YELP - Why Yelp Stock Surged Higher Today
Shares of Yelp (NYSE: YELP) surged higher on Friday after financial results for the second quarter of 2022 beat expectations and management raised guidance for the rest of the year. As of 1:30 p.m. ET, Yelp stock was up 21%. And don't look now, but with today's gains, Yelp stock is actually beating the market average over the past year.
Yelp is a local-business review platform, with 99% of 2021 revenue coming from the U.S. and 95% of total revenue was generated through advertisements. Many companies that generate revenue this way struggled in the second quarter. But not so for Yelp. The company generated net revenue of $299 million, up 16% year over year and far ahead of the $290 million at the high end of management's guidance.
Perhaps most surprising about Yelp's results was that ad clicks were down 11% year over year. Looked at in isolation, this is a bad thing -- ideally, clicks would go up and up. However, Yelp's ad monetization is improving, meaning it's making more per click. Q2 cost per click was up a whopping 32% year over year, which led to the revenue increase.
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Why Yelp Stock Surged Higher Today