Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2025 Yelp earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Kate Krieger, Director of Investor Relations. Please go ahead. Good afternoon, everyone, and thanks for joining us on Yelp's third quarter 2025 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 the 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 may discuss Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow, 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 investor relations website, you will find additional disclosures regarding these non-GAAP financial measures as well as historical reconciliations of GAAP net income or loss to adjusted EBITDA, GAAP net income margin to adjusted EBITDA margin, and GAAP cash flows from operating activities to free cash flow. And with that, I will turn the call over to Jeremy. Thanks, Kate, and welcome, everyone. Yelp's transformation with AI continues to accelerate. We are reconceiving the experience on Yelp for both consumers and businesses, recently rolling out more than 35 new features and updates that leverage the power of AI in combination with our human-generated, highly trusted content. This valuable content also underpins the continued expansion of our data-like memberships. Taken together, we believe our product-led strategy, along with our broad reach, will enable us to deliver on our ambitious product roadmap and create long-term value for our shareholders. Turning to the third quarter, Yelp delivered record net revenue and strong profitability. We generated $376 million of net revenue with a net income margin of 10% and an adjusted EBITDA margin of 26%. Underlying our top-line results, services revenue increased by 7% year-over-year and drove our business performance. At the same time, the operating environment for businesses in our restaurant, retail, and other categories remained challenging, with RRNO revenue declining by 2% year-over-year. We are continuing to deepen our focus on services, excluding projects acquired through our paid search initiative. Request-to-quote projects increased by approximately 10% year-over-year in the third quarter, driven by improvements to the request flow in our AI chatbot, Yelp Assistant. In fact, project submissions through Yelp Assistant increased by nearly 400% year-over-year. Our product and engineering teams also recently rolled out an enhanced version of Yelp Assistant that remembers important details and preferences from past projects. In addition to Yelp Assistant, we are using AI to simplify how consumers evaluate and select the right service pros. We extended our review insights feature to services categories, created a dedicated before-and-after section in businesses' media galleries, and expanded our response quality badges for service pros nationwide. Beyond services, our product and engineering teams continue to leverage AI to transform the way consumers connect with great local businesses in RRNO categories. We recently expanded Yelp Assistant to RRNO business pages, leveraging our trusted content and information from businesses' websites to give users instant, reliable answers to questions about specific businesses. This is a significant step towards delivering a comprehensive Yelp Assistant that works uniformly across all categories and entry points. We plan to begin testing our category-wide Yelp Assistant before the end of the year. We also recently launched MenuVision, an augmented reality feature that enables diners to point their camera phones at menus and view photos as well as reviews of individual dishes. In addition, we are now partnering with DoorDash as our preferred food ordering and delivery provider, expanding our food ordering network by approximately 200,000 new restaurants to a total of more than 500,000. We expect this partnership will generate incremental revenue, which will be recorded as other revenue. Lastly, we've rolled out two new voice AI subscription products, Yelp Host for restaurants and Yelp Receptionist for services. These SaaS solutions combine LLMs with Yelp's high-quality data to provide smarter, more human-like answering services tailored with information specific to each individual business. We are excited about the potential of these incremental offerings, which we believe are best in class. Early results indicate a strong product-market fit, saving restaurants and service pros significant time. In summary, our focus on services and AI products has continued to transform our business, and we remain excited by the opportunities ahead to drive profitable growth and shareholder value over the long term. With that, I'll turn it over to David. Thanks, Jeremy. In the third quarter, net revenue increased by 4% year-over-year to $376 million, $6 million above the high end of our outlook range. Net income increased by 2% year-over-year to $39 million, or 61 cents per share on a diluted basis, representing a 10% margin. Adjusted EBITDA decreased by 3% year-over-year to $98 million, representing a 26% margin, putting it $13 million above the high end of our outlook range. As Jeremy mentioned, services revenue increased by 7% year-over-year to a quarterly record $244 million. Restaurants and retailers remained pressured in the quarter, resulting in a 2% year-over-year decline in RRNO revenue to $114 million. A decrease in RRNO locations offset growth in