YELP INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those discussed in the section titled "Risk Factors" included under Part I, Item 1A in our Annual Report. See " Special Note Regarding Forward-Looking Statements " in this Quarterly Report.
Overview
As one of the best known internet brands inthe United States ,Yelp is a trusted local resource for consumers and a partner in success for businesses of all sizes. Consumers trust us for our more than 220 million ratings and reviews of businesses across a broad range of categories, while businesses advertise with us to reach our large audience of purchase-oriented and generally affluent consumers. We believe our ability to provide value to both consumers and businesses not only fulfills our mission to connect consumers with great local businesses, but also positions us well in the local, digital advertising market inthe United States . We generate substantially all of our revenue from the sale of performance-based advertising products, which our advertising platform matches to individual consumers through auctions priced on a cost-per-click ("CPC") basis. In the three months endedMarch 31, 2022 , our net revenue was$276.6 million , up 19% from the three months endedMarch 31, 2021 , and we recorded net loss of$0.9 million and adjusted EBITDA of$48.1 million . For information on how we define and calculate adjusted EBITDA, and a reconciliation of this non-GAAP financial measure to net income (loss), see " Non-GAAP Financial Measures " below.
In the first quarter of 2022, our strategic investments in product and marketing drove further progress on our revenue growth initiatives:
•Grow quality leads and monetization in Services. We continued working to drive more high-quality leads to Services businesses in the first quarter, including through enhancements to Request-a-Quote. Product improvements to reduce friction in the Request-a-Quote flow and better match consumers with the right businesses for their projects drove increases in both the number of submitted projects and consumer response rates following their implementation in the first quarter, and contributed to advertising revenue from Services businesses increasing 14% year over year and 38% from the first quarter of 2019. •Drive sales through the most efficient channels. Revenue from our Self-serve and Multi-location channels reached 46% of advertising revenue in the first quarter. Marketing investments and product improvements to the claim and ads purchase flows contributed to record Self-serve customer acquisition, which, together with continued strength in retention, resulted in advertising revenue from our Self-serve channel increasing by more than 30% year over year to reach a new record. Our Multi-location channel also gained momentum in the first quarter; revenue from this channel increased 35% year over year and paying advertising locations reached its highest quarterly level since the COVID-19 pandemic began in the first quarter of 2020. •Deliver more value to advertisers. Ad clicks increased by 4% year over year while Average CPC increased by 17% year over year. Growth in average CPC outpaced growth in ad clicks due to higher advertising demand than consumer engagement, particularly in Services. We believe this dynamic was driven by a combination of macroeconomic conditions, including inflation. Despite this, the first quarter marked another record in our retention rate for non-term advertiser budgets, demonstrating our continued ability to deliver more relevant, high-quality ad clicks to advertisers as we work to improve the efficiency of our ad system to better match consumers with the right advertisers. •Enhance the consumer experience. With an increased focus on consumer experience, we are investing in various product and marketing initiatives designed to expandYelp 's trusted content and drive targeted user engagement and growth. In the first quarter, we expanded the public health inspection information available on our platform, introduced new eco-friendly business attributes to help consumers make more informed decisions and entered into a new data licensing partnership that extends the reach of our content to Uber riders. With a view to bringing the user experience on our Android app to parity with the iOS experience, we significantly improved the map view search experience on the Android app and executed backend improvements, resulting in a 20% increase in Android ad clicks following their implementation inMarch 2022 . 22
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As a result of the structural improvements to our business and continued expense management, our strong revenue performance in the first quarter benefited our bottom line: net loss improved year over year to$0.9 million and adjusted EBITDA increased 10% year over year to$48.1 million , even as we continued our strategic investments in product and marketing. We expect net revenue to increase sequentially in the second quarter and plan to further invest in our growth initiatives; accordingly, we expect second quarter adjusted EBITDA to be approximately flat with the first quarter.
Key Metrics
We regularly review a number of metrics, including the key metrics set forth below, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions.
