E-commerce providers are now processing trillions of dollars in transactions every year. Helping over two million merchants make this happen, Shopify has become a critical tool for businesses in more than 175 countries around the world. With its cloud-based, multi-channel commerce platform that lets small and medium enterprises start, grow, and manage a business with a store, both online and in brick-and-mortar locations, Shopify is now a leading provider of essential commerce infrastructure.

With an extensive offering of products and services that are engineered for reliability and ease of use, the company’s software allows merchants to design, manage, and sell their products across multiple sales channels, including web and mobile storefronts, social media, physical retail locations, pop-up shops, and marketplaces. It also enables merchants to manage products and inventory, establish customer relationships, process orders and payments, ship orders, and leverage analytics and insightful reporting.

In addition to millions of small and medium businesses, Shopify is trusted by brands such as PepsiCo, Heinz, Tupperware, Netflix, Staples, and many more. As a result, it is now responsible for processing over $175 billion in gross merchandise value for its customers. And that number is only getting bigger as the company extends its reach with further international expansion, continuing to build buyer relationships, and investing in global partnerships to expand the Shopify ecosystem, whilst simplifying logistics and fulfillment.


In 2004, friends Tobias Lütke, Daniel Weinand, and Scott Lake took to the internet to begin selling snowboarding equipment by opening a store called Snowdevil. Not happy with existing e-commerce platforms, Lütke, a computer programmer, took it upon himself to build one of his own. After two months of development, Snowdevil was launched. Then two years later in 2006, the platform hosting Snowdevil was launched as Shopify.

Thanks to an application programming interface that allowed developers to create applications for Shopify online stores and then sell them on the Shopify App Store, the company’s position in e-commerce blossomed quickly. By 2010, Shopify was expanded to mobile, allowing business owners to view and manage their stores on their favorite devices.

In one of the company’s biggest impacts, the launch of Shopify Payments in 2013 redefined the point of sale for e-commerce, as it removed the necessity of third-party payment gateways, allowing merchants to completely bypass them. The platform soon hosted over 100k online retailers and following the company’s IPO in 2015, Shopify went a step further into brick and mortar, producing iPads with a point-of-sale system that directly accepted debit and credit card payments. This iPad POS is still widely used, especially by those on the smaller side without large-scale POS systems.

Additional services including Shopify Capital, a cash advance product, and integration with Amazon that would allow merchants to sell on Amazon from their Shopify stores, along with Shopify Studios, a full-service television and film content and production house, among many other new services have further bolstered the company’s offerings over the years.


To this day, founder “Tobi” Lütke remains the chief executive officer of Shopify. As a programmer, Lütke has served on the core team of the Ruby on Rails framework and has created many popular open-source libraries. However, his ability to help empower entrepreneurs globally to manage one of the major administrative burdens in business has allowed Shopify to grow into a juggernaut and one of Canada’s biggest companies. His efforts have earned him a position on Profit’s “The Fabulous 30” list, while the Globe and Mail named him “CEO of the Year” in 2014.

Lütke is joined by Harley Finkelstein who serves as president at Shopify and oversees Shopify’s commercial teams, growth, and external affairs. Prior to his current role, Finkelstein was Shopify’s COO and has founded numerous start-ups and e-commerce companies. While chief technology officer, Allan Leinwand, leads the company’s innovative engineering teams, following senior roles with Slack and ServiceNow.


Shopify offers various services and features for everyone from beginners to large businesses. Although its simplicity is particularly focused on entrepreneurs and SMBs, giving them the ability to create and operate their own website selling products, without requiring any specialized programming or technical knowledge; and freeing them from the high costs of web developers, ongoing support, or even middlemen like Amazon. The platform offers all the tools needed to manage a storefront, products, inventory, and shipping, as well as accept payments and engage with customers. It is completely cloud-based, removing the need to maintain software or web servers, and giving owners the flexibility to run their business from anywhere with an internet connection.

Shopify’s business model has two revenue streams – a recurring subscription component and a merchant success-based component. Subscription Solutions revenues are generated primarily through the sale of subscriptions to the platform, including variable fees, as well as through the sale of the company’s POS Pro offering which enables brick-and-mortar merchants to seamlessly bridge online and offline commerce operations and offer their buyers a smooth shopping experience, along with themes, apps, and the registration of domain names.

While a variety of merchant solutions are offered to augment those provided through a subscription to address the broad array of functionality merchants commonly require. Merchant Solutions revenue is principally generated from payment processing and currency conversion fees within Shopify Payments. However, it is also derived from an extensive list of other complementary services including the sale of POS hardware, transaction and referral fees, and advertising revenue on the Shopify App Store. Shopify Capital helps eligible merchants secure financing to accelerate the growth of their business with simple and convenient working capital, and Shop Pay Instalments enables merchants to sell their goods to buyers on an interest-free payment plan. Shopify Balance provides merchants with a no-fee money management account, Shopify Shipping and Fulfillment Network facilitates both in-house and 3rd party collaborative warehouse fulfillment solutions, while Shopify Email and Shopify Markets make cross-border commerce and comprehensive email campaigns easier for merchants.

Shopify’s customers represent a wide array of retail verticals and business sizes, from aspirational entrepreneurs to companies with large-scale, direct-to-consumer operations, at all stages of their business life cycle. While a direct sales team addresses the needs of large merchants, marketing efforts primarily focus on selling to SMBs and entrepreneurs, the large majority of which are on subscription plans that cost less than $50 per month, in line with a focus on providing cost-effective solutions for early-stage businesses. However, when customers grow their sales and become more successful, they consume more merchant solutions, upgrade to higher subscription plans, and purchase additional apps, making merchants’ success one of the most powerful drivers of Shopify’s business model.


Shopify is currently placing the highest importance on opportunities that it expects will significantly expand merchants’ businesses, accelerate its product roadmap, or have strong paybacks from improved operational efficiency. It is in a transitional period in which it is investing in several core themes to ensure long-term success. While profitability may be impacted in the near term, the company anticipates that these investments will allow it to emerge from the current macroeconomic cycle stronger and will position it well for long-term growth and sustainable profitability.

In light of the significant opportunity to increase the size of its current merchant base, Shopify intends to continue inspiring entrepreneurship through marketing programs and awareness-driven campaigns aiming at educating new prospects. While investments in direct sales efforts will focus on acquiring larger merchants, as well as brick-and-mortar retail merchants seeking to innovate.

Given the close alignment of merchant success with Shopify, improvements to the platform to help customers sell more will continue with initiatives such as the Shopify blogs digital community, the online business training platform, Shopify Learn, global events and meetups, as well as exclusive learning and engagement initiatives to educate merchants on how they can be even more successful with the platform.

In addition to the suite of merchant solutions Shopify has added over time, they are continuously advancing tooling and infrastructure so merchants can not only keep pace with the rapid changes in commerce, but be among the earliest adopters of commerce innovation. Most recently, the company launched its new first-in-class mobile hardware device, Point-of-Sale Go. POS Go was developed to allow merchants to meet consumers wherever they are, making it possible to close sales anywhere and take payments securely and smoothly. Also of particular focus, is localizing the platform for international expansion, while making it easier for merchants to accelerate their own global expansion.

