Summary
Yext reported second quarter fiscal 2025 revenue of $97.9 million, down 4.6% from $102.6 million a year earlier. Management tied the decline to a large customer that churned during the three months ended January 31, 2024. Gross profit fell 5.7% to $75.6 million, and gross margin was 77.2%, down from 78.2%. The GAAP picture stayed soft. Operating loss widened to $7.6 million from $4.2 million a year earlier, and net loss widened to $4.1 million from $3.4 million. Operating margin was negative 7.7%, down from negative 4.1%. Diluted loss per share was $0.03, flat against the prior-year quarter. Non-GAAP net income was $6.8 million, or $0.05 per share, and Adjusted EBITDA was $9.8 million.
The first half tracked the same pattern. Revenue for the six months was $193.9 million, down 4.0% from $202.1 million. Net loss for the six months was $7.9 million, compared with $3.8 million a year earlier. Operating cash flow for the six months was $27.7 million, up 40.3% from $19.7 million.
Forward-looking indicators were mixed. Total annual recurring revenue was $381.8 million as of July 31, 2024, down 4% from $397.7 million a year earlier. Direct ARR of $313.4 million was down 4% year over year, but it edged up from $312.1 million at the end of the first quarter, the first sequential gain in a year. Third-party reseller ARR of $68.4 million fell 3%, and the shareholder letter attributed part of that pressure to a shift toward usage-based structures, which keeps more of a deal's expected value out of committed ARR. Dollar-based net retention for total customers was 91%, down from 97%. Direct net retention was 91% and reseller net retention was 94%. Deferred revenue of $156.2 million was down 7.9% from $169.5 million a year earlier, and remaining performance obligations of $396.5 million were down 6.6% from $424.5 million. Customer count was roughly 2,970.
Cost discipline drove the quarter. A restructuring plan committed on June 4, 2024 cut full-time headcount by about 12% against January 31, 2024 levels, and the company booked roughly $5 million of related costs in the period. Sales and marketing expense fell 12% to $42.0 million. Research and development slipped 2% to $18.6 million. General and administrative expense rose 26% to $22.6 million, lifted by a $2.6 million increase in professional costs tied to the Hearsay deal and a $1.9 million increase in stock-based compensation. Adjusted EBITDA margin was 10.0%, down from 11.5%. Operating cash flow was negative $10.6 million for the quarter, against negative $7.0 million a year earlier. Capital expenditures were $0.5 million in the quarter.
Third quarter fiscal 2025 guidance puts the top line at $113.0 million to $113.5 million, with Adjusted EBITDA projected at $21.5 million to $22.0 million and non-GAAP net income per share at $0.11 to $0.12. For the full fiscal year 2025, the top line is projected at $420.0 million to $421.0 million, Adjusted EBITDA at $66.0 million to $67.0 million, and non-GAAP net income per share at $0.35 to $0.36. Those figures factor in the Hearsay integration, and management expects to exit the fiscal year with a consolidated Adjusted EBITDA margin in the low 20s.
