Places API, Yelp Insights API and Yelp Guest Manager programs.

Trends and Uncertainties of Net Revenue. Net revenue increased in the three months ended September 30, 2025 compared to the three months ended June 30, 2025 primarily due to increased advertiser demand in Services categories. We expect net revenue for the three months ending December 31, 2025 to decrease from the third quarter of 2025, reflecting ongoing macroeconomic uncertainties and typical seasonality in our Services categories.

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 nine months ended September 30, 2025 increased compared to the prior-year periods, primarily due to:

•increases in revenue share payments of $1.5 million and $4.2 million, respectively, due to our acquisition of RepairPal;

•increases in advertising fulfillment costs of $0.9 million and $4.2 million, respectively, largely attributable to higher costs to syndicate advertising budgets on certain third-party sites;

•increases in merchant credit card processing fees of $0.7 million and $2.3 million, respectively, due to increases in advertising revenue; and

•increases in website infrastructure expenses of $0.4 million and $4.1 million as a result of maintaining and improving our infrastructure.

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 months ended September 30, 2025 increased compared to the prior-year period, primarily due to an increase in sales and marketing employee-related costs of $5.7 million, as a result of higher average headcount in sales and marketing roles, including headcount from the acquisition of RepairPal.

Sales and marketing expenses for the nine months ended September 30, 2025 decreased compared to the prior-year period, primarily due to:

•a decrease in marketing and advertising costs of $11.6 million, mainly driven by decreased spending on acquiring Services projects through paid search, partially offset by increases in costs for business owner marketing; and

•a decrease in workplace operating costs of $4.0 million, primarily due to reductions in our leased office space.

These decreases were partially offset by an increase in sales and marketing employee-related costs of $14.5 million, primarily resulting from higher average headcount in sales and marketing roles, including headcount from the acquisition of RepairPal.

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 months ended September 30, 2025 remained relatively consistent with the prior-year period.

Product development expenses for the nine months ended September 30, 2025 decreased compared to the prior-year period, primarily due to a decrease in employee-related costs of $10.0 million, resulting from lower average headcount in product development roles and more employee-related costs being capitalized.

We expect product development expenses to decrease on an absolute dollar basis and as a percentage of revenue in 2025 compared to 2024.

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 months ended September 30, 2025 decreased compared to the prior-year period primarily due to a $5.9 million impairment charge related to the sublease of certain office space in Toronto and San Francisco recorded in the prior-year period. See Note 9, “Leases,” of the Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 in this Quarterly Report for further detail. The decrease was partially offset by a $0.9 million increase in general and administrative employee-related costs. This was primarily due to higher cost of labor, which was partially offset by lower average headcount in general and administrative roles.

General and administrative expenses for the nine months ended September 30, 2025 increased compared to the prior-year period due to:

•expenses in connection with an indemnification obligation assumed in the RepairPal acquisition of $5.0 million;

•an increase in general and administrative employee-related costs of $4.2 million, primarily driven by higher cost of labor, partially offset by lower average headcount in general and administrative roles; and

•an increase of $1.6 million in consulting costs.

The increase during the nine-month period was partially offset by the $5.9 million impairment charge related to the sublease of certain office space in the prior-year period, as described above.

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 and amortization on capitalized website and internal-use software development costs, computer equipment, leasehold improvements, and intangible assets.

Depreciation and amortization expense for the three and nine months ended September 30, 2025 increased compared to the prior-year periods primarily due to:

•increases of $2.1 million and $6.3 million, respectively, 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; and

•increases of $1.7 million and $3.4 million, respectively, as a result of higher capitalized website and internal-use software development costs.

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 nine months ended September 30, 2024, the release of a reserve related to a one-time payroll tax credit.

Other income, net for the three and nine months ended September 30, 2025 decreased compared to the prior-year periods primarily due to decreases in interest income of $1.5 million and $5.0 million, respectively, as a result of lower cash, cash equivalents, and marketable securities balances and lower federal interest rates. For the nine-month period, the decrease was also driven by the release of a $3.1 million reserve related to a one-time payroll tax credit in the prior-year period.

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 nine months ended September 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 September 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. As of the nine months ended September 30, 2025, the OBBBA did not 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”).