With a thriving third-party ecosystem that includes app developers, theme designers, and other partners, the company continues to make its terms more favorable to these partners to ultimately bolster the functionality of the Shopify platform. It recently reduced its revenue share on the first $1 million in earnings for partners to further increase the appeal of Shopify as a platform on which to build, enabling partners to reinvest in their own growth and innovation. The company expects that by growing this ecosystem and making the Shopify platform more attractive and stickier, it will further expand the merchant base, and in turn drive additional growth.

Shopify has also partnered with industry-leading, multinational professional services corporations, like Deloitte, Ernst & Young, and KPMG, to encourage the adoption of Shopify’s commerce solutions across their client bases. This strategy enables the acquisition of new, large-sized merchants through endorsements by professional consultants, extending the company’s ability to deeply embed its solutions into large enterprises’ core operations, creating higher and more sustainable revenue streams.


In the last decade, Shopify’s revenue has exploded, surging from $24 million in 2012 to exceed more than $5 billion in 2022, with the company posting record sales each and every year. That trend has continued in the latest quarter after total revenue again jumped 22% on the prior year to $1.4 billion, taking the trailing twelve months’ revenue to $5.24 billion. Subscription Solutions grew modestly by 12%, while the Merchant Solutions businesses increased by 26%, driven by higher gross merchandise volume and by merchants utilizing solutions to run greater parts of their business in an inflationary environment.

While gross profit growth was impacted by a greater mix of lower-margin Merchant Solutions revenue, lower margins in Shopify Payments due to merchant and card mix shifts and industry-wide network cost increases, along with increased investments in cloud infrastructure, adjusted gross profit still increased by 11% to $681.8 million. The company’s adjusted operating loss of $45.1 million in the quarter down from income of $140.2 million a year ago was largely driven by increased headcount and a new compensation framework.

Looking ahead, consensus estimates have Shopify closing out the full year with expected revenue of $5.5 billion representing year-over-year growth of almost 20%, while 2023 is forecasted to add a further 22% to $6.7 billion. Full-year earnings per share estimates for 2022 are forecasted to drop to a loss of $0.05 per share, down from $0.64 in 2021, as the company focuses on its long-term investments.


Shopify faces an extensive list of competitors across the spectrum of web development and e-commerce offerings catering to both small and large businesses from the likes of Wix, Squarespace, Shift4Shop, WooCommerce, BigCommerce, and Ecwid, along with many more. Some of these merchants may be able to piece together technology that covers e-commerce software, marketplaces, content management systems, payment processors, POS solutions, cross-border services, domain registrars, shipping and fulfillment service providers, as well as lending and financial service. However, Shopify believes no other challengers currently offer an integrated, multi-channel, cloud-based commerce platform with comparable functionality, pricing, or reliability.

The greatest commercial risk for Shopify is that ongoing inflationary pressures could weigh on consumer spending and affect the company’s prospects for platform growth in the near term, yet with so many growth drivers focused on expansion, this appears largely mitigated.


Despite its stock price tanking over 75% in 2022, Shopify’s expansion into new businesses and geographies coupled with its standout comprehensive offerings provide an enormously broad ecosystem and scale that gives the company a unique advantage in the e-commerce industry that has it well placed for long-term, sustainable growth.

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Merchants are increasingly adopting a multitude of software solutions and new digital tools to operate their businesses, manage interactions with customers, and accept payments, all whilst remaining competitive. The complexity of conducting commerce across these software suites has created an enormous challenge for card-accepting merchants.

Shift4 Payments is redefining commerce by simplifying complex payment ecosystems across the world. As a leader in commerce-enabling technology, Shift4 powers billions of transactions annually for over 200k businesses across virtually every industry. It has achieved this leadership position through decades of solving business and operational challenges facing customers’ overall commerce needs.

The company distributes services through a network of software partners and value-added resellers. For software partners, it offers everything from a single integration to an end-to-end payments solution, along with a proprietary gateway and a robust suite of other technology solutions to simplify payment acceptance. While for merchant customers, it provides a seamless, unified consumer experience as an alternative to relying on multiple providers to accept card-based and digital payments.

Shift4’s best-in-class technology provides the backbone payments for many leading brands from Burger King to Elon Musk’s Starlink. With a strong track record of consistent execution and winning new business, coupled with the ongoing growth in digital commerce the company is poised to benefit from huge tailwinds in payment processing needs.


While working as an employee of a payment processing company, the then 16-year-old Jarod Isaacman identified what he saw as inefficiencies in the industry. In response, he launched United Bank Card in his parent’s basement in New Jersey. At the time, it generally took merchants about one month to set up a payment system and merchants had to pay for their credit card readers and sign a lengthy application. As an alternative, Isaacman’s new company cut the set-up time to one day, gave merchants free credit card readers, and only required them to sign a two-page application.

In the preceding years, the company expanded by acquiring multiple payment processing and point-of-sale companies, including payment gateway provider Shift4 Corporation, and in the process, rebranding itself as Shift4 Payments.

Shift4 went public on the NYSE in June 2020, raising $345 million through its IPO, as one of the few companies to go public in the months after the start of the COVID-19 pandemic. Since then the company’s acquisitions have continued with 3dcart, an eCommerce platform, which was subsequently rebranded as Shift4Shop. Followed by VenueNext, a provider of point-of-sale and payment solutions for stadiums, arenas, and other entertainment venues. Along with global payment provider, Finaro, a year later.


Still with the company as chief executive officer, Jared Isaacman manages the core divisions of Shift4, as well as the overall operations of the company. He is considered to be one of the industry’s most influential business leaders and has been recognized with several prestigious awards including one of “America’s Best Entrepreneurs” by BusinessWeek Magazine and “30 Entrepreneurs Under 30” by Inc. Magazine.

Taylor Lauber serves as president and chief strategy officer and is responsible for all aspects of growth, including overseeing product development, strategic partnerships, and corporate development/investments. Prior to joining Shift4, Lauber held several senior roles at financial giants Blackstone and Merrill Lynch.

While chief technology officer, Michael Russo, has over 30 years of experience in the hospitality and healthcare technology space, building cutting-edge software products, driving strategic business initiatives, and developing go-to-market strategies.


At the heart of Shift4’s business is its payments platform. The company’s value proposition is to create a seamless end-to-end payments solution that includes point-of-sale (POS) terminals, payment gateway integration, and processing.

The platform provides omnichannel card acceptance and processing solutions across multiple payment types, including credit, debit, contactless card, EMV, QR Pay, and mobile wallets, as well as alternative payment methods such as Apple Pay, Google Pay, Alipay, and WeChat Pay. It also provides full eCommerce capabilities, including web-store design, hosting, shopping cart management, and fulfillment integrations, along with security and risk management solutions, as well as reporting and analytical tools.

