Yelp Inc. (YELP): Business Model Canvas [Dec-2025 Updated]

You're looking for the real story behind the local search giant's current strategy, and after two decades analyzing these plays, I can tell you Yelp Inc. is deep into its AI and Services transformation as of late 2025. Forget just reviews; the model now hinges on selling targeted local advertising-projected Services ad revenue hit about $243.81 million in Q3 alone-and pushing new AI subscription tools to service pros, all while sitting on a massive resource of over 200 million user reviews. With a full-year net revenue outlook landing between $1.460 billion and $1.465 billion, this isn't the same company it was five years ago. Dive into the canvas below to see exactly how they are structuring their costs and capturing value from this pivot.

Yelp Inc. (YELP) - Canvas Business Model: Key Partnerships

You're looking at how Yelp Inc. monetizes its massive local data through strategic alliances, which is defintely a core part of its strategy, especially as the company guides for full-year 2025 net revenue between $1.465 billion and $1.475 billion. These partnerships help drive traffic and revenue, particularly in the services segment, which saw advertising revenue growth of 8% year-over-year in Q2 2025.

The most significant recent development is the preferred food ordering/delivery partnership with DoorDash, which officially launched on October 1, 2025. This move connects Yelp's high-intent audience directly to DoorDash's expansive logistics network. DoorDash itself was showing strength, with revenue growth of nearly 24% over the twelve months leading up to the announcement.

This arrangement is designed to give Yelp users more choice right on the platform. Here's what that means for scale:

• Access to DoorDash's delivery network of over 500,000 restaurants across the United States.
• Seamless transition from Yelp discovery to order placement and real-time tracking via DoorDash.
• Yelp Inc. maintains existing delivery partnerships for restaurants not on the DoorDash platform.

The focus on services is also evident in other key relationships. You know Yelp acquired RepairPal, and that acquisition is factored into the 2025 financial outlook, with CFO David Schwarzbach noting increased costs anticipated from the RepairPal acquisition impacting the adjusted EBITDA guidance of $345 million to $360 million for the full year.

Beyond direct transactions, data licensing through API calls represents a growing, high-margin revenue stream. This is where Yelp's content becomes a resource for other platforms. The momentum here is strong:

• AI search API calls have increased by 20x year-over-year.
• The annual run-rate revenue related to this AI search licensing is now reported as >$10 million.

For reservations, Yelp continues its established relationships with third-party booking providers. While OpenTable is a prime example of this category, the actual booking flow is integrated to keep users within the Yelp ecosystem as much as possible, similar to how the new delivery integration works. We can map out the quantifiable partnership impact here:

These alliances are critical because they allow Yelp Inc. to capture transaction value across multiple verticals-food, auto, and home services-without needing to build out every single logistics or booking layer itself. It's a classic platform play, using its content as the hook. Finance: draft 13-week cash view by Friday.

Yelp Inc. (YELP) - Canvas Business Model: Key Activities

You're looking at the core engine of Yelp Inc. (YELP) as of late 2025; it's all about monetizing that massive user-generated content base through targeted sales and relentless product development, especially with AI.

The primary revenue driver remains selling targeted local advertising. As of September 30, 2025, Yelp was actively managing advertising relationships with over 512,000 paying locations. This activity is split between two main segments, which you can see clearly in the Q3 2025 performance:

Overall, net revenue for the third quarter of 2025 hit a record of $376 million, but that total advertising number masks the pressure in the RR&O segment, which saw a 2% year-over-year decline. Still, the Services category is showing resilience, with its revenue increasing 7% year-over-year.

A massive part of the Key Activities involves developing and deploying AI-powered products to enhance both user experience and advertiser value. Management highlighted the velocity here, rolling out over 35 new features in the Fall 2025 Product Release. This isn't just backend stuff; you're seeing direct customer-facing tools:

• Expansion of the Yelp Assistant across various pages.
• Launch of voice AI products like Yelp Host and Yelp Receptionist.
• Introduction of features like Menu Vision.

