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Yelp Earnings Preview: Will Local Ad Revenue Growth Keep Up With Expectations In Q4?

Yelp (NYSE:YELP) is set to release its Q4 2014 earnings on Thursday, February 5th. While the company continues to report good growth in its core local ads business, the pace of this growth is directly related to the duration of its presence in the regions where Yelp operates. In the last few years, Yelp has expanded to regions outside the U.S. where the purchasing power of businesses and users is low compared to the U.S. Therefore, we believe that the pace of local ads growth will slow down as cohorts within the U.S. mature and revenues from newer regions kick in. As a result, in this earnings announcement, growth in the local ads business will be the key focal point and will give us a fair indication of the expected revenue growth in the coming quarters. We will continue to monitor the monetization rate of its existing and new cohorts. Additionally, revenue growth from mobile devices and the Deal, Partnership and Other services (DPO) business will be critical for the future as these services form a significant portion of Yelp's revenues in the coming…