Yelp (YELP) 2026 Evercore Global TMT Conference summary

Strategic transformation and AI initiatives

• Shifted from sales-led to product-led growth, with a major focus on AI transformation and consumer experience reinvention, including the launch and expansion of Yelp Assistant across all categories.

• Developed AI-powered products like Yelp Host and Receptionist, targeting restaurant and services sectors, and acquired Hatch to strengthen AI voice and lead management capabilities.

• Hatch acquisition resulted in 92% year-over-year growth, with team size doubled and continued investment to maintain agility and market leadership.

• AI initiatives are driving new monetization opportunities, especially in services, with built-in monetization and growing project volumes through AI experiences.

• Data licensing deals with major AI players have expanded, providing both revenue and brand exposure, with Yelp content now featured on platforms like ChatGPT, Bing, and Apple Maps.

Financial outlook and investment strategy

• 2026 is positioned as a year of investment, with margin compression expected due to increased operating expenses and strategic investments in Hatch and paid search.

• Paid search investments are being refined to improve ROI, with mechanisms built to direct leads to higher-value customers and close the loop on advertiser returns.

• $270 million was deployed for the Hatch acquisition, with additional retention payments, and $125 million in share repurchases, resulting in a net debt position but strong free cash flow.

• Guidance anticipates lower EBITDA in 2026, but medium- to long-term expectations are for margin expansion as AI-driven products scale and productivity gains are realized.

• Stock-based compensation as a percentage of revenue is being reduced, targeting less than 6% by 2027, with no further structural changes needed.

Revenue growth drivers and market opportunities

• Other revenue, including Hatch, data licensing, and food delivery partnerships, is targeted to more than double from $115 million in Q1 to $250 million by 2028.

• DoorDash partnership has accelerated transaction revenue, with seamless integration and growing user awareness expected to drive further adoption.

• Data licensing is high-margin, balancing direct revenue with brand ubiquity and traffic, while refusing to license data for AI training without significant compensation.

• AI-powered voice and messaging products are positioned for high growth in a competitive market, leveraging Yelp’s operational expertise and client relationships.

• Product and go-to-market milestones focus on building client confidence in AI tools, expanding after-hours automation, and rapid iteration based on client feedback.