(YELP)
(YELP)
Ronald Clark - Investor Relations
Jeremy Stoppelman - Co-founder and Chief Executive Officer
James Miln - Interim Chief Financial Officer
Dan Salmon - BMO Capital Markets - Analyst
Shweta Khajuria - RBC Capital Markets - Analyst
Justin Patterson - Raymond James - Analyst
Cory Carpenter - J.P. Morgan - Analyst
Omar Dissoki - Wells Fargo Securities - Analyst
John Contoni - Jefferies - Analyst
Anthony Duplisea - SunTrust - Analyst
Ygal Arounian - Wedbush - Analyst
Sean Henderson - D.A. Davidson - Analyst
Operator
Good day and welcome to Yelp's Fourth Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Ronald Clark, Head of Investor Relations. Please go ahead.
Ronald Clark - Investor Relations
Good afternoon, everyone and thanks for joining us on Yelp's fourth quarter earnings conference call. Joining me today are Yelp's CEO, Jeremy Stoppelman; Interim CFO, James Miln; and 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. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with Generally Accepted Accounting Principles.
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 both adjusted EBITDA and adjusted EBITDA margin.
And with that, I'll turn the call over to Jeremy.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Thanks, Ron and welcome everyone. At the start of 2019 we launched a long-term strategic plan designed to deliver faster growth to improve Yelp's structural economics. In the first year executing our plan, we accelerated revenue growth from 5% in the first half to 10% in the second half. We also expanded adjusted EBITDA margin to 21% in 2019 from 19% in 2018. These results reflect an ongoing transformation of our business model, which we believe is laying the foundation for sustainable, profitable growth in the years to come. The initiatives we pursued in 2019 delivered accelerating year-over-year revenue growth from the first to the second half of the year, while reducing our reliance on the local sales force, which was 10% smaller by the end of the year.
Three facets of our long-term strategy were particularly impactful in driving 2019's profitable growth. We improved retention of non-term advertisers' budgets by a mid-teens percentage by delivering them more leads. We grew ad revenue from multi-location customers 22% by driving store visits to national advertisers and delivering compelling new advertising formats. We also accelerated revenue growth in the self-serve channel to 30% in 2019 by introducing new product offerings across a range of prices and optimizing our claiming and checkout processes. These initiatives generated double-digit year-over-year revenue growth in the first quarter laying the foundation for a strong 2020.
In fact at the start of February year-over-year growth in cost-per-click advertising budgets, historically a reliable indicator of future advertising revenue, exceeded 10%.
For the year ahead, we plan to tap into a deep well of initiatives designed to drive profitable growth by generating more value for our business customers, capturing the multi-location opportunity, expanding Yelp's product offerings, winning in our restaurants and services categories and enhancing the consumer experience.
Together with disciplined expense management, we believe their successful execution will help accelerate revenue growth once again in 2020 while also expanding adjusted EBITDA margins. We believe these same initiatives will also deliver strong growth and profitability in the years ahead.
Today we monetize just 10% of the leads we generate and we believe that our most significant opportunity will come from increasing that proportion, which is precisely what our long-term plan aims to achieve.
Two important parts of our long-term strategic plan are driving shareholder returns and building upon strong leadership and governance. We have several announcements to share on those fronts. In 2019 we repurchased 14 million shares for a total of $481 million and we remain committed to managing our capital to drive shareholder returns. Today, we announced that our Board has authorized a $250 million addition to the stock repurchase program. Since we announced the program in August 2017, our Board has authorized a nearly $1 billion return of capital to our shareholders.
Effective tomorrow David Schwarzbach will join Yelp as our new Chief Financial Officer. David joins us from Optimizely where he served as CFO and COO. He is a seasoned finance expert who brings a rare combination of financial and operating experience. Prior to joining Optimizely, David held senior finance positions at eBay, most recently serving as CFO of eBay's North American Marketplaces business where he played a key role in growing gross merchandise volume to more than $30 billion. We are thrilled to welcome David to the team.
