Financial Performance - Revenue for the three months ended July 31, 2025, was $113,094,000, representing a 15.5% increase from $97,887,000 in the same period of 2024[19] - Gross profit for the six months ended July 31, 2025, was $167,412,000, up from $150,038,000 in 2024, indicating an increase of 11.6%[19] - Net income for the three months ended July 31, 2025, was $26,751,000, compared to a net loss of $4,057,000 in the same period of 2024[19] - Net income for the six months ended July 31, 2025, was $27.5 million, compared to a net loss of $7.9 million for the same period in 2024[29] - Total revenue for the six months ended July 31, 2025, was $222.6 million, representing a 14.8% increase from $193.9 million in 2024[45] - Adjusted EBITDA for the three months ended July 31, 2025, was $26,369,000, compared to $9,787,000 for the same period in 2024, representing a significant increase[185] - GAAP net income for the six months ended July 31, 2025, was $27,521,000, up from a loss of $7,874,000 in the same period in 2024[184] Assets and Liabilities - Total current assets increased to $300,353,000 as of July 31, 2025, from $285,801,000 as of January 31, 2025, reflecting a growth of 5.4%[17] - Total liabilities decreased to $473,637,000 as of July 31, 2025, down from $456,885,000 as of January 31, 2025, a reduction of 3.7%[17] - Cash and cash equivalents increased to $178,761,000 as of July 31, 2025, compared to $123,133,000 as of January 31, 2025, marking a significant increase of 45.2%[17] - The total stockholders' equity as of July 31, 2025, was $152,529,000, slightly down from $153,193,000 as of January 31, 2025[17] - As of July 31, 2025, total assets amounted to $107.1 million, with $47.35 million in Level 1 assets and $59.76 million in Level 2 assets[77] Cash Flow - Cash provided by operating activities for the six months ended July 31, 2025, was $46.1 million, an increase from $27.7 million in 2024[29] - Free cash flow for the three months ended July 31, 2025, was $7,834,000, compared to a negative free cash flow of $11,194,000 in the same period in 2024[190] - The company reported a free cash flow margin of 20% for the six months ended July 31, 2025, compared to 14% in the same period in 2024[190] - Changes in accounts receivable positively impacted cash flows, with an increase of $47.3 million for the six months ended July 31, 2025[206] Expenses - Operating expenses for the three months ended July 31, 2025, were $55,360,000, down from $83,160,000 in the same period of 2024, a decrease of 33.5%[19] - The Company incurred total expenses of $89.48 million for the three months ended July 31, 2025, compared to $86.94 million for the same period in 2024, reflecting an increase of about 2.9%[123] - Cost of revenue for the three months ended July 31, 2025, was $28,060, representing 25% of total revenue[155] - Cost of revenue for the six months ended July 31, 2025, was $55.2 million, an increase of $11.3 million or 26%, primarily due to higher amortization expenses and personnel-related costs[169] Acquisitions - The company completed the acquisition of Hearsay on August 1, 2024, to enhance its digital presence platform capabilities[53] - The total consideration transferred for the acquisition of Hearsay amounted to $180.7 million, including $132.5 million in cash and liabilities incurred[54] - The acquisition of Places Scout was completed for a purchase price of $20.3 million, with $13.8 million allocated to goodwill[67][68] - The Company recognized acquisition-related costs totaling $11.2 million, which included $8.8 million related to the incentive pool for Hearsay founders and early employees[59] Stock-Based Compensation - Stock-based compensation expense increased to $25.6 million in the first half of 2025 from $24.4 million in 2024[29] - Total stock-based compensation expense for Q2 2025 was $12.962 million, a 5.1% increase from $12.333 million in Q2 2024[91] - Research and development stock-based compensation increased to $3.818 million in Q2 2025, up 46.4% from $2.607 million in Q2 2024[91] Debt and Credit Agreements - The company entered into a credit agreement providing for term loan facilities of up to $200 million[135] - The company is required to maintain minimum qualified cash of at least $35 million under the May 2025 Credit Agreement[105] - As of July 31, 2025, the company had $100 million in principal debt obligations under the May 2025 Credit Agreement[109] - The May 2025 Credit Agreement includes financial covenants requiring a minimum qualified cash of at least $35 million at all times[201] Revenue Growth - Revenue from North America for the six months ended July 31, 2025, was $179.9 million, up 18.3% from $152.2 million in 2024[45] - The company’s international revenue for the six months ended July 31, 2025, was $42.7 million, a slight increase from $41.7 million in 2024[45] - Revenue from direct customers was $94.5 million for the three months ended July 31, 2025, up 19% from $79.3 million in 2024, while revenue from third-party resellers remained stable at $18.6 million[158] Other Financial Metrics - The Company achieved a net income of $26.75 million for the three months ended July 31, 2025, compared to a net loss of $4.06 million for the same period in 2024[122] - The diluted net income per share attributable to common stockholders for the three months ended July 31, 2025, was $0.03, compared to a loss of $0.03 per share in the same period of 2024[122] - Dollar-Based Net Retention Rate for Direct Customers improved to 95% from 91% year-over-year[146] - Annual Recurring Revenue (ARR) for Direct customers increased to $369,541, representing an 18% growth from $313,392 in the previous year[143] - Total ARR reached $444,362, up 15% from $387,296 year-over-year[143]

