10-Q 1 yelp-20220630.htm 10-Q yelp-20220630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________________________________
Form 10-Q
______________________________________________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the Quarterly Period Ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the Transition period from                 to

Commission file number: 001-35444
_____________________________________________________________________________________________________
YELP INC.
(Exact Name of Registrant as Specified in Its Charter)
______________________________________________________________________________________________________
Delaware20-1854266
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
350 Mission Street, 10th Floor
San Francisco, California 94105
(Address of principal executive offices) (Zip Code)

(415) 908-3801
(Registrant’s Telephone Number, Including Area Code)
_________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, par value $0.000001 per shareYELPNew York Stock Exchange LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer        
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No  
As of July 29, 2022, there were 70,273,827 shares outstanding of the registrant’s common stock, par value $0.000001 per share.


YELP INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page
Part I.
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
___________________________________
Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “Yelp,” the “Company,” “we,” “us” and “our” refer to Yelp Inc. and, where appropriate, its subsidiaries.
Unless the context otherwise indicates, where we refer in this Quarterly Report to our “mobile application” or “mobile app,” we refer to all of our applications for mobile-enabled devices; references to our “mobile platform” refer to both our mobile app and the versions of our website that are optimized for mobile-based browsers. Similarly, references to our “website” refer to versions of our website dedicated to both desktop- and mobile-based browsers, as well as the U.S. and international versions of our website.

1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements that involve risks, uncertainties and assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements contained in this Quarterly Report that are not purely historical, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may include, but are not limited to, statements about:
our financial performance, including our revenue, operating expenses and margins, as well as our ability to maintain profitability;
our ability to maintain and expand our advertiser base;
our strategic initiatives to support revenue growth and margin expansion;
our investment plans and priorities, including planned investments in product development, marketing and our sales channels, as well as our ability to execute against those priorities and the results thereof;
our ability to operate with a distributed workforce as well as the benefits and costs thereof;
trends and expectations regarding customer and revenue retention;
trends and expectations regarding our key metrics, including consumer traffic and engagement and the opportunity they present for growth;
our liquidity and working capital requirements; and
our plans with respect to our stock repurchase program.
Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements.
These statements are based on the beliefs and assumptions of our management, which are in turn based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” included under Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”), as updated by Part II, Item 1A of this Quarterly Report, and elsewhere in this Quarterly Report, such as:
our ability to hire, retain, motivate and effectively manage well-qualified employees in a primarily remote work environment;
2

our ability to accurately forecast revenue and appropriately plan expenses;
Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
NOTE REGARDING METRICS
We review a number of performance metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. Please see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Metrics” in this Quarterly Report and in our Annual Report for information on how we define our key metrics. Unless otherwise stated, these metrics do not include metrics from subscription products or our business-owner products.
While our metrics are based on what we believe to be reasonable calculations, there are inherent challenges in measuring usage across our large user base. Certain of our performance metrics, including the number of unique devices accessing our mobile app, ad clicks, average cost-per-click and active claimed local business locations, are tracked with internal company tools, which are not independently verified by any third party and have a number of limitations. For example, our metrics may be affected by mobile applications that automatically contact our servers for regular updates with no discernible user action involved; this activity can cause our system to count the device associated with the app as an app unique device in a given period. Although we take steps to exclude such activity and, as a result, do not believe it has had a material impact on our reported metrics, our efforts may not successfully account for all such activity.
Our metrics that are calculated based on data from third parties — the number of desktop and mobile website unique visitors — are subject to similar limitations. Our third-party providers periodically encounter difficulties in providing accurate data for such metrics as a result of a variety of factors, including human and software errors. In addition, because these traffic metrics are tracked based on unique cookie identifiers, an individual who accesses our website from multiple devices with different cookies may be counted as multiple unique visitors, and multiple individuals who access our website from a shared device with a single cookie may be counted as a single unique visitor. As a result, the calculations of our unique visitors may not accurately reflect the number of people actually visiting our website.
Our measures of traffic and other key metrics may also differ from estimates published by third parties (other than those whose data we use to calculate such metrics) or from similar metrics of our competitors. We are continually seeking to improve our ability to measure these key metrics, and regularly review our processes to assess potential improvements to their accuracy. From time to time, we may discover inaccuracies in our metrics or make adjustments to improve their accuracy, including adjustments that may result in the recalculation of our historical metrics. We believe that any such inaccuracies or adjustments are immaterial unless otherwise stated.

