Reports Record Fourth Quarter Revenue of $63.8 Million, an Increase of 33% Year-Over-Year
Reports Record Full Year Fiscal 2019 Revenue of $228.3 million, an Increase of 34% Year-Over-Year
Reports Positive Cash Flow from Operations for Fourth Quarter and Full Year
Remaining Performance Obligations Exceeds a Quarter of a Billion Dollars
Company Adopts ASC 606 Standard for Current Period Results
Issues Revenue Guidance for the First Quarter Fiscal 2020 and the Full Year Fiscal 2020
NEW YORK, March 6, 2019 /PRNewswire/ — Yext, Inc. (NYSE: YEXT), the leader in digital knowledge management (DKM), today announced its results for the three months ended January 31, 2019, or the Company's fourth quarter, and the fiscal year that ended in that same period.
"We had another record quarter highlighted by the addition of 128 new Enterprise logos – the most we've added in any quarter in our history. The fourth quarter reflects our increasing momentum throughout fiscal 2019, with nearly 350 new Enterprise accounts signed," said Howard Lerman, Founder and Chief Executive Officer of Yext.
"Brands around the world are catching on to the revolution of DKM, including thought leaders like Morgan Stanley. During the quarter, Morgan Stanley announced its selection of Yext as the designated platform to manage facts such as their areas of focus, certifications, language skills, investment approach and more for its 15,000 wealth advisors.
"Today, we manage more than 185 million facts about our customers in our platform, providing brand-verified answers in services like Google, Siri, Alexa and WeChat to consumers looking for information verified by the source of truth. We will continue to invest in expanding our services and features, our geographic reach, and the endpoints in our Knowledge Network as we continue our mission to provide perfect answers everywhere."
Fourth Quarter Fiscal 2019 Highlights:
Note to the reader: Yext adopted the revenue accounting standard ASC 606 for its fiscal year ended January 31, 2019, and the results for both the fourth quarter and fiscal year ended January 31, 2019, which we refer to as the current periods, are presented on that basis. Yext elected the modified retrospective approach for adoption and our results for the fiscal year ended January 31, 2018 and all prior periods continue to be presented on the basis of ASC 605. Because we previously issued revenue and non-GAAP net loss per share guidance for the current periods on the basis of ASC 605, these results are also presented below on the basis of ASC 605 to facilitate comparability to the guidance. See the tables labeled "Reconciliation of Impacts from the Adoption of ASC 606" at the end of this release.
Revenue of $63.8 million, a 33% increase as compared to the $48.0 million reported in fourth quarter fiscal 2018. The adoption of ASC 606 did not have a material impact on revenue in the quarter.
Gross Profit of $48.1 million, a 34% increase as compared to the $35.8 million reported in fourth quarter fiscal 2018. Gross margin of 75.5% as compared to the 74.6% reported in fourth quarter fiscal 2018.
Net Loss and Non-GAAP Net Loss:
Net loss of $15.5 million as compared to the $17.0 million net loss in fourth quarter fiscal 2018. The improvement reflects a benefit to sales and marketing expenses associated with the adoption of ASC 606, as commissions and related costs are now being amortized over a longer period.
Non-GAAP net loss of $3.2 million as compared to the $9.6 million non-GAAP net loss in the fourth quarter fiscal 2018. The improvement was primarily due to the same factors that affected net loss.
- Net Loss Per Share and Non-GAAP Net Loss Per Share:
Net loss per share of $0.15 based on 101.4 million weighted-average shares outstanding, as compared to the net loss per share of $0.18 in the fourth quarter fiscal 2018 based on 92.4 million weighted-average shares outstanding.
Non-GAAP net loss per share of $0.03 as reported under ASC 606, based on 101.4 million weighted-average shares outstanding, as compared to the non-GAAP net loss per share of $0.10 in the fourth quarter fiscal 2018 based on 92.4 million weighted-average shares outstanding.