Shift4’s comprehensive suite of technology solutions which is designed to streamline customers’ business operations includes:
• VenueNext – provides stadium and entertainment venues with a frictionless commerce experience that includes mobile ordering, countertop point-of-sale, self-service kiosks, and digital wallets to facilitate food and beverage, merchandise, and loyalty functions all within a white-labeled technology application that is fully integrated with its secure end-to-end payment processing platform.
• Shift4Shop – a turnkey eCommerce platform for merchants to build their business online. Merchants can create a webstore in minutes, manage their product catalog, order fulfillment and inventory management, search engine optimization, and secure hosting.
• Lighthouse – a cloud-based suite of business intelligence tools that includes customer engagement, social media management, online reputation management, scheduling, and product pricing, as well as extensive reporting and analytics.
• SkyTab hybrid-cloud-based Integrated Point-of-Sale – purpose-built POS workstations pre-loaded with powerful software suites and integrated payment functionality for restaurant and stadium clients.
• SkyTab Mobile POS – provides pay-at-the-table, order-at-the-table, delivery, customer feedback, and email marketing functionality.
• Marketplace – enables seamless integrations into complementary third-party applications such as inventory, loyalty, payroll, timekeeping, and other human resource services, reducing the number of vendors on which merchants rely.

The majority of Shift4’s revenue is derived from fees paid by merchants, which principally include a processing fee that is charged as a percentage of end-to-end payment volume. In cases where merchants subscribe only to the gateway, Shift4 generates revenue from transaction fees charged in the form of a monthly and fixed fee per transaction. It also generates subscription revenue from licensing its POS software, business intelligence tools, payment device management, and other technology solutions.

Shift4 markets and sells its solutions through a diversified network of over 7,000 software partners, which consists of technology providers that develop commerce-enabling software suites with which they can bundle the payments platform, along with other organizations that provide distribution support.

The company has over 200k customers which mainly consist of brick-and-mortar restaurants, hotels, casinos, sports arenas, gyms, etc. The vast majority of its merchants include highly-scalable small to medium size businesses across numerous verticals including food and beverage, hospitality, stadiums and arenas, gaming, specialty retail, non-profits, and eCommerce. Yet its most well-known customers include Hilton, Caesers, DoubleTree, Burger King, Applebees, Popeyes, Dennys, TGI Fridays, the LA Galaxy Arena, and many more. While most recently, the company saw contract wins with Wisconsin and Alabama Universities, as well as taking on the payments for the Starlink satellite internet service.


Starting its life as a payment gateway which it still provides today, Shift4’s differentiation lies in its expansion into a complete end-to-end platform. This expanded suite of services offers many functional advantages and with over 400 software integrations, enables it to deal with the most complex payment requirements. Furthermore, as users migrate from a payment gateway to a wider usage of services, the company benefits from improvements in its overall gross margins and ultimate profitability.

Acquisitions in recent years have helped Shift4 take advantage of expanded verticals including sports and entertainment venues, gaming, and eCommerce, adding to its market-leading position in the restaurant and hospitality space and extending its total addressable market to more than $3.5 trillion. The purchase of VenueNext has driven substantial new customer acquisitions as individual stadiums and arenas are far larger than restaurants or even most hotels in terms of their contribution to payment volume.

These revenues from stadiums can also benefit from tickets to events and other merchandise, usually sold in conjunction with a Shift4Shop integration, born out of the 3dcart acquisition. Despite the availability of a substantial number of eCommerce platforms, including the ubiquitous Shopify, Shift4Shop has gained significant traction expanding its user base to tens of thousands of online stores, as merchants appreciate the in-built functionality of payment processing within the store management toolset.

Whilst most recently, the company’s purchase of global cross-border payment provider and fully licensed bank, Finaro, underscored its aggressive efforts to deliver a unified commerce experience across the world. By integrating Finaro’s capabilities, Shift4 expects to further expand its current services including SkyTab POS, Shift4Shop, and VenueNext stadium offerings globally.

The rollout of the latest version of Shift4’s SkyTab POS solution has also been of particular focus as restaurants remain by far, the largest single vertical of the company covering over 125k locations. It is anticipated the overall product refresh will continue to help solidify new wins and the conversions of gateway customers to the end-to-end platform, as the company looks to de-emphasize gateway-only connections to remove unnecessary operational parts, whilst also improving revenue and margins in its high-growth core business.


Shift4’s rapid expansion in recent years has flowed through to strong growth in end-to-end volumes, revenue, gross profit, and net income. This trend continued in its latest quarter with record results across the key metrics. Gross revenue was $547.3 million for the September 2022 period, compared to $377.8 million 2021, representing an impressive increase of 44.9% year-on-year. The increase was largely driven by end-to-end payment volume of $7.1 billion which was up by more than 52%, while subscriptions and other revenues were also up a healthy 24%. The strong result sent revenues for the year to date to an all-time high of $1.46 billion, surging over 50% on the same nine months in 2021.

Record levels were also reached for adjusted EBITDA and net income which came in at $85.4 million and $46.4 million respectively, as more and more enterprise gateway customers were re-signed under more favorable economic terms consistent with the company’s ‘gateway sunset strategy’ that is focused on ‘sunsetting’ legacy contracts.

Looking ahead, Shift4 is forecasting another robust quarter with revenue expected to close out 2022 between $1.95 and $2.04 billion, aligning with consensus estimates and representing year-over-year growth of 44%. While full-year earnings per share estimates for 2022 are also forecasted to improve by an enormous 95% to $1.38 per share, up from $0.71 in 2021.


Shift4 competes with a range of providers, many delivering particular components of Shift4’s offering, but do not provide an integrated end-to-end solution capable of addressing complex business challenges for software partners and merchants. Major competitors include third-party payment processors such as Chase Paymentech, Elavon, FIS, Fiserv, and Global Payments, along with integrated payment providers such as Adyen, Lightspeed POS, Shopify, Square, and Toast. For its hospitality gateway offering, the company competes primarily with Fusebox (a division of Elavon) and FreedomPay.

Despite the extensive list of well-established competitors, Shift4 believes its reputation, domain expertise, scale of distribution channels, and breadth of offerings and innovation, among other things, have been key to its rapid expansion.

On the economic front, high inflation and a rising interest rate environment have caused many analysts to forecast a recession. Consequently, fintech company share prices have come under pressure as it is assumed consumers will likely make fewer transactions resulting in lower payment volumes for companies like Shift4. Fortunately, any such reduction is likely cyclical.


Thanks to a concerted foray into additional verticals, international expansion, and the launching of new and enhanced products, Shift4 has demonstrated its ability to execute much-needed growth initiatives in the face of a potentially deteriorating economy. With a large base of existing customers and significant contract wins keeping the company delivering record results, it appears to be effectively combating any slowdown in consumer spending.

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Today’s most exciting technologies such as 5G, artificial intelligence, augmented reality, and autonomous vehicles among many others, are only enabled by the cutting-edge efforts of the most advanced organizations on the planet. ON Semiconductor Corporation (onsemi) is one of these companies bringing the most sophisticated and complex ideas in technology to reality, creating products and solutions that are driving disruptive innovations to help build a better future.

