Summary
Yext reported FY2026 Q1 revenue of $109.48 million, up 14.1% from the prior-year quarter. Gross profit rose 10.7% to $82.38 million, but gross margin slipped to 75.2% from 77.6%, a decline of 2.3 percentage points. The top line benefited from the Hearsay acquisition completed on August 1, 2024, while cost of revenue increased on higher amortization of acquired intangibles and royalties. The company also swung to GAAP profitability. Operating income was $1.12 million, while the prior-year quarter had an operating loss of $5.43 million, and operating margin improved to 1.0% from negative 5.7%. Net income was $0.77 million, while the prior-year quarter had a net loss of $3.82 million. Diluted EPS was $0.01 for the quarter, compared with negative $0.03 a year earlier.
Cash generation remained solid but slipped. Operating cash flow was $37.72 million, down 1.5% from $38.31 million in the prior-year quarter. Capital expenditures were $0.56 million, down 13.1% from $0.65 million. Free cash flow, a non-GAAP measure defined as operating cash flow less capital expenditures, was $37.163 million compared with $37.662 million a year earlier. Deferred revenue, current portion, rose 13.8% to $210.70 million from $185.22 million. Remaining performance obligations increased 8.7% to $469.20 million from $431.60 million.
Operational metrics showed mixed trends. Total annual recurring revenue was $446.469 million, up 15% from $387.278 million. Direct customer ARR was $371.851 million, up 19% from $312.060 million. Third-party reseller ARR was $74.618 million, down 1% from $75.218 million. Dollar-based net retention rate for total customers was 95%, up from 91%. Direct customer net retention was 95% versus 91%, and third-party reseller net retention was 96% versus 92%. Dollar-based gross retention rate for total customers was 87% versus 83%. Direct gross retention was 87% versus 83%, and third-party reseller gross retention was 88% versus 86%. The company completed the acquisition of Places Scout on February 7, 2025 for $20.3 million in cash and agreed to grant approximately $10.0 million of incentive equity to key employees.
Yext strengthened its balance sheet with a new $200 million senior secured term loan facility from funds and accounts managed by BlackRock. The May 2025 credit agreement provides a $100 million initial term loan facility, a $50 million delayed draw term loan facility, and a $50 million uncommitted discretionary delayed draw term loan facility. The facilities mature on May 15, 2030. Yext borrowed $100 million of initial term loans on the closing date and used a portion of the proceeds to repay and terminate its existing Silicon Valley Bank credit facility. The term loans bear interest at adjusted term SOFR plus 5.25%, subject to a 1.00% floor, or at a base rate plus 4.25%. The agreement requires minimum qualified cash of at least $35 million and minimum consolidated EBITDA, and it includes an excess cash flow sweep of up to 30% if annualized recurring revenue falls below $350 million.
Guidance context came with the financing announcement. Yext updated its outlook and said it expects its fiscal 2026 first quarter results to be above its previously stated guidance ranges from the quarterly shareholder letter dated March 5, 2025. The company faces macroeconomic risks including foreign currency fluctuations, interest rates, inflation, recession risks, tariffs, trade restrictions, geopolitical events, and changes in government policy. Customers may reduce, suspend, or delay technology spending, seek contract concessions, shorten contract durations, or elect not to renew. Third-party reseller attrition remains a pressure point, as shown by the 1% decline in reseller ARR.
