Yext, Inc. Announces Third Quarter Fiscal 2022 Results

- Customer Count Increased 20% Year-over-Year to Over 2,700
Published: Dec. 2, 2021 at 4:15 PM EST

NEW YORK, Dec. 2, 2021 /PRNewswire/ -- Yext, Inc. (NYSE: YEXT), the AI Search Company, today announced its results for the three months ended October 31, 2021, or the Company's third quarter of fiscal 2022.

Yext logo. (PRNewsFoto/Yext) (PRNewsFoto/Yext)
Yext logo. (PRNewsFoto/Yext) (PRNewsFoto/Yext)

"We are on the road to recovery," said Howard Lerman, Founder and CEO of Yext. "The solid results we delivered in the third quarter reflect strong execution against our growth plans. Answers is growing quickly, our Listings business is recovering, and our land-and-expand sales strategy is working. That, coupled with new growth vectors yet to tap, make us optimistic about the future."

Third Quarter Fiscal 2022 Highlights:

  • Revenue of $99.5 million, a 12% increase, compared to $89.1 million reported in the third quarter fiscal 2021.
  • Gross Profit of $74.3 million, a 10% increase, compared to $67.4 million reported in the third quarter fiscal 2021. Gross margin of 74.6%, compared to 75.7% reported in the third quarter fiscal 2021.
  • Net Loss and Non-GAAP Net Loss:
  • Net Loss Per Share and Non-GAAP Net Loss Per Share:
  • Balance Sheet: Cash and cash equivalents of $230 million as of October 31, 2021. Unearned revenue of $151 million as of October 31, 2021, compared to $129 million as of October 31, 2020.
  • Remaining Performance Obligations ("RPO"): RPO of $337 million as of October 31, 2021. RPO expected to be recognized over the next 24 months of $315 million with the remaining balance expected to be recognized thereafter. RPO does not include amounts under contract subject to certain accounting exclusions.
  • Cash Flow: Net cash used in operating activities was $9.7 million for the three months ended October 31, 2021, compared to net cash used in operating activities of $7.4 million for the three months ended October 31, 2020.

Readers are encouraged to review the tables labeled "Reconciliation of GAAP to Non-GAAP Financial Measures" at the end of this release.

Recent Business Highlights:

  • Announced that Samsung's Net Promoter Score increased after optimizing its help site with Yext Support Answers.
  • Announced that People's United Bank experienced ROI from Answers site search integration between Yext, Virtusa, and Adobe.
  • Announced collaboration with Acquia, enabling businesses to seamlessly implement AI-powered search experiences on websites built with Acquia Drupal Cloud.
  • Announced expansion of public sector efforts with new AI search solutions and team hires, building on successful work with the World Health Organization and State of New Jersey.
  • Launched Financial Services Cloud, highlighted by guided AI-powered search solution.
  • Announced that Yext continued to climb in the enterprise search software category on the Fall 2021 G2 Grid® Report by G2.com, Inc., a leading software review platform.
  • Launched AI-Powered "Find-a-Doc" solution to improve the pre-appointment patient experience when searching for healthcare providers.
  • Announced that Yext's AI search-powered website won a 2021 WebAward for Outstanding Website.
  • Customer count, which excludes our small business and third-party reseller customers, increased 20% year-over-year to over 2,700 as of October 31, 2021.
  • Annual recurring revenue, or ARR, increased 12% year-over-year to $387 million as of October 31, 2021, compared to $346 million as of October 31, 2020.

Financial Outlook:

Yext is also providing the following guidance for its fourth fiscal quarter ending January 31, 2022 and the fiscal year ending January 31, 2022.

  • Fourth Quarter Fiscal 2022 Outlook:
  • Full Year Fiscal 2022 Outlook:

Conference Call Information

Yext will host a conference call today at 4:30 P.M. Eastern Time (1:30 P.M. Pacific Time) to discuss its financial results with the investment community. A live webcast of the call will be available on the Yext Investor Relations website at http://investors.yext.com. A live dial-in is available domestically at (877) 883-0383 and internationally at (412) 902-6506, passcode 3063525.

A replay will be available domestically at (877) 344-7529 or internationally at (412) 317-0088, passcode 10161868, until midnight (ET) December 9, 2021.

About Yext

Yext (NYSE: YEXT) is the AI Search Company and is on a mission to transform the enterprise with AI search.

