Yelp Inc. (NYSE: YELP) reported first-quarter 2015 results after the markets closed Wednesday. The local business guide company posted a diluted earnings per share (EPS) loss of $0.02 on revenues of $118.5 million. In the first quarter of 2014, Yelp reported an EPS loss of $0.04 on revenues of $76.41 million. The Thomson Reuters estimates for the first quarter called for EPS of $0.01 and $119.98 million in revenue.

On a non-GAAP basis, Yelp posted EPS of $0.10 per share, which excludes stock-based compensation and amortization of intangible asset charges of $79 billion. Adjusted EBITDA totaled $16.3 million in the quarter.

Average monthly mobile unique visitors grew 29% year over year to approximately 79 million and average monthly desktop unique visitors declined 3% year over year to approximately 80 million. Average monthly unique visitors (desktop and mobile web) grew 8% year over year to approximately 142 million.

Local advertising revenue grew by 51% year over year to $98.6 million, while brand advertising revenue fell 11% to $6.6 million.

The company’s CEO said:

Looking to the rest of the year, we will continue to seek ways to increase engagement and drive awareness, while striving to demonstrate the value we can deliver to local businesses in order to capture the large local advertising market opportunity.

The CFO added:

Local businesses are increasingly adopting performance-based advertising, and in the first quarter, cost-per-click advertisers represented approximately 40% of local advertising revenue, an increase from 32% in the fourth quarter of 2014. With 92% growth in adjusted EBITDA year over year, we continue to show operating leverage in the business and look forward to growing the business through the rest of the year.

For the second quarter, Yelp is guiding revenue in a range of $131 million to $134 million and adjusted EBITDA in a range of $22 million to $24 million. Full-year guidance was affirmed: net revenues in a range of $574 million to $579 million and adjusted EBITDA in the range of $102 to $105 million.

Consensus estimates for the second quarter call for EPS of $0.03 on revenues of $138.42 million, and for the full year EPS is estimated at $0.16 on revenues of $579.21 million.

While local advertising revenue grew nicely, it did not meet expectations. Unique user numbers also rose, but the combination of lower-than-expected revenues and higher user numbers indicates that advertisers are not willing to pay the higher rates the company needs to generate a profit. Guidance is also a bit light, which never helps.

Shares closed at $51.28 Wednesday and tumbled about 14% to $44.03 in a 52-week range of $42.10 to $86.88. Thomson Reuters had a consensus price target of around $66.10 before the report.

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