With a focus on automotive and industrial end-markets, onsemi is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, 5G, and cloud infrastructure. The company offers a highly differentiated and innovative product portfolio, delivering intelligent power and sensing technologies that solve some of the world’s most complex challenges and lead the way to creating a safer, cleaner, and smarter planet.

onsemi’s intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers efficient fast-charging systems, and propels sustainable energy for the highest efficiency solar strings, industrial power, and storage systems.

While its intelligent sensing technologies support the next generation of smarter factories and buildings and enhance the automotive mobility experience with imaging and depth sensing that make advanced vehicle safety and automated driving systems possible.

onsemi continues to deliver record revenue levels stemming from continued growth in its focus markets of automotive and industrial applications. Furthermore, as the company takes a proactive approach to making structural changes to strengthen the business, it continues to secure contracts where semiconductor content growth is accelerating. Particularly in industries such as vehicle electrification, energy infrastructure, advanced safety, and factory automation.


Originally formed as a spinoff of Motorola’s Semiconductor Components Group, onsemi was founded in 1999. Motorola had been a pioneer in transistors, especially for commercial applications. It also pioneered the automotive electronics industry, from the first mobile radios in police cars in the 1940s to automotive electric controls and semiconductors in the 1970s.

Over the last two decades, the company has grown its footprint with an extensive list of acquisitions including semiconductor competitors, specialist hardware producers covering imaging, radar, power, and other micro-devices, as well as design, manufacturing, and fabrication facilities.

Along with Motorola, the acquisition of Fairchild Semiconductor in 2016 provided a foundation for the modern-day onsemi. Thanks to pioneering technology stemming from the early use of silicon and planar processes that produced the first commercially viable integrated circuits in the 1960s, Fairchild became the foundation for many of the innovations we see today.


Hassane El-Khoury has been the president and chief executive officer of onsemi since December 2020. El-Khoury is a seasoned professional with over twenty years of experience in the technology sector. His career has fostered a deep understanding of customer and design requirements in the automotive and industrial markets, as well as a systems-level understanding to form integrated customer solutions and business strategies. He has held several leadership roles throughout his career, most recently as president and CEO for Cypress Semiconductor, where he was the architect of its acquisition by Infineon Technologies AG in early 2020 for €9.0 billion.

El-Khoury has noted that onsemi is embarking on a transformational journey to revolutionize the semiconductor industry with a focus on driving intelligent power and sensing solutions to create a more sustainable ecosystem for future generations. Under his guidance, the company is looking to build a strong culture of innovators and forward, out-of-the-box thinkers interested in pushing the boundaries of expectation.


onsemi serves a broad base of end-user markets, including automotive, industrial, communications, computing, and consumer customers, among many others. Operating through three segments – Power Solutions, Advanced Solutions, and Intelligent Sensing segments, the company provides its intelligent products worldwide.

onsemi’s power solutions allow customers to achieve lower weights and reduce system costs through an unwavering focus on efficiency. It offers a wide range of semiconductor products that perform multiple application functions, including power switching and conversion, signal conditioning, circuit protection, signal amplification, and voltage regulation functions. The company also designs and develops application-specific standard products and circuits, radio frequency, and integrated power solutions, as well as provides foundry and design services for government customers. In addition, it develops image sensors, signal processors, and photon detectors, as well as actuator drivers for autofocus and image stabilization for a broad base of end-users in various end markets.

Coupled with its sensing integration, onsemi says its power solutions achieve higher efficiencies compared to competitors through lower temperature operation and reducing cooling requirements, all whilst saving costs and minimizing weight, and delivering the required power for a given battery capacity. The advanced proprietary features in smaller packages that deliver optimal results support a diverse range of use cases, and in particular, are enabling the next generation of automotive safety and autonomous driving.

While in the industrial space, onsemi is helping Original Equipment Manufacturers (OEMs) develop innovative products to navigate the ongoing transformation across energy infrastructure, factory automation, and power conversion.

Products are sold through distributors and direct to customers for ultimate use in a variety of products and markets. In general, onsemi maintains long-term relationships with key strategic end customers, which generally include minimum purchase commitments. Sales to distributors who resell to mid-sized and smaller OEMs and other companies accounted for approximately two-thirds of the company’s revenue in 2021. While sales to direct customers include manufacturers who provide contract services for OEMs, along with large multinationals and selected regional OEMs.


onsemi’s complementary focus on both power and sensing technologies is aligned with fast-growing secular megatrends in multiple end markets. Opportunities in automation and electrification across a wide range of industries should provide meaningful addressable market growth in years to come. The company currently has a key emphasis on gross margin and operating margin expansion, while at the same time achieving revenue growth in its end markets of automotive and industrial infrastructure, coupled with profitable growth opportunities in other end markets.

Additionally, it continues to rationalize its product portfolio by moving away from non-differentiated products, which have had historically lower gross margins. As a result, onsemi’s product development efforts are being directed towards building solutions in areas that appeal to customers in focused market segments and across multiple high-growth applications, including:
• Powering the electrification of the automotive industry with technologies that allow for lighter and longer-range electric vehicles and enable efficient fast-charging systems;
• Propelling the sustainable energy evolution with the highest efficiency solar strings, industrial power, and storage systems;
• Enhancing the automotive mobility experience with imaging and depth sensing technologies that make advanced vehicle safety and automated driving systems possible; and
• Enabling automation and data exchange with intelligent sensing technologies for smarter factories and buildings.

The volatility in global energy markets is driving an accelerated transition to alternative energy. And with a broad portfolio of Silicon Carbide (SiC) and silicon power modules, onsemi has emerged as a leader in this market. The top 10 solar inverter providers in the world collectively have a market share of 80%, and onsemi has now signed long-term agreements with eight of them. Traction for the company’s SiC solutions is complemented by continued growth in the silicon power business and as a result, it expects to see strong long-term growth in its alternative energy business. A key differentiating advantage for onsemi is its ability to offer silicon and silicon carbide solutions across a wide range of power and voltage requirements.

In 2022, the company has also targeted the streamlining of operations by undertaking several initiatives to achieve efficiencies including the divestment of manufacturing facilities, two office buildings, and the sale of its corporate headquarters facilities in Arizona. A transition to a lighter internal fabrication model aims to help financial performance to be less volatile and not as heavily influenced by internal manufacturing volumes. It also approved an exit plan to wind down its Wi-Fi solutions division within the Advanced Solutions Group segment, which will further enable investments to be directed to areas of strategic focus.


In its latest release, onsemi closed its sixth consecutive quarter of record financial results stemming from continued growth in automotive and industrial applications. Revenue of $2.19 billion beat analysts’ estimates and represented an increase of 26% year-over-year, with the auto segment up 51% and the industrial segment up 28%. While a softening in nonstrategic end markets of consumer and computing saw both declining mid-single digits sequentially.

Over the last 18 months, the company has taken a concerted approach to improve the predictability and reduce the volatility of the business, with the rationalization of the product portfolio exiting $277 million of business to eliminate exposure to products at dilutive gross margins. At the end of the third quarter, a record non-GAAP operating margin of 35.4% had increased by approximately 1,100 basis points year-over-year. As a result, gross profit increased $337.5 million, or approximately 47%, to a record $1.06 billion, up from $720.8 million in 2021.

