YELP INC (YELP)

CIK: 0001345016. SIC: 7200 Services-Personal Services. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Services > SIC Major Group 72 > SIC 7200 Services-Personal Services

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1345016. Latest filing source: 0001345016-26-000019.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001345016.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001345016.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001345016-26-000040.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those discussed in the section titled “Risk Factors” included under Part I, Item 1A in our Annual Report. See “Special Note Regarding Forward-Looking Statements” in this Quarterly Report.

Overview

As one of the best known Internet brands in the United States, Yelp is a trusted local resource for consumers and a partner in success for businesses of all sizes. Consumers trust us for the more than 300 million ratings and reviews available on our platform of businesses across a broad range of categories, while businesses advertise with us to reach our large audience of what we believe are purchase-oriented and generally affluent consumers.

We generate substantially all of our revenue from the sale of performance-based advertising products, which our advertising platform matches to individual consumers through auctions priced on a cost-per-click (“CPC”) basis. In the three months ended March 31, 2026, our net revenue was $361.5 million, up 1% from the three months ended March 31, 2025, and we recorded net income of $17.7 million and adjusted EBITDA of $79.4 million. For information on how we define and calculate adjusted EBITDA, and a reconciliation of this non-GAAP financial measure to net income, see “Non-GAAP Financial Measures” below.

In the first quarter of 2026, we continued to make progress transforming Yelp with artificial intelligence (“AI”) through our strategic investments in product innovation:

•Reconceive Yelp Around Answers and Actions. In the first quarter, increased adoption of Yelp Assistant drove approximately 15% of all Request-a-Quote projects.1 Building on this momentum, we launched a new Yelp Assistant that supports local discovery across every business category on Yelp. To provide a more comprehensive consumer experience, we also announced new integrations with Vagaro and Zocdoc to enable users to book beauty, wellness, fitness and healthcare appointments.

•Deliver AI Tools that Help Businesses Grow, Operate and Succeed. We continued to scale Yelp Host, our AI-powered call answering service for restaurants, in the first quarter, which surpassed an annual run rate2 of more than 1.5 million calls handled in April 2026, more than doubling from January 2026. Hatch has also demonstrated early progress since we acquired it in February 2026 with an annual run rate revenue of $34.0 million in March 2026. We also introduced an improved business owner account experience, which streamlines administrative tasks through an AI-powered support chatbot that handles account access, billing and troubleshooting.

•Extend Our Reach to Power Local Discovery Across the AI Ecosystem. Demand for our data licensing products was robust in the first quarter, contributing to strong growth in other revenue. We secured new licensing agreements, including with OpenAI, and continued to expand our integrations with existing partners, including Alexa+, where users are now able to book and manage Yelp restaurant reservations through our Reservations API. Consumers can now find licensed Yelp content on Amazon Alexa, Apple Maps, Microsoft Bing, Meta.ai and Yahoo, among many other platforms.

In the first quarter, strength in other revenue and growth in advertising revenue from Services businesses drove modest year-over-year revenue growth as the economic environment facing consumers and local businesses continued to be challenging. We expect these adverse conditions to persist and continue impacting advertising revenue across categories in the second quarter, driving a modest year-over-year decrease in revenue. However, we expect revenue to increase sequentially in the second quarter due to continued strength in other revenue. As our other revenue streams continue to gain traction, we are targeting an annual run rate of $250 million in other revenue by the end of 2028.

We expect expenses will increase sequentially in the second quarter as we invest in our AI transformation and increase marketing spend, which we anticipate will result in a year-over-year decrease in adjusted EBITDA in the second quarter.

1 Projects created by users through a Request-a-Quote flow or Yelp Assistant.

2 References to the “annual run rate” of certain metrics included in this Quarterly Report are calculated by annualizing the metric’s results for the indicated period. For example, we calculate annual run rate based on a metric’s results for a given month by multiplying those results by 12, or for a given quarter by multiplying the results by four.

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However, we believe we can drive strong growth in adjusted EBITDA margin over the next several years as a result of our top-line efforts and opportunities to drive operational efficiencies and employee productivity with AI.

Key Metrics

We regularly review a number of metrics, including the key metrics set forth below, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions.

Ad Clicks and Average CPC

The amount of revenue we generate from our pay-for-performance advertising products is determined by the number of ad clicks we deliver to advertisers and the price we charge for each ad click.

Ad clicks represent user interactions with our pay-for-performance advertising products, including clicks on advertisements on our website and mobile app, clicks on syndicated advertisements on third-party platforms and Request-a-Quote submissions, among others. Ad clicks include only user interactions that we are able to track directly, and therefore do not include user interactions with ads sold through our advertising partnerships. We do not expect the exclusion of such user interactions to materially affect this metric. We report the year-over-year percentage change in ad clicks as a measure of our success in monetizing more of our consumer activity and delivering more value to advertisers.

Average CPC is calculated as revenue from our performance-based ad products — excluding certain revenue adjustments that do not impact the outcome of an auction for an individual ad click, such as refunds, as well as revenue from our advertising partnerships — divided by the total number of ad clicks for a given period. Average CPC represents the average amount we charge advertisers for each ad click.

We believe that ad clicks and average CPC together reflect one of the most significant dynamics affecting our advertising revenue performance: the interplay of advertiser demand and consumer activity. At the level of an auction for an individual ad click, advertiser demand — consisting of advertiser budgets and the number of advertisers competing to purchase the ad click — intersects with the supply of consumer activity — consisting of the predicted levels of relevant consumer traffic and engagement — to determine CPC, with higher advertiser demand putting upward pressure on the CPC and higher consumer activity putting downward pressure on the CPC. In aggregate, advertiser demand consists of the number of business locations advertising with us (which we refer to as paying advertising locations, as discussed below) and the aggregate budget they allocate to purchasing our advertising products. Aggregate monetizable consumer activity depends on the levels of consumer traffic and engagement with our ads, the numbers of locations where we can display ads and other monetizable features, and our click-through rate, which is the ratio of ad clicks to the number of times the ads were displayed to consumers. The relative strengths of these factors in aggregate are reflected in average CPC.

Ad clicks and average CPC also provide important insight into the value we deliver to advertisers, which we believe is a significant factor in our ability to retain both revenue and customers. For example, a positive change in ad clicks for a given period combined with lower growth or a negative change in average CPC over the same period would indicate that we delivered more ad clicks at lower prices, thereby delivering more value to our advertisers; we would expect this to have a positive impact on retention. Conversely, growth in average CPC paired with a negative or lower growth rate in ad clicks would indicate we charged more without delivering more ad clicks; we would expect this to have a negative impact on retention unless we are able to increase the value we deliver through higher performing ad clicks.

The following table presents year-over-year changes in our ad clicks and average CPC for the periods presented (each expressed as a percentage):

Three Months Ended

March 31,

2026

2025

Ad Clicks

(10)%

(3)%

Average CPC

8%

9%

Ad clicks decreased year over year in the three months ended March 31, 2026, primarily due to a decrease in Restaurants, Retail & Other (“RR&O”) ad clicks, partially offset by a slight increase in Services ad clicks.

