10-K – 2026-02-27 – yelp-20251231.htm

Other comprehensive income (loss) 7,754   ( 3,229 ) 3,343  
Comprehensive income $ 153,354   $ 129,621   $ 102,516  

See Notes to Consolidated Financial Statements.

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YELP INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)

Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

Shares Amount
Balance as of December 31, 2022 69,797   $ —   $ 1,649,692   $ —   $ ( 15,545 ) $ ( 923,823 ) $ 710,324  

Issuance of common stock upon exercises of employee stock options 847   —  20,261   —  —  —  20,261  
Issuance of common stock upon vesting of restricted stock units (“RSUs”), net 3,243   —  —  —  —  —  —  
Issuance of common stock for employee stock purchase plan 604   —  19,206   —  —  —  19,206  
Stock-based compensation (inclusive of capitalized stock-based compensation) —  —  183,178   —  —  —  183,178  
Taxes withheld related to net share settlement of equity awards —  —  ( 85,670 ) —  —  —  ( 85,670 )
Repurchases of common stock, including excise tax —  —  —  ( 200,281 ) —  —  ( 200,281 )
Retirement of common stock ( 5,627 ) —  —  199,999   —  ( 199,999 ) —  
Other comprehensive income —  —  —  —  3,343   —  3,343  
Net income —  —  —  —  —  99,173   99,173  
Balance as of December 31, 2023 68,864   —   1,786,667   ( 282 ) ( 12,202 ) ( 1,024,649 ) 749,534  

Issuance of common stock upon exercises of employee stock options 37   —  1,244   —  —  —  1,244  
Issuance of common stock upon vesting of RSUs, net 2,863   —  —  —  —  —  —  
Issuance of common stock for employee stock purchase plan 614   —  19,546   —  —  —  19,546  
Stock-based compensation (inclusive of capitalized stock-based compensation) —  —  169,970   —  —  —  169,970  
Taxes withheld related to net share settlement of equity awards —  —  ( 73,829 ) —  —  —  ( 73,829 )
Repurchases of common stock, including excise tax —  —  —  ( 252,117 ) —  —  ( 252,117 )
Retirement of common stock ( 6,586 ) —  —  248,490   —  ( 248,490 ) —  
Other comprehensive loss —  —  —  —  ( 3,229 ) —  ( 3,229 )
Net income —  —  —  —  —  132,850   132,850  
Balance as of December 31, 2024 65,792   —   1,903,598   ( 3,909 ) ( 15,431 ) ( 1,140,289 ) 743,969  
Issuance of common stock upon exercises of employee stock options 58   —  1,235   —  —  —  1,235  
Issuance of common stock upon vesting of RSUs, net 2,337   —  —  —  —  —  —  
Issuance of common stock for employee stock purchase plan 637   —  18,430   —  —  —  18,430  
Stock-based compensation (inclusive of capitalized stock-based compensation) —  —  144,880   —  —  —  144,880  
Taxes withheld related to net share settlement of equity awards —  —  ( 57,195 ) —  —  —  ( 57,195 )
Repurchases of common stock, including excise tax —  —  —  ( 293,821 ) —  —  ( 293,821 )
Retirement of common stock ( 8,837 ) —  —  296,731   —  ( 296,731 ) —  
Other comprehensive income —  —  —  —  7,754   —  7,754  
Net income —  —  —  —  —  145,600   145,600  
Balance as of December 31, 2025 59,987   $ —   $ 2,010,948   $ ( 999 ) $ ( 7,677 ) $ ( 1,291,420 ) $ 710,852  

See Notes to Consolidated Financial Statements.
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YELP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2025 2024 2023
Operating Activities
Net income $ 145,600   $ 132,850   $ 99,173  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 50,092   40,407   42,184  
Provision for credit losses 43,271   45,614   40,702  
Stock-based compensation 133,993   158,193   173,451  
Amortization of right-of-use assets 10,398   15,094   28,084  
Deferred income taxes 25,073   ( 24,920 ) ( 22,150 )
Amortization of deferred contract cost 27,943   24,854   24,035  
Asset impairment —   5,914   23,563  

Write-off of website and internal use software
3,339   2,583   1,278  
Other adjustments, net ( 491 ) ( 4,995 ) ( 1,688 )
Changes in operating assets and liabilities:
Accounts receivable ( 41,872 ) ( 51,033 ) ( 54,947 )
Prepaid expenses and other assets ( 27,113 ) ( 24,314 ) ( 5,123 )
Operating lease liabilities ( 20,926 ) ( 39,230 ) ( 39,734 )
Accounts payable, accrued liabilities and other liabilities 22,722   4,798   ( 2,548 )
Net cash provided by operating activities 372,029   285,815   306,280  
Investing Activities
Purchases of marketable securities — available-for-sale ( 80,245 ) ( 94,304 ) ( 148,448 )
Sales and maturities of marketable securities — available-for-sale 78,530   123,094   117,916  

Purchases of other investments ( 700 ) ( 2,500 ) —  

Maturities of other investments 5,000   —   2,500  
Acquisition, net of cash received —   ( 66,199 ) —  
Purchases of property, equipment and software ( 48,353 ) ( 37,347 ) ( 26,847 )

Other investing activities 114   ( 10 ) 195  
Net cash used in investing activities ( 45,654 ) ( 77,266 ) ( 54,684 )
Financing Activities
Proceeds from issuance of common stock for employee stock-based plans 19,665   20,790   39,510  
Taxes paid related to the net share settlement of equity awards ( 56,889 ) ( 73,411 ) ( 85,180 )
Repurchases of common stock ( 290,949 ) ( 250,899 ) ( 199,999 )
Excise tax paid on net stock repurchases
( 1,218 ) ( 282 ) —  
Payment of issuance costs for credit facility ( 656 ) —   ( 1,109 )

Net cash used in financing activities ( 330,047 ) ( 303,802 ) ( 246,778 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash 2,279   ( 1,067 ) 2,046  
Change in cash, cash equivalents and restricted cash ( 1,393 ) ( 96,320 ) 6,864  
Cash, cash equivalents and restricted cash — Beginning of period 217,682   314,002   307,138  
Cash, cash equivalents and restricted cash — End of period $ 216,289   $ 217,682   $ 314,002  

Supplemental Disclosures of Noncash Investing and Financing Activities
Purchases of property, equipment and software recorded in accounts payable and accrued liabilities $ 2,181   $ 1,637   $ 914  
Excise tax accrued on net stock repurchases $ 1,873   $ 1,218   $ 282  

Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,814   $ 263   $ —  

Repurchases of common stock recorded in accounts payable and accrued liabilities $ 999   $ 1,249   $ 1,887  
Acquisition holdback consideration not yet paid $ —   $ 13,500   $ —  