Ad Clicks
Ad clicks represent user interactions with our pay-for-performance advertising products, including clicks on advertisements on our website and mobile app, clicks on syndicated advertisements on third-party platforms and Request-a-Quote submissions. Ad clicks include only user interactions that we are able to track directly, and therefore do not include user interactions with ads sold through our advertising partnerships. We do not expect the exclusion of such user interactions to materially affect this metric. Because we generate revenue primarily from the sale of performance-based ads, our ability to increase our revenue depends largely on our ability to increase ad clicks. We report the year-over-year percentage change in ad clicks on a quarterly basis as a measure of our success in monetizing more of our consumer traffic and delivering more value to advertisers.
The following table presents year-over-year changes in our ad clicks for the periods indicated (expressed as a percentage):
Three Months Ended
March 31,
2022 2021
Ad Clicks 4% (8)%
Average CPC
We define average CPC as revenue from our performance-based ad products -
excluding certain revenue adjustments that do not impact the outcome of an
auction for an individual ad click, such as refunds, as well as revenue from our
advertising partnerships - divided by the total number of ad clicks for a given
three-month period.
Average CPC, when viewed together with ad clicks, provides important insight
into the value we deliver to advertisers, which we believe is a significant
factor in our ability to retain both revenue and customers. For example, a
positive change in ad clicks for a given three-month period combined with lower
growth or a negative change in average CPC over the same period would indicate
that we delivered more ad clicks at lower prices, thereby delivering more value
to our advertisers; we would typically expect this to have a positive impact on
retention. Although growth in average CPC outpaced growth in ad clicks in the
three months ended March 31, 2022 , we continued to have a high retention rate of
non-term advertisers' budgets during the quarter. This dynamic was due to higher
advertising demand than consumer engagement, particularly in Services, which we
believe was driven by a combination of macro conditions, including inflation. We
expect these complex macroeconomic conditions to continue to cause volatility in
these metrics in the near term. We believe that average CPC and ad clicks
together reflect one of the largest dynamics affecting our advertising revenue
performance.
The following table presents year-over-year changes in our average CPC for the periods indicated (expressed as a percentage):
Three Months Ended
March 31,
2022 2021
Average CPC 17% (3)%
Advertising Revenue by Category
Our advertising revenue comprises revenue from the sale of our advertising products, including the resale of our advertising products by partners and syndicated ads appearing on third-party platforms.
To reflect our strategic focus on creating two differentiated experiences onYelp , we provide a quarterly breakdown of our advertising revenue attributable to businesses in two high-level category groupings: Services and Restaurants, Retail & Other. 23
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Our Services categories consist of home, local, auto, professional, pets, events, real estate and financial services. Our Restaurants, Retail & Other categories consist of restaurants, shopping, beauty & fitness, health and other.
Advertising revenue by category for the three months endedMarch 31, 2022 reflects our updated methodology for determining the business category with which advertising revenue is associated based on the business category of each advertising location rather than the business category of the business account that paid for the advertising. While business locations associated with a single payment account are generally part of the same business, they may offer a variety or a combination of services that differ by location; accordingly, we believe our updated methodology provides a more precise breakdown of our advertising revenue between our Services and Restaurants, Retail & Other categories. The categorization of business locations can change over time and historical business categories for individual business locations are not available; as a result, it is impracticable to apply our updated methodology to prior-year amounts based on the business categorizations in effect during the prior-year period. However, applying our updated methodology to the three months endedMarch 31, 2021 based on the current business categories of the associated advertising locations does not result in a materially different breakdown than previously reported for such periods. Due to the differences between the types of business categories comprising our Services and Restaurants, Retail & Other categories, we do not believe a significant number of businesses are re-categorized such that they move from one high-level category grouping to the other, and so do not believe the result would be materially different based on the then-current categorizations.
The following table presents our advertising revenue by category for the periods indicated (in thousands, except percentages):
Three Months Ended
March 31,
2022 2021 % Change
Services $ 160,263 $ 140,687 14%
Restaurants, Retail & Other 102,974 81,300 27%
Total Advertising Revenue
Paying Advertising Locations By Category
Paying advertising locations comprise all business locations associated with a business account from which we recognized advertising revenue in a given month, excluding business accounts that purchased advertising through partner programs other thanYelp Ads Certified Partners , averaged over a given three-month period. We also provide a breakdown of paying advertising locations between our Services categories and Restaurants, Retail & Other categories. We provide our paying advertising locations on a quarterly basis as a measure of the reach and scale of our business; however, this metric may exhibit short-term volatility as a result of factors such as seasonality and macroeconomic conditions. For example, macroeconomic factors, such as ongoing concerns about COVID-19 and its variants as well as labor and supply chain challenges, have had a predominant negative impact on Restaurants, Retail & Other paying advertising locations in recent quarters. Short-term fluctuations in paying advertising locations may also reflect the acquisition or loss of single advertising accounts associated with large numbers of locations, or the pausing/restarting of advertising campaigns by such multi-location advertisers.
