UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38056 YEXT, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organiz ...

Financial Data and Key Metrics Changes - Revenue grew 32% year-over-year to $72.4 million, exceeding the high-end of guidance [7][30] - Unearned revenue increased 42.4% year-over-year to $122.7 million [7][30] - Net loss increased from $19.4 million a year ago to $29.3 million this quarter, with a net loss per share of $0.26 compared to $0.20 a year ago [36][37] - Non-GAAP net loss increased from $8.4 million a year ago to $12.7 million this quarter, with a non-GAAP net loss per share of $0.11 [37] - Cash, cash equivalents, and marketable securities totaled $274.2 million as of July 31, 2019 [38] Business Line Data and Key Metrics Changes - The company closed over 90 deals with at least $100,000 in contract value, including ten deals with at least $1 million in total contract value [21] - Small business revenue was $3.2 million for the quarter [30] - International revenue accounted for 17% of total revenue, with significant growth in Europe and Japan [22][23][125] Market Data and Key Metrics Changes - The company signed contracts with major brands such as Travelers, Liberty Mutual, and Campbell's, indicating strong market demand [8][10] - The number of structured facts grew more than 60% year-over-year, reflecting increased engagement and usage [7] Company Strategy and Development Direction - The launch of the new product, Yext Answers, aims to enhance the customer experience by providing structured search capabilities [12][15] - The company is focusing on expanding its total addressable market by targeting businesses without physical locations [18][72] - Investments in building a mid-market sales team are expected to smooth revenue fluctuations from larger enterprise deals [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to traditional net revenue retention levels despite a drop to 108% this quarter [33] - The company does not foresee macroeconomic influences affecting business performance, with sales cycles remaining stable [128][129] - Future guidance includes expected revenue between $75.5 million and $76.5 million for Q3, with a full-year revenue range raised to $299 million to $301 million [41][42] Other Important Information - The company adopted ASC-606 and ASC-842 accounting standards, impacting revenue recognition and lease accounting [29] - The upcoming Onward event is expected to attract over 1,600 marketers and search technology leaders, focusing on the future of search [44][45] Q&A Session Summary Question: Sales capacity and headcount growth - Management confirmed that the 35% year-over-year increase in sales headcount is on target, with a focus on both enterprise and mid-market segments [48][50] Question: Enterprise growth rates - Management indicated that enterprise growth rates are challenged due to tough comparisons from a strong prior year, but the pipeline remains solid [59] Question: Impact of Google algorithm changes - Management stated that changes in Google's algorithm do not significantly impact their business, as they focus on providing accurate answers through knowledge graphs [62][64] Question: Pricing and packaging for Yext Answers - Management indicated that pricing details for Yext Answers will be announced at the Onward event, with the product expected to be a key offering [66][70] Question: International revenue growth - Management confirmed that international revenue is growing, with strong performance in the UK, France, Italy, and Japan [125][126] Question: Macro influences on sales cycles - Management reported no signs of longer sales cycles or macroeconomic impacts on business performance [128][129]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents Yext's unaudited condensed consolidated financial statements for April 30, 2019, covering balance sheets, operations, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28unaudited%29) Balance sheets show significant increases in cash, total assets, and stockholders' equity from January 31, 2019, to April 30, 2019, due to a stock offering | Metric | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $257,663 | $91,755 | | Total assets | $433,298 | $267,128 | | Total liabilities | $199,138 | $182,579 | | Total stockholders' equity | $234,160 | $84,549 | [Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20%28unaudited%29) Revenue increased 34.7% year-over-year for Q1 2019, but net loss widened due to higher operating expenses | Metric | Three months ended April 30, 2019 (in thousands) | Three months ended April 30, 2018 (in thousands) | | :------------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Revenue | $68,708 | $50,988 | | Gross profit | $52,235 | $38,188 | | Loss