Categories Earnings Call Transcripts, Technology

Yelp Inc (YELP) Q4 2022 Earnings Call Transcript

YELP Earnings Call - Final Transcript

Yelp Inc (NYSE: YELP) Q4 2022 earnings call dated Feb. 09, 2023

Corporate Participants:

James Miln — Senior Vice President, Finance and Investor Relations

Jeremy Stoppelman — Co-founder and Chief Executive Officer

David Schwarzbach — Chief Financial Officer

Jed Nachman — Chief Operating Officer

Analysts:

Colin Sebastian — Robert W. Baird — Analyst

Shweta Khajuria — Evercore ISI — Analyst

Eric Sheridan — Goldman Sachs — Analyst

Cory Carpenter — J.P. Morgan — Analyst

Christopher Suchecki — Jefferies, LLP. — Analyst

Brian Fitzgerald — Wells Fargo Securities — Analyst

Presentation:

Operator

Good afternoon. Thank you for attending today’s Yelp Fourth Quarter and Full Year 2022 Earnings Conference Call. My name is Megan, and I’ll be your moderator for today’s call. [Operator Instructions]

I would now like to pass the conference over to, James Miln, Senior Vice President of Finance and Investor Relations. James, please go ahead.

James Miln — Senior Vice President, Finance and Investor Relations

Good afternoon, everyone, and thanks for joining us on Yelp’s Fourth Quarter and Full Year 2022 Earnings Conference Call. Joining me today are Yelp’s Chief Executive Officer, Jeremy Stoppelman; Chief Financial Officer, David Schwarzbach; and Chief Operating Officer, Jed Nachman. We published a shareholder letter on our Investor Relations website and with the SEC and hope everyone had a chance to read it. We’ll provide some brief opening comments and then turn to your questions.

Now I’ll read our safe harbor statement. We’ll make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

In addition, we are subject to a number of risks that may significantly impact our business and financial results. Please refer to our SEC filings as well as our shareholder letter for a more detailed description of the risk factors that may affect our results. During our call today, we’ll discuss adjusted EBITDA and adjusted EBITDA margin which are non-GAAP financial measures. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with generally accepted accounting principles.

In our shareholder letter released this afternoon and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures, as well as historical reconciliations of GAAP net income to both adjusted EBITDA and adjusted EBITDA margin.

And with that, I will turn the call over to Jeremy.

Jeremy Stoppelman — Co-founder and Chief Executive Officer

Thanks, James. And welcome, everyone. Yelp delivered one of the strongest revenue growth performances among our advertising and marketplace peers in 2022. Our performance ad products and high-intent audience generated robust advertiser demand across a broad range of categories, both on and off Yelp.

Net revenue increased by 16% year-over-year to a record $1.2 billion in 2022. We delivered this performance with net income of $36 million and adjusted EBITDA of $270 million. These results demonstrate the strength and durability of Yelp’s ad platform and the ability of our team to execute under a range of difficult conditions to deliver excellent results.

Underlying our record top line, our product-led strategy drove a number of other record results in 2022. We achieved record paying advertising locations and average revenue per location for the year.

In services, we succeeded in differentiating the product experience and increasing monetization and lead quality, resulting in greater value to service pros. We believe Yelp gained market share in 2022 as advertising revenue from services businesses grew 14% year-over-year to a record $694 million. The home services category was particularly strong with year-over-year growth of approximately 20%.

Since 2019, revenue from this category has compounded at an annual growth rate of nearly 20%. Advertising revenue from restaurants, retail and other businesses increased by 17% year-over-year to $441 million, driven by growth in paying advertising locations.

We continue to deliver value to advertisers in these categories, by enhancing our suite of ad products designed to deliver high-intent clicks, both up and down the funnel and on and off Yelp.

On the consumer side of our business, traffic remained below pre-pandemic levels as the macroenvironment contributed to softer consumer demand, app unique devices of 33 million were flat compared to 2021. Despite this backdrop we made early progress on the consumer-focused initiative we announced at the beginning of 2022. We’ve reduced friction from the view writing process, which helped our trustworthy content grow by 21 million new reviews in 2022. This resulted in more than 265 million cumulative reviews as of December 31, up 9% from 2021.

In addition, our early work with large language models suggests there are a number of near-term applications that we can leverage to enhance the consumer experience on Yelp. We deliver value to our advertisers through our sophisticated ad system. This best-in-class technology is able to respond dynamically to changes in supply and demand to efficiently match consumers with advertisers.

