On Wednesday, online review site Yelp (YELP) reported third-quarter results, and the stock jumped 10%.
When I last wrote about Yelp in September, I wondered if shares of Yelp could go higher, especially after a 160% move off its lows.
Yelp reported third-quarter fiscal 2016 earnings of 22 cents per share, 4 cents ahead of the consensus estimate. Revenue rose 29.7% to $186.2 million. The cumulative number of reviews grew 29% to 115 million. The number of local advertising accounts grew 30% to 135,000. Earnings before interest, taxes, depreciation and amortization were $34 million, ahead of the $28 million consensus. EBITDA margin was 18%, the highest since 2014.
Local ad revenue jumped 41% and drove the upside to the quarter. Self-serve revenue increased 100% after the company released new tools for advertisers to place ads. Yelp is also adding ad bidding.
By my count, this is the third quarter in a row that local ad revenue grew in excess of 40%. Eat24 transaction revenue increased 33% to $15.9 million. Nowait, Yelp's reservation booking service, saw the total number of transaction increase 39% to 5.9 million.
The company also announced it would shut down its international business to focus on accelerating the U.S. business. The move will affect about 175 employees. The company will take a $3 million restructuring charge in the fourth quarter.
The company said it expects $191 million to $195 million in fourth-quarter revenue.
For the full year, Yelp said it sees revenue of $709 million to $713 million, above the consensus estimate of $707.6 million.