Unexpected losses at business listings service Yelp sent the company’s stock plummeting by 28pc. The company suggested the current unicorn bubble in Silicon Valley is hurting its performance, with rising salary costs eating into profitability.
Yelp reported a respectable 53pc surge in Q2 revenues to US$252.4m. However, a net loss of US$2.6m didn’t impress investors.
During Yelp’s earnings call, chief operating officer Geoff Donaker said that the unicorn bubble is hurting Yelp’s profitability as competition for talent in Silicon Valley is fierce.
He said that the challenge is something that Yelp and other players will simply have to ride out.
Last year, Yelp announced 100 new jobs for Dublin at its new international headquarters.
The company also said that chairman Max Levchin is to step down from the board to pursue other interests. Levchin, co-founder of PayPal, provided seed funding for Yelp before it went public in 2011.
“We continue to demonstrate solid topline growth, with total net revenue increasing 51pc year-over-year to approximately $134 million,” said Jeremy Stoppelman, Yelp’s CEO.
“Consumers are increasingly turning to apps when using their mobile phones, and we are excited about the growth we’ve seen in app usage, which accelerated to 51pc year-over-year.
“We believe our rich content married with our highly-differentiated local advertising product will position us well to capture a meaningful share of the large local market.”
Yelp image via Shutterstock
Buy your tickets now!