Ticker Bullets | YELP 4Q17 Initial Takeaways

02/07/18 06:38PM EST

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.


Ticker Bullets | YELP 4Q17 Initial Takeaways - YELP PAA mix 4Q17
Ticker Bullets | YELP 4Q17 Initial Takeaways - YELP New LAA vs. Sales 4Q17
Ticker Bullets | YELP 4Q17 Initial Takeaways - YELP PAA Attrition 4Q17
Ticker Bullets | YELP 4Q17 Initial Takeaways - YELP Guide history
Ticker Bullets | YELP 4Q17 Initial Takeaways - YELP RAQ slide

Let us know if you have any questions or would like to discuss in more detail.
 

Hesham Shaaban, CFA
Managing Director


@HedgeyeInternet 

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