The following table presents the number of paying advertising locations by category during the periods indicated (in thousands, except percentages):
Three Months Ended
March 31,
2022 2021 % Change
Services 223 224 -%
Restaurants, Retail & Other 323 279 16%
Total Paying Advertising Locations 546 503 9%
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Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted inthe United States ("GAAP"). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates and assumptions are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from those estimates. Due to macroeconomic conditions and other factors, certain estimates and assumptions have required and may continue to require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may materially change in future periods.
We believe that the assumptions and estimates associated with revenue recognition, website and internal-use software development costs, the incremental borrowing rate used with respect to leases, business combinations, allowance for doubtful accounts, income taxes and stock-based compensation expense have the greatest potential impact on our consolidated financial statements. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report.
Results of Operations
The following table sets forth our results of operations for the periods
indicated (in thousands, except percentages). The period-to-period comparison of
financial results is not necessarily indicative of the results of operations to
be anticipated for the full year 2022 or any future period.
Three Months Ended
March 31,
2022 2021 $ Change % Change(1)
Condensed Consolidated Statements of Operations
Data:
Net revenue by product:
Advertising revenue by category(2):
Services $ 160,263 $ 140,687 $ 19,576 14 %
Restaurants, Retail & Other 102,974 81,300 21,674 27 %
Advertising 263,237 221,987 41,250 19 %
Transactions 3,180 3,804 (624) (16) %
Other 10,211 6,305 3,906 62 %
Total net revenue 276,628 232,096 44,532 19 %
Costs and expenses:
Cost of revenue (exclusive of depreciation and
amortization shown separately below) 23,429 14,874 8,555 58 %
Sales and marketing 126,097 112,909 13,188 12 %
Product development 80,685 67,992 12,693 19 %
General and administrative 39,383 31,861 7,522 24 %
Depreciation and amortization 11,490 13,083 (1,593) (12) %
Restructuring - 20 (20) (100) %
Total costs and expenses 281,084 240,739 40,345 17 %
Loss from operations (4,456) (8,643) 4,187 (48) %
Other income, net 929 705 224 32 %
Loss before income taxes (3,527) (7,938) 4,411 (56) %
Benefit from income taxes (2,612) (2,142) (470) 22 %
Net loss $ (915) $ (5,796) $ 4,881 (84) %
(1) Percentage changes are calculated based on rounded numbers and may not recalculate exactly due to rounding.
(2) Please refer to " -Key Metrics-Ad Revenue by Category " for information on a methodology change adopted in 2021.