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) Yext reported strong Q2 FY2026 results exceeding guidance, alongside a non-binding acquisition proposal from its CEO [Second Quarter Fiscal 2026 Performance Overview](index=1&type=section&id=Second%20Quarter%20Fiscal%202026%20Performance%20Overview) Yext exceeded Q2 FY2026 guidance for **revenue** and **Adjusted EBITDA**, reporting strong year-over-year growth - Yext exceeded its prior quarterly guidance for both **revenue** and **Adjusted EBITDA**, and was within the high end of its range for **non-GAAP EPS**[2](index=2&type=chunk) Key Financial Highlights (Three months ended July 31, 2025 vs 2024) | Metric | Q2 FY2026 (2025) | Q2 FY2025 (2024) | YoY Change | | :-------------------------- | :--------------- | :--------------- | :--------- | | Revenue | $113.1 million | $97.9 million | 16% | | Adjusted EBITDA | $26.4 million | $9.8 million | 169.4% | | Adjusted EBITDA Margin | 23% | 10% | +13 percentage points | | Net Income (Loss) | $26.8 million | $(4.1) million | Not Applicable | | Non-GAAP EPS (basic) | $0.13 | $0.05 | 160% | | ARR (as of July 31) | $444.4 million | $387.3 million | 15% | - Results for the three months ended July 31, 2025, included the results of **Hearsay Social, Inc.** and **KabanaSoft, LLC (Places Scout)**, which were not included in the comparative period of the three months ended July 31, 2024[4](index=4&type=chunk) [Pending Acquisition Proposal](index=1&type=section&id=Pending%20Acquisition%20Proposal) Yext's **CEO** proposed to acquire outstanding shares, leading to Q2 FY2026 conference call cancellation - **Michael Walrath**, **CEO and Chairman**, submitted a non-binding proposal to acquire all outstanding shares of Yext not already owned by him at **$9.00 per share** in cash[3](index=3&type=chunk) - In light of the pending proposal, Yext will not hold a corresponding conference call[3](index=3&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section details Yext's platform, forward-looking statement disclaimers, and contact information [About Yext](index=2&type=section&id=About%20Yext) Yext is a leading brand visibility platform for discovery and engagement across digital channels - **Yext (NYSE: YEXT)** is the leading brand visibility platform, built for discovery and engagement across **AI search**, **traditional search**, **social media**, **websites**, and **direct communications**[15](index=15&type=chunk) - The platform is powered by over **2 billion trusted data points** and a suite of integrated products, offering **real-time insights**, **AI-driven recommendations**, and execution at scale[15](index=15&type=chunk) [Statement Regarding Forward-Looking Statements](index=2&type=section&id=Statement%20Regarding%20Forward-Looking%20Statements) Forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ - The release includes **forward-looking statements** regarding Yext's future expectations, beliefs, intentions, or strategies, including the effects, benefits, and challenges of a potential **acquisition transaction**[16](index=16&type=chunk) - These statements are subject to many **risks and uncertainties**, including the possibility that any **acquisition transaction** does not occur, conditions are not satisfied, required approvals are not obtained, potential litigation, and possible disruption to current plans and operations[16](index=16&type=chunk)[18](index=18&type=chunk) - Yext assumes no obligation to update or revise any **forward-looking statements**[18](index=18&type=chunk) [Contact Information](index=5&type=section&id=Contact%20Information) Contact details are provided for **investor relations** and **public relations** inquiries - **Investor Relations** can be reached at **IR@yext.com**[39](index=39&type=chunk) - **Public Relations** can be reached at **PR@yext.com**[39](index=39&type=chunk) [GAAP Financial Statements](index=6&type=section&id=GAAP%20Financial%20Statements) This section presents Yext's **GAAP financial statements**, including **balance sheets**, **operations**, and **cash flows** [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Yext's **total assets** increased to **$626.2 million**, driven by **cash** and new **long-term debt** Condensed Consolidated Balance Sheets (Selected Data, in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :-------------------------------- | :------------ | :--------------- | | Total assets | $626,166 | $610,078 | | Cash and cash equivalents | $178,761 | $123,133 | | Accounts receivable, net | $66,404 | $112,942 | | Goodwill | $110,686 | $96,782 | | Total liabilities | $473,637 | $456,885 | | Unearned revenue, current | $185,592 | $229,144 | | Long term debt, net | $98,281 | — | | Total stockholders' equity | $152,529 | $153,193 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) Yext reported Q2 FY2026 **net income** of **$26.8 million**, a significant improvement from a prior year **net loss** Condensed Consolidated Statements of Operations (Selected Data, in thousands) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Revenue | $113,094 | $97,887 | | Gross profit | $85,034 | $75,594 | | Total operating expenses | $55,360 | $83,160 | | Income (loss) from operations | $29,674 | $(7,566) | | Net income (loss) | $26,751 | $(4,057) | | Net income (loss) per share, basic | $0.22 | $(0.03) | | Net income (loss) per share, diluted | $0.03 | $(0.03) | - **General and administrative expenses** showed a significant