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Yext, Inc. Announces First Quarter Fiscal 2019 Results

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Yext, Inc. Announces First Quarter Fiscal 2019 Results

-- First Quarter Revenue of $51.1 Million, an Increase of 38% Year-Over-Year

-- Gross Margin of 74.9% as Compared to 73.9% in the Year Ago Quarter

-- Issues Revenue Guidance of $53.0 Million - $54.0 Million for the Second Quarter Fiscal 2019

-- Updates Revenue Guidance for Fiscal 2019 to $225 Million - $227 Million

PR Newswire

NEW YORK, May 31, 2018 /PRNewswire/ -- Yext, Inc. (NYSE:YEXT), the leader in digital knowledge management (DKM), today announced its results for the three months ended April 30, 2018, or the Company's first quarter of fiscal 2019.

Yext logo. (PRNewsFoto/Yext) (PRNewsFoto/Yext)

"We are pleased with our results this quarter, highlighted by our 38% revenue growth over the first quarter of last year - driven, in part, by the more than 60 new enterprise logos we won this quarter - as well as the positive operating cash flow we generated during the quarter," said Howard Lerman, Co-Founder and Chief Executive Officer of Yext.

"During the quarter, we issued our Spring Product Release, which was packed with new features for our cutting-edge Knowledge Assistant.  Through simple SMS or Facebook Messenger commands, our customers can easily update even more information about their business, including photos and featured messages, or even ask Knowledge Assistant information about reviews, ratings and profile views.

"The theme of our most recent EXPLORE conference in London was the Intelligent Future, and a record number of attendees heard from Google about the need for structured data and about the process of building a global brand from one of our European customers, Jaguar Land Rover.  In October, we expect more than 1,000 attendees at ONWARD, our annual user conference in New York, to hear from more thought leaders.  We invite our investors to join us."

First Quarter Fiscal 2019 Highlights:

  • Revenue of $51.1 million, a 38% increase as compared to the $37.1 million reported in first quarter fiscal 2018.  The revenue increase was primarily due to the continued growth of our customer base and higher revenue from existing customers, primarily due to expanded subscriptions.
  • Gross Profit of $38.3 million, a 40% increase as compared to the $27.4 million reported in first quarter fiscal 2018.  Gross margin of 74.9% as compared to the 73.9% reported in first quarter fiscal 2018.
  • Net Loss and Non-GAAP Net Loss:
    • Net loss of $18.1 million as compared to the $16.1 million net loss in first quarter fiscal 2018.  The increased loss was driven by increased operating expenses, primarily in sales and marketing, due to efforts to acquire new customers.
    • Non-GAAP net loss of $10.1 million as compared to the $12.0 million non-GAAP net loss in the first quarter fiscal 2018.
  • Net Loss Per Share and Non-GAAP Net Loss Per Share:
    • Net loss per share of $0.19 based on 94.9 million weighted-average shares outstanding, compared to the net loss per share of $0.40 based on 40.5 million weighted-average shares outstanding in the first quarter fiscal 2018.
    • Non-GAAP net loss per share of $0.11 based on 94.9 million weighted-average shares outstanding at quarter end, as compared to the $0.13 non-GAAP net loss per share in the first quarter fiscal 2018 based on 90.0 million non-GAAP shares outstanding at quarter end.
    • Readers are encouraged to review the tables labeled "Reconciliation of GAAP to Non-GAAP Financial Measures" at the end of this release.
  • Balance Sheet:  Cash, cash equivalents and marketable securities of $124.1 million as of April 30, 2018. 
  • Cash Flow:  Net cash provided by operating activities for the first quarter of fiscal 2019 was $1.4 million as compared to net cash used in operating activities of $8.3 million in the same period in fiscal 2018.  The improvement in the current period reflects a greater source of cash from working capital, driven primarily by the timing of collections of accounts receivable.

Recent Business Highlights:

  • Licenses to Yext's digital knowledge platform as of April 30, 2018 increased 49% as compared to April 30, 2017, while the attributes managed increased 53% over the same period.
  • Issued the Spring Product Release, which provides new services and features, including: enhancements to the Yext Knowledge Assistant - the intelligent, conversational user interface allowing users to manage and update public data about their business using Facebook Messenger or SMS text messaging - through the addition of 15 new skills; templated review responses, allowing customers to create and leverage a library of responses to address customer feedback rapidly; and new capabilities enabling users to upload their digital knowledge into the Yext Knowledge Manager in bulk. 
  • Launched Yext for Insurance, enabling individual agents to manage and organize relevant information sought by customers, such as the types of insurance offered, languages spoken, contact details and more.
  • Expanded the global reach of the industry-leading PowerListings® Network by announcing an integration with TripAdvisor, the world's largest travel site, giving our customers the ability to directly edit restaurant listings via the Yext Knowledge Engine and to monitor their TripAdvisor reviews in the Yext dashboard.
  • Expanded the capabilities of the Yext App Directory through additional integrations with Trustpilot Reviews and Traffic Booster by StoreYa.  The Yext App Directory allows customers to connect the digital knowledge they are managing within Yext to other software systems used across the enterprise, such as Salesforce, HubSpot, Zendesk, Domo, StoreForce, Tiger Pistol, Smartling and more.