These AI efforts are designed to capture incremental revenue and subscription Total Addressable Market (TAM) opportunities, especially in the Services space where Average Revenue Per Location (ARPL) reached record levels in Q3 2025.

Maintaining platform integrity is a constant, heavy lift. While the prompt mentioned 200+ million reviews, the latest reported cumulative figure as of early 2025 was over 308 million user reviews contributed since inception. A key activity here is the automated moderation; approximately 76% of these reviews are recommended by Yelp's system, meaning a significant portion requires engineering and moderation oversight to filter out low-trust or solicited content.

Core platform engineering and mobile app management underpin everything, ensuring the platform can handle the traffic-about 2.5 million people search on Yelp daily. This activity also includes managing the partnership expansion with DoorDash, which was noted to be expanding the ordering footprint by approximately 200,000 restaurants.

Finally, strategic capital allocation is a key financial activity. For Q3 2025, Yelp actively repurchased approximately $75 million of its stock, averaging a price of $32.59 per share. This action was executed against a remaining authorization of $127 million as of that quarter end. For context on the annual scale, the annual share buybacks for the full year 2024 totaled $251.181 million. Finance: draft 13-week cash view by Friday.

Yelp Inc. (YELP) - Canvas Business Model: Key Resources

You're looking at the core assets that power Yelp Inc.'s operations as of late 2025. These aren't just line items; they are the engine for generating revenue and maintaining market position.

Vast database of over 200 million user-generated reviews and photos

The sheer volume of content is a foundational resource. This database is the primary draw for consumers seeking local business information. As of early 2025 investor materials, the cumulative review count stood at 308 million. This content is the fuel for the platform's search functionality and the basis for data licensing partnerships mentioned in Q3 2025 shareholder communications.

Proprietary AI/LLM technology for search, call answering, and content

Yelp Inc. is actively transforming its platform using artificial intelligence. This technology is a key differentiator, moving beyond static listings. The company rolled out over 35 new features and updates in Q3 2025 alone, directly related to this investment. These include specific AI-powered services:

• Yelp Assistant
• Yelp Host
• Yelp Receptionist

This focus on AI is central to the product-led strategy management discussed following the Q3 2025 results.

Strong brand recognition as a trusted local business platform

The brand equity itself acts as a resource, reducing customer acquisition costs by drawing organic traffic. This trust is what underpins the advertising revenue streams. The platform remains a leading resource for consumers making everyday spending decisions.

Cash and cash equivalents of $231.1 million as of Q3 2025

Liquidity provides operational flexibility and the ability to fund strategic initiatives, like the AI transformation, without immediate external pressure. The balance sheet strength supports ongoing shareholder returns. Here's a look at some key financial metrics surrounding this position as of September 30, 2025, based on Q3 2025 filings.

The company also aggressively supported its stock, repurchasing approximately 2.3 million shares at a cost of $75 million during the third quarter.

Network effect from a large, active consumer user base

The value of the platform increases as more users and businesses join, creating a self-reinforcing loop. On the business side, Yelp Inc. reported a monthly average of 512K Paying Advertising Locations for Q3 2025. For the consumer side, while app-specific data from 2024 showed 29 million App Unique Devices monthly, broader user data from early 2025 indicated 76 million Unique visitors on desktop and mobile. The platform enables consumers to easily request a quote, join a waitlist, or make an appointment, which drives business participation.

Finance: draft 13-week cash view by Friday.

Yelp Inc. (YELP) - Canvas Business Model: Value Propositions

For Consumers: Trusted, comprehensive local business information and discovery.

Yelp Inc. provides a platform where millions of people find local businesses. Around 2.5 million people search on Yelp every day. As of 2024, the Yelp app was used by 29 million people each month. Consumers have contributed over 308 million cumulative reviews, with 21 million new reviews added in 2024 alone. Yelp ranks #2 among U.S. review platforms. Furthermore, 45.18% of users say they prefer to check reviews on Yelp before visiting a business. The user base includes a high-income segment, with over 56% of U.S. users earning $100,000 or more annually.

