Yext, Inc. Announces Second Quarter Fiscal 2018 Results

yext blog image
  • Second Quarter Revenue of $40.8 Million, an Increase of 38% Year-Over-Year

  • Gross Margin of 74.1% as Compared to 69.3% in the Year Ago Quarter

  • Issues Revenue Guidance of $43.5 Million – $44.0 Million for the Third Quarter Fiscal 2018

Yext, Inc. (NYSE: YEXT), the leader in digital knowledge management, today announced its results for the three months ended July 31, 2017, or the Company’s second quarter of fiscal 2018.

We had a great second quarter, highlighted by strong revenue growth of 38% over the second quarter last year and the continued expansion of our gross margins, which increased 480 basis points over the year ago quarter,” said Howard Lerman, Co-Founder and Chief Executive Officer of Yext.

We are the leader in a new category called digital knowledge management and we are continuing to benefit from an important macro trend: the rise of intelligent search.

During the second quarter, we opened our office in Japan, launched our App Directory and added over 50 new Enterprise logos. We have also continued our progress in building a world class sales organization with several new hires, including a GVP to lead both our eastern region and the Financial services vertical; an EVP for mid-markets and the small business channel; and the Chairman and CEO of Yext Japan.

“Our addressable market is at least $10 billion and growing, and we will continue to invest in expanding our distribution capabilities in the second half of the year, which we believe will position us for long-term success.”

Second Quarter Fiscal 2018 Highlights:

  • Revenue of $40.8 million, a 38% increase as compared to the $29.6 million reported in second quarter fiscal 2017. The revenue increase this quarter was primarily due to the continued growth of our customer base and higher revenue from existing customers, primarily due to expanded subscriptions.

  • Gross Profit of $30.2 million, a 48% increase as compared to the $20.5 million reported in second quarter fiscal 2017. Gross margin of 74.1% as compared to the 69.3% reported in second quarter fiscal 2017.

  • Net Loss and Non-GAAP Net Loss:

    • Net loss of $16.4 million as compared to the $9.0 million net loss in second quarter fiscal 2017. The increased loss was driven by increased operating expenses, primarily in sales and marketing, due to efforts to acquire new customers.

    • Non-GAAP net loss of $11.4 million as compared to the $6.8 million non-GAAP net loss in the second quarter fiscal 2017.

  • Net Loss Per Share and Non-GAAP Net Loss Per Share:

    • Net loss per share of $0.18 based on 90.1 million weighted-average shares outstanding, compared to the net loss per share of $0.29 based on 31.0 million weighted-average shares outstanding in the second quarter fiscal 2017.

    • Non-GAAP net loss per share of $0.13 based on 90.1 million weighted-average shares outstanding at quarter end, as compared to the $0.22 non-GAAP net loss per share in the second quarter fiscal 2017 and based on 31.0 million weighted-average shares outstanding at quarter end.

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

  • Balance Sheet: Cash, cash equivalents and marketable securities of $127.3 million as of July 31, 2017.

  • Cash Flow: Cash used in operating activities for the second quarter of fiscal 2018 was $5.1 million as compared to cash used in operating activities of $5.3 million in the same period in fiscal 2017. The lesser use of cash in the current period reflects a greater source of cash from working capital.

Second Quarter Fiscal 2018 and Other Recent Business Highlights:

  • Managed approximately 22.9 million attributes and approximately 1.2 million locations on Yext’s digital knowledge platform as of July 31, 2017.

  • Launched the Yext App Directory, allowing customers to connect the digital knowledge they are managing within Yext to the other software systems used across their enterprise, with more than 20 self-serve, pre-built integrations with the world’s leading business technologies, including HubSpot, Zendesk, Smartling and Domo.

  • Expanded the global reach of our industry-leading PowerListings Network with new publishing partners in the United Kingdom (Yell, FindOpen), Germany (Das Ortliche, GoYellow.de) and Italy (PagineGialle, Virgilio).

  • Appointed Eiji Uda, a leading cloud computing expert with over three decades of enterprise technology experience at IBM, Softbank Commerce Corporation, and Salesforce.com, as Chairman and CEO of Yext in Japan, and opened an office in Tokyo, Japan, marking the first time Yext’s platform will be available to businesses headquartered in Asia.

  • Named #1 on the list of the 25 Best Small and Medium Workplaces in New York published by Fortune Magazine.

Financial Outlook:

Yext is also providing the following guidance for its third fiscal quarter ending October 31, 2017 and the fiscal year ending January 31, 2018.

  • Third Quarter Fiscal 2018 Outlook:

    • Revenue is projected to be $43.5 million to $44.0 million.

    • Non-GAAP net loss per share is projected to be $0.12 to $0.14, which assumes 90.2 million weighted-average common shares outstanding.

  • Full Year Fiscal 2018 Outlook:

    • Revenue is projected to be $169.5 million to $170.5 million, an increase from the Company’s previous expectation of $169.0 million to $170.0 million.

    • Non-GAAP net loss per share is projected to be $0.50 to $0.52, which assumes 90.5 million non-GAAP common shares outstanding.

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

Conference Call Information

Yext will host a conference call at 5:00 P.M. Eastern Time (2:00 P.M. Pacific Time) today to discuss its financial results. To join, participants may call 1.866.591.4891 (U.S. callers) or 1.409.350.3168 (international callers) using conference ID number 73720820. A live audio webcast of the call will also be available on the Investor Relations section of the Company’s website at investors.yext.com. A replay of the call will be available until Sunday, September 10, 2017 at 11:59 P.M. Eastern Time by dialing 1.855.859.2056 (U.S. callers) or 1.404.537.3406 (international) and entering passcode 73720820.

About Yext

Yext puts business on the map. Yext is defining a new category called digital knowledge management, which helps businesses manage all of the public facts that it wants consumers to know across the digital ecosystem. The Yext Knowledge Engine™ lets companies manage their digital knowledge in the cloud and sync it to over 100 services in the PowerListings Network®. Yext Listings, Pages, and Reviews help businesses around the globe facilitate face-to-face and digital interactions that boost brand awareness, drive foot traffic, and increase sales.

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 and non-GAAP net loss for our third quarter of fiscal 2018 and full-year fiscal 2018 in the paragraphs under “Financial Outlook” above, and other statements regarding our expectations regarding the growth of our company 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, our ability to renew existing customers and attract new customers; our ability to successfully compete in new geographies; our ability to recruit and retain our enterprise-level sales force; our ability to develop new product and platform offerings; and our ability to manage our growth effectively. 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, which is available at http://investors.yext.com and on the SEC’s website at http://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 net loss and non-GAAP net loss per share. Non-GAAP net loss and non-GAAP net loss per share are financial measures that are not calculated in accordance with GAAP. We define these non-GAAP financial measures as our GAAP net loss as adjusted to exclude the effects of stock-based compensation expenses. 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. We also believe these 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, to evaluate the effectiveness of our business strategies and to communicate with our Board of Directors concerning our financial performance. 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 non-GAAP net loss to net loss and non-GAAP net loss per share to net loss per share, 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.

 

For Further Information Contact:

James Hart

Yext Investor Relations

212.994.6768

IR@yext.com

 

See first-hand how the Yext Knowledge Engine can help you better manage your digital knowledge and attract more customers.
Thank you for requesting a demo of the Yext Knowledge Engine. Someone will be in touch shortly to find a time that works for you.