3

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
YELP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
(Unaudited)
June 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents$421,162 $479,783 
Accounts receivable (net of allowance for doubtful accounts of $8,686 and $7,153 at June 30, 2022 and December 31, 2021, respectively)
124,690 107,358 
Prepaid expenses and other current assets65,334 57,536 
Total current assets611,186 644,677 
Property, equipment and software, net82,212 83,857 
Operating lease right-of-use assets122,698 140,785 
Goodwill101,526 105,128 
Intangibles, net9,679 10,673 
Restricted cash1,052 858 
Other non-current assets94,815 64,550 
Total assets$1,023,168 $1,050,528 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities$132,688 $119,620 
Operating lease liabilities — current41,177 40,237 
Deferred revenue6,141 4,156 
Total current liabilities180,006 164,013 
Operating lease liabilities — long-term105,809 127,979 
 Other long-term liabilities
18,749 7,218 
Total liabilities304,564 299,210 
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $0.000001 par value — 200,000 shares authorized, 71,226 shares issued and 71,119 shares outstanding at June 30, 2022, and 72,171 shares issued and outstanding at December 31, 2021
  
Additional paid-in capital1,587,337 1,522,572 
Treasury stock(3,138) 
Accumulated other comprehensive loss(15,657)(11,090)
Accumulated deficit(849,938)(760,164)
Total stockholders' equity718,604 751,318 
Total liabilities and stockholders' equity$1,023,168 $1,050,528 

See Notes to Condensed Consolidated Financial Statements.
4

YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Net revenue$298,884 $257,188 $575,512 $489,284 
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)26,988 17,993 50,417 32,867 
Sales and marketing129,412 113,641 255,509 226,550 
Product development76,848 68,695 157,533 136,687 
General and administrative38,377 45,095 77,760 76,956 
Depreciation and amortization11,258 12,833 22,748 25,916 
Restructuring 12  32 
Total costs and expenses282,883 258,269 563,967 499,008 
Income (loss) from operations16,001 (1,081)11,545 (9,724)
Other income, net1,327 542 2,256 1,247 
Income (loss) before income taxes17,328 (539)13,801 (8,477)
Provision for (benefit from) income taxes9,319 (4,751)6,707 (6,893)
Net income (loss) attributable to common stockholders$8,009 $4,212 $7,094 $(1,584)
Net income (loss) per share attributable to common stockholders
Basic$0.11 $0.06 $0.10 $(0.02)
Diluted$0.11 $0.05 $0.10 $(0.02)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders
Basic71,217 74,807 71,427 75,025 
Diluted72,835 78,983 73,572 75,025 

See Notes to Condensed Consolidated Financial Statements.

5

YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
 2022202120222021
Net income (loss)$8,009 $4,212 $7,094 $(1,584)
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of tax(3,754)1,181 (4,567)(1,571)
Other comprehensive (loss) income(3,754)1,181 (4,567)(1,571)
Comprehensive income (loss)$4,255 $5,393 $2,527 $(3,155)

See Notes to Condensed Consolidated Financial Statements.