• User base aged 55 and above share: 39%.
• Recommended reviews percentage: Approximately 76%.
• Total active business pages hosted: 7.74 million.

For Businesses: Targeted local advertising to high-intent customers.

Yelp Inc. offers businesses a way to reach customers actively looking for their services. For the third quarter of 2025, Yelp reported net revenue of a record $376 million, a 4.4% increase year-over-year. The full-year 2025 net revenue outlook is now projected to be between $1.460 billion and $1.465 billion at the midpoint. In mid-2025, Yelp had 515,000 paying advertising locations. Advertisers spent about 8% more per business page in 2024. The value proposition is segmented clearly by business category:

For Service Pros: AI-powered tools (Yelp Receptionist) to manage leads and calls.

Yelp Inc. introduced new AI tools as part of its Fall 2025 product release, including Yelp Receptionist, designed to automate customer interactions for service businesses. The Yelp Receptionist tool is set to launch initially for eligible businesses at $99 per month. This builds on earlier AI features like Yelp Assistant, a conversational chatbot previewed in April 2024. The Fall 2025 AI release included over 35 new features aimed at streamlining operations.

For Restaurants: Transaction enablement (ordering, reservations) and AI Host.

Restaurants gain operational support through AI tools like Yelp Host, which functions as an AI phone agent. Yelp Host can manage guest calls, update reservations, and provide wait times. For restaurants using Yelp Guest Manager, the subscription for Yelp Host starts at $99 per month; otherwise, it starts at $149 per month. These tools aim to automate front-of-house communication.

High-quality content via features like Menu Vision and Review Insights.

The platform enhances discovery with AI-driven content features. Menu Vision AI, launched in the Fall 2025 release, allows users to scan physical menus, and the app uses AI to pull up corresponding photos and review snippets. When paired with Google Business Profile optimizations, businesses in niches like dining have reported traffic gains of 15-25% from these AI features. Furthermore, AI-powered Review Insights, introduced in December 2024, uses Large Language Models to highlight reviewer sentiment on factors like food quality, service, and wait times.

• Number of new features in the Fall 2025 AI release: Over 35.
• Review Insights highlights sentiment on: food quality, service, and wait times.

Yelp Inc. (YELP) - Canvas Business Model: Customer Relationships

You're looking at how Yelp Inc. manages its connections with the two sides of its marketplace: the businesses paying for services and the users creating the content that drives value. The relationship structure is intentionally tiered based on the size and complexity of the business customer.

Self-service advertising platform for smaller local businesses.

The bulk of Yelp Inc.'s advertiser base relies on self-serve tools to manage their presence and advertising spend. As of September 30, 2025, the total number of paying advertising locations stood at 512,000. This is down 2% year-over-year, reflecting macroeconomic pressures, particularly in certain categories. However, the platform supports a much larger ecosystem, hosting 7.74 million active business pages, which grew 10% from the prior year. The average revenue per location reached an annual record in 2024, showing that the advertisers who remain are spending more. For context on the user side, 29 million people access the Yelp app each month to find businesses, and around 2.5 million people search on Yelp every day.

The influence of user-generated content is central to this relationship. A staggering 94% of customers claim that positive reviews on Yelp have made them devoted to a business, giving it first preference for purchases. Conversely, 92% of people are unlikely to engage with a business listing that has negative reviews.

Here's a look at the scale of the community and advertising base as of late 2025:

Dedicated sales and account management for larger advertisers.

Larger advertisers, often falling into the high-value Services categories, receive more dedicated attention. This is evident in the revenue performance: Services advertising revenue hit a record $244 million in Q3 2025, marking a 7% year-over-year increase. This segment growth contrasts with the Restaurants, Retail & Other (RR&O) category, which saw revenue decline by 2% in the same quarter. In 2024, Services advertising revenue was a record $879 million, up 11%, while RR&O revenue was $470 million, down 3%. The focus on Services, which includes home and auto repair, suggests these relationships are managed more closely to drive higher-value leads. Back in 2023, self-serve and multi-location channels accounted for approximately 50% of total advertising revenue, with multi-location revenue growing by approximately 15% year-over-year, indicating a segment that likely receives dedicated support.

