Good day, ladies and gentlemen, and thank you for your patience. Welcome to the Q3 2018 Yelp Earnings Conference Call. As a reminder, this conference may be recorded. I would now like to turn the call over to your host, Head of Investor Relations, Ronald Clark. Sir, you may begin.

Good afternoon, everyone, and thanks for joining us on Yelp's Third Quarter Earnings Conference Call. Joining me today are CEO Jeremy Stoppelman; our CFO, Lanny Baker; and our COO, Jed Nachman. Before we begin, I'll read our safe harbor statement. We'll make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. In addition, we are subject to a number of risks that may significantly impact our business and financial results. Please refer to our SEC filings as well as our Shareholder Letter for a more detailed description of the risk factors that may affect our results. During our call today, we'll discuss adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. In our Shareholder Letter released this afternoon and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures as well as historical reconciliations of GAAP net income to adjusted EBITDA and GAAP net income margin to adjusted EBITDA margin. Finally an announcement on our earnings process. As we have previously disclosed, we may make future announcements of material financial and other information through our Investor Relations website at www.yelp-ir.com. Beginning in 2019, we intend to announce our financial results on our IR website. While we plan to continue to issue press releases announcing that results have been posted, our IR website will serve as our Regulation FD compliance location. And with that I'll turn the call over to Jeremy.

Welcome and thank you for joining Yelp's Third Quarter Conference Call. I hope you've had a chance to read the Shareholder Letter published earlier today. During the third quarter, we experienced a handful of operational issues in our local Advertising business that impacted productivity. As a result, revenue for the quarter was below our outlook range. We believe the majority of these issues were internal and operational and we have begun to take steps to address our underlying causes. However, the near-term impact of lower-than-expected net account additions in the third quarter reduces our outlook for revenue and adjusted EBITDA in the fourth quarter. While we are disappointed with these results, we are optimistic about the strategic initiatives we have planned for 2019. Yelp's brand and consumer audience are strong. In the third quarter, monthly average mobile unique devices grew by 2 million quarter-to-quarter and 4 million year-to-year. The shift in non-term contracts has opened the local sales funnel and offering businesses more control over the Yelp Advertising is benefiting customer engagement. Churn, under non-term contracts, has been consistent with our expectations thus far and we are focused on the sizable opportunity to convert and retain more of the local advertisers who are engaging with our ad platform. Growth in our self-serve, national and third-party sales channels has begun to diversify Yelp's go-to-market strategy. We plan to lean into these areas, shifting beyond local sales head count as the primary endpoint to revenue growth. We expect the steps we're taking today to drive double-digit revenue growth and 2 to 3 percentage points of improvements in adjusted EBITDA margins in 2019, with further gains in profitability as we grow beyond next year. We plan to share more detail about our 2019 plans and financial expectations when we provide our 2019 outlook. Now, I'll turn it over to Lanny for some additional detail on our results.

Thanks, Jeremy. Before we open the line for your questions, I want to add color to Jeremy's comments. Total revenue for the third quarter came in below our outlook due to fewer new customer additions and lower local ad revenue than we anticipated. Paying advertising accounts for the third quarter were 194,000, flat with the second quarter. We do not believe that there was any one single factor behind the new sales shortfall relative to our expectations. Instead, a number of smaller, compounding issues arose, including slower-than-expected sales head count growth, a change in advertising promotions, a technical issue in flowing leads to our reps and a lower success rate in contacting business decision-makers by our outbound sales calls. These execution challenges that we experienced in the third quarter were generally similar to things we've experienced from time to time in the past, in both their size and their nature. However, the impact of issues like the ones I just mentioned, when encountered in the past, typically would have been stretched out over the course of the ensuing year based on our annual contract model. With more of our quarterly revenue coming from within the same period after making the transition to non-term advertising, variations in sales productivity and account growth can have greater near-term impacts. On the customer conversion and retention side, the shift to non-term advertising has introduced new customer behaviors, including a greater number of trial purchases and on-and-off spending patterns. Churn rates, as we've traditionally measured them, have therefore been higher in the early months under the non-term structure. However, non-term conversion and retention trends in the third quarter remained consistent with our expectations and in line with the second quarter results. While the number of paying advertising accounts for the quarter was flat quarter-to-quarter, the…

Thanks. Our first question comes from the line of Douglas Anmuth of JPMorgan. Your line is open.

