Summary
Yext reported revenue of $99.5 million for the first quarter of fiscal 2024, up 0.7% from $98.8 million a year earlier. Currency moves trimmed about $1.3 million from the top line, and revenue on a constant currency basis reached $100.8 million. Gross profit rose 5.4% to $78.1 million, and gross margin expanded to 78.5% from 75.0%. Direct customer revenue grew 4% to $80.0 million on new subscriptions and expansion at existing accounts. Third-party reseller revenue slipped 10% to $19.4 million as customers left.
The expense base did the heavy lifting. Total operating expenses fell to $79.3 million from $99.6 million. Sales and marketing dropped 28% to $44.0 million. Research and development eased 3% to $16.8 million. General and administrative declined 14% to $18.6 million. Lower headcount explained most of the savings, and stock-based compensation expense fell to $11.0 million from $18.1 million. The operating loss narrowed to $1.2 million from $25.5 million, and operating margin moved to negative 1.2% from negative 25.8%. The net loss narrowed to $0.4 million from $25.8 million. Diluted earnings per share was $0.00 against a loss of $0.20 in the prior-year quarter. Adjusted EBITDA was $14.4 million, compared with a loss of $3.0 million a year earlier, and non-GAAP net income was $10.6 million versus a non-GAAP net loss of $7.8 million.
Recurring revenue told a more mixed story. Total ARR was $398 million as of April 30, 2023, up 3% from $387 million. Direct customer ARR rose 5% to $326.1 million, while third-party reseller ARR declined to $72.2 million. Customer count grew 5% year over year to more than 2,970. Dollar-based net retention slipped to 96% from 97%, with direct customers at 97% and resellers at 92%. Backlog was sturdier. Remaining performance obligations reached $427.9 million, up 18.7% from $360.6 million, and the company expects $373 million of that to be recognized over the next 24 months. Deferred revenue was flat at $197.0 million.
Cash flow improved. Operating cash flow was $26.7 million for the quarter, up 49.7% from $17.9 million. A $50.6 million release from accounts receivable, tied to billing and collection timing, drove much of that. Capital expenditures fell 42.6% to $0.9 million. Cash and cash equivalents stood at $217 million at quarter end. The company repurchased 563,569 shares for $4.6 million, leaving about $18.0 million available under its $100.0 million authorization.
Guidance for the second quarter of fiscal 2024 includes Adjusted EBITDA of $11.0 million to $12.0 million and non-GAAP net income per share of $0.06 to $0.07. For the full fiscal year, the company raised its outlook, with Adjusted EBITDA of $49.0 million to $51.0 million and non-GAAP net income per share of $0.28 to $0.29. Management cites macroeconomic pressure, foreign currency swings, inflation and recession risk as live concerns. Customers could delay technology spending, ask for extended billing terms, shorten contracts or skip renewals. The reseller channel is already shrinking. The credit facility also carries a covenant requiring a consolidated quick ratio of at least 1.50 to 1.00, and the $50.0 million revolver had $36.0 million available, with $14.0 million of letters of credit pledged for office space.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $99.5M | $101.9M | -2.4% | $98.8M | +0.7% |
| Gross profit | $78.1M | $75.4M | +3.6% | $74.1M | +5.4% |
| Gross margin | 78.5% | 74.0% | +4.5 pp | 75.0% | +3.6 pp |
| Research & development | $16.8M | $17.1M | -2.2% | $17.3M | -3.2% |
| Sales & marketing | $44.0M | $47.2M | -6.9% | $60.8M | -27.6% |
| General & administrative | $18.6M | $18.7M | -0.7% | $21.5M | -13.5% |
| Total operating expenses | $79.3M | $83.1M | -4.5% | $99.6M | -20.3% |
| Operating income (loss) | -$1.2M | -$7.7M | +83.9% | -$25.5M | +95.2% |
| Operating margin | -1.2% | -7.5% | +6.3 pp | -25.8% | +24.6 pp |
| Net income (loss) | -$412.0K | -$7.8M | +94.7% | -$25.8M | +98.4% |
| Net margin | -0.4% | -7.7% | +7.2 pp | -26.1% | +25.7 pp |
| Diluted EPS | $0.00 | -$0.06 | +$0.06 | -$0.20 | +$0.20 |
| Net retention rate | 97.0% | 95.0% | +2.0 pp | — | — |
Risks
The filing states revenue growth rates slowed to 19% from fiscal 2020 to fiscal 2021, 10% from fiscal 2021 to fiscal 2022, 3% from fiscal 2022 to fiscal 2023, and 1% from the quarter ended April 30, 2022 to the quarter ended April 30, 2023; management expects growth in the coming year to be slower.
