GET DAILY SIGNALSYelp (YELP) Q3 Earnings: AI Revenue Climbs While Guidance Gets Trimmed
Key Takeaways
- Yelp reported third-quarter net revenue of $370.9 million, down roughly 1% year over year but slightly above its own outlook range and analyst consensus.
- GAAP diluted earnings per share came in at $0.63, beating consensus estimates, while net income fell to $34.6 million from $39.3 million a year earlier.
- "Other revenue" surged 82% year over year to a record $34 million, driven by AI offerings such as Yelp Host, Hatch, and data licensing.
- The company lowered its full-year 2026 net revenue outlook to $1.455 billion–$1.46 billion, below its prior guidance range.
- Full-year 2026 Adjusted EBITDA is now expected between $320 million and $325 million, with fourth-quarter revenue guided to $347 million–$352 million.
- For additional detail, explore Yelp's Major News, Today's Price Move, Price Targets, and Forecast on dedicated Tickeron pages.
- To discover data-driven trading ideas, explore Tickeron's Trending AI Robots.
Why This Quarter Matters
Yelp's third-quarter report arrives at an important time for the local-search and advertising platform. Advertising revenue, the company's longstanding core business, continues to face pressure as consumers and small businesses deal with a difficult economic backdrop. At the same time, management has moved quickly to reposition around AI, introducing more than 30 new features and emphasizing offerings such as Yelp Assistant, Yelp Host, and Hatch. This release matters because it shows whether growth in newer AI-driven streams can meaningfully offset softness in the legacy advertising business. The results and updated guidance also give investors a clearer sense of management's approach to profitability and capital allocation heading into 2027.
What the Numbers Showed
For the third quarter ended September 30, 2026, Yelp reported net revenue of $370.9 million, a decline of about 1% year over year from $376.0 million. The figure came in roughly $1 million above the high end of the company's own outlook range and slightly ahead of the consensus estimate of approximately $368.9 million. GAAP diluted EPS was $0.63, exceeding consensus expectations of around $0.45 per share. Net income declined to $34.6 million from $39.3 million in the year-ago period, while Adjusted EBITDA was $92.3 million, down from $98.1 million, representing a 25% margin.
The standout was "other revenue," which grew 82% year over year to a record $34 million, reflecting contributions from Hatch as well as growth in data licensing and food ordering. I also checked this using Tickeron's AI Screener to see how the stock compares to others in the industry. However, management lowered full-year guidance, now projecting net revenue of $1.455 billion to $1.46 billion, down from a prior range of $1.46 billion to $1.47 billion. Full-year Adjusted EBITDA guidance was narrowed to $320 million–$325 million, and fourth-quarter revenue is expected to be $347 million–$352 million.
Market Reaction and Investor Sentiment
Despite a top-line beat and stronger-than-expected EPS, investor sentiment turned cautious in after-hours trading as the company trimmed its full-year revenue outlook. The revised guidance, which sits below the prior range and below Wall Street's roughly $1.47 billion consensus, underscored that advertising demand remains soft even as AI-driven revenue accelerates. Shares had already been under pressure heading into the report, reflecting concerns about the durability of Yelp's core advertising business. The combination of a modest revenue decline, lower forward guidance, and continued economic headwinds for local businesses framed the print as a mixed result, with investors weighing cost discipline and AI momentum against persistent advertising weakness.
Forward Outlook and Key Factors to Monitor
Looking ahead, investors will be watching whether Yelp's AI-driven revenue can sustain its rapid growth. Management is targeting an annual run rate of $250 million in other revenue by the end of 2028, up from a $136 million run rate in the latest quarter. The pace of adoption for Yelp Host and Hatch, along with continued demand for data licensing, will be central to that trajectory.
Advertising revenue remains the key swing factor. Yelp expects the challenging economic environment for consumers and local businesses to persist into the fourth quarter, with increased pressure on advertising spending across categories. Any stabilization or recovery in local advertising would meaningfully shift the growth outlook.
Cost discipline is another area to monitor. Management reduced stock-based compensation as a percentage of revenue to 6% in the quarter and expects it to fall below that level in the fourth quarter, ahead of its prior target. Finally, capital allocation will draw attention, as Yelp paused share repurchases to pay down its revolving credit facility and expects to resume buybacks in 2027. These factors, taken together, will shape how the market evaluates Yelp's transition from a legacy ad-driven model to an AI-enabled platform.
Using AI Tools in My Research
When reviewing earnings-driven names like Yelp, I often turn to Tickeron's AI-powered tools to quickly surface comparable setups and technical patterns. The AI Screener stands out for its ability to filter across industries, fundamentals, and AI signals, helping me identify potential trade ideas more efficiently than manual methods. It has become a regular part of how I cross-check momentum and valuation metrics after reports like this one.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
YELP's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for YELP turned positive on October 02, 2026. Looking at past instances where YELP's MACD turned positive, the stock continued to rise in 32 of 44 cases over the following month. The odds of a continued upward trend are 73%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on November 04, 2026. You may want to consider a long position or call options on YELP as a result. In 59 of 93 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 63%.
YELP moved above its 50-day moving average on November 04, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +11.31% 3-day Advance, the price is estimated to grow further. Considering data from situations where YELP advanced for three days, in 178 of 293 cases, the price rose further within the following month. The odds of a continued upward trend are 61%.
The Aroon Indicator entered an Uptrend today. In 95 of 173 cases where YELP Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 55%.
Bearish Trend Analysis
The RSI Indicator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where YELP declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 65%.
YELP broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 49 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 56 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.856) is normal, around the industry mean (1.069). P/E Ratio (10.450) is within average values for comparable stocks, (-42.791). Projected Growth (PEG Ratio) (0.670) is also within normal values, averaging (17.274). Dividend Yield (0.000) settles around the average of (0.985) among similar stocks. P/S Ratio (0.854) is also within normal values, averaging (71.888).
The Tickeron Price Growth Rating for this company is 63 (best 1 - 100 worst), indicating steady price growth. YELP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 83 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. YELP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
a company that hosts an online database of user generated reviews of local businesses
Industry InternetSoftwareServices
Advertisement