Summary
Yext posted revenue of $98.1 million for the second quarter of fiscal 2022, up 11.4% from $88.1 million in the prior-year quarter. New customer subscriptions and expansions at existing accounts drove the gain. Revenue for the six months ended July 31, 2021 reached $190.1 million, up 9.6% from $173.4 million a year earlier. Gross profit rose 8.2% to $71.5 million for the quarter, but gross margin fell to 72.9% from 75.0%, down 2.2 percentage points. Management pinned the margin compression on higher employee-related costs, data center costs and depreciation, partly offset by lower Knowledge Network application provider fees. Subscription and support revenue accounted for 92% of the quarter's total, with professional services at 8%.
The company kept pushing product and partnership news alongside the numbers. Yext launched its AI Search offering on the Salesforce AppExchange, added integrations with Zendesk, and released its Summer 21 update. It also earned a first-place ranking and leader designation in several categories of the Summer 2021 G2 Grid and expanded its leadership team, naming a first vice president of public sector and a first head of industry for service and support. On the board side, the company appointed Miami Heat executive Shane Battier as a director effective June 30, 2021.
The GAAP loss lines moved in opposite directions depending on the period. For the quarter, operating loss widened 9.0% to $26.4 million from $24.2 million, net loss widened 9.9% to $27.6 million from $25.1 million, and diluted loss per share came in at $0.22 versus $0.21. Year to date, the trends reverse. Operating loss narrowed 18.3% to $43.6 million from $53.4 million, net loss narrowed 16.8% to $45.2 million from $54.3 million, and diluted loss per share narrowed to $0.36 from $0.46. Operating margin for the quarter was negative 26.9%, up 0.6 percentage points from negative 27.5%. Stock-based compensation is the main gap between the GAAP and adjusted numbers. Non-GAAP net loss was $7.2 million, compared with $7.9 million, and non-GAAP net loss per share was $0.06 versus $0.07.
Cash flow is the soft spot. Net cash used in operating activities was $32.6 million for the quarter, compared with $15.6 million used in the prior-year quarter. Through six months, operations generated $2.4 million, up from $16.3 million used a year earlier. Capital expenditures fell 83.5% to $3.1 million in the quarter from $18.8 million, and fell 73.6% to $10.6 million year to date from $40.1 million. The drop reflects the wind-down of spending on new office space, including the New York headquarters.
The demand-side metrics tell a better story. Annual recurring revenue rose 12% year over year to $378 million from $338 million. Customer count increased 23% to more than 2,600. Deferred revenue, current portion, was $165.4 million, up 12.4% from $147.2 million. Remaining performance obligations climbed 16.0% to $341.6 million from $294.4 million, and the company expects $324 million of that to be recognized over the next 24 months.
Guidance addresses the third quarter of fiscal 2022 and the full fiscal year 2022. For the third quarter, the company projects a non-GAAP net loss per share of $0.08 to $0.06 on 128.6 million weighted-average basic shares. For the full fiscal year, it projects a non-GAAP net loss per share of $0.24 to $0.20, assuming 127.9 million weighted-average basic shares. Risks deserve attention. Management warns that the COVID-19 pandemic continues to disrupt operations, and that customers in hard-hit industries such as retail and food services, along with certain geographies such as Europe, may cut, suspend or delay technology spending, request concessions such as extended billing and payment terms, shorten contract durations or let subscriptions lapse. Because revenue is recognized ratably over contract terms, those changes may not surface in reported results until later periods. The company also noted compliance with its debt covenants and the pending phase-out of LIBOR tied to its credit facility.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $98.1M | $92.0M | +6.7% | $88.1M | +11.4% |
| Gross profit | $71.5M | $70.1M | +2.0% | $66.1M | +8.2% |
| Gross margin | 72.9% | 76.2% | -3.4 pp | 75.0% | -2.2 pp |
| Research & development | $18.5M | $13.9M | +33.5% | $14.8M | +25.1% |
| Sales & marketing | $58.6M | $55.2M | +6.2% | $56.0M | +4.5% |
| General & administrative | $20.8M | $18.3M | +13.6% | $19.5M | +7.0% |
| Total operating expenses | $97.9M | $87.4M | +12.1% | $90.3M | +8.4% |
| Operating income (loss) | -$26.4M | -$17.2M | -53.3% | -$24.2M | -9.0% |
| Operating margin | -26.9% | -18.7% | -8.2 pp | -27.5% | +0.6 pp |
| Net income (loss) | -$27.6M | -$17.6M | -56.5% | -$25.1M | -9.9% |
| Net margin | -28.1% | -19.2% | -8.9 pp | -28.5% | +0.4 pp |
| Diluted EPS | -$0.22 | -$0.14 | -$0.08 | — | — |
Risks
COVID-19 disruptions are expected to continue and may cause existing and potential customers, especially in retail, food services, and Europe, to reduce, suspend, or delay technology spending, renegotiate contracts, shorten durations, or not renew subscriptions. MD&A states these effects may materially adversely impact future periods.
Customers have no renewal obligation and some reduced subscriptions, elected not to renew, shortened contracts, requested extended billing and payment terms, or sought better rates; this contributed to a continued decline in the trailing twelve month dollar-based net retention rate as of the three months ended July 31, 2021.
Growth depends on strategic relationships with about 200 Knowledge Network application providers including Amazon Alexa, Apple Maps, Bing, Google, Google Assistant, Google Maps, Siri, and Yelp. Termination or impairment of a relationship with key providers such as Google could lead to loss of a significant number of customers.
A material weakness in internal control over financial reporting related to the sales commission process continued to exist as of January 31, 2021, and the company cannot estimate how long remediation will take. Failure to remediate could impair reliable financial reporting and investor confidence.
Yext sells to enterprises with complex environments, creating long and unpredictable sales cycles; COVID-19 has disrupted customer operations and made cycles more complex, which could cause operating results to vary and delay revenue growth.
Yext faces intense competition in enterprise search and adjacent markets, including from larger, better-established companies with greater name recognition, more established customer relationships, and greater resources. The launch of Answers has brought it into competition with established enterprise search providers, and competitors may offer lower prices.
Quarterly gross margin declined to 72.9% from 75.0%, down 2.2 percentage points, as cost of revenue increased 21% on higher employee-related costs, stock-based compensation, data center costs, and depreciation. Continued investments and international expansion may pressure margins.
Revenue growth is substantially reliant on the sales force, and Yext has historically had difficulty recruiting and retaining sufficient sales personnel, a challenge heightened by COVID-19. It also depends on key executives including co-founders Howard Lerman and Brian Distelburger, and recent leadership departures may disrupt strategic initiatives.
The top five customers accounted for approximately 9% of revenue for fiscal year ended January 31, 2021, and a significant portion of revenue depends on third-party reseller customers whose efforts Yext does not control. Loss, consolidation, or reduced purchases by resellers or significant customers could materially harm revenue.
SaaS KPIs
All quarters →Customer Count
Remaining Performance Obligations (RPO)
Non-GAAP Gross Margin
ARR
Unearned Revenue
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q2 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.