While operating expenses did not change materially, the company declared a goodwill and intangible asset impairment of $271.8 million, which ultimately brought net income down to $311.9 for the quarter.

Looking ahead, onsemi is forecasting another robust quarter with revenue expected between $2.01-2.14 billion, aligning with consensus estimates that have the company closing out the full year with a record $8.31 billion in revenue, representing year-over-year growth of 23%. While full-year earnings per share estimates for 2022 are also forecasted to improve by almost 79% to $5.27 per share, up from $2.95 in 2021.


onsemi faces significant competition from major international semiconductor companies including Sony, Samsung, Broadcom, Infineon Technologies, Wolfspeed, STMicroelectronics, Texas Instruments, and Toshiba Corporation, along with smaller companies focused on specific market niches.

However, its competitive strengths include core competencies in leading-edge fabrication technologies and micro packaging expertise, coupled with the breadth of its product line and IP portfolio, where the company believes it maintains significant performance advantages over the competition.


While stocks in the semiconductor industry have experienced some weakness attributed to lower PC and smartphone demand, neither of these markets are of concern for onsemi. It remains attractively leveraged to growth not only in the auto sector due to EVs and automation, but also increased electrification across a range of end-markets, and as a result continues to post impressive results, delivering record numbers, and beating analysts’ expectations.

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Sporting brand ambassadors like the youngest surfer to ever win the US Open, a veteran of the Canadian snowboard circuit, and a 400-meter world record holder, among many other pro athletes, Lululemon Athletica has become a juggernaut as a designer, distributor, and retailer of its range of healthy lifestyle inspired athletic apparel and accessories.

With a steadfast focus on top quality, technically advanced products that offer unique innovations, the company’s assortment of apparel is marketed under the Lululemon brand and its “living the sweatlife” mantra. The range includes pants, shorts, tops, jackets and other gear that are designed for active athletic activities such as yoga, running, training, and other sweaty pursuits. Lululemon’s design and development team continuously seek out technically advanced fabrics, that offer a new feel and fit, and make it possible to craft innovative functional features for the company’s products.

The retailer sells its collections through a chain of hundreds of company-operated stores, outlets, and warehouse sales, along with a network of wholesale accounts that includes yoga studios, health clubs, and fitness centers. In addition, the company also uses temporary locations and maintains third-party licenses and supply arrangements with many international distributors. In recent years, online channels including mobile apps and the e-commerce website are also supporting direct-to-consumer demand.

Lululemon’s track record of innovation along with continued expansion into new product lines and geographies has produced an impressive record of consistent growth over the past two decades. While the company’s efforts to create excellent online and offline experiences for all customers have generated a loyal following. Building on this, the retailer is in the midst of a comprehensive strategic plan that began in 2021 that intends to double the size of the business by 2026.


Founded by Chip Wilson in Canada in 1998, Lululemon started as a design studio by day and a yoga studio by night, the company’s vision was to create more than a place where people could get gear to sweat in. It wanted to create a community hub where people could learn and discuss healthy living and mindfulness, while forming relationships with customers to understand what they are passionate about.

The company went public in 2007 after raising almost $330 million, and by 2013 it had made its third consecutive appearance on Fortune’s Fastest-Growing Companies list. A year later, Lululemon opened its first store in Europe, a flagship shop in London.

More than two decades since it began, Lululemon continues to focus on healthy living, mindfulness, and connecting with customers in its stores around the globe to continuously innovate its products. As the company believes the credibility of the brand and the authenticity of community experiences has been critical in creating a market beyond just athletes to those who pursue an active, mindful, and balanced life.


Joining Lululemon in 2018, Calvin McDonald is the current chief executive officer. The growth-oriented leader has an extensive history record helping large organizations scale and innovate how their brands engage with customers in stores, across digital channels, and from their homes. Previously, he served as president and CEO of Sephora Americas, a division of the LVMH group of luxury brands, before which he was president and CEO of Sears Canada, along with almost two decades at Loblaw Companies, the largest retailer in Canada.

Playing a critical role in leveraging innovative technology to transform Lululemon’s retail business and enhance guest experiences, Julie Averill has served as executive vice president and chief technology officer of the company since 2017. Prior to joining Lululemon, Averill served as the first-ever chief information officer of outdoor specialty retailer, REI, and she also spent over a decade at Nordstrom, where she held several key positions on the company’s IT leadership team.


Lululemon’s diverse line of apparel focuses on clothing that people can wear as they engage in fitness activities, although in addition to clothing, the company also sells accessories such as bags, socks, and yoga mats. And while the company’s products are mostly targeted at women who aim for a healthy lifestyle while balancing a busy life, it has expanded its reach by also bringing men and youth into its fold.

Complementing its apparel line, Lululemon acquired in-home fitness company MIRROR, in 2020. The interactive workout platform which features live and on-demand classes, bolstered the company’s digital offerings and brought immersive and personalized in-home mindfulness content to new and existing customers.

The bulk of Lululemon’s business is conducted through company-operated stores and direct-to-consumer channels with 600 stores that are located primarily on street locations, lifestyle centers, and malls, in 17 countries across the globe. In addition to being a venue to sell its products, the company utilizes them as a direct connection to customers to help build its brand and product line. Through a vertical retail strategy that allows Lululemon more control along the entire manufacturing and distribution process, coupled with its efforts to create this connection with customers, the retailer can collect and incorporate unique feedback into its design process to advance its product lines and differentiate from the competition.

The company also operates outlets and temporary locations to sell low-moving inventory and items from prior seasons at discounted prices. Wholesale accounts that include premium yoga studios, health clubs, and fitness centers offer an alternative distribution channel that is convenient for the core demographic and enhances the image of the brand. While license and supply arrangements take advantage of highly complementary partnerships in certain target markets like the Middle East and Mexico which grant partners the right to operate Lululemon-branded retail locations.


Underpinning Lululemon’s strategic objectives is its Power of Three x2 Growth Plan. Consisting of three key pillars which include product innovation, guest experience, and market expansion, the plan calls for a doubling of the business, taking revenue of $6.25 billion in 2021 to $12.5 billion by 2026.

To achieve this, Lululemon intends to double men’s, double direct-to-consumer, and quadruple international revenue relative to 2021. At the same time, the company’s women’s business, stores, and North American operations are all expected to grow by double digits. Although Lululemon’s largest customer group comes from its women’s range, representing 67% of revenue, it also designs a comprehensive men’s line which is growing rapidly as men discover the technical rigor and premium quality of the company’s range of products.

North America is currently Lululemon’s largest market by geographical split, representing 85% of its 2021 net revenue. However, the Power of Three plan has the company rapidly expanding internationally across China, the rest of Asia Pacific, and Europe. In the last year, the retailer opened 53 new company-operated stores, including 43 stores outside of North America. And in keeping with its connection to customers, it is approaching the expansion in these regions with a decentralized model, allowing for local community insight and consumer preferences to maintain its continuous innovation and efforts to broaden merchandise offerings.