Community-driven engagement and content contribution from users.

The relationship with users is built on facilitating content creation and ensuring its quality. Users have contributed over 308 million cumulative reviews. In 2024 alone, 21 million new reviews were added. Yelp Inc. actively curates this content, with approximately 76% of reviews being recommended by its system. The user base is financially attractive to businesses; over 50% of Yelp users have an annual income above $100,000. Furthermore, user demographics show that 40% of users are aged 55+, and 62% have attended college.

The platform uses this community data to help businesses connect with current demand, as shown by its trend tracking capabilities, which use year-over-year data in searches and mentions.

New subscription model for AI-powered SaaS tools (Yelp Host/Receptionist).

Yelp Inc. is actively deepening relationships with businesses, especially in the service and restaurant sectors, through new AI-powered Software as a Service (SaaS) tools launched in the Fall 2025 product release. These tools aim to automate customer management, which is a direct value exchange for a recurring subscription fee. Early results indicate a strong product-market fit for these incremental offerings.

The pricing structure for these new direct-to-business relationships is as follows:

• Yelp Host: Starts at $149 per month.
• Yelp Host (for existing Guest Manager users): Priced at $99 per month.
• Yelp Receptionist: Launching initially for eligible businesses at $99 per month.

These tools are designed to answer calls 24/7, manage reservations, collect lead details, and filter spam, directly addressing labor challenges for businesses.

Finance: draft 13-week cash view by Friday.

Yelp Inc. (YELP) - Canvas Business Model: Channels

You're looking at how Yelp Inc. gets its product-local business information and advertising-into the hands of consumers and businesses as of late 2025. It's a multi-pronged approach, heavily weighted toward mobile, but with significant AI integration now driving both consumer discovery and business tools.

Yelp mobile application (primary consumer channel)

The mobile application is definitely the core engagement point for consumers. It's where the high-intent traffic lives. You see this in the user behavior metrics; mobile users are more likely to act fast after searching.

• The Yelp app had 29 million monthly users in 2024.
• The platform has around 32 million regular mobile app users.
• Mobile Yelp users are 70% more likely to visit a business within 24 hours compared to desktop users.
• Yelp mobile app users contribute 55% of new reviews.
• The app has been downloaded over 250 million times since launch.
• About 45% of Yelp's audience accesses the platform primarily via the mobile app.

Yelp website (desktop and mobile web)

The website still pulls in a massive audience, especially for desktop users doing deeper research. While mobile traffic is dominant in searches, desktop still accounts for a significant chunk of overall visits.

Here's a look at the traffic split based on recent data points:

It's clear that while the app drives immediate action, the desktop web experience is critical for capturing a large segment of the overall user base.

AI-powered voice and chat interfaces (Yelp Assistant)

The investment in Artificial Intelligence is a major channel evolution, moving beyond simple search to conversational discovery and direct business support. The Yelp Assistant, which debuted in 2024, is central to this push.

• The AI-powered Yelp Assistant drove a 50% sequential increase in project submissions from Q3 to Q4 2024.
• Yelp launched over 35 new AI features in October 2025, including enhanced conversational AI assistants.
• Yelp Assistant now uses large language models to answer direct consumer inquiries instantly.
• New AI solutions for businesses include Yelp Host and Yelp Receptionist.
• Yelp Host is priced at $149 per month (or $99 with Yelp Guest Manager integration).

Paid search and digital marketing to acquire users and service requests

This channel is Yelp Inc.'s primary revenue driver, focused on getting businesses to pay for visibility and lead generation, especially within the high-growth Services categories. The company made significant investments in its advertising technology in 2024.

