Yelp Forecasts Revenue Below Estimates; Shares Tumble

Yelp, operator of consumer review website Yelp.com, forecast second-quarter revenue below analysts’ expectations on Wedensday, sending its shares down about 15 percent in extended trading.

The company also reported first-quarter revenue below the average analyst estimate as it added fewer-than-expected local advertising accounts.

Yelp’s local advertising accounts rose about 43 percent to 90,200 in the first quarter. Analysts were expecting 91,900 accounts, according to market research firm FactSet StreetAccount.

Yelp gets about 83 percent of its total revenue from local advertising.

The company has been stepping up efforts to expand in markets outside the United States, and it has also been diversifying into other businesses such as restaurant bookings, event management and payments, mainly through acquisitions.

Yelp’s website and mobile app allow users to rate a variety of businesses, including restaurants, on a scale of five.

Yelp forecast second-quarter revenue of $131 million-$134 million on Wednesday. Analysts on average were expecting $138.4 million, according to Thomson Reuters I/B/E/S.

Yelp’s net loss attributable to common stockholders narrowed to $1.3 million, or two cents per share, in the first quarter, ended March 31 from $2.6 million, or four cents per share, a year earlier.

Revenue rose about 55 percent to $118.5 million.

Analysts on average had expected the company to report a profit of one cent per share and revenue of $120 million.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Kirti Pandey)

This article originally appeared on Recode.net.

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