services locations in the quarter. This resulted in an overall decline of 2% year-over-year in paying advertising locations to $512,000. Ad clicks declined by 11% year-over-year in the quarter, primarily due to macro pressures. To a lesser extent, competitive pressures in RRNO categories and reduced spend on paid project acquisition in the current year period also negatively impacted clicks. Average CPC increased by 14% year-over-year, reflecting growth in services demand and fewer clicks overall. Turning to expenses, our third-quarter results demonstrate the margin potential of our business, with a net income margin of 10% and an adjusted EBITDA margin of 26%. We achieved these strong results through disciplined expense management. As we continue to focus on allocating resources towards our best opportunities, we continue to expect headcount will be approximately flat year-over-year by the end of 2025. In the third quarter, we reduced stock-based compensation expense as a percentage of revenue by 2 percentage points year-over-year to 9%. We remain focused on reaching our targets of less than 8% by the end of this year and less than 6% by the end of 2027. We expect these efforts to stack over time, improving the quality of our adjusted EBITDA and benefiting GAAP profitability in the years to come. Our capital allocation strategy consists of three main elements. First, maintaining a healthy cash balance to fund our operations. Second, retaining balance sheet capacity for acquisitions. And third, returning capital to shareholders through share repurchases. In the third quarter, we repurchased $75 million worth of shares at an average purchase price of $32.59 per share. As of September 30, 2025, we have $127 million remaining under our existing repurchase authorization. We plan to continue repurchasing shares through the remainder of 2025, subject to market and economic conditions. Turning to our outlook, with heightened macroeconomic uncertainties, we did not see our typical seasonal increases in revenue in the second and third quarters. We anticipate that these heightened macroeconomic uncertainties will persist in the fourth quarter, with net revenue decreasing from the third quarter. As such, we are lowering our outlook range for the full year. We now expect net revenue will be in the range of $1.460 billion- $1.465 billion, reflecting a decrease of $8 million at the midpoint. Turning to margin, we expect fourth-quarter expenses to remain relatively consistent with the third quarter as we remain focused on disciplined expense management. In addition, we expect our efforts to reduce SBC will continue to act as a headwind to adjusted EBITDA, but will not impact net income. As such, we are narrowing our range and now expect full-year adjusted EBITDA to be in the range of $360 million to $365 million, reflecting an increase of $8 million at the midpoint. In closing, Yelp's third-quarter results reflect the underlying profitability of our business. We continue to believe in the opportunities ahead to create shareholder value over the long term as we focus our investment in areas that we believe will transform our business, particularly around AI. With that, operator, please open up the line for questions. As a reminder, if you would like to ask a question, please press star followed by the number one on your telephone keypad. We ask that participants limit themselves to one question and one follow-up question. Your first question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead. Hi, this is Alex on for Eric. Thanks for taking my question. I just wanted to unpack what you're seeing in the macro environment a little bit more. I think if you take just looking at the model, if you take sort of normal sequential seasonality in the services segment in your Q4 guide, it implies a pretty meaningful step down in RRNO. So are you seeing sort of a more broad-based. Macro pressures within the services segment as well, or is it really still just concentrated in the RRNO segment? Thank you. Alex, thanks for the question. This is David. So broadly on the macro front, as we mentioned, the. Pressures that we saw emerging in the spring, particularly in April. Persisted through the second quarter into the third quarter, and we did see those persist here into the fourth quarter. In terms of p ressure on RRNO versus services, first, I think it's important to just recognize our seasonality between those two sides of our business. On the RRNO front, there is typically a seasonal rise in the fourth quarter, and on services, there's typically a seasonal decline as service pros wind down for the year and weather changes. In terms of RRNO more specifically, we have seen that there is more caution among advertisers in their spend as they've come into the fourth quarter. I think you've heard that from a couple of other. Consumer internet companies this week. And so that is certainly something that we have seen as well. On the services front, we continue to see. Consistent demand from advertisers still wanting to reach consumers as they look at doing projects or having repairs done. So net net, it's more significant on the RRNO side. Thank you. The next question comes from the line of Jason Kreyer with Craig-Hallum. Please go ahead. Great. Thank you. This is Kyle for Jason. So maybe to start, you called out in the shareholder letter the strong