See Notes to Consolidated Financial Statements.
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YELP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Yelp Inc. was incorporated in Delaware on September 3, 2004. Except where specifically noted or the context otherwise requires, the use of terms such as the “Company” and “Yelp” in these Notes to Consolidated Financial Statements refers to Yelp Inc. and its subsidiaries.
Yelp is a trusted local resource for consumers and a partner in success for businesses of all sizes. Consumers trust Yelp for its extensive ratings and reviews of businesses across a broad range of categories, while businesses advertise on Yelp to reach its large audience of consumers. Yelp has operations in the United States, United Kingdom, Canada, Ireland and Germany.
Basis of Presentation —The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated upon consolidation.
Certain Significant Risks and Uncertainties —The Company operates in a dynamic industry and, accordingly, may be affected by a variety of factors. For example, the Company’s management believes that changes in any of the following areas could have a significant negative impact on the Company in terms of its future financial position, results of operations or cash flows: adverse macroeconomic conditions, such as the current uncertain and inflationary economy; the Company’s ability to maintain and expand its advertiser base; the success of the Company’s strategy; qualified employees and key personnel; levels of traffic and user engagement on the Company’s platform; industry competition; reliance on search engines and application marketplaces; the quality and reliability of reviews; real or perceived security breaches and the Company’s ability to maintain uninterrupted operation of its network infrastructure; protection of the Company’s brand, reputation and intellectual property; intellectual property infringement and other disputes; and changes in government regulation affecting the Company’s business, among other things.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates —The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Items that require estimates, judgments or assumptions include, but are not limited to, determining variable consideration and identifying the nature and timing of satisfaction of performance obligations, allowance for credit losses, valuation of intangible assets acquired in a business combination, fair value and estimated useful lives of long- and indefinite-lived assets, litigation loss contingencies, liabilities related to incurred but not reported insurance claims, fair value and achievement of targets for performance-based restricted stock units (“PRSUs”), and income taxes. These estimates, judgments and assumptions are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management’s estimates due to macroeconomic uncertainty and other factors.
Foreign Currency Translation —The consolidated financial statements of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of foreign subsidiaries are translated at exchange rates in effect as of the balance sheet date. Revenues and expenses are translated at average exchange rates in effect during the year. Translation adjustments are recorded within accumulated other comprehensive loss, a separate component of stockholders’ equity.
Cash and Cash Equivalents —The Company considers all highly liquid investments, such as treasury bills, commercial paper, certificates of deposit, and money market instruments with maturities of three months or less at the time of acquisition to be cash equivalents. Cash and cash equivalents primarily consist of cash on deposit with banks and amounts held in interest-bearing money market funds that are readily convertible to cash. The fair value of cash and cash equivalents approximates their carrying value.
Marketable Securities —The Company considers highly liquid treasury notes, U.S. agency securities, corporate debt securities, money market funds and other funds with maturities of more than three months to be marketable securities. These securities are classified as short-term marketable securities on the consolidated balance sheets as they represent the investment of cash available for current operations. The Company has a policy that generally requires its securities to be investment grade (i.e., rated ‘A’ or higher by bond rating firms) with the objective of minimizing the potential risk of principal loss. The
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Company classifies its marketable securities as available-for-sale and determines the classification at the time of purchase based on its investment strategy; it reevaluates such designation at each balance sheet date.
Available-for-sale securities are stated at fair value as of each balance sheet date and are periodically assessed for impairment. An investment is impaired if the fair value of the investment is less than its amortized cost basis. The Company reviews the securities in an unrealized loss position and evaluates whether a credit loss exists by considering factors such as historical experience, market data, issuer-specific factors including their credit rating, and current economic conditions. If a credit loss exists, the Company measures the loss by comparing the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. An allowance for credit loss is recorded as a component of other income (expense), net, limited by the amount of unrealized loss. Any remaining unrealized losses are recorded to other comprehensive income (loss).
The Company determines any realized gains or losses on the sale of marketable securities on a specific identification method and records such gains and losses as a component of other income (expense), net. Amortization of premiums and accretion of discounts are included in interest income. If the Company has the intent to sell an available-for-sale security in an unrealized loss position or it is more likely than not that it will be required to sell the security prior to recovery of its amortized cost basis, any previously recorded allowance is reversed and the entire difference between the amortized cost basis of the security and its fair value is recognized on the consolidated statements of operations.
Fair Value Measurements —The accounting guidance for fair value measurements prioritizes the inputs used in measuring fair value in the following hierarchy:
Level 1 —Observable inputs, such as quoted prices in active markets;
Level 2 —Inputs other than quoted prices in active markets that are observable either directly or indirectly, or;
Level 3 —Unobservable inputs in which there are little or no market data, which require the Company to develop its own assumptions.
This hierarchy requires the Company to use observable market data, when available, to minimize the use of unobservable inputs when determining fair value. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company’s certificates of deposit, commercial paper, corporate bonds, agency bonds and U.S. government securities are classified within Level 2 of the fair value hierarchy because they have been valued using inputs other than quoted prices in active markets that are observable directly or indirectly.
Concentrations of Credit Risk —Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and other investments, and accounts receivable. The Company places its cash and cash equivalents, marketable securities and other investments with major financial institutions, which management assesses to be of high credit quality, in order to limit the exposure of each investment.
Credit risk with respect to accounts receivable is dispersed due to the Company’s large number of customers. In addition, the Company’s credit risk is mitigated by the relatively short collection period. Collateral is not required for accounts receivable.
Accounts Receivable, Net, and Payment Terms —The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records an accounts receivable balance when revenue is recognized prior to or at the time of invoicing the customer. Payment terms and conditions vary by contract type and the service being provided. For advertising services, the Company typically invoices customers on a monthly basis,  one month  in arrears, with payment due either at the end of each billing period or up to  30 days after the end of the billing period. For transaction services, the Company collects its commission fee on each transaction either at the time of the transaction or up to  30 days after the end of the billing period. For subscription services, the Company typically invoices customers one month in advance, with payment due at the beginning of each billing period.
Allowance for Credit Losses —The Company maintains an allowance for credit losses. The allowance reflects the Company’s best estimate of probable losses associated with the accounts receivable balance. It is based upon historical experience and loss patterns, the number of days that billings are past due, an evaluation of the potential risk of loss associated with delinquent accounts based on the credit risk of those accounts, known delinquent accounts, as well as current conditions and reasonable and supportable economic forecasts. When new information becomes available that allows the Company to more accurately estimate the allowance, it makes an adjustment, which is considered a change in accounting estimate. The carrying value of accounts receivable approximates fair value.
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Deferred Contract Costs —The Company has determined that certain sales incentive compensation costs are incremental costs to obtain the related contract. These costs are capitalized in the period in which they are incurred and amortized on a straight-line basis over the expected customer life of the associated contract. The Company uses a straight-line basis as it expects the benefit of these costs to be realized uniformly over the amortization period. The amortization periods for contract costs, which extend up to  27 months, were determined based on both qualitative and quantitative factors, including product life cycle attributes and customer retention historical data. For contract costs with amortization periods of less than  12 months, the Company applies a practical expedient to expense such costs as incurred. The Company assesses deferred contract costs for impairment on a quarterly basis. No impairment charges were recorded in the periods presented. Amortized contract costs are recorded within sales and marketing expense on the consolidated statements of operations. Deferred contract costs are included within other non-current assets on the Company’s consolidated balance sheets (see Note 11, “ Selected Consolidated Financial Statement Data ” ).
Deferred Revenue —The Company records deferred revenue when it has received consideration, or has the right to receive consideration, in advance of the transfer of the performance obligations of the contract to the customer.
Property, Equipment and Software —Property, equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are approximately three to five years . Leasehold improvements are amortized over the shorter of the lease term or 10 years. Following the disposition of an asset, the associated net cost is no longer recognized as an asset, and any gain or loss on the disposition is reflected in costs and expenses on the consolidated statements of operations.
Website and Internal-Use Software Development Costs —Costs related to website and internal-use software are primarily related to the Company’s website and mobile app, including support systems. The Company capitalizes its costs to develop software when: preliminary development efforts are successfully completed; management has authorized and committed project funding; and it is probable that the project will be completed and the software will be used as intended. Costs incurred for enhancements that are expected to result in additional material functionality are capitalized and amortized over the estimated useful life of the upgrades. Such costs are amortized on a straight-line basis over the estimated useful life of the related asset, which is generally three years .
The Company capitalizes certain implementation costs incurred related to cloud computing arrangements that are service contracts. Such costs are amortized on a straight-line basis over the term of the associated hosting arrangement plus any reasonably certain renewal period. Any capitalized amounts related to such arrangements are recorded within prepaid expense and other current assets and within non-current assets on the consolidated balance sheets.
Leases —The Company leases its office facilities under operating lease agreements that expire from 2026 to 2031, some of which include options to renew at the Company’s sole discretion. If exercised, such options would extend the lease terms by five years . Additionally, one of the Company’s lease agreements contains the option to terminate the lease, which requires 12 months prior written notice to the landlord. The Company does not have any finance lease agreements.
The Company determines if an arrangement contains a lease at inception. The Company recognizes on its consolidated balance sheets operating lease liabilities representing the present value of future lease payments, and an associated operating lease right-of-use (“ROU”) asset for any operating lease with a term greater than one year. The Company recognizes the amortization of the ROU asset each month within lease expense. The Company elected to use the practical expedient for short-term leases, and therefore does not record operating lease ROU assets or lease liabilities associated with leases with durations of 12 months or less.
When recording the present value of lease liabilities, a discount rate is required. The Company has concluded that the rates implicit in the various operating lease agreements are not readily determinable. As a result, the Company instead uses its incremental borrowing rate, which is calculated based on hypothetical borrowings to fund each respective lease over the lease term, as of the lease commencement date, assuming that borrowings are secured by the various leased properties. The incremental borrowing rates are determined based on an assessment of the Company’s implied credit rating, using ratings scales from reputable rating agencies that consider a number of qualitative and quantitative factors. Market rates are derived as of the lease commencement dates with reference to companies with the same debt rating that operate in a similar industry to the Company.
When the Company is reasonably certain to exercise a lease renewal or termination option, the Company recognizes the associated impact to the ROU asset and lease liability.
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The Company does not combine lease and non-lease components; its lease agreements provide specific allocations of the Company’s obligations between lease and non-lease components. As a result, the Company is not required to exercise any judgment in determining such allocations.
The Company has subleased certain office facilities under operating lease agreements that expire in 2026 and 2031. The sublease agreements do not contain any options to renew. The Company recognizes a majority of the sublease rental income as a reduction in rent expense on a straight-line basis over the lease period, with any sublease income in excess of the original lease cost recorded to other income, net.
Business Combinations— The Company accounts for acquisitions of entities that consist of inputs and processes that have the ability to contribute to the creation of outputs as business combinations. The Company allocates the purchase price of the acquisition to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition and integration costs are expensed as incurred. During the measurement period, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, which could be up to one year after the acquisition date, subsequent adjustments are recorded to the Company’s consolidated statements of operations.