6

YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
Common StockAdditional Paid-In CapitalTreasury StockAccumulated
Other Comprehensive Loss
Accumulated DeficitTotal Stockholders' Equity
SharesAmount
Balance as of March 31, 202175,153 $ $1,428,890 $(3,313)$(9,559)$(588,918)$827,100 
Issuance of common stock upon exercises of employee stock options41 — 863 — — — 863 
Issuance of common stock upon vesting of restricted stock units ("RSUs")744 — — — — —  
Issuance of common stock for employee stock purchase plan255 — 8,675 — — — 8,675 
Stock-based compensation (inclusive of capitalized stock-based compensation)— — 44,174 — — — 44,174 
Shares withheld related to net share settlement of equity awards— — (18,112)— — — (18,112)
Repurchases of common stock— — — (64,629)— — (64,629)
Retirement of common stock(1,603)— — 63,692 — (63,692) 
Foreign currency adjustments, net of tax— — — — 1,181 — 1,181 
Net income— — — — — 4,212 4,212 
Balance as of June 30, 202174,590 $ $1,464,490 $(4,250)$(8,378)$(648,398)$803,464 
Balance as of March 31, 202271,641 $ $1,547,337 $(2,886)$(11,903)$(808,199)$724,349 
Issuance of common stock upon exercises of employee stock options61 — 1,351 — — — 1,351 
Issuance of common stock upon vesting of RSUs710 — — — — —  
Issuance of common stock for employee stock purchase plan364 — 9,110 — — — 9,110 
Stock-based compensation (inclusive of capitalized stock-based compensation)— — 43,224 — — — 43,224 
Shares withheld related to net share settlement of equity awards— — (13,685)— — — (13,685)
Repurchases of common stock— — — (50,000)— — (50,000)
Retirement of common stock(1,550)— — 49,748 — (49,748) 
Foreign currency adjustments, net of tax— — — — (3,754)— (3,754)
Net income— — — — — 8,009 8,009 
Balance as of June 30, 202271,226 $ $1,587,337 $(3,138)$(15,657)$(849,938)$718,604 

See Notes to Condensed Consolidated Financial Statements.








7

YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)
(In thousands)
(Unaudited)
Common StockAdditional Paid-In CapitalTreasury StockAccumulated
Other Comprehensive Loss
Accumulated DeficitTotal Stockholders' Equity
SharesAmount
Balance as of December 31, 202075,371 $ $1,398,248 $(2,964)$(6,807)$(533,943)$854,534 
Issuance of common stock upon exercises of employee stock options565 — 6,912 — — — 6,912 
Issuance of common stock upon vesting of RSUs1,414 — — — — —  
Issuance of common stock for employee stock purchase plan255 — 8,675 — — — 8,675 
Stock-based compensation (inclusive of capitalized stock-based compensation)— — 85,693 — — — 85,693 
Shares withheld related to net share settlement of equity awards— — (35,038)— — — (35,038)
Repurchases of common stock— — — (114,157)— — (114,157)
Retirement of common stock(3,015)— — 112,871 — (112,871) 
Foreign currency adjustments, net of tax— — — — (1,571)— (1,571)
Net loss— — — — — (1,584)(1,584)
Balance as of June 30, 202174,590 $ $1,464,490 $(4,250)$(8,378)$(648,398)$803,464 
Balance as of December 31, 202172,171 $ $1,522,572 $ $(11,090)$(760,164)$751,318 
Issuance of common stock upon exercises of employee stock options88 — 1,939 — — — 1,939 
Issuance of common stock upon vesting of RSUs1,535 — — — — —  
Issuance of common stock for employee stock purchase plan364 — 9,110 — — — 9,110 
Stock-based compensation (inclusive of capitalized stock-based compensation)— — 85,991 — — — 85,991 
Shares withheld related to net share settlement of equity awards— — (32,275)— — — (32,275)
Repurchases of common stock— — — (100,006)— — (100,006)
Retirement of common stock(2,932)— — 96,868 — (96,868) 
Foreign currency adjustments, net of tax— — — — (4,567)— (4,567)
Net income— — — — — 7,094 7,094 
Balance as of June 30, 202271,226 $ $1,587,337 $(3,138)$(15,657)$(849,938)$718,604 

