About David Schwarzbach
Yelp CFO David Schwarzbach stated that the company achieved its 10th consecutive quarter of double-digit revenue growth, calling it "the best quarter in the company's history" and expressing confidence that Yelp is "set up to have the best year in the company's history." He attributed this performance to a shift from a sales headcount-driven growth model to a product-led growth model, which he said is "paying off." Schwarzbach noted that services revenue grew 14% in the third quarter, with home services up 20%, and said the company believes it is "taking market share" while achieving a record adjusted EBITDA margin of 28%.
Schwarzbach said that despite a "challenging environment for digital advertising" and high inflation, consumers are "doing even more research than ever before" before making purchase decisions. He described Yelp's users as "high intent," "affluent," and often college-educated, and emphasized the company's focus on being a "trusted brand" for reviews, particularly in services. When asked about Yelp's market capitalization being half of its 2014 peak, Schwarzbach said the company has "transformed" over the past five years and that the product-led model will enable "profitable growth for the long term."
Source: AI-verified profile updated from David Schwarzbach's recent appearances.
Browse all interviews →
Transcript (7 segments)
D
David Schwarzbach0:00
10th straight quarter of double digit revenue growth. I think what's missing is the answer and what keeps that going, and it's good to be here is the 10th straight quarter of double digit growth for us. That's been against the backdrop of what has certainly been a challenging environment for digital advertising. How have we done it? Well, it certainly starts with consumers. Tens of millions of consumers come to Yelp every month for our trusted reviews. We're obviously a household brand when they're making those critical decisions, like going out on a first date, they want to go to the right restaurant. But if you're spending a lot on remodeling your kitchen, you really want to choose someone who's going to do a great job for you. And around services in particular, we've really leaned in 14% growth in the third quarter for services, 20% in-home services. We think we're taking market share and we're doing that while driving. Adjusted EBITDA was a record quarter for us at 28% adjusted EBIT. And we think our product led strategy is really working very well for us. We think it's the best quarter in the company's history and we think that we're set up to have the year in the company's history.
I
Interviewer1:06
David, we love the numbers. I love digging deep into the financials, but with Yelp, I just always want to know what the story is right in this economy with the priorities that consumers have. What is the psychology or driver that makes them go on Yelp? What is it that the consumer's doing that helps your business grow?
D
David Schwarzbach1:26
Well, against a backdrop of high inflation where things are more expensive, it means people can't go out as often. They can't do as many home projects. So they really want to make sure they're making a good decision. And what we found actually is that consumers are doing even more research than ever before making those purchase decisions. And the folks who are coming to help, their high intent, they're actually ready to purchase. They're affluent. They are the majority of folks have gone to college. They have advanced degrees. And so they want to do that research before they make that purchase decision.
I
Interviewer1:59
I'm interested in these big record sets of numbers. You say perhaps the best quarter in history yet your market capitalization is half of where it's best was back in 2014. How can you convince an investor base that you are worth more, that the value of what you're bringing is more to an investor right now?
D
David Schwarzbach2:18
Well, we really have transformed the company over the past five years, and we moved from what was a sales headcount driven growth model to a product led growth model. And that product led growth model is paying off. We obviously saw very strong adjusted EBIT margin in the third quarter. But over the long term, we think that that product lead model enables us to continue to deliver profitable growth for the long term. You know, we're just going through our planning process for 2014 to 2024 and we're very excited about what we can achieve next year that will enable us to deliver these types of consistent results.
I
Interviewer2:57
How about globally speaking? David, where can you pull on levers in terms of growth? We were just speaking with a European based company, Siemens, which of course is having a harder macro picture in Europe than it is in the US. How do you see your ability to continue to ride a wave of US outperformance?
D
David Schwarzbach3:13
The U.S. economy certainly has held in there, and we've been very relevant to consumers that they've made those decisions, as I was saying, around inflation. But fundamentally, what we want to be able to do is to really leverage technology to continue to deliver value to consumers and to advertisers at the end of the day. We have to give them value and they have to find us relevant. We obviously generate that content through these user reviews. We think it's really important for those to be trusted. We want to be that trusted brand for folks, but we also want to be the best possible place for consumers to go to make purchase decisions, particularly around services. So we're continuing to invest there. We're continuing to differentiate the experience. We grew home services about 20% in the third quarter. We think we're taking market share and we think that that sets us up very well for the future.
