Ticker Bullets | YELP | Eat24 Financials

10/17/17 07:09AM EDT

KEY POINTS

  1. Transaction Revenue to Decline: Eat24 represented ~95% of YELP's Transaction revenue over the last 6 months, so the Eat24 sale is basically a segment divestiture.  Even with the Grubhub deal, all YELP would be getting is a take of its prior take, and only on the food orders that are processed on the Yelp Platform, which we estimate is <25% of Eat24's business.
  2. But Related EBITDA to Increase: Eat24 was also EBITDA negative over the last 6 months (-$5.6M vs. $34.5M in revenue), with S&M as its largest expense ($22.5M).  So unless there is material stock-based comp in those reported figures, the Eat24 sale will be EBITDA accretive to YELP next year, regardless of any orders that YELP processes for GRUB.  

Ticker Bullets | YELP | Eat24 Financials - YELP Eat24 financials

Let us know if you have any questions or would like to discuss further.

Hesham Shaaban, CFA
Managing Director


@HedgeyeInternet 

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