Thanks for taking the question. So you guys laid out a bunch of different issues just related to the kind of internal execution around 3Q and into 4Q performance. But obviously we've seen this multiple times over the last few years. So just curious if you can talk about whether you think there's anything more external or exogenous going on in terms of competitive issues? Or more specifically around consumer engagement as well? Or anything else you can point out structurally? Thanks.

Sure. Hey, Doug. This is Jed. Short answer is, no, we don't believe there are any external factors that fundamentally change Yelp's position in the marketplace. During the first half of the year, productivity momentum was really strong. And we anticipated that to continue throughout Q3, when in fact it slowed down. We saw degradation in the volume of accounts that we were able to add, due to some really short-term operational issues that had near-term impact. Those, just to repeat from the letter, number one, lower-than-anticipated head count. We saw more movement out of the local sales role from veteran reps, who had a harder time than anticipated moving to the non-term contract model. And slight headwinds in the hiring environment. We're through that transition period and remain on track for the 2018 head count plan. Number two, changes in our promotional strategy. We moved from the majority of promotions being a flat upfront credit to a bonus ads dollar-for-dollar structure. These deals have a higher lifetime value, but affected starts volume. We're now through that transition and expect to be on more of an apples-to-apples basis moving forward. The third technical issue that we referenced was specifically the way in which new business additions to Yelp were being captured and delivered to the reps and sales force. These new business additions have a high propensity to buy and cause a drag on production during the quarter, until we identified the cause and took the appropriate actions to fix. We were able to fix this issue in short order after it was identified. And then finally the fourth one, a lower success rate in reaching local business decision-makers through outbound sales calls. We're in the process of working through alternative ways to reach local business owners, who are not as receptive to phone calls as they have been in the past. These include more extensive and targeted use of email, SMS, in-app notifications. So we believe we're on the right track there. So the majority of these issues are within our control and have either already been addressed or are in the process of being worked through right now. But as we said, there will be a follow-on effect for Q4. And those have been reflected in the outlook.

Okay. And just to follow up quickly. Lanny, any more color on kind of how you define double-digit revenue growth in 2019?

It's a great question, Doug. No, not at this time. We're looking at the fourth quarter, as I said, looks like it's about 10% year-over-year growth at the midpoint of our outlook range. There's – a year ago, we had just a little bit of time with Eat24 that we don't have this year. So there's a modest impact from that. But, no, we'll update that. It's a little bit early right now for us to give a precise view on 2019.

Okay, thank you.

Thank you. Our next question comes from the line of Lloyd Walmsley of Deutsche Bank. Your line is open.

Thanks. I guess first one just, can you discuss the move away from salespeople and lowering the head count growth? And just what you're seeing? Is some of that just, to Jed's, I guess your last point, people aren't as interested in answering phone calls anymore? And what gives you confidence that you can scale into regrowing the gross adds on the advertising side under a completely new focused model? And then I guess if you can elaborate...

Yes, Lloyd, sure we can give you some thoughts on that. And I think – I don't think we are in the place that you just described of a completely new mark – approach at all. What we're really talking about is diversifying our go-to-market. And we are at a position where our product, our marketing, our self-serve channel, the national success that we're having, some of the stuff we're doing with small channel partners are really indicating to us that there are ways for Yelp to get to the large, local business opportunity that are not exclusively driven by our local sales force. We have a 3,000-plus person sales force at this point. And what we're looking at is additional ways to get to the market where we can get there faster, we can get there more efficiently and we can drive margins and penetration for the company. So these things all surround – we'll continue to have growth in the sales force. I think at the end of this year, we'll be where we'd anticipated all year long, which is kind of a high-teens to 20% exiting this year growth rate in our sales force. But as we look into the future, we want to and we intend to surround that with a broader, deeper go-to-market that leverages all these other channels as well.

