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]

Financial Data and Key Metrics Changes - The company reported a strong Q1 performance, outperforming guidance on all metrics, with expectations of continued strength into Q2 [4][5] - There was a noted improvement in both gross and net retention rates, alongside enhanced customer satisfaction and value perception [5][35] Business Line Data and Key Metrics Changes - The core business health is improving, with significant advancements in customer retention and satisfaction [5][35] - The introduction of Yext Scout has generated interest from both existing and new customers, indicating a positive reception for new product offerings [9][12] Market Data and Key Metrics Changes - The fragmentation of the consumer search market is accelerating, driven by advancements in AI search, which is creating opportunities for Yext's products [4][21] - Google recently dipped below 90% market share, highlighting a shift in the brand discovery landscape that could benefit Yext [21] Company Strategy and Development Direction - The company is focused on reinvesting in organic initiatives and pursuing opportunistic investments through M&A or partnerships to enhance its business [5][38] - There is a strategic emphasis on maintaining a strong balance sheet and cash flow to support growth initiatives [5][38] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment, which could impact spending decisions among businesses [20][22] - Despite macro uncertainties, the company remains optimistic about the growth potential in the fragmented digital visibility market [22] Other Important Information - The company has seen a tailwind from favorable foreign exchange rates, contributing to revenue and ARR improvements [33] - The buyback program has accelerated, reflecting the company's strong cash flow and liquidity position [35][38] Q&A Session Summary Question: Update on Yext Scout and customer interest - Management indicated a mix of existing and new customers on the waitlist for Yext Scout, with positive sales traction expected [9][10] Question: Sales cycle for Yext Scout - The sales cycle for Yext Scout is anticipated to be shorter due to easier implementation and the value perceived by customers [12][13] Question: Balancing enthusiasm with macroeconomic caution - Management acknowledged macroeconomic uncertainties but highlighted the fertile environment for brand visibility products [20][22] Question: Drivers of revenue outperformance in Q1 - Revenue outperformance was attributed to improved retention rates and favorable foreign exchange impacts [33][34] Question: Buyback strategy and appetite - The company views buybacks as a key tool for capital allocation, alongside M&A opportunities [35][38] Question: Organic growth and retention improvements - Management noted that improved retention and upsell opportunities are driving organic growth [41][42] Question: Loan facility with BlackRock - The new facility provides flexibility for growth initiatives and potential acquisitions, replacing an expiring credit facility [47][48]

Financial Data and Key Metrics Changes - The company reported a strong Q1 performance, outperforming guidance on all metrics, with improvements in gross and net retention, customer satisfaction, and overall value perception across the platform [4][5][35] - There was a tailwind from foreign exchange rates, which contributed to revenue and ARR improvements [33] Business Line Data and Key Metrics Changes - The core business health is improving, with better retention rates and customer satisfaction [5][35] - The new product, Yext Scout, has seen significant interest, with a waitlist of 1,000 customers, indicating a mix of existing and new customers [9][10] Market Data and Key Metrics Changes - The fragmentation of the consumer search market is accelerating, driven by advancements in AI search, which enhances the importance of managing digital visibility for brands [4][22] - Google recently dipped below 90% market share, indicating a shift in the brand discovery landscape [22] Company Strategy and Development Direction - The company aims to strategically reinvest in organic initiatives and pursue opportunistic investments through M&A or partnerships [5][39] - The management is focused on maintaining a conservative outlook due to macroeconomic uncertainties while recognizing the fertile environment for growth [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed caution due to macroeconomic factors but remains optimistic about the growth potential driven by the fragmentation of the search market [21][23] - The company is encouraged by the positive reception of its products and the increasing value perception among customers [42][46] Other Important Information - The company has a strong balance sheet and cash flow, allowing for flexibility in growth initiatives and share buybacks [5][39] - The integration of recent acquisitions, such as Hearsay, is complete, and the company is looking for further M&A opportunities [50][51] Q&A Session Summary Question: Update on Yext Scout and customer interest - Management noted a mix of existing and new customers on the waitlist for Scout, indicating strong demand [10] Question: Balancing enthusiasm with macroeconomic caution - Management acknowledged macroeconomic uncertainties but highlighted the positive shifts in the brand discovery landscape as a potential growth driver [21][23] Question: Drivers of revenue outperformance in Q1 - Revenue improvements were attributed to favorable FX rates and better retention metrics [33][35] Question: Buyback strategy and appetite - The company views buybacks as a valuable tool for capital allocation, especially given the attractive stock price [36][39] Question: Organic growth and retention improvements - Management indicated that improved retention and upsell opportunities are driving organic growth [42][45] Question: Rationale for new loan facility with BlackRock - The new facility provides better terms and flexibility for growth initiatives and potential acquisitions [48][50]