Average CPC increased in the three months ended March 31, 2026, primarily due to an increase in average CPC in RR&O categories as advertiser demand outpaced consumer demand in these categories, partially offset by a modest decrease in average CPC in Services categories resulting from relatively stable advertiser demand together with the slight increase in ad clicks. In

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addition, Services ad clicks, which generally have higher CPCs, comprised a greater portion of total ad clicks compared to the prior-year period.

These trends reflect the economic uncertainties facing consumers, the challenging operating environment for local businesses and, to a lesser extent, competitive pressures in RR&O categories from food ordering and delivery providers.

Advertising Revenue by Category

We generate advertising revenue from the sale of our advertising products — including business page upgrades and performance-based advertising in search results and elsewhere on our platform — to businesses of all sizes, from single-location local businesses to multi-location national businesses (“Yelp Ads”). Advertising revenue also includes revenue generated from the resale of our advertising products by certain partners and monetization of advertising inventory through third-party ad networks, as well as revenue generated from RepairPal.

To reflect our strategic focus on creating two differentiated experiences on Yelp, we provide a breakdown of our advertising revenue attributable to businesses in two high-level category groupings: Services and RR&O. Our Services categories consist of home, local, auto, professional, pets, events, real estate and financial services. Our RR&O categories consist of restaurants, shopping, beauty & fitness, health and other.

Refer to “Results of Operations — Net Revenue” below for further discussion of our advertising revenue by category.

Paying Advertising Locations

Paying advertising locations comprise all business locations associated with a business account from which we recognized advertising revenue in a given month, excluding business accounts that purchased advertising through partner programs other than Yelp Ads Certified Partners, averaged over a given period. We also provide a breakdown of paying advertising locations between our Services categories and RR&O categories.

We provide our paying advertising locations as a measure of the reach and scale of our business; how

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-27. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those discussed in the section titled “Risk Factors” included under Part I, Item 1A and elsewhere in this Annual Report. See “Special Note Regarding Forward-Looking Statements” in this Annual Report.

The following section also includes information regarding 2025 and 2024 and year-over-year comparisons between these periods. A full discussion of 2023 items and year-over-year comparisons between 2024 and 2023 can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

As one of the best known Internet brands in the United States, Yelp is a trusted local resource for consumers and a partner in success for businesses of all sizes. Consumers trust us for the more than 300 million ratings and reviews available on our platform of businesses across a broad range of categories, while businesses advertise with us to reach our large audience of what we believe are purchase-oriented and generally affluent consumers. We generate substantially all of our revenue from the sale of performance-based advertising products, which our advertising platform matches to individual consumers through auctions priced on a CPC basis.

In the year ended December 31, 2025, our net revenue was $1.46 billion, up 4% from the year ended December 31, 2024, and we recorded net income of $145.6 million and adjusted earnings before interest, income taxes, depreciation and amortization (“EBITDA”) of $369.2 million. For information on how we define and calculate adjusted EBITDA and a reconciliation of this non-GAAP financial measure to net income, see “—Non-GAAP Financial Measures” below.

In 2025, we delivered record annual revenue and profitable growth through the consistent execution of our product-led strategic initiatives and prudent capital allocation:

Lead in Services

•Services continued to drive our performance in 2025, with advertising revenue from businesses in these categories up 8% year over year to a record $948 million, led by growth in our Auto Services and Home Services categories. Advertising revenue from our Auto Services category includes revenue generated by RepairPal, which we acquired in November 2024 and which contributed significantly to growth in Services advertising revenue in 2025.

•Request-A-Quote projects1 increased by approximately 5% year over year in 2025, or by approximately 15% excluding projects acquired through our paid search initiative, driven by improvements to the flow and increased adoption of Yelp Assistant.

•We enhanced Yelp Assistant by incorporating AI-powered photo recognition, which evaluates photos uploaded by consumers to help identify and better understand their project needs, and by enabling it to remember important details and preferences from previously submitted projects.

Drive Advertiser Value

•We continued to invest in business-focused products and improving the business owner experience across categories in 2025. We launched two AI-powered call answering services, Yelp Host and Yelp Receptionist, for restaurants and service pros, respectively. These solutions combine LLMs with our high-quality data to provide smarter, more human-like AI voice answering services tailored with information specific to each individual business. Since its roll out in the third quarter of 2025, Yelp Host has answered more than 190,000 calls, handling thousands of reservations for restaurant customers per month.

•For SMB advertisers, we began providing budget recommendations, billing optimizations and competitive insights in the business owner dashboard. We also launched Co-branded Showcase Ads, which enable brand advertisers to promote their local business partners alongside a customized offer or message with an image or video on Yelp. Off Yelp, we continued to expand local advertiser reach through a variety of partnerships, including by leveraging on-Yelp search intent to surface relevant Yelp ads to users on other platforms such as Facebook and Bing.

1 Projects created by users through a Request-a-Quote flow or Yelp Assistant. Year-over-year changes in Request-a-Quote projects are rounded to the nearest multiple of 5%.

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Transform the Consumer Experience

•In 2025, we announced more than 55 new products and features designed to improve the consumer experience, many powered by AI. We introduced natural language and voice capabilities for search, AI-powered business and review highlights, and Popular Offerings, a feature that highlights the most frequently mentioned services items or experiences across more than 100 business categories.

•We expanded Yelp Assistant to business pages in RR&O categories and added hundreds of thousands of new restaurants for food ordering and delivery through our preferred partnership with DoorDash.

•To make it easier for consumers to schedule appointments with auto repair shops, we integrated RepairPal’s booking system into the Yelp experience.

Prudent Capital Allocation

•We held headcount approximately flat year over year in 2025. Stock-based compensation as a percentage of revenue decreased by two percentage points year over year to 9% in 2025, and to less than 8% for the month of December 2025.

•As of December 31, 2025, we had repurchased nearly $2.0 billion of our outstanding common stock. Together with our reduction in stock-based compensation, total outstanding shares (including unissued shares underlying outstanding equity awards) decreased by approximately 8 million shares, or about 10%, in 2025.

We believe that we are positioned to deliver long-term durable growth by executing consistently against our 2026 strategic initiatives, and we plan to increase our investments in 2026 to capitalize on this opportunity. As we enter 2026, we expect that our expenses will increase from the fourth quarter of 2025 to the first quarter of 2026, primarily reflecting a seasonal increase in expenses from payroll taxes and benefits, as well as for the full year 2026 compared to 2025 as we invest in our AI transformation, in paid traffic acquisition and to support Hatch operations. We also expect that the challenging operating environment will continue for RR&O businesses and, to a lesser extent, Services businesses, which will continue to negatively impact advertising revenue. As a result, we anticipate that revenue in the first quarter of 2026 will be down slightly year over year and revenue in the full year 2026 may be slightly down year over year. We also expect first quarter revenue to be slightly down sequentially, reflecting seasonal trends.

Factors Affecting Our Performance

Conditions in Local Economies. Many businesses in the United States, particularly in our RR&O categories but increasingly in Services categories as well, have faced challenging operating environments amid widespread economic uncertainties in recent years, including labor shortages, supply chain issues, inflation and recessionary concerns, and higher interest rates, which have been exacerbated by changes to U.S. tariff policy and immigration enforcement priorities. These challenging conditions have had, and we expect them to continue to have, a significant adverse impact on our business and results of operations. For example, adverse economic conditions have had, and we expect them to continue to have, a negative impact on the ability and willingness of advertisers to spend on our products and services, as has been the case for RR&O businesses, which have experienced protracted operating challenges.