Okay. And then if I can ask another, you guys have mentioned a bit more of a focus on third-party channels. So wondering you have been, I think, working with third-party channels at different levels for a little while. Can you just give us a sense of what you see there in terms of the ability to scale those channels? And then what kind of revenue shares do you have to give up working with folks on the third-party side?

Yes, I mean there's – we're very early. That business is in its infancy. It's a small portion of our go-to-market today. It's pretty clear to us that many others who are going after the local opportunity are working through, in many cases, local, digital marketing agencies, who often control and manage the ad budgets of local merchants who are kind of too busy to do some of the things that are required to effectively manage digital marketing campaigns. Yelp has spent some time and some product effort to make ourselves available and interesting to those third-party resellers. And as I said, it's in its infancy at this point, but it's really exciting and we're very encouraged by what we're seeing there. The things that those channel partners want from us are APIs and ability to control spending, very much the change to non-term contract makes us far more appealing in that channel than we were when it was a – we were kind of the only item on the shelf that had a 12-month contract behind it. We've made some investments on our side selling and made some investments in product. We'll continue to make investments in those areas as well as in marketing to build our presence in that third-party channel. And it looks to us like a very efficient way to get to the market. Most of these customers do a great job of measuring return on investments on advertising. And Yelp typically comes out very, very well when it's analyzed carefully in terms of the return on marketing investment on Yelp.

Yes, I would just add one more thing to that. What we found with these third-party resellers is that Yelp represents a pretty attractive alternative to Google and Facebook out in the marketplace and something that we haven't really offered in a packaged way before and made it easy to work with. And so, this program – it's coming out in the growth rates that you see today, but we're able to go out and introduce effectively for the first time to a lot of these channels the Yelp product and it's resonating really well. It's another weapon that they can have in their bag as they go out to talk to these local business owners.

All right. Thank you.

Thank you. Our next question comes from the line of Mark May of Citi. Your question please.

Thank you. Just maybe I'm still a little bit confused on what happened in the quarter that will continue to impact Q4. It sounds like if I had to boil it down that productivity slowed in the quarter and you had shortfalls in gross adds or was it more a heightened churn perspective? I'm just trying to boil it down. I know you mentioned a number of smaller things, but if you had to roll them up and look at them from gross adds to churn – I'm kind of taking that it was primarily a gross adds issue, but if you could just sort of help us boil it down. And then given that a number of these factors were – are already being addressed or had been addressed, would you anticipate that by Q1, your net adds will start to look more like historical levels? Thanks.

Yeah. Thanks, Mark. On the – you're right in understanding the dynamics in the third quarter that are affecting the fourth quarter outlook and that is that if we did not achieve the gross additions of customers during the quarter that we anticipated and the customer turnover in the quarter was in line with what we expected it was – the prior – first half of the year was a record period of time in terms of new customer additions. And so the number of accounts canceling or turning over in the third quarter rose just as we expected, but really the shortfall in the net number relates to the gross additions being later than we thought for the quarter. As we look into next year, we haven't given any outlook at this point for sort of the first quarter or for the year. But as we said, we anticipate being able to get back into a position of growing the net account profile of Yelp in the future.

Thanks.

Thank you. Our next question comes from the line of Brent Thill of Jefferies. Your line is open.

Lanny, I'm just curious if you can expand on the self-service channel. That's one of the keys for next year, cutting back on the sales reps and letting customers onboard themselves. Can you give us a sense of what percent of customers are doing that today and what do you need to put into effectively bridge that gap so that they can do this more effectively?

