YELP INC — Call Transcript 2026

Ladies and gentlemen, I'd like to welcome you to the Yelp Inc. Q1 2026 earnings conference call. We will be getting started in just a minute or two from now. Thank you for your patience. We'll be right back with you. Thank you. Ladies and gentlemen, once again, I do really appreciate your patience. Good afternoon and welcome. My name is Aaron. I will be your conference operator for today, and I would again like to welcome you to the Q1 2026 Yelp Inc. 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, and at that point, if you would like to ask a question, remember, it's star plus the number one on your telephone keypad. At any point, if you'd like to withdraw your question, just hit star followed by one again. With that, let's go ahead and begin our call. It's my pleasure to turn our call over to Kate Krieger, Director of Investor Relations. Kate, with that, you can go ahead. Thank you. Good afternoon, everyone, and thanks for joining us on Yelp's first quarter 2026 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. 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 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, 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. With that, I will turn the call over to Jeremy. Thanks, Kate, and welcome everyone. Yelp continued to accelerate its AI transformation in the first quarter. We are making local discovery increasingly conversational, delivering tools to help businesses succeed and expanding the reach of our trusted content through new partnerships. Our progress in the quarter resulted in the recent rollout of more than 35 new features and updates, including a new Yelp Assistant that now works across all categories. At the same time, local businesses have continued to face a challenging economic environment. First quarter net revenue increased by 1% year-over-year to $361 million with a net income margin of 5% and an adjusted EBITDA margin of 22%. Underlying our top-line results, services ad revenue increased by 1% year-over-year, and RR&O ad revenue decreased by 11% year-over-year. We've increased our focus on growing a number of AI-driven revenue streams this year. Other revenue grew 75% year-over-year as a result. Moving to our product initiatives, we are reconceiving how consumers and businesses connect on Yelp through a conversational experience that provides answers and enables actions. In the first quarter, Yelp Assistant connected more consumers and service pros than ever before, with its growing adoption accounting for approximately 15% of request-to-quote projects. We recently rolled out a new Yelp Assistant that supports local discovery across every business category on Yelp, delivering trusted recommendations while surfacing relevant reviews, star ratings, and other helpful details. While still early, we are seeing positive signals and believe Yelp Assistant can ultimately drive deeper engagement. In addition to evolving our product offerings, we are expanding our partner ecosystem to help consumers complete tasks like initiating a reservation or booking an appointment. In the first quarter, consumers took advantage of the hundreds of thousands of new restaurants available for food ordering and delivery through our DoorDash partnership, with food ordering revenue up 88% year-over-year. More recently, we announced new integrations with Vagaro and Zocdoc to enable users to book beauty, wellness, fitness, and healthcare appointments. We are delivering AI tools that help service pros and other local businesses grow, operate, and succeed. For advertisers, this showed up in the form of improvements to the ad experience and business owner platform, where we've introduced a new AI-powered support chatbot that streamlines administrative activities. Our team continued to scale Yelp Host, our AI-powered call answering service for restaurants, which surpassed an annual run rate of 1.5 million calls handled in April, more than doubling from January. We plan to roll out new improvements and functionality, including the ability to place food orders over the phone. Overall, we estimate there is a market opportunity of over $1 billion in the United States for Yelp Host. With our best-in-class offering and expansive distribution, we believe we are well-positioned to capture meaningful market share. We also accelerated our strategy in this area for services businesses through the acquisition of Hatch in February and have been pleased with the team's early progress. Notably, Hatch's annual run rate revenue exceeded $34 million in March, up 92% year-over-year. Looking ahead, we see considerable opportunity for significant growth, and we have added Yelp go-to-market and engineering resources to advance Hatch's growth initiatives. Lastly, we are extending our reach to power local discovery across the AI ecosystem through data licensing. In the first quarter, we secured new licensing agreements, including with OpenAI, and expanded our integrations with existing partners. Consumers can now find licensed Yelp content on Amazon Alexa, Apple Maps, Microsoft Bing, Meta AI, and Yahoo, among many other platforms. We expect the operating environment for local businesses to remain challenging this year. As such, we have allocated meaningful resources to drive growth in other revenue through AI-driven offerings such as Yelp Host, Hatch, and data licensing. As these accretive revenue streams continue to gain traction, we are targeting an annual run rate of $250 million in other revenue by the end of 2028, more than double the run rate delivered in the first quarter of this year. In summary, we continue to make significant progress transforming Yelp with AI in the first quarter as we focus on deepening the connection between consumers and businesses. We're confident in our plans for the year and believe that our initiatives will position us to drive profitable growth over the long term. With that, I'll turn it over to David. Thanks, Jeremy. Turning to our first quarter results. Net revenue increased by 1% year-over-year to $361 million, $6 million above the high end of our outlook range. Net income decreased by 27% year-over-year to $18 million, representing a 5% margin. Adjusted EBITDA decreased by 7% year-over-year to $79 million, $15 million above the high end of our outlook range, representing a 22% margin. As Jeremy mentioned, local businesses have faced a challenging operating environment, which is reflected in our advertising metrics for the quarter. Services ad revenue increased by 1% year-over-year to $234 million, while RR&O ad revenue decreased by 11% year-over-year to $99 million. A decrease in both services and RR&O locations resulted in an overall decline of 6% year-over-year in paying advertising locations to 485,000. Ad clicks declined by 10% year-over-year in the quarter, driven by lower consumer demand in RR&O categories, partially offset by a slight increase in services categories. Average CPC increased by 8% as advertiser demand outpaced consumer demand. Moving to other revenue. Other revenue increased by 75% year-over-year to a record $29 million. This strong growth was driven by the inclusion of revenue generated by Hatch, as well as significant growth in revenue from data licensing and food ordering. Turning to expenses. In 2026, we're investing behind high return areas that we believe will transform Yelp and re-accelerate growth. As Jeremy mentioned, we believe we can drive significant growth in other revenue, and we have reallocated resources behind these high-growth areas to better capture the opportunities ahead. At the same time, we see substantial opportunities to unlock operational efficiencies and increase employee productivity with AI, giving us increased confidence in the margin potential for our business. As a result of these top and bottom line efforts, we believe we can drive strong growth in adjusted EBITDA margin over the next several years. We reduced stock-based compensation expense as a percentage of revenue by 2 percentage points year-over-year to 8% in the first quarter. We expect the impact of this effort, combined with continued share repurchases, to stack over time and benefit GAAP profitability in the years to come. We also continue to expect that we will reduce stock-based compensation expense to less than 6% of revenue by the end of 2027. Our approach to capital allocation remains focused on three priorities: investing in strategic transactions, driving traffic acquisition, and returning excess capital to shareholders through share repurchases. In the first quarter, we repurchased $125 million worth of shares at an average price of $24.58 per share, reflecting our disciplined approach and contributing to a 12% year-over-year decline in diluted shares outstanding. As of March 31, 2026, we had $414 million remaining under our existing repurchase authorization. We plan to continue repurchasing shares in 2026, subject to market and economic conditions. Turning to our outlook, we anticipate that the challenging economic environment for local businesses will persist into the second quarter and continue impacting advertising revenue across categories. At the same time, we expect our investments in our strategic initiatives to drive strong growth in other revenue. As a result, we anticipate second quarter net revenue will be in the range of $363 million-$368 million. For the full year, we continue to expect net revenue will be in the range of $1.455 billion-$1.475 billion. Turning to margin, we expect expenses will increase sequentially as we invest in our AI transformation and increase marketing spend. As a result, we anticipate second quarter adjusted EBITDA will be in the range of $70 million-$75 million. For the full year, we continue to expect adjusted EBITDA will be in the range of $310 million-$330 million. For the second quarter and full year, our expected adjusted EBITDA ranges exclude accrued acquisition and integration-related payments for continuing Hatch employees of approximately $4 million and $13 million respectively, which we do not believe are indicative of our ongoing operating performance. In closing, Yelp's first quarter results reflect continued product momentum as we invest in our AI transformation. We continue to believe in the opportunities ahead and our ability to create long-term shareholder value. With that, operator, please open up the line for questions. Thank you. Ladies and gentlemen, once again, if you would like to ask a question today, remember it's star followed by the number one on your telephone keypad. Our first question for today comes from the line of Sergio Segura with KeyBanc. Your line is live. Great. Thanks for taking the questions, I have a couple. Excuse me. Maybe just starting out on the quarterly performance and the full year guide. Congrats on, you know, achieving revenue and EBITDA above the high end of your guidance outlook for Q1. Just curious why, you know, the guide was maintained here. Was Q1 from a macroeconomic perspective a little bit better and Q2 a little bit worse? Could you just explain the reasoning why, you know, Q1 came in better than expected, but you're maintaining your full year outlook? Sergio, this is David. Thanks for the question. Q1, we were pleased with the performance in Q1. That being said, we did see a dynamic in the March month around the conflict in the Middle East, which had an impact on budgets from advertisers. Just as a reminder, the dynamics that we saw in 2025, they did persist into the first quarter, but we saw that further playing out in March. While we've seen improvement in April, and it's more in line with our typical seasonal ramp, we are operating under the expectation that, again, these dynamics are gonna continue to play out over the course of the year. Some of that March softness does persist into the second quarter. It does carry through. That's how we're thinking about the performance plus the continued uncertainty, which is reflected in the overall guidance for the year. Understood. That makes sense. Maybe a bigger picture one, appreciate the $250 million run rate target you gave for other revenue by the end of 2028. Maybe if you could just elaborate on kind of the drivers and main components you see to achieving that target by that timeframe. Thank you. Absolutely. We see three components there, and I'll talk just a little bit about how they contribute and then turn it over to Jeremy to talk more strategically about the approach that we're taking. In the first quarter, as we mentioned, or just to step back as a quick reminder, other revenue consists of three components. One is transaction revenue. In the first quarter, we saw that grow 88%, as Jeremy already mentioned. That's around the DoorDash partnership. We continue to see momentum in the second component, licensing, which we're very pleased with and continue to see a large opportunity there. Then third, obviously, Hatch. We see the opportunity for all three of those areas to contribute over the next several years. Thanks, David. Yeah, I'll