Financial Outlook:

Yext is also providing the following guidance for its second fiscal quarter ending July 31, 2018 and the fiscal year ending January 31, 2019. 

  • Second Quarter Fiscal 2019 Outlook:
    • Revenue is projected to be $53.0 million to $54.0 million.
    • Non-GAAP net loss per share is projected to be $0.11 to $0.13, which assumes 97.2 million weighted-average shares outstanding.
  • Full Year Fiscal 2019 Outlook:
    • Revenue is projected to be $225 million to $227 million, an increase from the Company's previous expectation of $224 million to $226 million.
    • Non-GAAP net loss per share is projected to be $0.43 to $0.45, which assumes 98.0 million weighted average shares outstanding.
    • Readers are encouraged to review the tables labeled "Reconciliation of GAAP to Non-GAAP Financial Measures" at the end of this release.

Conference Call Information
Yext will host a conference call at 5:00 P.M. Eastern Time (2:00 P.M. Pacific Time) today to discuss its financial results.  To join, participants may call 1.877.883.0383 (U.S. callers) or 1.412.902.6506 (international callers) using conference ID number 4352846.  A live audio webcast of the call will also be available on the Investor Relations section of the Company's website at investors.yext.com.  A replay of the call will be available until June 7, 2018 at 11:59 P.M. Eastern Time by dialing 1.877.344.7529 (U.S. callers) or 1.412.317.0088 (international) and entering passcode 10120639.

About Yext
Yext is the leading Digital Knowledge Management (DKM) platform. Yext's mission is to give companies control over their brand experiences across the digital universe of maps, apps, search engines, voice assistants, and other intelligent services that drive consumer discovery, decision, and action. Today, thousands of businesses including brands like Taco Bell, Rite Aid and Steward Health use the Yext Knowledge Engine™ to manage their digital knowledge in order to boost brand engagement, drive foot traffic, and increase sales.

Yext has been named a Best Place to Work by Fortune and Great Place to Work® as well as a Best Workplace for women.  Yext is headquartered in New York City with offices in Berlin, Chicago, Dallas, Geneva, London, Paris, Tyson's Corner, San Francisco, Shanghai, and Tokyo. For more information, visit www.yext.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This release includes forward-looking statements including, but not limited to, statements regarding our revenue, non-GAAP net loss and shares outstanding for our second fiscal quarter 2019 and full year fiscal 2019 in the paragraphs under "Financial Outlook" above, and other statements regarding our expectations regarding the growth of our company and our industry.  In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential," "might," "would," "continue," or the negative of these terms or other comparable terminology.  Actual events or results may differ from those expressed in these forward-looking statements, and these differences may be material and adverse.

We have based the forward-looking statements contained in this release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, strategy, short- and long-term business operations, prospects, business strategy and financial needs.  Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, our ability to renew existing customers and attract new customers; our ability to successfully compete in new geographies; our ability to recruit and retain our enterprise-level sales force; our ability to expand our publishing network to obtain new partners; our ability to develop new product and platform offerings and release product updates that are adopted by our customers; our ability to manage our growth effectively; the number of options exercised by our employees and former employees; and the accuracy of the assumptions and estimates underlying our financial projections.  For a detailed discussion of these and other risk factors, please refer to the risks detailed in our filings with the Securities and Exchange Commission, including, without limitation, our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K, which are available at http://investors.yext.com and on the SEC's website at https://www.sec.gov.  Further information on potential risks that could affect actual results will be included in other filings we make with the SEC from time to time.  Moreover, we operate in a very competitive and rapidly changing environment.  New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release.  We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this release relate only to events as of the date on which such statements are made.  We undertake no obligation to update any forward-looking statements after the date hereof or to conform such statements to actual results or revised expectations, except as required by law.