from operations | $(19,260) | $(16,906) | | Net loss | $(18,959) | $(17,041) | | Net loss per share attributable to common stockholders, basic and diluted | $(0.18) | $(0.18) | [Condensed Consolidated Statements Stockholders' Equity (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20Stockholders%27%20Equity%20%28unaudited%29) Stockholders' equity significantly increased from January 31, 2019, to April 30, 2019, driven by a common stock offering and stock-based compensation | Metric | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $234,160 | $84,549 | | Common stock offering, net | $146,470 | — | | Stock-based compensation | $13,472 | — | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28unaudited%29) Cash, cash equivalents, and restricted cash increased substantially to **$269.8 million** as of April 30, 2019, primarily from financing activities | Activity | Three months ended April 30, 2019 (in thousands) | Three months ended April 30, 2018 (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | $819 | $1,409 | | Net cash provided by investing activities | $23,866 | $11,651 | | Net cash provided by financing activities | $153,497 | $6,169 | | Cash, cash equivalents and restricted cash at end of period | $269,763 | $53,403 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed explanations and disclosures for condensed consolidated financial statements, covering business, accounting policies, and key financial components [1. Organization and Description of Business](index=11&type=section&id=1.%20Organization%20and%20Description%20of%20Business) Yext, Inc. provides a cloud-based platform for businesses to manage and sync digital knowledge across over 150 providers - Yext, Inc. offers a cloud-based platform, the Yext Knowledge Engine, for businesses to control and sync digital knowledge across a network of over **150** service and application providers (e.g., Amazon Alexa, Apple Maps, Google)[28](index=28&type=chunk) - The company's fiscal year concludes on January 31st[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements adhere to GAAP and SEC rules; company operates as a single segment, adopting new standards for leases, stock compensation, and cloud computing - Financial statements are prepared in accordance with GAAP and SEC rules for interim financial reporting[30](index=30&type=chunk) - The company operates as one operating segment, with all offerings on a single platform[36](index=36&type=chunk) - Adopted ASU 2016-02 (Leases) on February 1, 2019, recording lease liabilities and right-of-use assets, which did not materially affect the statement of operations[46](index=46&type=chunk)[47](index=47&type=chunk) - Prospectively adopted ASU 2018-07 (Stock Compensation) and ASU 2018-15 (Cloud Computing Arrangement Costs) on February 1, 2019, with no material effect on condensed consolidated financial statements[48](index=48&type=chunk)[49](index=49&type=chunk) [3. Revenue](index=14&type=section&id=3.%20Revenue) Revenue primarily from cloud-based platform subscriptions, recognized ratably over 1-3 year terms; North America dominates, international revenue growing, professional services are small - Revenue is primarily from subscription and associated support to the cloud-based Knowledge Engine platform, recognized ratably over contract terms (typically one to three years)[37](index=37&type=chunk)[38](index=38&type=chunk) | Geographic Region | Three months ended April 30, 2019 (in thousands) | Three months ended April 30, 2018 (in thousands) | | :---------------- | :----------------------------------------------- | :----------------------------------------------- | | North America | $56,512 | $44,867 | | International | $12,196 | $6,121 | | Total revenue | $68,708 | $50,988 | - Professional services revenue accounted for less than **5%** of total revenue for the three months ended April 30, 2019, up from **2%** in the prior year[55](index=55&type=chunk) - As of April 30, 2019, the company has approximately **$256.3 million** in remaining performance obligations, with **$240.2 million** expected to be recognized as revenue over the next twenty-four months[59](index=59&type=chunk) [4. Investments in Marketable Securities](index=15&type=section&id=4.%20Investments%20in%20Marketable%20Securities) Marketable securities, mainly corporate bonds and U.S. treasury securities, decreased in fair value from **$51.0 million** to **$26.4 million** by April 30, 2019 | Metric | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :---------------------- | :----------------------------- | :----------------------------- | | Total marketable securities (Fair Value) | $26,442 | $51,021 | - As of April 30, 2019, all marketable securities have a remaining contractual maturity of one year or less[63](index=63&type=chunk) [5. Fair Value of Financial Instruments](index=17&type=section&id=5.