pop in with a little bit more color. You know, we're very excited about the opportunities we have to really ride this AI wave and, you know, take an offensive position here. You know, with Hatch and with Host, those are really greenfield opportunities. You know, closed the transaction with Hatch in February. That's going really well. You know, 92% annual run rate revenue growth year-over-year, $34 million run rate in March. We're really pleased with that. We've taken the opportunity to surge resources there, in particular on the product and engineering side to support the business, as well as the go-to-market side. You know, it's a huge opportunity. There's a lot of share to be had, we wanna make sure to lean in there. We also have been developing, you know, the opportunity around our Host, which is our phone answering service for restaurants. Really great response from customers. Great, you know, go-to-market activity. You know, we just talked about the progress we're making on the product side in the letter. You know, one of the major unlocks we've got coming very soon is food ordering over the phone. That allows us to take a market opportunity that was already exciting and make it even more exciting. Talked to lots of restaurants that maybe don't have front of house, don't need that integration that Host provides, but would love to take food orders. We see tremendous opportunity there. We've built out a lot of that experience. We're in live testing now, we'll keep you posted on that. Finally, we've got the data licensing business, which, you know, obviously we've been in that business for a long time, particularly with search. You know, have had some great relationships there that have driven revenue as well as traffic. Really our focus is to, you know, apply that playbook once again to this really exciting opportunity to, you know, power local search for AI players as well as, of course, our own products. Bringing the great high quality human written content to all of these new large audiences, I think is, you know, really exciting both from a revenue standpoint, from a marketing standpoint, having the Yelp brand and our great content out there. Ultimately, there'll, you know, be relevant links back where it makes sense for consumers, and that can drive meaningful traffic over the long term. We see, you know, within that other area, just a lot of AI opportunities that are already growing really fast, and we have opportunities to go even faster. Thank you for your question, Sergio. Our next questions are from the line of Cory Carpenter with JPMorgan. Your line is live. Hey. So thanks for the questions. I had two related to EBITDA. David, I did think it was notable you mentioned your expectation for strong growth in EBITDA margins over the coming years. Could you just elaborate a bit on that comment? You know, how much of that is due to some of these core business efficiencies you're seeing from AI? How much of that is due to maybe a, perhaps a higher margin nature of some of these emerging revenue streams you have? More, more near term, the 1Q EBITDA beat was rather significant. Just any comments on what drove the upside in the quarter. Thank you. Thanks for the question, Cory. In terms of the longer term, we're very encouraged both on the revenue potential as well as the opportunity to drive productivity. On the revenue potential side, and again, I think we'll ask Jeremy to add some comments here, we are seeing accelerated product development and time to ship. That was already emerging as we've shared previously, really as we move through 2024 and 2025, and I just say that our product-led growth strategy has really been working, and the capabilities that are now available with AI are further enhancing that. That's particularly true about for newer products, where you have more freedom to drive that change compared to maybe some of the improvements that we're making on the experience that we've had, where you have a larger code base. That's certainly something that we're excited about, that ability to really innovate and deliver features more quickly and drive revenue, also respond to customer feedback, consumer dynamics. That's a really positive feedback loop there. Obviously, we made the acquisition of Hatch, which is an AI-driven product in order to enhance lead management. Lots of opportunity to continue to push forward on the revenue side. On the productivity side, already touched on what's happening in product and engineering. That's a common theme, I think, across companies. We're really also starting to see that play out in the sales and marketing side, and we're even able to take the capabilities that we're building for consumers like our voice product in Yelp Host and apply that on our customer success side and being able to answer calls. I think it's still emerging, but there's certainly opportunity for productivity in the G&A function. When you combine those, we do feel optimistic on our ability to generate incremental margin over the next few years, and we think that could be quite substantial. Before I turn it over, just to address your question on the first quarter. As you know, over the years, as we've been able to outperform our guidance, we've flowed through that incremental revenue to EBITDA. That also took place once again in the first quarter. We also saw some benefits around capitalized software development, there's just the normal puts and takes across some of the other operating line items. Jeremy, perhaps you could expand a little bit on what we're seeing with product development and velocity. Yeah, happy to. We are adopting, you know, all the modern tools and, you know, we're starting to see signs of real productivity gains. You know, things like migrations come to mind where, you know, something that would maybe take three months, has taken more like three weeks. That's fantastic. I think, you know, a significant portion of our code at this point is AI-generated, like many others have reported. We're very optimistic that we're gonna see continued acceleration in terms of product development velocity in the coming months. Great. Thank you. Great. Thank you. Thank you for your questions. Ladies and gentlemen, once again, if you do wanna ask a question, remember it's star followed by the number one on your telephone keypad. Our next question is from the line of Colin Sebastian with Baird. Your line is live. Thank you. Good afternoon. I have a couple questions. I guess first regarding some of the disclosures around Yelp Assistant and request-to-quote projects. I guess any more detail on how materially different those interactions are in terms of conversion in the paid leads and booked jobs and ultimately advertiser ROI. Secondly, I guess, maybe as a follow-up in terms of, you know, what you've been saying and disclosing around your relationships with other surfaces like OpenAI and Apple and others. Are these partnerships generating mostly rich referral traffic, off-platform monetization? You know, any other takeaways I think could be useful as those relationships become more important over time. Thank you. Sure. Happy to answer that. This is Jeremy. On the Yelp Assistant side, particularly with the services focus and request-to-quote, we have seen incremental projects as we've rolled out Yelp Assistant, particularly the services version that's been around now for a couple of years and seen gains there. In fact, we noted that of request-to-quote projects, 15% now are driven by Yelp Assistant, and that's up from about 5% last year. We feel really good about what our LLM-powered flow has been able to do to move the needle in terms of projects. In fact, we're doubling down there and we've invested a lot more in bringing the power of Yelp Assistant across to all categories. We just launched that in April. The early signs are really good. We're excited. Obviously, you know, it's kind of the first inning of the rollout. We have a lot more to do in terms of weaving it into the overall product experience. You know, we're quite excited about it. We think, you know, it helps consumers ultimately find needles in the haystack and really get more out of the incredible depth of content that we've had. If you think about a consumer experience, you know, prior to the invention of LLMs, we might have, you know, 1,000 reviews on a particular place. There is no possible way that a human could dig through that and really make sense of all the valuable information that's been submitted by users over the years. Now with Yelp Assistant, we can actually tap into that and provide the evidence back to the consumer of, "Hey, you know, this is why it meets your needs. Here's some quotes from users." I think that's really powerful. I think that, you know, our expectation and hope is that we can move the needle with that over time. We're just getting started there. On the partnership side, the data licensing side, with some of the AI players, I think it speaks, number one, to the importance of Yelp in the overall AI ecosystem. If you wanna provide a local search experience powered by AI, you really need to be grounded in reality, and you need to have very high-quality human-written content, and that's exactly what Yelp has. A while ago, maybe a year or two ago, we started highlighting that, you know, we believe that there was an opportunity here, and it's really played out along with our expectations. We've signed, you know, with a number of big names. You know, we talked about Amazon Alexa, Apple Maps, you've been able to, you know, see our content for quite some time. Microsoft Bing, Meta AI, Yahoo, and many others. And we've announced a deal with OpenAI. You know, as far as the maturity of that sector, I think it's extremely early. You know, many of these players have not really built out their local experience yet. They're just, you know, realizing that they need high-quality human-written content like Yelp. It's very early. I do think, you know, there's certainly opportunities, one, for just Yelp exposure, branding, et cetera. There is also opportunities for traffic back where it's relevant and is helpful to the consumer. I think we will see that over time. Again, I think some of these players haven't really even launched their experience yet. We're, you know, even before the first inning, I would say, in this whole area. Appreciate that. Thank you. Thank you for your questions. Our next question is from the line of Nitin Bansal with Bank of America. Your line is live. Thank you for taking my question. Just double-pressing on the OpenAI partnership. When I search for restaurants or local recommendation on ChatGPT today, Yelp content appears relatively limited versus sources like Reddit, OpenTable, Tripadvisor. Can you help us understand the scope of the partnership today, specifically like how OpenAI is leveraging your data and where Yelp content is surfacing? What needs to happen for Yelp to become more visible or primary source within these AI surfaces? Secondly, one for David. You shared guidance on the other revenue segment, like the $28 run rate, but how should we think about the trajectory of growth in this segment over the next quarters, and what does it mean for your advertising, given the overall revenue guide remains unchanged? Thank you. Hi, this is Jeremy. I'll hop in with the first question on the OpenAI partnership that we announced. You know, at this point, we've announced the partnership, as far as the experience that OpenAI is planning, like we can't really comment on that, nor do we have all the details of their plans. Obviously, you know, they're moving really fast, you know, innovating quite quickly, things are changing within their own experience very rapidly. I would just say, you know, continue to watch that space, but can't really comment on what they're up to. Thanks for the question. In terms of other revenue, again, we have the three components to it. Transaction revenue, in the first quarter growing 88%. We've shared with you the run rate revenue as of March for Hatch at 92% growth. We do continue to sign up licensing agreements and entering into new partnerships, which contributed to the overall growth of 75%. Obviously, we've reflected that performance into our guidance for the year, and we're looking forward to continuing to execute against them. I would just say overarching perspective on our guidance this year is the degree of uncertainty that we need to reflect, given the variability that we've seen, particularly for local businesses in the U.S. and the dynamics that we saw, which I already mentioned playing out in March from the conflict in the Middle East. We're combining both of those in the guidance that we're providing, and we'll look forward to giving you an update on the Q2 call. Thank you. Thank you for your questions. Ladies and gentlemen, that will conclude our questions for today, and it will also conclude today's Q1 2026 Yelp earnings conference call. Thank you all for attending. We appreciate your time. Have a great rest of your day. Take care.