These efforts are set to continue in 2022 with further expansion of apparel lines that will offer new styles including heat retention and reflective detailing to enable outdoor runs in cooler and low light conditions as the seasons shift. While additions to the company’s new hiking category will include heavier styles to protect against the elements during cold weather outings. The new lines are expected to open a broad new category for outdoor and cold weather solutions, bringing in a previously underserved segment.

Lululemon has also had an increasing focus on e-commerce given its convenience and potential to reach new customers beyond its physical locations, which has proved particularly effective in building brand awareness. Consequently, the company continues to evolve and integrate its digital and physical channels to create the best possible customer experience.


Despite challenges in the macro-environment for most retailers, Lululemon has managed to maintain incredible results across both its physical stores and its e-commerce sites. In the last 20 quarters, the company has beaten analyst earnings expectations an astonishing 19 times.

A strong financial performance was again delivered in the most recent second quarter of the 2023 financial year, where net revenue increased almost 30% to $1.9 billion. Furthermore, it achieved this growth without any discounts on its products, whilst also passing on costs to consumers, ultimately producing margins that improved by more than 56%.

As a result, gross profit increased 25% to $1.1 billion, while net income rose almost 40% to $289.5 million, maintaining an impressive run of significant year-on-year growth for the last six consecutive quarters.

The momentum appears to be showing no signs of stopping as the company expects revenue to hit almost $8 billion for the year, representing a three-year compound annual growth rate of approximately 26%.

Looking ahead, consensus estimates also have Lululemon closing out the full year with expected revenue of $7.93 billion representing year-over-year growth of 27%. While full-year earnings per share estimates for 2023 are also forecasted to improve by 27% to $9.90 per share, up from $7.79 at the year-end Jan 2022.


Competition in the athletic apparel industry is highly competitive and based principally on brand image and recognition as well as perceived product quality, innovation, style, distribution, and price. It includes increasing challenges from established companies that are expanding their production and marketing of performance products, as well as from frequent new entrants to the market. Lululemon is in direct competition with wholesalers and direct sellers of athletic apparel, such as Nike, Adidas, Under Armour, and Columbia Sportswear. It also competes with retailers who have expanded to include women’s athletic apparel including The Gap, Victoria’s Secret with its sport and lounge offering, and Urban Outfitters.

Yet the company believes that it successfully competes on the basis of its premium brand image and technical product innovation. Its ability to introduce new product innovations, combine function and fashion, and connect through in-store, online, and community experiences also sets it apart from the competition.


Lululemon’s commitment to listening to its customers and innovation for over two decades has created a strong brand that is fashionable, functional, and provides a distinctive experience that has driven customer loyalty and global growth. Despite consistently exceeding market expectations with impressive growth quarter after quarter, the company is only at the start of its life cycle, and has significant opportunities to expand its footprint which are being taken advantage of with a comprehensive strategic plan.

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The Internet has fundamentally changed the way people invest. The days of telephone calls, paper stock certificates, and high commissions are all but gone. Now, thanks to new technologies and regulatory environments, billions of trades are executed electronically every day from the comfort of desk chairs, in many cases at virtually zero cost.

With origins going back almost half a century, Interactive Brokers has been at the forefront of the automated trading revolution. The proliferation of electronic exchanges and market centers since the early 1990s has allowed it to integrate its software with an increasing number of trading venues, creating one automatically functioning, computerized platform that requires minimal human intervention.

Today it continues to be one of the premier securities firms, with over $10 billion in equity capital and close to $300 billion in client equity, conducting its broker and dealer business on over 150 market destinations worldwide. The company provides direct access, online trade execution, and clearing services to institutional and professional traders for a wide variety of electronically traded products including stocks, options, futures, currencies, bonds, commodities, cryptocurrencies, and funds worldwide, executing over three million trades per day.

Since the launch of its electronic brokerage business in 1993, IB has grown to over two million institutional and individual brokerage customers by providing one of the most effective and efficient platforms in the industry with high-speed trade execution at low commission rates due to its proprietary automation technology. As a result of the high-performance platform, the company attracts both sophisticated and active investors. It is now the largest electronic brokerage firm in the U.S. by the number of daily average revenue trades and is the leading forex broker.

Increased interest in the financial markets and the interconnectedness of investors worldwide have also propelled IB’s growth in recent years. Furthermore, with ongoing innovation and new products added to the company’s portfolio, it continues to deliver industry-leading profits and growth.


In 1977, Thomas Peterffy left his job designing commodity trading software and bought a seat on the American Stock Exchange as an individual market maker. He soon expanded trading activities to several other members, as he developed algorithms to determine the best prices for options, which he used on the trading floor.

Under pressure to become a true market maker and keep constant bids and offers, Peterffy saw value in handheld computers and was instrumental in convincing the Chicago Board Options Exchange to be the first to allow computer use on the trading floor, which soon extended to other exchanges. By 1987, he had created the first fully automated algorithmic trading system and was trading on the Nasdaq.

Interactive Brokers Inc was incorporated in 1993 as a U.S. broker-dealer, providing technology developed for electronic network and trade execution services to customers. In 1995, IB created its primary trading platform, Trader Workstation, and executed its first trades for public customers, as trading across more and more exchanges were added.

The company’s technology and products continued to advance with additions such as direct market access, smart order routing, and the ability to trade equity derivatives, and by 2001, IB was handling 200,000 trades per day. Within ten years it became the largest online U.S. broker based on daily average revenue trades. The company’s offerings expanded further with real-time risk management and portfolio analysis tools, along with additional trading algorithms and a mobile app for the Trader Workstation. IBKR went public on the Nasdaq in 2007.

Over four decades of developing automated trading platforms and automating many middle and back office functions have allowed the company to become one of the lowest-cost providers of broker-dealer services, whilst also significantly increasing the volume of trades it handles from its now two million-strong customer base.


After pioneering the advancement of securities markets and electronic brokerage and trading, founder Thomas Peterffy, despite stepping down as CEO in 2019, continues to serve IB as the chairman of the board of directors, whilst also being the company’s largest shareholder.

Current chief executive officer, president and director, Milan Galik joined IB over 30 years ago as a software developer after being recruited by Peterffy. After trading European derivatives for the firm, Galik moved to Germany, where he helped launch the region’s operations and ran the derivatives trading desk on the first electronic exchange in Frankfurt. On returning to the U.S., he helped build IB’s automated market-making systems and the firm’s electronic brokerage segment. He was named president of IB in 2014, and CEO in 2019.

Fellow company veteran, Thomas A. Frank, who joined IB in 1985 and was instrumental in the development of its early market-making systems, is now executive vice president and chief information officer, responsible for the company’s technical infrastructure and operations and information security.


As an electronic broker, IB executes, clears, and settles trades globally for both institutional and individual customers. Capitalizing on its proprietary technology, its systems provide customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically in these markets at a low cost across multiple products and currencies from a single trading account.