While ad clicks for the year declined by 8% from 2021 a year that had benefited from reopening tailwind and elevated consumer spending, advertiser demand remained robust as we executed against our roadmap of ad system improvements and average CPC increased by 27% year-over-year.

We also made progress on our initiatives to drive sales through the most efficient channels. Self-serve and Multi-location channels each grew approximately 25% year-over-year to record levels in 2022. Together these channels represented approximately 48% of advertising revenue in 2022, up 4 percentage points from ’21.

Looking back, over the last year, the Yelp team has made tremendous progress across all of our strategic initiatives. Our investments in product have not only delivered record revenue, but also strengthened Yelp’s position as a leader in local with trusted content and sophisticated ad stack. As a result, we plan to expand upon each of our initiatives to drive profitable growth in 2023 and over the long-term by continuing to invest in growing quality leads and monetization and services, driving sales through the most efficient channels, delivering more value to advertisers and enhancing the consumer experience.

At their core, these initiatives aim to continue to differentiate Yelp from peers and bringing increased value to local consumers and advertisers. We believe that our consistent execution in these areas in 2022 has positioned Yelp better than ever to drive long-term profitable growth.

With that, I’d like to turn it over to David.

David Schwarzbach — Chief Financial Officer

Thanks for the recap of our strong 2022 performance, Jeremy. I will now turn to our fourth quarter results. Fourth quarter net revenue increased by 13% year-over-year to $309 million, the high-end of our outlook range.

Net income decreased by 13% year-over-year to $20 million, largely due to a significant increase in our effective GAAP tax rate. Adjusted EBITDA grew by 18% year-over-year to $80 million. Which is at the midpoint of our outlook range.

Paying advertising locations increased by 3% year-over-year to 545,000 in the fourth quarter, while average revenue per location reached a quarterly record. Advertising revenue from services businesses increased by 13% year-over-year to $178 million in the fourth quarter.

Our efforts to drive high-quality leads to service pros have clearly resonated with advertisers in these categories. Average revenue per location in services reached a record and increased for the tenth quarter in a row.

Advertising revenue from restaurants, retail and other businesses increased by 11% year-over-year to $116 million. As anticipated in our fourth quarter business outlook, advertiser demand was more muted in the 2022 holiday season than in prior years, particularly among multi-location advertisers. This contributed to softer year-over-year growth in paying advertising locations in these categories.

Turning to expenses. Since, significantly decreasing our headcount in 2020, we have made prudent investments in our product-led strategy to drive profitable growth over the long term. We have increased the size of our product development and multi-location sales organizations while holding local sales headcount relatively flat.

As a result, we ended the year with the total headcount of approximately 4,900 people, representing an increase of 11% year-over-year, that’s still 18% below 2019, while full-year net revenue increased by 16% and 18% over the same periods.

We are pleased with this progress and currently planning to maintain approximately the same total headcount in 2023. We believe our sales channel mix shift, product-led strategy, and reduced real-estate footprint, will be sources of leverage and margin improvement over the long term. In addition, we are committed to reducing stock-based compensation as a percentage of revenue. In 2022, we decreased this percentage by approximately 2 percentage points and expect to drive an additional decrease of 1 percentage point in 2023.

Looking ahead, we believe we can lower stock-based compensation to less than 8% of revenue by the end of 2025 driven by revenue growth as well as by continuing to optimize our location and compensation mix, particularly within product development.

Returning capital to shareholders through share repurchases remains an important element of our overall capital allocation strategy. In 2022, we repurchased $200 million worth of shares at an average purchase price of $32.28. At the end of the year, we had $282 million remaining under our existing repurchase authorization. We plan to continue repurchasing shares in 2023 subject to market and economic conditions.

Turning to our outlook. As we enter 2023, we continue to believe in the significant long-term opportunities ahead and our team’s ability to capture them. However, the macroenvironment remains challenging, we expect net revenue will be in the range of $300 million to $310 million for the first quarter, reflecting typical seasonality. For the full year, we expect net revenue will be in the range of $1.29 billion to $1.31 billion as our initiatives continue to drive growth against the backdrop of ongoing macro uncertainties.

Turning to margin, we expect expenses to increase from the fourth quarter to the first quarter, reflecting our hiring efforts in 2022 as well as the seasonal increase in expense, primarily driven by payroll taxes. As a result, we anticipate first quarter adjusted EBITDA to be in the range of $40 million to $50 million. For the full year, we expect expenses to increase modestly year-over-year as we maintain approximately the same total headcount compared to the end of 2022.

