Summary
Yext closed the first quarter of fiscal 2027 with a smaller top line and better margins. Revenue was $107.9 million for the quarter ended April 30, 2026, down 1% from $109.5 million a year earlier. Management points to customer attrition and an intentional shift away from smaller accounts. Total ARR was $440.8 million, down 1% from $446.5 million at April 30, 2025. The mix inside that number carries the argument. ARR from customers with $50,000 or more of annual contract value was $403.1 million, up 1% year over year, while ARR from customers below $50,000 fell 19% to $37.7 million. The $50K cohort now represents 91% of total ARR.
Profitability improved even as revenue slipped. Gross profit was $78.7 million, down 4%, and gross margin fell to 72.9% from 75.2%. Cost of revenue absorbed a $1.1 million increase in data center costs plus $1.5 million of asset impairment charges tied mainly to subleasing office space. Operating income was $5.6 million, up from $1.1 million, and operating margin reached 5.2% against 1.0%. Net income was $2.6 million, up from $0.8 million, and diluted EPS was $0.02 versus $0.01. Adjusted EBITDA, a non-GAAP measure, was $26.9 million at a 25% margin, compared with $24.7 million and 22.5% in the prior-year quarter.
Cash generation held roughly steady. Operating cash flow was $37.4 million for the quarter, down from $37.7 million. Capital expenditures were $0.4 million, down from $0.6 million, which left free cash flow of $37.0 million versus $37.2 million. Cash, cash equivalents and restricted cash ended the quarter at $105.4 million, with $91.9 million of that in cash and cash equivalents. The company deployed $140.0 million to repurchase 24.3 million shares at $5.75 through a completed tender offer, taking outstanding shares to 100.1 million. Directors then approved an additional $100 million for buybacks on top of $14.9 million remaining under the prior authorization. Yext has drawn $150 million of its $200 million credit facility, and interest expense rose year over year after the borrowings.
The company no longer issues quarterly guidance and has suspended earnings calls, so the forward view sits in the shareholder letter. Yext expects Adjusted EBITDA margin expansion toward 30% and GAAP net income margins in the 10% to 15% range in each of Q2, Q3 and Q4 of fiscal 2027. The letter flags a calendar effect: the first quarter had 89 days, while each of the remaining quarters has 92, so recognized subscription revenue rises while costs stay relatively flat. Non-GAAP gross margin is expected to stay inside a 75% to 80% target range.
On products, Scout, the AI competitive intelligence tool, is moving from pilots into production use cases and into renewal conversations as a reason to expand. The recently launched Scout MCP gives customers programmatic access to localized competitive data, and management frames headless architecture as a differentiator against brand-level answer engine optimization entrants. The pipeline for Scout-led expansions is described as robust.
The notable risks sit with the customer mix and the balance sheet. Deferred revenue, current, was $201.1 million, down 4.5% from $210.7 million a year earlier. Dollar-based net retention for customers below $50,000 fell to 86% from 93%, and gross retention in that cohort was 71%. Over the trailing twelve months the sub-$50K cohort produced $8.8 million of net churn against $3.1 million of net growth in the $50K cohort. The AI-first self-serve experiments aimed at stabilizing smaller customers remain unproven. The credit agreement requires minimum qualified cash of $35.0 million and minimum consolidated EBITDA tested quarterly, and it includes an excess cash flow sweep if ARR drops below $350.0 million. RPO was $500.1 million, up 6.6% from $469.2 million, which offers some forward visibility.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2027 | Q4 FY2026 | QoQ | Q1 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $107.9M | $112.0M | -3.6% | $109.5M | -1.4% |
| Gross profit | $78.7M | $82.3M | -4.4% | $82.4M | -4.4% |
| Gross margin | 73.0% | 73.5% | -0.5 pp | 75.2% | -2.3 pp |
| Research & development | $21.5M | $22.0M | -2.4% | $21.9M | -1.9% |
| Sales & marketing | $29.4M | $32.5M | -9.4% | $36.2M | -18.8% |
| General & administrative | $22.3M | $63.3M | -64.8% | $23.2M | -3.9% |
| Total operating expenses | $73.1M | $76.3M | -4.2% | $81.3M | -10.0% |
| Operating income (loss) | $5.6M | $6.0M | -6.6% | $1.1M | +399.3% |
| Operating margin | 5.2% | 5.3% | -0.2 pp | 1.0% | +4.2 pp |
| Net income (loss) | $2.6M | $4.2M | -37.7% | $770.0K | +240.9% |
| Net margin | 2.4% | 3.8% | -1.3 pp | 0.7% | +1.7 pp |
| Diluted EPS | $0.02 | $0.03 | -$0.01 | $0.01 | +$0.01 |
| Customers | 50,000 | — | — | — | — |
Risks
Revenue decreased 1.4% in FY2027 Q1 versus FY2026 Q1, and MD&A attributes the decline primarily to customer attrition. Risk factors state revenue growth slowed to 1% to 6% in recent fiscal years and would have declined without the Hearsay acquisition, so future growth may slow further or contract.
MD&A shows total ARR of $440.8 million at April 30, 2026, down 1% from $446.5 million a year earlier, with ARR from customers under $50,000 falling 19%. Dollar-based net retention for that cohort was 86% versus 93%, and gross retention was 71% versus 79%, highlighting churn and contraction in smaller accounts.
Risk factors and MD&A warn that inflation, interest rates, tariffs, trade disputes, geopolitical conflicts and reduced technology spending may cause customers to delay purchases, renegotiate contracts, shorten durations or not renew. MD&A states these conditions have had and may continue to have an adverse impact on financial condition and operating results.
The filing adds risk that incorporating generative AI into products presents compliance and reputational risks, and that regulatory or legislative developments related to AI could adversely affect its use. Competition is also intensifying, including in enterprise search and from application providers that may bundle competing products.
Yext completed Hearsay in August 2024 and Places Scout in February 2025 and is still integrating both. The filing says acquisitions may not yield expected returns, may divert management, may result in impairment charges or dilution, and revenue growth has been inorganic due to Hearsay.
Top five customers accounted for approximately 8% of revenue in FY2026, and a significant portion of revenue depends on third-party reseller customers whose efforts Yext does not control. Loss or consolidation of these customers or resellers could materially reduce revenue.
Yext cites recent headcount reductions and leadership changes, difficulty recruiting and retaining sales personnel, and a recent net decrease in sales personnel. It says failure to manage the sales force or retain key employees could impede growth and execution.
Yext completed a $140.0 million self-tender offer in March 2026, repurchasing 24,347,825 shares at $5.75, and borrowed $50.0 million under its delayed draw term loan. The filing warns the capital allocation strategy may not enhance stockholder value and that repurchases will diminish cash reserves.
The May 2025 Credit Agreement contains restrictive covenants, a minimum qualified cash requirement of $35.0 million, and a quarterly consolidated EBITDA test. Interest expense rose to $3.102 million in FY2027 Q1 from $0.642 million in FY2026 Q1, increasing fixed obligations and potential default risk.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Adjusted EBITDA
Non-GAAP Gross Margin
Non-GAAP Operating Margin
ARR
Adjusted EBITDA Margin
Free Cash Flow Margin
Free Cash Flow
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q1 FY2027 (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.