Credit Agreement and Loan Details - The Borrower, YEXT, INC., has requested credit extensions totaling $100 million in Initial Term Loans and up to $100 million in Delayed Draw Term Loans[14] - Proceeds from the Initial Term Loans will be used for repaying existing debt, general corporate purposes, and financing permitted acquisitions[14] - The Applicable Margin for SOFR Loans is set at 5.25% per annum, while for ABR Loans it is 4.25% per annum[24] - The Borrower aims to finance permitted acquisitions with the Delayed Draw Term Loans and Discretionary Delayed Draw Term Loans[14] - The credit agreement is dated May 15, 2025, and involves YEXT, INC. as the Borrower and ACQUIOM AGENCY SERVICES LLC as the Administrative Agent[13] - The total amount available for Delayed Draw Term Loans is capped at $50 million[14] - The Borrower is required to maintain minimum consolidated EBITDA as part of the negative covenants[6] - The credit agreement includes provisions for mandatory prepayments under certain conditions[2] - The Borrower must comply with various affirmative covenants, including maintaining records and compliance with laws[7] - The agreement outlines the conditions of lending, including representations and warranties by the Borrower[5] - The aggregate principal amount of Delayed Draw Commitments equals $50,000,000 as of the Closing Date[70] - The Delayed Draw Availability Period extends until November 15, 2026[69] Financial Performance and Revenue - The company reported a total revenue of $1.5 billion for Q3 2023, representing a 15% increase year-over-year[1] - The company expects revenue guidance for Q4 2023 to be between $1.6 billion and $1.7 billion, indicating a potential growth of 7% to 13%[3] - New product launches are anticipated to contribute an additional $200 million in revenue over the next two quarters[4] - The company reported a consolidated EBITDA of $X million for the fiscal year, reflecting a Y% increase compared to the previous year[89] - The company anticipates a revenue growth of B% for the next fiscal year, driven by new product launches and market expansion strategies[89] - The company reported a revenue of $1.5 billion for Q3 2023, representing a 15% year-over-year increase[110] - The company provided guidance for Q4 2023, expecting revenue to be between $1.6 billion and $1.7 billion, indicating a growth of 10-13%[110] User Growth and Market Expansion - User growth reached 10 million new users in the last quarter, bringing the total user base to 150 million[2] - Market expansion efforts include entering three new countries, projected to increase market share by 5%[6] - The company has completed a strategic acquisition of a smaller competitor for $300 million, expected to enhance product offerings[7] - The company is investing $50 million in R&D for new technology aimed at enhancing user experience[5] - Market expansion efforts are underway in Europe, with a target to increase market share by 5% by the end of 2024[110] - The company plans to expand its operations into E new markets by the end of the fiscal year, aiming for a market penetration rate of F%[89] Cost Management and Operational Efficiency - Cost management strategies have led to a 10% reduction in operational expenses compared to the previous quarter[8] - The company plans to increase its marketing budget by 20% to support new product launches and market expansion[9] - The company has set a target to reduce operational costs by H% through efficiency improvements and process optimization[90] - Cash flow from operations increased to $400 million, reflecting a 20% improvement compared to the same period last year[110] Customer Satisfaction and Engagement - Customer satisfaction ratings improved to 85%, up from 80% in the previous quarter, reflecting better service delivery[10] - A new marketing strategy was introduced, focusing on digital channels, aiming to increase customer engagement by 20%[110] Financial Definitions and Obligations - Consolidated EBITDA is calculated by adding consolidated net income with various expenses, including interest, taxes, depreciation, and non-recurring charges, with a cap of 25% on certain addbacks[58] - Consolidated Net Income excludes income from subsidiaries if dividend payments are restricted and any gains from asset sales outside the ordinary course of business[59] - Consolidated Working Capital is defined as the excess of current assets over current liabilities[60] - Current Assets exclude cash and cash equivalents, while Current Liabilities do not include the current portion of long-term indebtedness[63][64] - "Indebtedness" includes all obligations for borrowed money, bonds, and guarantees, among other financial commitments[117] - The term "Loan Parties" encompasses the Borrower and the Guarantors involved in the loan agreements[129] - Total Debt of the company is determined on a consolidated basis in accordance with GAAP, excluding Synthetic Lease Obligations and certain contingent obligations[195] - Total Net Leverage Ratio is calculated as Total Debt minus Qualified Cash divided by Consolidated EBITDA for the most recently ended Test Period[196] - The company has obligations under various financial instruments, including bonds and notes, which contribute to its overall debt profile[195] - The financial definitions provided are crucial for understanding the company's leverage and financial obligations in the context of its overall strategy[196]

Financial Performance - The company reported a significant increase in revenue, with a year-over-year growth of 25%[21] - Operating expenses rose by 15%, primarily due to increased investments in research and development[21] - Future revenue is projected to grow by 20% in the next fiscal year, driven by new product launches[21] - Cash flow remains strong, with sufficient liquidity to meet operational needs for at least the next 12 months[21] User Growth - The user base expanded by 30%, reaching a total of 1.5 million active users[21] Strategic Investments - The company plans to invest $50 million in international expansion efforts over the next two years[21] - Recent acquisition of Hearsay Social, Inc. is expected to enhance product offerings and customer reach[21] Challenges and Risks - The company anticipates challenges from macroeconomic conditions, including inflation and currency fluctuations[21] Product Development - New product development is focused on enhancing user experience and integrating advanced technologies[21] Sales Strategy - The company aims to maintain and expand its relationships with its Publisher Network to drive sales growth[21]