Many of the challenges facing local economies are also impacting consumers. Changes in consumer behavior due to adverse economic conditions have also had, and may continue to have, a negative impact on our business. This negative impact is both direct — through reduced consumer traffic to our platform, which impacts the number of ads we are able to show as well as the value of those ads to businesses — and indirect — as consumers reduce their spending in local economies, compounding challenges for local businesses and further negatively impacting their willingness to spend on our products and services. For example, as adverse conditions in local economies persisted through 2025, they increasingly impacted our Services categories as consumers forwent, delayed or scaled down services projects; as a result, demand from Services businesses for our products and services was more muted than typical through the third quarter and decreased sequentially in the fourth quarter.

Although it is not possible for us to predict the remaining duration of the ongoing adverse conditions facing local economies or the duration or magnitude of any resulting adverse impact on our business, we expect the current challenging operating conditions to continue in 2026 and negatively impact our advertising revenue.

Investment in Growth. In 2026, we plan to invest in our strategic initiatives to reconceive Yelp around answers and actions, deliver AI tools that help service pros and other local businesses grow, operate and succeed, and extend our reach to power local delivery across the AI ecosystem. These initiatives will require substantial investments that may not prioritize short-term financial results, depend on our ability to develop innovative, relevant and useful products in a timely manner, and involve

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significant risks and uncertainties. For example, new products and initiatives may fail to generate sufficient revenue, operating margin or other value to justify the investments we made in them, which is a particular risk for new products and initiatives that are unproven or that are outside of our historical core business, such as our plans to expand our use of AI throughout our platform and business operations. While we believe these initiatives will ultimately drive revenue growth, our investments in them will increase our operating expenses, and any increase in revenue resulting from these product innovations will likely trail the increase in expenses.

Our Ability to Attract, Retain and Engage Consumers. We generate substantially all of our revenue based on our users’ engagement with the ads that we display. Because traffic to and user engagement on our platform together determine the number of ads we are able to show, affect the value of those ads to businesses and support the content creation that drives further traffic, our ability to attract, retain and engage visitors on our platform is critical to our business and financial success. While we believe our largest growth opportunity will be to monetize a greater portion of our existing traffic, rather than to grow traffic generally, we are also investing in a broad set of consumer initiatives to support the long-term growth of our traffic and business.

Our Ability to Attract and Retain Advertisers. Our revenue growth is driven by our ability to attract and retain advertising customers. To do so, we must deliver tailored advertising products at a competitive price in a highly competitive market. A substantial portion of our advertisers have the ability to cancel their advertising campaigns at any time. Their decisions to renew depend on the degree of satisfaction with our products as well as a number of factors that are outside of our control, including their ability to continue their operations and spending levels. Although the opportunity presented by multi-location Services businesses has been a strategic focus, we continue to rely heavily on SMBs that often have limited advertising budgets, may view online advertising products like ours as experimental and unproven, and are disproportionately impacted by macroeconomic conditions.

Corporate Development Activities. As part of our business strategy, we may decide to expand our product offerings and grow our business through the acquisition of complementary businesses or technologies, as well as through partnerships. For example, we acquired Hatch in February 2026 to advance our AI transformation and expand our subscription offerings to help Services businesses operationally. In addition to diverting our management’s attention and otherwise disrupting our operations, our corporate development activities will affect our future financial results due to factors such as expenses incurred in identifying, investigating and pursuing transactions, whether or not they are consummated, possible dilutive issuances of equity securities or the incurrence of debt, unidentified liabilities and the amortization of acquired intangible assets. For example, we funded the purchase price of Hatch in part with a loan under our credit facility. Maintaining relationships with partners also requires significant time and resources, as does integrating their data, services and technologies onto our platform. We may not realize the full benefits of synergies, innovation and operational efficiencies that may be possible from a corporate transaction; similarly, if our relationships with partners deteriorate, we could suffer increased costs and delays in our ability to provide consumers and advertisers with our content or services.

Our Ability to Attract and Retain Talent. Our ability to execute on our strategic initiatives depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand and we expect to continue to face significant competition from other companies in hiring such personnel. For a discussion of our talent attraction and retention efforts, as well as the impact of our company culture, see the section titled “Human Capital Management” included under Part I, Item 1 of this Annual Report. Our employee operations are complex and place substantial demands on management and our operational infrastructure, particularly in our fully remote work environment. We believe our decision to maintain distributed operations will provide even greater flexibility to our employees, who now have the opportunity to relocate within the countries where we operate so they can live where they want to live and work where they will feel most effective, and will allow us to access and attract great talent from a wider pool of candidates across North America and Europe.

Seasonality. Our business is affected by seasonal fluctuations in Internet usage and advertising spending. Based on historical trends, our revenue is typically lowest in the first quarter and increases sequentially through the third quarter. Fourth quarter revenue is typically similar to the third quarter as well as to the first quarter of the subsequent year. While our 2025 advertising revenue generally increased sequentially from the first through the third quarter, the relative magnitude of each increase was not as large as historical increases and advertising revenue ultimately decreased sequentially from the third to the fourth quarter. We believe this divergence from historical trends was the result of advertisers exercising increased caution amid a challenging operating environment for local businesses.

With regard to expenses, we generally decrease our marketing expenditures in the fourth quarter before increasing them again in the first quarter of the following year. Our personnel expenses tend to increase from the fourth quarter to the first quarter due to the timing of payroll taxes and benefits, as well as our annual compensation cycle. As a result, we anticipate expenses will increase seasonally from the fourth quarter of 2025 to the first quarter of 2026.

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Key Metrics

We regularly review a number of metrics, including the key metrics set forth below, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions.

Ad Clicks and Average CPC

The amount of revenue we generate from our pay-for-performance advertising products is determined by the number of ad clicks we deliver to advertisers and the price we charge for each ad click (“CPC”).

Ad clicks represent user interactions with our pay-for-performance advertising products, including clicks on advertisements on our website and mobile app, clicks on syndicated advertisements on third-party platforms and Request-a-Quote submissions, among others. Ad clicks include only user interactions that we are able to track directly, and therefore do not include user interactions with ads sold through our advertising partnerships. We do not expect the exclusion of such user interactions to materially affect this metric. We report the year-over-year percentage change in ad clicks as a measure of our success in monetizing more of our consumer activity and delivering more value to advertisers.

Average CPC is calculated as revenue from our performance-based ad products — excluding certain revenue adjustments that do not impact the outcome of an auction for an individual ad click, such as refunds, as well as revenue from our advertising partnerships — divided by the total number of ad clicks for a given period. Average CPC represents the average amount we charge advertisers for each ad click.