Goodwill —Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. The carrying amount of goodwill is reviewed at least annually, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that its fair value is less than the carrying amount, or opts not to perform a qualitative assessment, then the Company will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. No impairment charges associated with goodwill have been recorded by the Company to date.
Intangible Assets —Intangible assets include acquired intangible assets identified through business combinations, which are carried at fair value less accumulated amortization, and purchased intangible assets, which are carried at cost less accumulated amortization. Amortization is recorded over the estimated useful lives of the assets, generally 2 to 12 years. The Company reviews amortizable intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value. No material impairment charges have been recorded to date.
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed of —The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
Stock Repurchases —The Company accounts for repurchases of its common stock by recording the cost to repurchase those shares to treasury stock, a separate component of stockholders’ equity. Upon retirement, the carrying amount of treasury stock is reduced with a corresponding reduction to par value of common stock, with any excess of the cost incurred to repurchase shares over their par value recorded as an adjustment to retained earnings (accumulated deficit) on the date of retirement.
Revenue Recognition —The Company generates revenue from the sale of advertising products and other revenue sources, which correspond to the Company’s major product lines. The Company recognizes revenue by applying the following steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) the Company satisfies these performance obligations in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company applies the portfolio practical expedient to account for the vast majority of contracts with customers in each category of revenue. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the amount of revenue it recognizes is equal to the amount which the Company has a right to invoice.
Contracts with customers can include multiple performance obligations, where the transaction price is allocated to each performance obligation based on its relative standalone selling price (“SSP”). The Company determines SSP based on the
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prices of the promised goods or services charged when sold separately to customers, which are determined using contractually stated prices. The Company allocates revenue to each of the performance obligations included in a contract with multiple performance obligations at the inception of the contract. The various products and services comprising contracts with multiple performance obligations are typically capable of being both distinct and distinct within the context of the arrangement and are accounted for as separate performance obligations.
For all contracts with customers, estimates and assumptions include determining variable consideration and identifying the nature and timing of satisfaction of performance obligations. The Company may accept lower consideration than the amount promised per the contract for certain revenue transactions and certain customers may receive cash-based incentives, credits or refunds, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company estimates these amounts based on the expected amount to be provided to customers and constrains the revenue. The Company believes that there will not be a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the estimates of variable consideration is subsequently resolved. For contracts satisfied over time, the Company applies the invoice practical expedient to depict the value transferred to the customer and measure of progress towards completion of its obligations. The Company considers the right to receive consideration from a customer to correspond directly with the value to the customer of its performance completed to date. The Company does not consider the effects of the time value of money as substantially all of the Company’s contracts are invoiced on a monthly basis,  one month  in arrears.
Revenue is recognized net of any taxes collected from customers, which are remitted to governmental authorities. The Company does not typically refund customers for services once it determines the performance obligations of the contract have been satisfied, but will assess any refund requests from customers and partners on a case by case basis. The Company records an allowance for potential future refunds, which is estimated based on historical trends and recorded as a reduction of net revenue.
Advertising . The Company generates advertising revenue primarily through the display of advertising products on its website and mobile app. These arrangements are evidenced by either written or electronic acceptance of a contract that stipulates the types of advertising to be delivered, the timing and pricing. Performance-based advertising placements are priced on a cost-per-click basis, while impression-based advertising placements are priced on a cost per thousand impressions basis. The Company recognizes revenue from the delivery of performance-based ads and impression-based ads in the period of delivery, in each case net of customer discounts. The Company also offers businesses premium features in connection with their business pages pursuant to fixed monthly fees, and recognizes revenue from such offerings over the service period.
The Company also generates advertising revenue through indirect sales of advertising products, such as through reseller contracts that allow partners to sell Yelp Branded Profiles to their clients, its RepairPal, Inc. (“RepairPal”) network of partners that promotes certified auto repair shops to consumers and the monetization of remnant advertising inventory through third-party ad networks, and recognizes revenue in the period of delivery, net of customer discounts.
Other Revenue . The Company generates other revenue through non-advertising contracts, including subscription services contracts, such as sales of monthly subscriptions of Yelp Guest Manager, Yelp Receptionist and Yelp Host, licensing contracts for access to Yelp data, as well as transactions revenue, primarily from both revenue-sharing partner contracts and fixed fee contracts. Subscription revenues are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date the service is made available to the customer. The Company’s transactions platform provides consumers with the ability to place food orders for pickup and delivery through third parties, primarily DoorDash, and complete other transactions directly on Yelp. The Company earns a per-transaction commission fee in accordance with partnership contracts for acting as an agent for these transactions, which it recognizes on a net basis and includes in revenue upon completion of a transaction.
Cost of Revenue —The Company’s cost of revenue primarily consists of credit card processing fees, website infrastructure expense, which includes website hosting costs, and salaries, benefits and stock-based compensation expense for the infrastructure teams responsible for operating the Company’s website and mobile app, and excludes depreciation and amortization expense. Cost of revenue also includes third-party advertising fulfillment costs.
Research and Development —The Company incurs research and development expenses for costs it incurs in research aimed at developing, and in translating the results of such research into, new products and services or significant improvements to existing products or services intended for internal use. Such costs are considered research and development and are expensed as incurred. These expenses primarily consist of employee-related costs (including stock-based compensation) for the Company’s engineers and other employees engaged in the research and development of its products and services, as well as allocated indirect overhead costs. Research and development costs were $ 297.8 million, $ 310.5 million and $ 320.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, and are recorded to costs and expenses on the consolidated statements of operations for those periods, primarily within product development costs.
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Stock-Based Compensation —The Company accounts for stock-based employee compensation plans under the fair value recognition and measurement provisions, which require all stock-based payments to employees, including grants of stock options, restricted stock awards, restricted stock units (“RSUs”), PRSUs and issuances under its 2012 Employee Stock Purchase Plan, as amended (“ESPP”), to be measured based on the grant-date fair value of the awards. The Company accounts for forfeitures as they occur. The Company recognizes compensation cost related to options using the straight-line method.
The fair value of RSUs is measured using the closing price of the Company’s common stock on the New York Stock Exchange on the grant date. The Company recognizes compensation cost related to RSUs using the straight-line method. No compensation cost is recorded for RSUs that do not vest. The Company settles the employee tax liabilities associated with the vesting of RSUs by withholding a portion of the vested shares and covering such taxes with cash from its balance sheet, which the Company refers to as net share settlement.
The Company has two types of PRSUs outstanding — awards for which the vesting is subject to both a time-based vesting schedule and either (a) a market condition or (b) the achievement of performance goals.
For the awards subject to a market condition, the Company uses a Monte Carlo model to determine the fair value of the PRSUs. The Company recognizes compensation cost related to PRSUs subject to a market condition on a graded basis over the requisite service period if the service condition is met regardless of whether the market condition is satisfied. No compensation cost is recorded if the service condition is not met.
For the awards subject to the achievement of performance goals, compensation costs are recorded when the Company concludes that it is probable that the performance conditions will be achieved. The Company performs an analysis in each reporting period to determine the probability that the performance goals will be met, and recognizes a cumulative catch-up adjustment to compensation cost for changes in its probability assessment in subsequent reporting periods, if required, until the performance period has expired. The fair value of the PRSUs is measured using the closing price of the Company’s common stock on the New York Stock Exchange on the grant date. The Company recognizes compensation cost related to PRSUs subject to the achievement of performance goals on a graded basis over the requisite service period. No compensation cost is recorded if the service condition is not met.
Advertising Expenses —Advertising costs are expensed in the period in which the advertising takes place. Costs of producing advertising are expensed in the period in which production takes place. Total advertising expenses incurred were $ 77.4 million, $ 87.8 million and $ 65.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Comprehensive Income (Loss) —Comprehensive income (loss) consists of net income and other comprehensive income (loss), which consists of foreign currency adjustments and unrealized gain (loss) on available-for-sale debt securities, net of tax.
Income Taxes —The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments or changes in the tax law or rates. In assessing the realization of DTAs, the Company considers whether it is more likely than not that all or some portion of DTAs will not be realized. The ultimate realization of the DTAs is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Valuation allowances are provided to reduce DTAs to the amount that is more likely than not to be realized. In determining the need for a valuation allowance, the weight given to positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. The Company evaluates the ability to realize net DTAs and the related valuation allowance on a quarterly basis.
The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company provides for tax contingencies whenever it is deemed probable that a tax asset has been impaired or a tax liability has been incurred for events such as tax claims or changes in tax laws. Tax contingencies are based upon their technical merits, relative tax law, and the specific facts and circumstances as of each reporting period. Changes in facts and circumstances could result in material changes to the amounts recorded for such tax contingencies.
The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
Employee Benefit Plan —The Company sponsors a qualified 401(k) defined contribution plan covering eligible U.S. employees. Participants may contribute a portion of their annual compensation up to a maximum annual amount set by the
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Internal Revenue Service (“IRS”). Employer contributions under this plan were $ 16.0 million, $ 14.9 million and $ 9.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company also sponsors defined contribution plans in international locations and the employer contributions for these plans were $ 2.4 million , $ 2.2 million and $ 1.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Insurance —The Company is self-insured for certain employee benefits including medical, dental and vision; however, the Company obtains third-party excess insurance coverage to limit its exposure to certain claims. Liabilities associated with these benefits include estimates of both claims filed and losses incurred but not yet reported. The Company utilizes valuations provided by reputable, independent third-party actuaries. The Company’s self-insured liabilities are included on the consolidated balance sheets within accounts payable and accrued liabilities.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which primarily requires the disclosure of specific categories in the rate reconciliation and greater disaggregation for income taxes paid. The Company adopted ASU 2023-09 effective December 31, 2025 using a retrospective approach. See Note 1 4 , “ Income Taxes , ” for disclosures impacted by ASU 2023-09.
Recent Accounting Pronouncements Not Yet Effective
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes to the financial statements, to provide enhanced transparency regarding the expense captions presented on the consolidated statements of operations. ASU 2024-03 will be effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 can be applied either prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2024-03 on its related disclosures.
In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”), which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 will be effective for annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied prospectively. The Company is currently evaluating the impact of ASU 2025-05, but does not expect the adoption to have a material impact on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”), which amends the accounting for internal-use software by requiring that an entity start capitalizing software costs once management has authorized and committed funding for the project and it is probable that the project will be completed and the software will be used as intended. ASU 2025-06 will be effective for annual periods beginning after December 15, 2027 and interim periods within those annual reporting periods, with early adoption permitted. ASU 2025-06 can be applied using a prospective transition approach, a modified transition approach or a retrospective transition approach. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements and related disclosures.

3. CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash, cash equivalents and restricted cash as of December 31, 2025 and 2024 consisted of the following (in thousands):

December 31,
2025 December 31,
2024
Cash
$ 129,476   $ 87,056  
Cash equivalents
86,586   130,269  
Total cash and cash equivalents
216,062   217,325  
Restricted cash
227   357  
Total cash, cash equivalents and restricted cash
$ 216,289   $ 217,682  

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Restricted cash is included in other non-current assets on the Company’s consolidated balance sheets.

4. MARKETABLE SECURITIES
Short-term marketable securities and certain cash equivalents consist of investments in debt securities that are classified as available-for-sale. The amortized cost, gross unrealized gains and losses and fair value of those investments as of December 31, 2025 and 2024 were as follows (in thousands):

December 31, 2025
Amortized Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair Value

Cash equivalents:
U.S. government securities $ 215   $ —   $ —   $ 215  
Commercial paper 554   554  
Total cash equivalents 769   —   —   769  
Short-term marketable securities:

Certificates of deposit 3,662   —   —   3,662  
Commercial paper 3,522   —   —   3,522  
Corporate bonds 41,248   96   ( 5 ) 41,339  
Agency bonds 1,240   1   —   1,241  
U.S. government securities 53,388   139   ( 1 ) 53,526  
Total short-term marketable securities 103,060   236   ( 6 ) 103,290  

Total $ 103,829   $ 236   $ ( 6 ) $ 104,059  

December 31, 2024
Amortized Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair Value

Certificates of deposit $ 1,282   $ —   $ —   $ 1,282  
Commercial paper 8,867   —   —   8,867  
Corporate bonds 38,505   42   ( 64 ) 38,483  
Agency bonds 1,237   1   —   1,238  
U.S. government securities 50,554   177   ( 20 ) 50,711  
Total short-term marketable securities $ 100,445   $ 220   $ ( 84 ) $ 100,581  

The following tables present gross unrealized losses and fair values for those securities that were in an unrealized loss position as of December 31, 2025 and 2024, aggregated by investment category and the length of time that the individual securities had been in a continuous loss position (in thousands):

December 31, 2025
Less Than 12 months 12 Months or Greater Total
Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

Corporate bonds $ 7,148   $ ( 5 ) $ —   $ —   $ 7,148   $ ( 5 )

U.S. government securities 3,608   ( 1 ) —   —   3,608   ( 1 )
Total $ 10,756   $ ( 6 ) $ —   $ —   $ 10,756   $ ( 6 )

December 31, 2024
Less Than 12 months 12 Months or Greater Total
Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

Corporate bonds $ 18,285   $ ( 64 ) $ —   $ —   $ 18,285   $ ( 64 )

U.S. government securities 2,038   ( 20 ) —   —   2,038   ( 20 )
Total $ 20,323   $ ( 84 ) $ —   $ —   $ 20,323   $ ( 84 )

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For the years ended December 31, 2025, 2024 and 2023, the Company did no t recognize any credit loss related to available-for-sale marketable securities.
The contractual maturities for marketable securities classified as available-for-sale as of December 31, 2025 were as follows (in thousands):

Amortized Cost Fair Value
Due in one year or less $ 46,418   $ 46,467  
Due in one to five years 57,411   57,592  
Total $ 103,829   $ 104,059  

5. FAIR VALUE MEASUREMENTS
The Company’s investments in money market accounts are recorded as cash equivalents at fair value on the consolidated balance sheets. Additionally, the Company carries its available-for-sale debt securities at fair value. See Note 4, “ Marketable Securities ,” for further details.     
The following table represents the fair value of the Company’s financial instruments, including those measured at fair value on a recurring basis, as of December 31, 2025 and 2024 (in thousands):

December 31, 2025 December 31, 2024
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash equivalents:
Money market funds $ 57,123   $ —   $ —   $ 57,123   $ 102,793   $ —   $ —   $ 102,793  
U.S. government securities —   215   —   215   —   —   —   —  
Commercial paper —   554   —   554   —   —   —   —  
Short-term marketable securities:

Certificates of deposit —   3,662   —   3,662   —   1,282   —   1,282  
Commercial paper —   3,522   —   3,522   —   8,867   —   8,867  
Corporate bonds —   41,339   —   41,339   —   38,483   —   38,483  
Agency bonds —   1,241   —   1,241   —   1,238   —   1,238  
U.S. government securities —   53,526   —   53,526   —   50,711   —   50,711  
Other investments:
Certificates of deposit (1)
—   5,000   —   5,000   —   10,000   —   10,000  
Total cash equivalents, short-term marketable securities and other investments
$ 57,123   $ 109,059   $ —   $ 166,182   $ 102,793   $ 110,581   $ —   $ 213,374  

(1) Reflected in prepaid expenses and other current assets on the consolidated balance sheets.
Certain long- and indefinite-lived assets are recognized at fair value on a nonrecurring basis. The Company recognized impairment charges related to ROU assets and leasehold improvements associated with certain office space that it subleased or abandoned during the years ended December 31, 2024 and 2023. See Note 9 , “ Leases ,” for further details. The Company estimated the fair value of these assets as of the impairment dates using an income approach based on discounted cash flows expected to be received for the subleased or abandoned properties. This valuation technique relied on certain assumptions made by management based on both internal and external data, such as the incremental borrowing rates used to discount these cash flows to their present values. As a result, these assets are classified within Level 3 of the fair value hierarchy.

6. PROPERTY, EQUIPMENT AND SOFTWARE, NET
The Company capitalized $ 55.0 million, $ 43.7 million and $ 30.0 million in website and internal-use software costs during the years ended December 31, 2025, 2024 and 2023, respectively, which are included in property, equipment and software, net on the consolidated balance sheets. Amortization expense related to capitalized website and internal-use software was $ 33.5 million, $ 28.6 million and $ 28.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company
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wrote off $ 3.3 million, $ 2.6 million and $ 1.3 million of capitalized website and internal-use software costs in the years ended December 31, 2025, 2024 and 2023, respectively, which are included in product development expenses on its consolidated statements of operations.
Property, equipment and software, net as of December 31, 2025 and 2024 consisted of the following (in thousands):

December 31,
2025 December 31,
2024
Capitalized website and internal-use software development costs $ 350,883   $ 299,177  
Leasehold improvements (1)
10,805   55,875  
Computer equipment 26,136   27,272  
Furniture and fixtures 1,048   8,911  
Other
1,223   1,366  
Total 390,095   392,601  
Less: accumulated depreciation and amortization (1)
( 298,410 ) ( 316,932 )
Property, equipment and software, net $ 91,685   $ 75,669  

(1) Leasehold improvements, net includes an impairment of $ 1.3 million recorded during the year ended December 31, 2024 as a result of the Company’s sublease of certain office space. See Note 9, “ Leases ,” for further details.
Depreciation and amortization expense related to property, equipment and software for the years ended December 31, 2025, 2024 and 2023 was $ 40.2 million, $ 37.6 million and $ 40.8 million, respectively.

7. ACQUISITION
On November 26, 2024, the Company acquired auto services platform RepairPal. The key purpose underlying the Company’s acquisition of RepairPal was to accelerate its efforts in Services categories by expanding its offerings in the auto services advertising vertical. RepairPal’s results of operations are included in the Company’s consolidated financial statements from November 26, 2024.
In connection with the acquisition, all outstanding capital stock, options and warrants to purchase capital stock of RepairPal were converted into the right to receive total purchase consideration of $ 80.0 million in cash, including approximately $ 12.3  million in aggregate holdback liability. Of the total amount of consideration, the following amounts were initially held back to secure the Company’s right of indemnity under the Agreement and Plan of Merger: (1) $ 8.0  million, for a 15-month period after closing (the “general holdback”); (2) $ 2.0  million, for a 24-month period after closing (the “tax holdback”); and (3) $ 3.5  million, until 30 days following the final, non-appealable resolution of certain legal matters (the “indemnity holdback”). During the year ended December 31, 2025, the Company incurred approximately $ 5.0  million in legal expenses (originally recorded in general and administrative expenses), $ 3.5  million of which were applied against the indemnity holdback and the remainder of which were applied against the general holdback. As a result, as of December 31, 2025, $ 5.3  million of the general holdback and $ 2.0  million of the tax holdback remained, both of which were classified as accounts payable and accrued liabilities on the consolidated balance sheets. Under the terms of the Agreement and Plan of Merger, the remaining general holdback was to be released 15 months after closing; however, the Company will retain such amount through June 30, 2026 pending the resolution of certain claims by the Company against it.
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The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed was completed as of November 25, 2025, based on estimated fair values, as follows (in thousands):

Fair Values
Fair value of purchase consideration:
Cash:
Distributed to RepairPal stockholders $ 63,935  
Paid on behalf of RepairPal stockholders 3,812  
Holdbacks 12,294  
Total purchase consideration $ 80,041  

Fair value of net assets acquired:
Cash and cash equivalents $ 1,565  
Accounts receivable 3,057  
Intangibles 53,600  
Goodwill 28,825  
Other assets 620  
Total assets acquired 87,667  
Accounts payable and accrued liabilities ( 3,816 )
Deferred tax liability ( 3,767 )
Other liabilities ( 43 )
Total liabilities assumed ( 7,626 )
Net assets acquired $ 80,041  

The amounts assigned to each class of intangible assets acquired and their estimated useful lives are as follows (in thousands, except years):

Intangible Asset Type Amount Assigned Useful Life
Business relationships $ 36,000   8.8 years
Developed technology 14,600   4.5 years
Trademarks 3,000   11.0 years

Weighted average 7.7 years

The Company estimated the fair value of intangible assets acquired using an income approach. Significant assumptions used include forecasted revenue and expenses, customer attrition rate, royalty rates and discount rates. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement within the fair value hierarchy. The intangible assets are amortized on a straight-line basis, which reflects the pattern in which the economic benefits of the intangible assets are being utilized. The goodwill results from expected synergies between the Company and RepairPal. None of the goodwill is deductible for tax purposes.
For the years ended December 31, 2025 and 2024, the Company recorded acquisition and integration costs of approximately $ 0.5  million and $ 1.3 million, respectively, which were included in general and administrative expenses in the accompanying consolidated statements of operations. Measurement period adjustments were not significant and were included in the period in which they occurred.
The Company has not presented the supplemental pro forma information for revenue and earnings related to the acquisition, as the acquisition is not material to the Company’s consolidated financial statements during the periods presented.