IB offers customers access to all classes of tradable stocks, options, futures, forex, bonds, mutual funds, ETFs, commodities, and cryptocurrencies traded on more than 150 electronic exchanges and market centers in 33 countries and 25 currencies seamlessly around the world. The ever-growing complexity of multiple market centers has provided IB with opportunities to build and continuously adapt its order-routing software to secure market-leading execution prices.

Customers include individuals, trading desk professionals, electronic retail brokers, hedge funds, mutual funds, financial advisors, proprietary trading firms, and introducing brokers and banks that require global access.

IB’s versatile platform provides seamless electronic market access to a range of instruments in a single platform across multiple desktop and mobile trading interfaces. Furthermore, customers can access advanced trading and research tools, over 100 order types, algorithms, and API solutions.


Proprietary technology has been key to IB’s success. Automation allows the company to be one of the lowest-cost processors in the industry. From account opening through the entire transaction lifecycle, to back office functions such as compliance and customer service, IB’s processes are automated. The majority of senior management are software engineers, committed to streamlining as many processes as possible and integrating systems with electronic exchanges and market centers worldwide to ensure transparency, liquidity, and efficiencies of scale. This approach reduces overall transaction costs to customers and in turn, increases transaction volumes and profits.

Over the past forty years, IB has developed its integrated trading system and communications network to position the company as an efficient conduit for capital across asset and product classes on electronic marketplaces around the world. Developing, maintaining, and continuing to enhance this proprietary technology provides IB and its customers with the competitive advantage of being able to adapt quickly to the rapidly changing environment of the industry. Whilst also allowing it to take advantage of opportunities presented by new exchanges, products, or regulatory changes before competitors.

The company has several important growth drivers, including a growing brokerage market in emerging regions, where more and more individual and institutional clients are entering the market. The adoption of cryptocurrencies and the ability to trade both securities and cryptocurrencies from one account make for a significant competitive advantage. Furthermore, tightening monetary policy which will see rising interest rates increase the company’s income in an aggressive environment will also provide a lucrative tailwind.

New product development also continues to keep IB at the forefront of the industry. Recent enhancements and new products include the IMPACT mobile app – a simplified trading platform that allows users to seamlessly align their investments with their values as environmental, social and governance factors gain an increased focus with customers. Fractional share trading is now possible for European stocks and ETFs, allowing investors the opportunity to trade across markets more affordably. While the company’s Traders’ Insight Radio is providing a new podcast series featuring interviews with executives, thought leaders, and market experts from across the financial services industry discussing topical themes impacting global markets and trading.


Despite weak equity markets worldwide, IB has performed strongly in 2022 as the company reported total revenues of $830 million for the third quarter, blitzing the prior comparative period at $467 million. This was largely driven by a 73% increase in net interest income due to higher benchmark interest rates and customer credit balances.

Impressively, customer account growth has continued with a 34% five-year compound annual growth rate, further expanding IB’s potential for both commission and interest revenues going forward. The strong third quarter result has trailing twelve-month revenues exceeding a record annual $2.8 billion run-rate.

While execution, clearing, and distribution costs rose from last year and total operating costs exceeded $1 billion, adjusted pre-tax margins were a record 68%, leading to an operating income of $563 million and net income of $99 million, up from $480 million and $42 million respectively.

Looking ahead, consensus estimates have IB closing out the full year with expected revenue of $3.09 billion representing year-over-year growth of 14%, while 2023 is forecasted to add a further 30% to $4.01 billion. Full-year earnings per share estimates for 2022 are forecasted to improve by 16% to $3.94 per share, up from $3.37 in 2021.


IB has a broad array of competitors ranging from large integrated banks to online brokers to early-stage private companies including huge names such as Charles Schwab, Morgan Stanley, and Goldman Sachs among many others. These firms, both in the U.S. and abroad, provide electronic and prime brokerage, along with financial advisor, and introducing broker products and services. They compete based on numerous factors, including transaction execution, customer experience, products and services, technological excellence and innovation, as well as price.

Yet since IB’s inception, it has been driven to transform the electronic brokerage business through continued innovation, which has created significant differentiators that set the company apart from its competitors.


Interactive Brokers’ relentless focus on automation has seen it impressively increase its customer base, revenue, and earnings over the past decade. And with several important drivers including a growing brokerage market in emerging markets, the adoption of cryptocurrencies, and an environment of rising interest rates creating further benefits to trading volumes, the company looks well-placed to deliver continued growth ahead.

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For almost two decades, Yelp has been connecting people with local businesses. Over that time, it has become one of the best-known internet brands in the U.S., as consumers have access to more than 220 million ratings across a broad range of business categories. With local information, photos, and review content, Yelp provides a one-stop local platform for consumers to discover, connect, and transact with businesses of all sizes.

By making it easy to request a quote, join a waitlist, make a reservation, appointment, or even a purchase, the company’s products help businesses reach a large audience, advertise their products, and drive conversion of their services.

Yelp has built a broad-based local advertising platform with sophisticated technology, offering a range of free and paid advertising products including cost-per-click and multi-location ads, along with several business page products that allow customers to build a complete online profile that highlights their business and showcases their specialties. In addition to its advertising products, it also offers features and interactive tools to facilitate transactions between consumers and the local businesses they find on the platform.

Thanks to an ambitious, multi-year business transformation plan initiated in 2019 which was designed to drive and sustain long-term growth through product innovation, Yelp has successfully transformed into a stronger and more efficient business. Despite the company’s consistent, long-term growth being interrupted by the covid pandemic, Yelp’s performance in 2021 saw it emerge to deliver record revenue and profitable growth despite a difficult operating environment.

Looking ahead, the company plans to continue enhancing the Yelp experience for consumers, business owners, and advertisers with a comprehensive strategy that focuses on product investments and driving sales in its most efficient channels, which continue to trend towards highly scalable self-serving and multi-location offerings.


In 2004, two former PayPal employees, Jeremy Stoppelman and Russel Simmons founded Yelp at a business incubator. The pair conceived the initial idea for the business as an email-based referral network, after Stoppelman caught the flu and had a difficult time finding an online recommendation for a local doctor. With support from a former colleague and founding chief technology officer of PayPal, Max Levchin, the platform evolved from an email-based system to user reviews, which saw the site’s popularity soar after it was re-designed in late 2005.

By the summer of 2006, the site had one million monthly visitors, which grew to over 16 million in 2008, as it reached over 24 cities across the country. Expansion continued internationally as the site was introduced to countries across Europe and Asia in the years following.

Yelp went public in 2012, listing on the NYSE, after which several acquisitions followed, including its largest European rival, Qype, for $50 million. Within two years the company was profitable for the first time as ad spending by business owners increased and changes in Google’s local search algorithm helped authoritative local directory sites like Yelp in getting more visibility.

Additional sites were launched across numerous countries along with several more acquisitions expanding the company’s footprint, however, operations were drastically scaled back when business closures and stay-at-home orders during the covid pandemic caused a massive decline in searches. Yet with many people resuming their pre-pandemic habits, Yelp revenues have returned to their 2019 highs, which now exceed $1 billion per year.


