Hello, everyone. Thank you for your patience and for joining us. Welcome to Yelp Incorporated's second quarter 2026 earnings conference call. A reminder that participants are in a listen-only mode. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Kate Krieger, Director of Investor Relations. Kate, please go ahead. Good afternoon, everyone. Thanks for joining us on Yelp's second quarter 2026 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 a shareholder letter on our investor relations website and with the SEC. Hope everyone had the chance to read it. We'll provide some brief opening comments. 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. 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, in 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 a historical reconciliation of GAAP net income or loss to Adjusted EBITDA, a calculation of net income margin and Adjusted EBITDA margin, and a historical reconciliation of GAAP cash flows from operating activities to Free Cash Flow. With that, I will turn the call over to Jeremy. Thanks, Kate, and welcome everyone. Yelp continued to advance its AI transformation in the second quarter. Our team made local discovery more conversational, delivered new tools to help businesses succeed, and expanded the reach of our trusted content through new partnerships. We are pleased by the progress of our initiatives and the meaningful signs of improvement that emerge across several key metrics. At the same time, consumers and local businesses have continued to face a challenging economic environment. Second quarter net revenue increased by 1% year- over- year to $376 million, with a net income margin of 8% and an Adjusted EBITDA margin of 24%. Underlying our top-line results, services ad revenue was flat year- over- year, and RR&O ad revenue decreased by 10% year- over- year. We've increased our focus on growing a number of AI-driven revenue streams this year, which contributed to other revenue growth accelerating from the first quarter to 98% year- over- year. On the consumer side of our business, we saw encouraging traffic trends in the quarter, with improvements in app installs and page views. Moving to our product initiatives, we have reconceived how consumers and businesses connect on Yelp through a conversational experience that provides answers and enables actions. Central to this updated experience, the new Yelp Assistant, which works across all categories, demonstrated early positive signs in user engagement. In services category, specifically, Yelp Assistant has been an important driver of project submissions and monetization, contributing to overall project growth of approximately 10% year- over- year. We are delivering AI tools that help service pros and other local businesses grow, operate, and succeed. For advertisers, we improved our advertising technology and ad formats. We also directed leads acquired via paid search to multi-location services advertisers, which contributed to substantial budget growth from these customers over the first half of the year. Our team continued to scale Yelp Host, our AI-powered call answering service for restaurants, which reached an annual run rate of 2.4 million calls handled in July, more than tripling from January. We recently rolled out a number of updates to the product, including 16 new languages and an integration with OpenTable that enables consumers to book and manage reservations automatically via Yelp Host. We also significantly expanded Yelp Host's market opportunity by adding food ordering functionality with full point-of-sale integration, which enables restaurants to take phone orders for pickup without added fees. We accelerated our strategy in this area for services businesses through the acquisition of Hatch in February. Hatch annual run rate revenue grew 59% year- over- year to $35 million in June as we lapped a period of significant growth. To accelerate Hatch's roadmap, we significantly increased the size of the team in Q2. While this resulted in an adjustment period in the quarter, we saw improved trends in July. Looking ahead, we see a considerable opportunity in AI lead management. With increased product velocity and added sales headcount that continues to ramp, we're excited by Hatch's growth potential in the year ahead. We are extending our reach to power local discovery across the AI ecosystem through data licensing. In the second quarter, we saw robust demand for our licensing products, including from our partnership with OpenAI. Yelp ratings and reviews recently began powering ChatGPT's local experience in relevant categories. Request a Quote integration with ChatGPT is coming soon, building on our success with Apple Maps and Yahoo. In summary, we continue to make significant progress transforming Yelp with AI in the second quarter. We're confident in our plans for the year and believe that our initiatives will position us to drive profitable growth over the long term. With that, I'll turn it over to David. Thanks, Jeremy. Turning to our second quarter