8. GOODWILL AND INTANGIBLE ASSETS
The Company’s goodwill is the result of its acquisitions of other businesses and represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed. The Company performed its annual goodwill impairment analysis on August 31, 2025 and concluded that goodwill was not impaired, as the fair value of the reporting unit
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exceeded its carrying value. Additionally, no triggering events were identified as of December 31, 2025 that would more likely than not reduce the fair value of goodwill below its carrying value.
The change in the carrying amount of goodwill during the years ended December 31, 2025 and 2024 were as follows (in thousands):

Year Ended December 31,
2025 2024
Balance, beginning of period $ 130,980   $ 103,886  
Goodwill acquired ( 944 ) 29,769  

Effect of currency translation 5,811   ( 2,675 )
Balance, end of period $ 135,847   $ 130,980  

Intangible assets that were not fully amortized as of December 31, 2025 and 2024 consisted of the following (dollars in thousands):

December 31, 2025

Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Weighted
Average
Remaining
Life
Business relationships $ 45,918   $ ( 13,390 ) $ 32,528   7.6 years
Developed technology 22,309   ( 11,494 ) 10,815   3.3 years
Licensing agreements 6,141   ( 3,453 ) 2,688   4.2 years

Domain and data licenses 3,324   ( 2,999 ) 325   3.6 years
Trademarks 3,877   ( 1,195 ) 2,682   9.8 years

Total $ 81,569   $ ( 32,531 ) $ 49,038  

December 31, 2024

Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Weighted
Average
Remaining
Life
Business relationships $ 45,918   $ ( 7,759 ) $ 38,159   8.3 years
Developed technology 22,309   ( 8,250 ) 14,059   4.3 years
Licensing agreements 6,141   ( 2,808 ) 3,333   5.2 years

Domain and data licenses 3,194   ( 2,912 ) 282   4.4 years
Trademarks 3,877   ( 923 ) 2,954   10.8 years

Total $ 81,439   $ ( 22,652 ) $ 58,787  

Amortization expense related to intangible assets for the years ended December 31, 2025, 2024 and 2023 was $ 9.9 million, $ 2.8 million and $ 1.4 million, respectively.
As of December 31, 2025, estimated future amortization expense was as follows (in thousands):

2026 $ 9,861  
2027 9,861  
2028 9,465  
2029 4,688  
2030 2,908  
Thereafter 12,255  
   Total amortization $ 49,038  

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9. LEASES
The components of lease cost, net for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Operating lease cost $ 10,776   $ 18,617   $ 33,694  
Short-term lease cost (12 months or less) 414   392   396  
Sublease income ( 10,600 ) ( 13,873 ) ( 13,551 )
   Total lease cost, net $ 590   $ 5,136   $ 20,539  

The Company’s leases and subleases do not include any variable lease payments, residual value guarantees, related-party leases, or restrictions or covenants that would limit or prevent the Company from exercising its right to obtain substantially all of the economic benefits from use of the respective assets during the lease term.
Supplemental cash flow information related to leases for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 22,511   $ 42,725   $ 45,410  

As of December 31, 2025, maturities of lease liabilities were as follows (in thousands) (1) :

2026 $ 8,397  
2027 8,043  
2028 6,108  
2029 2,838  
2030 979  
Thereafter 633  
Total minimum lease payments 26,998  
Less: imputed interest ( 2,121 )
Present value of lease liabilities $ 24,877  

(1) Non-cancelable sublease proceeds of $ 15.1  million are not included in the maturities of lease liabilities disclosed in the table.

As of December 31, 2025 and 2024, the weighted-average remaining lease term and weighted-average discount rate were as follows:

December 31, 2025 December 31, 2024
Weighted-average remaining lease term (years) — operating leases 3.7 3.3
Weighted-average discount rate — operating leases 4.6   % 5.1   %

The Company subleased certain office space in San Francisco and Toronto during the year ended December 31, 2024 and abandoned certain office space in San Francisco and New York during the year ended December 31, 2023. The Company evaluated the associated ROU assets and leasehold improvements for impairment as a result of the subleases and abandonments, and recognized impairment charges of $ 5.9 million and $ 23.6 million during the years ended December 31, 2024 and 2023, respectively, which are included in general and administrative expenses on its consolidated statements of operations. The impairment charges during the year ended December 31, 2024 reduced the carrying amounts of the ROU assets and leasehold improvements by $ 4.6 million and $ 1.3 million, respectively. The impairment charges during the year ended December 31, 2023 reduced the carrying amount of the ROU assets and leasehold improvements by $ 21.3 million and $ 2.3 million, respectively. For more information on the fair values of the ROU assets and leasehold improvements used in the
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impairment analysis, see Note 5, “ Fair Value Measurements .”

10. CONTRACT BALANCES
The changes in the allowance for credit losses during the years ended December 31, 2025, 2024 and 2023, were as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Balance, beginning of period $ 15,301   $ 13,768   $ 9,277  
Add: provision for credit losses
43,271   45,614   40,702  
Less: write-offs, net of recoveries ( 44,790 ) ( 44,081 ) ( 36,211 )
Balance, end of period $ 13,782   $ 15,301   $ 13,768  

In calculating the allowance for credit losses as of December 31, 2025, 2024 and 2023, the Company considered expectations of probable credit losses based on observed trends in cancellations, observed changes in the credit risk of specific customers, the impact of anticipated closures and bankruptcies using forecasted economic indicators in addition to historical experience and loss patterns during periods of macroeconomic uncertainty. The decrease in the provision for credit losses and write-offs, net of recoveries in the year ended December 31, 2025 as compared to the prior-year period was a result of lower aggregate customer delinquencies, while the increase in the year ended December 31, 2024 as compared to the prior-year period was primarily driven by the ordinary course of business, reflecting the increase in net revenue as well as higher aggregate customer delinquencies.
Contract liabilities consist of deferred revenue, which is recorded on the consolidated balance sheets when the Company has received consideration, or has the right to receive consideration, in advance of transferring the performance obligations under the contract to the customer.
The changes in short-term deferred revenue during the years ended December 31, 2025 and 2024 were as follows (in thousands):

Year Ended December 31,
2025 2024
Balance, beginning of period $ 2,973   $ 3,821  
Less: recognition of deferred revenue from beginning balance ( 2,784 ) ( 3,527 )
Add: net increase in current period contract liabilities 5,656   2,679  
Balance, end of period $ 5,845   $ 2,973  

The majority of the Company’s deferred revenue balance as of December 31, 2025 is classified as short-term and is expected to be recognized as revenue in the subsequent three-month period ending March 31, 2026. An immaterial amount of long-term deferred revenue is included in other long-term liabilities as of December 31, 2025. No other contract assets or liabilities were recorded on the Company’s consolidated balance sheets as of December 31, 2025 and 2024.
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11. SELECTED CONSOLIDATED FINANCIAL STATEMENT DATA
Prepaid Expenses and other current assets
Prepaid expenses and other current assets as of December 31, 2025 and 2024 consisted of the following (in thousands):

December 31,
2025 December 31,
2024
Prepaid expenses $ 17,144   $ 18,615  
Certificates of deposit 5,000   10,000  

Other current assets 20,215   15,033  
Total prepaid expenses and other current assets $ 42,359   $ 43,648  

Other non-current assets
Other non-current assets as of December 31, 2025 and 2024 consisted of the following (in thousands):

December 31,
2025 December 31,
2024
Deferred tax assets (1)
$ 116,090   $ 139,588  
Deferred contract costs 19,880   24,156  

Other non-current assets 14,957   13,396  
Total other non-current assets $ 150,927   $ 177,140  

(1)     Represents net non-current DTAs. DTAs are netted against DTLs within the same jurisdiction. See Note 14, “ Income Taxes , ” for additional details.
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities as of December 31, 2025 and 2024 consisted of the following (in thousands):

December 31,
2025 December 31,
2024
Accounts payable $ 9,791   $ 11,904  
Employee-related liabilities 112,539   85,396  

Taxes payable 3,982   9,528  
Accrued cost of revenue 9,304   8,559  

Other accrued liabilities 23,173   15,935  
Total accounts payable and accrued liabilities $ 158,789   $ 131,322  

As of December 31, 2025, other accrued liabilities primarily consisted of accrued operating expenses and current holdback consideration related to the acquisition of RepairPal. See Note 7, “ Acquisition , ” for details of current holdback consideration related to the acquisition of RepairPal.
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Other income, net
Other income, net for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in thousands):

Year Ended December 31,
2025 2024 2023
Interest income, net $ 13,796   $ 20,921   $ 19,571  

Release of nonrecurring tax reserve (1)
—   3,102   —  
Other non-operating income, net 5,712   7,892   6,468  
Other income, net $ 19,508   $ 31,915   $ 26,039  

(1)     Represents the release of a reserve related to a one-time payroll tax credit.

12. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is subject to legal proceedings arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently does not believe that the final outcome of any of these other matters will have a material effect on the Company’s business, financial position, results of operations or cash flows.
Indemnification Agreements
In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. The Company may also assume indemnification obligations in strategic transactions, such as its assumption of certain indemnification obligations in its acquisition of RepairPal.
In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees.
While the outcome of claims cannot be predicted with certainty, the Company does not believe that the outcome of any claims under the indemnification arrangements will have a material effect on the Company’s business, financial position, results of operations or cash flows.
Revolving Credit Facility
The Company has a revolving credit facility established by its Revolving Credit and Guaranty Agreement, dated as of April 28, 2023, with certain lenders and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, as amended by the First Amendment to Revolving Credit and Guaranty Agreement, dated as of December 18, 2025, with the lenders party thereto, JPMorgan Bank, N.A., as the existing administrative agent and collateral agent, and Wells Fargo Bank National Association, as the successor administrative agent and collateral agent (as amended, the “Credit Agreement”).
The Credit Agreement provides for a $ 325.0  million senior secured revolving credit facility (the “credit facility”), which includes a $ 35.0  million letter of credit sub-limit, a $ 25.0  million bilateral letter of credit facility and an accordion option, which, if exercised, would allow the Company to increase the aggregate commitments by up to $ 250.0  million, plus additional amounts if the Company is able to satisfy a leverage test, subject to certain conditions. The commitments under the credit facility expire on April 28, 2028.
Loans under the credit facility bear interest, at the Company’s election, at either (a) an adjusted term Secured Overnight Financing Rate plus 0.10 % plus a margin of 1.25 % – 1.50 %, depending on the Company’s total leverage ratio, or (b) an alternative base rate plus a margin of 0.25 % – 0.50 %, depending on the Company’s total leverage ratio. The Company is required to pay a commitment fee on the undrawn portion of the aggregate commitments that accrues at 0.20 % – 0.25 % per annum, depending on the Company’s total leverage ratio, as well as a letter of credit fee on any outstanding letters of credit that accrues at 1.25 % – 1.50 % per annum, depending on the Company’s total leverage ratio.
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The credit facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict the Company’s ability to incur indebtedness, grant liens, make distributions, pay dividends, repurchase shares, make investments and engage in transactions with the Company’s affiliates, in each case subject to certain exceptions. The credit facility also requires the Company to maintain a total leverage ratio of no greater than 3.75 to 1.00, subject to an increase up to 4.25 to 1.00 for a certain period following significant acquisitions, and an interest coverage ratio of no less than 3.00 to 1.00. The obligations under the credit facility are secured by liens on substantially all of the Company’s domestic assets, including certain domestic intellectual property assets and the equity of its domestic subsidiaries, as well as a portion of the equity interests the Company holds directly in its foreign subsidiaries.
As of December 31, 2025, the Company had $ 4.2 million of letters of credit outstanding under the credit facility sub-limit. The letters of credit are primarily related to lease agreements for certain office locations and are required to be maintained and issued to the landlords of each facility. No loans were outstanding under the credit facility and the Company was in compliance with all conditions and covenants thereunder as of December 31, 2025.
Purchase Obligations
The Company has certain off-balance sheet non-cancelable purchase obligations, consisting primarily of website hosting costs and other commitments required in the ordinary course of business. As of December 31, 2025, total commitments were approximately $ 147.1 million, of which approximately $ 92.6 million is expected to be paid within the next 12 months.

13. STOCKHOLDERS’ EQUITY
Stock Repurchase Program
As of December 31, 2025, the Company’s board of directors had authorized the Company to repurchase up to an aggregate of $ 1.95  billion of its outstanding common stock, $ 38.8  million of which remained available as of December 31, 2025. The Company may purchase shares at management’s discretion in the open market, in privately negotiated transactions, in transactions structured through investment banking institutions or a combination of the foregoing.
During the year ended December 31, 2025, the Company repurchased 8,768,771 shares on the open market for an aggregate purchase price of $ 291.9 million (excluding the 1 % excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022) and retired 8,836,631 shares. As of December 31, 2025, the Company had a treasury stock balance of 33,000 shares, which were excluded from its outstanding share count as of such date and subsequently retired in January 2026.
During the year ended December 31, 2024, the Company repurchased 6,686,518 shares on the open market for an aggregate purchase price of $ 250.9 million (excluding the 1 % excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022) and retired 6,585,658 shares. As of December 31, 2024, the Company had a treasury stock balance of 100,860 shares, which were excluded from its outstanding share count as of such date and subsequently retired in January 2025.
Common Stock Reserved for Future Issuance
As of December 31, 2025, the Company had reserved shares of common stock for future issuances in connection with the following (in thousands):

Number of Shares
Stock options outstanding 2,262  
RSUs and PRSUs outstanding 4,898  
Available for future equity award grants 11,546  
Available for future ESPP offerings 830  
Total reserved for future issuance 19,536  

Equity Incentive Plans
The Company has outstanding awards under its 2012 Equity Incentive Plan, as amended (the “2012 Plan”). Under the 2012 Plan, the Company has the ability to issue incentive stock options, non-statutory stock options, stock appreciation rights, RSUs, restricted stock awards, performance units and performance shares. Additionally, the 2012 Plan provides for the grant of performance cash awards to employees, directors and consultants.
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On February 6, 2023, the Company adopted the Yelp Inc. 2023 Inducement Award Plan (the “Inducement Plan”), pursuant to which it reserved 1,400,000 shares of its common stock for issuance to individuals who were not previously employees of the Company, or who are returning to employment following a bona fide period of non-employment with the Company, as an inducement material to such persons entering into employment with the Company, in accordance with New York Stock Exchange Listed Company Manual Rule 303A.08. Under the Inducement Plan, the Company has the ability to issue non-statutory stock options, stock appreciation rights, RSUs, restricted stock awards, PRSUs and performance shares. The Inducement Plan also provides for the grant of performance cash awards to individuals eligible to receive awards under the Inducement Plan.
Stock Options
Prior to 2023, the Company granted stock options under its 2012 Plan. Options granted under the 2012 Plan were granted at a price per share not less than the fair value of a share of the Company’s common stock on the grant date, and are generally exercisable for contractual terms of up to 10 years. There were no options granted during the year ended December 31, 2025. All options were fully vested as of December 31, 2025. The Company issues new shares when stock options are exercised.
A summary of stock option activity for the year ended December 31, 2025 is as follows:

Number of
Shares (in thousands) Weighted-
Average
Exercise
Price Weighted-
Average
Remaining
Contractual
Term (in
years) Aggregate
Intrinsic
Value (in
thousands)
Outstanding at December 31, 2024 2,464   $ 34.44   2.6 $ 14,407  

Exercised ( 58 ) 21.13  
Canceled ( 144 ) 50.36  
Outstanding at December 31, 2025 2,262   $ 33.78   1.8 $ 4,420  
Options vested and exercisable at December 31, 2025 2,262   $ 33.78   1.8 $ 4,420  

Aggregate intrinsic value represents the difference between the closing price of the Company’s common stock as quoted on the New York Stock Exchange on a given date and the exercise price of outstanding, in-the-money options. The total intrinsic value of options exercised was approximately $ 0.7 million, $ 0.3 million and $ 6.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.
RSUs
RSUs generally vest over a four-year period, on one of two schedules: (a) 25 % vesting at the end of one year and the remaining vesting quarterly or annually thereafter or (b) ratably on a quarterly basis.
RSUs include PRSUs that are subject to either (a) a market condition or (b) the achievement of performance goals. PRSUs may also be subject to a time-based vesting schedule of quarterly over four years (the “Time-Based Vesting Schedule”). For PRSUs subject to a market condition, the Company recognizes expense from the date of grant. For PRSUs subject to the achievement of performance goals, the Company recognizes expense when it is probable that the performance condition will be achieved.
The Company granted PRSUs subject to market conditions in 2022, 2023 and 2024. The shares underlying each of these PRSU awards vest based on the relative performance of the Company’s total stockholder return (“TSR”) over a three-year period. A percentage of the target number of shares underlying each award, ranging from zero to 200%, will vest based on the percentile rank of the Company’s TSR relative to that of the other companies in the Russell 2000 Index over a three-year period beginning January 1 of the year of grant (the “Performance Period”). The Company’s TSR, as well as the TSR of the other companies in the Russell 2000 Index, will be calculated based on the average closing price of each company’s stock over the last 20 trading days of the Performance Period compared to the average closing price over the first 20 trading days of the Performance Period. Any shares that become eligible to vest based on the Company’s level of achievement of the market goal will fully vest on or following certification of the Company’s performance on February 20, 2025, 2026 and 2027, respectively, or, if certification occurs following such date, March 15, 2025, 2026 and 2027, respectively, for the 2022, 2023 and 2024 grants, subject to the applicable employee’s continued service as of such vesting dates.
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For PRSUs subject to the achievement of performance goals, a percentage of the target number of shares, ranging from zero to 200%, will become eligible to vest based on the Company’s level of achievement of certain financial targets, subject to the Time-Based Vesting Schedule. The shares subject to the achievement of performance goals become eligible to vest once the achievement against the financial targets is known, which will be no later than March of the year following the year in which the PRSUs are granted. On the quarterly vest date immediately following such determination (or a vest date otherwise specified in the agreement), the eligible shares, if any, will vest to the extent that the employee has met the Time-Based Vesting Schedule as of such date. Thereafter, the eligible shares will continue to vest in accordance with the Time-Based Vesting Schedule, subject to the applicable employee’s continued service as of each such vesting date. The Company performed an analysis as of December 31, 2025 to assess the probability of achievement of the PRSU financial targets and, as a result, recorded compensation costs in the year ended December 31, 2025 for the PRSUs granted in 2025 that it expected to vest.
As the PRSU activity during the year ended December 31, 2025 was not material, it is presented together with the RSU activity in the table below. A summary of RSU and PRSU activity for the year ended December 31, 2025 is as follows (in thousands, except per share amounts):

