Yelp Inc Surges After Earnings, Square Slumps

Yelp and Square released their latest earnings reports after closing bell tonight. Yelp posted adjusted earnings of 8 cents per share on $158.6 million, against the consensus estimates of 3 cents per share and $155.6 million. Management had guided for revenue of $154 million to $157 million.

Square posted adjusted losses of 14 cents per share on $379.3 million in total net revenue, against the consensus estimates of 6 cents per share in adjusted losses on $345 million in revenue.

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Yelp shares surge

Yelp’s reported losses were 20 cents per share, compared to 2 cents per share in losses last year. Adjusted EBITDA was $13 million. Cumulative reviews increased 31% year over year to about 102 million, while app unique devices increased 32% to 21 million. Local advertising accounts increased 34% to about 121,000, while local ad revenue increased 40% to $138.1 million. Cantor Fitzgerald analysts had been predicting $134 million in local ad revenue and 117,000 active local businesses at the end of the quarter.

For the second quarter, Yelp expects revenue to be between $167 million and $171 million and adjusted EBITDA to be between $21 million and $25 million. The consensus estimates for Yelp’s second quarter are $167.7 million in revenue and $21.3 million in adjusted EBITDA. Management expects revenue of $690 million to $702 million and adjusted EBITDA of $93 million to $105 million. For the full year, Wall Street expects $691.1 million in revenue and $95.3 million in adjusted EBITDA.

Cantor Fitzgerald analysts said before tonight’s earnings report that the company must show continued strong revenue growth from its oldest markets. They noted that the oldest markets recorded a 30% growth rate in revenue for the fourth quarter, compared to 33% growth in the third quarter.

Of note, David Einhorn’s Greenlight Capital is long Yelp. The company’s stock surged 7.14% to $21.42 in after-hours trades.

Square shares fall

Square’s reported losses were 29 cents per share, compared to last year’s losses of 34 cents per share. Adjusted EBITA was -$9 million, compared to last year’s -$20 million. Software and data product revenue grew 197% to $24 million, while gross payment volume climbed 45% to $10.3 billion. Square said so far it has taken almost 500,000 orders for its new contactless and chip reader.

Shares of Square plunged by as much as 12.84% to $11.21 in after-hours trades.