Three Months Ended
Net Revenue
Advertising. We generate advertising revenue from the sale of our advertising
products - including enhanced listing pages and performance and impression-based
advertising in search results and elsewhere on our platform - to businesses of
all sizes, from single-location local businesses to multi-location national
businesses. Advertising revenue also includes revenue generated
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from the resale of our advertising products by certain partners and monetization of remnant advertising inventory through third-party ad networks. We present advertising revenue on a disaggregated basis for our high-level category groupings, Services and Restaurants, Retail & Other. Advertising revenue for the three months endedMarch 31, 2022 increased compared to the prior-year period primarily due to higher customer spend as a result of an improved retention rate of non-term advertisers' budgets and higher average revenue per location, as well as an increase in paying advertising locations in our Restaurants, Retail & Other categories. Paying advertising locations in Restaurants, Retail & Other increased as these businesses were able to operate at a greater capacity than the prior-year period. Transactions. We generate revenue from various transactions with consumers, primarily through our partnership integrations, which are mainly revenue-sharing arrangements that provide consumers with the ability to complete food ordering and delivery transactions through third parties directly onYelp . We earn a fee for acting as an agent for transactions placed through these integrations, which we record on a net basis and include in revenue upon completion of a transaction. Transactions revenue for the three months endedMarch 31, 2022 decreased compared to the prior-year period primarily due to a lower volume of food takeout and delivery orders as restaurants' dine-in capacity was greater than in the prior-year period. The decrease was partially offset by an increase in the per-order transaction fee that we receive from Grubhub following the renewal of our partnership inMarch 2022 . Other Revenue. We generate revenue through our subscription services, including ourYelp Reservations andYelp Guest Manager products. We also generate revenue through ourYelp Knowledge andYelp Fusion programs, which provide access toYelp data for a fee, as well as other non-advertising partnerships. Other revenue for the three months endedMarch 31, 2022 increased compared to the prior-year period, primarily reflecting higher revenue from the continued growth of ourYelp Fusion program. The increase also reflects lower COVID-19 relief incentives - mainly in the form of waived subscription fees - for our subscription product customers in the current-year period. Trends and Uncertainties of Net Revenue. In contrast to historical seasonal trends, net revenue increased slightly in the three months endedMarch 31, 2022 compared to the three months endedDecember 31, 2021 due to increased advertiser demand and the continued execution of our strategic initiatives. We anticipate net revenue in the three months endingJune 30, 2022 to increase from the first quarter of 2022. Costs and Expenses Cost of Revenue (exclusive of depreciation and amortization). Our cost of revenue consists primarily of credit card processing fees and website infrastructure expense, which includes website hosting costs and employee costs (including stock-based compensation expense) for the infrastructure teams responsible for operating our website and mobile app, and excludes depreciation and amortization expense. Cost of revenue also includes third-party advertising fulfillment costs.
Cost of revenue for the three months ended
•an increase in website infrastructure expense of
•an increase in advertising fulfillment costs of
•an increase in merchant credit card fees of
We expect cost of revenue to increase on an absolute dollar basis in 2022 compared to 2021.
Sales and Marketing. Our sales and marketing expenses primarily consist of employee costs (including sales commission and stock-based compensation expenses) for our sales and marketing employees. Sales and marketing expenses also include business and consumer acquisition marketing, community management, as well as allocated workplace and other supporting overhead costs.
Sales and marketing expenses for the three months ended
•an increase in marketing and advertising costs of
•an increase of
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These increases were partially offset by a decrease in allocated workplace
operating costs of
We expect sales and marketing expenses to continue to increase in 2022 compared to 2021 as we hire across our sales and marketing teams and invest in marketing initiatives. However, we expect sales and marketing expenses to decrease as a percentage of net revenue in 2022 compared to 2021 as the composition of our sales force shifts toward more tenured and multi-location sales reps. Product Development. Our product development expenses primarily consist of employee costs (including stock-based compensation expense, net of capitalized employee costs associated with capitalized website and internal-use software development) for our engineers, product management and corporate infrastructure employees. In addition, product development expenses include allocated workplace and other supporting overhead costs. Product development expenses for the three months endedMarch 31, 2022 increased compared to the prior-year period primarily due to an increase in employee costs of$13.0 million , which includes bonuses and stock-based compensation, reflecting higher average headcount. We expect product development expenses to increase in 2022 compared to 2021 as we expand our product and engineering teams and invest to support our product initiatives, but decrease as a percentage of net revenue as our distributed operations provide leverage. General and Administrative. Our general and administrative expenses primarily consist of employee costs (including stock-based compensation expense) for our executive, finance, user operations, legal, people operations and other administrative employees. Our general and administrative expenses also include our provision for doubtful accounts, consulting costs, as well as workplace and other supporting overhead costs. General and administrative expenses for the three months endedMarch 31, 2022 increased compared to the prior-year period primarily due to an increase of$4.3 million in our provision for doubtful accounts as a result of the increase in advertising revenue and an increase in employee costs of$3.2 million due to higher average headcount. We expect general and administrative expenses to increase in 2022 compared to 2021 due to increased headcount to support business growth and an increase in provision for bad debt as a result of continued macroeconomic challenges, partially offset by savings from our office space reductions as we continue to operate on a distributed basis. We expect general and administrative expenses as a percentage of net revenue to remain relatively consistent in 2022 compared to 2021.