In 2019 we added three talented and experienced independent directors to our Board to help drive the execution of our long-term plan. In 2020 we are continuing to enhance our world-class Board and sharpen our governance focus. To that end, we are pleased to announce that Christine Barone will join Yelp's Board of Directors effective March 1st. Christine brings deep restaurant category experience to our Board, having scaled True Food Kitchen to more than 30 stores in 14 states in a role as Chief Executive Officer. We believe her leadership and restaurants experience will help us serve both our shareholders and customers. Christine will replace Mariam Naficy on the Board and on the Nominating and Corporate Governance Committee. On behalf of our team, I would like to thank Mariam for her years of dedicated Board service and wish her all the best.
In summary, in 2019 we made excellent progress on our long-term strategic plan. I'm proud of the team's hard work and focused execution, which has generated strong momentum in the business. Their accomplishments have provided a foundation for the year ahead and brought us closer to realizing our long-term financial targets.
And with that I will turn it over to James.
James Miln - Interim Chief Financial Officer
Thanks, Jeremy. As Jeremy noted, the drivers of our profitable growth, stronger retention and the mix shifts to the multi-location and self-serve channels have improved our business economic and enabled us to reduce local sales headcount by 10% in 2019, while accelerating revenue growth from the first to the second half of the year. We believe the evolution of our business model has been significant and will allow us to continue to improve profitability in the years ahead.
In our investor presentation, now on our Investor Relations website, you will find more detail around our growth strategy and revenue initiatives. I'd like to take a moment to outline the three drivers of our path to greater profitability shown on Slide 21 of that presentation.
First, our sales channel mix is evolving away from dependence on adding sales headcount to drive revenue growth. By increasing growth in our most profitable channels, multi-location and self-serve, we expect our margin profile to improve. Second, we will look to our investments in new offerings and delivering greater value to advertisers to drive revenue retention improvements. We successfully executed this initiative in 2019 and plan to do so again in the year ahead. We believe there is significant opportunity to grow our bottom line over time by improving retention and benefiting from a greater percentage of our revenue coming from existing customers.
Third, we are continuing to look closely at our corporate expense base and location footprint and see strategic opportunities for margin leverage over the next few years. In 2019 we greatly reduced our sales footprint in San Francisco and relocated significant portions of our G&A organizations from San Francisco to our Phoenix office, reducing some recurring operating expenses. We are now expanding our engineering footprint in Toronto to tap into a strong pool of technical talent, while reducing our reliance on the high-cost San Francisco Bay Area.
We expect the sales mix shift, retention gains and expense discipline we achieved in 2019 to help drive profitable growth again in 2020 and bring us closer to reaching our long-term target.
Beyond revenue growth and margin expansion, we have focused on providing value to our shareholders through prudent capital allocation. We had a robust, multi-year capital return program in place since 2017 and in 2019 our share repurchase program helped drive a 12% reduction in outstanding shares.
As Jeremy noted, in January our Board authorized a $250 million increase in our share repurchase program, bringing the total authorized to nearly $1 billion since 2017. We will continue to allocate capital wisely with the two objectives, supporting our strategy and increasing shareholder value.
Now I will turn to our financial results and business outlook for 2020. Revenue for the full year surpassed $1 billion, growing 8% year-over-year and exiting the year with double-digit growth in the fourth quarter. In the fourth quarter of 2019 net revenue was $269 million, up 10% from the fourth quarter of 2018. This was slightly below our outlook owing to greater than expected seasonality in December as our local advertisers took advantage of the flexibility of our non-term advertising product opting to reduce spending during the December holidays. However, this seasonal activity reversed in January, which was our strongest month for both non-term advertiser acquisition and budget retention since we began selling non-term advertising. These operational signals suggest we are getting off to a strong start in 2020.
Net income was $17 million in the fourth quarter of 2019, compared to $32 million in the fourth quarter of 2018, reflecting higher income taxes in the fourth quarter of 2019 due to the release of our valuation allowance in the fourth quarter of 2018.
Adjusted EBITDA grew to $61 million in the fourth quarter of 2019, an increase of $8 million or 15% compared to the fourth quarter of 2018. Adjusted EBITDA margin increased 1 percentage point to 23% in the fourth quarter of 2019, driving a strong incremental adjusted EBITDA margin of 43%. For the full year 2019 adjusted EBITDA margin improved from 19% to 21%.
Turning to our outlook, we expect to accelerate revenue growth and expand margins again in 2020. Specifically, we expect net revenue to grow 10% to 12% over 2019 with adjusted EBITDA increasing by 1 to 2 percentage points over 2019.
