By Christopher Kuo

Yelp shares fell after the company reported lower advertising revenue from restaurants and retail in its first quarter.

Shares of the business review website operator fell 8.1%, to $26.25, in midday Friday trading. The company's shares are down 13% year to date.

The company on Thursday reported that services advertising revenue rose 1% year over year, but advertising revenue in the restaurants, retail and other category declined 11%. Local businesses have faced a challenging economic environment, with adverse effects from the Middle East conflict, which caused some to spend less on advertising, said Chief Financial Officer David Schwarzbach.

"We anticipate that the challenging economic environment for local businesses will persist into the second quarter and continue impacting advertising revenue across categories," Schwarzbach said.

The company on Thursday posted a net income attributable to common shareholders of $17.7 million, or 30 cents a share, compared with a profit of $24.4 million, or 36 cents a share, a year earlier. Analysts polled by FactSet expected earnings of 26 cents a share.

First-quarter revenue rose to $361.5 million from $358.5 million in the year-ago period. Analysts expected revenue of $353.5 million.

A decrease in both services and restaurants, retail and other locations resulted in an overall decline of 6% in paying advertising locations to 485,000, Schwarzbach said on a call with investors.

The company reaffirmed its full-year guidance of revenue ranging from $1.46 billion to $1.48 billion and full-year adjusted earnings before interest, taxes, depreciation, and amortization between $310 million and $330 million.

Write to Christopher Kuo at chris.kuo@wsj.com

(END) Dow Jones Newswires

May 08, 2026 11:52 ET (15:52 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.