Yelp (YELP) Morgan Stanley Technology, Media & Telecom Conference summary

Business transformation and strategic focus

• Shifted from sales headcount-driven to product-led growth, enhancing competitive positioning, especially with AI advancements.

• Services now represent about two-thirds of revenue, with a strong focus on expanding this segment and targeting enterprise advertisers.

• Incremental investments are directed toward services, particularly home services, and enhancing ad technology with neural nets.

• Revamped Home Feed and improved consumer experience to meet rising expectations and drive engagement.

• Self-serve and multi-location channels grew from 30% to 50% of ad revenue in five years, improving advertiser retention and efficiency.

Macroeconomic environment and business impact

• Services business grew 11% in 2024, while Restaurant, Retail, & Other (R&O) shrank due to rising input and wage costs.

• Margin compression in R&O led to reduced advertising spend; these trends persisted into 2025.

• Consumers in 2024 were less willing to accept price increases compared to previous years.

• Focus remains on being positioned for recovery in R&O while prioritizing services for incremental investment.

Product innovation and AI integration

• Leveraged large language models and neural nets to extract relevant review insights and personalize user experiences.

• Launched Yelp Assistant chatbot for services, increasing project creation by 50% quarter-over-quarter.

• Plans to expand Yelp Assistant across all categories and entry points, aiming for deeper consumer engagement.

• Product iteration and workflow integration are key to successful AI rollouts beyond services.

• Maintains multiple user entry points to accommodate varying consumer preferences.