change, reporting a credit of **$(61) thousand** in Q2 FY2026 compared to an expense of **$22,623 thousand** in Q2 FY2025[43](index=43&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Net cash** from **operating activities** increased to **$46.1 million**, with **investing outflow** and **financing inflow** Condensed Consolidated Statements of Cash Flows (Selected Data, in thousands) | Metric | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $46,132 | $27,660 | | Net cash used in investing activities | $(19,936) | $(1,192) |\n| Net cash provided by (used in) financing activities | $40,748 | $(2,008) | | Cash, cash equivalents and restricted cash at end of period | $209,538 | $234,823 | - Key drivers for **cash flow from operating activities** included **net income** of **$27.5 million** and **stock-based compensation expense** of **$25.6 million**, partially offset by adjustments to **contingent consideration** of **$(21.6) million**[45](index=45&type=chunk) - **Financing activities** were significantly impacted by proceeds from **debt issuance** of **$99.0 million** and **share repurchases** of **$(45.4) million**[45](index=45&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles Yext's **non-GAAP financial measures** for core business performance [Non-GAAP Measurements Definitions](index=3&type=section&id=Non-GAAP%20Measurements%20Definitions) Yext uses **non-GAAP measures**, excluding **stock-based compensation** and **acquisition costs**, for consistent performance - **Non-GAAP financial measures** exclude the effects of **stock-based compensation expenses**, **acquisition-related costs**, and **amortization of acquired intangibles** to provide consistency and comparability with past financial performance[19](index=19&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) - **Adjusted EBITDA** is defined as **GAAP net income (loss)** before **interest**, **taxes**, **depreciation**, **amortization**, **other income/expense**, **stock-based compensation expense**, and **acquisition-related costs**[23](index=23&type=chunk) - **Constant currency revenue** provides a framework for assessing performance by excluding the effect of **foreign currency rate fluctuations**, while **free cash flow** is defined as **net cash** from **operating activities** less **capital expenditures**[25](index=25&type=chunk)[26](index=26&type=chunk) [Adjusted EBITDA Reconciliation](index=9&type=section&id=Adjusted%20EBITDA%20Reconciliation) Yext's **Adjusted EBITDA** for Q2 FY2026 significantly increased to **$26.4 million**, with an improved **23.3% margin** GAAP Net Income (Loss) to Adjusted EBITDA Reconciliation (in thousands) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | GAAP net income (loss) | $26,751 | $(4,057) | | Adjusted EBITDA | $26,369 | $9,787 | | GAAP net income (loss) as a % of revenue | 23.7% | -4.1% | | Adjusted EBITDA margin | 23.3% | 10.0% | [Non-GAAP Operating Expenses Reconciliation](index=10&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) **Non-GAAP operating expenses** decreased to **$64.7 million** (**57%** of **revenue**) in Q2 FY2026, indicating improved efficiency Non-GAAP Operating Expenses Reconciliation (Three months ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | GAAP sales and marketing | $32,069 | $41,957 | | Non-GAAP sales and marketing | $29,959 | $38,802 | | Non-GAAP sales and marketing as a % of revenue | 26% | 40% | | GAAP research and development | $23,352 | $18,580 | | Non-GAAP research and development | $19,149 | $15,973 | | Non-GAAP research and development as a % of revenue | 17% | 16% | | GAAP general and administrative | $(61) | $22,623 | | Non-GAAP general and administrative | $15,582 | $14,581 | | Non-GAAP general and administrative as a % of revenue | 14% | 15% | [Non-GAAP Gross Profit and Operating Income Reconciliation](index=11&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Operating%20Income%20Reconciliation) **Non-GAAP gross profit** increased to **$88.3 million** (**78.1% margin**), showing improved operational efficiency Non-GAAP Gross Profit and Operating Income Reconciliation (Three months ended July 31, in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | GAAP gross profit | $85,034 | $75,594 | | Non-GAAP gross profit | $88,304 | $76,292 | | Non-GAAP gross margin | 78.1% | 77.9% | | GAAP income (loss) from operations | $29,674 | $(7,566) | | Non-GAAP income from operations | $23,614 | $6,936 | | Non-GAAP operating margin | 21% | 7% | [Non-GAAP Net Income and EPS Reconciliation](index=12&type=section&id=Non-GAAP%20Net%20Income%20and%20EPS%20Reconciliation) **Non-GAAP net income** for Q2 FY2026 was **$16.3 million**, with **diluted EPS** rising to **$0.12** Non-GAAP Net Income and EPS Reconciliation (Three months ended July 31, in thousands, except per share data) | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | GAAP net income (loss) | $26,751 | $(4,057) | | Non-GAAP net income | $16,309 | $6,752 | | Non-GAAP net income as a % of revenue | 14.4% | 6.9% | | GAAP basic EPS | $0.22 | $(0.03) | | Non-GAAP basic EPS | $0.13 | $0.05 | | GAAP diluted EPS | $0.03 | $(0.03) | | Non-GAAP diluted EPS | $0.12 | $0.05 | - The projected **tax rate** for **non-GAAP income tax provision** was updated to **25.5%** in the second quarter of fiscal 2026, compared to **23.5%** at the start of the fiscal year and **25%** in fiscal year 2025[21](index=21&type=chunk)[56](index=56&type=chunk) Non-GAAP Net Income and EPS Reconciliation (Six months ended July 31, in thousands, except per share data) | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | GAAP net income (loss) | $27,521 | $(7,874) | | Non-GAAP net income | $32,834 | $13,104 | | Non-GAAP net income as a % of revenue | 14.8% | 6.8% | | GAAP basic EPS | $0.22 | $(0.06) | | Non-GAAP basic EPS | $0.26 | $0.10 | | GAAP diluted EPS | $0.05 | $(0.06) | | Non-GAAP diluted EPS | $0.25 | $0.10 | [Constant Currency Revenue and Free Cash Flow Reconciliation](index=14&type=section&id=Constant%20Currency%20Revenue%20and%20Free%20Cash%20Flow%20Reconciliation) **Constant currency revenue** grew **14%**, and **free cash flow** improved to **$7.8 million** with a **7% margin** Constant Currency Revenue and Free Cash Flow (Three months ended July 31, in thousands) | Metric | 2025 | 2024 | Growth Rates | | :------------------------------------------ | :----- | :----- | :----------- | | Revenue (GAAP) | $113,094 | $97,887 | 16% | | Revenue on a constant currency basis (Non-GAAP) | $111,875 | Not Applicable | 14% | | Net cash provided by (used in) operating activities | $8,407 | $(10,649) | Not Applicable | | Free cash flow | $7,834 | $(11,194) | Not Applicable | | Free cash flow margin | 7% | -11% | Not Applicable | Constant Currency Revenue (Six months ended July 31, in thousands) | Metric | 2025 | 2024 | Growth Rates | | :------------------------------------------ | :----- | :----- | :----------- | | Revenue (GAAP) | $222,577 | $193,877 | 15% | | Revenue on a constant currency basis (Non-GAAP) | $220,825 | Not Applicable | 14% | [Operating Metrics & Supplemental Information](index=2&type=section&id=Operating%20Metrics%20%26%20Supplemental%20Information) This section defines key **operating metrics** and provides supplemental information on **ARR**, **retention rates**, and **RPO** [Operating Metrics Definitions](index=4&type=section&id=Operating%20Metrics%20Definitions) Yext defines **ARR** as annualized recurring contract amounts, and **retention rates** measure **customer retention** - **Annual recurring revenue (ARR)** for **Direct customers** is the **annualized recurring amount** of all contracts in the **enterprise**, **mid-size**, and **small business customer base**[30](index=30&type=chunk) - **Dollar-based net retention rate (NRR)** assesses the ability to retain **customers** and expand the **ARR** they generate, calculated by comparing **ARR** from a cohort of **customers** over a **12-month period**, including **expansion, contraction, and churn**[37](index=37&type=chunk) - **Dollar-based gross retention rate** assesses the ability to retain **customers**, similar to **NRR** but excludes **customer expansion**[38](index=38&type=chunk) [Annual Recurring Revenue (ARR)](index=15&type=section&id=Annual%20Recurring%20Revenue%20%28ARR%29) **Total Annual Recurring Revenue (ARR)** reached **$444.4 million**, a **15%** year-over-year increase Annual Recurring Revenue (in thousands) | Metric | July 31, 2025 | July 31, 2024 | Variance (Dollars) | Percent | | :-------------------------- | :------------ | :------------ | :----------------- | :------ | | Direct Customers | $369,541 | $313,392 | $56,149 | 18% | | Third-Party Reseller Customers | $74,821 | $73,904 | $917 | 1% | | Total Annual Recurring Revenue | $444,362 | $387,296 | $57,066 | 15% | - **ARR** as of July 31, 2025, included an approximate **$3.2 million positive impact** from **foreign currency exchange rates** on a **constant currency basis**[11](index=11&type=chunk) [Dollar-Based Net Retention Rate (NRR)](index=15&type=section&id=Dollar-Based%20Net%20Retention%20Rate%20%28NRR%29) Yext's total **Dollar-Based Net Retention Rate (NRR)** was **95%**, an improvement from **91%** in the prior year Dollar-Based Net Retention Rate | Metric | Jul. 31, 2025 | Jul. 31, 2024 | | :-------------------------- | :------------ | :------------ | | Direct Customers | 95% | 91% | | Third-Party Reseller Customers | 98% | 93% | | Total Customers | 95% | 91% | [Dollar-Based Gross Retention Rate](index=15&type=section&id=Dollar-Based%20Gross%20Retention%20Rate) The total **Dollar-Based Gross Retention Rate** was **88%**, an improvement from **84%** in the prior year Dollar-Based Gross Retention Rate | Metric | Jul. 31, 2025 | Jul. 31, 2024 | | :-------------------------- | :------------ | :------------ | | Direct Customers | 87% | 83% | | Third-Party Reseller Customers | 88% | 88% | | Total Customers | 88% | 84% | [Remaining Performance Obligations (RPO)](index=2&type=section&id=Remaining%20Performance%20Obligations%20%28RPO%29) **Remaining Performance Obligations (RPO)** totaled **$445.0 million**, with **$407.2 million** expected over **24 months** - **Remaining Performance Obligations (RPO)** were **$445.0 million** as of July 31, 2025[12](index=12&type=chunk) - **$407.2 million** of **RPO** is expected to be recognized as **revenue** over the **next twenty-four months**[12](index=12&type=chunk)

Company Overview - Yext (YEXT) shares increased by 8.8% to $8.8, driven by CEO Michael Walrath's proposal to take the company private at a cash offer of $9.00 per share, representing an 11% premium over the previous closing price [1] - The stock had previously experienced a 1.1% loss over the past four weeks [1] Earnings Expectations - Yext is expected to report quarterly earnings of $0.12 per share, reflecting a year-over-year increase of 140% [2] - Revenue projections for Yext stand at $111.22 million, which is a 13.6% increase compared to the same quarter last year [2] Stock Performance and Trends - The consensus EPS estimate for Yext has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [3] - Yext currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] - Acuity (AYI), another company in the same industry, saw a 1.8% increase in its stock price, closing at $319.38, with a 7.2% return over the past month [3] Acuity Overview - Acuity's consensus EPS estimate for its upcoming report is $4.6, which is a 7% increase from the previous year [4] - Acuity also holds a Zacks Rank of 3 (Hold), similar to Yext [4]