As such, we anticipate adjusted EBITDA to be in the range of $290 million to $310 million for the full year. We also currently expect our effective GAAP tax rate for 2023 to be in the range of 32% to 38%, largely due to the requirement to amortize certain research and development expenses under the 2017 U.S. Tax Cuts and Jobs Act.

In closing, Yelp delivered one of the strongest revenue growth performances among our advertising and marketplace peers in 2022. Our broad-based local ad platform has proven its durability and our team has continued to execute against our initiatives driving excellent results. While the macroenvironment remains uncertain, we’ve built a strong foundation for the future and are confident in Yelp’s path to delivering profitable growth along with shareholder value over the long term.

With that operator, please open up the line for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Colin Sebastian with Baird. Your line is now open.

Colin Sebastian — Robert W. Baird — Analyst

Great. Thanks. Good afternoon. Thanks for taking my questions. I guess two for me. First regarding some of the expense outlook. I think keeping product development roughly flattish, adding headcount to sales. Just curious about the thought process behind that. It sounds like you have what you need from a product development or a product developer standpoint, but just a little more detail on the sales strategy.

And then secondly, I mean, given the strength you saw during the year. Just curious in terms of how we should think about, you talked about the roadmap, but but continuing growth beyond this year. Pricing is — ad pricing is still going up, clicks down, maybe there’s a flip there where it shifts more to more ad click growth. Just curious on some of the metrics, how you see that playing out? Thank you.

David Schwarzbach — Chief Financial Officer

Thanks for the question, Colin. With regard to headcount on the expense side. Just to clarify, in 2022, we added to product and engineering. We also added to our multi-location sales team. And our local sales headcount, which is still down substantially from 2020 or — from 2019 was modestly higher, but in line with what we’ve shared with you in the past about being in the range of about half of what it’s previously been, that’s really around 2022. For 2023, we plan to keep headcount overall, approximately flat. And that’s true across all the functional areas whether it’s product and engineering, sales and marketing or general and administrative. So, no shift in mix expected in terms of headcount in 2023.

Jeremy Stoppelman — Co-founder and Chief Executive Officer

And Colin, this is Jeremy. I’ll take the second question there. Thinking about the roadmap for the year and beyond. We feel really great. Despite all of the macro uncertainty, the team’s execution on the product and engineering side, rest of the company too. But specifically on the product and engineering side, it’s been really clean. We continue to have the portfolio of projects, leading into ads, continuing to improve our ad tech stack, that are matching Request a Quote, driving up both the number of projects as well as the quality of leads, obviously, makes a difference. We turned towards — more towards the consumer, recently, in ’22, we started that pivot. We’re starting to see some benefits there. You may have noticed reviews grew 3% year-over-year. So, starting to see some of those wins stack-up.

And then from a go-to-market perspective, we’ve been leaning into self-serve and multi-location, continues to go well, continues — we continue to see really great progress there. And then further afield, we’ve started to try and share a little bit more color about why we have conviction that we can grow for a considerable amount of time into the future. One example that we cite in the letter is looking at the SCM for services traffic. There’s a big pool of quality leads out there and we currently don’t participate in that area really at all. And so, if you go and you look back at what we’ve built with Request a Quote, Nearby Jobs matching technology like we’ve been slowly assembling the pieces necessary to play uniquely in that space.

And I think if you look at the strength of Yelp’s brand and then also its value to consumers, beyond a single job, I think that gives you some sense of like why we think we can take considerable share in that space over time. We haven’t baked anything into this year it’s really — this year is about product development and experimentation in that area. But I think in the out years, that’s a really interesting area. And then I would just point you to off Yelp as just another area of investment and opportunity for us. It wasn’t that long ago that Yelp syndication and Yelp audiences didn’t really exist. That’s been innovation that we’ve built in house. And now it’s a rapidly growing considerable business for us, it’s taking a very unique down funnel intent that we see from consumers on Yelp. And then it’s reaching out to those consumers as they travel across the web, providing even more value to our advertisers.

So, if you look across the whole host of portfolio you get as we do, high confidence that there’s growth opportunities in the future and over the long-term.

Colin Sebastian — Robert W. Baird — Analyst

Great. Thanks, guys. Appreciate that.

Operator

Thank you. Our next question comes from the line of Shweta Khajuria with Evercore ISI. Your line is now open.