For the first quarter of 2020, we expect net revenue growth of 8% to 10% compared to the first quarter of 2019 and adjusted EBITDA margin to be approximately 2 percentage points lower than the year-ago quarter. The Q1 outlook reflects a slight deceleration in top line over the fourth quarter, continuing the seasonal pattern of recent years past, as well as funding product development to appropriately invest in our top revenue initiatives.
We anticipate expense leverage to come in in the second half of the year as planned retention improvements, growth in our multi-location and self-serve channels and productivity improvements on flat sales force headcount begin to leverage the product investments we are making at the start of the year.
In summary, we are looking forward to another year of progress towards our long-term target with faster growth driven by more profitable model.
And with that, operator, we will now open up the call for questions.
Operator
Thank you. [Operator Instructions] Our first question today will come from Dan Salmon of BMO Capital Markets. Please go ahead.
Dan Salmon - BMO Capital Markets - Analyst
Hey. Great. Good afternoon everyone. Thanks for taking the questions. Maybe Jeremy, just in light of having the 2020 outlook now and seeing that growth still towards the bottom end of double-digit top line comparing to your mid-teens target that you're focused on over the long term, could you just review us on what you see as being the top two or three elements to help us see that acceleration up there? I mean, on a high level we know the multi-location business growing versus the local, but just maybe within that what are the two or three things you're focused on this year most to get you there?
And then just - maybe just a little bit more expansion on the new CFO hiring. You mentioned a unique combination of both financial and operational background. Just maybe you could talk a little bit more about whether that means some different responsibilities that you see David coming in and taking? Thanks.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Sure. Thanks for the question, Dan. So looking back at 2019 there was a real fundamental shift in our business model. We went from contract model with local advertisers driven by local sales headcount to one that is really led by product and engineering, better retention as well as the multi-loc opportunity, multi-location and enterprise opportunity. And so with that growth you get high - you get high revenue growth - higher revenue growth and you also get higher profitability.
And in 2019 in the first half we saw a 5% growth accelerating to 10% growth in the second half. So that we think that we're well on our way to an acceleration - continued acceleration in 2020.
I guess I'd also like to point out that about 10% of our leads on Yelp right now are being monetized. So we feel like we have an incredible runway to continue accelerating revenue and profitability just by capturing more of the leads and directing them to our successful clients. And so that's a big part of what gives us confidence in 2020.
On to your second about David Schwarzbach, our new CFO, really we were attracted to his experience at eBay, growing the North American Marketplace business. We also like what he was up to at Optimizely with an operational role there. We still see it as a CFO role here at Yelp. So I don't think there is a change in job description, but we like his financial acumen and operational experience, both I think are going to be helpful in 2020 and beyond.
Dan Salmon - BMO Capital Markets - Analyst
Great. Thank you.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Sure.
Operator
And our next question will come from Shweta Khajuria of RBC Capital Markets. Please go ahead.
Shweta Khajuria - RBC Capital Markets - Analyst
Great. Thank you. Could you please talk about your new product pipeline Verified Licenses and Business Highlights? These are great, just as you think about 2020, how - what's your conviction around things that you're working on and any context there?
Second is on SEO challenges. I know this is asked just about in every quarter, but when we look at app download growth that is decelerating, just thoughts on if you are seeing in app engagement grow? And if you're measurement of not only just app devices but internally do you measure other metrics that speak to growing engagement within app that offer you upside - that offer you cross-selling opportunities?
And then the third is on just overall retention, it's the balance of clicks and CPCs. Where do you see this go long term 2020-2021? Thanks.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Sure. So I guess, I'll take the first two questions here. As to products that are coming in 2020, I think it's along the same lines of doing more of what we did in 2019 is a big part of it. One of the most impactful things that we did was really improve our ad system targeting and batching serving the right ad to the right consumer at the right time. Ultimately that's going to drive a connection to the business that is successful and delivers value, which results in better retention. And so we have deep well of projects designed to continue improve that matching system.
There is also more that we'll do on the ad user experience. We've got a modern look coming in the app and site that we will continue to roll out to improve the consumer experience. We've got a new business owner - look and feel to the business owner experience. And then also making sure the pricing is right for the type of business based on category as well as whether they are a new business or an established business, it's been around for a while. So we've got a whole host of exciting things coming in 2020 that I think will continue to accelerate revenue and drive retention improvements.
