Summary
Yext closed the third quarter of fiscal 2025 as a larger but less profitable company. Revenue was $114.0 million in the quarter ended October 31, 2024, up from $101.2 million a year earlier, a 13% increase. The gain came entirely from three months of Hearsay Systems results, following the August 1, 2024 close. Constant currency revenue growth was 11%. Year-to-date revenue was $307.9 million, up 1.5% from $303.2 million. The comparison also absorbed the loss of a large customer that did not renew as of January 31, 2024.
Profitability below the top line moved the wrong way. Gross profit was $87.7 million, up 11%, while gross margin slipped to 77.0% from 78.2%. Operating loss widened to $10.4 million from $1.8 million in the prior-year quarter. Net loss was $12.8 million, or $0.10 per diluted share, against a net loss of $0.5 million, or $0.00 per share. General and administrative expense rose 94% to $33.4 million, driven by $8.8 million tied to the Hearsay founder and early employee incentive pool, $0.6 million of contingent consideration fair value movement, and $2.2 million more in professional fees.
Non-GAAP measures tell a friendlier story. Adjusted EBITDA reached $23.1 million, up from $13.5 million, an Adjusted EBITDA margin of 20.3% versus 13.4%. Non-GAAP net income was $15.6 million, or $0.12 per share. Non-GAAP gross margin rose to 79.4%, and non-GAAP operating expenses fell to 62% of revenue from 69%. The gap between the two sets of numbers comes mostly from stock-based compensation, acquisition-related costs, and amortization of acquired intangibles.
Recurring revenue metrics were mixed. Total ARR was $441.8 million, up 11% year over year. Direct customer ARR of $374.5 million rose 15% and now accounts for 85% of the total. Third-party reseller ARR of $67.3 million fell 4%. Total dollar-based net retention rate was 91%, down from 96%, and the churn of that one large customer still weighs on the figure. RPO was $457.1 million, up 8.0%. Deferred revenue, the current portion, was $160.9 million, up 11.4%. Customer count was over 3,000 as of October 31, 2024.
Cash generation reversed in the quarter. Operating cash flow was negative $15.8 million, compared with negative $1.6 million a year earlier. Year-to-date operating cash flow fell to $11.9 million from $18.1 million. Capital expenditures were $0.6 million in the quarter. Free cash flow, a non-GAAP measure, was negative $16.4 million for the quarter, and the shareholder letter cites $37.7 million of free cash flow over the trailing twelve months. About $125 million of cash went out the door for Hearsay.
Fourth quarter fiscal 2025 guidance calls for Adjusted EBITDA of $24.5 million to $25.0 million and non-GAAP net income per share of $0.12 to $0.13. For the full fiscal year 2025, the company guided to Adjusted EBITDA of $67.0 million to $67.5 million and non-GAAP earnings per share of $0.35 to $0.36. Management noted that favorable foreign exchange helped the third quarter and expects that trend to reverse in the fourth quarter.