Speaker 7: Ladies and gentlemen, I'd like to welcome you to the Yelp Inc. Q1 2026 earnings conference call. We will be getting started in just a minute or two from now. Thank you for your patience. We'll be right back with you. Thank you. Ladies and gentlemen, once again, I do really appreciate your patience. Good afternoon and welcome. My name is Aaron. I will be your conference operator for today, and I would again like to welcome you to the Q1 2026 Yelp Inc. 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, and at that point, if you would like to ask a question, remember, it's star plus the number one on your telephone keypad. Ladies and gentlemen, I'd like to welcome you to the Yelp Inc. Q1 2026 earnings conference call. ladies and gentlemen i'd like to welcome you to the yelp inc q1 2026 earnings conference call We will be getting started in just a minute or two from now. we will be getting started in just a minute or two from now Thank you for your patience. thank you for your patience We'll be right back with you. we'll be right back with you Thank you. thank you Ladies and gentlemen, once again, I do really appreciate your patience. ladies and gentlemen once again i do really appreciate your patience Good afternoon and welcome. good afternoon and welcome My name is Aaron. my name is aaron I will be your conference operator for today, and I would again like to welcome you to the Q1 2026 Yelp Inc. earnings conference call. i will be your conference operator for today and i would again like to welcome you to the q1 2026 yelp inc earnings conference call All lines have been placed on mute to prevent any background noise. 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 at that point, if you would like to ask a question, remember, it's star plus the number one on your telephone keypad. after the speaker's remarks there will be a question and answer session and at that point if you would like to ask a question remember it's star plus the number one on your telephone keypad At any point, if you'd like to withdraw your question, just hit star followed by one again. With that, let's go ahead and begin our call. It's my pleasure to turn our call over to Kate Krieger, Director of Investor Relations. Kate, with that, you can go ahead. Thank you. At any point, if you'd like to withdraw your question, just hit star followed by one again. at any point if you'd like to withdraw your question just hit star followed by one again With that, let's go ahead and begin our call. with that let's go ahead and begin our call It's my pleasure to turn our call over to Kate Krieger, Director of Investor Relations. it's my pleasure to turn our call over to kate krieger director of investor relations Kate, with that, you can go ahead. kate with that you can go ahead Thank you. thank you

Speaker 5: Good afternoon, everyone, and thanks for joining us on Yelp's first quarter 2026 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. 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. Good afternoon, everyone, and thanks for joining us on Yelp's first quarter 2026 earnings conference call. good afternoon everyone and thanks for joining us on yelp's first quarter 2026 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. 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. 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. 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. 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. 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 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 addition, we are subject to a number of risks that may significantly impact our business and financial results. 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. 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 margin, and free cash flow, which are non-GAAP financial measures. during our call today we may discuss adjusted ebitda adjusted ebitda 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. 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, 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. With that, I will turn the call over to Jeremy. In our shareholder letter released this afternoon and our filings with the SEC, each of which is 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. in our shareholder letter released this afternoon and our filings with the sec each of which is 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 With that, I will turn the call over to Jeremy. with that i will turn the call over to jeremy

Speaker 4: Thanks, Kate, and welcome everyone. Yelp continued to accelerate its AI transformation in the first quarter. We are making local discovery increasingly conversational, delivering tools to help businesses succeed and expanding the reach of our trusted content through new partnerships. Our progress in the quarter resulted in the recent rollout of more than 35 new features and updates, including a new Yelp Assistant that now works across all categories. At the same time, local businesses have continued to face a challenging economic environment. First quarter net revenue increased by 1% year-over-year to $361 million with a net income margin of 5% and an adjusted EBITDA margin of 22%. Underlying our top-line results, services ad revenue increased by 1% year-over-year, and RR&O ad revenue decreased by 11% year-over-year. Thanks, Kate, and welcome everyone. thanks kate and welcome everyone Yelp continued to accelerate its AI transformation in the first quarter. yelp continued to accelerate its ai transformation in the first quarter We are making local discovery increasingly conversational, delivering tools to help businesses succeed and expanding the reach of our trusted content through new partnerships. we are making local discovery increasingly conversational delivering tools to help businesses succeed and expanding the reach of our trusted content through new partnerships Our progress in the quarter resulted in the recent rollout of more than 35 new features and updates, including a new Yelp Assistant that now works across all categories. our progress in the quarter resulted in the recent rollout of more than 35 new features and updates including a new yelp assistant that now works across all categories At the same time, local businesses have continued to face a challenging economic environment. at the same time local businesses have continued to face a challenging economic environment First quarter net revenue increased by 1% year-over-year to $361 million with a net income margin of 5% and an adjusted EBITDA margin of 22%. first quarter net revenue increased by 1% year-over-year to $361 million with a net income margin of 5% and an adjusted ebitda margin of 22% Underlying our top-line results, services ad revenue increased by 1% year-over-year, and RR&O ad revenue decreased by 11% year-over-year. underlying our top-line results services ad revenue increased by 1% year-over-year and rr&o ad revenue decreased by 11% year-over-year We've increased our focus on growing a number of AI-driven revenue streams this year. Other revenue grew 75% year-over-year as a result. Moving to our product initiatives, we are reconceiving how consumers and businesses connect on Yelp through a conversational experience that provides answers and enables actions. In the first quarter, Yelp Assistant connected more consumers and service pros than ever before, with its growing adoption accounting for approximately 15% of request-to-quote projects. We recently rolled out a new Yelp Assistant that supports local discovery across every business category on Yelp, delivering trusted recommendations while surfacing relevant reviews, star ratings, and other helpful details. While still early, we are seeing positive signals and believe Yelp Assistant can ultimately drive deeper engagement. We've increased our focus on growing a number of AI-driven revenue streams this year. we've increased our focus on growing a number of ai-driven revenue streams this year Other revenue grew 75% year-over-year as a result. other revenue grew 75% year-over-year as a result Moving to our product initiatives, we are reconceiving how consumers and businesses connect on Yelp through a conversational experience that provides answers and enables actions. moving to our product initiatives we are reconceiving how consumers and businesses connect on yelp through a conversational experience that provides answers and enables actions In the first quarter, Yelp Assistant connected more consumers and service pros than ever before, with its growing adoption accounting for approximately 15% of request-to-quote projects. in the first quarter yelp assistant connected more consumers and service pros than ever before with its growing adoption accounting for approximately 15% of request-to-quote projects We recently rolled out a new Yelp Assistant that supports local discovery across every business category on Yelp, delivering trusted recommendations while surfacing relevant reviews, star ratings, and other helpful details. we recently rolled out a new yelp assistant that supports local discovery across every business category on yelp delivering trusted recommendations while surfacing relevant reviews star ratings and other helpful details While still early, we are seeing positive signals and believe Yelp Assistant can ultimately drive deeper engagement. while still early we are seeing positive signals and believe yelp assistant can ultimately drive deeper engagement In addition to evolving our product offerings, we are expanding our partner ecosystem to help consumers complete tasks like initiating a reservation or booking an appointment. In the first quarter, consumers took advantage of the hundreds of thousands of new restaurants available for food ordering and delivery through our DoorDash partnership, with food ordering revenue up 88% year-over-year. More recently, we announced new integrations with Vagaro and Zocdoc to enable users to book beauty, wellness, fitness, and healthcare appointments. We are delivering AI tools that help service pros and other local businesses grow, operate, and succeed. For advertisers, this showed up in the form of improvements to the ad experience and business owner platform, where we've introduced a new AI-powered support chatbot that streamlines administrative activities. In addition to evolving our product offerings, we are expanding our partner ecosystem to help consumers complete tasks like initiating a reservation or booking an appointment. in addition to evolving our product offerings we are expanding our partner ecosystem to help consumers complete tasks like initiating a reservation or booking an appointment In the first quarter, consumers took advantage of the hundreds of thousands of new restaurants available for food ordering and delivery through our DoorDash partnership, with food ordering revenue up 88% year-over-year. in the first quarter consumers took advantage of the hundreds of thousands of new restaurants available for food ordering and delivery through our doordash partnership with food ordering revenue up 88% year-over-year More recently, we announced new integrations with Vagaro and Zocdoc to enable users to book beauty, wellness, fitness, and healthcare appointments. more recently we announced new integrations with vagaro and zocdoc to enable users to book beauty wellness fitness and healthcare appointments We are delivering AI tools that help service pros and other local businesses grow, operate, and succeed. we are delivering ai tools that help service pros and other local businesses grow operate and succeed For advertisers, this showed up in the form of improvements to the ad experience and business owner platform, where we've introduced a new AI-powered support chatbot that streamlines administrative activities. for advertisers this showed up in the form of improvements to the ad experience and business owner platform where we've introduced a new ai-powered support chatbot that streamlines administrative activities Our team continued to scale Yelp Host, our AI-powered call answering service for restaurants, which surpassed an annual run rate of 1.5 million calls handled in April, more than doubling from January. We plan to roll out new improvements and functionality, including the ability to place food orders over the phone. Overall, we estimate there is a market opportunity of over $1 billion in the United States for Yelp Host. With our best-in-class offering and expansive distribution, we believe we are well-positioned to capture meaningful market share. We also accelerated our strategy in this area for services businesses through the acquisition of Hatch in February and have been pleased with the team's early progress. Notably, Hatch's annual run rate revenue exceeded $34 million in March, up 92% year-over-year. Our team continued to scale Yelp Host, our AI-powered call answering service for restaurants, which surpassed an annual run rate of 1.5 million calls handled in April, more than doubling from January. our team continued to scale yelp host our ai-powered call answering service for restaurants which surpassed an annual run rate of 1.5 million calls handled in april more than doubling from january We plan to roll out new improvements and functionality, including the ability to place food orders over the phone. we plan to roll out new improvements and functionality including the ability to place food orders over the phone Overall, we estimate there is a market opportunity of over $1 billion in the United States for Yelp Host. overall we estimate there is a market opportunity of over $1 billion in the united states for yelp host With our best-in-class offering and expansive distribution, we believe we are well-positioned to capture meaningful market share. with our best-in-class offering and expansive distribution we believe we are well-positioned to capture meaningful market share We also accelerated our strategy in this area for services businesses through the acquisition of Hatch in February and have been pleased with the team's early progress. we also accelerated our strategy in this area for services businesses through the acquisition of hatch in february and have been pleased with the team's early progress Notably, Hatch's annual run rate revenue exceeded $34 million in March, up 92% year-over-year. notably hatch's annual run rate revenue exceeded $34 million in march up 92% year-over-year Looking ahead, we see considerable opportunity for significant growth, and we have added Yelp go-to-market and engineering resources to advance Hatch's growth initiatives. Lastly, we are extending our reach to power local discovery across the AI ecosystem through data licensing. In the first quarter, we secured new licensing agreements, including with OpenAI, and expanded our integrations with existing partners. Consumers can now find licensed Yelp content on Amazon Alexa, Apple Maps, Microsoft Bing, Meta AI, and Yahoo, among many other platforms. We expect the operating environment for local businesses to remain challenging this year. As such, we have allocated meaningful resources to drive growth in other revenue through AI-driven offerings such as Yelp Host, Hatch, and data licensing. Looking ahead, we see considerable opportunity for significant growth, and we have added Yelp go-to-market and engineering resources to advance Hatch's growth initiatives. looking ahead we see considerable opportunity for significant growth and we have added yelp go-to-market and engineering resources to advance hatch's growth initiatives Lastly, we are extending our reach to power local discovery across the AI ecosystem through data licensing. lastly we are extending our reach to power local discovery across the ai ecosystem through data licensing In the first quarter, we secured new licensing agreements, including with OpenAI, and expanded our integrations with existing partners. in the first quarter we secured new licensing agreements including with openai and expanded our integrations with existing partners Consumers can now find licensed Yelp content on Amazon Alexa, Apple Maps, Microsoft Bing, Meta AI, and Yahoo, among many other platforms. consumers can now find licensed yelp content on amazon alexa apple maps microsoft bing meta ai and yahoo among many other platforms We expect the operating environment for local businesses to remain challenging this year. we expect the operating environment for local businesses to remain challenging this year As such, we have allocated meaningful resources to drive growth in other revenue through AI-driven offerings such as Yelp Host, Hatch, and data licensing. as such we have allocated meaningful resources to drive growth in other revenue through ai-driven offerings such as yelp host hatch and data licensing As these accretive revenue streams continue to gain traction, we are targeting an annual run rate of $250 million in other revenue by the end of 2028, more than double the run rate delivered in the first quarter of this year. In summary, we continue to make significant progress transforming Yelp with AI in the first quarter as we focus on deepening the connection between consumers and businesses. We're confident in our plans for the year and believe that our initiatives will position us to drive profitable growth over the long term. With that, I'll turn it over to David. As these accretive revenue streams continue to gain traction, we are targeting an annual run rate of $250 million in other revenue by the end of 2028, more than double the run rate delivered in the first quarter of this year. as these accretive revenue streams continue to gain traction we are targeting an annual run rate of $250 million in other revenue by the end of 2028 more than double the run rate delivered in the first quarter of this year In summary, we continue to make significant progress transforming Yelp with AI in the first quarter as we focus on deepening the connection between consumers and businesses. in summary we continue to make significant progress transforming yelp with ai in the first quarter as we focus on deepening the connection between consumers and businesses We're confident in our plans for the year and believe that our initiatives will position us to drive profitable growth over the long term. we're confident in our plans for the year and believe that our initiatives will position us to drive profitable growth over the long term With that, I'll turn it over to David. with that i'll turn it over to david