With the explosion of information and data online, search has never been more important. However, while the world of consumer search has innovated over time, enterprise search has not. In fact, the majority of enterprise search is powered by outdated keyword search technology that only scans for keywords and delivers a list of hyperlinks rather than actually answering questions.

Yext, the AI Search Company, offers a modern, AI-powered Answers Platform that understands natural language so that when people ask questions about a business online they get direct answers – not links.

Brands like Verizon, Vanguard, Subway and Marriott — as well as organizations like the U.S. State Department and World Health Organization — trust Yext to radically improve their business with answers-led AI search.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This release includes forward-looking statements including, but not limited to, statements regarding our revenue, non-GAAP net loss and shares outstanding for our fourth quarter and full year fiscal 2022 in the paragraphs under "Financial Outlook" above, statements regarding the impact of the COVID-19 pandemic on our business and results of operations and other statements regarding our expectations regarding the growth of our company, our market opportunity, product roadmap, sales efficiency efforts and our industry.  In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential," "might," "would," "continue," or the negative of these terms or other comparable terminology.  Actual events or results may differ from those expressed in these forward-looking statements, and these differences may be material and adverse.

We have based the forward-looking statements contained in this release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, strategy, short- and long-term business operations, prospects, business strategy and financial needs.  Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, the impact of the COVID-19 pandemic and its variants on U.S. and global markets, our business, operations, financial results, cash flow, demand for our products, sales cycles, and customer acquisition and retention; our ability to renew and expand subscriptions with existing customers especially enterprise customers and attract new customers generally; our ability to successfully expand and compete in new geographies and industry verticals; our ability to expand and scale our sales force; our ability to expand our service and application provider network; our ability to develop new product and platform offerings to expand our market opportunity, including with Yext Answers; our ability to release new products and updates that are adopted by our customers; our ability to manage our growth effectively; weakened or changing global economic conditions; the number of options exercised by our employees and former employees; and the accuracy of the assumptions and estimates underlying our financial projections.  For a detailed discussion of these and other risk factors, please refer to the risks detailed in our filings with the Securities and Exchange Commission, including, without limitation, our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K, which are available at http://investors.yext.com and on the SEC's website at https://www.sec.gov.  Further information on potential risks that could affect actual results will be included in other filings we make with the SEC from time to time. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this release relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date hereof or to conform such statements to actual results or revised expectations, except as required by law.

Non-GAAP Measurements

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables include non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative), non-GAAP operating expenses (sales and marketing, research and development, general and administrative) as a percentage of revenue, non-GAAP loss from operations, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP net income (loss) as a percentage of revenue, which are referred to as non-GAAP financial measures.

These non-GAAP financial measures are not calculated in accordance with GAAP as they have been adjusted to exclude the effects of stock-based compensation expenses. Non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative) as a percentage of revenue, non-GAAP operating margin, and non-GAAP net income (loss) as a percentage of revenue are calculated by dividing the applicable non-GAAP financial measure by revenue. Non-GAAP net income (loss) per share is defined as non-GAAP net income (loss) on a per share basis. See "Reconciliation of GAAP to Non-GAAP Financial Measures" for a discussion of the applicable weighted-average shares outstanding.

We believe these non-GAAP financial measures provide investors and other users of our financial information consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our results of operations. With respect to non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative) as a percentage of revenue, non-GAAP operating margin and non-GAAP net loss as a percentage of revenue, we believe these non-GAAP financial measures are useful in evaluating our profitability relative to the amount of revenue generated, excluding the impact of stock-based compensation expense. We also believe non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics eliminate the effects of stock-based compensation, which may vary for reasons unrelated to overall operating performance.

We use these non-GAAP financial measures in conjunction with traditional GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, and to evaluate the effectiveness of our business strategies. Our definition may differ from the definitions used by other companies and therefore comparability may be limited.  In addition, other companies may not publish this or similar metrics.  Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.

These non-GAAP financial measures may be limited in their usefulness because they do not present the full economic effect of our use of stock-based compensation. We compensate for these limitations by providing investors and other users of our financial information a reconciliation of the non-GAAP financial measure to the most closely related GAAP financial measures. However, we have not reconciled the non-GAAP guidance measures disclosed under "Financial Outlook" to their corresponding GAAP measures because certain reconciling items such as stock-based compensation and the corresponding provision for income taxes depend on factors such as the stock price at the time of award of future grants and thus cannot be reasonably predicted. Accordingly, reconciliations to the non-GAAP guidance measures is not available without unreasonable effort. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP net loss and non-GAAP net loss per share in conjunction with net loss and net loss per share.