Non-GAAP Measurements
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables include non-GAAP net loss and non-GAAP net loss per share.  Non-GAAP net loss and non-GAAP net loss per share are financial measures that are not calculated in accordance with GAAP.  We define these non-GAAP financial measures as our GAAP net loss as adjusted to exclude the effects of stock-based compensation expenses.  We believe these non-GAAP financial measures provide investors and other users of our financial information consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our results of operations.  We also believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics eliminate the effects of stock-based compensation, which may vary for reasons unrelated to overall operating performance.

We use these non-GAAP financial measures in conjunction with traditional GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our Board of Directors concerning our financial performance.  Our definition may differ from the definitions used by other companies and therefore comparability may be limited.  In addition, other companies may not publish this or similar metrics.  Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.

These non-GAAP financial measures may be limited in their usefulness because they do not present the full economic effect of our use of stock-based compensation.  We compensate for these limitations by providing investors and other users of our financial information a reconciliation of non-GAAP net loss to net loss and non-GAAP net loss per share to net loss per share, the most closely related GAAP financial measures.  However, we have not reconciled the non-GAAP guidance measures disclosed under "Financial Outlook" to their corresponding GAAP measures because certain reconciling items such as stock-based compensation and the corresponding provision for income taxes depend on factors such as the stock price at the time of award of future grants and thus cannot be reasonably predicted.  Accordingly, reconciliations to the non-GAAP guidance measures is not available without unreasonable effort.  We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP net loss and non-GAAP net loss per share in conjunction with net loss and net loss per share.

For Further Information Contact:
James Hart
Yext Investor Relations
212.994.6768
IR@yext.com

 

YEXT, INC.


Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(unaudited)



April 30, 2018


January 31, 2018

Assets




Current assets:




Cash and cash equivalents

$

53,403



$

34,367


Marketable securities

70,710



83,974


Accounts receivable, net of allowances of $81 and $231, respectively

24,123



44,656


Prepaid expenses and other current assets

7,912



7,703


Deferred commissions, current

9,480



9,342


Total current assets

165,628



180,042


Property and equipment, net

11,572



11,438


Goodwill

4,835



4,924


Intangible assets, net

2,524



2,761


Other long term assets

3,847



4,324


Total assets

$

188,406



$

203,489


Liabilities and stockholders' equity




Current liabilities:




Accounts payable, accrued expenses and other current liabilities

$

19,573



$

27,416


Deferred revenue, current

83,865



89,474


Deferred rent

1,249



1,288


Total current liabilities

104,687



118,178


Deferred rent, non-current

2,940



3,213


Other long term liabilities

490



645


Total liabilities

108,117



122,036


Commitments and contingencies




Stockholders' equity:




Preferred stock, $0.001 par value per share; 50,000,000 shares authorized at April 30, 2018 and January 31, 2018; zero shares issued and outstanding at April 30, 2018 and January 31, 2018




Common stock, $0.001 par value per share; 500,000,000 shares authorized at April 30, 2018 and January 31, 2018; 102,743,648 and 100,482,264 shares issued at April 30, 2018 and January 31, 2018, respectively; 96,238,314 and 93,976,930 shares outstanding at April 30, 2018 and January 31, 2018, respectively

103



100


Additional paid-in capital

345,408



328,344


Accumulated other comprehensive loss

(1,731)



(1,636)


Accumulated deficit

(251,586)



(233,450)


Treasury stock, at cost

(11,905)



(11,905)


Total stockholders' equity

80,289



81,453


Total liabilities and stockholders' equity

$

188,406



$

203,489


 

 

YEXT, INC.


Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(unaudited)



Three months ended April 30,


2018


2017

Revenue

$

51,095



$

37,080


Cost of revenue

12,800



9,688


Gross profit

38,295



27,392


Operating expenses:




Sales and marketing

37,029



28,462


Research and development

7,729



4,986


General and administrative

11,538



9,338


Total operating expenses

56,296



42,786


Loss from operations

(18,001)



(15,394)


Investment income

387




Interest expense

(67)



(88)


Other expense, net

(170)



(592)


Loss from operations before income taxes

(17,851)



(16,074)


Provision for income taxes

(285)



(32)


Net loss

$

(18,136)



$

(16,106)






Net loss per share attributable to common stockholders, basic and diluted

$

(0.19)



$

(0.40)


Weighted-average number of shares used in computing net loss per share
attributable to common stockholders, basic and diluted

94,942,773



40,466,620






Other comprehensive (loss) income:




Foreign currency translation adjustment

$

(93)



$

192


Unrealized loss on marketable securities

(2)




Total comprehensive loss

$

(18,231)



$

(15,914)


 

 

YEXT, INC.


Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)



Three months ended April 30,


2018


2017

Operating activities:




Net loss

$

(18,136)



$

(16,106)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:




Depreciation and amortization

1,576



1,176


Provision for bad debts

76



79


Stock-based compensation expense

7,993



4,062


Change in fair value of convertible preferred stock warrant liability



491


Deferred income taxes

(22)



(13)


Amortization of deferred financing costs

34



34


Amortization of premium on marketable securities

39




Changes in operating assets and liabilities:




Accounts receivable

20,269



8,537


Prepaid expenses and other current assets

(379)



(1,277)


Deferred commissions

366



(365)


Other long term assets

(79)



(220)


Accounts payable, accrued expenses and other current liabilities

(4,565)



(4,994)


Deferred revenue

(5,463)



243


Deferred rent

(305)



7


Other long term liabilities

5



2


Net cash provided by (used in) operating activities

1,409



(8,344)


Investing activities:




Maturities of marketable securities

13,223




Capital expenditures

(1,572)



(1,078)


Net cash provided by (used in) investing activities

11,651



(1,078)


Financing activities:




Proceeds from initial public offering, net of underwriting discounts and commissions



123,527


Payments of deferred offering costs



(1,969)


Proceeds from exercise of stock options

4,948



2,140


Repayments on Revolving Line



(5,000)


Proceeds, net from employee stock purchase plan withholdings

1,221




Net cash provided by financing activities

6,169



118,698


Effect of exchange rate changes on cash, cash equivalents and restricted cash

(193)



41


Net increase in cash, cash equivalents and restricted cash

19,036



109,317


Cash, cash equivalents and restricted cash at beginning of period

34,367



24,920


Cash, cash equivalents and restricted cash at end of period

$

53,403



$

134,237


 

Supplemental reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:


(in thousands)

April 30, 2018


April 30, 2017

Cash and cash equivalents

$

53,403



$

133,735


Restricted cash



502


Total cash, cash equivalents and restricted cash

$

53,403



$

134,237


 

 

YEXT, INC.


Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands)

(unaudited)



Three months ended April 30, 2018


GAAP


Stock-Based
Compensation
Expense


Non-GAAP

Cost and expenses:






Cost of revenue

$

12,800



$

(566)



$

12,234


Gross profit

$

38,295



$

(566)



$

38,861


Sales and marketing

$

37,029



$

(3,770)



$

33,259


Research and development

$

7,729



$

(1,556)



$

6,173


General and administrative

$

11,538



$

(2,101)



$

9,437


Loss from operations

$

(18,001)



$

(7,993)



$

(10,008)


Net loss

$

(18,136)



$

(7,993)



$

(10,143)




Three months ended April 30, 2017


GAAP


Stock-Based
Compensation
Expense


Non-GAAP

Cost and expenses:






Cost of revenue

$

9,688



$

(147)



$

9,541


Gross profit

$

27,392



$

(147)



$

27,539


Sales and marketing

$

28,462



$

(2,259)



$

26,203


Research and development

$

4,986



$

(563)



$

4,423


General and administrative

$

9,338



$

(1,093)



$

8,245


Loss from operations

$

(15,394)



$

(4,062)



$

(11,332)


Net loss

$

(16,106)



$

(4,062)



$

(12,044)


 

 

YEXT, INC.


Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except share and per share data)

(unaudited)



Three months ended April 30,


2018


2017

Net loss

$

(18,136)



$

(16,106)


Stock-based compensation expense

7,993



4,062


Non-GAAP net loss

$

(10,143)



$

(12,044)






Net loss per share attributable to common stockholders, basic and diluted

$

(0.19)



$

(0.40)






Stock-based compensation expense per share

0.08



0.10


Non-GAAP unweighted adjustment



0.17


Non-GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.11)



$

(0.13)






Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted

94,942,773



40,466,620






Non-GAAP unweighted adjustment



49,528,821


Non-GAAP number of shares outstanding in computing non-GAAP net loss per share attributable to common stockholders, basic and diluted

94,942,773



89,995,441


Note: the Company's IPO transaction closed on April 19, 2017, at which time the Company's convertible preferred stock converted to approximately 43.5 million shares and the Company issued an additional 12.1 million shares to investors in that offering.  In order to serve as a better comparison, the Company calculated non-GAAP net loss per share for the three months ended April 30, 2017, using the shares outstanding as of the end of the period, as if they had been outstanding for the whole period.

The Company calculated non-GAAP net loss per share for the three months ended April 30, 2018 using the weighted-average number of shares outstanding for the respective period and did not include a non-GAAP unweighted adjustment.

 

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SOURCE Yext, Inc.

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