Core Viewpoint - Yext's CEO and chairman, Michael Walrath, has proposed to acquire all outstanding shares of the company not already owned by him, and the board has formed a special subcommittee to evaluate this proposal [2][3] Group 1: Acquisition Proposal - Walrath's acquisition proposal is set at $9.00 per share, and he emphasizes his commitment to the company and its stakeholders while being open to other qualified bidders [2][3] - The board of directors is currently assessing the proposal through a special subcommittee of independent directors [2] Group 2: Company Performance and Expectations - Yext expects to report revenue for the quarter ended July 31 in the range of $111 million to $111.5 million, with adjusted EBITDA between $24.5 million and $25 million, and non-GAAP net income per share of 12 to 13 cents [4] - In the previous quarter ended April 30, Yext reported revenue of $109.5 million, adjusted EBITDA of $24.7 million, and non-GAAP earnings per share of 13 cents [4] - Walrath noted that the first quarter results showed solid execution and growing interest in Yext's platform, exceeding guidance on revenue and profitability [5]

Core Insights - The focus on steady earnings growth is essential for assessing a company's profitability, but rapid earnings growth can significantly drive stock prices higher [1] - Research indicates that stocks with accelerating earnings often see their prices increase subsequently [1] Earnings Acceleration - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), characterized by an increase in quarter-over-quarter earnings growth rates [3] - This metric helps identify stocks that have not yet attracted investor attention, potentially leading to a price rally once recognized [4] Screening Parameters - The screening process involves identifying stocks where the last two quarter-over-quarter EPS growth rates exceed previous periods' growth rates, with projected EPS growth rates for the upcoming quarter expected to surpass prior periods [6][7][8] - Additional criteria include a current price of at least $5 and an average 20-day trading volume of 50,000 or more to ensure adequate liquidity [8] Identified Stocks - The screening narrowed down to three stocks: Yext, Agenus, and NCR Voyix, all showing strong earnings acceleration [9] - NCR Voyix leads with an expected EPS growth rate of 152.7%, followed by Agenus at 114.7% and Yext at 37.1% for the current year [9] Company Profiles - **Yext**: Provides a platform for consumer inquiries globally, with an expected earnings growth rate of 37.1% [10] - **Agenus**: A biotechnology firm focused on developing immune therapies for cancer and infections, with an expected earnings growth rate of 114.7% [11] - **NCR Voyix**: Offers digital commerce solutions for retail and dining, with an expected earnings growth rate of 152.7% [12]

Market Overview - The stock market has reached new all-time highs, primarily driven by large-cap growth stocks [1] - Valuation multiples are stretched, raising concerns about a potential recession [1] Analyst Insights - Gary Alexander has extensive experience in covering technology companies and advising startups, providing insights into current industry themes [1] - He has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications [1] Investment Strategy - Investors are encouraged to rotate their investments amid the current market conditions [1]

Group 1 - The article highlights significant global events since summer 2023, including the rise of generative AI, the cultural adoption of anti-obesity drugs, and the performance of the "Magnificent 7" companies [1] Group 2 - The generative AI sector has experienced explosive growth, indicating a transformative impact on various industries [1] - Anti-obesity drugs have gained widespread cultural acceptance, suggesting potential shifts in healthcare and pharmaceutical markets [1] - The "Magnificent 7" refers to a group of companies that have seen substantial stock performance, reflecting investor interest and market trends [1]

Core Viewpoint - Yext (YEXT) shows a significantly improving earnings outlook, making it a solid choice for investors as analysts continue to raise earnings estimates for the company [1][2]. Estimate Revisions - The rising trend in estimate revisions reflects growing analyst optimism regarding Yext's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, Yext is projected to earn $0.12 per share, representing a +140% change from the previous year's reported number, with the Zacks Consensus Estimate increasing by 150% over the last 30 days [5]. - For the full year, Yext is expected to earn $0.48 per share, indicating a +37.14% change from the prior year, with the consensus estimate rising by 63.64% due to one upward revision and one downward revision [6][7]. Zacks Rank - Yext has achieved a Zacks Rank 2 (Buy) due to favorable estimate revisions, which is a reliable rating tool that helps investors leverage earnings estimate revisions for informed investment decisions [8]. - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500, indicating a positive outlook for Yext [8]. Stock Performance - Yext's stock has increased by 30.8% over the past four weeks, driven by strong estimate revisions, suggesting that there may still be further upside potential [9].

