Shares of Yelp (YELP - Get Report) were plummeting 22% to $27.05 in pre-market trading on Wednesday after the crowdsourced review company posted worse-than-expected fiscal first quarter revenue on Tuesday after the close. Yelp also gave 2017 sales guidance that fell short of Wall Street's estimates.
For the quarter, Yelp's revenue of $197.3 million fell below Wall Street's projected $198.3 million. And the San Francisco-based company also lowered its full-year sales forecast to be in the range of $850 million to $865 million, down from its prior estimated range of $880 million to $900 million. Wall Street, meanwhile, was looking for revenue of $888.7 million for the year.
"While we are lowering our revenue and adjusted EBITDA outlook for the year, sales productivity has rebounded, transactions revenue has accelerated and we've seen promising results from our newly expanded retention efforts, giving us confidence in our ability to grow and scale in 2017 and beyond," said Yelp CFO Lanny Baker in a statement.
The loss of local advertisers appears to have been one of the main culprits in its revenue miss and lowered guidance.