Local business platform Yelp NYSE:YELPreported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 1.4% year on year to $375.5 million. The company expects the full year’s revenue to be around $1.47 billion, close to analysts’ estimates. Its GAAP profit of $0.57 per share was 56.7% above analysts’ consensus estimates.
Yelp (YELP) Q2 CY2026 Highlights:
- Revenue: $375.5 million vs analyst estimates of $367 million (1.4% year-on-year growth, 2.3% beat)
- EPS (GAAP): $0.57 vs analyst estimates of $0.36 (56.7% beat)
- Adjusted EBITDA: $91.43 million vs analyst estimates of $74.09 million (24.3% margin, 23.4% beat)
- The company reconfirmed its revenue guidance for the full year of $1.47 billion at the midpoint
- EBITDA guidance for the full year is $320 million at the midpoint, in line with analyst expectations
- Operating Margin: 11.6%, down from 14.4% in the same quarter last year
- Free Cash Flow Margin: 16.3%, up from 12.5% in the previous quarter
- Market Capitalization: $1.41 billion
Company Overview
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp NYSE:YELP is an online platform that helps people discover local businesses through crowd-sourced reviews.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Yelp’s 5.1% annualized revenue growth over the last three years was sluggish. This fell short of our benchmark for the consumer internet sector and is a tough starting point for our analysis.
This quarter, Yelp reported modest year-on-year revenue growth of 1.4% but beat Wall Street’s estimates by 2.3%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and implies its products and services will see some demand headwinds.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.
Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar.
Cash Is King
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Yelp has shown robust cash profitability, driven by its attractive business model that enables it to reinvest or return capital to investors while maintaining a cash cushion. The company’s free cash flow margin averaged 19.9% over the last two years, quite impressive for a consumer internet business.
Taking a step back, we can see that Yelp’s margin expanded by 4.1 percentage points over the last few years. This shows the company is heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.
Yelp’s free cash flow clocked in at $61.07 million in Q2, equivalent to a 16.3% margin. This result was good as its margin was 4.1 percentage points higher than in the same quarter last year, building on its favorable historical trend.
Key Takeaways from Yelp’s Q2 Results
We were impressed by how significantly Yelp blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 1.1% to $25.31 immediately following the results.
Yelp put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. .