Speaker 3: Thanks, Jeremy. Turning to our first quarter results. Net revenue increased by 1% year-over-year to $361 million, $6 million above the high end of our outlook range. Net income decreased by 27% year-over-year to $18 million, representing a 5% margin. Adjusted EBITDA decreased by 7% year-over-year to $79 million, $15 million above the high end of our outlook range, representing a 22% margin. As Jeremy mentioned, local businesses have faced a challenging operating environment, which is reflected in our advertising metrics for the quarter. Services ad revenue increased by 1% year-over-year to $234 million, while RR&O ad revenue decreased by 11% year-over-year to $99 million. Thanks, Jeremy. thanks jeremy Turning to our first quarter results. turning to our first quarter results Net revenue increased by 1% year-over-year to $361 million, $6 million above the high end of our outlook range. net revenue increased by 1% year-over-year to $361 million $6 million above the high end of our outlook range Net income decreased by 27% year-over-year to $18 million, representing a 5% margin. net income decreased by 27% year-over-year to $18 million representing a 5% margin Adjusted EBITDA decreased by 7% year-over-year to $79 million, $15 million above the high end of our outlook range, representing a 22% margin. adjusted ebitda decreased by 7% year-over-year to $79 million, $15 million above the high end of our outlook range representing a 22% margin As Jeremy mentioned, local businesses have faced a challenging operating environment, which is reflected in our advertising metrics for the quarter. as jeremy mentioned local businesses have faced a challenging operating environment which is reflected in our advertising metrics for the quarter Services ad revenue increased by 1% year-over-year to $234 million, while RR&O ad revenue decreased by 11% year-over-year to $99 million. services ad revenue increased by 1% year-over-year to $234 million while rr&o ad revenue decreased by 11% year-over-year to $99 million A decrease in both services and RR&O locations resulted in an overall decline of 6% year-over-year in paying advertising locations to 485,000. Ad clicks declined by 10% year-over-year in the quarter, driven by lower consumer demand in RR&O categories, partially offset by a slight increase in services categories. Average CPC increased by 8% as advertiser demand outpaced consumer demand. Moving to other revenue. Other revenue increased by 75% year-over-year to a record $29 million. This strong growth was driven by the inclusion of revenue generated by Hatch, as well as significant growth in revenue from data licensing and food ordering. Turning to expenses. In 2026, we're investing behind high return areas that we believe will transform Yelp and re-accelerate growth. A decrease in both services and RR&O locations resulted in an overall decline of 6% year-over-year in paying advertising locations to 485,000. a decrease in both services and rr&o locations resulted in an overall decline of 6% year-over-year in paying advertising locations to 485,000 Ad clicks declined by 10% year-over-year in the quarter, driven by lower consumer demand in RR&O categories, partially offset by a slight increase in services categories. ad clicks declined by 10% year-over-year in the quarter driven by lower consumer demand in rr&o categories partially offset by a slight increase in services categories Average CPC increased by 8% as advertiser demand outpaced consumer demand. average cpc increased by 8% as advertiser demand outpaced consumer demand Moving to other revenue. moving to other revenue Other revenue increased by 75% year-over-year to a record $29 million. other revenue increased by 75% year-over-year to a record $29 million This strong growth was driven by the inclusion of revenue generated by Hatch, as well as significant growth in revenue from data licensing and food ordering. this strong growth was driven by the inclusion of revenue generated by hatch as well as significant growth in revenue from data licensing and food ordering Turning to expenses. turning to expenses In 2026, we're investing behind high return areas that we believe will transform Yelp and re-accelerate growth. in 2026 we're investing behind high return areas that we believe will transform yelp and re-accelerate growth As Jeremy mentioned, we believe we can drive significant growth in other revenue, and we have reallocated resources behind these high-growth areas to better capture the opportunities ahead. At the same time, we see substantial opportunities to unlock operational efficiencies and increase employee productivity with AI, giving us increased confidence in the margin potential for our business. As a result of these top and bottom line efforts, we believe we can drive strong growth in adjusted EBITDA margin over the next several years. We reduced stock-based compensation expense as a percentage of revenue by 2 percentage points year-over-year to 8% in the first quarter. We expect the impact of this effort, combined with continued share repurchases, to stack over time and benefit GAAP profitability in the years to come. As Jeremy mentioned, we believe we can drive significant growth in other revenue, and we have reallocated resources behind these high-growth areas to better capture the opportunities ahead. as jeremy mentioned we believe we can drive significant growth in other revenue and we have reallocated resources behind these high-growth areas to better capture the opportunities ahead At the same time, we see substantial opportunities to unlock operational efficiencies and increase employee productivity with AI, giving us increased confidence in the margin potential for our business. at the same time we see substantial opportunities to unlock operational efficiencies and increase employee productivity with ai giving us increased confidence in the margin potential for our business As a result of these top and bottom line efforts, we believe we can drive strong growth in adjusted EBITDA margin over the next several years. as a result of these top and bottom line efforts we believe we can drive strong growth in adjusted ebitda margin over the next several years We reduced stock-based compensation expense as a percentage of revenue by 2 percentage points year-over-year to 8% in the first quarter. we reduced stock-based compensation expense as a percentage of revenue by 2 percentage points year-over-year to 8% in the first quarter We expect the impact of this effort, combined with continued share repurchases, to stack over time and benefit GAAP profitability in the years to come. we expect the impact of this effort combined with continued share repurchases to stack over time and benefit gaap profitability in the years to come We also continue to expect that we will reduce stock-based compensation expense to less than 6% of revenue by the end of 2027. Our approach to capital allocation remains focused on three priorities: investing in strategic transactions, driving traffic acquisition, and returning excess capital to shareholders through share repurchases. In the first quarter, we repurchased $125 million worth of shares at an average price of $24.58 per share, reflecting our disciplined approach and contributing to a 12% year-over-year decline in diluted shares outstanding. As of March 31, 2026, we had $414 million remaining under our existing repurchase authorization. We plan to continue repurchasing shares in 2026, subject to market and economic conditions. We also continue to expect that we will reduce stock-based compensation expense to less than 6% of revenue by the end of 2027. we also continue to expect that we will reduce stock-based compensation expense to less than 6% of revenue by the end of 2027 Our approach to capital allocation remains focused on three priorities: investing in strategic transactions, driving traffic acquisition, and returning excess capital to shareholders through share repurchases. our approach to capital allocation remains focused on three priorities investing in strategic transactions driving traffic acquisition and returning excess capital to shareholders through share repurchases In the first quarter, we repurchased $125 million worth of shares at an average price of $24.58 per share, reflecting our disciplined approach and contributing to a 12% year-over-year decline in diluted shares outstanding. in the first quarter we repurchased $125 million worth of shares at an average price of $24.58 per share reflecting our disciplined approach and contributing to a 12% year-over-year decline in diluted shares outstanding As of March 31, 2026, we had $414 million remaining under our existing repurchase authorization. as of march 31 2026 we had $414 million remaining under our existing repurchase authorization We plan to continue repurchasing shares in 2026, subject to market and economic conditions. we plan to continue repurchasing shares in 2026 subject to market and economic conditions Turning to our outlook, we anticipate that the challenging economic environment for local businesses will persist into the second quarter and continue impacting advertising revenue across categories. At the same time, we expect our investments in our strategic initiatives to drive strong growth in other revenue. As a result, we anticipate second quarter net revenue will be in the range of $363 million-$368 million. For the full year, we continue to expect net revenue will be in the range of $1.455 billion-$1.475 billion. Turning to margin, we expect expenses will increase sequentially as we invest in our AI transformation and increase marketing spend. As a result, we anticipate second quarter adjusted EBITDA will be in the range of $70 million-$75 million. Turning to our outlook, we anticipate that the challenging economic environment for local businesses will persist into the second quarter and continue impacting advertising revenue across categories. turning to our outlook we anticipate that the challenging economic environment for local businesses will persist into the second quarter and continue impacting advertising revenue across categories At the same time, we expect our investments in our strategic initiatives to drive strong growth in other revenue. at the same time we expect our investments in our strategic initiatives to drive strong growth in other revenue As a result, we anticipate second quarter net revenue will be in the range of $363 million-$368 million. as a result we anticipate second quarter net revenue will be in the range of $363 million-$368 million For the full year, we continue to expect net revenue will be in the range of $1.455 billion-$1.475 billion. for the full year we continue to expect net revenue will be in the range of $1.455 billion-$1.475 billion Turning to margin, we expect expenses will increase sequentially as we invest in our AI transformation and increase marketing spend. turning to margin we expect expenses will increase sequentially as we invest in our ai transformation and increase marketing spend As a result, we anticipate second quarter adjusted EBITDA will be in the range of $70 million-$75 million. as a result we anticipate second quarter adjusted ebitda will be in the range of $70 million-$75 million For the full year, we continue to expect adjusted EBITDA will be in the range of $310 million-$330 million. For the second quarter and full year, our expected adjusted EBITDA ranges exclude accrued acquisition and integration-related payments for continuing Hatch employees of approximately $4 million and $13 million respectively, which we do not believe are indicative of our ongoing operating performance. In closing, Yelp's first quarter results reflect continued product momentum as we invest in our AI transformation. We continue to believe in the opportunities ahead and our ability to create long-term shareholder value. With that, operator, please open up the line for questions. For the full year, we continue to expect adjusted EBITDA will be in the range of $310 million-$330 million. for the full year we continue to expect adjusted ebitda will be in the range of $310 million-$330 million For the second quarter and full year, our expected adjusted EBITDA ranges exclude accrued acquisition and integration-related payments for continuing Hatch employees of approximately $4 million and $13 million respectively, which we do not believe are indicative of our ongoing operating performance. for the second quarter and full year our expected adjusted ebitda ranges exclude accrued acquisition and integration-related payments for continuing hatch employees of approximately $4 million and $13 million respectively which we do not believe are indicative of our ongoing operating performance In closing, Yelp's first quarter results reflect continued product momentum as we invest in our AI transformation. in closing yelp's first quarter results reflect continued product momentum as we invest in our ai transformation We continue to believe in the opportunities ahead and our ability to create long-term shareholder value. we continue to believe in the opportunities ahead and our ability to create long-term shareholder value With that, operator, please open up the line for questions. with that operator please open up the line for questions

