4Q17 Initial Takeaways
- Gross adds & attrition both accelerated: Gross PAA adds accelerated on both an absolute and y/y basis. YELP's PAA attrition rate reverted back near historic highs. We suspect the common denominator is that YELP's salesforce is now selling ad packages without contracted terms.
- 2018 revenue guidance inline. Straddled consensus, consistent with YELP's historical approach to its annual release, which is usually well off the mark.
- But they missed badly on 2018 EBITDA guide: on the heels of another acceleration in sales rep hires, suggesting they're giving on EBITDA in hopes of staving off another revenue guide-down.
- They're actually serious about an RAQ take-rate model: This is beyond stupid, something only the sell-side would buy into. This can't work in Home & Local, and risks siphoning off much needed ad inventory.
- What is revenue retention? Can someone please ask mgmt what that means, or if they have an actual definition for it. It's a sound byte until they clarify.
Let us know if you have any questions or would like to discuss in more detail.