%20Fair%20Value%20of%20Financial%20Instruments) Financial instruments are classified using a three-level fair value hierarchy; all cash equivalents and marketable securities are in Level 1 or Level 2 - The company applies a three-level fair value hierarchy (Level 1: quoted prices in active markets; Level 2: observable inputs other than Level 1; Level 3: unobservable inputs)[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - All cash equivalents and marketable securities are classified within Level 1 or Level 2[69](index=69&type=chunk) | Asset Category | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :------------- | :----------------------------- | :----------------------------- | | Total assets measured at fair value | $248,871 | $93,042 | [6. Goodwill and Intangible Assets](index=18&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) Goodwill and intangible assets, net, decreased slightly to **$4.6 million** and **$1.8 million** by April 30, 2019, with no impairment identified | Asset Category | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :------------- | :----------------------------- | :----------------------------- | | Goodwill | $4,583 | $4,660 | | Intangible assets, net | $1,788 | $1,960 | - No events or circumstances indicated a reduction in the fair value of the reporting unit or impairment of intangible assets during the three months ended April 30, 2019 and 2018[74](index=74&type=chunk)[76](index=76&type=chunk) - Amortization expense related to intangible assets was **$0.1 million** for the three months ended April 30, 2019, down from **$0.2 million** in the prior year period[76](index=76&type=chunk) [7. Property and Equipment, net](index=18&type=section&id=7.%20Property%20and%20Equipment%2C%20net) Property and equipment, net, remained stable at **$11.1 million** by April 30, 2019, while depreciation expense increased to **$1.8 million** for the quarter | Metric | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total property and equipment, net | $11,093 | $11,077 | - Depreciation expense increased to **$1.8 million** for the three months ended April 30, 2019, from **$1.4 million** in the prior year period[77](index=77&type=chunk) [8. Accounts Payable, Accrued Expenses and Other Current Liabilities](index=19&type=section&id=8.%20Accounts%20Payable%2C%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Total current liabilities decreased to **$35.7 million** by April 30, 2019, from **$44.2 million**, due to reductions in employee compensation and ESPP liabilities | Metric | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Total accounts payable, accrued expenses and other current liabilities | $35,671 | $44,236 | - Accrued employee compensation decreased from **$19.0 million** to **$9.3 million**[78](index=78&type=chunk) - Accrued employee stock purchase plan withholdings liability decreased from **$2.6 million** to **$1.2 million**[78](index=78&type=chunk) [9. Stock-Based Compensation](index=19&type=section&id=9.%20Stock-Based%20Compensation) The 2016 Equity Incentive Plan increased by over **4 million** shares; stock-based compensation expense rose to **$13.2 million** for Q1 2019, with **$133.8 million** unrecognized cost remaining - The number of shares available for issuance under the 2016 Equity Incentive Plan automatically increased by **4,086,916** shares on February 1, 2019[81](index=81&type=chunk) | Metric | April 30, 2019 | January 31, 2019 | | :-------------------------------- | :------------- | :--------------- | | Stock Options Outstanding | 14,759,535 | 15,977,235 | | Restricted Stock and RSUs Outstanding | 7,730,203 | 7,703,705 | | Stock-Based Compensation Expense | Three months ended April 30, 2019 (in thousands) | Three months ended April 30, 2018 (in thousands) | | :------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Total stock-based compensation expense | $13,216 | $7,993 | - As of April 30, 2019, total unrecognized compensation cost related to unvested stock-based awards was approximately **$133.8 million**, expected to be recognized over an estimated weighted-average vesting period of **3.0 years**[96](index=96&type=chunk) [10. Equity](index=23&type=section&id=10.%20Equity) A common stock offering on March 20, 2019, issued **7 million** shares, generating **$147.0 million** in net proceeds, significantly increasing stockholders' equity - On March 20, 2019, the company closed a common stock offering, issuing **7,000,000** shares and receiving aggregate net proceeds of **$147.0 million**[97](index=97&type=chunk) | Metric | April 30, 2019 (in thousands) | January 31, 2019 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $234,160 | $84,549 | - As of April 30, 2019, and January 31, 2019, no shares of preferred stock were issued or outstanding[101](index=101&type=chunk) [11. Debt](index=25&type=section&id=11.