We believe that ad clicks and average CPC together reflect one of the most significant dynamics affecting our advertising revenue performance: the interplay of advertiser demand and consumer activity. At the level of an auction for an individual ad click, advertiser demand — consisting of advertiser budgets and the number of advertisers competing to purchase the ad click — intersects with the supply of consumer activity — consisting of the predicted levels of relevant consumer traffic and engagement — to determine CPC, with higher advertiser demand putting upward pressure on the CPC and higher consumer activity putting downward pressure on the CPC. In aggregate, advertiser demand consists of the number of business locations advertising with us (which we refer to as paying advertising locations, as discussed below) and the aggregate budget they allocate to purchasing our advertising products. Aggregate monetizable consumer activity depends on the levels of consumer traffic and engagement with our ads, the numbers of locations where we can display ads and other monetizable features, and our click-through rate, which is the ratio of ad clicks to the number of times the ads were displayed to consumers. The relative strengths of these factors in aggregate are reflected in average CPC.

Ad clicks and average CPC also provide important insight into the value we deliver to advertisers, which we believe is a significant factor in our ability to retain both revenue and customers. For example, a positive change in ad clicks for a given period combined with lower growth or a negative change in average CPC over the same period would indicate that we delivered more ad clicks at lower prices, thereby delivering more value to our advertisers; we would expect this to have a positive impact on retention. Conversely, growth in average CPC paired with a negative or lower growth rate in ad clicks would indicate we charged more without delivering more ad clicks; we would expect this to have a negative impact on retention unless we are able to increase the value we deliver through higher performing ad clicks.

The following table presents year-over-year changes in our ad clicks and average CPC for the periods presented (each expressed as a percentage):

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Ad Clicks

(8)%

5%

(7)%

6%

Average CPC

6%

—%

10%

—%

In the three months ended December 31, 2025, advertising revenue decreased 2% year over year, primarily due to a decrease in ad clicks, partially offset by the increase in average CPC. In the twelve months ended December 31, 2025, advertising revenue increased 3% year over year, primarily due to higher average CPC, partially offset by the decrease in ad clicks.

The increase in average CPC in both periods was primarily due to strong advertiser demand in Services categories, as reflected in the increases in average revenue per Services location1 and, in the twelve-month period, the increase in Services

1 Defined as Services advertising revenue divided by Services paying advertising locations.

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paying advertising locations, as well as to lower overall levels of consumer activity. The decreases in ad clicks were primarily driven by the lower levels of consumer activity, which we believe was due to economic uncertainties and, to a lesser extent, competitive pressures from food ordering and delivery providers in RR&O categories as well as reduced spend on paid project acquisitions in the current-year periods.

Advertising Revenue by Category

Our advertising revenue comprises revenue from the sale of our advertising products, including the resale of our advertising products by partners and syndicated ads appearing on third-party platforms, as well as revenue generated from RepairPal.

To reflect our strategic focus on creating two differentiated experiences on Yelp, we provide a breakdown of our advertising revenue attributable to businesses in two high-level category groupings: Services and RR&O. Our Services categories consist of home, local, auto, professional, pets, events, real estate and financial services. Our RR&O categories consist of restaurants, shopping, beauty & fitness, health and other.

The following table presents our advertising revenue by category for the periods presented (in thousands, except percentages):

Three Months Ended

December 31,

% Change

Year Ended

December 31,

% Change

2025

2024

2025

2024

Services

$

231,381 

$

224,840 

3%

$

947,564 

$

879,092 

8%

Restaurants, Retail & Other

106,829 

120,798 

(12)%

443,696 

469,928 

(6)%

Total Advertising Revenue

$

338,210 

$

345,638 

(2)%

$

1,391,260 

$

1,349,020 

3%

Paying Advertising Locations

Paying advertising locations comprise all business locations associated with a business account from which we recognized advertising revenue in a given month, excluding business accounts that purchased advertising through partner programs other than Yelp Ads Certified Partners, averaged over a given three- or twelve-month period. We also provide a breakdown of paying advertising locations between our Services categories and RR&O categories.

For the three and twelve months ended December 31, 2025, Services paying advertising locations include business locations from which RepairPal recognized revenue. While the addition of these locations did not have a material impact on the overall number of paying advertising locations, or the year-over-year change in Services paying advertising locations in the three months ended December 31, 2025, it contributed nearly two-thirds of the year-over-year increase in Services paying advertising locations in the twelve months ended December 31, 2025 shown in the table below.

We provide our paying advertising locations as a measure of the reach and scale of our business; however, this metric may exhibit short-term volatility as a result of factors such as seasonality and macroeconomic conditions. For example, macroeconomic factors, including related to labor and supply chain issues, inflation and recessionary concerns, and interest rates, have had a predominant negative impact on RR&O paying advertising locations in recent periods. Short-term fluctuations in paying advertising locations may also reflect the acquisition or loss of single advertising accounts associated with large numbers of locations, or the pausing/restarting of advertising campaigns by such multi-location advertisers.

The following table presents the number of paying advertising locations for the periods presented (in thousands, except percentages):

Three Months Ended

December 31,

% Change

Year Ended

December 31,

% Change

2025

2024

2025

2024

Services

250

250

—%

257

252

2%

Restaurants, Retail & Other

246

271

(9)%

253

274

(8)%

Total Paying Advertising Locations

496

521

(5)%

510

526

(3)%

Paying advertising locations decreased in the three and twelve months ended December 31, 2025 compared to the prior-year periods due to the decreases in RR&O paying advertising locations, partially offset by growth in Services paying advertising locations in the twelve-month period. We believe the decreases in RR&O paying advertising locations and lack of growth in

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Services paying advertising locations in the three-month period reflect the challenging operating environment facing local businesses. The decreases in RR&O paying advertising locations also reflect, to a lesser extent, competition for ad spend from such businesses, including from food ordering and delivery providers.

Reviews and Traffic

We report our reviews and traffic metrics on an annual basis as measures of the volume of our content and the size of our audience, respectively. Although measures of our content (including our reviews metric) and traffic do not factor directly into the advertising arrangements we have with our customers, this dynamic underpins our ability to deliver ad clicks and drive conversion of advertisers’ products and services. Consumer engagement metrics validate our value proposition to businesses as they seek easy-to-use and effective advertising solutions.

Reviews

Number of reviews represents the cumulative number of reviews submitted to Yelp since inception, as of the period end, including reviews that were not recommended or had been removed from our platform. In addition to the text of the review, each review includes a rating of one to five stars. We include reviews that are not recommended and that have been removed because all of them are either currently accessible on our platform or were accessible at some point in time, providing information that may be useful to users to evaluate businesses and individual reviewers. Because our automated recommendation software continually reassesses which reviews to recommend based on new information that becomes available, the “recommended” or “not recommended” status of reviews may change over time. Reviews that are not recommended or that have been removed do not factor into a business’s overall star rating. Users can access the reviews that are not currently recommended, as well as the star rating and other information about reviews that were removed for violation of our terms of service, through a link on the business’s page.

As of December 31, 2025, 330.2 million reviews had been submitted to our platform, of which 300.3 million reviews were available on business pages, including 48.1 million reviews that were not recommended, and 29.9 million reviews had been removed from our platform, either by us for violation of our terms of service or by the users who contributed them. The following table presents the number of cumulative reviews as of December 31, 2025 and 2024 (in thousands):

As of December 31,

% Change

2025

2024

Reviews

330,202

308,100

7%

Traffic

Traffic to our website and mobile app has three components: mobile devices accessing our mobile app, devices accessing our non-mobile optimized website, which we refer to as our desktop website, and devices accessing our mobile-optimized website, which we refer to as our mobile website.