Depreciation and Amortization. Depreciation and amortization expense primarily consists of depreciation on computer equipment, software, leasehold improvements, capitalized website and software development costs, and amortization of purchased intangible assets.
Depreciation and amortization expense for the three months endedMarch 31, 2022 decreased compared to the prior-year period, primarily due to decreases in depreciation of leasehold improvements from asset retirements related to lease terminations and expirations that have occurred since prior year.
Other Income, Net
Other income, net consists primarily of the interest income earned on our cash, cash equivalents and previously held marketable securities, the portion of our sublease income in excess of our lease cost, amortization of debt issuance costs, credit facility fees and foreign exchange gains and losses. Other income, net for the three months endedMarch 31, 2022 increased compared to the prior-year period, primarily due to increases in tax incentives related to research and development activity in theUnited Kingdom .
Benefit from Income Taxes
Benefit from income taxes consists of: federal and state income taxes inthe United States and income taxes in certain foreign jurisdictions; deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes; and the realization of net operating loss carryforwards. The increase in benefit from income taxes for the three months endedMarch 31, 2022 compared to the prior-year period was primarily due to the positive annual effective tax rate estimated for 2022 applied to a quarterly loss, compared to a negative annual effective tax rate for 2021 applied to a larger quarterly loss in the year-ago period, offset by a decrease in year-to-date excess tax benefits from stock-based compensation in the current period. 27
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As ofDecember 31, 2021 , we had approximately$40.5 million in net deferred tax assets ("DTAs"). As ofMarch 31, 2022 , we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that some or all of these DTAs will not be realized. Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance may be required to reduce our DTAs, which would materially increase our expenses in the period in which we recognize the allowance and have a materially adverse impact on our consolidated financial statements. The exact timing and amount of the valuation allowance recognition are subject to change on the basis of the net income that we are able to actually achieve. We will continue to evaluate the possible recognition of a valuation allowance on a quarterly basis. Our GAAP tax rate is impacted by a number of factors that are not in our direct control and that are subject to quarterly variability, which limits our visibility into the applicable rate for future fiscal periods. While we currently expect our GAAP tax rate for 2022 to be a substantial positive rate - potentially exceeding our previous estimate of 38% - it ultimately depends on, among other things, the status of legislative efforts to repeal the requirement under theU.S. Tax Cuts and Jobs Act (the "Tax Act") to capitalize and amortize research and development expenses, which may result in a substantially lower rate if successful, as well as the amount of our stock-based compensation expense, which fluctuates based on our stock price. We do not plan to provide regular updates to our estimate of our 2022 GAAP tax rate given the uncertainty inherent in it as a result of these factors; however, we note that it may have a material and adverse impact on our cash flows in 2022 as well as future years.
Non-GAAP Financial Measures
Our condensed consolidated financial statements are prepared in accordance with GAAP. However, we have also disclosed below adjusted EBITDA and adjusted EBITDA margin, each of which is a non-GAAP financial measure. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. In particular, adjusted EBITDA should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are: •although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
•adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
•adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
•adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as restructuring costs; and
•other companies, including those in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider adjusted EBITDA and adjusted EBITDA margin alongside other financial performance measures, net income (loss) and our other GAAP results.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as restructuring costs.
Adjusted EBITDA margin. Adjusted EBITDA margin is a non-GAAP financial measure that we calculate as adjusted EBITDA divided by net revenue.