%20Debt) The company maintains a **$15.0 million** revolving credit line and a **$7.0 million** Letter of Credit facility, both maturing March 2020, and established a new **$12.1 million** standby letter of credit - The company has a **$15.0 million** revolving credit line and a **$7.0 million** Letter of Credit facility, maturing March 16, 2020[105](index=105&type=chunk) - As of April 30, 2019, the company was in compliance with all debt covenants, the **$15.0 million** Revolving Line was fully available, and **$6.8 million** of the **$7.0 million** Letter of Credit facility was allocated as security[109](index=109&type=chunk) - In April 2019, a **$12.1 million** back-to-back standby letter of credit was established, secured by a **$12.1 million** restricted cash deposit[108](index=108&type=chunk) [12. Income Taxes](index=26&type=section&id=12.%20Income%20Taxes) Provision for income taxes was **$(0.3) million** for Q1 2019 and 2018; effective tax rate differs from statutory due to a full valuation allowance on U.S. deferred tax assets - Provision for income taxes was **$(0.3) million** for both the three months ended April 30, 2019, and 2018[110](index=110&type=chunk) - The effective tax rate differs from the U.S. federal statutory tax rate primarily due to a full valuation allowance on U.S. deferred tax assets[111](index=111&type=chunk) [13. Leases](index=26&type=section&id=13.%20Leases) Adopted ASU 2016-02, recognizing **$36.6 million** in operating lease liabilities and **$33.4 million** in ROU assets by April 30, 2019; a new **$135 million** NY office lease commenced May 2019 - Adopted ASU 2016-02 (Leases) on February 1, 2019, using the modified retrospective approach[113](index=113&type=chunk) | Metric | April 30, 2019 (in thousands) | | :-------------------------------- | :----------------------------- | | Operating lease liabilities, current | $2,005 | | Operating lease liabilities, non-current | $34,582 | | Operating lease right-of-use assets | $33,424 | - Lease expense for the three months ended April 30, 2019, was **$2.6 million**, including **$0.5 million** for short-term leases[115](index=115&type=chunk) - A new operating lease for office space in New York, NY, dated April 23, 2019, with approximately **$135 million** of legally binding minimum lease payments, commenced accounting in May 2019[116](index=116&type=chunk) [14. Commitments and Contingencies](index=27&type=section&id=14.%20Commitments%20and%20Contingencies) Non-cancelable contractual obligations total **$188.6 million** for operating leases and **$23.5 million** for other commitments by April 30, 2019; legal proceedings are not expected to have a material impact | Fiscal year ending January 31: | Operating Leases (in thousands) | Other (in thousands) | | :----------------------------- | :------------------------------ | :------------------- | | 2020 | $5,899 | $14,961 | | 2021 | $10,637 | $6,553 | | 2022 | $16,691 | $1,865 | | 2023 | $16,762 | $50 | | 2024 and thereafter | $138,614 | $118 | | **Total payments** | **$188,603** | **$23,547** | - The company is involved in various legal proceedings but believes the likelihood of any material adverse impact on its financial position or results of operations is remote[120](index=120&type=chunk) - The company's arrangements generally include provisions for indemnifying customers against intellectual property infringement and contractual breaches[122](index=122&type=chunk) [15. Net Loss Per Share Attributable to Common Stockholders](index=28&type=section&id=15.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Stockholders) Basic and diluted net loss per share remained **$(0.18)** for Q1 2019 and 2018; all potential common equivalent shares were anti-dilutive due to net loss | Metric | Three months ended April 30, 2019 | Three months ended April 30, 2018 | | :------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss per share attributable to common stockholders, basic and diluted | $(0.18) | $(0.18) | - The company was in a net loss position, making all potential common equivalent shares (options, restricted stock, ESPP shares) anti-dilutive[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides an overview of Yext's business, Q1 2019 financial performance, liquidity, capital resources, and critical accounting policies, highlighting revenue growth and increased expenses [Overview](index=29&type=section&id=Overview) Yext operates a cloud-based Knowledge Engine platform for businesses to manage digital knowledge across over 150 applications, with international operations contributing over **18%** of Q1 2019 revenue - Yext's