Summary
Yext closed fiscal 2023 with fourth-quarter revenue of $101.9 million, up 1.0% from the prior-year quarter. On a constant currency basis, revenue rose 3%, after a roughly $2.3 million negative foreign exchange impact. The company ended the year with ARR of $400 million, up 3% year over year and up 4% on a constant currency basis. Customer count increased 7% to more than 2,960. Direct customer ARR was $327.0 million, up 5%, while third-party reseller ARR was $73.3 million, down 6%. Total dollar-based net retention rate slipped to 96% at January 31, 2023, from 101% a year earlier, reflecting pressure in the reseller channel. The mix matters because the direct business is growing while the reseller channel is shrinking.
Profitability improved sharply even as gross margin contracted. Fourth-quarter gross profit was $75.4 million, down 1.2% year over year, and gross margin was 74.0%, down 1.6 percentage points. The operating loss narrowed to $7.7 million, and the net loss narrowed to $7.8 million. Non-GAAP net income was $6.3 million, compared with a non-GAAP net loss of $4.1 million in the prior-year quarter. Adjusted EBITDA was $10.9 million, compared with $1.4 million. Operating cash flow for the quarter was $35.9 million, up 23.4% year over year. The company said the quarter marked its second consecutive quarter of non-GAAP profitability.
Full-year revenue was $400.85 million, up 2.6% from the prior fiscal year, or up 5% on a constant currency basis. Foreign exchange cut roughly $10.2 million from full-year revenue. Gross profit was $296.89 million, up 1.6%, while gross margin was 74.1%, down 0.8 percentage points. The full-year operating loss narrowed to $64.83 million, and the net loss narrowed to $65.94 million. Diluted EPS was -$0.53, an improvement from the prior fiscal year. Non-GAAP net loss was $2.9 million, compared with $19.8 million, and adjusted EBITDA was $15.8 million, compared with $0.3 million. Full-year operating cash flow was $17.85 million, down 18.3%, and capital expenditures were $6.19 million, down 53.8%. Deferred revenue, current portion, was $223.71 million, roughly flat with the prior year. RPO was $447.70 million, up 10.6% year over year. The company noted that RPO does not include amounts under contract subject to certain accounting exclusions.
On the product side, Yext announced an integration of generative AI into its Knowledge Graph and launched Yext Chat, a product that uses GPT-3 and other large language models. It also announced an integration with Apple Business Connect and the general availability of its Fall '22 Release, which includes the Listings Verifier. The company received recognition from G2's Winter '23 Reports and a 2022 Customer Value Leadership Award from Frost Sullivan for reputation management in the North American financial services industry. Yvette Martinez-Rea joined as EVP of Corporate Development. These moves are aimed at strengthening the Answers Platform and expanding the company's use cases beyond listings management.
Management issued guidance for the first fiscal quarter ending April 30, 2023 and for the fiscal year ending January 31, 2024. First-quarter fiscal 2024 adjusted EBITDA is projected in a range of $10.5 million to $11.5 million, with non-GAAP net income per share of $0.05 to $0.06 on 122.9 million weighted-average basic shares. For full fiscal 2024, adjusted EBITDA is projected in a range of $44.0 million to $46.0 million, with non-GAAP net income per share of $0.22 to $0.23 on 124.5 million weighted-average basic shares. Revenue ranges were also provided for both the first quarter and the full year.