Speaker 7: Thank you. Ladies and gentlemen, once again, if you would like to ask a question today, remember it's star followed by the number one on your telephone keypad. Our first question for today comes from the line of Sergio Segura with KeyBanc. Your line is live. Thank you. thank you Ladies and gentlemen, once again, if you would like to ask a question today, remember it's star followed by the number one on your telephone keypad. ladies and gentlemen once again if you would like to ask a question today remember it's star followed by the number one on your telephone keypad Our first question for today comes from the line of Sergio Segura with KeyBanc. our first question for today comes from the line of sergio segura with keybanc Your line is live. your line is live

Speaker 8: Great. Thanks for taking the questions, I have a couple. Excuse me. Maybe just starting out on the quarterly performance and the full year guide. Congrats on, you know, achieving revenue and EBITDA above the high end of your guidance outlook for Q1. Just curious why, you know, the guide was maintained here. Was Q1 from a macroeconomic perspective a little bit better and Q2 a little bit worse? Could you just explain the reasoning why, you know, Q1 came in better than expected, but you're maintaining your full year outlook? Great. great Thanks for taking the questions, I have a couple. thanks for taking the questions i have a couple Excuse me. excuse me Maybe just starting out on the quarterly performance and the full year guide. maybe just starting out on the quarterly performance and the full year guide Congrats on, you know, achieving revenue and EBITDA above the high end of your guidance outlook for Q1. congrats on you know achieving revenue and ebitda above the high end of your guidance outlook for q1 Just curious why, you know, the guide was maintained here. just curious why you know the guide was maintained here Was Q1 from a macroeconomic perspective a little bit better and Q2 a little bit worse? was q1 from a macroeconomic perspective a little bit better and q2 a little bit worse Could you just explain the reasoning why, you know, Q1 came in better than expected, but you're maintaining your full year outlook? could you just explain the reasoning why you know q1 came in better than expected but you're maintaining your full year outlook

Speaker 3: Sergio, this is David. Thanks for the question. Q1, we were pleased with the performance in Q1. That being said, we did see a dynamic in the March month around the conflict in the Middle East, which had an impact on budgets from advertisers. Just as a reminder, the dynamics that we saw in 2025, they did persist into the first quarter, but we saw that further playing out in March. While we've seen improvement in April, and it's more in line with our typical seasonal ramp, we are operating under the expectation that, again, these dynamics are gonna continue to play out over the course of the year. Some of that March softness does persist into the second quarter. It does carry through. Sergio, this is David. sergio this is david Thanks for the question. thanks for the question Q1, we were pleased with the performance in Q1. q1 we were pleased with the performance in q1 That being said, we did see a dynamic in the March month around the conflict in the Middle East, which had an impact on budgets from advertisers. that being said we did see a dynamic in the march month around the conflict in the middle east which had an impact on budgets from advertisers Just as a reminder, the dynamics that we saw in 2025, they did persist into the first quarter, but we saw that further playing out in March. just as a reminder the dynamics that we saw in 2025 they did persist into the first quarter but we saw that further playing out in march While we've seen improvement in April, and it's more in line with our typical seasonal ramp, we are operating under the expectation that, again, these dynamics are gonna continue to play out over the course of the year. while we've seen improvement in april and it's more in line with our typical seasonal ramp we are operating under the expectation that again these dynamics are gonna continue to play out over the course of the year Some of that March softness does persist into the second quarter. some of that march softness does persist into the second quarter It does carry through. it does carry through That's how we're thinking about the performance plus the continued uncertainty, which is reflected in the overall guidance for the year. That's how we're thinking about the performance plus the continued uncertainty, which is reflected in the overall guidance for the year. that's how we're thinking about the performance plus the continued uncertainty which is reflected in the overall guidance for the year

Speaker 8: Understood. That makes sense. Maybe a bigger picture one, appreciate the $250 million run rate target you gave for other revenue by the end of 2028. Maybe if you could just elaborate on kind of the drivers and main components you see to achieving that target by that timeframe. Thank you. Understood. understood That makes sense. that makes sense Maybe a bigger picture one, appreciate the $250 million run rate target you gave for other revenue by the end of 2028. maybe a bigger picture one appreciate the $250 million run rate target you gave for other revenue by the end of 2028 Maybe if you could just elaborate on kind of the drivers and main components you see to achieving that target by that timeframe. maybe if you could just elaborate on kind of the drivers and main components you see to achieving that target by that timeframe Thank you. thank you