Shweta Khajuria — Evercore ISI — Analyst

Thanks for taking my questions. I have a couple, please. So you talked about services revenue and you gained share in the industry versus peers. It sounds like you want to maintain the 25% monetized leads based on the shareholder letter. Could you specifically double click on what your plans are for the year in terms of driving quality of leads and improving the experience to drive services revenue growth? That’s the question one.

And the second question is, David, if you could please talk about the cadence of EBITDA. So sequentially you had some comments in the prepared remarks as well as in the letter. How should we think about cadence of EBITDA for the rest of the year to get to your full year guide? Thank you.

Jeremy Stoppelman — Co-founder and Chief Executive Officer

Hi, Shweta, this is Jeremy. I can touch on maybe the first one within services and monetized leads. Really happy to see the growth there, particularly the growth in home services where that was 20% year-over-year. Great to see all that activity happening on Yelp. We have a whole host of continued improvements within Request a Quote. One project in particular, launching soon will really leverage Yelp’s brand to help give consumers the confidence to engage with Request a Quote in particular. So, we do see really healthy portfolio within our product development there.

On the monetized leads question, 25% monetized leads that has come up a lot over the years. We do think obviously, there is considerable headroom to keep making improvements there, but there’s trade-offs, like we could certainly move that number up, but if the quality isn’t there from a lease perspective, then that value is itself on the advertisers side. And given the really high demand from advertisers right now, we want to make sure that they’re getting a lead that is actionable that works for them where they feel like there is an opportunity to drive ROI. So we’re not rushing to drive that number up immediately. We’re focused on quality as we were last year, but we do believe that over time that will continue to go up.

David Schwarzbach — Chief Financial Officer

Shweta just addressing your question on the cadence of EBITDA through the year. Once again in the first quarter, we do see significantly higher expense due to payroll taxes. There’s also a bid layering in the additional expense of headcount, that we hired in the first half of 2022. So, we would expect EBITDA to increase over the course of the year and for expenses to moderate down from the first quarter as we also move through the year. So that’s the profile that we expect from in order to deliver $300 million to $310 million for –excuse me, yeah just the — $290 million to $310 million for 2023.

Shweta Khajuria — Evercore ISI — Analyst

Okay. Thanks, David. Thanks, Jeremy. Just a quick follow-up, though. So, David, any help with just for modeling for — for modeling purposes. In terms of seasonality, should we follow a particular year? Is it more representative of 2019 versus perhaps 2022? Any thoughts there.

David Schwarzbach — Chief Financial Officer

Shweta, I don’t off the top of my head have a thought in terms of that seasonality for a year to compare to. So, we’ll go back and take a look at that. What I can say again is Tier 1 is meaningfully higher because of this payroll tax and that we do actually expect for expenses to moderate down as we move through the year in order to deliver the overall adjusted EBITDA for the year. But let us take a look and see what we think is a comparable year in terms of profile. As you know, things have changed considerably through ’19, ’20, and ’21, it makes it a little harder to do comparisons.

And the other thing I would just point out is we are not seeing large movements in headcount in ’23 or we don’t anticipate large movements in headcount in ’23. So that’s also just a very different profile compared to prior years.

Shweta Khajuria — Evercore ISI — Analyst

Okay. I appreciate it. Thanks, David.

Operator

Thank you. Our next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is now open.

Eric Sheridan — Goldman Sachs — Analyst

Thanks so much for taking the questions. Maybe two if I can. Coming back to the comments on the macro, would love to get as much details you’re willing to give about what sort of headwind that might have created to Q4, at the beginning of Q1, just so we could better size out ex the macro. How are you thinking about the underlying performance of the business, of things within your control versus outside of your control?

And then coming back to the mix-shift towards self-serve and multi-location. Are there any elements you can give us in terms of targets or frameworks of thinking about mix-shift towards those elements to the ad business as we move through ’23 and think about an exit velocity into 2024? Thanks so much.

Jed Nachman — Chief Operating Officer

Hi, Eric, this is Jed. I can take both questions. In terms of the Q4 revenue and macro visibility, we remain really pleased with the overall resilience of the business, thus far. We’ve in the past experienced periods of uncertainty and the business has remained solid. We have a diverse and really high-quality revenue base by both channel and category, down funnel, performance-based ads. Our most efficient channels as you mentioned, self-serve and multi-location both grew at 25% rate year-over-year in 2022.