A substantial majority of each of these traffic streams goes to our RR&O categories, with traffic to our mobile app particularly heavily weighted toward RR&O. Because RR&O traffic is particularly sensitive to changes in consumer confidence levels, our overall traffic levels generally fluctuate with macroeconomic conditions. For example, although our traffic has recovered from its lowest levels during the pandemic in 2020, it has remained below our pre-pandemic 2019 traffic levels due to ongoing economic uncertainty and inflationary pressures, among other macroeconomic concerns, as well as resulting changes in consumer preferences, such as consumers’ preference for food delivery over dine-in restaurant experiences since the pandemic. We cannot predict the remaining duration of these conditions, or the duration or magnitude of any resulting adverse impacts on our traffic, and we expect that our traffic levels will continue to fluctuate with consumers’ level of confidence.

As a result of these dynamics, as well as the maturation of our business and high penetration rates in most major geographic markets within the United States and Canada, we generally expect our traffic to decrease in certain periods going forward. In 2026, we expect traffic to remain challenged as consumers continue to face economic uncertainty and inflation. While we believe our largest growth opportunity will be to monetize a greater portion of our existing traffic, rather than to grow traffic generally, we are also investing in a broad set of consumer initiatives to support the long-term growth of our traffic and business.

We use the metrics set forth below to measure each of our traffic streams. An individual device that accesses our platform through multiple traffic streams will be counted in each applicable traffic metric; as a result, the sum of our traffic metrics will not accurately represent the number of visitors to our platform on an average monthly basis.

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App Unique Devices. We calculate app unique devices as the number of unique mobile devices using our mobile app in a given month that meet a minimum level of engagement during such month by, for example, viewing a business, performing a search, viewing or submitting content, or other similar interactions (“minimum required level of engagement”), averaged over a given twelve-month period. Under this calculation method, an individual who accesses our mobile app from multiple mobile devices will be counted as multiple app unique devices, while multiple individuals who access our mobile app from a shared device will be counted as a single app unique device.

App users generate a substantial majority of activity on Yelp, including the page views and ad clicks that we monetize. The following table presents app unique devices for the periods presented (in thousands):

Year Ended December 31,

% Change

2025

2024

App Unique Devices

28,009

28,595

(2)%

In 2025, app unique devices decreased year over year as consumers visited restaurants less frequently.

Desktop and Mobile Website Unique Devices. We calculate desktop web traffic and mobile web traffic as (1) the number of devices identified by our internal measurement tools that have visited our desktop website and mobile website, respectively, at least once in a given month, (2) adjusted to exclude devices that do not meet our minimum required level of engagement during such month, (3) averaged over a given twelve-month period. As a result of our ongoing efforts to improve the accuracy of our key metrics, in 2025, we revised the minimum required level of engagement for desktop web traffic to exclude devices that visit the Yelp home page, but take no further action, which we do not believe represent valuable consumer traffic. Although this change did not have a material impact on the desktop unique devices reported for previous years, we have adjusted the number of desktop unique devices we are reporting below for the year ended December 31, 2024 to remove such traffic to provide greater accuracy and transparency, as well as for comparative purposes against the year ended December 31, 2025.

Our internal measurement tools measure devices based on unique identifiers. As a result, an individual who visits our website from multiple devices with different identifiers may be counted as multiple unique devices, while multiple individuals who visit our website from a shared device with a single identifier may be counted as a single unique device. Accordingly, the calculations of our unique devices may not accurately reflect the number of individuals who actually visit our website.

The following table presents our web traffic for the periods presented (in thousands):

Year Ended December 31,

% Change

2025

2024

Desktop Unique Devices

37,399

39,627

(6)%

Mobile Web Unique Devices

59,729

63,987

(7)%

Active Claimed Local Business Locations

We report active claimed local business locations annually as a measure of the scope of our Local advertising business. The number of active claimed local business locations represents the number of claimed local business locations — business addresses for which a business representative has visited our platform and claimed the free business page for the business located at that address — that are both (a) active on Yelp and (b) associated with an active business owner account as of a given date. We consider a claimed local business location to be active if it has not closed, been removed from our platform or merged with another claimed local business.

The table set forth below presents the number of active claimed local business locations as of the dates presented (in thousands):

As of December 31,

% Change

2025

2024

Active Claimed Local Business Locations

8,392

7,736

8%

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Results of Operations

The following table sets forth our results of operations for 2025 and 2024 (in thousands, except percentages). The period-to-period comparison of financial results is not necessarily indicative of future results.

Year Ended December 31,

2025

2024

$ Change

% Change(1)

Consolidated Statements of Operations Data:

Net revenue by product:

Services

$

947,564 

$

879,092 

$

68,472 

8 

%

Restaurants, Retail & Other

443,696 

469,928 

(26,232)

(6)

%

Total advertising

1,391,260 

1,349,020 

42,240 

3 

%

Other

73,695 

63,044 

10,651 

17 

%

Total net revenue

1,464,955 

1,412,064 

52,891 

4 

%

Costs and expenses:

Cost of revenue (exclusive of depreciation and amortization shown separately below)

142,596 

123,684 

18,912 

15 

%

Sales and marketing

592,107 

585,978 

6,129 

1 

%

Product development

313,688 

325,992 

(12,304)

(4)

%

General and administrative

181,951 

184,958 

(3,007)

(2)

%

Depreciation and amortization

50,092 

40,407 

9,685 

24 

%

Total costs and expenses

1,280,434 

1,261,019 

19,415 

2 

%

Income from operations

184,521 

151,045 

33,476 

22 

%

Other income, net

19,508 

31,915 

(12,407)

(39)

%

Income before income taxes

204,029 

182,960 

21,069 

12 

%

Provision for income taxes

58,429 

50,110 

8,319 

17 

%

Net income attributable to common stockholders

$

145,600 

$

132,850 

$

12,750 

10 

%

(1)    Percentage changes may not recalculate using the rounded numbers presented in this table.

Years Ended December 31, 2025 and 2024

Net Revenue

Advertising. We generate advertising revenue from the sale of Yelp Ads — including business page upgrades and performance-based advertising in search results and elsewhere on our platform — to businesses of all sizes, from single-location local businesses to multi-location national businesses. Advertising revenue also includes revenue generated from the resale of our advertising products by certain partners and monetization of advertising inventory through third-party ad networks, as well as revenue generated from RepairPal. We present advertising revenue on a disaggregated basis for our high-level category groupings, Services and RR&O.

Advertising revenue increased in 2025 compared to 2024, as a result of increased revenue from Services businesses, partially offset by decreased revenue from RR&O businesses. The increase in Services revenue was driven by the addition of revenue from RepairPal and growth in revenue from Yelp Ads, due to a 9% increase in average CPC, partially offset by a 3% decrease in ad clicks. Revenue from RepairPal contributed approximately two percentage points of the year-over-year growth in total advertising revenue.

