Yelp Shares Tumble As Q3 Loss Widens; To Commence Secondary Offering

(RTTNews) - Shares of Yelp, Inc. (YELP) declined 10 percent after the consumer review website reported a loss for the third quarter that widened from last year and also came in wider than analysts' expectations. However, revenue for the quarter surged 68 percent and beat analysts' estimates.

Looking ahead, Yelp forecast fourth-quarter revenue above Street view and also raised its full-year revenue forecast. Yelp also said it is commencing an underwritten registered follow-on public offering of $250 million of its Class A common stock.

Yelp said that cumulative reviews for the third quarter grew 42 percent year-over-year to more than 47.3 million. Average monthly unique visitors grew 41 percent to about 117 million, while active local business accounts surged 61 percent from the year-ago period to about 57,200.

Yelp noted that in the latest quarter, about 46 percent of local ads were shown on mobile devices and approximately 62 percent of searches were on mobile, including mobile web and app. Additionally, Yelp launched a number of mobile upgrades including the ability to write and post reviews.

San Francisco-based Yelp's third-quarter net loss was $2.32 million or $0.04 per share, wider than loss of $2.01 million or $0.03 per share in the year-ago period. On average, twenty one analysts polled by Thomson Reuters expected the company to report loss of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.

However, net revenue for the quarter grew 68 percent to $61.18 million from $36.37 million in the prior-year quarter. Analysts had a consensus revenue estimate of $59.41 million.

Looking ahead to the fourth quarter, Yelp forecast revenues in a range of $66 million to $67 million. This represents growth of about 62 percent compared to the year-ago period. Analysts have a consensus revenue estimate of $64.81 million.

For fiscal 2013, Yelp now forecasts revenue in a range of $228 million to $229 million, up from the prior range of $222 million to $224 million. The revised outlook represents growth of about 66 percent compared to the previous year. Analysts currently expect revenues of $225.38 million for the year.

Separately, Yelp said it is commencing an underwritten registered public offering of approximately $250 million of its shares of Class A common stock. In addition, the company will grant the underwriters an option to purchase up to an additional $37.5 million of its shares of Class A common stock.

Yelp intends to use net proceeds of the offering for additional working capital and general corporate purposes. This includes sales and marketing activities, general and administrative matters and capital expenditures.

The company may also use a part of the net proceeds for the acquisitions or investments in technologies, solutions or businesses that complement its business.

Goldman Sachs & Co., Citigroup Global Markets Inc. and Jefferies LLC will be bookrunning managers for the offering, while Oppenheimer & Co. Inc. as well as Cowen and Co. will be co-managers for the offering.

YELP closed Wednesday's regular trading session at $68.83, up $1.24 or 1.83 percent on a volume of 6.24 million shares. However, in after-hours, the stock declined $7.18 or 10.43 percent to $61.65.