Risks remain. Macroeconomic uncertainty could lead customers to delay, shorten, or renegotiate contracts. Reseller revenue is migrating toward usage-based pricing, and management expects continued movement between committed and uncommitted revenue. Hearsay integration carries execution risk, and the deal includes up to $75 million of earnout payments tied to ARR milestones. Yext repurchased $6.7 million of stock during the quarter and had $43.1 million authorized for future buybacks.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $114.0M | $97.9M | +16.4% | $101.2M | +12.7% |
| Gross profit | $87.7M | $75.6M | +16.1% | $79.1M | +10.9% |
| Gross margin | 77.0% | 77.2% | -0.3 pp | 78.2% | -1.2 pp |
| Research & development | $21.1M | $18.6M | +13.4% | $18.3M | +15.2% |
| Sales & marketing | $43.7M | $42.0M | +4.1% | $45.4M | -3.7% |
| General & administrative | $33.4M | $22.6M | +47.5% | $17.2M | +93.7% |
| Total operating expenses | $98.1M | $83.2M | +18.0% | $80.9M | +21.3% |
| Operating income (loss) | -$10.4M | -$7.6M | -37.0% | -$1.8M | -482.1% |
| Operating margin | -9.1% | -7.7% | -1.4 pp | -1.8% | -7.3 pp |
| Net income (loss) | -$12.8M | -$4.1M | -215.5% | -$468.0K | -2634.8% |
| Net margin | -11.2% | -4.1% | -7.1 pp | -0.5% | -10.8 pp |
| Diluted EPS | -$0.10 | -$0.03 | -$0.07 | $0.00 | -$0.10 |
| Net retention rate | 91.0% | 91.0% | ±0.0 pp | 97.0% | -6.0 pp |
Risks
The filing states that while total revenue increased by 2% from the nine months ended October 31, 2023 to the nine months ended October 31, 2024, the increase was inorganic due to the Hearsay acquisition, and without that acquisition revenue would have otherwise declined 4% year-over-year in the same period. The June 2024 cost-cutting plan could further limit organic growth and may result in revenue contraction.
The attrition of a large customer that did not renew its contract as of January 31, 2024 negatively affected revenue, and ARR as of October 31, 2024 includes a decrease of $10.8 million related to that attrition. The filing also notes that for the fiscal years ended January 31, 2024, 2023 and 2022, the top five customers accounted for approximately 8%, 9% and 8% of revenue, respectively.
Yext completed the acquisition of Hearsay on August 1, 2024 for approximately $125 million in cash, with a $20 million employee bonus pool and up to $75 million in contingent consideration tied to annual recurring revenue targets. The filing states the company has limited acquisition experience and may fail to integrate personnel, operations and technologies or achieve expected benefits.
Third-party reseller customers comprise a significant portion of revenue, and revenue attributable to third-party reseller customers decreased 2% for the three months ended October 31, 2024 and decreased 4% for the nine months ended October 31, 2024, primarily due to customer attrition. Resellers may elect not to renew, purchase fewer licenses or seek contract concessions, and Yext does not control their efforts.
Net loss was $20.7 million for the nine months ended October 31, 2024, and the operating loss widened to $23.4 million for the nine months ended October 31, 2024 from $7.2 million for the nine months ended October 31, 2023. As of October 31, 2024, accumulated deficit was $699.8 million.
The MD&A states that fluctuations in foreign exchange rates and rising inflation have had, and may continue to have, an adverse impact on financial condition and operating results. Customers may reduce, suspend or delay technology spending, request renegotiated contracts with extended billing and payment terms, shorten contract durations or elect not to renew subscriptions.
Yext sells to enterprises with complex operating environments, and the filing cites long and unpredictable sales cycles, lengthy evaluations, customer budget constraints and senior management approvals as factors that limit visibility and can delay revenue recognition. MD&A notes that changes in contracting activity may not be fully reflected in results until future periods.
The company is incorporating generative artificial intelligence into some products and states this technology is new and developing and may present compliance and reputational risks. Regulatory and legislative developments related to the use of AI could adversely affect Yext's use of such technologies in its products and services.
The June 2024 restructuring plan reduced the workforce by approximately 12% of overall headcount as compared to January 31, 2024, and the filing cites significant leadership changes and recent decreases in stock price as factors that may decrease retention. Failure to adequately recruit and retain sales personnel or other key employees could impede growth.
SaaS KPIs
All quarters →Customer Count
Remaining Performance Obligations (RPO)
Adjusted EBITDA
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Dollar-Based Net Retention Rate (Total Customers)
Adjusted EBITDA Margin
Free Cash Flow Margin
Dollar-Based Net Retention Rate (Direct Customers)
Dollar-Based Net Retention Rate (Third-Party Reseller Customers)
Free Cash Flow
Annual Recurring Revenue (Direct Customers)
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q3 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.