I'll let Jed talk about that a little bit. If you were to look back at 2018 or 2017 rather, the number of gross additions coming through the self-serve channel was larger than the number – that were coming through the rep channel and that was primarily the difference, and then we're offering the non-term in the self-serve and still selling term amongst the reps. As we opened up this year with the reps selling non-term, those numbers have really balanced out. In fact, we've seen periods of time where the reps have been adding more gross adds than the self-serve channel. The key to the growth of all of our sales is really, starts with businesses claiming their pages on Yelp. We had roughly 200,000 businesses claim their page on Yelp for the first time in the third quarter, about 1 million in the last 12 months. And that's really the pool from which whether it's self-serve through that claiming process or into the lead-generation system that goes through our sales force, that's really the pool where we fish for converting those claims into paying advertisers. So I think from a product and a marketing perspective, the things that we're doing to make the business owner page more dynamic, more engaging, give advertisers more control over their page are things that very much drive people into that claim flow, bring them through and give us an opportunity to drive self-serve.

Yeah. I guess I would just add and this goes for kind of rep-assisted self-serve or non-term contract as well as pure self-serve. Traditionally, Yelp had been tooled for the majority of our business to be done through kind of human beings and human contact. And so whether that was a salesperson on the front end or an account manager on the back end. And we have a huge opportunity now that all of our clients start from the exact same starting point, which is inside the business owner's account. And so we're doing a ton of work behind the scenes to make sure that that online experience and that product marketing experience as people are exposed to that is a lot better experience. And just to give you a couple tangible examples there. In the middle of September, we released a new onboarding flow. We hadn't needed to set up an onboarding flow in the past because you'd have human beings that would walk you through kind of your first experience with Yelp. Well, now that's online and they guide somebody on – guide local businesses on how to kind of create the most effective experience on Yelp. Another example is if you look at our mobile app, we had not invested a lot in our mobile business owners' app. And it turns out that business owners in fact like using that to interact with Yelp. And so we're doing a little bit of catch-up compared to desktop there and we believe that type of thing can unlock a bunch of new business for us. So that's one – two out of a list of many things that we're doing to make sure that that product marketing experience conversion flow is really world-class.

And can I just clarify the comments you made around some of veteran reps moving out? I think you said that that's under control, so that, from your perspective, you've addressed or I just want to make sure I understood that statement.

Yeah. We had a bunch of folks who had been effectively under the same model for years. And when we made the transition, some of them did not adapt to the non-term contract model as well. And so we did experience some of those folks leaving the local sales force. And we've now been able to kind of get back on track and replace with new folks, granted there's a ramp-up time to get everybody up to kind of get into full speed there, but folks that we start out in a non-term contract world are still really productive.

Great. Thanks for the clarification.

Thank you. Our next question comes from Mark Mahaney of RBC. Your line is open. We'll go to the next question from Deepak Mathivanan of Barclays. Your line is open.

Hey, guys. Thanks for taking the questions. Two quick ones from me. First, is the constraint so far in driving self-serve adoption something you think is related to product or capability-related? Or is it just due to purpose (24:59) finding difficulty in understanding the value of Yelp Advertising? Do you feel comfortable that a more pronounced push towards self-serve, you can kind of address the constraint with explaining the value of Yelp Advertising to advertisers? And then second one, Lanny, you mentioned that the churn has been as expected. But how does that compare with the cohort of advertisers that you saw come into non-term contracts from early this year? Has there been any change at all from 1Q to 3Q?