Other. We generate other revenue through non-advertising contracts, such as our subscription services, which include our Yelp Guest Manager product, Yelp Receptionist product, and Yelp Host product, and through our Yelp Places API (formerly Yelp Fusion), Yelp AI API and Yelp Insights API (formerly Yelp Fusion Insights) programs, which provide Yelp content and data for a fee. In addition, other revenue includes revenue from various transactions with consumers. We generate revenue from such transactions through our partnership integrations, which are mainly revenue-sharing arrangements that provide consumers with the ability to place food orders for pickup and delivery through third parties directly on Yelp. We earn a fee for acting as an agent for transactions placed through these integrations, which we record on a net basis and include in revenue upon completion of a transaction.

Other revenue increased in 2025 compared to 2024, primarily due to increases in revenue from our Yelp Places API, Yelp Guest Manager and Yelp Insights API programs, as well as higher volume of food takeout and delivery orders.

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Trends and Uncertainties of Net Revenue. Net revenue in the year ended December 31, 2025 increased by 4% year over year as momentum in our Services categories continued. We expect net revenue for the first quarter of 2026 to decrease slightly from the fourth quarter of 2025, reflecting typical seasonality and ongoing operating challenges for businesses in our RR&O categories.

Costs and Expenses

Cost of Revenue (exclusive of depreciation and amortization). Our cost of revenue consists primarily of website infrastructure expense, which includes website hosting costs and employee-related costs (including stock-based compensation expense) for the infrastructure teams responsible for operating our website and mobile app, and excludes depreciation and amortization expense. Cost of revenue also includes third-party advertising fulfillment costs, credit card processing fees and revenue share payments, which primarily consist of payments to RepairPal referral partners.

Cost of revenue increased in 2025 compared to 2024, primarily due to:

•increases in revenue share payments of $5.1 million due to our acquisition of RepairPal;

•increases in website infrastructure expenses of $4.5 million as a result of maintaining and improving our infrastructure;

•increases in advertising fulfillment costs of $4.5 million largely attributable to higher costs to syndicate advertising budgets on certain third-party sites, partially offset by a decrease in Yelp Audiences spend; and

•increases in merchant credit card processing fees of $2.6 million due to increases in advertising revenue.

We expect cost of revenue to increase on an absolute dollar basis in 2026 compared to 2025, primarily due to investment in AI tools.

Sales and Marketing. Our sales and marketing expenses primarily consist of employee-related costs (including sales commission and stock-based compensation expenses) for our sales and marketing employees. Sales and marketing expenses also include business and consumer acquisition marketing, community management, as well as allocated workplace and other supporting overhead costs.

Sales and marketing expenses increased in 2025 compared to 2024, primarily due to an increase in sales and marketing employee-related costs of $24.8 million, primarily resulting from higher average headcount in sales and marketing roles, including headcount from the acquisition of RepairPal, and higher cost of labor.

This increase was partially offset by:

•a decrease in marketing and advertising costs of $12.8 million, mainly driven by decreased spending on acquiring Services projects through paid search, partially offset by increases in costs for business owner marketing; and

•a decrease in workplace operating costs of $5.9 million, primarily due to reductions in our leased office space. See Note 9, “Leases,” of the Notes to Consolidated Financial Statements for further detail.

We expect sales and marketing expenses to increase in 2026 compared to 2025, primarily due to additional headcount from the acquisition of Hatch. However, we expect sales and marketing expenses to remain relatively consistent as a percentage of net revenue as we realize efficiencies from our sales and marketing initiatives.

Product Development. Our product development expenses primarily consist of employee-related costs (including bonuses and stock-based compensation expense, net of capitalized employee-related costs associated with capitalized website and internal-use software development) for our engineers, product management and corporate infrastructure employees. In addition, product development expenses include allocated workplace and other supporting overhead costs.

Product development expenses decreased in 2025 compared to 2024, primarily due to:

•a decrease in employee-related costs of $10.5 million, primarily resulting from more employee-related costs being capitalized and lower average headcount in product development roles and;

•a decrease of $2.8 million in workplace operating costs due to reductions in our leased office space. See Note 9, “Leases,” of the Notes to Consolidated Financial Statements for further detail.

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We expect product development expenses to decrease on an absolute dollar basis and as a percentage of revenue in 2026 compared to 2025, inclusive of additional headcount from the acquisition of Hatch, as we realize cost efficiencies within our organization.

General and Administrative. Our general and administrative expenses primarily consist of employee-related costs (including bonuses and stock-based compensation expense) for our executive, finance, user operations, legal, people operations and other administrative employees. Our general and administrative expenses also include our provision for credit losses, certain consulting and professional services costs, including litigation settlements, as well as allocated workplace and other supporting overhead costs.

General and administrative expenses decreased in 2025 compared to 2024, primarily due to:

•a decrease of $5.9 million in impairment charges related to the sublease of certain office space in Toronto and San Francisco recorded in the prior year period. See Note 9, “Leases,” of the Notes to Consolidated Financial Statements for further detail; and

•a decrease in our provision for credit losses of $2.3 million primarily due to lower customer delinquencies.

These decreases were partially offset by an increase in general and administrative employee-related costs of $5.1 million, primarily driven by higher cost of labor.

Additionally, $5.0 million in expenses in connection with an indemnification obligation assumed in the RepairPal acquisition were offset with the release of a portion of the holdback liability. See Note 7, “Acquisition,” of the Notes to Consolidated Financial Statements for further detail.

We expect general and administrative expenses to increase on an absolute dollar basis but remain relatively consistent as a percentage of revenue in 2026 compared to 2025, inclusive of additional headcount from the acquisition of Hatch, as we continue to support our business and the integration of Hatch.

Depreciation and Amortization. Depreciation and amortization expense primarily consists of depreciation and amortization on capitalized website and internal-use software development costs, computer equipment, leasehold improvements, and intangible assets.

Depreciation and amortization expense increased in 2025 compared to 2024, primarily due to:

•an increase of $7.1 million primarily as a result of intangible assets acquired in the RepairPal acquisition. See Note 7, “Acquisition,” of the Notes to Consolidated Financial Statements for further detail; and

•an increase of $4.8 million as a result of higher capitalized website and internal-use software development costs.

Other Income, Net

Other income, net consists primarily of the interest income earned on our cash, cash equivalents and marketable securities, research and development tax credits, the portion of our sublease income in excess of our lease cost, accretion of discounts and amortization of premiums on investments, and, in the year ended December 31, 2024, the release of a reserve related to a one-time payroll tax credit.

Other income, net decreased in 2025 compared to 2024 primarily due to a $6.2 million decrease in interest income as a result of lower average cash, cash equivalents, and marketable securities balances and lower federal interest rates. The decrease was also due to the release of a $3.1 million reserve related to a one-time payroll tax credit in the prior-year period and lower tax incentives of $3.1 million related to research and development activity in the United Kingdom in the current year.

Provision for Income Taxes

Provision for income taxes consists of: federal and state income taxes in the United States and income taxes in certain foreign jurisdictions; and deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The increase in the provision for income taxes in 2025 compared to the prior year was primarily driven by an increase in income before income taxes, changes to the research development credit (“R&D Credit”) due to the OBBBA, and greater tax impacts related to stock-based compensation vesting and exercises. This increase was partially offset by an election made for a refundable California R&D credit.