PART I. FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarter ended April 30, 2025, detailing financial position, performance, and cash flows Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | April 30, 2025 (in thousands) | January 31, 2025 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $114,994 | $123,133 | | Total current assets | $246,978 | $285,801 | | Goodwill | $110,667 | $96,782 | | Intangible assets, net | $97,250 | $94,247 | | **Total assets** | **$572,356** | **$610,078** | | **Liabilities & Equity** | | | | Unearned revenue, current | $210,695 | $229,144 | | Total current liabilities | $327,241 | $344,714 | | **Total liabilities** | **$430,331** | **$456,885** | | **Total stockholders' equity** | **$142,025** | **$153,193** | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Account | Three months ended April 30, 2025 (in thousands) | Three months ended April 30, 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $109,483 | $95,990 | | Gross profit | $82,378 | $74,444 | | Income (loss) from operations | $1,118 | $(5,426) | | **Net income (loss)** | **$770** | **$(3,817)** | | Net income (loss) per share, basic and diluted | $0.01 | $(0.03) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Three months ended April 30, 2025 (in thousands) | Three months ended April 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $37,725 | $38,309 | | Net cash used in investing activities | $(19,363) | $(647) | | Net cash used in financing activities | $(29,023) | $(1,174) | | Net (decrease) increase in cash | $(6,639) | $35,930 | - The company finalized the accounting for its acquisition of Hearsay and completed the acquisition of Places Scout for **$20.3 million** in cash during the quarter[50](index=50&type=chunk)[62](index=62&type=chunk) - Subsequent to the quarter's end, on May 15, 2025, the company entered into a new credit agreement with BlackRock for up to **$200 million** in term loans and terminated its existing facility with SVB[98](index=98&type=chunk)[111](index=111&type=chunk)[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting a 14% revenue increase to **$109.5 million**, a shift to net income, and growth in key recurring revenue metrics [Overview and Recent Developments](index=26&type=section&id=MD%26A_Overview) This section provides an overview of Yext's business, recent acquisitions of Hearsay and Places Scout, and a new **$200 million** credit agreement with BlackRock - The company acquired Hearsay Social, Inc. in August 2024 and KabanaSoft, LLC (d/b/a Places Scout) on February 7, 2025, for a purchase price of **$20.3 million** in cash[123](index=123&type=chunk)[126](index=126&type=chunk) - On May 15, 2025, the company entered into a new credit agreement with BlackRock for term loan facilities up to **$200.0 million** and terminated its existing credit facility with SVB[127](index=127&type=chunk) - Management notes that macroeconomic conditions, including foreign currency fluctuations, interest rates, and inflation, have influenced and may continue to impact financial results and customer spending[124](index=124&type=chunk)[125](index=125&type=chunk) [Key Metrics](index=27&type=section&id=MD%26A_Key_Metrics) Key performance metrics show Total Annual Recurring Revenue grew **15%** to **$446.5 million**, with improved dollar-based net and gross retention rates Annual Recurring Revenue (ARR) as of April 30 | Customer Type | 2025 (in thousands) | 2024 (in thousands) | YoY Change | YoY % Change | | :--- | :--- | :--- | :--- | :--- | | Direct Customers | $371,851 | $312,060 | $59,791 | 19% | | Third-Party Reseller Customers | $74,618 | $75,218 | $(600) | (1)% | | **Total ARR** | **$446,469** | **$387,278** | **$59,191** | **15%** | Dollar-Based Net Retention Rate as of April 30 | Customer Type | 2025 | 2024 | | :--- | :--- | :--- | | Direct Customers | 95% | 91% | | Third-Party Reseller Customers | 96% | 92% | | **Total Customers** | **95%** | **91%** | Dollar-Based Gross Retention Rate as of April 30 | Customer Type | 2025 | 2024 | | :--- | :--- | :--- | | Direct Customers | 87% | 83% | | Third-Party Reseller Customers | 88% | 86% | | **Total Customers** | **87%** | **83%** | [Results of Operations](index=30&type=section&id=MD%26A_Results_of_Operations) Revenue increased **14%** to **$109.5 million**, driven by acquisitions, leading to a turnaround from operating loss to net income year-over-year Comparison of Results for the Three Months Ended April 30 | (in thousands) | 2025 | 2024 | Variance ($) | Variance (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $109,483 | $95,990 | $13,493 | 14% | | Gross profit | $82,378 | $74,444 | $7,934 | 11% | | Sales and marketing | $36,209 | $43,254 | $(7,045) | (16)% | | Research and development | $21,896 | $17,059 | $4,837 | 28% | | General and administrative | $23,155 | $19,557 | $3,598 | 18% | | Income (loss) from operations | $1,118 | $(5,426) | $6,544 | N/A | | Net income (loss) | $770 | $(3,817) | $4,587 | N/A | - The **14%** revenue increase was entirely driven by the inclusion of Hearsay's revenue; revenue from direct customers increased **18%**, while revenue from third-party resellers decreased **3%**[149](index=149&type=chunk)[151](index=151&type=chunk) - Gross margin decreased from **77.6%** to **75.2%** YoY, primarily due to a **$2.4 million** increase in amortization expense from acquired intangibles and a **$0.8 million** increase in royalties[152](index=152&type=chunk)[153](index=153&type=chunk) - Sales and marketing expense decreased by **16%** (**$7.0 million**) due to lower personnel costs, conference expenses, and advertising, partially offset by higher