I'll take the conversion, retention and churn question first, Deepak. No, we've seen really pretty consistent trends on that. We look at those numbers obviously in a bunch of different ways. And there are kind of different behavior patterns. There is the initial start and there's a period there, what we consider, kind of like to be trial purchase activity. There's a point in time where you move through that trial purchase. And now I'd say you've got more like a customer retention dynamic. As we look at all those metrics, they've been very consistent throughout the year. So we've scaled up the volume really dramatically. And we've been really pleased to see that our expectations for those numbers have been largely in line with the reality that we've seen. There's a big opportunity in there. There is a lot of leverage to improving trial purchase conversion and customer retention. About 24 months ago, we went to work on improving the churn and the retention of advertisers in the long-term model. And over the ensuing 18-month period, I think we've improved the retention rate or reduced the churn rate by probably about one-third over that period of time. So we've done this before. It is a little bit of a different game with the velocity of the business right now and a little bit different purchase activity by businesses. But to answer your question, it's been pretty consistent year-to-date. On the question about self-serve and articulating to businesses the value proposition of Yelp Advertising, I think it's a lot of what Jed just spoke about, and that is bringing people into the business owner application, showing them the control that they have over their advertising and being able to market better the value that Yelp can deliver to local businesses.

Yeah. I guess, I would just add in this new world, the first 45 days becomes critical in terms of the experience that a new advertiser has with Yelp. And by the way and a new claimed business has with Yelp. And there's certainly room for improvement in that conversion funnel, both from non-claimed to claimed and then claimed into paying advertisers. And there's a bunch of low-hanging fruit that we're already in process on working on there. And product marketing becomes a much larger driver of that opportunity.

Okay. If I can just quickly follow up, do you have an expectation for where self-serve could kind of shake out by next year in terms of total advertisers? Or is it still early to kind of make a forecast?

It's early to make a statement about that. But we believe it could be a bigger driver of our growth and a bigger contributor to the overall customer acquisition of the company.

Okay. Thanks, Lanny.

Thank you. Our next question comes from the line of Mark Mahaney of RBC. Your line is open.

Great, thanks. I know you talk about I think 200 to 300 bps of EBITDA margin expansion in 2019. Could you just go through the levers there? What needs to happen in order to get there?

As your saw in this quarter, we had a little bit better than 40% incremental profitability year-over-year in terms of revenue – incremental revenue going through to incremental adjusted EBITDA. And we've said in the past and I think we've shown in the past that the core Yelp model has inherently very high operating leverage. As we focus on channels that we've talked about, whether it's the bigger dollars that come through the national channel or it's the lower selling cost that comes through the self-serve channel or it's small changes in account retention, all of those things are contributors to sort of revenue side operating leverage. On the expense side, there's operating leverage against our fixed costs. There's leverage against the investment that we're making in areas such as our restaurant strategy. And I think there are opportunities as well against product and marketing. So, Mark, there are a number of places, 200 to 300 basis points of margin leverage feels like a pretty reasonable target for us to achieve in the coming year.

Thank you. Our next question comes from the line of Brian Nowak of Morgan Stanley. Your line is open. Brian Nowak - Morgan Stanley & Co. LLC: Thanks for taking my questions. I guess if we look back over the last 12 to 18 months, there's been some ebbs and flows in the sales force productivity and execution. I guess maybe, Lanny or Jed, maybe just for your shareholders listening, could you just sort of talk to one or two of the biggest learnings you've had over the last year to 18 months on ways you can improve the sales force efficiency sort of to avoid some of these unfortunate hiccups? And then the second one, I think you talked about slowing hiring next year on the sales force. What gives you confidence that's the right strategy, following a quarter where I think you said you had higher-than-expected sales churn, impacting the gross adds? Thanks.

Yeah, this is Jed. I'll take the second part of that question first. In terms of moving into next year, irrespective of what had happened in this quarter, we were taking a hard look well before this at what's the go-to-market strategy that's going to make the most sense for Yelp and how do we get the most high-quality, high-calorie revenue into the system and in turn drive margin? So you look at kind of our market share in the national segment as an example compared to total kind of media spend in that market. And as a percentage, we're way down from kind of where we think we should be at about 25% of our revenue today. And we started to actually see that traction pick up. You look at that business, it's grown 30% year-over-year. We're seeing the seeds in the channel partner area really look nice. And so, as we think about investment opportunities, we'd love to get off of, hey, you need to drive head count in order to drive revenue and really invest in those high-quality areas. That being said, we're still going to have a very large sales force going into next year. And our ability to really focus the folks that we do have in the building on the most – on the best opportunities for them to go after is critical. And so we do believe we can improve the efficiency of the folks that we do have in seeds and that's kind of how we're looking at it as where can we invest the dollars that are going to yield the most high-quality revenue and that's the lens.

