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Yelp’s 98% AI Revenue Surge — Can It Offset A Weakening Ad Business?

Yelp Incorporated reported modest net revenue growth of 1% year-over-year to $376 million for the second quarter of 2026, slightly exceeding the high end of its guidance by $8 million. The company’s net income margin declined notably, with net income falling 28% year-over-year to $32 million, resulting in an 8% margin. Adjusted EBITDA decreased by 9% to $91 million but also beat guidance by $16 million, maintaining a 24% margin. These results reflect a mixed performance amid an economically challenging environment for local businesses. Advertising revenue—a key component of Yelp’s business—showed a split trend. Services advertising revenue remained flat at $241 million, while the Restaurants, Retailers & Others (RR&O) segment experienced a 10% decline to $102 million. Paying advertising locations decreased by 1% to 510,000, with ad clicks falling 5% year-over-year, primarily due to reduced activity in the RR&O categories.