demand for data licensing products, particularly at AI search. And I think we saw some of that with the growth acceleration in the other segment. But just curious if there's any additional color there on the expanding opportunities for Yelp, especially as we're seeing the AI search platform start to stand up more third-party integrations. Yeah. Hey, Kyle. This is Jeremy. Yeah. I mean, we continue to be really excited about this area for Yelp. Obviously, we have highly trusted content about SMBs, which we think is a critical ingredient for any of these LLM-based players that are trying to provide a general search experience, especially one that competes with Google. We talked about the momentum last quarter. I would say. The quality of conversations we continue to have with the various folks in this space is excellent. I think we'll have more to talk about. We're still kind of early in the development of this area, but we're really excited both on the data licensing side as well as the APIs we have to offer. We think Yelp is just a critical resource, and I'd say the conversations are showing that so far. Great. And then just as a follow-up, you integrated the RepairPal booking system into the Yelp platform, and now you're launching the DoorDash partnership. So just curious, with the greater ability to tie out ad spend on the platform to bookings and transactions, what benefits might you expect to see, whether it's a CPC uplift or more resilient ad spend? Any color there would be great. Yeah. With RepairPal, the integration continues to go well. We've started rolling out bookings there to expose RepairPal to Yelp users. I think. That's positive. That's certainly. Helping us on the services revenue side as a contributor there. You mentioned DoorDash. We're really excited about that partnership as well. Obviously. Expands our footprint in terms of restaurant coverage and with a very high-quality partner leader in the space. So we do see some incremental revenue coming from that. As we get further out. Great. Thanks for taking my question. Sure thing. The next question comes from the line of Josh Beck with Raymond James. Please go ahead. Yes. Thanks for the question. Maybe just following on the DoorDash partnership, certainly it seems like it's a much bigger footprint of restaurants. I think over half a million. I'm curious, should we think about it as something like a. Lead generation type of model? I mean, my experience has been you're on Yelp and you find something to order, and it kind of deep links to DoorDash. So is that kind of the right trigger for. Modeling it out or any kind of guidance you can give us there? Yeah. Hi, this is Jed. I can take that. As Jeremy mentioned, first of all, we're really excited about this partnership. The footprint of restaurants has expanded dramatically on Yelp by about 200,000 restaurants. And I think if you're a consumer looking for the best food options in your area, it's a natural progression to then. Transact on the platform. And I think the way you described it is, in fact, how it is happening on the platform. So. You have a d irect integration into the DoorDash ordering model. By the way, we have other food partners that we're still partnered with in order to kind of keep that full coverage. But we really just think ultimately it's a much better consumer experience to be able to kind of. Consummate everything on the Yelp platform, and we're really excited about it moving forward. Okay. And then maybe. A follow-up. On the AI strategy. It certainly seems like there's a lot of v ectors. You have the on-platform push with AI assistant or the Yelp assistant and the like. We've seen some examples. In the last few months of. Internet platforms kind of e nabling t hird-party chatbots within t heir app, n ot a lot of those examples. And then obviously the bigger kind of push to. Agentic commerce and. Agentic browsers and doing partnerships there. So obviously, that's probably just a sample, but there's many ways to. Kind of form this strategy. Just kind of curious how you're thinking about it. Broadly and maybe where that could head. In the next year. Yeah. Sure thing. This is Jeremy. I'll take that. I think AI for Yelp is really transformative. We've already started down that path. You mentioned Yelp Assistant. So that was our first chatbot agent-like product, really geared towards services. We have recently expanded it, so now there is a version of Yelp Assistant that lives on business pages. So you can ask in a wide variety of categories. You can ask anything about that business, and it's going to give you answers and back it up with our trusted content. So that's really exciting. And that's essentially a waypoint as we get to the cross-category Yelp Assistant, which we're going to be testing here in Q4 with more of an expansion expected early next year. I think for us, that's a big deal. That's going to be the way that consumers interact with Yelp content, I think, in the future. Obviously, a lot of people are getting used to. The chat interface as a way to tap into insights and information. And we have really great content, highly trusted, millions of reviews. And to be able to put a chat interface on all of that and serve up exactly what you're looking for, I think, is going to wow consumers. So we're really looking forward to that. We've also built. And just started selling