Yes and I think on your questions about the learnings about the sales force, it's an interesting one. I guess one of the things I'd point out is that as we've moved our selling model from long-term contracts to non-term contracts, more of our revenue comes in the more near-term kind of in the quarter, for the quarter versus the model that was more like long-term sales that stacked up and would lay out over the ensuing year. And so, one of the reasons we've expressed this year some caution about the transition to non-term contract is a recognition that the business is operating at a bit of a different clock speed today than it was before. And so one of the things we've learned is that the business is now more sensitive to the short-term productivity issues that probably were there in the past as well, but their impact in sort of the immediately – turn over to the next quarter was just not as great as it is now.

Thank you. Our next question comes from the line of Justin Patterson of Raymond James. Your line is open. Justin T. Patterson - Raymond James & Associates, Inc.: Great. Thank you very much. Just curious how you're thinking about uses of cash at this point? There's a pretty healthy move in the stock price after-hours, so curious about just changes to appetite on buyback at all. And then just kind of thinking broadly at a high level. As you've rolled out these new products, what changes have you seen in terms of advertisers talking about their ROI from Yelp? Said another way, do you think there's any signs that advertisers are actually having a suboptimal ROI right now? And that's why?

Yes. This is Jed. To kind of address that second question, really our most sophisticated advertisers, which is the national segment right now, they're seeing the most success and the most visibility into the ROI they're getting from Yelp. We certainly have some product that's not available today to the local advertising segment and some attribution products where we use both first-party data and third-party data to actually show folks that have been exposed to an ad and then end up in store or in restaurant. And that's been a lot of the key to our success in the national segment and they're able to kind of parse through all of that data and understand the ROI that's coming out of it. We do believe there's an opportunity to kind of shift that mindset over into the local category as well. And so overall, we believe just from the data that we've seen internally and internally we call it Yelp store visits and that's the product that we're actually driving people into these storefronts. And so the fundamental kind of premise of Yelp Advertising is working and working very well. I do think there's an opportunity to get better at how we display all of the results for our local advertisers. And so to me, it's more of a, how do we take what we already have and put it in a format that's really digestible for that local business?

Yeah. I think as we see the results in this quarter, one of the things I think to keep in mind is that the number of repeating customers grew by 5,000 or 6,000 quarter-over-quarter and is growing at a mid-teens rate year-over-year. So while we're flat quarter-to-quarter on the total number of advertisers, I don't think that's indicative of exactly the things you're describing. From a cash perspective, during the third quarter, we repurchased about $3 million worth of our shares. We have – we've tried to be pretty disciplined about the prices at which we repurchased the stock. We have an initial $200 million authorization. I believe there's about $115 million left on that authorization as of the end of the quarter. And we'll get, we have probably an opportunity based on the reaction today to continue to buy back stock. And when that authorization is completed, we'll consider what we'll do next. Justin T. Patterson - Raymond James & Associates, Inc.: Great. Thank you.

Thank you. Our next question comes from the line of Ygal Arounian of Wedbush Securities. Your question please.

Hey. Thanks, guys. So first, was there any advertiser feedback in the decision to rely less on the sales force? Were you getting feedback from your actual advertisers that led you to make that decision? And second, is there any way to help quantify the impact of, if you're going to hire less sales next year and focus more on the self-serve and partners, how long until the net effect sort of balanced out, meaning your efforts from ramping up self-serve is driving as many adds as the net loss from those salespeople? Thanks.

In terms of feedback from advertisers, no, nothing. There was no feedback that specifically drove any decision around head count kind of going into next year.