Number of
Shares
Weighted-
Average Grant
Date Fair Value

Nonvested at December 31, 2024 6,715   $ 36.10  
Granted 2,737   40.67  
Vested (1)
( 4,009 ) 35.93  
Canceled ( 545 ) 36.72  
Nonvested at December 31, 2025 (2)
4,898   $ 38.72  

(1)     Includes 1,672,085  shares that vested but were not issued due to the Company’s use of net share settlement for payment of employee taxes.
(2)     Includes 798,438 PRSUs.
The aggregate fair value as of the vest date of RSUs and PRSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $ 136.8 million, $ 177.3 million and $ 207.4 million, respectively. As of December 31, 2025, the Company had approximately $ 156.4 million of unrecognized stock-based compensation expense related to RSUs and PRSUs, which it expects to recognize over the remaining weighted-average vesting period of approximately 1.9 years.
Employee Stock Purchase Plan
The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15 % of their eligible compensation, subject to any plan limitations, during designated six-month offering periods. At the end of each offering period, employees are able to purchase shares at 85 % of the fair market value of the Company’s common stock on the last day of the offering period, based on the closing sales price of the Company’s common stock as quoted on the New York Stock Exchange on such date.
During the years ended December 31, 2025, 2024 and 2023, there were 637,281 , 614,339 and 604,111 shares purchased by employees under the ESPP at a weighted-average purchase price per share of $ 28.92 , $ 31.82 and $ 31.79 , respectively. The Company recognized stock-based compensation expense related to the ESPP of $ 3.2 million during the year ended December 31, 2025 and $ 3.3 million during each of the years ended December 31, 2024 and 2023.
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Stock-Based Compensation
The following table summarizes the effects of stock-based compensation expense related to stock-based awards in the consolidated statements of operations during the periods presented (in thousands):

Year Ended December 31,
2025 2024 2023
Cost of revenue $ 4,035   $ 5,209   $ 5,274  
Sales and marketing 27,925   33,436   35,187  
Product development 68,718   85,510   97,515  
General and administrative 33,315   34,038   35,475  
Total stock-based compensation recorded to income before income taxes
133,993   158,193   173,451  
Benefit from income taxes ( 25,961 ) ( 29,409 ) ( 34,474 )
Total stock-based compensation recorded to net income attributable to common stockholders
$ 108,032   $ 128,784   $ 138,977  

During the years ended December 31, 2025, 2024 and 2023, the Company capitalized $ 10.8 million, $ 11.7 million and $ 9.7 million, respectively, of stock-based compensation expense as website and internal-use software development costs and, to a lesser extent, implementation costs incurred related to cloud computing arrangements that are service contracts.

14. INCOME TAXES
The following table presents domestic and foreign components of income before income taxes for the periods presented (in thousands):

Year Ended December 31,
2025 2024 2023
United States $ 218,683   $ 203,177   $ 131,459  
Foreign ( 14,654 ) ( 20,217 ) ( 26,377 )
Total income before income taxes $ 204,029   $ 182,960   $ 105,082  

The income tax provision is composed of the following (in thousands):

Year Ended December 31,
2025 2024 2023
Current:
Federal $ 25,480   $ 61,873   $ 20,466  
State 4,158   8,020   3,934  
Foreign 3,718   5,137   3,659  
Total current tax 33,356   75,030   28,059  
Deferred:
Federal 22,562   ( 24,747 ) ( 19,934 )
State 1,376   680   ( 2,085 )
Foreign 1,135   ( 853 ) ( 131 )
Total deferred tax 25,073   ( 24,920 ) ( 22,150 )
Total provision for income taxes
$ 58,429   $ 50,110   $ 5,909  

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The following table (in thousands, except percentages) presents a reconciliation of the provision for income taxes computed at the statutory federal rate to that computed at the Company’s effective tax rate for the year ended December 31, 2025 as required by ASU 2023-09. Prior periods presented have been conformed to the new additional disclosure requirements as applicable. See Note 2 , “ Summary of Significant Accounting Policies—Recently Adopted Accounting Pronouncemen ts , ” for additional details on the adoption of ASU 2023-09:

Year Ended December 31,
2025 2024 2023
Amount
Percent Amount Percent Amount Percent
Income tax at federal statutory rate $ 42,846   21.0   % $ 38,422   21.0   % $ 22,067   21.0   %
State and local income tax, net of federal (national) income tax effect (1)
3,958   1.9   7,078   3.8   903   0.8  
Foreign tax effects:

Canada

Stock-based compensation
4,070   2.0   5,012   2.7   5,388   5.1  
Other
( 290 ) ( 0.1 ) ( 1,415 ) ( 0.8 ) ( 1,696 ) ( 1.6 )
Germany

Stock-based compensation
1,134   0.5   1,411   0.8   1,578   1.5  
Other
( 189 ) ( 0.1 ) ( 306 ) ( 0.2 ) ( 279 ) ( 0.3 )
United Kingdom

Stock-based compensation
3,422   1.7   4,146   2.3   4,022   3.8  
Other
( 352 ) ( 0.2 ) ( 377 ) ( 0.2 ) ( 26 ) — 
Other foreign jurisdictions
126   0.1   58   —   84   0.1  

Effect of cross-border tax laws
Other
56   —   ( 765 ) ( 0.4 ) ( 609 ) ( 0.6 )
Global Intangible Low-Taxed Income
—   —   —   —   ( 10,747 ) ( 10.2 )
Tax credits
Research and development credits
( 6,963 ) ( 3.4 ) ( 8,680 ) ( 4.7 ) ( 13,078 ) ( 12.4 )

Nontaxable or nondeductible items
Stock-based compensation (2)
( 900 ) ( 0.4 ) ( 5,509 ) ( 3.0 ) ( 7,587 ) ( 7.2 )
Executive compensation limitation
4,812   2.4   4,513   2.5   4,560   4.3  
Other
1,189   0.5   3,610   2.0   803   0.8  
Change in unrecognized tax benefits 5,055   2.5   2,951   1.6   268   0.3  
Other
455   0.2   ( 39 ) —   258   0.2  
Income tax provision and effective tax rate
$ 58,429   28.6   % $ 50,110   27.4   % $ 5,909   5.6   %

(1)     The state and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include: 2025: California, New York, and New York City; 2024: California, Illinois, New York, and New York City; and 2023: California, Illinois, and New York.
(2)     Stock-based compensation consists of: stock-based compensation windfalls/shortfalls, Section 1032 intercompany stock gain not recognized, disqualifying dispositions, and intercompany stock-based compensation.

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Deferred Tax Balances
Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities for the periods presented (in thousands):

As of December 31,
2025 2024
Deferred tax assets:
Reserves and others $ 11,137   $ 8,612  
Stock-based compensation 13,569   15,050  
Net operating loss carryforward 6,530   6,228  
Tax credit carryforward 26,820   29,810  
Capitalized research and development 122,700   140,813  
Operating lease liabilities 3,439   9,140  
Gross deferred tax assets 184,195   209,653  
Valuation allowance ( 31,172 ) ( 34,743 )
Total deferred tax assets 153,023   174,910  
Deferred tax liabilities:  
Depreciation and amortization ( 29,870 ) ( 24,329 )

Deferred contract costs ( 5,249 ) ( 6,250 )
Operating lease right-of-use assets ( 2,446 ) ( 4,747 )
Total deferred tax liabilities ( 37,565 ) ( 35,326 )
Net deferred tax assets $ 115,458   $ 139,584  

As of December 31, 2025, the Company had federal and state net operating loss carryforwards of approximately $ 16.3 million and $ 42.1 million, respectively, expiring beginning in 2034 and 2029, respectively. The Company had federal research credit carryforwards of approximately $ 2.5 million (gross) that begin to expire in 2027, if unused, and California research credit carryforwards of approximately $ 72.0 million (gross) that do not expire. The Company had Canada research credit carryforwards of approximately $ 1.2  million (gross) that begin to expire in 2045.
Utilization of net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company does not expect any previous ownership changes, as defined under Section 382 and 383 of the Internal Revenue Code, to result in a limitation that will materially reduce the total amount of net operating loss carryforwards and credits that can be utilized. Further, foreign loss carryforwards may be subject to limitations under the applicable laws of the taxing jurisdictions due to ownership change limitations.
As of December 31, 2025, the Company had accumulated undistributed earnings generated by its foreign subsidiaries of approximately $ 50.4  million. The Company continues to assert that all its foreign earnings are to be permanently reinvested and expects future U.S. cash generation to be sufficient to meet future U.S. cash needs. As such, the Company has not recognized a deferred tax liability related to unremitted foreign earnings.
Deferred Tax Valuation Allowance
As more fully described in “Income Taxes” in Note 2, “ Summary of Significant Accounting Policies ,” the Company maintains valuation allowances against deferred tax balances where appropriate and considers all positive and negative evidence that the Company would have future taxable income sufficient to realize the benefit of its DTAs. 
Valuation allowances of $ 31.2 million and $ 34.7 million primarily related to California state tax credits were recorded against the Company’s net deferred tax asset balances as of December 31, 2025 and 2024, respectively. Since the Company mainly conducts research and development activities in California but earns a substantial portion of its U.S. income in other states, the Company could not assert, at the required more-likely-than-not level of certainty, that it would generate future
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taxable California income sufficient to realize the benefit of these DTAs. Accordingly, the Company maintained a valuation allowance against specific state credits.
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Balance at the beginning of the year $ 75,683   $ 64,459   $ 59,764  
(Decrease) increase based on tax positions related to the prior year
( 608 ) 91   ( 2,146 )
Increase based on tax positions related to the current year 6,524   11,641   6,841  
Decrease from tax authorities’ settlements
—   ( 508 ) —  
Lapse of statute of limitations ( 355 ) —   —  
Balance at the end of the year $ 81,244   $ 75,683   $ 64,459  