amortization from the Hearsay acquisition[154](index=154&type=chunk) [Non-GAAP Financial Measures](index=32&type=section&id=MD%26A_Non-GAAP_Financial_Measures) Non-GAAP net income significantly increased to **$16.5 million**, Adjusted EBITDA more than doubled to **$24.7 million**, and free cash flow reached **$37.2 million** Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income | (in thousands) | Three months ended April 30, 2025 | Three months ended April 30, 2024 | | :--- | :--- | :--- | | GAAP net income (loss) | $770 | $(3,817) | | Stock-based compensation expense | $12,659 | $12,065 | | Acquisition-related costs | $4,048 | $— | | Amortization of acquired intangibles | $4,141 | $— | | Tax adjustment | $(5,093) | $(1,896) | | **Non-GAAP net income** | **$16,525** | **$6,352** | Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA | (in thousands) | Three months ended April 30, 2025 | Three months ended April 30, 2024 | | :--- | :--- | :--- | | GAAP net income (loss) | $770 | $(3,817) | | Interest expense (income), net | $10 | $(1,968) | | (Benefit from) provision for income taxes | $(17) | $221 | | Depreciation and amortization | $6,855 | $2,963 | | Other expense (income), net | $355 | $138 | | Stock-based compensation expense | $12,659 | $12,065 | | Acquisition-related costs | $4,048 | $— | | **Adjusted EBITDA** | **$24,680** | **$9,602** | Free Cash Flow | (in thousands) | Three months ended April 30, 2025 | Three months ended April 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $37,725 | $38,309 | | Less: Capital expenditures | $(562) | $(647) | | **Free cash flow** | **$37,163** | **$37,662** | [Liquidity and Capital Resources](index=34&type=section&id=MD%26A_Liquidity_and_Capital_Resources) The company maintains **$115.0 million** in cash, secured a new **$200 million** credit facility, and increased its share repurchase program by **$50.0 million** - Principal sources of liquidity as of April 30, 2025, were cash and cash equivalents of **$115.0 million**[173](index=173&type=chunk) - On May 15, 2025, the company entered a new credit agreement with BlackRock for up to **$200 million** in term loan facilities maturing in 2030, and terminated its existing SVB credit facility[183](index=183&type=chunk)[188](index=188&type=chunk) - The Board authorized an additional **$50.0 million** for the share repurchase program in March 2025; during the quarter, **4.5 million** shares were repurchased, leaving **$54.2 million** available under the program[189](index=189&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency, inflation, and interest rates, though management currently deems these risks immaterial - The company is exposed to foreign currency risk from its international operations, but a hypothetical **10%** change in the U.S. dollar exchange rate is not expected to have a material effect[201](index=201&type=chunk) - Inflation has not had a material effect on the business, but significant inflationary pressure on personnel costs could harm results if not offset by price increases[202](index=202&type=chunk) - Interest rate risk is considered low, as cash and cash equivalents of **$115.0 million** are held for capital preservation, and a **10%** change in interest rates would not have a material impact[203](index=203&type=chunk)[204](index=204&type=chunk) - The company is exposed to financial institution risk as it holds cash balances at large institutions that may exceed federally insured limits[205](index=205&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls were effective as of April 30, 2025, with ongoing integration of Hearsay's internal control structure - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of April 30, 2025[207](index=207&type=chunk) - Following the August 2024 acquisition of Hearsay, the company is in the process of reviewing and integrating Hearsay's internal control structure[208](index=208&type=chunk) - No other changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[208](index=208&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings deemed material to its business or financial condition - The company is not currently a party to any legal proceedings that it believes are material to its business or financial condition[210](index=210&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks to the company's business, including slowing growth, integration challenges, competition, and evolving regulations [Risks Related to Our Business and Industry](index=41&type=section&id=RiskFactors_Business_Industry) Key business risks include slowing revenue growth, a history of losses, integration challenges from acquisitions, and reliance on third-party resellers - Revenue growth has slowed, and without the Hearsay acquisition, revenue would have slightly declined year-over-year for the three months ended April 30, 2025[216](index=216&type=chunk) - The company has a history of losses, with an accumulated deficit of **$706.4 million** as of April 30, 2025, and may not achieve or sustain profitability[219](index=219&type=chunk) - Acquisitions, such as Hearsay and Places Scout, could divert management's attention, result in dilution, and disrupt operations if not integrated successfully[222](index=222&type=chunk)[225](index=225&type=chunk) - A significant portion of revenue is dependent on third-party reseller customers, whose efforts the company does not control, and on a few large customers[263](index=263&type=chunk)[265](index=265&type=chunk) [Risks Related to Information Technology, Intellectual Property, and Data Security](index=53&type=section&id=RiskFactors_IT_IP_DataSecurity) Risks include security breaches, intellectual