And then, your second question was around MAUs - app MAUs, what's going on there. Big change that we made last year was backing off on some of our consumer marketing which was paid installs. And so we drove that down which increased profitability and we are leaning more on our restaurant investment in Yelp Reservations and Waitlist which drives millions of downloads and it's going to continue to grow at a rapid clip.
We also see puts and takes from Google. You mentioned SCO, that's still a factor although we believe we're less dependent on Google than certainly we have been in the past. And early last year, we actually saw benefits from some Google algo changes and in Q4, we saw some headwinds in that regard. So there is ups and downs. But we have a number of different levers. And I guess backing up to the fact that we have 10% of our leads monetized, we feel like we have plenty of inventory and opportunity with the traffic that's on the site today. And Comscore has us at about 100 million monthly users right now.
And then on to retention, CPCs - well, is there a question there?
Shweta Khajuria - RBC Capital Markets - Analyst
Well, what's the trend that you've seen and where do you see that go? I mean it is the difference between pricing and the clicks. You're offering greater value to advertisers but - and that's driving retention. Where do you see that go long term? I mean do you think that the difference will narrow over time?
Jeremy Stoppelman - Co-founder and Chief Executive Officer
I mean - what we've seen is as we drive more value to our advertisers, we do tend to see better retention and so we have a laser focus on continuing to improve matching. In fact in home and local services over the last year, we doubled the number of leads going to those advertisers and that business grew at a healthy teens clip.
And so we've got a whole list of projects to continue pushing value to advertisers and we think that's going to show up in retention in 2020 as well.
Shweta Khajuria - RBC Capital Markets - Analyst
Thanks, Jeremy.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Sure.
Operator
Our next question will come from Justin Patterson of Raymond James. Please go ahead.
Justin Patterson - Raymond James - Analyst
Great. Thank you very much. Jeremy, I wanted to go back to [Indecipherable] you had mentioned a few times, fewer than 10% of leads are generating revenue. How much of that is just intrinsic to the category and simply challenging approved ROI? And then how much of that is solvable with these new products and better sales motion? How many of these leads do you think you can monetize over time and how quickly can you solve that? Thanks so much.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Sure. I mean I was just mentioning how in home and local category we doubled lead last year - leads last year and we think we have a long runway of additional projects to continue driving up the number of leads. I think if you look Yelp from an ARPU standpoint relative to other peers in the space, we're a little bit low and we think we can do better by driving more value to our advertisers and moving that number up.
So I don't have a specific, but I can tell you we're obviously guiding to continue the acceleration on revenue and profitability and that's going to be driven by better monetization.
Justin Patterson - Raymond James - Analyst
Got it. Thanks.
Operator
Our next question will come from Cory Carpenter of JP Morgan. Please go ahead.
Cory Carpenter - J.P. Morgan - Analyst
Great. Thanks for the questions. Two, if I could. First on products, could you talk about the adoption of some of your newer ad units maybe which are having the biggest impact? And then on sales force with head count expected to be flat in 2020, could you talk about where you expect to see the productivity gains come from and how you're thinking about the opportunity to bundle some of the new ad products together? Thanks.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Yeah, sure, I can take this one, In terms of the additional products, we - since the inception of some of the initial profile products, we have about 70,000 customers who have adopted them. Those are largely getting bundled with our CPC ad product right now and we're thrilled with the progress.
We do see these products as a launching point and a really important first step in being able to sell the right products to the right customers at the right price. Traditionally we've been kind of a one size fits all product. Yet local businesses are really different, some are starting out on their journey as local business, some have been around for a while, some are in different geo cats. And so we believe that over the course of 2020, we have the opportunity to really become targeted in terms of how we merchandise those products across that potential customer base. And so there is a, I'll say, deep well of additional things that we have in the pipeline. We're not going to go on kind of specifics about those. But ultimately, we believe that the TAM is there to be able to kind of hit different points within the life cycle of these local businesses.
On the second question around headcount and how can we kind of maintain that productivity with flat headcount going to 2020, obviously in 2019 we got a good start on that process. We were able to - overall sales force headcount was down about 6%, 10% in the local sales force and yet we were able to accelerate revenue throughout the back half of the year, and do so while still driving margins. And so that's encouraging first step in this process.