Non-GAAP net loss per share would have been $0.08 if reported on the basis of ASC 605.
Balance Sheet: Cash, cash equivalents and marketable securities of $142.8 million as of January 31, 2019. The adoption of ASC 606 did not alter the reported cash balance.
Cash Flow: Cash provided by operating activities for the fourth quarter of fiscal 2019 was $30.8 million as compared to cash used in operating activities of $2.1 million in the same period in fiscal 2018. The improvement in cash flow in the current period reflects improved working capital, driven primarily by a higher amount of unearned revenue.
Remaining Performance Obligations ("RPO"): RPO as of January 31, 2019 was $262.0 million, with $242.9 million expected to be recognized over the next 24 months and the balance to be recognized thereafter. RPO does not include amounts under contracts subject to certain accounting exclusions.
Full Year Fiscal 2019 Highlights:
Revenue of $228.3 million as reported under ASC 606, or $228.8 million if reported on the basis of ASC 605, reflects a 34% increase as compared to the $170.2 million reported in fiscal year ended January 31, 2018.
Gross Profit of $170.9 million, a 35% increase as compared to the $126.1 million reported in fiscal year ended January 31, 2018. Gross margin of 74.9% as compared to the 74.1% reported in fiscal year ended January 31, 2018.
Net Loss and Non-GAAP Net Loss:
Net loss of $74.8 million as compared to the $66.6 million net loss in fiscal year ended January 31, 2018.
Non-GAAP net loss of $30.6 million as compared to the $44.2 million non-GAAP net loss in the fiscal year ended January 31, 2018.
- Net Loss Per Share and Non-GAAP Net Loss Per Share:
Net loss per share of $0.76 based on 98.4 million weighted-average shares outstanding, as compared to the net loss per share of $0.85 in the fiscal year ended January 31, 2018 based on 78.6 million weighted-average shares outstanding.
Non-GAAP net loss per share of $0.31 as reported under ASC 606, based on 98.4 million weighted-average shares outstanding at January 31, 2019, as compared to the non-GAAP net loss per share of $0.47 in the fiscal year ended January 31, 2018 based on 94.0 million non-GAAP shares outstanding at January 31, 2018.
Non-GAAP net loss per share would have been $0.40 if reported on the basis of ASC 605.
- Cash Flow: Cash provided by operating activities for the fiscal year ended January 31, 2019 was $5.2 million as compared to cash used in operating activities of $32.4 million for the fiscal year ended January 31, 2018.
As the Company adopted ASC 606 on a modified retrospective basis, operating results for the fiscal year ended January 31, 2019 are presented under ASC 606, whereas operating results for the fiscal year ended January 31, 2018 are presented under ASC 605. Readers are encouraged to review the tables labeled "Reconciliation of GAAP to Non-GAAP Financial Measures" and "Reconciliation of Impacts from the Adoption of ASC 606" at the end of this release.
Recent Business Highlights:
Stored more than 185 million facts1 in Yext's digital knowledge platform as of January 31, 2019, an increase of approximately 50% as compared to January 31, 2018.
Announced the appointment of Wendi Sturgis, Yext's Chief Client Officer, as CEO of Yext Europe, as well as a tripling in the number of enterprise customers over the past year served by its Southern Europe region across a diverse set of industries, including luxury, retail, food, hospitality, and financial services.
Unveiled an expansion of Yext's presence in the Washington D.C.-area with an office located in Rosslyn, Virginia, as well as a plan to hire hundreds of people over a five year period in that region.
Issued our Spring Product Release, providing new services and features to our platform, including: integrations with some of the largest global digital services used by Chinese consumers when traveling overseas, such as Baidu Map (Overseas), Fliggy, CK Map and PIRT; the ability for our customers to monitor and answer questions their consumers ask about them on Google in Google's Q&A search results; general access for self-serve, AI-ready Pages, letting our customers create smart landing pages on their website for any entity stored in Yext.
