Summary
Yext closed fiscal 2021 with fourth quarter revenue of $92.2 million, up 13.3% from $81.4 million in the prior-year quarter. Full year revenue was $354.7 million, up 18.7% from $298.8 million. Gross profit was $70.6 million in the quarter, up 16.8%, and $268.3 million for the full year, up 20.9%. Gross margin reached 76.6% in the quarter against 74.3% a year earlier, while the full year gross margin was 75.6% versus 74.2%. The company attributed the annual revenue increase mainly to new customer subscriptions, with a smaller contribution from expanded subscriptions at existing customers.
GAAP losses narrowed. The fourth quarter operating loss was $19.1 million, a 37.4% improvement, and the full year operating loss was $94.3 million, better by 23.3%. The fourth quarter net loss narrowed 40.1% to $18.3 million, compared with a net loss of $30.6 million in the prior-year quarter, and the full year net loss narrowed 22.1% to $94.7 million. Operating margin improved to -20.8% from -37.6% in the prior-year quarter. Diluted loss per share was $0.79 for the fiscal year.
Cash generation turned positive. Operating cash flow was $24.9 million in the fourth quarter, up from $11.7 million a year earlier, and $1.2 million for the fiscal year against $30.8 million used in operating activities the year before. Capital expenditures were $11.2 million in the quarter and $65.1 million for the fiscal year, up from $11.9 million, mostly tied to the new corporate headquarters in New York. Deferred revenue was $191.8 million, up 8.5% from $176.8 million, and remaining performance obligations were $351.8 million, up 7.2% from $328.1 million.
Operating metrics were mixed. Annual recurring revenue rose 8% year over year to $354 million as of January 31, 2021, from $326 million. Customer count, which excludes small business and third-party reseller customers, increased 21% to more than 2,400. Structured facts in the Knowledge Graph topped 475 million, a 71% increase that the company largely credited to a single large U.S. cable company customer. The dollar-based net retention rate slipped to 102% for fiscal 2021 from 106% a year earlier and 110% two years earlier, a decline management linked to weaker expansion within existing accounts and, to a lesser extent, customer retention.
Non-GAAP results looked very different. Non-GAAP net income was $0.1 million in the fourth quarter against a non-GAAP net loss of $13.7 million a year earlier, and the full year non-GAAP net loss was $22.4 million compared with $53.8 million. Guidance covers the first quarter of fiscal 2022 and the full fiscal year 2022, with revenue ranges issued alongside the non-GAAP loss per share figures. For the quarter, the company projected a non-GAAP net loss per share of $0.07 to $0.05 on 125.4 million weighted-average basic shares. For the full fiscal year, it projected a non-GAAP net loss per share of $0.22 to $0.17 on 128.4 million weighted-average basic shares.
Risk stays concentrated in how the pandemic shapes customer behavior. Management said some existing and potential customers, particularly in hard-hit industries such as retail and food services and in certain geographies such as Europe, may reduce, suspend or delay technology spending, ask for concessions such as extended billing and payment terms, shorten contract terms, or not renew. Because subscriptions are recognized ratably over the contract term, near-term changes in contracting activity may not show up in reported revenue until later periods. The structured facts gain also leaned heavily on one large customer, and the lower net retention rate points to softness in expansion. On the product side, Yext promoted David Rudnitsky to President and Chief Revenue Officer and said an Orion search algorithm update with advanced extractive question answering is scheduled for March 17, 2021.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $92.2M | $89.1M | +3.5% | $81.4M | +13.3% |
| Gross profit | $70.6M | $67.4M | +4.7% | $60.5M | +16.8% |
| Gross margin | 76.6% | 75.7% | +0.9 pp | 74.3% | +2.3 pp |
| Research & development | $14.5M | $14.5M | +0.2% | $13.8M | +4.8% |
| Sales & marketing | $57.2M | $56.6M | +1.0% | $57.3M | -0.2% |
| General & administrative | $18.0M | $18.1M | -0.2% | $19.8M | -9.1% |
| Total operating expenses | $89.7M | $89.2M | +0.6% | $91.0M | -1.4% |
| Operating income (loss) | -$19.1M | -$21.8M | +12.0% | -$30.6M | +37.4% |
| Operating margin | -20.8% | -24.4% | +3.7 pp | -37.6% | +16.8 pp |
| Net income (loss) | -$18.3M | -$22.0M | +16.9% | -$30.6M | +40.1% |
| Net margin | -19.9% | -24.8% | +4.9 pp | -37.6% | +17.7 pp |
| Net retention rate | 102.0% | — | — | 106.0% | -4.0 pp |
Risks
COVID-19 has disrupted operations and is expected to continue to adversely affect business, customers and financial results. MD&A states some existing and potential customers, especially in retail and food services and Europe, have reduced, suspended or delayed technology spending, requested concessions such as extended billing and payment terms, shortened contract durations or elected not to renew subscriptions. Because revenue is recognized ratably, changes in contracting activity may not be fully reflected until future periods.