our Yelp host and Yelp receptionist products, which are essentially answering services that are powered by AI. Fantastic technology, time-saving. Also helps businesses capture more value, both from their Yelp leads, but it can be employed across all leads. There's no reason why that phone number. Can't and shouldn't be added to their website, to Google, etc., and really create leverage, reducing costs because maybe they don't need to have as many people picking up the phone, but also capturing critical information. Whether it's for a restaurant, they can actually tie into our front-of-house reservation and waitlist services and have people make bookings or add themselves or take themselves off the waitlist. It's just really powerful stuff and with a huge TAM. So it's as if we've kind of launched a whole little startup within Yelp. But with all of our great content as well as our incredible distribution power. So we're looking forward to seeing how that plays out. And then also on the AI side, as you mentioned. There's a lot of players trying to create valuable search services. And so that's where our data licensing business comes in, our APIs that we offer to tap into Yelp content as well as our AI tech. Bringing things like Yelp Assistant wrapped in an API is something we definitely want to do and can create monetization opportunities for others off Yelp. So there's just a lot of different ways for us to invest and leverage AI. And we're early innings, but we do see it as transformational for the company over time. Okay. And I don't know if I can just think in one more for David. Just with respect to the. Restaurant industry, obviously, same-store sales has been. Challenged pretty broadly. What, I guess, are you monitoring? Is that kind of the key external metric for a potential recovery in spend? Just what should we be watching in terms of macro factors within that vertical? Yeah. Thanks for the question. Obviously. We also listen and follow. What the larger restaurant players are saying about the industry and their expectations. And so they have obviously a good read on it. We want. To see folks starting to dine out more is a good indicator, certainly, as opposed to per se delivery. That's a factor. But I think if you just step back, I think the larger macro picture is a key indicator for us. Obviously, there have been a variety of reports out, pressure for. On spend for folks in lower and mid-income levels. And so that's certainly a leading indicator for us that shows what the expectation should be around. Restaurants. There's also another factor at play here, which is just continued pressure on input costs for restaurants. They have seen a significant amount of inflation both on. The. Ingredient side, but also on the labor side. And so that will play out over time. They've had a harder time passing on that cost to consumers in the current environment. But one of the things that we think is likely to happen is as we wrap that inflation increase, assuming that it doesn't persist, then they will start to be able to generate more margin, which will put them in a better position to advertise to consumers. So you've got a little bit of dynamics playing out both on the consumer side as well as on the restaurant side. That's super helpful. Thanks. Thank you. The next question comes from the line of Nathan Bonsall with Bank of America. Please go ahead. Thank you for taking my question. Just a follow-up on the earlier question. You mentioned that Yelp host and Yelp receptionist are expected to drive incremental subscription revenue and a large TAM for these products. Can you help us understand the scale of this opportunity and how much of these products could contribute to revenue next year and what early adoption and feedback you are seeing so far? Hey, Nathan. This is Jeremy. Sure. Happy to talk a bit more about Yelp host and receptionist. It's obviously early. We're one month in with Yelp host and just a couple of weeks in and a few categories with receptionist. But I would say the feedback's been really positive. They're out there in the field answering calls. Yelp host has received thousands of calls. It's handled hundreds of reservations at this point. So it's no longer just in test. It's really out there serving real customers and touching real consumers or helping real consumers. As far as how big this can be, I think we have conviction that it's a really large TAM. We have north of 500,000 folks that are Yelp advertisers. That's obviously a natural place to start. They already have a relationship with Yelp. But then we also have. Businesses that have signed up with us over the years, as well as maybe businesses that don't even have an existing relationship with Yelp. There's no reason why they wouldn't want an answering service. That could potentially save them time and money, capture valuable leads that were maybe getting dropped. And so we think there's just a lot of value here to unlock for business owners, both. SMBs, but also mid-market and multi-location. With multi-location, that informs a longer product roadmap because as you get to that scale, there's other needs. So we have things to build. But we're really excited about what's ahead of us here. We think this is a very impactful area that will provide incremental revenue. And we also see it as a potential expansion opportunity into lead management