And when you think about the shift and the mix shift from that local sales kind of add water by local sales headcount instead moving towards multi-loc and self-serve, both of which grew healthily I think multi loc 22% year-over-year and the self-serve at 30% year-over-year. Those are going to have embedded productivity improvements along with the retention improvements. And so part of that productivity equation is not only what can we do on the acquisition side, but what's happening on the back half in terms of LTV and we're really encouraged with the signals that we're seeing.
And then I guess finally, going back to kind of the first part of your question which was additional products. We did have success last year in releasing additional products to the sales force. It gives - tends to give a shot of energy and gives them something to talk about with clients and we believe we will continue to kind of have that opportunity throughout 2020. And I guess I would just end on the drivers on the mix shift moving to self-serve and multi loc are also going to kind of drive the profitability profile as well.
Cory Carpenter - J.P. Morgan - Analyst
Okay. Thank you.
Operator
Our next question will come from Brian Fitzgerald of Wells Fargo Securities. Please go ahead.
Omar Dissoki - Wells Fargo Securities - Analyst
Yeah. Hi, this is Omar Omar Dissoki [Phonetic] for Brian. Do you see any interesting dynamics in your various verticals? And we think a lot of vendors are engaging with the CPC model. Does it alter the search order in anyway if they're not a CPC user?
Jeremy Stoppelman - Co-founder and Chief Executive Officer
This is Jeremy. Yeah, I guess it depends on the context that you're talking about. Request a Quote for instance when you request a quote it's largely going to paying advertisers so that lead would be routed to paying advertisers whenever possible. If you go through the search experience, there's clearly marked ads and then a organic concept, much like Google. And so if you are talking about the organic listings, those are not impacted by ad status.
Operator
We'll move to our next question. Our next question will come from Brent Thill of Jefferies. Please go ahead.
John Contoni - Jefferies - Analyst
Thanks. This is John Contoni [Phonetic] on for Brent. It sounds like you had a strong customer acquisition budget retention so far in the first quarter. Given this dynamic, can you comment on why guidance for first quarter revenue growth is below the full year rate despite an easy year-ago comparison? Thanks.
James Miln - Interim Chief Financial Officer
Yeah. Thanks John. This is James. So it's something we pointed out in the letter is that we are seeing more pronounced seasonality in our business. We saw it especially following the move to non-term contracts a year and a half ago. And so this is the first full year of that in place. It's become a large part of our business. Also multi-location is becoming a larger part of our business and that has very strong seasonality into Q4 and then into Q1. So what you're seeing from Q4 to Q1 is driven by some of that the mix and seasonality and we build that into our guide. And then as we look at how the year is starting on bouncing back on the local side on that - those trends in retention and acquisition are looking really good. They compound over time. So you don't necessarily flow through that revenue immediately, but we feel really good about how those build into our outlook for the year. So that's all being built into those numbers, and I think we've seen January and we see where we are on February and we think that the range is very solid in terms of eight to 10.
John Contoni - Jefferies - Analyst
Great. And I believe most of the early uptake of your recent products like Verified Licenses and Business Highlights were primarily coming from existing advertisers. Can you discuss whether you're starting to see these products bring in a greater share of new customers and how you see these types of offerings helping to drive more ad revenue over time? Thanks.
James Miln - Interim Chief Financial Officer
Yeah, I can take that one. I guess I wouldn't say necessarily there all those products are attaching to existing customers. I think a lot of that comes through new acquisition and it increases the value of kind of the ad packages that folks are buying predominantly through the local sales force and the self-serve channel. So we believe that it is opening doors and allows us to kind of juice that productivity as a result of having those additional products. Certainly we look to kind of expand and there is an effort obviously to go and upsell into our existing client base and we do see some nice returns from that. Ultimately we believe these products have the ability to kind of open doors to other segments that may not be ready to go buy a full-fledged advertising program and there is a deep well of things that we can kind of continue to release out to the sales channels in order to get that done.
John Contoni - Jefferies - Analyst
Okay, thanks so much.
Operator
[Operator Instructions] Our next question today will come from Matthew Thornton of SunTrust. Please go ahead.