cloud-based Knowledge Engine platform allows businesses to control and sync digital knowledge to over **150** services and applications in its Knowledge Network[127](index=127&type=chunk) - The company offers annual and multi-year subscriptions to its platform, with pricing based on feature sets and the number of licenses[128](index=128&type=chunk) - Revenue from non-U.S. operations exceeded **18%** of total revenue for the three months ended April 30, 2019, reflecting ongoing international expansion[130](index=130&type=chunk) [Components of Results of Operations](index=29&type=section&id=Components%20of%20Results%20of%20Operations) Revenue primarily from cloud-based platform subscriptions; cost of revenue includes network fees, hosting, and support; operating expenses are driven by personnel and stock-based compensation - Revenue is primarily derived from subscription and associated support to the cloud-based Knowledge Engine platform, generally recognized ratably over contract terms (typically one to three years)[132](index=132&type=chunk) - Cost of revenue includes fees to Knowledge Network application providers, hosting expenses, and associated support costs (salaries, data center capacity, stock-based compensation)[133](index=133&type=chunk) - Operating expenses (Sales and marketing, Research and development, General and administrative) primarily consist of personnel costs, costs to obtain revenue contracts, and stock-based compensation expense[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q1 2019 revenue increased **35%** to **$68.7 million** with a **76.0%** gross margin, but operating expenses rose **30%** to **$71.5 million**, resulting in a wider net loss of **$(19.0) million** | Metric | Three months ended April 30, 2019 (in thousands) | Three months ended April 30, 2018 (in thousands) | Variance ($k) | Variance (%) | | :----------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------ | :----------- | | Revenue | $68,708 | $50,988 | $17,720 | 35% | | Cost of revenue | $16,473 | $12,800 | $3,673 | 29% | | Gross profit | $52,235 | $38,188 | $14,047 | 37% | | Gross margin | 76.0% | 74.9% | | | | Total operating expenses | $71,495 | $55,094 | $16,401 | 30% | | Loss from operations | $(19,260) | $(16,906) | $(2,354) | 14% | | Net loss | $(18,959) | $(17,041) | $(1,918) | 11% | | Operating Expense Category | Three months ended April 30, 2019 (in thousands) | Three months ended April 30, 2018 (in thousands) | Variance ($k) | Variance (%) | | :------------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------ | :----------- | | Sales and marketing | $46,398 | $35,827 | $10,571 | 30% | | Research and development | $9,906 | $7,729 | $2,177 | 28% | | General and administrative | $15,191 | $11,538 | $3,653 | 32% | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Yext had **$284.1 million** in liquidity by April 30, 2019, boosted by a **$147.0 million** stock offering, and maintains credit facilities, deemed sufficient for 12 months - As of April 30, 2019, principal sources of liquidity were cash, cash equivalents, and marketable securities, totaling **$284.1 million**[144](index=144&type=chunk) - Management believes existing liquidity will be sufficient to meet projected operating requirements for at least the next **12 months**[144](index=144&type=chunk) - A common stock offering closed on March 20, 2019, generated aggregate net proceeds of **$147.0 million**[146](index=146&type=chunk) - The company has a **$15.0 million** revolving credit line (fully available) and a **$7.0 million** Letter of Credit facility (**$6.8 million** allocated as security) as of April 30, 2019, and established a new **$12.1 million** standby letter of credit in April 2019[147](index=147&type=chunk)[149](index=149&type=chunk) | Cash Flow Activity | Three months ended April 30, 2019 (in thousands) | Three months ended April 30, 2018 (in thousands) | | :------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | $819 | $1,409 | | Net cash provided by investing activities | $23,866 | $11,651 | | Net cash provided by financing activities | $153,497 | $6,169 | | Contractual Obligations (as of April 30, 2019) | Operating Leases (in thousands) | Other (in thousands) | | :--------------------------------------------- | :------------------------------ | :------------------- | | Fiscal year ending January 31, 2020 | $5,899 | $14,961 | | Fiscal year ending January 31, 2021 | $10,637 | $6,553 | | Fiscal year ending January 31, 2022 | $16,691 | $1,865 | | Fiscal year ending January 31, 2023 | $16,762 | $50 | | Fiscal year ending January 31, 2024 and thereafter | $138,614 | $118 | | **Total** | **$188,603** | **$23,547** | [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not engage in off-balance sheet