5 Things Yelp Inc.'s Management Wants You to Know

By Fool.com

Yelp turned in another disappointing quarter on Wednesday.

The local reviews giant continues to enjoy strong growth, but it isn't expanding as rapidly as analysts had hoped. Although Yelp's first quarter earnings report beat on the bottom line, top line growth proved disappointing. At the same time, its traffic growth slowed notably from prior periods.

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During its subsequent earnings call, Yelp's CEO Jeremy Stoppelman and its CFO Rob Krolik offered a few key takeaways on Yelp's business. Below are five of the most important quotes from that earnings call.

On its plans for Eat24In February, Yelp announced that it had purchased Eat24, an online food-ordering service, for $134 million. Given that the majority of Yelp's reviews are for restaurants, integrating online food ordering into its business seemed to make sense. During the call, Stoppelman provided some color on how Yelp thought about the Eat24 acquisition.

Yelp's app engagement is risingLike other Internet-based companies, Yelp is the midst of a shift. Increasingly, users are visiting it from its mobile app rather than its traditional desktop website. Yelp has long offered its traffic metrics for mobile in its earnings releases, but during the call, Stoppelman went a step further, providing color on its app engagement.

A long-term goalYelp certainly isn't a value stock. In fact, under traditional accounting metrics, Yelp isn't even profitable. Investors buying shares are likely looking focused on Yelp's long-term potential. During the call, Krolik reiterated Yelp's aim to generate $1 billion in annual revenue by 2017.

Helping to explain thedisappointingtop lineFollowing its earnings release, Yelp shares fell more than 15%. Investors were likelydisappointedin Yelp's quarterly revenue, which fell short of analyst estimates. It was atopic Yelp's management explored frequently during the call, as it tried to offer up some sort of explanation. Krolik placed blame on execution -- a shift in the way in which it organized its sales team.

Why Yelp can make its annual guidanceGiven itsdisappointingfirst quarter, it was somewhat surprising that Yelp's managementreiteratedits full year outlook. When asked about it, Krolik explained that Yelp had corrected its execution mistakes, and that improving productivity in March and April gave him confidence in the company's ability to execute for the rest of the year.

The article 5 Things Yelp Inc.'s Management Wants You to Know originally appeared on Fool.com.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Yelp. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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