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As of December 31, 2025, we had approximately $115.5 million in net deferred tax assets (“DTAs”). As of December 31, 2025, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that some or all of these DTAs will not be realized. Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance may be required to reduce our DTAs, which would materially increase our expenses in the period in which we recognize the allowance and have a materially adverse impact on our consolidated financial statements. The exact timing and amount of the valuation allowance recognition are subject to change on the basis of the net income that we are able to actually achieve. We will continue to evaluate the possible recognition of a valuation allowance on a quarterly basis.

In July 2025, the congressional bill known as the OBBBA was signed into law, which, among other things, restored certain favorable corporate tax provisions, including permitting full expensing of domestic research and development expenses. As of December 31, 2025, the impacts of the OBBBA are reflected in the 2025 annual effective tax rate calculated in accordance with GAAP.

We estimate that our effective GAAP tax rate (before discrete items) for 2026 will be in the range of 22% to 26%. However, our GAAP tax rate is impacted by a number of factors that are not in our direct control and that are subject to quarterly variability, which limits our visibility into the applicable rate for future fiscal periods.

Non-GAAP Financial Measures

Our consolidated financial statements are prepared in accordance with GAAP. However, we have also disclosed below adjusted EBITDA, adjusted EBITDA margin and free cash flow, each of which is a non-GAAP financial measure. We have included adjusted EBITDA, adjusted EBITDA margin and free cash flow because they are key measures used by our management and Board to understand and evaluate our operating performance and trends, to prepare and approve our annual budget, to develop short- and long-term operational plans, and to assess our sources of liquidity. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our primary business operations, while free cash flow provides information about the quality of our earnings. Accordingly, we believe that adjusted EBITDA, adjusted EBITDA margin and free cash flow provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board.

Adjusted EBITDA and free cash flow have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, adjusted EBITDA and free cash flow should not be viewed as substitutes for, or superior to, net income (loss) or net cash provided by (used in) operating activities prepared in accordance with GAAP as measures of profitability or liquidity. Some of these limitations are:

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;

•adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

•adjusted EBITDA does not take into account certain expense items, such as asset impairment charges, expenses related to acquired indemnification obligations, acquisition and integration costs, and fees related to shareholder activism, or other costs that management determines are not indicative of ongoing operating performance;

•free cash flow does not represent the total residual cash flow available for discretionary purposes because it does not reflect our contractual commitments or obligations; and

•other companies, including those in our industry, may calculate adjusted EBITDA and free cash flow differently, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider adjusted EBITDA, adjusted EBITDA margin and free cash flow alongside other financial performance measures, including net income (loss), net cash provided by (used in) operating activities and our other GAAP results.

Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other operating income and expense items, such as impairment charges, expenses

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related to acquired indemnification obligations (net of amounts for which we have been indemnified), acquisition and integration costs, fees related to shareholder activism, and other items we deem not to be indicative of our ongoing operating performance.

Adjusted EBITDA margin. Adjusted EBITDA margin is a non-GAAP financial measure that we calculate as adjusted EBITDA divided by net revenue.

The following is a reconciliation of net income to adjusted EBITDA, as well as the calculation of net income margin and adjusted EBITDA margin, for the periods presented (in thousands, except percentages):

Year Ended December 31,

2025

2024

Reconciliation of Net Income to Adjusted EBITDA:

Net income

$

145,600 

$

132,850 

Provision for income taxes

58,429 

50,110 

Other income, net(1)

(19,508)

(31,915)

Depreciation and amortization

50,092 

40,407 

Stock-based compensation

133,993 

158,193 

Asset impairment(2)

— 

5,914 

Expenses related to acquired indemnification obligation, net(2)(3)

35 

— 

Acquisition and integration costs(2)

539 

1,266 

Fees related to shareholder activism(2)

— 

1,168 

Adjusted EBITDA

$

369,180 

$

357,993 

Net revenue

$

1,464,955 

$

1,412,064 

Net income margin

10 

%

9 

%

Adjusted EBITDA margin

25 

%

25 

%

(1)    See Note 11, “Selected Consolidated Financial Statement Data,” of the Notes to Consolidated Financial Statements for further detail.

(2)    Recorded within general and administrative expenses on our consolidated statements of operations.

(3)    Primarily represents expenses recorded in connection with an indemnification obligation assumed in the RepairPal acquisition, net of the release of a portion of the RepairPal holdback to indemnify us for such expenses. See Note 7, “Acquisitions,” of the Notes to Consolidated Financial Statements for further detail.

Free Cash Flow. Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.

The following is a reconciliation of net cash provided by operating activities to free cash flow for the periods presented (in thousands):

Year Ended December 31,

2025

2024

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:

Net cash provided by operating activities

$

372,029 

$

285,815 

Purchases of property, equipment and software

(48,353)

(37,347)

Free cash flow

$

323,676 

$

248,468 

Net cash used in investing activities

$

(45,654)

$

(77,266)

Net cash used in financing activities

$

(330,047)

$

(303,802)

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Liquidity and Capital Resources

Sources of Liquidity

Our principal sources of liquidity are our cash and cash equivalents, short-term marketable securities and cash generated from operations. As of December 31, 2025, we had cash and cash equivalents of $216.1 million and short-term marketable securities of $103.3 million. Cash and cash equivalents consist of cash, money market funds and investments with original maturities of three month or less. Our cash held internationally as of December 31, 2025 was $67.9 million. As of December 31, 2025, we also had $5.0 million of investments in certificates of deposit with minority depository financial institutions.

We also have the ability to access backup liquidity to fund working capital and for other capital requirements, as needed, through the credit facility established pursuant to the Credit Agreement. The Credit Agreement provides for a $325.0 million senior secured revolving credit facility, which includes a $35.0 million letter of credit sub-limit, a $25.0 million bilateral letter of credit facility and an accordion option, which, if exercised, would allow us to increase the aggregate commitments by up to $250.0 million, plus additional amounts if we are able to satisfy a leverage test, subject to certain conditions. The commitments under the credit facility expire on April 28, 2028.

As of December 31, 2025, we had $4.2 million of letters of credit outstanding under the credit facility sub-limit and $320.8 million remained available under the credit facility. The letters of credit are primarily related to lease agreements for certain office locations and are required to be maintained and issued to the landlords of each facility. No loans were outstanding under the credit facility and we were in compliance with all conditions and covenants thereunder as of December 31, 2025. In February 2026, we funded our acquisition of Hatch in part with borrowings under the credit facility, leaving $240.8 million available under the credit facility as of February 17, 2026.

For additional details regarding the credit facility, see Note 12, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements.

Material Cash Requirements

Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors” in Part I, Item 1A of this Annual Report. We believe that our existing cash, cash equivalents and short-term marketable securities, together with any cash generated from operations, will be sufficient to meet our material cash requirements in the next 12 months and beyond, including: working capital requirements; our anticipated repurchases of common stock pursuant to our stock repurchase program; payment of taxes related to the net share settlement of equity awards; payment of lease costs related to our operating leases; income tax payments; purchases of property, equipment and software and website hosting services. However, this estimate is based on a number of assumptions that may prove to be materially different and we could fully utilize our available cash, cash equivalents and marketable securities earlier than presently anticipated.

On February 2, 2026, we completed our acquisition of Hatch for approximately $270 million in cash. In connection with the acquisition, we have also agreed to provide certain continuing Hatch employees with retention packages valued in the aggregate at approximately $30 million, to be paid over the next two to three years.