Operating Metrics

This press release also includes certain operating metrics that we believe are useful in providing additional information in assessing the overall performance of our business.

Customer count is defined as the total number of customers with contracts executed as of the last day of the reporting period and a unique administrative account identifier on the Yext platform. We believe that customer count provides insight into our ability to grow our enterprise and mid-market customer base. As such, customer count excludes third-party reseller customers and small businesses customers as well as customers only receiving free trials.

Annual recurring revenue, or ARR, is defined as the annualized recurring amount of all contracts executed as of the last day of the reporting period. The recurring amount of a contract is determined based upon the terms of a contract and is calculated by dividing the amount of a contract by the term of the contract and then annualizing such amount.  The calculation assumes no subsequent changes to the existing subscription and excludes amounts related to overages above the contractual minimum commitment. Contracts include portions of professional services contracts that are recurring in nature. ARR is independent of historical revenue, unearned revenue, remaining performance obligations or any other GAAP financial measure over any period. It should be considered in addition to, not as a substitute for, nor superior to or in isolation from, these measures and other measures prepared in accordance with GAAP. We believe ARR provides insight into the performance of our recurring revenue business model while mitigating for fluctuations in billing and contract terms.

For Further Information Contact:

Investor Relations:
Jeff Houston
IR@yext.com

Public Relations:
Amanda Kontor
PR@yext.com

YEXT, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)




October 31, 2021


January 31, 2021

Assets




Current assets:




Cash and cash equivalents

$

229,526



$

230,411


Accounts receivable, net of allowances of $2,604 and $2,528, respectively

62,142



97,455


Prepaid expenses and other current assets

18,060



17,993


Costs to obtain revenue contracts, current

33,680



30,325


Total current assets

343,408



376,184


Property and equipment, net

77,102



80,344


Operating lease right-of-use assets

97,228



104,844


Costs to obtain revenue contracts, non-current

27,541



22,692


Goodwill

4,683



4,842


Intangible assets, net

298



767


Other long term assets

5,945



6,316


Total assets

$

556,205



$

595,989


Liabilities and stockholders' equity




Current liabilities:




Accounts payable, accrued expenses and other current liabilities

$

50,980



$

54,186


Unearned revenue, current

151,464



191,810


Operating lease liabilities, current

18,471



14,165


Total current liabilities

220,915



260,161


Operating lease liabilities, non-current

114,548



123,584


Other long term liabilities

5,729



5,009


Total liabilities

341,192



388,754


Commitments and contingencies




Stockholders' equity:




Preferred stock, $0.001 par value per share; 50,000,000 shares authorized at October 31, 2021 and January 31, 2021; zero shares issued and outstanding at October 31, 2021 and January 31, 2021




Common stock, $0.001 par value per share; 500,000,000 shares authorized at October 31, 2021 and January 31, 2021; 136,178,652 and 130,494,513 shares issued at October 31, 2021 and January 31, 2021, respectively; 129,673,318 and 123,989,179 shares outstanding at October 31, 2021 and January 31, 2021, respectively

136



130


Additional paid-in capital

813,093



733,933


Accumulated other comprehensive income

1,183



2,422


Accumulated deficit

(587,494)



(517,345)


Treasury stock, at cost

(11,905)



(11,905)


Total stockholders' equity

215,013



207,235


Total liabilities and stockholders' equity

$

556,205



$

595,989


YEXT, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share data)
(Unaudited)




Three months ended October 31,


Nine months ended October 31,


2021


2020


2021


2020

Revenue

$

99,529



$

89,061



$

289,645



$

262,467


Cost of revenue

25,255



21,639



73,724



64,807


Gross profit

74,274



67,422



215,921



197,660


Operating expenses:








Sales and marketing

58,548



56,646



172,292



171,215


Research and development

17,986



14,475



50,343



43,641


General and administrative

22,094



18,061



61,284



57,993


Total operating expenses

98,628



89,182



283,919



272,849


Loss from operations

(24,354)



(21,760)



(67,998)



(75,189)


Interest income

5



9



15



524


Interest expense

(113)



(184)



(403)



(475)


Other expense, net

(191)



(38)



(1,018)



