Summary
Yext posted first quarter fiscal 2023 revenue of $98.8 million, up 7.4% from $92.0 million in the prior-year quarter. Gross profit rose 5.6% to $74.1 million from $70.1 million. Gross margin slipped to 75.0% from 76.2%, a decline of 1.3 percentage points. The company credited new customer subscriptions and expansion with existing customers for the top line move. Customer count increased 11% year over year to over 2,830 as of April 30, 2022. Total annual recurring revenue reached $387 million, up 5% from $370 million a year earlier. Direct customer ARR rose 7% to $310.3 million, while third-party reseller ARR fell 3% to $76.7 million.
Profitability moved the other way. Operating loss widened to $25.5 million from $17.2 million in the prior-year quarter, a 48.0% larger loss. Net loss widened to $25.8 million from $17.6 million. Diluted net loss per share was $0.20, against $0.14 a year earlier. Operating margin was negative 25.8%, compared with negative 18.7%, down 7.1 percentage points. On a non-GAAP basis, net loss was $7.8 million versus $3.0 million, and non-GAAP net loss per share was $0.06 versus $0.02. The spread between the two sets of results comes from stock-based compensation expense, which the company strips out of its non-GAAP measures.
Cash generation fell. Operating cash flow was $17.9 million, down 49.1% from $35.1 million in the prior-year quarter. Capital expenditures were $1.6 million, down 78.0% from $7.5 million. The MD&A ties the operating cash flow change to working capital movements, including the timing of billings and cash collections. Deferred revenue, current, stood at $196.4 million, up 5.2% from $186.6 million a year earlier. Remaining performance obligations were $360.6 million, flat against the prior-year quarter. The company notes that RPO excludes amounts under contract subject to certain accounting exclusions.
Guidance covers the second fiscal quarter and the full fiscal year. For the second quarter ending July 31, 2022, the revenue outlook includes a negative impact of $1.8 million from foreign currency exchange rates. Second quarter non-GAAP net loss per share is projected at $0.06 to $0.05, assuming 124.6 million weighted-average basic shares outstanding. For the full fiscal year ending January 31, 2023, the revenue outlook includes a negative impact of $6.0 million from foreign currency exchange rates. Full year non-GAAP net loss per share is projected at $0.12 to $0.10, assuming 127.1 million weighted-average basic shares outstanding.
The quarter brought management and capital allocation changes. The board authorized a $100 million share repurchase program, and over $55 million has been repurchased to date, leaving roughly $45 million available as of June 9, 2022. David Rudnitsky resigned as Chief Revenue Officer effective June 7, 2022, and will assist in a transitional role until September 30, 2022. Brian Distelburger is serving as interim Chief Revenue Officer while a permanent replacement is sought. The company also launched a global startup program, partnered with Main Line Health, and announced general availability of its Spring 2022 Release.
Risk language centers on the pandemic and customer spending. Yext states that COVID-19 has significantly disrupted business operations for the company and its customers, and that the effects may continue. Existing and potential customers could reduce, suspend, or delay technology spending, ask to renegotiate contracts, shorten durations, or opt not to renew. The filing also flags weakened or changing global economic conditions, competition, and the ability to renew and expand subscriptions with enterprise customers. Foreign currency exchange rates are already a stated drag on the guidance, with a $1.8 million second quarter impact and a $6.0 million full year impact.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $98.8M | $100.9M | -2.1% | $92.0M | +7.4% |
| Gross profit | $74.1M | $76.4M | -3.0% | $70.1M | +5.6% |
| Gross margin | 75.0% | 75.7% | -0.7 pp | 76.2% | -1.3 pp |
| Research & development | $17.3M | $18.0M | -3.9% | $13.9M | +24.9% |
| Sales & marketing | $60.8M | $58.2M | +4.5% | $55.2M | +10.2% |
| General & administrative | $21.5M | $22.1M | -2.9% | $18.3M | +17.2% |
| Total operating expenses | $99.6M | $98.3M | +1.3% | $87.4M | +14.0% |
| Operating income (loss) | -$25.5M | -$22.0M | -16.1% | -$17.2M | -48.0% |
| Operating margin | -25.8% | -21.8% | -4.0 pp | -18.7% | -7.1 pp |
| Net income (loss) | -$25.8M | -$23.1M | -11.8% | -$17.6M | -46.6% |
| Net margin | -26.1% | -22.9% | -3.3 pp | -19.2% | -7.0 pp |
| Diluted EPS | -$0.20 | — | — | -$0.14 | -$0.06 |
Risks
The filing states revenue growth has slowed to 7% for the quarter ended April 30, 2022 from 31%, 19% and 10% in prior fiscal-year comparisons, and management expects growth in the coming year to be slower. Current-quarter revenue was $98.8 million, up 7.4% from the prior-year quarter, while RPO was flat at $360.6 million.
Net loss widened to $25.8 million for the quarter ended April 30, 2022 from $17.6 million in the prior-year quarter, operating loss widened to $25.5 million from $17.2 million, and diluted EPS loss widened to $0.20 from $0.14. Operating cash flow decreased 49.1% to $17.9 million and gross margin declined to 75.0% from 76.2%.
In March 2022, CEO Howard Lerman and CFO Steven Cakebread resigned, with Chairman Michael Walrath and Chief Accounting Officer Darryl Bond succeeding them as CEO and CFO, respectively. The filing says the resulting changes and related disruption have had and will continue to have near-term effects on business, growth and profitability.
Revenue growth is substantially reliant on the sales force, and the company may change the size of its sales force as part of strategic realignment, potentially causing a net decrease in sales personnel in the near term. Recruiting and retaining qualified sales personnel, particularly quota-carrying representatives, has been difficult, including during the COVID-19 pandemic.
Answers, the search product, faces established enterprise search competitors with greater experience, name recognition and larger customer bases, while broader platform competition may intensify through industry consolidation. Competitors may offer lower prices, pressuring target pricing levels, margins and operating results.
Growth depends on strategic relationships with approximately 200 Knowledge Network application providers such as Google, Apple, Amazon, Microsoft and Meta. Losing or impairing access, especially with a limited number of key providers like Google, could make the platform less efficient, accurate or competitive and lead to customer loss.
Adverse economic conditions, COVID-19 disruptions, weak European economies and Russia's invasion of Ukraine may lengthen sales cycles, reduce technology spending and negatively impact sales activities in Europe. The filing notes customers may reduce, suspend or delay spending, renegotiate contracts, shorten durations or elect not to renew.
Revenue depends on a few customers and third-party resellers: top five customers accounted for approximately 8% of revenue in FY2022, and resellers comprise a significant portion of revenue while being outside the company's control. Reseller non-renewal, reduced license purchases, consolidation or bankruptcy could materially harm operating results.
The company recently began offering capacity-based pricing for Pages and Answers, with no assurance the model will succeed, and changes to pricing models could adversely affect results. Large customers may demand greater discounts, and international expansion may require lower prices or shorter contract durations.
In March 2022 the Board authorized a $100.0 million share repurchase program; as of April 30, 2022, 4,838,184 shares had been repurchased for $30.6 million, and about $55 million total was repurchased by June 9, 2022. Repurchases will diminish cash reserves and could limit flexibility for strategic opportunities and acquisitions.
SaaS KPIs
All quarters →Customer Count
Remaining Performance Obligations (RPO)
Annual Recurring Revenue (ARR)
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q1 FY2023 (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.