Yelp (YELP) Q2 2026 Earnings Call Transcript
Yelp (YELP) reported Q2 2026 net revenue of $376 million (+1% YoY) and net income of $32 million (-28% YoY). Adjusted EBITDA was $91 million (-9% YoY). Services ad revenue was flat, RR&O ad revenue fell 10%, and Other revenue rose 98%. Management narrowed FY revenue guidance to $1.460B-$1.470B and paused buybacks to pay down debt after the Hatch acquisition.
How this was made
The 30-second read
Why it matters
The most tradable elements are the updated guidance ranges (Q3 and full-year), the AI transformation and marketing spend assumptions embedded in EBITDA outlook, and the capital allocation change after the Hatch acquisition (temporary pause of repurchases to reduce revolving credit facility debt).
Market read
Guidance narrowing and explicit capital allocation actions (repurchase pause) create a clear near-term setup for traders balancing AI monetization optimism against ad demand headwinds.
What to watch
Other revenue growth is heavily influenced by Hatch inclusion and data licensing; traders should watch whether Other revenue can sustain growth without continued acquisition-related tailwinds.
Background
Yelp’s Q2 2026 earnings call emphasized diversification away from core advertising via AI-centric products (Yelp Assistant, Yelp Host) and data licensing, while acknowledging ongoing macro pressure on local business advertisers.
Ticker impact
Yelp guided Q3 net revenue to $365M-$370M and full-year net revenue to $1.460B-$1.470B, narrowing the range amid macro pressure.
Near-term volatility likely around the narrowed revenue and EBITDA outlook, with sentiment split between AI growth signals and reduced capital return.
The call provides multiple decision-relevant datapoints: specific quarterly and full-year guidance ranges, Hatch acquisition cost, and a stated pause in share repurchases tied to revolving credit facility paydown.
Market effects
Local-services and online advertising peers may face read-across on ad retention sensitivity to macro conditions and shift toward AI-enabled lead generation.
Limited direct regional impact; the story is US-centric local SMB advertising demand and AI product monetization.
Moderate, as AI-driven local discovery and data licensing are broadly relevant to global digital advertising models, but the guidance is company-specific.
Counterpoint
The buyback pause and RR&O ad decline could be temporary, and Hatch ARR growth plus Yelp Host scaling may offset near-term ad softness faster than the market expects.
Key entities
- companyYelp Inc.
Reported Q2 2026 results and provided Q3 and full-year guidance, highlighting AI product scaling and a shift in revenue mix toward Other revenue.
- executiveJeremy Stoppelman
CEO who discussed AI-driven local discovery and planned integrations such as Request-a-Quote.
- executiveDavid Schwarzbach
CFO who cited persistent macroeconomic challenges and stated the share repurchase program was paused to pay down the revolving credit facility.
- acquisition/technologyHatch
AI-powered lead management platform acquired by Yelp; cited as driving Other revenue growth and Hatch ARR growth.