(545)


Loss from operations before income taxes

(24,653)



(21,973)



(69,404)



(75,685)


(Provision for) benefit from income taxes

(273)



(68)



(745)



(696)


Net loss

$

(24,926)



$

(22,041)



$

(70,149)



$

(76,381)










Net loss per share attributable to common stockholders, basic and diluted

$

(0.19)



$

(0.18)



$

(0.55)



$

(0.64)


Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted

128,570,237



120,721,555



126,967,336



118,594,452










Other comprehensive (loss) income:








Foreign currency translation adjustment

$

(1,586)



$

(497)



$

(1,239)



$

420


Total comprehensive loss

$

(26,512)



$

(22,538)



$

(71,388)



$

(75,961)


YEXT, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)




Nine months ended October 31,


2021


2020

Operating activities:




Net loss

$

(70,149)



$

(76,381)


Adjustments to reconcile net loss to net cash used in operating activities:




Depreciation and amortization expense

12,490



7,539


Bad debt expense

826



2,376


Stock-based compensation expense

54,455



53,889


Amortization of operating lease right-of-use assets

6,934



9,367


Other, net

506



589


Changes in operating assets and liabilities:




Accounts receivable

34,317



30,302


Prepaid expenses and other current assets

965



(5,023)


Costs to obtain revenue contracts

(8,654)



4,743


Other long term assets

43



(1,350)


Accounts payable, accrued expenses and other current liabilities

3,841



(7,192)


Unearned revenue

(39,423)



(49,592)


Operating lease liabilities

(4,041)



2,526


Other long term liabilities

615



4,485


Net cash used in operating activities

(7,275)



(23,722)


Investing activities:




Capital expenditures

(12,333)



(53,946)


Net cash used in investing activities

(12,333)



(53,946)


Financing activities:




Proceeds from exercise of stock options

15,869



13,145


Payments of deferred financing costs

(263)



(869)


Proceeds, net from employee stock purchase plan withholdings

4,059



4,811


Net cash provided by financing activities

19,665



17,087


Effect of exchange rate changes on cash and cash equivalents

(942)



1,401


Net decrease in cash and cash equivalents

(885)



(59,180)


Cash and cash equivalents at beginning of period

230,411



268,176


Cash and cash equivalents at end of period

$

229,526



$

208,996


YEXT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(
In thousands)
(Unaudited)




Three months ended October 31, 2021

Costs and expenses

GAAP


Stock-Based Compensation Expense


Non-GAAP

Cost of revenue

$

25,255



$

(1,840)



$

23,415


Sales and marketing

$

58,548



$

(6,757)



$

51,791


Research and development

$

17,986



$

(5,469)



$

12,517


General and administrative

$

22,094



$

(5,389)



$

16,705






Three months ended October 31, 2021

Costs and expenses as a percentage of revenue

GAAP



Stock-Based Compensation Expense



Non-GAAP

Cost of revenue


25.4%



(1.9)%




23.5%


Sales and marketing


59%



(7)%




52%


Research and development


18%



(6)%




12%


General and administrative


22%



(5)%




17%






Three months ended October 31, 2020

Costs and expenses

GAAP


Stock-Based Compensation Expense


Non-GAAP

Cost of revenue

$

21,639



$

(1,513)



$

20,126


Sales and marketing

$

56,646



$

(9,410)



$

47,236


Research and development

$

14,475



$

(4,228)



$

10,247


General and administrative

$

18,061



$

(4,136)



$

13,925






Three months ended October 31, 2020

Costs and expenses as a percentage of revenue

GAAP


Stock-Based Compensation Expense



Non-GAAP

Cost of revenue


24.3%



(1.7)%




22.6%

Sales and marketing


64%



(11)%




53%

Research and development


16%



(5)%




11%

General and administrative


20%



(4)%




16%

____________________________

Note: Numbers rounded for presentation purposes. 