arrangements, thus its financial results are not subject to related risks - The company does not engage in off-balance sheet arrangements with unconsolidated entities or financial partnerships[158](index=158&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation requires estimates and assumptions; no material changes to critical accounting policies and estimates since the Annual Report on Form 10-K, except as noted in Note 2 - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts[159](index=159&type=chunk) - No material changes to critical accounting policies and estimates compared to the Annual Report on Form 10-K, except as described in Note 2[160](index=160&type=chunk) [Recent Accounting Pronouncements](index=35&type=section&id=Recent%20Accounting%20Pronouncements) Refers to Note 2 for detailed information regarding adopted and pending new accounting standards - Refer to Note 2, 'Summary of Significant Accounting Policies—Recent Accounting Pronouncements,' for details on adopted and pending accounting pronouncements[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency, inflation, and interest rates, but a **10%** change in any is not expected to materially affect financial results [Foreign Currency Risk](index=36&type=section&id=Foreign%20Currency%20Risk) Exposed to foreign currency fluctuations, but a hypothetical **10%** change in the U.S. dollar is not expected to materially affect financial results - The company is exposed to foreign currency exchange rate fluctuations[164](index=164&type=chunk) - A hypothetical **10%** change in the U.S. dollar's value is not expected to have a material effect on the company's financial position or results of operations[164](index=164&type=chunk) [Inflation Risk](index=36&type=section&id=Inflation%20Risk) Inflation has not had a material effect on the company's business, financial condition, or results of operations - Inflation has not had a material effect on the company's business, financial condition, or results of operations[165](index=165&type=chunk) [Interest Rate Risk](index=36&type=section&id=Interest%20Rate%20Risk) The company held **$284.1 million** in liquidity by April 30, 2019, and does not anticipate material interest rate risks, with a hypothetical **10%** change having no material impact - As of April 30, 2019, the company had **$284.1 million** in cash, cash equivalents, and marketable securities[166](index=166&type=chunk) - The company does not anticipate material risks due to changes in interest rates; a hypothetical **10%** change would not have a material impact on its financial statements[167](index=167&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of April 30, 2019, due to a material weakness in IT general controls; no material changes in internal control, and remediation efforts are ongoing [Evaluation of Disclosure Controls and Procedures](index=36&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of April 30, 2019, due to a material weakness in information technology general controls identified in the Annual Report on Form 10-K - Disclosure controls and procedures were deemed ineffective as of April 30, 2019[169](index=169&type=chunk) - The ineffectiveness is attributed to a material weakness in information technology general controls, as identified in the Annual Report on Form 10-K[169](index=169&type=chunk) [Changes in Internal Control over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during Q1 2019; the company continues efforts to remediate the material weakness identified in its Annual Report on Form 10-K - No material changes in internal control over financial reporting occurred during the three months ended April 30, 2019[170](index=170&type=chunk) - The company is continuing to take steps to remediate the material weakness in internal control over financial reporting identified in the Annual Report on Form 10-K[170](index=170&type=chunk) [Limitations on the Effectiveness of Disclosure Controls and Procedures](index=36&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) Management acknowledges that disclosure controls and internal control provide reasonable, not absolute, assurance due to inherent limitations like faulty judgments, circumvention, and management override - Management does not expect that disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud[171](index=171&type=chunk) - Control systems provide only reasonable, not absolute, assurance due to inherent limitations, including faulty judgments, circumvention by individual acts or collusion, and management override[171](index=171&type=chunk)[172](index=172&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, though it may face litigation in the ordinary course of business - The company is not currently a party to any legal proceedings