On a non-GAAP basis, net income was $16.525 million compared with $6.352 million. Adjusted EBITDA was $24.680 million compared with $9.602 million. During the quarter, Yext repurchased 4,473,633 shares, and approximately $54.2 million remained available under its share repurchase program as of April 30, 2025. The quarter delivered GAAP profitability and ARR growth, but gross margin compression and lower operating cash flow show that acquisition-related costs and a changing revenue mix still weigh on the model.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $109.5M | $113.1M | -3.2% | $96.0M | +14.1% |
| Gross profit | $82.4M | $86.8M | -5.1% | $74.4M | +10.7% |
| Gross margin | 75.2% | 76.8% | -1.5 pp | 77.5% | -2.3 pp |
| Research & development | $21.9M | $20.5M | +6.9% | $17.1M | +28.4% |
| Sales & marketing | $36.2M | $45.9M | -21.1% | $43.3M | -16.3% |
| General & administrative | $23.2M | $29.5M | -21.5% | $19.6M | +18.4% |
| Total operating expenses | $81.3M | $95.9M | -15.3% | $79.9M | +1.7% |
| Operating income (loss) | $1.1M | -$9.1M | +112.3% | -$5.4M | +120.6% |
| Operating margin | 1.0% | -8.0% | +9.1 pp | -5.7% | +6.7 pp |
| Net income (loss) | $770.0K | -$7.3M | +110.6% | -$3.8M | +120.2% |
| Net margin | 0.7% | -6.4% | +7.1 pp | -4.0% | +4.7 pp |
| Diluted EPS | $0.01 | -$0.06 | +$0.07 | -$0.03 | +$0.04 |
| Net retention rate | 95.0% | 92.0% | +3.0 pp | 91.0% | +4.0 pp |
Risks
Revenue rose 14.1% year over year to $109.5 million in FY2026 Q1, but management states the increase was entirely driven by the Hearsay acquisition and revenue would have slightly declined year over year without it. This makes future growth dependent on acquisitions and successful retention of acquired customers.
Yext completed Hearsay in August 2024 and Places Scout in February 2025 for $20.3 million in cash and is integrating both; the filing cites limited acquisition experience, potential unanticipated liabilities, impairment of goodwill and intangible assets, and inability to capture expected value. Failure to integrate could erode revenue growth.
Revenue from third-party reseller customers decreased 3% to $18.1 million in FY2026 Q1, and reseller ARR declined 1% to $74.6 million as of April 30, 2025. The filing says reseller customers comprise a significant portion of revenue, are not controlled by Yext, and may reduce purchases, seek concessions, or consolidate.
Net income was $0.8 million in FY2026 Q1, a swing from a net loss of $3.8 million in FY2025 Q1, and operating income swung to a profit with operating margin up 6.7 percentage points to 1.0%. However, the company has a history of losses and may not sustain profitability if revenue does not offset potential expense increases.
MD&A and risk factors highlight inflation, tariffs and trade restrictions, geopolitical events, government fiscal policy changes, and reduced technology spending that could cause customers to reduce, suspend or delay spending, renegotiate contracts, shorten durations, or not renew. Yext says macroeconomic uncertainty may continue to adversely affect financial condition and results.
Enterprise sales cycles are long and unpredictable due to complex customer environments, budget constraints, and senior management approvals, and the filing says cycles may lengthen during uncertain macroeconomic conditions. Delayed or failed sales could cause operating results to vary period to period.
After a June 2024 restructuring that reduced headcount by about 12%, Yext says failure to manage its sales force and organizational changes could impede growth; sales and marketing expense fell 16% in FY2026 Q1 partly from lower headcount while R&D expense rose 28%. The filing also cites significant leadership changes.
Yext is incorporating generative AI into some products and says the technology is new and developing and may present compliance and reputational risks; regulatory and legislative developments related to AI could adversely affect its use of AI. The risk factor summary specifically calls out AI regulatory risk.
On May 15, 2025, Yext entered a $200.0 million term loan facility with BlackRock, borrowed $100.0 million, and terminated its SVB credit facility; the agreement includes minimum qualified cash of $35.0 million, minimum consolidated EBITDA, and an excess cash flow sweep if ARR falls below $350.0 million. Covenants restrict dividends, buybacks, acquisitions, and other actions.
The top five customers accounted for approximately 8% of revenue in fiscal 2025, 2024, and 2023, and the prior attrition of one top five customer has since affected quarterly results. Loss of large customers could materially reduce revenue.
Growth depends on strategic relationships with over 200 Publisher Network application providers including Google, Apple, Facebook, Bing, Amazon Alexa, and Yelp; loss of access or impairment with one or limited number, such as Google, could lead to loss of a significant number of customers.
SaaS KPIs
All quarters →Free Cash Flow Margin
Total Annual Recurring Revenue
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q1 FY2026 (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.