Yelp Inc. reported third‑quarter 2025 results on November 6, 2025, with net revenue of $376.0 million, a 4 % year‑over‑year increase, and net income of $39.0 million, up 2 % from the $38.2 million earned in Q3 2024. Adjusted EBITDA fell 3 % to $98.0 million, reflecting a 26 % margin that is 2 percentage points lower than the 28 % margin recorded in the same quarter last year.
The Services segment, the company’s primary growth engine, generated $244.0 million in revenue, a 7 % increase from $227.5 million in Q3 2024. The rise was driven by stronger demand for local‑service listings and the rollout of AI‑powered lead‑generation tools. In contrast, the Restaurant, Retail & Other (RRNO) segment declined 2.4 % YoY to $132.0 million, a drop attributed to macroeconomic headwinds that have dampened advertising spend in the hospitality and retail space.
Margins tightened as higher fulfillment costs and capital outlays for AI product enhancements pushed the adjusted EBITDA margin down to 26 % from 28 % a year ago, while the net income margin held steady at 10 %. The company’s disciplined expense management and share‑repurchase program helped offset some of the pressure, but the investment in AI and fulfillment infrastructure remains a key cost driver.
Management guided for full‑year 2025 net revenue of $1.460 billion to $1.465 billion, a range that falls short of the consensus estimate of $1.47 billion and signals caution about future revenue growth. The adjusted EBITDA guidance of $360 million to $365 million, however, was raised from the prior range of $355 million to $360 million, reflecting confidence in maintaining profitability despite the revenue outlook.
CEO Jeremy Stoppelman highlighted the company’s “transformative” AI initiatives, noting that the combination of trusted human‑generated content and new AI capabilities positions Yelp to capture significant opportunities. CFO David Schwarzbach emphasized disciplined expense management and the strategic investment in AI, while also noting that the DoorDash partnership added roughly 200,000 new restaurants to Yelp’s food‑ordering network, a move expected to generate incremental revenue.
Investors reacted negatively in after‑hours trading, with the stock falling roughly 3 % as the revenue guidance miss outweighed the earnings and revenue beat. The market’s focus on the lower revenue outlook underscored concerns about the company’s ability to sustain growth momentum in the face of macroeconomic headwinds, even as the firm delivered a $0.14 EPS beat and a $8.4 million revenue beat.
Overall, Yelp’s Q3 2025 results demonstrate a resilient Services segment and a continued commitment to AI‑driven growth, but the company’s guidance reflects a cautious stance on revenue expansion amid ongoing headwinds in the RRNO space. The firm’s ability to maintain healthy margins and free cash flow will be critical as it navigates the balance between investment and profitability.
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