Local business platform Yelp (NYSE: YELP) reported Q1 CY2026 results exceeding the market’s revenue expectations, but sales were flat year on year at $361.5 million. The company expects the full year’s revenue to be around $1.47 billion, close to analysts’ estimates. Its GAAP profit of $0.30 per share was 13.8% above analysts’ consensus estimates.
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Yelp (YELP) Q1 CY2026 Highlights:
- Revenue: $361.5 million vs analyst estimates of $353.7 million (flat year on year, 2.2% beat)
- EPS (GAAP): $0.30 vs analyst estimates of $0.26 (13.8% beat)
- Adjusted EBITDA: $79.35 million vs analyst estimates of $61.85 million (22% margin, 28.3% beat)
- The company reconfirmed its revenue guidance for the full year of $1.47 billion at the midpoint
- EBITDA guidance for the full year is $320 million at the midpoint, below analyst estimates of $322.4 million
- Operating Margin: 7.6%, in line with the same quarter last year
- Free Cash Flow Margin: 12.5%, down from 20.1% in the previous quarter
- Market Capitalization: $1.58 billion
“We continued to accelerate Yelp's AI transformation in the first quarter,” said Jeremy Stoppelman, Yelp's co-founder and chief executive officer.
Company Overview
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE: YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Yelp’s sales grew at a tepid 6.1% compounded annual growth rate over the last three years. This was below our standard for the consumer internet sector and is a poor baseline for our analysis.
This quarter, Yelp’s $361.5 million of revenue was flat year on year but beat Wall Street’s estimates by 2.2%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and suggests its products and services will face some demand challenges.
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Cash Is King
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Yelp has shown robust cash profitability, driven by its attractive business model that enables it to reinvest or return capital to investors while maintaining a cash cushion. The company’s free cash flow margin averaged 19% over the last two years, quite impressive for a consumer internet business.
Taking a step back, we can see that Yelp’s margin expanded by 5 percentage points over the last few years. This shows the company is heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.
Yelp’s free cash flow clocked in at $45.16 million in Q1, equivalent to a 12.5% margin. The company’s cash profitability regressed as it was 11.9 percentage points lower than in the same quarter last year, prompting us to pay closer attention. Short-term fluctuations typically aren’t a big deal because investment needs can be seasonal, but we’ll be watching to see if the trend extrapolates into future quarters.
Key Takeaways from Yelp’s Q1 Results
We were impressed by how significantly Yelp blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its full-year EBITDA guidance slightly missed and its full-year revenue guidance was in line with Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The market seemed to be hoping for more, and the stock traded down 3.4% to $27.51 immediately after reporting.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