YEXT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited)




Nine months ended October 31, 2021

Costs and expenses

GAAP


Stock-Based Compensation Expense


Non-GAAP

Cost of revenue

$

73,724


$

(5,597)


$

68,127

Sales and marketing

$

172,292


$

(19,635)


$

152,657

Research and development

$

50,343


$

(15,285)


$

35,058

General and administrative

$

61,284


$

(13,938)


$

47,346








Nine months ended October 31, 2021

Costs and expenses as a percentage of revenue

GAAP


Stock-Based Compensation Expense


Non-GAAP

Cost of revenue

25.5%


(2.0)%


23.5%

Sales and marketing

60%


(7)%


53%

Research and development

17%


(5)%


12%

General and administrative

21%


(5)%


16%








Nine months ended October 31, 2020

Costs and expenses

GAAP


Stock-Based Compensation Expense


Non-GAAP

Cost of revenue

$

64,807


$

(4,053)


$

60,754

Sales and marketing

$

171,215


$

(25,151)


$

146,064

Research and development

$

43,641


$

(12,104)


$

31,537

General and administrative

$

57,993


$

(12,581)


$

45,412








Nine months ended October 31, 2020

Costs and expenses as a percentage of revenue

GAAP


Stock-Based Compensation Expense


Non-GAAP

Cost of revenue

24.7%


(1.6)%


23.1%

Sales and marketing

65%


(9)%


56%

Research and development

17%


(5)%


12%

General and administrative

22%


(5)%


17%

____________________________

Note: Numbers rounded for presentation purposes.

YEXT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited)




Three months ended October 31,


Nine months ended October 31,


2021


2020


2021


2020

Gross profit








GAAP gross profit

$

74,274



$

67,422



$

215,921



$

197,660


Plus: Stock-based compensation expense

1,840



1,513



5,597



4,053


Non-GAAP gross profit

$

76,114



$

68,935



$

221,518



$

201,713










Gross margin








GAAP gross margin

74.6%



75.7%



74.5%



75.3%


Plus: Stock-based compensation expense

1.9%



1.7%



2.0%



1.6%


Non-GAAP gross margin

76.5%



77.4%



76.5%



76.9%










Operating expenses








GAAP operating expenses

$

98,628



$

89,182



$

283,919



$

272,849


Less: Stock-based compensation expense

(17,615)



(17,774)



(48,858)



(49,836)


Non-GAAP operating expenses

$

81,013



$

71,408



$

235,061



$

223,013










Operating expenses as a percentage of revenue







GAAP operating expenses as a percentage of revenue

99%



100%



98%



104%


Less: Stock-based compensation expense

(18)%



(20)%



(17)%



(19)%


Non-GAAP operating expenses as a percentage of revenue

81%



80%



81%



85%










Loss from operations








GAAP loss from operations

$

(24,354)



$

(21,760)



$

(67,998)



$

(75,189)


Plus: Stock-based compensation expense

19,455



19,287



54,455



53,889


Non-GAAP loss from operations

$

(4,899)



$

(2,473)



$

(13,543)



$

(21,300)










Operating margin (Loss from operations as a percentage of revenue)





GAAP operating margin

(24)%



(24)%



(24)%



(29)%


Plus: Stock-based compensation expense

19%



21%



19%



21%


Non-GAAP operating margin

(5)%



(3)%



(5)%



(8)%










____________________________

Note: Numbers rounded for presentation purposes.

YEXT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except share and per share data)
(Unaudited)




Three months ended October 31,


2021


2020

GAAP net loss

$

(24,926)



$

(22,041)


Plus: Stock-based compensation expense

19,455



19,287


Non-GAAP net loss

$

(5,471)



$

(2,754)






GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.19)



$

(0.18)


Stock-based compensation expense per share

0.15



0.16


Non-GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.04)



$

(0.02)






Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted

128,570,237



120,721,555




Three months ended October 31,


2021


2020

GAAP net loss as a percentage of revenue


(25.0)%




(24.7)%


Plus: Stock-based compensation expense


19.5%




21.6%


Non-GAAP net loss as a percentage of revenue


(5.5)%




(3.1)%









Nine months ended October 31,


2021


2020

GAAP net loss

$

(70,149)



$

(76,381)


Plus: Stock-based compensation expense

54,455



53,889


Non-GAAP net loss

$

(15,694)



$

(22,492)






GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.55)



$

(0.64)


Stock-based compensation expense per share

0.43



0.45


Non-GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.12)



$

(0.19)






Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted

126,967,336



118,594,452




Nine months ended October 31,


2021


2020

GAAP net loss as a percentage of revenue


(24.2)%




(29.1)%


Plus: Stock-based compensation expense


18.8%




20.5%


Non-GAAP net loss as a percentage of revenue


(5.4)%




(8.6)%








____________________________

Note: Numbers rounded for presentation purposes.

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