Revenue growth rates declined to 19% for the fiscal year ended Jan. 31, 2021, from 31% for the fiscal year ended Jan. 31, 2020 and 34% for the fiscal year ended Jan. 31, 2019. The filing states historical revenue growth rates are not indicative of future growth, and MD&A reports revenue increased 19% year to date for fiscal 2021.
Dollar-based net retention rate declined to 102% for fiscal 2021 from 106% for fiscal 2020 and 110% for fiscal 2019. The filing attributes the decline to challenges in expanding relationships with existing customers and, to a lesser extent, customer retention, with COVID-19 potentially continuing to negatively impact the metric.
A material weakness in internal control over financial reporting related to the sales commission process continued to exist as of Jan. 31, 2021. The company is taking remediation steps but cannot estimate how long it will take, and failure to remediate could affect reliability of financial reporting and investor confidence.
The platform is sold to enterprises with complex operating environments, leading to long and unpredictable sales cycles. The filing states the COVID-19 pandemic has disrupted customer operations and made sales cycles more complex, which could cause operating results and financial condition to suffer in a given period.
The top five customers accounted for approximately 9% of revenue for the fiscal year ended Jan. 31, 2021, down from 11% for fiscal 2020 and 14% for fiscal 2019. Although concentration decreased, loss of any significant customer could still materially and adversely affect revenue and results of operations.
A significant portion of revenue depends on third-party reseller customers whose efforts the company does not control. Resellers may not renew, may purchase fewer licenses, may request extended billing and payment terms, and in some international markets have exclusive rights to sell Yext features.
The company depends on co-founders Howard Lerman and Brian Distelburger and other key personnel. During the fiscal year ended Jan. 31, 2021, the company announced changes to leadership for sales and research and development functions, and the departure of these key executives may disrupt strategic initiatives. Competition for qualified personnel is particularly intense in the New York area.
The market for Yext features is competitive, rapidly evolving and fragmented. New entrants, including application providers, could increase competition significantly, and the Answers site search product launched in October 2019 competes with other search products. Competitors may have greater resources and may respond more quickly to market changes.
Growth depends on strategic relationships with approximately 200 third-party application providers, including Amazon Alexa, Apple Maps, Bing, Google, Siri and Yelp. Losing access to these applications, or failure to maintain or renegotiate agreements, could make the Knowledge Network less efficient, accurate or competitive and lead to customer losses.
The company has limited experience with optimal prices and contract lengths and recently began offering capacity-based pricing for Pages and Answers products. There is no assurance this new pricing and distribution model will be successful, and it could adversely affect financial results if customers demand greater discounts or shorter contract durations.
Adverse economic conditions or reduced technology spending may adversely impact the business. COVID-19 created additional global economic uncertainty, led some customers to decrease information technology spending, delay purchasing decisions or reduce subscription value or duration, and Europe has experienced weakness, including Brexit uncertainty, negatively impacting sales activities in the region.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Annual Recurring Revenue (ARR)
Unearned Revenue
Structured facts in Yext Knowledge Graph
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q4 FY2021 (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.