Hearsay Social closed on August 1, 2024 for about $125 million in cash, alongside a $20 million employee bonus pool and a potential earnout of up to $75 million tied to annual recurring revenue targets. The third quarter will carry a full quarter of Hearsay, and management expects the deal to be accretive to the ARR growth rate for fiscal 2025. Risks are the familiar ones. Enterprise buyers stayed cautious, sales cycles stretched, and deals slipped past expected close dates. Renewal budgets were under pressure, and the shareholder letter points to interest rates, a looming election, geopolitical risk and questions about a consumer recession as reasons caution may persist. Committed reseller ARR also faces pressure as more of a deal's value moves to uncommitted usage.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $97.9M | $96.0M | +2.0% | $102.6M | -4.6% |
| Gross profit | $75.6M | $74.4M | +1.5% | $80.2M | -5.7% |
| Gross margin | 77.2% | 77.5% | -0.3 pp | 78.2% | -0.9 pp |
| Research & development | $18.6M | $17.1M | +8.9% | $18.9M | -1.6% |
| Sales & marketing | $42.0M | $43.3M | -3.0% | $47.6M | -11.8% |
| General & administrative | $22.6M | $19.6M | +15.7% | $18.0M | +26.0% |
| Total operating expenses | $83.2M | $79.9M | +4.1% | $84.4M | -1.5% |
| Operating income (loss) | -$7.6M | -$5.4M | -39.4% | -$4.2M | -78.8% |
| Operating margin | -7.7% | -5.7% | -2.1 pp | -4.1% | -3.6 pp |
| Net income (loss) | -$4.1M | -$3.8M | -6.3% | -$3.4M | -18.0% |
| Net margin | -4.1% | -4.0% | -0.2 pp | -3.4% | -0.8 pp |
| Diluted EPS | -$0.03 | -$0.03 | ±$0.00 | -$0.03 | ±$0.00 |
| Net retention rate | 91.0% | 91.0% | ±0.0 pp | 98.0% | -7.0 pp |
Risks
Revenue declined 4.6% in FY2025 Q2 to $97.9 million and 4.0% year to date to $193.9 million, and management attributes the decline primarily to the attrition of a large customer that occurred during the three months ended January 31, 2024. Total ARR also declined 4% to $381.8 million as of July 31, 2024, while deferred revenue decreased 7.9% to $156.2 million and RPO decreased 6.6% to $396.5 million versus the prior-year quarter.
Total dollar-based net retention rate fell to 91% as of July 31, 2024 from 97% a year earlier, with direct customer retention at 91% versus 98%. The company links the decline in part to a large customer attrition, indicating elevated churn and contraction risk.
A portion of revenue depends on a few customers, and the three months ended January 31, 2024 included attrition of one top-five customer. Management expects the absence of that customer's revenue to be realized primarily in fiscal 2025, pressuring results.
Yext initiated a restructuring plan on June 4, 2024 that reduced workforce by approximately 12% versus January 31, 2024 headcount and incurred about $5 million of costs in FY2025 Q2. The plan may limit organic growth and involve additional costs beyond Q2.
Yext completed the Hearsay acquisition on August 1, 2024 for approximately $125 million in cash, plus a $20 million bonus pool and up to $75 million of contingent earnout consideration. Integration risks include unanticipated liabilities, retention of key employees, and failure to realize expected revenue or synergies.
Third-party reseller customers generated $68.4 million of ARR as of July 31, 2024, down 3% year over year, and a significant portion of revenue depends on resellers whose efforts Yext does not control. Reseller consolidation, non-renewal, or reduced purchases could materially affect results.
Yext sells to enterprises with complex operating environments and cites long, unpredictable sales cycles, including customer budget constraints and lengthy approval processes. Delays or failed completions could cause quarterly results to vary and slow revenue growth.
Management states that macroeconomic uncertainty, inflation, interest rates, and reduced technology spending may cause customers to delay or reduce spending, request contract concessions, shorten contract durations, or not renew subscriptions. These pressures could adversely affect future revenue and operating results.
Yext is incorporating generative AI into some products and notes this technology is new and may present compliance and reputational risks. Regulatory and legislative developments related to AI could adversely affect the company's use of such technologies.
The restructuring reduced headcount by approximately 12%, and the company cites significant leadership changes and difficulty retaining sales and technical personnel. Recent decreases in stock price may also hurt retention and require larger equity awards.
The market for Yext's platform is competitive, rapidly evolving, and fragmented, and the company faces established competitors in enterprise search and other product areas. Competitors with greater resources may respond faster or offer lower prices, harming revenue growth or margins.
SaaS KPIs
All quarters →Customer Count
Remaining Performance Obligations (RPO)
Adjusted EBITDA
Non-GAAP Operating Margin
Adjusted EBITDA Margin
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q2 FY2025 (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.