material to its business or financial condition[174](index=174&type=chunk) - The company may become involved in various litigation matters and claims arising in the ordinary course of business[174](index=174&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Yext faces risks including net losses, growth management, international expansion, dependence on network providers, competition, security breaches, control weaknesses, IP disputes, regulatory compliance, stock volatility, and no future dividends - The company has a history of net losses, including **$19.0 million** for the three months ended April 30, 2019, and an accumulated deficit of **$320.1 million**, indicating potential for continued operating losses[176](index=176&type=chunk) - Rapid growth and significant organizational changes (e.g., headcount increase from **450** to over **900** employees from Jan 2016 to Jan 2019) pose challenges to effective management, maintaining corporate culture, and scaling infrastructure[179](index=179&type=chunk)[181](index=181&type=chunk) - International expansion (non-U.S. operations accounted for over **18%** of total revenue in Q1 2019) exposes the company to significant regulatory, economic, and political risks, including compliance with laws like GDPR and currency fluctuations[185](index=185&type=chunk)[186](index=186&type=chunk) - The company's growth depends on maintaining and expanding strategic relationships with over **150** Knowledge Network application providers; loss of access or unfavorable renegotiation of terms could severely impact business[189](index=189&type=chunk)[190](index=190&type=chunk) - The market for the company's features is competitive, rapidly evolving, and fragmented, with risks from new entrants, competitive pricing, and technological advancements[194](index=194&type=chunk)[195](index=195&type=chunk) - A security breach, network attack, or information security incident could lead to service interruptions, data loss, reputational harm, and significant liability[215](index=215&type=chunk)[216](index=216&type=chunk) - The company identified a material weakness in information technology general controls as of January 31, 2019, which could adversely affect financial reporting reliability and investor confidence[221](index=221&type=chunk) - Compliance with governmental regulations and legal obligations, particularly those related to privacy, data protection (e.g., GDPR, CCPA), and information security, increases costs and may impair business growth[238](index=238&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) - The market price of the company's common stock has been and may continue to be volatile due to various factors, including financial performance, competitive dynamics, and general economic conditions[282](index=282&type=chunk) - The company does not intend to pay dividends for the foreseeable future, requiring stockholders to rely on stock price appreciation for investment gains[289](index=289&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[296](index=296&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities during the reporting period - No defaults upon senior securities to report[297](index=297&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[298](index=298&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) No other information to report for the period - No other information to report[299](index=299&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, a sublease agreement, and officer certifications - Exhibits include Amended and Restated Certificate of Incorporation (3.1), Amended and Restated Bylaws (3.2), and Form of Common Stock Certificate (4.1)[300](index=300&type=chunk) - A Sublease agreement dated April 23, 2019, between Aetna Life Insurance Company and Yext, Inc. is filed as Exhibit 10.1[300](index=300&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer are included as Exhibits 31.1, 31.2, 32.1, and 32.2[300](index=300&type=chunk) [SIGNATURES](index=60&type=section&id=SIGNATURES) [SIGNATURES](index=60&type=section&id=SIGNATURES) The Quarterly Report on Form 10-Q was signed by Steven Cakebread, CFO of Yext, Inc., on May 31, 2019 - The report was signed by Steven Cakebread, Chief Financial Officer, on behalf of Yext, Inc. on May 31, 2019[303](index=303&type=chunk)

Yext, Inc. (NYSE:YEXT) Q1 2020 Results Earnings Conference Call May 30, 2019 5:00 PM ET Company Participants Conrad Grodd - Vice President of Investor Relations Howard Lerman - Founder, Chief Executive Officer Jim Steele - President, Chief Revenue Officer Steve Cakebread - Chief Financial Officer Conference Call Participants Koji Ikeda - Oppenheimer Brent Bracelin - KeyBanc Capital Markets Naved Khan - SunTrust Alex Zukin - Piper Jaffray Mark Randall - Morgan Stanley Brett Knoblauch - Berenberg Capital Mark ...

