Yelp Inc. Q2 2026 Earnings Recap

Yelp shares edged down 0.5% following earnings as modest revenue growth and flat Services ad revenue contrasted with ongoing headwinds in RR&O advertising and margin pressure. Investors appear cautious despite accelerated AI-driven revenue streams and product innovations.

Key Takeaways

• Net revenue grew 1% year-over-year to $376 million, slightly above guidance, but momentum remains subdued amid a difficult economic environment for local businesses.
• Services ad revenue was flat at $241 million, reflecting stagnant paid locations and a small increase in ad clicks, while RR&O ad revenue declined 10% to $102 million.
• Adjusted EBITDA declined 9% to $91 million, though still above guidance, with margin compression reflecting increased investments in AI initiatives and Hatch team expansion.
• Other revenue nearly doubled, rising 98% to $33 million, driven by Hatch, data licensing partnerships (including OpenAI), and new food ordering integrations.
• Paid advertising locations decreased 1% to 510,000, and ad clicks fell 5%, signaling persistent challenges in customer engagement despite product enhancements.