And at the edges, we did see some increased caution from the multi-location advertisers in Q4, which resulted in a more muted holiday spend than in previous years. These businesses have obviously been dealing with a number of macro issues from labor supply to rising input costs, but our relationships with the multi-location business remain really-really strong, and we believe that multi-location channel has room to run.

On the SMB side, our advertiser base is comprised of really high-quality local SMBs, which has demonstrated that resilience in the past. We’re focused on what’s in our control right now and executing against those initiatives. And in terms of the mix between self-serve and multi-location, we’ve increased 4 points year-over-year in terms of the total, out of those two channels between self-serve and multi-location up to 48% of our revenue. And you have over approximately 50% of our revenue growing at a 25% clip. So, we’re really pleased with those two channels. We continue to make improvements on the multi-location product portfolio, spotlight ads, Yelp Audiences, sponsored collections, which are really resonating in the marketplace.

And on the self-serve side, continue to make improvements in terms of what we’re giving our local advertisers in terms of customer insights and improved message center and really matching the most important leads with with our advertisers. So, from a mix-shift perspective, we’re going to continue to lean into both of those channels and believe they both have headroom to run.

Eric Sheridan — Goldman Sachs — Analyst

Thanks so much.

Operator

Thank you. Our next question comes from the line of Cory Carpenter with J.P. Morgan. Your line is now open.

Cory Carpenter — J.P. Morgan — Analyst

Hey, thank you. I had two, I want try one more on macro. Just maybe more specifically, have you seen improvement in the multi-location advertiser base coming out of the holiday season or would you characterize it as kind of staying steady perhaps at those lower levels?

And then secondly, on the consumer demand, I think Jeremy, you mentioned that it remains a little below pre-pandemic levels. Curious what you attribute that to? And then you called out app unique devices are lower. But what about engagement per user, I mean, how that’s trending? Thank you.

Jed Nachman — Chief Operating Officer

I can take another shot at the macro in terms of multi-location trends. Obviously, we saw that muted spend in the fourth quarter, but we were really pleased with where we’re able to kind of continue conversations with all of those multi-location advertisers and we feel like we’re really well positioned going into 2023. Ultimately, in this type of environment, we have a really down funnel lead and are strong from — in times of macro uncertainty folks want to spend their money in a place where they think they are yielding ROI and based — we have attribution solutions as an example, that are able to really-really prove that out and whether it’s our YSV, which is our first-party data derived from Yelp and/or third-parties that we use in order to kind of showcase that attribution that’s in a really good spot right now. Of course, there are macro uncertainties that are out of our control. But we feel well positioned relative to the competition as we head into 2023 there. And so that’s what I would say on the multi-location side.

Jeremy Stoppelman — Co-founder and Chief Executive Officer

Thanks, Cory. Jeremy again. So, talking about the consumer engagement and looking at the app it’s kind of flat year-over-year. I think the contributing factor obviously macro and how much consumers are getting out there and transacting, but we’re not just kind of sitting around. We have today a lot of resources towards consumer. We did see contributions rise 3% year-over-year. So, I think that’s early signs of success from the efforts there. We have a deep roadmap that we’ll be executing on in ’23, that’s focused on some of these things you mentioned. Improving the Android experience, like improving engagement. We’ve got a new home feed that we’re going to keep iterating on. You may have also noticed there’s new technology out there, a lot of language models. They’ve already booked their first win within search from leveraging LLM [Phonetic]. So, I think there’s a lot of opportunity, we’re just gearing up, last year was kind of our first effort starting to stack wins and so I think we’ll see that continue. Also worth noting, mobile app was up as well. And so with the product and engineering investment that is now quite significant I think we feel confident. And then also return to marketing spend, one of the things we pulled back on, especially during the — early pandemic timeframe was installs and driving installs from a pay perspective. And so that’s something that we’ve returned to and so that provide some audience upside as well.

Cory Carpenter — J.P. Morgan — Analyst

Maybe one more if I can, just for Jed on — if I wasn’t — you called out local sales productivity. I think these are new customer acquisitions, the best we’ve seen in two years. Curious what you attribute that to? I mean if there’s something maybe specifically that you’ve changed or that you’re doing that you would call out working well? Thank you.