Speaker 3: Absolutely. We see three components there, and I'll talk just a little bit about how they contribute and then turn it over to Jeremy to talk more strategically about the approach that we're taking. In the first quarter, as we mentioned, or just to step back as a quick reminder, other revenue consists of three components. One is transaction revenue. In the first quarter, we saw that grow 88%, as Jeremy already mentioned. That's around the DoorDash partnership. We continue to see momentum in the second component, licensing, which we're very pleased with and continue to see a large opportunity there. Then third, obviously, Hatch. We see the opportunity for all three of those areas to contribute over the next several years. Absolutely. absolutely We see three components there, and I'll talk just a little bit about how they contribute and then turn it over to Jeremy to talk more strategically about the approach that we're taking. we see three components there and i'll talk just a little bit about how they contribute and then turn it over to jeremy to talk more strategically about the approach that we're taking In the first quarter, as we mentioned, or just to step back as a quick reminder, other revenue consists of three components. in the first quarter as we mentioned or just to step back as a quick reminder other revenue consists of three components One is transaction revenue. one is transaction revenue In the first quarter, we saw that grow 88%, as Jeremy already mentioned. in the first quarter we saw that grow 88% as jeremy already mentioned That's around the DoorDash partnership. that's around the doordash partnership We continue to see momentum in the second component, licensing, which we're very pleased with and continue to see a large opportunity there. we continue to see momentum in the second component licensing which we're very pleased with and continue to see a large opportunity there Then third, obviously, Hatch. then third obviously hatch We see the opportunity for all three of those areas to contribute over the next several years. we see the opportunity for all three of those areas to contribute over the next several years

Speaker 4: Thanks, David. Yeah, I'll pop in with a little bit more color. You know, we're very excited about the opportunities we have to really ride this AI wave and, you know, take an offensive position here. You know, with Hatch and with Host, those are really greenfield opportunities. You know, closed the transaction with Hatch in February. That's going really well. You know, 92% annual run rate revenue growth year-over-year, $34 million run rate in March. We're really pleased with that. We've taken the opportunity to surge resources there, in particular on the product and engineering side to support the business, as well as the go-to-market side. You know, it's a huge opportunity. There's a lot of share to be had, we wanna make sure to lean in there. Thanks, David. thanks david Yeah, I'll pop in with a little bit more color. yeah i'll pop in with a little bit more color You know, we're very excited about the opportunities we have to really ride this AI wave and, you know, take an offensive position here. you know we're very excited about the opportunities we have to really ride this ai wave and you know take an offensive position here You know, with Hatch and with Host, those are really greenfield opportunities. you know with hatch and with host those are really greenfield opportunities You know, closed the transaction with Hatch in February. you know closed the transaction with hatch in february That's going really well. that's going really well You know, 92% annual run rate revenue growth year-over-year, $34 million run rate in March. you know 92% annual run rate revenue growth year-over-year $34 million run rate in march We're really pleased with that. we're really pleased with that We've taken the opportunity to surge resources there, in particular on the product and engineering side to support the business, as well as the go-to-market side. we've taken the opportunity to surge resources there in particular on the product and engineering side to support the business as well as the go-to-market side You know, it's a huge opportunity. you know it's a huge opportunity There's a lot of share to be had, we wanna make sure to lean in there. there's a lot of share to be had we wanna make sure to lean in there We also have been developing, you know, the opportunity around our Host, which is our phone answering service for restaurants. Really great response from customers. Great, you know, go-to-market activity. You know, we just talked about the progress we're making on the product side in the letter. You know, one of the major unlocks we've got coming very soon is food ordering over the phone. That allows us to take a market opportunity that was already exciting and make it even more exciting. Talked to lots of restaurants that maybe don't have front of house, don't need that integration that Host provides, but would love to take food orders. We see tremendous opportunity there. We've built out a lot of that experience. We also have been developing, you know, the opportunity around our Host, which is our phone answering service for restaurants. we also have been developing you know the opportunity around our host which is our phone answering service for restaurants Really great response from customers. really great response from customers Great, you know, go-to-market activity. great you know go-to-market activity You know, we just talked about the progress we're making on the product side in the letter. you know we just talked about the progress we're making on the product side in the letter You know, one of the major unlocks we've got coming very soon is food ordering over the phone. you know one of the major unlocks we've got coming very soon is food ordering over the phone That allows us to take a market opportunity that was already exciting and make it even more exciting. that allows us to take a market opportunity that was already exciting and make it even more exciting Talked to lots of restaurants that maybe don't have front of house, don't need that integration that Host provides, but would love to take food orders. talked to lots of restaurants that maybe don't have front of house don't need that integration that host provides but would love to take food orders We see tremendous opportunity there. we see tremendous opportunity there We've built out a lot of that experience. we've built out a lot of that experience We're in live testing now, we'll keep you posted on that. Finally, we've got the data licensing business, which, you know, obviously we've been in that business for a long time, particularly with search. You know, have had some great relationships there that have driven revenue as well as traffic. Really our focus is to, you know, apply that playbook once again to this really exciting opportunity to, you know, power local search for AI players as well as, of course, our own products. Bringing the great high quality human written content to all of these new large audiences, I think is, you know, really exciting both from a revenue standpoint, from a marketing standpoint, having the Yelp brand and our great content out there. We're in live testing now, we'll keep you posted on that. we're in live testing now we'll keep you posted on that Finally, we've got the data licensing business, which, you know, obviously we've been in that business for a long time, particularly with search. finally we've got the data licensing business which you know obviously we've been in that business for a long time particularly with search You know, have had some great relationships there that have driven revenue as well as traffic. you know have had some great relationships there that have driven revenue as well as traffic Really our focus is to, you know, apply that playbook once again to this really exciting opportunity to, you know, power local search for AI players as well as, of course, our own products. really our focus is to you know apply that playbook once again to this really exciting opportunity to you know power local search for ai players as well as of course our own products Bringing the great high quality human written content to all of these new large audiences, I think is, you know, really exciting both from a revenue standpoint, from a marketing standpoint, having the Yelp brand and our great content out there. bringing the great high quality human written content to all of these new large audiences i think is you know really exciting both from a revenue standpoint from a marketing standpoint having the yelp brand and our great content out there Ultimately, there'll, you know, be relevant links back where it makes sense for consumers, and that can drive meaningful traffic over the long term. We see, you know, within that other area, just a lot of AI opportunities that are already growing really fast, and we have opportunities to go even faster. Ultimately, there'll, you know, be relevant links back where it makes sense for consumers, and that can drive meaningful traffic over the long term. ultimately there'll you know be relevant links back where it makes sense for consumers and that can drive meaningful traffic over the long term We see, you know, within that other area, just a lot of AI opportunities that are already growing really fast, and we have opportunities to go even faster. we see you know within that other area just a lot of ai opportunities that are already growing really fast and we have opportunities to go even faster

Speaker 3: Thank you for your question, Sergio. Thank you for your question, Sergio. thank you for your question sergio

Speaker 7: Our next questions are from the line of Cory Carpenter with JPMorgan. Your line is live. Our next questions are from the line of Cory Carpenter with JP Morgan. our next questions are from the line of cory carpenter with jp morgan Your line is live. your line is live

Speaker 2: Hey. So thanks for the questions. I had two related to EBITDA. David, I did think it was notable you mentioned your expectation for strong growth in EBITDA margins over the coming years. Could you just elaborate a bit on that comment? You know, how much of that is due to some of these core business efficiencies you're seeing from AI? How much of that is due to maybe a, perhaps a higher margin nature of some of these emerging revenue streams you have? More, more near term, the 1Q EBITDA beat was rather significant. Just any comments on what drove the upside in the quarter. Thank you. Hey. hey So thanks for the questions. so thanks for the questions I had two related to EBITDA. i had two related to ebitda David, I did think it was notable you mentioned your expectation for strong growth in EBITDA margins over the coming years. david i did think it was notable you mentioned your expectation for strong growth in ebitda margins over the coming years Could you just elaborate a bit on that comment? could you just elaborate a bit on that comment You know, how much of that is due to some of these core business efficiencies you're seeing from AI? you know how much of that is due to some of these core business efficiencies you're seeing from ai How much of that is due to maybe a, perhaps a higher margin nature of some of these emerging revenue streams you have? how much of that is due to maybe a perhaps a higher margin nature of some of these emerging revenue streams you have More, more near term, the 1Q EBITDA beat was rather significant. more more near term the 1q ebitda beat was rather significant Just any comments on what drove the upside in the quarter. just any comments on what drove the upside in the quarter Thank you. thank you