Yeah. And I think that as we look at the balance between the sales channel and the self-serve-channel, our goal is going to be to clutch from one into the other. As we gain momentum on the self-serve side, it will allow us to think about the investments and the rate of growth that we have on the sales force side. So we'll end this year with a sales force that will be, as I said, kind of high-teens to 20% bigger year-over-year. That will put us in position for 2019. And as we – I think we've started to turn the corner of growth on the self-serve side of the house and we'll continue to push on that lever as we go into 2019.

Thank you. Our next question comes from the line of Tom Champion of Cowen. Your line is open. Thomas Champion - Cowen & Co. LLC: Hi. Good afternoon, guys. A couple quick ones, if I may. Curious if the recent Google algo or user interface update in August has had any impact on the business? And then on Request a Quote, the 5.5 million leads in 3Q, is that flat sequentially with 2Q? It wasn't clear to me in the letter if that was apples-to-apples. And then, I guess just more broadly on the service, how do you think user awareness is trending and maybe how that can be boosted? Thank you.

Hi, Tom. This is Jeremy. So taking your first question here, the Google algorithmic adjustments that happened over the course of the quarter, we did see an impact particularly on desktop traffic and neither of their updates were favorable. They were both negative impacts to our traffic levels. But the reality today is that so much of our engagement is on the mobile app. We didn't see real tectonic shifts or massive impacts. So we feel good about our overall audience metrics and engagement with users. Request a Quote. Volume is up 46% year-over-year. So we feel great about our growth there. And the attributable revenue, which we've talked about all throughout the year, was actually $45 million, which is up 27% quarter-over-quarter. So, we're taking those leads and we are monetizing them better than ever. So we feel great about that. Seasonally, obviously as you go in towards the holidays, you do see volume impacted, but so we were fairly flat quarter-over-quarter, but that's actually still pushing against a seasonal trend, which would be a decline. And then your last question was on user awareness. Again, with our focus on the mobile app, it's up 13% year-over-year that – quarter-over-quarter, we added two million devices and year-over-year 4 million devices. So we feel like that's pretty healthy audience growth. We are making additional investments. We've talked a lot about the restaurant segment and particularly Yelp Reservations and Nowait and we saw over a million monthly Yelp-seated diners. And so that – those are people that are going through the app or the desktop website and adding themselves to a waitlist or a booking, reservation, booking their party at a restaurant. So, we think that growth rate is really healthy there. It's up, I think, 150% from September 2017 to September 2018. So really strong momentum and that will start, I think, really spilling up into 2019, contributing to our user engagement. But overall, it's looking quite healthy there. Thomas Champion - Cowen & Co. LLC: Thanks very much.

Thank you. Our next question comes from Sameet Sinha of B. Riley. Your line is open.

Yes. Thank you very much. A couple of questions. In terms of the paying advertisers, can you disclose what percentage of total PAAs are term versus no term? And if what the ARPU differential is between the two? And the second question would be, I'm just thinking looking back at when you raised guidance in the last quarter, that was over 40 days into the quarter. So should we assume that some things kind of just fell off in the second half of third quarter and that's why you started seeing these issues?

Yes. So let me take the first question about the term versus non-term contracts. We stopped selling term contracts in our local business really by the end of May of 2018. So everything that's been added new since that in the local business has been on a non-term basis. At May, probably half of the business that was under term contract was already one year into those relationships and therefore on a month-to-month basis. So we're in a place today where the proportion of our business that is under long-term contracts is shrinking pretty quickly. On the other hand, the number of customers that have been with us for more than a year continues to grow. That's a cohort that tends to have very strong relationship with Yelp and kind of relies upon Yelp for the growth of their local business. And we tend to see retention rates and revenue retention rates really strong from that group. As to your question about the sort of course of the quarter, there are always a number of factors that are at play. And as we had talked about in the past, we've been cautious about the transformation – or the transition to non-term contracts and how that would play out, while being really confident about this being the right thing to be doing for the long-term opportunity and for the benefits that we'll see from having made this change. As we got to the second half of the quarter and then to the end of the quarter, it became apparent that we would need to revise our outlook for the fourth quarter based on what we saw in the number of paying accounts and where we ended the quarter. And as we said earlier, there are two components to that. One is the gross addition of new customers. The other is the conversion and retention of customers that we have. And the delta relative to our expectations was on the gross additions side rather than on the retention and conversion side.

