Yelp, operator of the popular consumer review website, forecast current-quarter revenue below analysts’ average estimate, sending its shares down as much as 14 percent after the bell.
Yelp Stock Tumbles on Weak Q4 Outlook
Third-quarter numbers, however, beat expectations.
The company forecast revenue of $107 million to $108 million for the fourth-quarter. Analysts on average were expecting $111.0 million, according to Thomson Reuters I/B/E/S.
However, Yelp reported a better-than-expected 67.5 percent rise in third-quarter revenue as its business customers spent more on advertising.
The company’s aggressive promotion of its cost-per-click (CPC) advertising model has helped it draw more advertising dollars. A business subscribing to Yelp’s CPC product pays only when a user clicks on the advertising.
Yelp reported net income attributable to common stockholders of $3.6 million, or five cents per share, in the third quarter, ended Sept. 30, compared with a loss of $2.3 million, or four cents per share, a year earlier.
Revenue rose to $102.5 million from $61.2 million, crossing the $100 million mark for the first time.
Analysts on average were expecting a profit of three cents per share on revenue of $99 million, according to Thomson Reuters I/B/E/S.
Yelp’s local business accounts grew 51 percent to about 86,200 during the quarter.
Average monthly unique visitors grew 19 percent, Yelp said, citing Google Analytics, while average monthly mobile unique visitors grew 46 percent.
The stock was down 14 percent at $60.45 in extended trading. Up to Wednesday’s close, the stock had risen two percent so far this year, compared with a 5.8 percent fall in the Dow Jones U.S. specialized consumer services index.
(Reporting By Lehar Maan in Bangalore; Editing by Savio D’Souza)
This article originally appeared on Recode.net.
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