See Notes to Condensed Consolidated Financial Statements.
8

YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
20222021
Operating Activities
Net income (loss)$7,094 $(1,584)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization22,748 25,916 
Provision for doubtful accounts12,676 7,240 
Stock-based compensation81,121 80,104 
Noncash lease cost16,870 20,712 
Deferred income taxes(24,114)(7,755)
Amortization of deferred cost8,413 6,881 
Asset impairment 11,164 
Other adjustments, net717 386 
Changes in operating assets and liabilities:
Accounts receivable(30,014)(20,382)
Prepaid expenses and other assets(22,149)(6,793)
Operating lease liabilities(19,813)(22,489)
Accounts payable, accrued liabilities and other liabilities24,683 15,707 
Net cash provided by operating activities78,232 109,107 
Investing Activities
Purchases of property, equipment and software(14,498)(13,286)
Other investing activities19 90 
Net cash used in investing activities(14,479)(13,196)
Financing Activities
Proceeds from issuance of common stock for employee stock-based plans11,026 15,587 
Taxes paid related to the net share settlement of equity awards(32,046)(34,824)
Repurchases of common stock(100,006)(114,157)
Net cash used in financing activities(121,026)(133,394)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1,154)197 
Change in cash, cash equivalents and restricted cash(58,427)(37,286)
Cash, cash equivalents and restricted cash — Beginning of period480,641 596,540 
Cash, cash equivalents and restricted cash — End of period$422,214 $559,254 
Supplemental Disclosures of Other Cash Flow Information
Cash paid (refund received) for income taxes, net$23,727 $(586)
Supplemental Disclosures of Noncash Investing and Financing Activities
Purchases of property, equipment and software recorded in accounts payable and accrued liabilities$3,836 $1,295 
Tax liabilities related to equity awards included in accounts payable and accrued liabilities$39 $21 
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities$ $4,497 
Repurchases of common stock recorded in accounts payable and accrued liabilities$2,397 $3,444 

See Notes to Condensed Consolidated Financial Statements.
9

YELP INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS FOR PRESENTATION
Yelp Inc. was incorporated in Delaware on September 3, 2004. Except where specifically noted or the context otherwise requires, the use of terms such as the "Company" and "Yelp" in these Notes to Condensed Consolidated Financial Statements refers to Yelp Inc. and its subsidiaries.
Yelp is a trusted local resource for consumers and a partner in success for businesses of all sizes. Consumers trust Yelp for its extensive ratings and reviews of businesses across a broad range of categories, while businesses advertise on Yelp to reach its large audience of purchase-oriented and generally affluent consumers.
Basis of Presentation
The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Annual Report.
The unaudited condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures required by GAAP, including certain notes to the financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current period presentation, including reclassifying amortization of deferred costs to a separate line item within the condensed consolidated statement of cash flows.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normally recurring nature necessary for the fair presentation of the interim periods presented.
Principles of Consolidation
These unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation.
Use of Estimates
The preparation of the Company’s unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates due to the uncertainty of the extent of the impacts of macroeconomic conditions and other factors.
Significant Accounting Policies
There have been no material changes to the Company's significant accounting policies from those described in the Annual Report.
10

2. CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash, cash equivalents and restricted cash as of June 30, 2022 and December 31, 2021 consisted of the following (in thousands):
June 30,
2022
December 31,
2021
Cash$30,147 $89,407 
Cash equivalents391,015 390,376 
Total cash and cash equivalents$421,162 $479,783 
Restricted cash1,052 858 
Total cash, cash equivalents and restricted cash$422,214 $480,641 
3. FAIR VALUE MEASUREMENTS
The Company’s investments in money market accounts are recorded as cash equivalents at fair value on the condensed consolidated balance sheets.
The accounting guidance for fair value measurements prioritizes the inputs used in measuring fair value in the following hierarchy:
Level 1—Observable inputs, such as quoted prices in active markets,
Level 2—Inputs other than quoted prices in active markets that are observable either directly or indirectly, or
Level 3—Unobservable inputs in which there are little or no market data, which require the Company to develop its own assumptions.
This hierarchy requires the Company to use observable market data, when available, to minimize the use of unobservable inputs when determining fair value. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company's certificates of deposit are classified within Level 2 of the fair value hierarchy because they have been valued using inputs other than quoted prices in active markets that are observable directly or indirectly.
The following table represents the fair value of the Company’s financial instruments, including those measured at fair value on a recurring basis, as of June 30, 2022 and December 31, 2021 (in thousands):
June 30, 2022December 31, 2021
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents: 
Money market funds$391,015 $ $ $391,015 $390,376 $ $ $390,376 
Other investments:
Certificates of deposit 10,000  10,000  10,000  10,000 
Total cash equivalents and other investments$391,015 $10,000 $ $401,015 $390,376 $10,000 $ $400,376 
The certificates of deposit are reflected in prepaid expenses and other current assets on the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021.
11

4. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets as of June 30, 2022 and December 31, 2021 consisted of the following (in thousands):
June 30,
2022
December 31,
2021
Prepaid expenses$14,538 $13,480 
Certificates of deposit10,000 10,000 
Other current assets40,796 34,056 
Total prepaid expenses and other current assets$65,334 $57,536 
Prepaid expenses included $0.5 million of short-term capitalized implementation costs related to cloud computing arrangements that are service contracts. The long-term portion of capitalized cloud computing implementation costs of $1.4 million are included in other non-current assets. The Company recorded an immaterial amount of amortization expense during the three and six months ended June 30, 2022 and 2021 related to capitalized implementation costs. As of June 30, 2022, other current assets primarily consisted of non-trade receivables, current tax receivables and deferred costs related to unsettled share repurchases.
5. PROPERTY, EQUIPMENT AND SOFTWARE, NET
Property, equipment and software, net as of June 30, 2022 and December 31, 2021 consisted of the following (in thousands):
June 30,
2022
December 31,
2021
Capitalized website and internal-use software development costs$216,468 $202,169 
Leasehold improvements61,515 59,190 
Computer equipment50,685 48,264 
Furniture and fixtures11,841 12,573 
Telecommunication4,941 4,953 
Software1,702 1,703 
Total347,152 328,852 
Less accumulated depreciation and amortization(264,940)(244,995)
Property, equipment and software, net$82,212 $83,857 
Depreciation and amortization expense related to property, equipment and software was $11.0 million and $12.1 million for the three months ended June 30, 2022 and 2021, respectively, and $21.8 million and $24.5 million for the six months ended June 30, 2022 and 2021, respectively.
6. GOODWILL AND INTANGIBLE ASSETS
The Company’s goodwill is the result of its acquisitions of other businesses and represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed. The Company performed its annual goodwill impairment analysis as of August 31, 2021 and concluded that goodwill was not impaired, as the fair value of the reporting unit exceeded its carrying value.
The changes in carrying amount of goodwill during the six months ended June 30, 2022 were as follows (in thousands):
Balance as of December 31, 2021$105,128 
Effect of currency translation(3,602)
Balance as of June 30, 2022$101,526 
        
12

Intangible assets that were not fully amortized as of June 30, 2022 and December 31, 2021 consisted of the following (dollars in thousands):
June 30, 2022
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Remaining Life
Business relationships$9,918 $(5,196)$4,722 6.7years
Developed technology7,709 (7,709) 0.0years
Licensing agreements6,129 (1,183)4,946 7.7years
Domains and data licenses2,869 (2,858)11 1.0years
Total$26,625 $(16,946)$9,679 
December 31, 2021
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted Average Remaining Life
Business relationships$9,918 $(4,786)$5,132 7.1years
Developed technology7,709 (7,453)256 0.2years
Licensing agreements6,129 (860)5,269 8.2years
Domain and data licenses2,869 (2,853)16 1.5years
Total$26,625 $(15,952)$10,673 
Amortization expense was $0.3 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $1.0 million and $1.4 million for the six months ended June 30, 2022 and 2021, respectively.
As of June 30, 2022, estimated future amortization expenses were as follows (in thousands):
Remainder of 2022$682 
20231,359 
20241,353 
20251,353 
20261,353 
20271,353 
Thereafter2,226 
Total amortization$9,679 
7. LEASES
The components of lease cost, net for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Operating lease cost$10,499 $12,631 $21,166 $26,394 
Short-term lease cost (12 months or less)270 136 524 273 
Sublease income(2,777)(1,778)(5,555)(3,406)
Total lease cost, net$7,992 $10,989 $16,135 $23,261 
13