Risks include macroeconomic weakness, foreign currency fluctuations, inflation, recession risk, and the company's ability to renew and expand subscriptions with existing customers. Yext also flagged customer attrition in its third-party reseller channel and the uncertainty around its credit facility after Silicon Valley Bank was placed into receivership. The company repurchased 13.8 million shares for $77.4 million under its share repurchase program, leaving $22.6 million available as of January 31, 2023.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $101.9M | $99.3M | +2.6% | $100.9M | +1.0% |
| Gross profit | $75.4M | $73.6M | +2.4% | $76.4M | -1.2% |
| Gross margin | 74.0% | 74.2% | -0.1 pp | 75.7% | -1.6 pp |
| Research & development | $17.1M | $17.6M | -2.9% | $18.0M | -4.9% |
| Sales & marketing | $47.2M | $49.4M | -4.3% | $58.2M | -18.8% |
| General & administrative | $18.7M | $18.7M | -0.1% | $22.1M | -15.4% |
| Total operating expenses | $83.1M | $85.7M | -3.1% | $98.3M | -15.5% |
| Operating income (loss) | -$7.7M | -$12.1M | +36.8% | -$22.0M | +65.1% |
| Operating margin | -7.5% | -12.2% | +4.7 pp | -21.8% | +14.2 pp |
| Net income (loss) | -$7.8M | -$12.3M | +36.7% | -$23.1M | +66.3% |
| Net margin | -7.7% | -12.4% | +4.8 pp | -22.9% | +15.2 pp |
| Diluted EPS | -$0.06 | -$0.10 | +$0.04 | — | — |
| Net retention rate | 95.0% | — | — | 98.0% | -3.0 pp |
Risks
Adverse economic conditions, inflation, reduced technology spending, and instability after the collapse of Silicon Valley Bank may cause customers to reduce, suspend, or delay spending, request concessions, shorten contract durations, or not renew. MD&A states fluctuations in foreign exchange rates and rising inflation have had, and may continue to have, an adverse impact on financial condition and operating results.
The filing states revenue growth has slowed in recent periods and the company expects slower growth in the coming year. FY2023 revenue was $400.85M, up +2.6% versus FY2022, and Q4 FY2023 revenue was $101.90M, up +1.0% versus Q4 FY2022.
A significant portion of revenue depends on third-party reseller customers, whose efforts Yext does not control. Third-party reseller ARR was $73.3M, down 6% year over year, and third-party reseller dollar-based net retention rate fell to 92% for FY2023 from 101% for FY2022.
Customers have no obligation to renew subscriptions and may renew for fewer features, at renegotiated rates, or for shorter contract lengths. Total dollar-based net retention rate declined to 96% for FY2023 from 101% for FY2022, with direct customers at 97% from 101%.
The company initiated a reduction in force in late January 2023 affecting approximately 8% of overall headcount, bringing headcount to about 1,100, and has experienced significant leadership turnover including CEO, CFO, and CRO changes. The filing says these changes have had and will continue to have near-term effects on business, growth, and profitability.
Revenue growth is substantially reliant on the sales force, and the filing notes a recent net decrease in sales personnel and historical difficulty recruiting and retaining sales personnel. Failure to adequately manage the sales force would impede growth.
The credit facility with Silicon Valley Bank may not be available in all or in part depending on the resolution of SVB after the FDIC was appointed receiver in March 2023. As of January 31, 2023, the company was in compliance with debt covenants, but the facility contains restrictive covenants and financial covenants.
Gross margin declined to 74.1% for FY2023 from 74.8% for FY2022 and to 74.0% in Q4 FY2023 from 75.7% in Q4 FY2022. The filing notes international network service provider fees are generally higher than domestic rates and gross margin may fluctuate as international operations expand.
Growth depends in part on strategic relationships with over 200 Publisher Network application providers such as Google, Apple, and Bing. Loss of access to one or a limited number of key providers, new fees, or non-renewal could reduce the value of the platform and lead to lost customers.
The market for the platform is competitive, rapidly evolving, and fragmented, and the company faces established enterprise search competitors as well as larger competitors with greater resources. If competitors' products become more accepted or are offered at lower prices, revenue growth and margins could be adversely affected.
Operating cash flow decreased to $17.85M for FY2023, down -18.3% versus FY2022, while capital expenditures decreased to $6.19M, down -53.8% versus FY2022. MD&A states cash flows may vary significantly quarter to quarter and future capital requirements depend on many factors.
Beginning in fiscal 2023, the Tax Cuts and Jobs Act eliminates the option to deduct research and development expenditures currently and requires amortization over five or fifteen years, which may increase cash taxes. The Inflation Reduction Act also introduced a 1% excise tax on certain stock repurchases after December 31, 2022, which could increase the cost of repurchases.
SaaS KPIs
All quarters →Customer Count
Remaining Performance Obligations (RPO)
Adjusted EBITDA
Non-GAAP Operating Margin
Dollar-Based Net Retention Rate (Total Customers)
Annual Recurring Revenue (ARR)
Dollar-Based Net Retention Rate (Direct Customers)
Dollar-Based Net Retention Rate (Third-Party Reseller Customers)
Annual Recurring Revenue (Direct Customers)
Summary, forecast, risks and KPIs are extracted from Yext, Inc.'s SEC filings for Q4 FY2023 (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.