Expanded the Yext Knowledge Network through an integration with Snapchat, allowing businesses to power the facts about them in Snapchat Context Cards and Organic Venue Geofilters directly from Yext.
Named to the Best Workplaces in Technology list by Fortune Magazine and Great Place to Work®.
- Facts represent the data stored by customers in our Knowledge Manager. We previously reported a metric called attributes, which aggregated certain data in our Knowledge Manager and reported that data as a single attribute. Facts reflects all of the discrete data elements provided by our customers. For example, a customer's opening hours from Monday through Friday is reflected as five facts.
Financial Outlook:
Yext is also providing the following guidance for its first fiscal quarter ending April 30, 2019 and the fiscal year ending January 31, 2020. All guidance is provided on the basis of ASC 606.
- First Quarter Fiscal 2020 Outlook:
Revenue is projected to be $66.0 million to $67.0 million. This compares to $51.0 million of revenue from the first quarter of fiscal 2019, which reflects the adoption of ASC 606.
Non-GAAP net loss per share is projected to be $0.09 to $0.11, which assumes 103.1 million weighted-average shares outstanding. This compares to a non-GAAP net loss per share of $0.10 from the first quarter of fiscal 2019, which reflects the adoption of ASC 606.
- Full Year Fiscal 2020 Outlook:
Revenue is projected to be $295 million to $300 million.
Non-GAAP net loss per share is projected to be $0.40 to $0.44, which assumes 105.9 million weighted-average shares outstanding.
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 1.877.883.0383 (U.S. callers) or 1.412.902.6506 (international callers) using conference ID number 7870330. 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 March 13, 2019 at 11:59 P.M. Eastern Time by dialing 1.877.344.7529 (U.S. callers) or 1.412.317.0088 (international) and entering passcode 10129114.
About Yext:
Yext, Inc. (NYSE: YEXT) is the leading Digital Knowledge Management (DKM) platform. Our mission is to give companies control over their brand experiences across the digital universe of maps, apps, search engines, voice assistants, and other intelligent services that drive consumer discovery, decision, and action. Today, thousands of businesses including brands like Taco Bell, Rite Aid, and Steward Health Care use the Yext Knowledge Engine™ to manage their digital knowledge in order to boost brand engagement, drive foot traffic, and increase sales.
Yext has been named a Best Place to Work by Fortune and Great Place to Work® as well as a Best Workplace for Women. Yext is headquartered in New York City with offices in Berlin, Chicago, Dallas, Geneva, London, Paris, San Francisco, Shanghai, Tokyo and the Washington, D.C. Area. For more information, visit yext.com.
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 first fiscal quarter 2020 and full year fiscal 2020 in the paragraphs under "Financial Outlook" above, and other statements regarding our expectations regarding the growth of our company, our future hiring, our market opportunity 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 expand and compete in new geographies; our ability to recruit and retain our enterprise-level sales force; our ability to expand our publishing network; our ability to develop new product and platform offerings to expand our market opportunity; the impact of newly adopted accounting standards on our financial results and guidance; our ability to release product updates that are adopted by our customers; our ability to manage our growth effectively; 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 https://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 net loss, non-GAAP net loss per share and non-GAAP net loss margin. Non-GAAP net loss, non-GAAP net loss per share and non-GAAP net loss margin are financial measures that are not calculated in accordance with GAAP. We define these non-GAAP net loss financial measures as our GAAP net loss as adjusted to exclude the effects of stock-based compensation expenses. Non-GAAP net loss per share is defined as non-GAAP net 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. Non-GAAP net loss margin is defined as non-GAAP net loss divided by revenue. 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 net loss margin, we believe this metric is useful in evaluating our profitability relative to the amount of revenue generated, excluding the impact of stock-based compensation expense. 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, non-GAAP net loss per share to net loss per share and non-GAAP net loss margin to net loss margin, 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
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