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The following is a reconciliation of net loss to adjusted EBITDA, as well as the calculation of net loss margin and adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages):
Three Months Ended
March 31,
2022 2021
Reconciliation of Net Loss to Adjusted EBITDA:
Net loss $ (915) $ (5,796)
Benefit from income taxes (2,612) (2,142)
Other income, net (929) (705)
Depreciation and amortization 11,490 13,083
Stock-based compensation 41,060 39,245
Restructuring - 20
Adjusted EBITDA $ 48,094 $ 43,705
Net revenue $ 276,628 $ 232,096
Net loss margin - % (2) %
Adjusted EBITDA margin 17 % 19 %
Liquidity and Capital Resources
Sources of Cash
As ofMarch 31, 2022 , we had cash and cash equivalents of$465.1 million , which consisted of cash and money market funds. Our cash held internationally as ofMarch 31, 2022 was$10.9 million . As ofMarch 31, 2022 , we also had$10.0 million of investments in certificates of deposit with minority-owned financial institutions. To date, we have been able to finance our operations and our acquisitions through proceeds from private and public financings, including our initial public offering inMarch 2012 and our follow-on offering inOctober 2013 , cash generated from operations, and, to a lesser extent, cash provided by the exercise of employee stock options and purchases under the Employee Stock Purchase Plan, as amended, as well as proceeds from our sale of Eat24 to Grubhub inOctober 2017 . We continue to hold the majority of our investments in highly liquid money market funds following the liquidation of our portfolio of marketable securities in the first half of 2020, which we undertook as a result of our change in investment strategy to preserve liquidity in response to the COVID-19 pandemic. Our remaining investments that were not held in money market funds as ofMarch 31, 2022 were held in certificates of deposit. We have the ability to access backup liquidity to fund working capital and for other capital requirements, as needed, through a three-year,$75.0 million senior unsecured revolving credit facility (including a$25.0 million letter of credit sub-limit) as part of our Credit Agreement withWells Fargo Bank, National Association which we entered into inMay 2020 (the "Credit Agreement"). As ofMarch 31, 2022 , we had$21.5 million of letters of credit under the sub-limit related to lease agreements for certain office locations, which are required to be maintained and issued to the landlords of each facility, and$53.5 million remained available under the revolving credit facility as of that date. The cost of capital associated with this credit facility was not significantly more than the cost of capital that we would have expected prior to the onset of the COVID-19 pandemic. As ofMarch 31, 2022 , we were in compliance with all covenants and there were no loans outstanding under the Credit Agreement. For more information about the terms of the Credit Agreement, including financial covenants, events of default and other limitations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources" included under Part II, Item 7 in our Annual Report. Material Cash Requirements Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under "Risk Factors" included under Part I, Item 1A in our Annual Report. We believe that our existing cash and cash equivalents, together with any cash generated from operations, will be sufficient to meet our material cash requirements in the next 12 months and beyond, including: working capital requirements; our anticipated repurchases of common stock pursuant to our stock repurchase program; payment of taxes related to the net share settlement of equity awards; payment of lease costs related to our operating leases; the potential payment of a higher amount of income taxes beginning in 2022, primarily due to the new requirement to amortize certain research and development expenses under the Tax Act; and purchases of property, 29
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equipment and software and website hosting services. However, this estimate is based on a number of assumptions that may prove to be materially different and we could exhaust our available cash and cash equivalents earlier than presently anticipated. We may be required to draw down funds from our revolving credit facility or seek additional funds through equity or debt financings to respond to business challenges associated with the impact of macroeconomic conditions, including the ongoing COVID-19 pandemic, or other challenges, including the need to develop new features and products or enhance existing services, improve our operating infrastructure or acquire complementary businesses and technologies. We lease office facilities under operating lease agreements that expire from 2022 to 2031. Our cash requirements related to these lease agreements are$177.8 million , of which$48.6 million is expected to be paid within the next 12 months. The total lease obligations are partially offset by our future minimum rental receipts to be received under non-cancelable subleases of$41.3 million . See Note 7 , " Leases ," of the Notes to Condensed Consolidated Financial Statements for further detail on our operating lease obligations.
Our cash requirements related to purchase obligations consisting of
non-cancelable agreements to purchase goods and services required in the
ordinary course of business - primarily website hosting services - are
approximately
The cost of capital associated with any additional funds sought in the future might be adversely impacted by the impact of macroeconomic conditions on our business. Additionally, amounts deposited with third-party financial institutions exceed theFederal Deposit Insurance Corporation andSecurities Investor Protection Corporation insurance limits, as applicable. These cash and cash equivalents could be impacted if the underlying financial institutions fail or are subjected to other adverse conditions in the financial markets. To date, we have experienced no loss or lack of access to our cash and cash equivalents; however, we can provide no assurances that access to our invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
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