results. Net revenue increased by 1% year-over-year to $376 million, $8 million above the high end of our outlook range. Net income decreased by 28% year-over-year to $32 million, representing an 8% margin. Adjusted EBITDA decreased by 9% year-over-year to $91 million, $16 million above the high end of our outlook range, representing a 24% margin. As Jeremy mentioned, local businesses have faced a challenging operating environment, which is reflected in our advertising metrics for the quarter. Services ad revenue was flat year-over-year at $241 million, while RR&O ad revenue decreased by 10% year-over-year to $102 million. Flat services locations and a decrease in RR&O locations resulted in an overall decline of 1% year-over-year in paying advertising locations to 510,000. Ad clicks declined by 5% year-over-year in the quarter, driven by fewer clicks in RR&O categories, partially offset by a slight increase in services categories. Average CPC increased by 1% as services ad clicks comprised a greater portion of total ad clicks compared to the prior year period. Moving to other revenue. Other revenue increased by 98% year-over-year to a record $33 million. This strong growth was driven by the inclusion of revenue generated by Hatch, as well as significant growth in revenue from data licensing and food orders. Turning to expenses. In 2026, we're investing behind high return areas that we believe will transform Yelp. In particular, we see a significant opportunity in other revenue through AI-driven offerings such as Yelp Host, Hatch, and data licensing. As these accretive revenue streams continue to gain traction, we are targeting an annual run rate of $250 million in other revenue by the end of 2028. At the same time, we see substantial opportunities to unlock operational efficiencies and increase employee productivity with AI. We've already seen AI tools drive meaningful improvements in product and engineering velocity. We are iterating quickly and bringing new products like Yelp Host to market faster than ever before. In the short term, we plan to increase our investments in a number of areas. We are providing Hatch with additional resources to accelerate their product roadmap and go to market. We also expect to continue to invest in consumer marketing to drive leads to multi-location services businesses. We reduced stock-based compensation expense as a percentage of revenue by 3 percentage points year-over-year to 7% in the second quarter. We also continue to expect that we will reduce stock-based compensation expense to less than 6% of revenue by the end of 2027. To create long-term shareholder value, we are evolving our approach to capital allocation. We plan to invest in future growth, pursue strategic acquisitions through a combination of cash and financing, and return more than 50% of Free Cash Flow to shareholders each year through share repurchases. To that end, in the second quarter, we repurchased $15 million worth of shares at an average price of $24.92 per share, contributing to a 15% year-over-year reduction in diluted shares outstanding. We subsequently repurchased approximately $25 million worth of shares in the third quarter, bringing our total repurchases for the year to approximately $200 million. We have now paused our program as we work to pay down our revolving credit facility. With $339 million remaining under our existing authorization at present, we expect to resume repurchases in 2027. Turning to our outlook. We anticipate that the challenging economic environment for local businesses will persist for the remainder of the year and continue impacting advertising revenue across categories. At the same time, we expect our investments in our strategic initiatives will continue to drive strong growth in other revenue. As a result, we anticipate third quarter net revenue will be in the range of $365 million to $370 million. For the full year, we are narrowing our range and now expect net revenue will be between $1.460 billion and $1.470 billion. Turning to margin, we expect expenses will increase sequentially in the third quarter as we invest in our AI transformation, Hatch, and consumer marketing. As a result, we expect third quarter Adjusted EBITDA will be in the range of $70 million to $75 million. For the full year, we are narrowing our range and now expect Adjusted EBITDA will be between $315 million and $325 million. In closing, with early signs of improvement across a number of key metrics, Yelp's second quarter results reflect continued product momentum as we invest in our AI transformation. We continue to believe in the opportunities ahead and our ability to create long-term shareholder value. With that, operator, please open up the line for questions. Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Your first question comes from the line of Eric Sheridan with Goldman Sachs. Eric, your line is open. Please go ahead. Hey, guys. This is Alex on for Eric. Thanks for taking our question. Maybe just wanted to dig into a little bit of some of the investments you're making behind the other revenue push year and specifically for Hatch. What are some of the investments, whether it's product development, go-to-market, that you plan to make to support that? What are the potential differences in structural margins going forward between that revenue stream and your core advertising? Thanks. A reminder, if you are muted locally, to unmute your device. Alex, thanks for the question. We are investing in Hatch. We're investing across the board, both in go-to-market as well as product and engineering. Really, when we acquired Hatch in February, it was a startup, and now we obviously want to scale operations there. We're bringing a lot of folks as well as process and metrics to the go-to-market side, and we were able to deliver quite a few product improvements throughout the course of the second quarter. We obviously think that there's a significant market opportunity here, and we absolutely want to go after it. In terms of over the longer term, the margin profile for this business we expect can be similar to other subscription businesses. In the near term, though, we definitely want to continue to invest, to scale and again, to capture market opportunity. Great. Thank you. Your next question comes from the line of Sergio Segura with KeyBanc. Sergio, your line is open. Please go ahead. Great. Thanks for taking the questions. Maybe one on data licensing and the ChatGPT Request a Quote integration that's coming up. I'm just curious how you think about it longer term, how you believe Yelp captures most of the economic value from AI. Is it driving users back to the Yelp ecosystem, generating leads to these platforms, or licensing the content and data? Just how you view all those opportunities. Hi, Sergio. Thanks for the question. We're really excited about working with OpenAI, obviously. It has a big consumer footprint with ChatGPT. You can now see our integration starting to happen there. It's still kind of the first inning, but you can see ratings. It links back to Yelp. You can see review snippets that also can link back to Yelp. In fact, we just started to see rolling Request a Quote. Services represents a huge majority of our revenue, so having that interconnectivity, I think, is pretty exciting. It's super early days in terms of traffic impact, but we see this as a potentially significant distribution channel over time. We do have a history here in licensing our data and cooperating with other big players. For example, our data can be found in places like Amazon, DuckDuckGo, Bing, and Apple has been obviously a huge partner that we've worked with for a long time. When our content shows up there, I think it's a win-win. We meet consumers wherever they're at. There's often ways to get back to Yelp. It's both an opportunity to merchandise and remind consumers of Yelp, but also can deliver some meaningful traffic back. We see the opportunity with these AI players to be quite similar, and we're thinking about it much in the same way. Great. That's helpful. Maybe just to follow up on that. Anything notable to call out on differences in quality or conversion of these leads coming through these AI platforms versus other performance channels? I think it's quite early to really have a strong opinion on that. The way that it's being merchandised is just at the bare minimum, as you can see, I don't think that's the eventual steady state. I really haven't seen any data on conversion just because it's just been starting more recently. Okay. I mean, I guess separately, speaking of overall traffic, we did note some consumer tailwinds, some good things happening. Just to highlight, that's coming from a variety of places. Some of it is our great work product team's done on SEO as well as driving more downloads, which is exciting because, of course, downloads are more of a direct relationship with consumers. It's a great way to discover and utilize Yelp. We did see some gains from our partner network. Again, we've been licensing data for quite some time. This is folks that are not in the AI LLM search space. In working with our partners, we were able to drive some more traffic. We also saw some positive changes on the algorithmic side for Google, where we've seen they've started to really lean into user-generated content in a big way, I think because of the onslaught of spam and low-quality content. That's benefited us as well. Understood. Thank you, Jeremy. Appreciate the perspective. Sure thing. Your next question comes from the line of Colin Sebastian with Baird. Colin, your line is open. Please go ahead. Hey, this is Zach on for Colin. I guess, on your success with the Yelp Host, have you found any early success cross-selling the ads product with it so far? How might it be able to open the door to other new or expanded partnerships? Thanks. This is Jeremy here. I'd say we're very excited about Yelp Host. Homegrown product that we started from scratch a little over a year ago, we're now at a $2.4 million call run rate. Up, it's about tripled from January this