As of December 31, 2025, the Company ha d $ 50.3 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. During the years ended December 31, 2025 and 2024, the Company recorded interest and penalties of $ 9.1  million and $ 3.9  million, respectively. During the year ended December 31, 2023 , the Company recorded an immaterial amount of interest and penalties.
In addition, the Company is subject to the continuous examination of its income tax returns by the IRS and other tax authorities. The Company’s federal and state income tax returns for tax years subsequent to 2012 remain open to examination. In the Company’s foreign jurisdictions — Canada, Germany, Ireland and the United Kingdom — the tax years subsequent to 2019 remain open to examination. The Company regularly assesses the likelihood of adverse outcomes resulting from examinations to determine the adequacy of its provision for income taxes, and monitors the p rogress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.
Supplemental Disclosures of Other Cash Flow Information — Cash Paid for Income Taxes, Net
Supplemental cash flow information related to cash paid for income taxes, net for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Supplemental Disclosures of Other Cash Flow Information
Cash paid for federal income taxes
$ 26,168   $ 51,668   $ 20,650  
Cash paid for state income taxes
7,893   3,953   6,648  
Cash paid for foreign income taxes
406   2,573   3,327  
Cash paid for income taxes, net (1)
$ 34,467   $ 58,194   $ 30,625  

(1) Individual jurisdictions equaling 5% or more of the cash paid for income taxes, net for the year includes: 2025: United States federal $ 26.2  million, Canada $ 2.0  million, United Kingdom $( 1.8 ) million, and Foreign Other $ 0.2  million; 2024: United States federal $ 51.7  million and Foreign $ 2.6  million; and 2023: United States federal $ 20.7  million, United Kingdom $ 1.5  million and Foreign Other $ 1.8  million.

15. NET INCOME PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
Basic net income (loss) per share attributable to common stockholders is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted net income (loss) per share attributable to common stockholders is computed using the weighted-average number of outstanding shares of common stock and the effect of potentially dilutive
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securities outstanding during the period. Potentially dilutive securities include stock options, RSUs (including PRSUs) and, to a lesser extent, ESPP shares. If dilutive, such potentially dilutive securities are reflected in net income (loss) per share attributable to common stockholders using the treasury stock method.
The following tables present the calculation of basic and diluted net income per share attributable to common stockholders for the periods presented (in thousands, except per share data):

Year Ended December 31,
2025 2024 2023
Basic net income per share:
Net income attributable to common stockholders $ 145,600   $ 132,850   $ 99,173  
Shares used in computation:
Weighted-average common shares outstanding 63,334   67,415   69,221  
Basic net income per share attributable to common stockholders: $ 2.30   $ 1.97   $ 1.43  

Year Ended December 31,
2025 2024 2023
Diluted net income per share:
Net income attributable to common stockholders $ 145,600   $ 132,850   $ 99,173  
Shares used in computation:
Weighted-average common shares outstanding 63,334   67,415   69,221  
Stock options and ESPP 207   335   333  
RSUs 1,549   2,861   4,042  

Number of shares used in diluted calculation 65,090   70,611   73,596  
Diluted net income per share attributable to common stockholders: $ 2.24   $ 1.88   $ 1.35  

The following stock-based instruments were excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands):

Year Ended December 31,
2025 2024 2023
Stock options 1,714   674   791  
RSUs 2,843   1,559   424  

16. INFORMATION ABOUT SEGMENT, REVENUE AND GEOGRAPHIC AREAS
The Company considers operating segments to be components of the Company for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has determined that it has a single operating and reporting segment managed on a consolidated basis. The single segment generates substantially all of its revenue from the sale of performance-based advertising products through its advertising platform. The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer assesses performance for the single segment and decides how to allocate resources based on net income, which is reported on the consolidated statements of operations as net income attributable to common stockholders. Net income is used to monitor budget versus actual results. The measure of segment assets is reported on the consolidated balance sheets as total assets.
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The following table presents a reconciliation of segment net income to net income attributable to common stockholders for the periods presented (in thousands):

Year Ended December 31,
2025 2024 2023
Net revenue
$ 1,464,955   $ 1,412,064   $ 1,337,062  
Less:

Employee expenses (exclusive of stock-based compensation) (1)(3)
736,665   693,614   677,829  
Cost of revenue (exclusive of depreciation and amortization and stock-based compensation)
138,561   118,475   108,955  
Stock-based compensation
133,993   158,193   173,451  
Other segment items (2)(3)
201,615   218,415   229,561  
Depreciation and amortization
50,092   40,407   42,184  
Provision for income taxes
58,429   50,110   5,909  
Segment net income
145,600   132,850   99,173  

Reconciliation of segment net income to net income attributable to common stockholders

Adjustments and reconciling items
—  —  — 
Net income attributable to common stockholders
$ 145,600   $ 132,850   $ 99,173  

(1)     Includes expenses related to employees working in the sales and marketing, product development and general and administrative departments and excludes expenses related to employees working in the infrastructure department whose costs are included in the cost of revenue (exclusive of depreciation and amortization and stock-based compensation) line.
(2)     Includes marketing, facilities, travel and entertainment, consulting and professional services, hardware and software, credit losses, litigation settlement, asset impairment, other operating expenses and other income (expense).
(3)     Prior period segment information has been recast to conform to the way the Company internally managed and monitored its business during 2025. The recast of prior period information had no impact on the Company’s consolidated balance sheets, consolidated statements of operations, or consolidated statements of cash flows.
Net Revenue
When the Company communicates results externally, it disaggregates net revenue into major product lines and primary geographical markets, which is based on the billing address of the customer. The disaggregation of net revenue by major product lines is based on the type of service provided and also aligns with the timing of revenue recognition for each. To reflect the Company’s strategic focus on creating differentiated experiences for its Services categories and Restaurants, Retail & Other categories, the Company further disaggregates advertising revenue to reflect these two high-level category groupings. The Services categories consist of the following businesses: home, local, auto, professional, pets, events, real estate and financial services. The Restaurants, Retail & Other categories consist of the following businesses: restaurants, shopping, beauty & fitness, health and other.
The following table presents the Company’s net revenue by major product line (and by category for advertising revenue) for the periods presented (in thousands):

Year Ended December 31,
2025 2024 2023
Services $ 947,564   $ 879,092   $ 793,112  
Restaurants, Retail & Other 443,696   469,928   483,406  
Total advertising
1,391,260   1,349,020   1,276,518  
Other
73,695   63,044   60,544  
Total net revenue $ 1,464,955   $ 1,412,064   $ 1,337,062  

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During the years ended December 31, 2025, 2024 and 2023, no individual customer accounted for 10% or more of consolidated net revenue.
The following table presents the Company’s net revenue by major geographic region for the periods presented (in thousands):

Year Ended December 31,
2025 2024 2023
United States $ 1,455,256   $ 1,401,531   $ 1,327,263  
All other countries 9,699   10,533   9,799  
Total net revenue $ 1,464,955   $ 1,412,064   $ 1,337,062  

Long-Lived Assets
The following table presents the Company’s long-lived assets by major geographic region as of December 31, 2025 and 2024 (in thousands):

As of December 31,
2025 2024
United States $ 88,256   $ 71,641  
All other countries 3,429   4,028  
Total long-lived assets $ 91,685   $ 75,669  

17. SUBSEQUENT EVENTS
Acquisition of Hatchify Inc.
On January 17, 2026, the Company and Hargrove Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Hatchify Inc. (“Hatch”) and Fortis Advisors LLC, as the Securityholders’ Representative. Pursuant to the Merger Agreement, on February 2, 2026, Merger Sub merged with and into Hatch, with Hatch continuing as the surviving corporation and a wholly owned subsidiary of the Company (the “Merger”).
On February 2, 2026, the transaction closed upon the consummation of the Merger and all outstanding capital stock and options to purchase capital stock of Hatch were converted into the right to receive an aggregate of approximately $ 270  million in cash, subject to customary post-closing adjustments. Pursuant to the Merger Agreement, the Company will also provide certain continuing Hatch employees with retention packages valued at an aggregate of $ 30  million to be paid out over two to three years .
The Company funded its acquisition of Hatch in part with borrowings under the credit facility. See Note 12, “ Commitments and Contingencies , ” for additional details. The Company funded the remainder of the purchase price with proceeds from the sale of approximately $ 162  million of marketable securities subsequent to year end.
The Company acquired Hatch, an artificial intelligence (“AI”) lead management platform, to further compliment the Company’s AI capabilities and strategy. The initial accounting for this acquisition is incomplete due to the timing of available information and purchase accounting information is still being compiled and is not available for disclosure. The results of operations of the acquired business will be included in the Company’s consolidated results beginning from the date of acquisition.
Stock Repurchase Program
On February 10, 2026, the Company’s board of directors authorized a $ 500.0  million increase to its stock repurchase program, bringing the total amount of repurchases authorized under the stock repurchase program since its inception in 2017 to $ 2.45  billion. The Company repurchased $ 25.1 million of shares subsequent to December 31, 2025, resulting in $ 513.7 million remaining available for future repurchases on February 17, 2026.
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