Jed Nachman — Chief Operating Officer

Yeah, thanks for the question. We have been really pleased with our local channel, which both includes — which includes both kind of the self-serve as well as our reps sold business. From a sales force perspective, certainly we feel there are benefits in our remote posture and being able to retain our top-performing reps who are now distributed across the country and that’s been a real boon for us in terms of making sure that we have the right people in the seats and as that sales force ages, you’re going to get more productivity out of them. And ultimately, we’re also giving them more products to sell to which is really-really important as you’ve watched the product portfolio evolve over the past few years and the confidence level with which they can talk to local businesses. We know we’re delivering more value than we ever have. And that’s been really an important part of the successful on the local sales team.

Cory Carpenter — J.P. Morgan — Analyst

Thank you, guys.

Operator

Thank you. Our next question comes from the line of John Colantuoni with Jefferies. Your line is now open.

Christopher Suchecki — Jefferies, LLP. — Analyst

Hi, this is Chris Suchecki on for John. Thank you for taking the question. So, we think we picked up on an uptick in ad loads across the Yelp app, particularly in the services category. Was this just some testing we picked up on or are you able to talk about if you’ve made a permanent adjustments to the services ad load? And then maybe just some comments on how you’re thinking about greater ad load could impact consumer experience and then lead monetization? Thank you.

Jeremy Stoppelman — Co-founder and Chief Executive Officer

Hi Chris, this is Jeremy. We’re constantly running experiments that are very good to search experience and so nothing to report there as far as something massively different than historical. I do think a lot of the activity within services, it’s important to note is within Request a Quote. And so a lot of what’s happening within Request a Quote is fully or near fully monetized. And it’s a great consumer experience because you’re telling us more about your project and you’re hearing from people that can actually fulfill that, and ideally within a reasonable timeframe. We see it as kind of a win all around in that the pro gets valuable leads and an opportunity to engage with the consumer, the consumer gets responsive businesses and Yelp facilitate that and gets paid. So that’s where a lot of the focus is and a lot of the value is within services.

Christopher Suchecki — Jefferies, LLP. — Analyst

Got it. Thanks so much.

Operator

Thank you. Our next question comes from the line of Brian Fitzgerald with Wells Fargo. Your line is now open.

Brian Fitzgerald — Wells Fargo Securities — Analyst

Hey guys. Thanks for taking the questions. Last quarter, you guys called out some interesting almost counter-cyclical trends in services. It was roofers maybe increasing ad spends even if they saw demand cool. So you noted home services was up 20% year-over-year this quarter, so maybe it looks like that trend continued. Curious if there’s anything else you’d call out there or any other services categories especially weak or strong?

Jeremy Stoppelman — Co-founder and Chief Executive Officer

Brian, this is Jeremy, don’t remember the specific on roofers. I’m not sure about that, but yes, we did — we have seen services demand from advertisers remain robust in home services, even more so. What’s going on there I think, hard to fully unpack given the strange, call it, macroenvironment, but I think part of it is, as business has slowed down, is a great boom time year of ’21. Businesses did have — continue to have to spend on keeping their trucks rolling and keeping themselves busy. And so they’re looking for reliable channels in which to invest and get a return on their investment from a lead perspective.

And I think that’s why so many have turned to Yelp is because we’re a reliable source of high-quality leads. And it’s also very convenient, they can turn it on and off as needed. They can test it out and see for themselves, whether we’re delivering.

And from ours perspective, we just — we’ve been working really hard on making Request a Quote work for these businesses, driving quality leads, quality over quantity was a big theme last year. We weren’t as focused on driving up the percentage of monetized leads, we’re really focused on that lead quality. I think that’s coming through. And then if you look at the opportunity off Yelp. We’re taking that consumer demand, when someone comes to us with one of these longer-tail and frequent service requests. We’re able to reach them, when they hit, maybe the New York Times or somewhere else on the web, through Yelp syndication. And so that’s a powerful tool as well.

So, I think everything is coming together to deliver valuable leads to these local businesses, and they are continuing to spend with us, which is great.

Brian Fitzgerald — Wells Fargo Securities — Analyst

Awesome. Thank you.

Operator

Thank you. There are no additional questions waiting at this time. So, I will now conclude the Yelp fourth quarter and full-year 2022 earnings conference call. Thank you for your participation. You have a wonderful day.

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This transcript is produced by AlphaStreet, Inc. While we strive to produce the best transcripts, it may contain misspellings and other inaccuracies. This transcript is provided as is without express or implied warranties of any kind. As with all our articles, AlphaStreet, Inc. does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company’s SEC filings. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. Any opinion expressed in the transcript does not necessarily reflect the views of AlphaStreet, Inc.

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