Summary
Yext closed FY2022 Q1 with revenue of $92.0 million, up 7.8% from the prior-year quarter. Gross profit rose 9.3% to $70.1 million, and gross margin improved 1.1 percentage points to 76.2%. The company still posted an operating loss, but it narrowed 41.0% to $17.2 million. Operating margin improved 15.5 percentage points to -18.7%. Net loss narrowed 39.7% to $17.6 million, and diluted EPS improved to -$0.14 per share. On a non-GAAP basis, net loss was $3.0 million, or $0.02 per share, compared with a non-GAAP net loss of $11.9 million, or $0.10 per share, a year earlier.
Demand metrics held up. Customer count increased 22% year over year to over 2,500 as of April 30, 2021. Annual recurring revenue rose 14% to $370 million, compared with $326 million a year earlier. Remaining performance obligations increased 22.7% to $360.6 million. Deferred revenue, current portion, rose 22.3% to $186.6 million. Cash generation swung sharply positive. Operating cash flow was $35.1 million, up from the prior-year quarter. Capital expenditures fell 64.9% to $7.5 million, reflecting lower spending on office spaces, including the new corporate headquarters in New York.
Yext used the quarter to push its AI search platform into new areas. The company launched Support Answers, a suite of enterprise search tools for customer support teams. It announced a joint digital event with Adobe for June 16, 2021. It also announced general availability of its Spring '21 Release, with features such as extractive QA, a website crawler, and developer tools for Answers. Other highlights include inclusion in Forrester's Now Tech Cognitive Search, Q2 2021 report, a leader designation on the Spring 2021 G2 Grid, and the #Back2Biz campaign aimed at businesses reopening as COVID restrictions loosen. Management said the roadmap will let Yext deliver AI search everywhere across the enterprise.
Guidance points to continued spending but no near-term profitability. For the second quarter of fiscal 2022, the company projects a non-GAAP net loss per share of $0.09 to $0.07, assuming 127.0 million weighted-average basic shares outstanding. For the full fiscal year 2022, it projects a non-GAAP net loss per share of $0.22 to $0.17, assuming 128.2 million weighted-average basic shares outstanding. The press release says the company raised its full-year fiscal 2022 guidance.
Risks remain tied to the pandemic and the pace of reopening. MD&A states that COVID-19 has disrupted business operations and that disruptions are expected to continue for an indefinite period. Most employees still work remotely, non-essential travel is restricted, and in-person marketing events have been canceled or replaced with virtual events. Those conditions may continue to hurt sales efforts and revenue growth rates. Customers in hard-hit industries such as retail and food services, as well as certain geographies such as Europe, may reduce, suspend, or delay technology spending, ask for concessions such as extended billing and payment terms, shorten contract duration, or choose not to renew. Because Yext recognizes revenue ratably, changes in near-term contracting activity may not fully show up in results until future periods. The company also operates in a competitive and rapidly changing environment.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $92.0M | $92.2M | -0.2% | $85.4M | +7.8% |
| Gross profit | $70.1M | $70.6M | -0.7% | $64.2M | +9.3% |
| Gross margin | 76.2% | 76.6% | -0.3 pp | 75.2% | +1.1 pp |
| Research & development | $13.9M | $14.5M | -4.5% | $14.4M | -3.6% |
| Sales & marketing | $55.2M | $57.2M | -3.6% | $58.5M | -5.7% |
| General & administrative | $18.3M | $18.0M | +1.7% | $20.5M | -10.3% |
| Total operating expenses | $87.4M | $89.7M | -2.6% | $93.4M | -6.4% |
| Operating income (loss) | -$17.2M | -$19.1M | +10.0% | -$29.2M | +41.0% |
| Operating margin | -18.7% | -20.8% | +2.0 pp | -34.2% | +15.5 pp |
| Net income (loss) | -$17.6M | -$18.3M | +3.7% | -$29.2M | +39.7% |
| Net margin | -19.2% | -19.9% | +0.7 pp | -34.2% | +15.1 pp |
| Diluted EPS | -$0.14 | — | — | — | — |
Risks
COVID-19 has disrupted operations and is expected to continue to negatively affect sales activities, with existing and potential customers in retail, food services and Europe reducing, suspending or delaying technology spending, renegotiating contracts or not renewing. The company also notes most employees remain remote and these disruptions could materially adversely impact future operating results.
Risk factors state the trailing twelve month dollar-based net retention rate continued to decline as of the three months ended April 30, 2021, driven by customers reducing subscriptions, not renewing, shortening contracts, requesting extended billing and payment terms or seeking more favorable rates. If renewal rates fall significantly below public market expectations, revenue and stock price could be harmed.
The company identified and continues to identify material weaknesses in internal control over financial reporting, including a material weakness associated with processes to calculate, record and account for sales commissions that continued to exist as of January 31, 2021. It cannot estimate how long remediation will take, and failure to remediate could impair reliability of financial reporting and investor confidence.
The company experienced historical annual revenue growth rates of 34%, 31% and 19% across the fiscal years ended January 31, 2019, 2020 and 2021, respectively, and FY2022 Q1 revenue increased 7.8% year over year to $91.99M. It cautions that historical revenue growth rates are not indicative of future growth and that failure to maintain consistent growth could hurt profitability and stock price.
A significant portion of revenue depends on third-party reseller customers whose efforts Yext does not control, and lower demand from certain resellers has and may continue to result in them not renewing, purchasing fewer licenses, renegotiating contracts or requesting extended billing and payment terms. In some international markets, resellers have exclusive rights, so failure to maintain those relationships could impair sales in those territories.
Because the platform is sold to enterprises with complex operating environments, the company faces long and unpredictable sales cycles, and COVID-19 has made sales cycles more complex. Delays or failures to complete sales could cause operating results and financial condition to suffer in a given period.
Growth depends on strategic relationships with approximately 200 Knowledge Network application providers, including Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp. Contracts may be canceled after notice or not renewed, and loss of access, especially to a key provider such as Google, could make the Knowledge Network less efficient, accurate or competitive and lead to customer losses.
With the October 2019 launch of Answers, Yext faces competition from established companies in enterprise search that may have greater experience, name recognition, more established customer relationships and larger customer bases. If competitors' products become more accepted or reach market earlier, revenue growth could be adversely affected.
The company depends on key executives including co-founders Howard Lerman and Brian Distelburger, and during fiscal year ended January 31, 2021 announced changes to sales and research and development leadership; departures may disrupt strategic initiatives. It also faces intense competition for software developers, sales and other skilled personnel, and stock price declines or volatility could impair ability to attract and retain employees.
International expansion exposes Yext to regulatory, economic and political risks, and Europe in particular has experienced weakness, a COVID-19 downturn and Brexit uncertainty. The company has operations and customers throughout Europe, and deterioration could delay or reduce customer technology spending.
Yext recently began offering capacity-based pricing for Pages and Answers and has limited experience determining optimal prices and contract length. If it must reduce prices or offer shorter contract durations due to competition, large customer discounts or international expansion, revenue, gross margin and cash flow could be adversely affected.
For fiscal years ended January 31, 2021, 2020 and 2019, top five customers accounted for approximately 9%, 11% and 14% of revenue, respectively. Losing a significant customer or customer consolidation could materially and adversely affect revenue and results.
SaaS KPIs
All quarters →Non-GAAP Gross Margin
Non-GAAP Operating Margin
ARR
Unearned Revenue
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.