property infringement, reliance on open-source software, and compliance and reputational challenges from generative AI - A security breach or network attack could interrupt service, result in unauthorized data access, harm the company's reputation, and lead to significant liability[294](index=294&type=chunk)[295](index=295&type=chunk) - The company's use of generative AI is a new and developing technology that presents compliance, reputational, and legal risks, including unintended biases, data disclosure, and potential copyright issues[314](index=314&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk) - The platform's reliance on open-source software could expose the company to unanticipated license restrictions, and its use of third-party licensed software could lead to increased costs or service disruptions if licenses cannot be maintained[306](index=306&type=chunk)[307](index=307&type=chunk) [Risks Related to Laws, Regulation and Taxation](index=57&type=section&id=RiskFactors_Laws_Regulation_Taxation) The company faces risks from evolving data privacy and AI regulations, anti-corruption laws, export controls, and complex tax laws across jurisdictions - The company is subject to evolving data privacy laws like the CCPA and GDPR, and non-compliance could result in significant fines, litigation, and reputational harm[321](index=321&type=chunk)[322](index=322&type=chunk)[326](index=326&type=chunk) - New and developing regulations for Artificial Intelligence, such as the EU's AI Act, could impose significant compliance costs and affect the company's use of AI technologies in its products[334](index=334&type=chunk)[335](index=335&type=chunk) - The company's ability to use its net operating loss carryforwards and other tax attributes may be limited by ownership changes under Section 382 of the Code[350](index=350&type=chunk) - The company is subject to anti-corruption laws (like the FCPA), export controls, and economic sanctions, which could impair its ability to compete internationally and subject it to penalties for non-compliance[336](index=336&type=chunk)[338](index=338&type=chunk) [Risks Related to Ownership of Our Common Stock and Our Status as a Public Company](index=62&type=section&id=RiskFactors_Stock_Ownership) Risks include stock price volatility, potential dilution from future stock sales, impact of share repurchases, and anti-takeover provisions affecting mergers - The market price of the company's common stock has been and may continue to be volatile, influenced by factors such as fluctuating operating results, analyst recommendations, and broad market trends[356](index=356&type=chunk) - Future sales and issuances of capital stock, including for equity compensation, could result in substantial dilution to existing stockholders[359](index=359&type=chunk)[362](index=362&type=chunk) - The company's share repurchase program could affect stock price volatility and will diminish cash reserves, potentially impacting the ability to pursue future strategic opportunities[365](index=365&type=chunk) - Provisions in the company's certificate of incorporation and bylaws, along with Delaware law, could make a merger, tender offer, or proxy contest difficult, potentially depressing the stock price[366](index=366&type=chunk)[367](index=367&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity, with **4,473,633** shares repurchased and **$54.2 million** remaining in the program Issuer Purchases of Equity Securities (Q1 FY2026) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining in Program (in millions) | | :--- | :--- | :--- | :--- | | Feb 2025 | 575,658 | $6.59 | $28.2 | | Mar 2025 | 1,405,917 | $6.29 | $69.3 | | Apr 2025 | 2,492,058 | $6.06 | $54.2 | | **Total** | **4,473,633** | | | - As of April 30, 2025, approximately **$54.2 million** remains available for future purchases under the company's share repurchase program[370](index=370&type=chunk) [Defaults Upon Senior Securities](index=66&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - None[371](index=371&type=chunk) [Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[372](index=372&type=chunk) [Other Information](index=66&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - During the three months ended April 30, 2025, no director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[373](index=373&type=chunk) [Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including acquisition agreements, a new credit agreement, and officer certifications - Key exhibits filed include the Hearsay merger agreement, the Places Scout purchase agreement, and the new credit agreement with BlackRock[374](index=374&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are included as exhibits[374](index=374&type=chunk)

Group 1: Earnings Performance - Yext reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and up from $0.05 per share a year ago, representing an earnings surprise of 9.09% [1] - The company posted revenues of $109.48 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 1.73% and increasing from $95.99 million year-over-year [2] - Over the last four quarters, Yext has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Yext shares have increased approximately 5.2% since the beginning of the year, compared to the S&P 500's gain of 0.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $109.83 million, and for the current fiscal year, it is $0.50 on revenues of $443.84 million [7] - The estimate revisions trend for Yext is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Technology Services industry, to which Yext belongs, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]