Co-founder Jeremy Stoppelman continues to drive the vision and product experience for Yelp as the company’s chief executive officer. With a hands-on management style that sees him sit at a desk among his employees, Stoppelman also oversees product development among other aspects of the business. Prior to Yelp, he was the V.P. of engineering at PayPal, and one of the group’s highly successful early employees referred to as the PayPal Mafia.

Joining Stoppleman as Yelp’s chief operating officer is Jed Nachman, who after previous roles as chief revenue officer and senior VP of revenue, now oversees the company’s business operations including sales, marketing, and administration. Prior to Yelp, Nachman spent several years in senior sales roles for Yahoo! HotJobs, after beginning his career at the investment bank, Robertson Stephens.


Yelp’s range of advertising products provide the ability to deliver targeted search advertising to large local audiences. The vast majority of the company’s revenue comes from its cost-per-click (CPC) search advertising, which allows businesses to promote themselves as a sponsored search result on the platform, including on the Yelp pages of businesses in similar categories. Customers can also provide competing quotes for consumers using a Request-A-Quote feature. Revenue is generated primarily via performance-based ads, which the platform matches to individual consumers through auctions priced on a CPC basis.

Multi-location ad products also make it possible to display Showcase Ads that show special offerings with limited-time localized promotions in relevant search results. While Spotlight Ads highlight special offers and promotions related to holidays or other special events in a carousel directly on the Yelp app home screen. Furthermore, with the Yelp Audience Network, ads can be displayed on a large collection of third-party sites such as Business Insider, The Washington Post, Daily Mail, New York Post, and others.

In 2020, Yelp released a new Store Visits product that utilizes a variety of signals to measure user engagement with business pages and opt-in location data provided by customers. Leveraging these data points, Yelp can generate a cost-per-visit metric for businesses, so they can get a better sense of return on ad spend.

The company’s suite of Business Page products begin with a basic free online account where businesses can claim the Yelp page for each of their locations. Once a business has claimed its listing page, it can update its information and has the option to purchase a range of premium page features. These features include enhanced and branded profiles, business highlights, and showcase specialties, while Yelp Verified License badge upgrades allow businesses to distinguish themselves as licensed, to help consumers make confident decisions.

Finally, Yelp’s tools to facilitate transactions between consumers and local businesses are primarily available through partner integrations such as Grubhub, which makes it possible for consumers to place food orders for pickup and delivery through the platform.


Yelp has established itself with a proven engine to generate and recommend trusted content. The platform provides the type of reliable and useful reviews that consumers value, creating a virtuous cycle in which more content attracts more users, content, and advertisers in turn. The breadth and depth of its high-quality content are the result of significant investments over the past 18 years in developing communities of contributors, as well as providing a robust consumer interface that enables and encourages consumers to share their everyday business experiences. Yelp’s availability across a wide range of platforms and devices also provides a compelling value proposition to advertisers.

The company has also developed industry-leading moderation practices to maintain the quality and integrity of content, as recommendation software and other machine learning algorithms are designed to surface the most useful and trustworthy information for consumers. This technology, together with other consumer protection efforts, helps Yelp detect and mitigate attempts to manipulate ratings and reviews.

Strategic initiatives that have helped transform Yelp’s business continue to provide significant opportunities for growth. Looking ahead the company plans to build increasingly differentiated product experiences for both consumers and businesses in Services categories, such as home, local, auto, professional, pets, events, real estate, and financial services, whilst also increasing monetization in these areas. In 2021, the percentage of monetized leads in the Services categories increased to 25% from less than 10% in 2018, the year before Yelp adopted the initiative. As a result, the company achieved a record average revenue per paying advertising location in the Services categories in 2021.

Through investments in the Multi-location business, Yelp has also significantly shifted its go-to-market mix in recent years toward its most efficient channels, allowing the company to surpass 2019 revenue in 2021 with a significantly smaller local sales force. In 2021, the Self-serve channel, together with a more-tenured local sales force, acquired small and medium-sized businesses more efficiently and exhibited a higher retention rate than with its pre-pandemic local sales force. Thanks to these improvements, as well as marketing investments, revenue from the Self-serve channel also reached a new record in 2021 and increased as a percentage of advertising revenue to 17%, up from 10% in 2019.

In addition, developing customer relationships and introducing new Multi-location products resulted in record revenue in 2021 from this channel as well. Newly introduced products such as Seasonal Spotlight Ads and Sponsored Collections, expanded the company’s first-party attribution solution, Yelp Store Visits. While the fully launched off-platform solution, Yelp Audiences, increased the company’s market opportunity by enabling multi-platform brand awareness campaigns and providing non-location-based advertisers with access to Yelp’s audience.


These strategies led Yelp to return to record highs in revenue as the company delivered a strong performance in the most recent second quarter, driven by surging demand in Self-serve and Multi-location channels, which now comprise 49% of total Ad revenue. Net revenue for the period was $299 million, growing 16% on the prior year, and exceeding the high end of the company’s expected business outlook range. Higher aggregate customer spend and higher average revenue per location also factored strongly in the solid performance.

Total expenses were also higher, coming in at $283 million for the quarter, up 10% on 2021. These were driven by a combination of variable cost of revenue expenses including higher advertising fulfillment costs attributable to the expansion of Yelp Audiences, higher website infrastructure expenses, and higher merchant credit card processing fees associated with the increase in Advertising revenue. Sales and marketing expenses and product development costs also contributed to the increase. Consequently, net income was $8 million for the period compared to $4 million in the second quarter of 2021.

The strong second-quarter results heightened Yelp’s growth expectations for the year despite continued macro uncertainty. The company raised its full-year revenue outlook to a range of $1.18 to $1.20 billion, in line with consensus expectations, and representing year-over-year growth of 16%. Analysts have full-year earnings per share estimates for 2022 forecasted to contract modestly by almost 10% to $2.29 per share, after the 2021 result of $2.53 smashed expectations. However, EPS growth is expected to return to 25%+ year-over-year in 2023 and 2024.


Yelp competes with a wide range of companies that help businesses connect and engage with consumers including online search engines, directories, and providers of online marketing and tools, such as Google, Facebook, and Twitter. As well as various forms of traditional offline advertising, including radio, direct marketing campaigns, yellow pages, and newspapers. It also competes with dedicated providers of consumer ratings, reviews, and referrals, such as TripAdvisor, as well as restaurant reservation, seating, food ordering, and delivery services. However, Yelp’s strength in size, composition, and level of engagement of its consumer audience, along with its ease of use, performance, and reliability of products and services set it above many of these competitors.

Like many other publishers, Yelp also faces ongoing challenges regarding privacy issues, and in particular, crackdowns on sharing and selling user data. Although by relying primarily on its own first-party consumer data, Yelp hopes to address a key problem facing other competitors.


Yelp is well positioned in the large and growing local, digital advertising market. The competitive advantages the company has established over the past two decades, together with a structurally more efficient, product-led business model, have helped re-accelerate a return to growth after the impacts of the covid pandemic.

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