more generally. And so we think it's the start of something potentially really big for us. Thank you. If I can follow up one more. Average pricing on the platform has been growing at an accelerating pace. Can you help us understand the key factors behind this trend? Additionally, how it is impacting the advertiser ROI and influencing incremental ad spend and retention on the platform? And then that's David. I'll cover that. So just stepping back for one moment. On Yelp, we receive ad budget from advertisers, and then we optimize the deployment of that ad budget on their behalf through auctions. So we don't per se set the number of clicks or the cost per click. We let the algorithm determine that optimal mix. And with that auction, we're really trying to determine. What's the price for that visitor in that category, that time of day, in that part of the country. So it's a very dynamic system, and we like that because it enables us to balance. Between actually hundreds of parameters that go into that matching algorithm. So that's the backdrop. In terms of. Clicks lower and CPCs higher, that's going to be a natural outcome because we have the budget to deploy. And then in terms of the current dynamics and trends, the year-on-year does tend to have a shape to it where it will increase for a period of time historically and then decrease for a period of time. So what we're really looking at often is the absolute dollar run rate for the click. And advertisers are most focused on not with the cost per click, but actually with the cost per lead. So we're always very focused on continuing to drive improved value per lead. And to the extent that we can drive improved value, then advertisers are certainly willing to pay more per click. And over the course of 2025 here, because of macro pressure, we have seen that there are. Fewer clicks on the platform, and that's resulted in the higher prices. It has not translated in the third quarter to a change from a year-ago period in terms of churn. So advertisers, I believe, recognize a couple of things are happening. One, of course, is those leads are valuable to them in an environment where there may not be as much interest in. Visits or using their services. And so they want to generate those leads, and they're willing to pay for those leads. That's one dynamic. We think that we are continuing to increase the value that we are delivering to those advertisers. And the c ost for those leads fits within their model as they've seen inflation. Certainly, they've also passed on a portion of their costs to the. Consumer, although I called out the challenges, particularly in restaurants, for that. But setting that aside, inflation has certainly been something that's impacted their pricing as well. So you combine all those factors, and we certainly are very attentive to the cost per click. And ultimately, our mission is to deliver valuable leads and visits to those advertisers as efficiently as possible, competitive with other platforms. Thank you. Our last question comes from the line of Sergio Segura with KeyBank. Please go ahead. Great. Thanks for taking the questions. I have two. So maybe first on Yelp Assistant. I know it's early for the logged-out users, but just curious what you're seeing there, if it's pretty consistent with what impact you've seen from logged-in users. And then on the EBITDA side, the cost side of the business. Raising that outlook. Just can you provide us a little bit more color on the efficiencies that you're seeing there that are driving that improved outlook? Thanks. Hey, Sergio. This is Jeremy. Yeah, Yelp Assistant, the logged-out. Release is just starting to roll, so it's a bit early to see the exact effects. But overall, Yelp Assistant on the services side is doing great. We were up in terms of projects 400% year-over-year. And so we'll keep you posted as we get more data on the rollout. But there is a lot of opportunity there, as we highlighted last quarter, to expose Yelp Assistant in a variety of different places, especially with logged-out users. And this is David Sergio, turning to your question on EBITDA. We o perate, we believe, in a very efficient way in deploying capital and investing across the business. We're constantly monitoring that and making adjustments. As you recall, we committed to flat headcount here in 2025. We expect to be flat as we come to the end of the year. That's a commitment we made in 2024 and 2023 as well. And we believe that we continue to. Increase the efficiency and leverage. Across Yelp from the contributions of everybody working at Yelp. So we are overall pleased with the progression there. There's also an element of being able to capitalize more. Software because we're doing more new greenfield projects. So for instance, Yelp Assist, Yelp Host, Yelp receptionist, and portions of the work that are associated with Yelp Assistant. So the overall profile of our investment, even in product and engineering. Reflects the fact that we are increasing our velocity and particularly our innovation. So we're very excited about our ability to leverage AI to build these new products, deliver more value to both consumers and advertisers. And obviously, we'll continue to be very disciplined in the way that we allocate capital going forward. There are no further questions at this time. Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now.