Financially, the advertising performance for 2024 shows a clear strategic pivot:

Services advertising now accounts for over 60% of Yelp Inc.'s total ad revenue. As of mid-2025, Yelp has 515,000 paying advertising locations. The platform operates on a Cost-Per-Click (CPC) model for advertisers, where costs can vary wildly; legal services might see CPCs exceeding $50, while restaurants could pay under $1 per click. A key feature of this channel is that Yelp Ads can place a paying business's ad directly on a competitor's business page, though Yelp charges an extra $50 monthly fee to remove competitor ads from one's own profile. Consumer intent here is high: 82% of Yelp users visit the platform with immediate purchase intent.

Yelp Inc. (YELP) - Canvas Business Model: Customer Segments

You're looking at the core audience Yelp Inc. serves to drive its platform value. Honestly, the customer base is clearly bifurcated into those who spend money to get found-the businesses-and those who spend money after finding a business-the consumers.

Local Businesses: Small and medium-sized enterprises (SMEs) across Services and RR&O

These are the backbone of the platform's revenue. Yelp Inc. hosts a massive inventory of businesses, but the paying segment is what matters for the top line. As of the third quarter of 2025, the average number of paying advertising locations stood at 512K. This is a key metric showing business commitment. The total number of active business pages on the platform reached 7.74 million, marking a 10% increase from the prior year. The revenue mix clearly shows where the current investment focus is landing:

Consumers: Individuals seeking local information, reviews, and transactions

This group provides the essential content and drives the demand for advertisers. You need to know their profile to value the traffic. As of September 2025 data, the income profile is strong: 54% of U.S. users report household incomes of $100,000+. Also, 62% of U.S. users have attended college. The intent is high; about 97% of users buy from businesses they find on Yelp Inc., and 93% compare options there before purchasing. Daily engagement is solid, with around 2.5 million people searching on the platform every day.

Here's a quick look at the consumer demographics as of late 2025:

• Monthly active app unique devices: 29 million (2024 average)
• Cumulative reviews posted: Over 308 million
• Users aged 55 and above: 40% of U.S. users
• Users aged 18-34: 25% of U.S. users
• Users who visit a business after looking it up: 92%

Service Professionals: Home services, auto repair, and other high-value categories

This group is a subset of the Local Businesses but represents the highest-growth area for Yelp Inc.'s advertising revenue. The strategic pivot is clear from the growth rates. In 2024, advertising revenue from Services grew by 11% year-over-year, reaching a record $879 million. To be fair, the home services category specifically led this charge, showing a 15% year-over-year revenue growth in 2024. This segment is where management is clearly placing its near-term bets for profitable expansion.

Large Advertisers: National brands and multi-location businesses

While Yelp Inc.'s core is local, larger advertisers are captured within the Services and RR&O buckets. The data shows that average revenue per location reached an annual record in 2024, which often suggests success in upselling higher-tier advertising packages to larger, multi-location clients, even as the total number of paying locations decreased by 5% that year. The company expects 2025 full-year net revenue to land between $1.470 billion and $1.485 billion.

Finance: review the Q3 2025 average revenue per location against the 2024 annual record by next Tuesday.

Yelp Inc. (YELP) - Canvas Business Model: Cost Structure

You're looking at the expense profile for Yelp Inc. as of late 2025, which is heavily influenced by its ongoing AI transformation and the operational costs of a distributed team. The cost structure reflects a shift in spending priorities, moving resources toward technology while maintaining a disciplined approach to sales and marketing spend relative to revenue growth.

The primary cost drivers for Yelp Inc. are personnel-related, embedded within the major operating expense categories. For the nine months ended September 30, 2025, the company reported significant year-to-date expenditures across its core functions. The Cost of Revenue, which includes data center and cloud computing expenses necessary to run the platform, was reported at \$3,238 thousand for the nine-month period. This figure is lower than the total Stock-Based Compensation for the same period, highlighting the non-cash nature of a large portion of the compensation expense.