Speaker 3: Thanks for the question, Cory. In terms of the longer term, we're very encouraged both on the revenue potential as well as the opportunity to drive productivity. On the revenue potential side, and again, I think we'll ask Jeremy to add some comments here, we are seeing accelerated product development and time to ship. That was already emerging as we've shared previously, really as we move through 2024 and 2025, and I just say that our product-led growth strategy has really been working, and the capabilities that are now available with AI are further enhancing that. That's particularly true about for newer products, where you have more freedom to drive that change compared to maybe some of the improvements that we're making on the experience that we've had, where you have a larger code base. Thanks for the question, Cory. thanks for the question cory In terms of the longer term, we're very encouraged both on the revenue potential as well as the opportunity to drive productivity. in terms of the longer term we're very encouraged both on the revenue potential as well as the opportunity to drive productivity On the revenue potential side, and again, I think we'll ask Jeremy to add some comments here, we are seeing accelerated product development and time to ship. on the revenue potential side and again i think we'll ask jeremy to add some comments here we are seeing accelerated product development and time to ship That was already emerging as we've shared previously, really as we move through 2024 and 2025, and I just say that our product-led growth strategy has really been working, and the capabilities that are now available with AI are further enhancing that. that was already emerging as we've shared previously really as we move through 2024 and 2025 and i just say that our product-led growth strategy has really been working and the capabilities that are now available with ai are further enhancing that That's particularly true about for newer products, where you have more freedom to drive that change compared to maybe some of the improvements that we're making on the experience that we've had, where you have a larger code base. that's particularly true about for newer products where you have more freedom to drive that change compared to maybe some of the improvements that we're making on the experience that we've had where you have a larger code base That's certainly something that we're excited about, that ability to really innovate and deliver features more quickly and drive revenue, also respond to customer feedback, consumer dynamics. That's a really positive feedback loop there. Obviously, we made the acquisition of Hatch, which is an AI-driven product in order to enhance lead management. Lots of opportunity to continue to push forward on the revenue side. On the productivity side, already touched on what's happening in product and engineering. That's a common theme, I think, across companies. We're really also starting to see that play out in the sales and marketing side, and we're even able to take the capabilities that we're building for consumers like our voice product in Yelp Host and apply that on our customer success side and being able to answer calls. That's certainly something that we're excited about, that ability to really innovate and deliver features more quickly and drive revenue, also respond to customer feedback, consumer dynamics. that's certainly something that we're excited about that ability to really innovate and deliver features more quickly and drive revenue also respond to customer feedback consumer dynamics That's a really positive feedback loop there. that's a really positive feedback loop there Obviously, we made the acquisition of Hatch, which is an AI-driven product in order to enhance lead management. obviously we made the acquisition of hatch which is an ai-driven product in order to enhance lead management Lots of opportunity to continue to push forward on the revenue side. lots of opportunity to continue to push forward on the revenue side On the productivity side, already touched on what's happening in product and engineering. on the productivity side already touched on what's happening in product and engineering That's a common theme, I think, across companies. that's a common theme i think across companies We're really also starting to see that play out in the sales and marketing side, and we're even able to take the capabilities that we're building for consumers like our voice product in Yelp Host and apply that on our customer success side and being able to answer calls. we're really also starting to see that play out in the sales and marketing side and we're even able to take the capabilities that we're building for consumers like our voice product in yelp host and apply that on our customer success side and being able to answer calls I think it's still emerging, but there's certainly opportunity for productivity in the G&A function. When you combine those, we do feel optimistic on our ability to generate incremental margin over the next few years, and we think that could be quite substantial. Before I turn it over, just to address your question on the first quarter. As you know, over the years, as we've been able to outperform our guidance, we've flowed through that incremental revenue to EBITDA. That also took place once again in the first quarter. We also saw some benefits around capitalized software development, there's just the normal puts and takes across some of the other operating line items. Jeremy, perhaps you could expand a little bit on what we're seeing with product development and velocity. I think it's still emerging, but there's certainly opportunity for productivity in the G&A function. i think it's still emerging but there's certainly opportunity for productivity in the g&a function When you combine those, we do feel optimistic on our ability to generate incremental margin over the next few years, and we think that could be quite substantial. when you combine those we do feel optimistic on our ability to generate incremental margin over the next few years and we think that could be quite substantial Before I turn it over, just to address your question on the first quarter. before i turn it over just to address your question on the first quarter As you know, over the years, as we've been able to outperform our guidance, we've flowed through that incremental revenue to EBITDA. as you know over the years as we've been able to outperform our guidance we've flowed through that incremental revenue to ebitda That also took place once again in the first quarter. that also took place once again in the first quarter We also saw some benefits around capitalized software development, there's just the normal puts and takes across some of the other operating line items. we also saw some benefits around capitalized software development there's just the normal puts and takes across some of the other operating line items Jeremy, perhaps you could expand a little bit on what we're seeing with product development and velocity. jeremy perhaps you could expand a little bit on what we're seeing with product development and velocity

Speaker 4: Yeah, happy to. We are adopting, you know, all the modern tools and, you know, we're starting to see signs of real productivity gains. You know, things like migrations come to mind where, you know, something that would maybe take three months, has taken more like three weeks. That's fantastic. I think, you know, a significant portion of our code at this point is AI-generated, like many others have reported. We're very optimistic that we're gonna see continued acceleration in terms of product development velocity in the coming months. Yeah, happy to. yeah happy to We are adopting, you know, all the modern tools and, you know, we're starting to see signs of real productivity gains. we are adopting you know all the modern tools and you know we're starting to see signs of real productivity gains You know, things like migrations come to mind where, you know, something that would maybe take three months, has taken more like three weeks. you know things like migrations come to mind where you know something that would maybe take three months has taken more like three weeks That's fantastic. that's fantastic I think, you know, a significant portion of our code at this point is AI-generated, like many others have reported. i think you know a significant portion of our code at this point is ai-generated like many others have reported We're very optimistic that we're gonna see continued acceleration in terms of product development velocity in the coming months. we're very optimistic that we're gonna see continued acceleration in terms of product development velocity in the coming months

Speaker 2: Great. Thank you. Great. great Thank you. thank you

Speaker 3: Great. Thank you. Great. great Thank you. thank you

Speaker 7: Thank you for your questions. Ladies and gentlemen, once again, if you do wanna ask a question, remember it's star followed by the number one on your telephone keypad. Our next question is from the line of Colin Sebastian with Baird. Your line is live. Thank you for your questions. thank you for your questions Ladies and gentlemen, once again, if you do wanna ask a question, remember it's star followed by the number one on your telephone keypad. ladies and gentlemen once again if you do wanna ask a question remember it's star followed by the number one on your telephone keypad Our next question is from the line of Colin Sebastian with Baird. our next question is from the line of colin sebastian with baird Your line is live. your line is live

Speaker 1: Thank you. Good afternoon. I have a couple questions. I guess first regarding some of the disclosures around Yelp Assistant and request-to-quote projects. I guess any more detail on how materially different those interactions are in terms of conversion in the paid leads and booked jobs and ultimately advertiser ROI. Secondly, I guess, maybe as a follow-up in terms of, you know, what you've been saying and disclosing around your relationships with other surfaces like OpenAI and Apple and others. Are these partnerships generating mostly rich referral traffic, off-platform monetization? You know, any other takeaways I think could be useful as those relationships become more important over time. Thank you. Thank you. thank you Good afternoon. good afternoon I have a couple questions. i have a couple questions I guess first regarding some of the disclosures around Yelp Assistant and request-to-quote projects. i guess first regarding some of the disclosures around yelp assistant and request-to-quote projects I guess any more detail on how materially different those interactions are in terms of conversion in the paid leads and booked jobs and ultimately advertiser ROI. i guess any more detail on how materially different those interactions are in terms of conversion in the paid leads and booked jobs and ultimately advertiser roi Secondly, I guess, maybe as a follow-up in terms of, you know, what you've been saying and disclosing around your relationships with other surfaces like OpenAI and Apple and others. secondly i guess maybe as a follow-up in terms of you know what you've been saying and disclosing around your relationships with other surfaces like openai and apple and others Are these partnerships generating mostly rich referral traffic, off-platform monetization? are these partnerships generating mostly rich referral traffic off-platform monetization You know, any other takeaways I think could be useful as those relationships become more important over time. you know any other takeaways i think could be useful as those relationships become more important over time Thank you. thank you