The Company's leases and subleases do not include any variable lease payments, residual value guarantees, related-party leases, or restrictions or covenants that would limit or prevent the Company from exercising its right to obtain substantially all of the economic benefits from use of the respective assets during the lease term.
Supplemental cash flow information related to leases for the six months ended June 30, 2022 and 2021 was as follows (in thousands):
Six Months Ended
June 30,
20222021
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows from operating leases$25,511 $27,784 
As of June 30, 2022, maturities of lease liabilities were as follows (in thousands):
Remainder of 2022$23,967 
202345,369 
202442,667 
202522,134 
20267,197 
20276,386 
Thereafter16,258 
Total minimum lease payments163,978 
Less imputed interest(16,992)
Present value of lease liabilities$146,986 
As of June 30, 2022 and December 31, 2021, the weighted-average remaining lease terms and weighted-average discount rates were as follows:
June 30,
2022
December 31,
2021
Weighted-average remaining lease term (years) — operating leases4.44.8
Weighted-average discount rate — operating leases5.3 %5.4 %
Subsequent to the quarter end, in July 2022, the Company entered into a sublease agreement for a portion of its office space in New York. The Company expects to recognize an impairment charge of approximately $10.5 million in the three months ending September 30, 2022, which will be included in general and administrative expenses on its condensed consolidated statement of operations, and will reduce the carrying amounts of the associated right-of-use assets and leasehold improvements accordingly.
8. OTHER NON-CURRENT ASSETS
Other non-current assets as of June 30, 2022 and December 31, 2021 consisted of the following (in thousands):
June 30,
2022
December 31,
2021
Deferred tax assets$64,597 $40,606 
Deferred contract costs23,000 16,931 
Other non-current assets7,218 7,013 
Total other non-current assets$94,815 $64,550 
14

Deferred contract costs as of June 30, 2022 and December 31, 2021, and changes in deferred contract costs during the six months ended June 30, 2022, were as follows (in thousands):
Six Months Ended
June 30, 2022
Balance, beginning of period$16,931 
Add: costs deferred on new contracts14,482 
Less: amortization recorded in sales and marketing expenses(8,413)
Balance, end of period$23,000 
9. CONTRACT BALANCES
The changes in the allowance for doubtful accounts during the six months ended June 30, 2022 and 2021 were as follows (in thousands):
Six Months Ended
June 30,
20222021
Balance, beginning of period$7,153 $11,559 
Add: provision for doubtful accounts12,676 7,240 
Less: write-offs, net of recoveries(11,143)(9,510)
Balance, end of period$8,686 $9,289 
The net increase in the allowance for doubtful accounts in the six months ended June 30, 2022 was primarily related to an anticipated increase in customer delinquencies due to an increase in both advertisers and customer spend during the six month period. The net decrease in the allowance for doubtful accounts in the six months ended June 30, 2021 was primarily a result of a reduction in expected customer delinquencies as collection rates improved. In calculating the allowance for doubtful accounts as of June 30, 2022 and 2021, the Company considered expectations of probable credit losses, including probable credit losses associated with the COVID-19 pandemic, based on observed trends in cancellations, observed changes in the credit risk of specific customers, the impact of anticipated closures and bankruptcies using forecasted economic indicators in addition to historical experience and loss patterns during periods of macroeconomic uncertainty.
Contract liabilities consist of deferred revenue, which is recorded on the condensed consolidated balance sheets when the Company has received consideration, or has the right to receive consideration, in advance of transferring the performance obligations under the contract to the customer.
The changes in deferred revenue during the six months ended June 30, 2022 were as follows (in thousands):
Six Months Ended
June 30, 2022
Balance, beginning of period$4,156 
      Less: recognition of deferred revenue from beginning balance(3,508)
      Add: net increase in current period contract liabilities5,493 
Balance, end of period$6,141 
The majority of the deferred revenue balance as of June 30, 2022 is expected to be recognized as revenue in the subsequent three-month period ending September 30, 2022. An immaterial amount of long-term deferred revenue is included in other long-term liabilities as of June 30, 2022. No other contract assets or liabilities were recorded on the Company's condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021.
15