Technology and Development costs, which the company refers to as Product Development, are a major focus area, supporting the AI transformation mentioned by management. For the first nine months of FY 2025, Product Development expenses totaled \$53,862 thousand. This investment underpins the rollout of features like the Yelp Assistant and voice AI services. Sales and Marketing expenses, aimed at acquiring advertisers and users, were \$21,986 thousand year-to-date September 30, 2025. General and Administrative costs, which cover the infrastructure supporting a fully remote workforce, amounted to \$26,039 thousand over the same nine months.

Stock-Based Compensation (SBC) remains a material component of the overall cost base. For the nine months ended September 30, 2025, total SBC expense was \$105,125 thousand. This aligns with the expectation that SBC for the full fiscal year 2025 is projected to be around 9% of FY 2025 net revenue, which the company guided to be between \$1.460 billion and \$1.465 billion.

Here's a look at the key expense components based on the nine months ended September 30, 2025:

The operational structure is clearly leaning into technology investment while managing other overhead. You can see the breakdown of the total stock-based compensation across the main expense lines:

• Cost of revenue SBC component: \$3,238 thousand
• Sales and marketing SBC component: \$21,986 thousand
• Product development SBC component: \$53,862 thousand
• General and administrative SBC component: \$26,039 thousand

The company explicitly noted in its Q3 2025 filings that its ability to continue operating effectively with a primarily remote workforce is a factor in its ongoing cost management strategy. This setup helps control traditional workplace operating costs, which were noted as decreasing in prior periods due to reductions in leased office space. Finance: draft 13-week cash view by Friday.

Yelp Inc. (YELP) - Canvas Business Model: Revenue Streams

You're looking at how Yelp Inc. actually brings in the money, which is critical for valuing the business heading into 2026. Honestly, the story here is about the shift from general local ads to specialized, high-value services advertising, all while trying to monetize new AI investments.

Advertising Revenue remains the primary engine for Yelp Inc. The company has seen a clear bifurcation in its advertising performance. Services advertising revenue, which covers things like home and auto repair, was a record $243.8 million in the third quarter of 2025. This is the number you were tracking, and the prompt specified a projected $243.81 million for Q3 2025 Services ad revenue. The growth in this segment was partly fueled by the RepairPal acquisition, which contributed approximately two percentage points to the overall advertising revenue growth in Q3 2025. Conversely, the Restaurants, Retail, and Other (RR&O) advertising segment faced headwinds, declining 2% year-over-year to $113.5 million in Q3 2025.

The overall picture for the full year 2025 shows a slight tempering of expectations due to macroeconomic uncertainty. Yelp Inc. updated its full-year 2025 net revenue outlook to a range of $1.460 billion to $1.465 billion. This was a slight trim from previous guidance, reflecting caution about the fourth quarter. For context, the third quarter of 2025 itself achieved record net revenue of $376 million, which beat consensus estimates.

Here's a quick look at the revenue components from the Q3 2025 results:

Other Revenue is where Yelp Inc. is placing strategic bets for future growth, particularly around its AI transformation. Management has explicitly noted expectations for incremental "Other" revenue stemming from new AI initiatives. This includes revenue potential from voice AI products like Yelp Host and Yelp Receptionist, which management sees as contributing to a larger subscription Total Addressable Market (TAM). While specific dollar amounts for data licensing or AI subscriptions weren't detailed in the Q3 2025 reports, the focus on launching over 35 new AI features signals a push to monetize this area beyond traditional advertising.

Transaction fees from partnerships represent another layer of monetization, often embedded within the platform experience. The expansion of the DoorDash partnership is a concrete example, growing the ordering footprint by approximately ~200k restaurants. While the direct fee structure isn't public, these integrations drive transaction volume, which can translate into fees or enhanced advertising value for participating businesses. You should watch for any specific metrics on transaction volume or attach rates in future shareholder letters, as these flow through as either advertising revenue or, potentially, a distinct transaction-based stream.

You'll want Finance to track the split between Services and RR&O advertising closely; that ratio is the purest indicator of near-term business health. Finance: draft 13-week cash view by Friday.