Speaker 4: Sure. Happy to answer that. This is Jeremy. On the Yelp Assistant side, particularly with the services focus and request-to-quote, we have seen incremental projects as we've rolled out Yelp Assistant, particularly the services version that's been around now for a couple of years and seen gains there. In fact, we noted that of request-to-quote projects, 15% now are driven by Yelp Assistant, and that's up from about 5% last year. We feel really good about what our LLM-powered flow has been able to do to move the needle in terms of projects. In fact, we're doubling down there and we've invested a lot more in bringing the power of Yelp Assistant across to all categories. We just launched that in April. Sure. sure Happy to answer that. happy to answer that This is Jeremy. this is jeremy On the Yelp Assistant side, particularly with the services focus and request-to-quote, we have seen incremental projects as we've rolled out Yelp Assistant, particularly the services version that's been around now for a couple of years and seen gains there. on the yelp assistant side particularly with the services focus and request-to-quote we have seen incremental projects as we've rolled out yelp assistant particularly the services version that's been around now for a couple of years and seen gains there In fact, we noted that of request-to-quote projects, 15% now are driven by Yelp Assistant, and that's up from about 5% last year. in fact we noted that of request-to-quote projects 15% now are driven by yelp assistant and that's up from about 5% last year We feel really good about what our LLM-powered flow has been able to do to move the needle in terms of projects. we feel really good about what our llm-powered flow has been able to do to move the needle in terms of projects In fact, we're doubling down there and we've invested a lot more in bringing the power of Yelp Assistant across to all categories. in fact we're doubling down there and we've invested a lot more in bringing the power of yelp assistant across to all categories We just launched that in April. we just launched that in april The early signs are really good. We're excited. Obviously, you know, it's kind of the first inning of the rollout. We have a lot more to do in terms of weaving it into the overall product experience. You know, we're quite excited about it. We think, you know, it helps consumers ultimately find needles in the haystack and really get more out of the incredible depth of content that we've had. If you think about a consumer experience, you know, prior to the invention of LLMs, we might have, you know, 1,000 reviews on a particular place. There is no possible way that a human could dig through that and really make sense of all the valuable information that's been submitted by users over the years. The early signs are really good. the early signs are really good We're excited. we're excited Obviously, you know, it's kind of the first inning of the rollout. obviously you know it's kind of the first inning of the rollout We have a lot more to do in terms of weaving it into the overall product experience. we have a lot more to do in terms of weaving it into the overall product experience You know, we're quite excited about it. you know we're quite excited about it We think, you know, it helps consumers ultimately find needles in the haystack and really get more out of the incredible depth of content that we've had. we think you know it helps consumers ultimately find needles in the haystack and really get more out of the incredible depth of content that we've had If you think about a consumer experience, you know, prior to the invention of LLMs, we might have, you know, 1,000 reviews on a particular place. if you think about a consumer experience you know prior to the invention of llms we might have you know 1,000 reviews on a particular place There is no possible way that a human could dig through that and really make sense of all the valuable information that's been submitted by users over the years. there is no possible way that a human could dig through that and really make sense of all the valuable information that's been submitted by users over the years Now with Yelp Assistant, we can actually tap into that and provide the evidence back to the consumer of, "Hey, you know, this is why it meets your needs. Here's some quotes from users." I think that's really powerful. I think that, you know, our expectation and hope is that we can move the needle with that over time. We're just getting started there. On the partnership side, the data licensing side, with some of the AI players, I think it speaks, number one, to the importance of Yelp in the overall AI ecosystem. If you wanna provide a local search experience powered by AI, you really need to be grounded in reality, and you need to have very high-quality human-written content, and that's exactly what Yelp has. Now with Yelp Assistant, we can actually tap into that and provide the evidence back to the consumer of, "Hey, you know, this is why it meets your needs. now with yelp assistant we can actually tap into that and provide the evidence back to the consumer of "hey you know this is why it meets your needs Here's some quotes from users." I think that's really powerful. here's some quotes from users." i think that's really powerful I think that, you know, our expectation and hope is that we can move the needle with that over time. i think that you know our expectation and hope is that we can move the needle with that over time We're just getting started there. we're just getting started there On the partnership side, the data licensing side, with some of the AI players, I think it speaks, number one, to the importance of Yelp in the overall AI ecosystem. on the partnership side the data licensing side with some of the ai players i think it speaks number one to the importance of yelp in the overall ai ecosystem If you wanna provide a local search experience powered by AI, you really need to be grounded in reality, and you need to have very high-quality human-written content, and that's exactly what Yelp has. if you wanna provide a local search experience powered by ai you really need to be grounded in reality and you need to have very high-quality human-written content and that's exactly what yelp has A while ago, maybe a year or two ago, we started highlighting that, you know, we believe that there was an opportunity here, and it's really played out along with our expectations. We've signed, you know, with a number of big names. You know, we talked about Amazon Alexa, Apple Maps, you've been able to, you know, see our content for quite some time. Microsoft Bing, Meta AI, Yahoo, and many others. And we've announced a deal with OpenAI. You know, as far as the maturity of that sector, I think it's extremely early. You know, many of these players have not really built out their local experience yet. They're just, you know, realizing that they need high-quality human-written content like Yelp. It's very early. A while ago, maybe a year or two ago, we started highlighting that, you know, we believe that there was an opportunity here, and it's really played out along with our expectations. a while ago maybe a year or two ago we started highlighting that you know we believe that there was an opportunity here and it's really played out along with our expectations We've signed, you know, with a number of big names. we've signed you know with a number of big names You know, we talked about Amazon Alexa, Apple Maps, you've been able to, you know, see our content for quite some time. you know we talked about amazon alexa apple maps you've been able to you know see our content for quite some time Microsoft Bing, Meta AI, Yahoo, and many others. microsoft bing meta ai yahoo and many others And we've announced a deal with OpenAI. and we've announced a deal with openai You know, as far as the maturity of that sector, I think it's extremely early. you know as far as the maturity of that sector i think it's extremely early You know, many of these players have not really built out their local experience yet. you know many of these players have not really built out their local experience yet They're just, you know, realizing that they need high-quality human-written content like Yelp. they're just you know realizing that they need high-quality human-written content like yelp It's very early. it's very early I do think, you know, there's certainly opportunities, one, for just Yelp exposure, branding, et cetera. There is also opportunities for traffic back where it's relevant and is helpful to the consumer. I think we will see that over time. Again, I think some of these players haven't really even launched their experience yet. We're, you know, even before the first inning, I would say, in this whole area. I do think, you know, there's certainly opportunities, one, for just Yelp exposure, branding, et cetera. i do think you know there's certainly opportunities one for just yelp exposure branding et cetera There is also opportunities for traffic back where it's relevant and is helpful to the consumer. there is also opportunities for traffic back where it's relevant and is helpful to the consumer I think we will see that over time. i think we will see that over time Again, I think some of these players haven't really even launched their experience yet. again i think some of these players haven't really even launched their experience yet We're, you know, even before the first inning, I would say, in this whole area. we're you know even before the first inning i would say in this whole area

Speaker 1: Appreciate that. Thank you. Appreciate that. appreciate that Thank you. thank you

Speaker 7: Thank you for your questions. Our next question is from the line of Nitin Bansal with Bank of America. Your line is live. Thank you for your questions. thank you for your questions Our next question is from the line of Nitin Bansal with Bank of America. our next question is from the line of nitin bansal with bank of america Your line is live. your line is live

Speaker 6: Thank you for taking my question. Just double-pressing on the OpenAI partnership. When I search for restaurants or local recommendation on ChatGPT today, Yelp content appears relatively limited versus sources like Reddit, OpenTable, Tripadvisor. Can you help us understand the scope of the partnership today, specifically like how OpenAI is leveraging your data and where Yelp content is surfacing? What needs to happen for Yelp to become more visible or primary source within these AI surfaces? Secondly, one for David. You shared guidance on the other revenue segment, like the $28 run rate, but how should we think about the trajectory of growth in this segment over the next quarters, and what does it mean for your advertising, given the overall revenue guide remains unchanged? Thank you. Thank you for taking my question. thank you for taking my question Just double-pressing on the OpenAI partnership. just double-pressing on the openai partnership When I search for restaurants or local recommendation on ChatGPT today, Yelp content appears relatively limited versus sources like Reddit, OpenTable, Tripadvisor. when i search for restaurants or local recommendation on chatgpt today yelp content appears relatively limited versus sources like reddit opentable tripadvisor Can you help us understand the scope of the partnership today, specifically like how OpenAI is leveraging your data and where Yelp content is surfacing? can you help us understand the scope of the partnership today specifically like how openai is leveraging your data and where yelp content is surfacing What needs to happen for Yelp to become more visible or primary source within these AI surfaces? what needs to happen for yelp to become more visible or primary source within these ai surfaces Secondly, one for David. secondly one for david You shared guidance on the other revenue segment, like the $28 run rate, but how should we think about the trajectory of growth in this segment over the next quarters, and what does it mean for your advertising, given the overall revenue guide remains unchanged? you shared guidance on the other revenue segment like the $28 run rate but how should we think about the trajectory of growth in this segment over the next quarters and what does it mean for your advertising given the overall revenue guide remains unchanged Thank you. thank you

Speaker 4: Hi, this is Jeremy. I'll hop in with the first question on the OpenAI partnership that we announced. You know, at this point, we've announced the partnership, as far as the experience that OpenAI is planning, like we can't really comment on that, nor do we have all the details of their plans. Obviously, you know, they're moving really fast, you know, innovating quite quickly, things are changing within their own experience very rapidly. I would just say, you know, continue to watch that space, but can't really comment on what they're up to. Hi, this is Jeremy. hi this is jeremy I'll hop in with the first question on the OpenAI partnership that we announced. i'll hop in with the first question on the openai partnership that we announced You know, at this point, we've announced the partnership, as far as the experience that OpenAI is planning, like we can't really comment on that, nor do we have all the details of their plans. you know at this point we've announced the partnership as far as the experience that openai is planning like we can't really comment on that nor do we have all the details of their plans Obviously, you know, they're moving really fast, you know, innovating quite quickly, things are changing within their own experience very rapidly. obviously you know they're moving really fast you know innovating quite quickly things are changing within their own experience very rapidly I would just say, you know, continue to watch that space, but can't really comment on what they're up to. i would just say you know continue to watch that space but can't really comment on what they're up to

Speaker 3: Thanks for the question. In terms of other revenue, again, we have the three components to it. Transaction revenue, in the first quarter growing 88%. We've shared with you the run rate revenue as of March for Hatch at 92% growth. We do continue to sign up licensing agreements and entering into new partnerships, which contributed to the overall growth of 75%. Obviously, we've reflected that performance into our guidance for the year, and we're looking forward to continuing to execute against them. Thanks for the question. thanks for the question In terms of other revenue, again, we have the three components to it. in terms of other revenue again we have the three components to it Transaction revenue, in the first quarter growing 88%. transaction revenue in the first quarter growing 88% We've shared with you the run rate revenue as of March for Hatch at 92% growth. we've shared with you the run rate revenue as of march for hatch at 92% growth We do continue to sign up licensing agreements and entering into new partnerships, which contributed to the overall growth of 75%. we do continue to sign up licensing agreements and entering into new partnerships which contributed to the overall growth of 75% Obviously, we've reflected that performance into our guidance for the year, and we're looking forward to continuing to execute against them. obviously we've reflected that performance into our guidance for the year and we're looking forward to continuing to execute against them I would just say overarching perspective on our guidance this year is the degree of uncertainty that we need to reflect, given the variability that we've seen, particularly for local businesses in the U.S. and the dynamics that we saw, which I already mentioned playing out in March from the conflict in the Middle East. We're combining both of those in the guidance that we're providing, and we'll look forward to giving you an update on the Q2 call. I would just say overarching perspective on our guidance this year is the degree of uncertainty that we need to reflect, given the variability that we've seen, particularly for local businesses in the U.S. and the dynamics that we saw, which I already mentioned playing out in March from the conflict in the Middle East. i would just say overarching perspective on our guidance this year is the degree of uncertainty that we need to reflect given the variability that we've seen particularly for local businesses in the u.s and the dynamics that we saw which i already mentioned playing out in march from the conflict in the middle east We're combining both of those in the guidance that we're providing, and we'll look forward to giving you an update on the Q2 call. we're combining both of those in the guidance that we're providing and we'll look forward to giving you an update on the q2 call

Speaker 6: Thank you. Thank you. thank you

Speaker 7: Thank you for your questions. Ladies and gentlemen, that will conclude our questions for today, and it will also conclude today's Q1 2026 Yelp earnings conference call. Thank you all for attending. We appreciate your time. Have a great rest of your day. Take care. Thank you for your questions. thank you for your questions Ladies and gentlemen, that will conclude our questions for today, and it will also conclude today's Q1 2026 Yelp earnings conference call. ladies and gentlemen that will conclude our questions for today and it will also conclude today's q1 2026 yelp earnings conference call Thank you all for attending. thank you all for attending We appreciate your time. we appreciate your time Have a great rest of your day. have a great rest of your day Take care. take care