10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities as of June 30, 2022 and December 31, 2021 consisted of the following (in thousands):
June 30,
2022
December 31,
2021
Accounts payable$17,485 $16,127 
Employee-related liabilities60,285 50,132 
Accrued sales and marketing expenses8,582 5,455 
Accrued cost of revenue7,058 9,537 
Accrued legal settlements26,011 26,037 
Other accrued liabilities13,267 12,332 
Total accounts payable and accrued liabilities$132,688 $119,620 
As of June 30, 2022, other accrued liabilities primarily consisted of accrued costs related to unsettled share repurchases as well as accrued general and administrative, product development and workplace costs.
11. COMMITMENTS AND CONTINGENCIES
Legal Proceedings—In January 2018, a putative class action lawsuit alleging violations of the federal securities laws was filed in the U.S. District Court for the Northern District of California (the "Court"), naming as defendants the Company and certain of its officers (the “Securities Class Action”). The complaint, which the plaintiff amended on June 25, 2018, alleges violations of the Securities Exchange Act of 1934, as amended, by the Company and its officers for allegedly making materially false and misleading statements regarding its business and operations on February 9, 2017. The plaintiff seeks unspecified monetary damages and other relief. On November 27, 2018, the Court granted in part and denied in part the defendants’ motion to dismiss. On October 22, 2019, the Court approved a stipulation to certify a class in this action and, on September 9, 2021, it denied the defendants’ motion for summary judgment. The case was scheduled for trial to begin on February 7, 2022. However, on December 3, 2021, the defendants reached a preliminary agreement with the plaintiff to settle this matter for $22.25 million, which the Company expects to be funded by defendants’ insurers. The proposed settlement, which was preliminarily approved by the Court on July 25, 2022, will resolve all claims asserted against all defendants in the Securities Class Action without any liability or wrongdoing attributed to them.
On June 22, 2022, the Court granted preliminary approval of the settlement of a stockholder derivative action (the “Derivative Action”) asserting claims against certain current and former officers, and naming the Company as a nominal defendant, which arose out of the same facts as the Securities Class Action and is also pending before the Court. The proposed settlement will resolve all claims asserted against all defendants in the Derivative Action without any liability or wrongdoing attributed to them personally or to the Company. Under the terms of the proposed settlement, the Company’s board of directors will adopt and implement certain corporate governance modifications and the Company will receive $18.0 million of insurance proceeds. Subsequent to the quarter end, the proceeds were placed in escrow in July 2022 pending final approval of the settlement. The Company has agreed to pay $3.75 million of such insurance proceeds to the plaintiff’s attorneys as fees.
The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies, which it will accrue when it believes a loss is probable and the amount can be reasonably estimated. Although final approval of the settlement agreements for the Securities Class Action and the Derivative Action remains pending, the Company believes the loss for both are probable and the payment amounts described above, which total $26.0 million, represent reasonable estimates of loss contingencies. The Company also believes that the anticipated insurance proceeds related to each action described above, which also total $26.0 million, are probable and represent reasonable estimates for loss recovery. Accordingly, the Company recorded a $26.0 million accrual for loss contingency within accounts payable and accrued liabilities as well as a $26.0 million receivable for loss recovery within prepaid expenses and other current assets on its condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021.
The Company is subject to other legal proceedings arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently does not believe that the final outcome of any of these other matters will have a material effect on the Company’s business, financial position, results of operations or cash flows.
Indemnification Agreements—In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but
16

not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties.
In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees.
While the outcome of claims cannot be predicted with certainty, the Company does not believe that the outcome of any claims under the indemnification arrangements will have a material effect on the Company’s business, financial position, results of operations or cash flows.
Revolving Credit Facility—The Company is a party to a Credit Agreement with Wells Fargo Bank, National Association (the "Credit Agreement"), which provides for a three-year, $75.0 million senior unsecured revolving credit facility including a letter of credit sub-limit of $25.0 million. As of June 30, 2022, the Company had $20.5 million of letters of credit under the sub-limit related to lease agreements for certain office locations, which are required to be maintained and issued to the landlords of each facility, and $54.5 million remained available under the revolving credit facility as of this date. The Company was in compliance with all covenants associated with the credit facility and there were no loans outstanding under the Credit Agreement as of June 30, 2022. For additional information on the terms of the Credit Agreement, including fees payable by the Company, financial covenants, events of default and other limitations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" included under Part II, Item 7 in our Annual Report.
12. STOCKHOLDERS’ EQUITY
The following table presents the number of shares authorized and issued as of the dates indicated (in thousands):
June 30, 2022December 31, 2021
Shares Authorized