Thank you. Our next question comes from the line of Anthony DiClemente of Evercore ISI. Your question, please.

Thank you for taking my questions. Sorry about the tough quarter here. I guess at a really high level, we see other companies, other ad-supported Internet companies shifting in terms of new ad formats and evolving their product offering. So I guess just is there anything you feel you can do to invest in the ad product next year and beyond to maybe just thinking more creatively, improve the ROI or improve the experience for your customers? And then a second question, which would be, Lanny, you mentioned claimed local business pages as being a metric to really focus on as opposed to PAA. But if you look at that conversion ratio of claimed pages to PAAs, that's stayed pretty constant over time, I think. Correct me if I'm wrong. But are you basically saying that you would expect that conversion rate to kind of go up from here? Or what gives you confidence that claimed business pages is really a better way to look at or a better leading indicator of revenue like that? Thank you.

Yes. Let me take the claims question first and then maybe Jeremy can talk about the ad product. On the claims – remember that the claimed count that we provide is the cumulative count of claims. The number of PAAs is the current active revenue generators in the quarter. And so there's another difference between the two measures. And that is that the number of claims is claimed local business locations. The number of paying advertisers is the number of master accounts that are paying Yelp. And you might have in there a small business that owns 2 to 10 shops. You might also have a large national advertiser that could have hundreds of locations advertised on Yelp. So it's that ratio between the two isn't quite working the way that I think you're thinking about it. And we do believe that driving claims, marketing to those businesses that are sort of, of their own volition, saying that they recognize Yelp is important to their local presence and their local brand. And then showing up to show them the ways that we can help them through our advertising products and increasingly some of our other products. We can help them find customers, bring customers back and operate their business. It's a really important part of our flow.

And this is Jeremy. Talking about products and particularly with respect to our ad offering. So we've got a lot of investments happening in that area, Request a Quote, being a big part of that. And so we continue to improve that product. Better match consumers to advertisers, and so you'll see a lot of additional improvements happening there. And I think some of that's reflected in our really fast growth of Request a Quote attributable revenue, which grew very nicely quarter-over-quarter. We also launched new product, Yelp Verified. So for home and local services type businesses that have a licensing structure, which of course varies state-by-state, we have started rolling that out. I think right now, we're in California, something like 30 different categories in California and the early signs are pretty interesting there, but still early days. So that's another example of some innovation that we're doing there. We continue to invest in search and how that looks and along with that, how we present advertisers. So if you look across the industry at other search results, there's a lot of monetization happening, especially in low-frequency, high-value categories like home and local services. So we continue to look at differing experiences that can drive more leads to our advertisers. And then on the business owner dashboard side, the business owner account, we've got a lot of work happening there, both in helping business owners claim faster, have a really smooth on-boarding experience, help them understand the value better by presenting the data in more intuitive ways and then should they decide – they're considering canceling their advertising, doing a better job of convincing them of the ROI that they're getting. And of course all of this has to be built out on mobile. We do have a version of business owner account on mobile, our business app, but it's relatively rudimentary. I would say it's somewhat underinvested, partially as we heard earlier on the call, because we've been so focused on the human side of the experience where you, as a potential Yelp advertiser were talking to a salesperson and then to get your account set up, you were talking to an account manager. Now all of that is happening within the product. And so our orientation within product and engineering now reflects that and so we're pouring a lot of our resources into improving those experiences.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may disconnect your lines at this time.