In addition, we are still assessing the OBBBA’s impact on our income tax payments for 2025 and beyond. We are not able to reasonably estimate the timing of future cash flows related to $53.0 million of uncertain tax positions. We also may be required to draw down additional funds from our credit facility or seek additional funds through equity or debt financings to respond to business challenges associated with the uncertain macroeconomic environment or other challenges, including the need to develop new features and products or enhance existing services, improve our operating infrastructure or acquire complementary businesses and technologies.

We lease office facilities under operating lease agreements that expire from 2026 to 2031. Our cash requirements related to these lease agreements are $27.0 million, of which $8.4 million is expected to be paid within the next 12 months. The total lease obligations are partially offset by our future minimum rental receipts to be received under non-cancelable subleases of $15.1 million. See Note 9, “Leases,” of the Notes to Consolidated Financial Statements for further detail on our operating lease obligations.

Our cash requirements related to off-balance sheet purchase obligations consisting of non-cancelable agreements to purchase goods and services required in the ordinary course of business — primarily website hosting services — are approximately $147.1 million, of which approximately $92.6 million is expected to be paid within the next 12 months.

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The cost of capital associated with any additional funds sought in the future might be adversely impacted by the effects of macroeconomic conditions on our business. Additionally, amounts deposited with third-party financial institutions exceed the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits, as applicable. These cash and cash equivalents could be impacted if the underlying financial institutions fail or are subjected to other adverse conditions in the financial markets. To date, we have experienced no loss or lack of access to our cash and cash equivalents; however, we can provide no assurances that access to our invested cash, cash equivalents and short-term marketable securities will not be impacted by adverse conditions in the financial markets.

Cash Flows

The following table summarizes our cash flows for the periods presented (in thousands):

Year Ended December 31,

2025

2024

Net cash provided by operating activities

$

372,029 

$

285,815 

Net cash used in investing activities

$

(45,654)

$

(77,266)

Net cash used in financing activities

$

(330,047)

$

(303,802)

Operating Activities. Net cash provided by operating activities during the year ended December 31, 2025 increased by $86.2 million compared to 2024, primarily due to a $67.8 million increase in cash collected from customers, a $26.9 million decrease in cash paid to vendors and others, a $23.7 million decrease in cash used to pay income taxes and the payment of $15.0 million to settle legal claims in the prior-year period, which did not recur in the current-year period. These movements were partially offset by a $22.3 million increase in employee-related payments for salaries, commissions, bonuses and benefits, which was primarily driven by a higher cost of labor as well as slightly higher average headcount, including headcount from the acquisition of RepairPal.

Investing Activities. Net cash used in investing activities during the year ended December 31, 2025 decreased compared to 2024 primarily due to our acquisition of RepairPal in the prior year period, partially offset by an increase in capitalized website and internal-use software development costs as well as lower net sales and maturities of marketable securities in the current year.

Financing Activities. Net cash used in financing activities during the year ended December 31, 2025 increased compared to 2024 primarily due to increased repurchases of our common stock, partially offset by a decrease in taxes paid related to the net share settlement of equity awards.

Stock Repurchase Program

Since the initial authorization of our stock repurchase program in July 2017, our Board has authorized us to repurchase up to an aggregate of $2.45 billion of our outstanding common stock, including the $500.0 million authorized in February 2026, of which $513.7 million remained available for future repurchases on February 17, 2026.

We may repurchase shares at our discretion in the open market, privately negotiated transactions, in transactions structured through investment banking institutions, or a combination of the foregoing. The program is not subject to any time limit and may be modified, suspended or discontinued at any time. The amount and timing of repurchases are subject to a variety of factors, including liquidity, cash flow and market conditions.

During the year ended December 31, 2025, we repurchased 8,768,771 shares on the open market for an aggregate purchase price of $291.9 million (excluding the 1% excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022). We have funded all repurchases to date and currently expect to fund any future repurchases with cash and cash equivalents available on our consolidated balance sheet.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates and assumptions are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from those estimates. Due to macroeconomic conditions and other factors, certain estimates and assumptions have required and may continue to require increased judgment and carry a higher degree of

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variability and volatility. As events continue to evolve and additional information becomes available, these estimates may materially change in future periods.

We consider the estimates discussed below to be critical as we believe that the assumptions and estimates associated with these policies have the greatest potential impact on our consolidated financial statements. For further information on these and our other significant accounting estimates, see Note 2, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

Revenue Recognition—We generate revenue from the sale of advertising products and other revenue sources, which correspond to our major product lines. We perform estimates and apply judgment when determining the amount of revenue to be recognized and may accept lower consideration than what is agreed to in the relevant contract. For all contracts with customers, estimates and assumptions include determining variable consideration and identifying the nature and timing of satisfaction of performance obligations. We believe that there will not be significant changes to our estimates of variable consideration, and to date, actual amounts of consideration received have been materially consistent with the provisions we have made based on our historical estimates.

For revenue generated from arrangements that involve third parties, considerable judgment may be required in evaluating whether we are the principal, and report revenue on a gross basis, or the agent, and report revenue on a net basis. In this assessment, we consider whether we obtain control of the specified goods or services before they are transferred to the customer as well as other indicators, such as whether we are the party primarily responsible for the fulfillment, inventory risk and discretion in establishing price. The assessment of whether we are considered the principal or agent in a transaction could impact our revenue and cost of revenue recognized on our consolidated statements of operations. Changes in judgments with respect to assumptions and estimates could impact the amount of revenue recognized.

Business Combinations—We account for acquisitions of entities that consist of inputs and processes that have the ability to contribute to the creation of outputs as business combinations. We allocate the purchase price of the acquisition to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, forecasted revenue and expenses, customer attrition rate, royalty rates and discount rates.

Income Taxes—Significant judgment is required to determine our provision for (benefit from) income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles, complex tax laws, or variances between our actual and anticipated operating results. Therefore, actual income taxes could materially vary from these estimates.

We record income taxes using the asset and liability method, which requires the recognition of DTAs and deferred tax liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. In estimating future tax consequences, we generally consider all expected future events other than enactments or changes in the tax law or rates. In assessing the realization of DTAs, we consider whether it is more likely than not that all or some portion of DTAs will not be realized. The ultimate realization of the DTAs is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Valuation allowances are provided to reduce DTAs to the amount that is more likely than not to be realized. In determining the need for a valuation allowance, the weight given to positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. The determination of future taxable income requires significant judgment and relies on various estimates and assumptions using forecasted amounts. Changes in various factors, including economic and political conditions, could drive actual results in future years to differ from our current assumptions, judgments and estimates. We evaluate the ability to realize net DTAs and the related valuation allowance on a quarterly basis.

We operate in various tax jurisdictions and are subject to audit by various tax authorities. We provide for tax contingencies whenever it is deemed probable that a tax asset has been impaired or a tax liability has been incurred for events such as tax claims or changes in tax laws. Tax contingencies are based upon their technical merits, relative tax law and the specific facts and circumstances as of each reporting period. Changes in facts and circumstances could result in material changes to the amounts recorded for such tax contingencies.

We recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. However, the outcome of tax audits cannot be predicted with certainty. If

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any issues addressed in our tax audits are resolved in a manner not consistent with our expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.