year. We've also just launched OpenTable integration, which is exciting. People can call in and make changes to reservations, obviously, of course, with Yelp Guest Manager, which is our front of house product, but we're opening up to the rest of the ecosystem there, which is exciting. Food ordering, we've recently added. That's great for restaurants. Obviously, it takes a lot of time to take down food orders, but also if they're taking in orders primarily through food delivery services, that can really add up a lot of fees and expenses in getting that food out. Whereas food orders coming in over the phone is just pickup, it comes without a commission, our restaurants really love that. On the ad side, we do have a dedicated group to working with restaurant partners. They're selling Yelp Guest Manager, they're selling Yelp Ads, they're selling Yelp Host. We do see some positive synergies there. It's early days. I don't think it's really changed the game for us on the restaurant ad side. I do think having a really compelling product that is delivering for restaurants, is certainly a step in the right direction and gives us some opportunity to have those conversations. Your next question comes from the line of Nitin Bansal with Bank of America. Nitin, your line is open. Please go ahead. Thank you for taking questions. You mentioned that you resumed acquiring leads through paid search. Can you help us understand what has changed versus prior reports and what gives you confidence that this time the strategy will have the intentional impact and will drive incremental advertising budgets to Yelp? Thank you. Hey, this is Jed. I can take that question. We have certainly experimented in the past on buying leads for the overall ecosystem. I think the difference now is that we're specifically targeting multi-location services businesses. We've talked about that opportunity for a while now. They're obviously able to commit a lot of budget, if you're able to drive leads. Our ability to go out and source quality leads from the broader ecosystem just enforces and allows us to kind of get through more budget. Ultimately, these businesses are looking for scale. They want the ability to buy a ton of leads that make a difference. We've been very targeted in the way that we go out and do that and are really confident on the ROAS of that spend for our customers. That's the big difference between when we've been doing it in the past. Thank you. If I can ask one more. There was, like, a healthy acceleration in the Paying Advertiser Locations, both on the services side and the RR&O side. Can you help us understand what contributed to that? How should we think about the future locations growth and the monetization implications for your ad business, given that you lowered the upper end of the revenue guide by $5 million? Overall, we did see encouraging trends on the Paying Advertiser Location side. On restaurants, we saw kind of the best performance that we've seen from a PAL perspective in a few years. On the services side, we stayed flat on the PAL side. Overall, PALs were down 1% year-over-year, which is a big improvement over Q1. We see that as early signs of encouragement there. There is certainly a lag, and these local businesses continue to face macroeconomic pressures. You look at the impact of inflation, higher gas costs, input costs all around the board. We don't expect any massive trajectory turn in terms of the broader local economy, but it is certainly encouraging to see our traffic trends, as well as the Paying Advertiser Location trends. We have a long pipeline as we continue to kind of drive. Over the long term, we believe we can impact both Paying Advertiser Locations, the number as well as the ARPAL. Thank you. Your last question comes from the line of Kishan Patel with Raymond James. Kishan, your line is open. Please go ahead. Hey, this is Kishan Patel on for Josh Beck. Can you elaborate on the tailwinds in Google traffic post the May and June court updates, as some internet peers have noted AI Overviews related traffic headwinds? If you could delineate between paid marketing versus organic tailwinds. Thank you. Hi, Kishan. This is Jeremy. Yeah. Certainly, we've been monitoring folks as they talk about what's going on in the space with AI Overviews and traffic patterns. It does seem that we bucked the trend. I think our area has been different when it comes to AI Overviews. Our categories that we get a lot of traffic in are highly monetizable. While you do occasionally see AI Overviews, they're usually not right at the top. I think there's some element of Google trying to preserve its own revenue there that is a bit protective. From a paid traffic standpoint, largely, we are organically driven. We do have some limited paid traffic that we try to optimize. We've talked about some of that with multi-location and so forth. It's relatively de minimis in terms of overall traffic impact. Really, it's organic sort of. Got it. Thank you. There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.