Anthony Duplisea - SunTrust - Analyst
[Technical Issues] taking the question. This is Anthony Duplisea on for Matt. Hoping you could discuss a little bit about the impact of some of the Board additions in 2019 and whether there's been any change to how you're thinking about partnerships and/or M&A.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Sure. This is Jeremy. So first question was Board impact, yeah we on-boarded three new Board Members in 2019. It's been great to have their energy and interest and experience. I think it's been a positive and that also leads us to 2020 where we've now announced that we're adding Christine Barone to the Board and long time Board Member Mariam Naficy has retired from the Board. And I think it's a positive to continue to bring in fresh eyes and fresh energy and new expertise. So that's why we're continuing on that path to continue to improve and refine our Board governance and leadership.
On partnerships and M&A, we continue to be very open to the idea of partnerships. We continue to have a good relationship with Apple, a good relationship with Grubhub, conversations are ongoing. And ultimately what we're focused on is providing profitable growth to shareholders as well as delivering a fantastic consumer experience. So when those two things align then we're always happy to do deals. And on the M&A side, we don't really comment or speculate on M&A. So we will pass on that one.
Anthony Duplisea - SunTrust - Analyst
Understood. Thanks.
Operator
And our next question today will come from Ygal Arounian of Wedbush. Please go ahead.
Ygal Arounian - Wedbush - Analyst
Hey guys. Thanks for taking the question. I may have missed some of this commentary. I had to [Phonetic] jump around a few calls. Just wanted to dig into the seasonality a little bit more, those unexpected in December. Maybe just trying to parse out and understand a little bit better what drove the weaker than expected seasonality in December? What were the factors that kind of led to the bounce back in January, just kind of the ins and outs of what were the moving pieces there? And then on PALs, they decelerated somewhat meaningfully from 3Q. It was the first time it's decelerated all year. Maybe just if you could talk about PALs and expectations there going forward as well it would be helpful. Thanks.
James Miln - Interim Chief Financial Officer
Hey, Ygal, it's James. So I'll cover seasonality and I think Jed will be able to talk about the PALs. So yeah, we talked about this in the letter. I mean I think it's important to help everyone understand that we are seeing more profound seasonality as our non-term contract structure has - is now had a full year and that becomes a bigger portion of our overall business. So - and we saw some of this a year ago, but it's a larger piece of our business now. And we've also been driving a lot of initiatives over the year to improve seasonality. And so the ongoing improvements we saw in retention throughout the year narrowed a little bit in the final month in December. And that was the thing that was not - we did not sort of see in our outlook and made us come in a little bit under where our expectations were.
Having said that, as we entered into January, we saw that retention improvement year-on-year actually grow back and expand a little bit as well. And so as we said, seeing sort of record level of retention and a great performance from our sales team in terms of acquiring new business in January. So we think that December, January thing is here to stay and probably as that business becomes bigger could also become more pronounced.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Yeah, I can take the PALs. Obviously, it's a combination of both our local and our multi loc that contribute to the PALs. But I would say specifically within multi loc the dynamic is not that multi loc advertisers come on and add necessarily a bunch of new locations to start spending money on. And in the fourth quarter, which by the way, is a very seasonally high quarter for them in both retail and restaurants, it really typically comes out from a revenue perspective in adding more budget into the existing locations that they have. And so I think you see a little bit of that dynamic happening in terms of PALs. We don't manage that number specifically on PALs. We're really concerned about how do we drive the most revenue in most profitable way and so that's kind of what was happening.
Ygal Arounian - Wedbush - Analyst
Okay. Thanks. That's very helpful.
Operator
Our next question will come from Sean Henderson of D.A. Davidson. Please go ahead.
Sean Henderson - D.A. Davidson - Analyst
Hi guys. Thank you for taking my question. So just one question from me, kind of a broader industry question. Could you guys provide a little color maybe on any of the effects felt or any impact from the rollout of CCPA and how that's kind of affecting your advertising business?
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Yeah, Sean, thanks for the question. First off, we don't sell any data that's covered by CCPA to third parties. And additionally, we've already made the necessary adjustments to comply with CCPA. So we don't see any major impacts to our business at this time.
Sean Henderson - D.A. Davidson - Analyst
Got it. Thank you very much.
Jeremy Stoppelman - Co-founder and Chief Executive Officer
Sure.
Operator