Adverse economic conditions, inflation, reduced technology spending and instability in the banking system may cause customers to reduce, suspend or delay spending, request contract concessions such as extended billing and payment terms, shorten contract durations or elect not to renew. MD&A also notes foreign exchange rates had a negative impact on FY2024 Q1 revenue.
Third-party reseller customers comprise a significant portion of revenue and their efforts are not controlled by Yext. For the quarter ended April 30, 2023, third-party reseller revenue decreased 10% versus the prior-year quarter, third-party reseller ARR decreased 6% year over year, and reseller dollar-based net retention rate declined to 92% from 94%.
If customers do not renew or reduce subscriptions, revenue will decline. MD&A reports total dollar-based net retention rate was 96% for the three months ended April 30, 2023, compared with 97% for the prior-year period, with direct customers at 97% versus 98% and third-party reseller customers at 92% versus 94%.
The company has experienced significant leadership turnover: CEO and CFO resigned in March 2022, President and CRO resigned in June 2022, CRO changed in October 2022, and Brian Distelburger announced in March 2023 he would step back as an employee. A reduction in force initiated in late January 2023 resulted in additional terminations of approximately 8% of overall headcount that took effect in the three months ended April 30, 2023.
Revenue growth is substantially reliant on the sales force, and Yext has had difficulty recruiting and retaining sales personnel; it recently had a net decrease in sales personnel. Failure to recruit, train and retain the sales force could prevent reaching market potential and executing the business plan.
The Answers platform utilizes Artificial Intelligence technology in some products or features; AI is an emerging technology subject to a complex and evolving regulatory landscape, including data protection and privacy laws, with different jurisdictions taking varying approaches. Compliance can be complex, costly and time-consuming, with risk of enforcement or litigation, and may require altering business practices or products.
The credit facility was provided by Silicon Valley Bank; after SVB's closure and receivership, First Citizens assumed SVB's obligations under the Credit Facility. There can be no assurance similar actions will occur in future bank closures, and inability to access the credit facility or need to use alternative cash to support letters of credit could adversely affect the business; cash and cash equivalents are also exposed to bank failures, with the filing mentioning SVB, Signature Bank, Silvergate Capital and First Republic Bank.
Yext sells to enterprises with complex operating environments, which creates greater costs, longer sales cycles and less predictability; delayed and more complex sales cycles could cause operating results to suffer in a given period. Management expects lengthy sales cycles may continue or increase during times of uncertain or volatile macroeconomic conditions.
Yext plans to transition a portion of its services business to various third-party service providers; it is not a party to the transaction with the customer and does not control the efforts or quality of services provided by these third parties. If not managed effectively, the transition may harm retention, reputation and revenue growth rates.
Growth depends in part on strategic relationships with over 200 Publisher Network application providers, including Amazon Alexa, Apple Maps, Bing, Google, Google Maps, Siri and Yelp. Losing access to these applications, or termination or impairment of a relationship with a key provider such as Google, could reduce the efficiency and competitiveness of the Publisher Network and lead to loss of a significant number of customers.
SaaS KPIs
All quarters →Customer Count
Remaining Performance Obligations (RPO)
Adjusted EBITDA
Non-GAAP Operating Margin
Dollar-Based Net Retention Rate (Total Customers)
Total Annual Recurring Revenue
Dollar-Based Net Retention Rate (Direct Customers)
Dollar-Based Net Retention Rate (Third-Party Reseller Customers)
Annual Recurring Revenue (Direct Customers)
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q1 FY2024 (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.