Part I [Business Overview](index=6&type=section&id=Item%201.%20Business) Yext offers a cloud platform for businesses to manage public digital information across 150+ services, achieving $228.3 million revenue but a $74.8 million net loss in FY2019 - Yext's platform enables businesses to control and synchronize digital knowledge across a **Knowledge Network** of over **150** services, including **Amazon Alexa**, **Apple Maps**, **Google**, and **Facebook**[23](index=23&type=chunk) - The company's growth strategy focuses on expanding its customer base, increasing sales to existing customers, international expansion (over **14%** of FY2019 revenue), developing new products, and extending its **Knowledge Network**[34](index=34&type=chunk)[37](index=37&type=chunk) - As of January 31, 2019, Yext had over **900** full-time employees and served businesses in over **100** countries, with no single customer accounting for more than **10%** of fiscal 2019 revenue[49](index=49&type=chunk)[64](index=64&type=chunk) Financial Performance (Fiscal Years 2017-2019) | Fiscal Year Ended Jan 31 | Revenue (in millions) | Net Loss (in millions) | | :--- | :--- | :--- | | 2019 | $228.3 | $(74.8) | | 2018 | $170.2 | $(66.6) | | 2017 | $124.3 | $(43.2) | [Overview](index=6&type=section&id=Item%201.%20Business%23Overview) Yext positions itself as a knowledge engine, providing a cloud platform to manage public digital information across a vast network of services, reporting $228.3 million revenue and a $74.8 million net loss in fiscal 2019 - Yext's platform serves as a system of record for digital knowledge, ensuring accuracy across its Knowledge Network including **Amazon Alexa**, **Apple Maps**, **Google**, and **Yelp**[23](index=23&type=chunk)[25](index=25&type=chunk) Key Financials (FY2017-FY2019) | Fiscal Year Ended | Revenue (in millions) | Net Loss (in millions) | | :--- | :--- | :--- | | Jan 31, 2019 | $228.3 | $(74.8) | | Jan 31, 2018 | $170.2 | $(66.6) | | Jan 31, 2017 | $124.3 | $(43.2) | [Growth Strategy](index=7&type=section&id=Item%201.%20Business%23Growth%20Strategy) Yext's growth strategy focuses on expanding its customer base, deepening existing customer relationships, developing new products, and extending its global Knowledge Network - Key growth strategies include expanding the customer base, up-selling to existing customers, and international expansion[34](index=34&type=chunk)[37](index=37&type=chunk) - International revenue comprised over **14%** of total revenue in fiscal 2019, with established presence in the **UK**, **Germany**, **France**, **Italy**, **Switzerland**, **Japan**, and **China**[37](index=37&type=chunk) - The company plans to expand its Knowledge Network, which included over **150** applications in FY2019, focusing on industry-specific and international services like **Amazon Alexa** integration[37](index=37&type=chunk) [The Yext Knowledge Engine](index=11&type=section&id=Item%201.%20Business%23The%20Yext%20Knowledge%20Engine) The Yext Knowledge Engine is a cloud-based platform enabling customers to manage digital knowledge through subscription packages for Listings, Pages, and Reviews - The platform's core features, **Listings**, **Pages**, and **Reviews**, are offered via subscription packages[40](index=40&type=chunk) - The technology features a cloud-based, microservices architecture built with open-source technology, hosted in co-location data centers for scalability and redundancy[42](index=42&type=chunk)[43](index=43&type=chunk) - Data is structured using **schema.org** standards, ensuring compatibility with search engines such as **Google** and **Bing**[44](index=44&type=chunk) [Sales and Marketing](index=13&type=section&id=Item%201.%20Business%23Sales%20and%20Marketing) Yext sells solutions globally via direct sales, resellers, and self-service, focusing on enterprise and mid-size businesses with a dollar-based net retention rate of 110% in fiscal 2019 - The quota-carrying sales force grew from **131** to **173** representatives in the year ended January 31, 2019[51](index=51&type=chunk) - Revenue from direct sales to small businesses was less than **10%** of total revenue in fiscal 2019, reflecting a shift towards larger customers[54](index=54&type=chunk) Dollar-Based Net Retention Rate | Fiscal Year Ended | Rate | | :--- | :--- | | Jan 31, 2019 | 110% | | Jan 31, 2018 | 109% | | Jan 31, 2017 | 119% | [Competition](index=15&type=section&id=Item%201.%20Business%23Competition) Yext operates in an evolving digital knowledge management market, primarily competing with in-house manual processes and smaller firms offering limited features - Primary competition stems from businesses managing digital knowledge in-house via manual processes[62](index=62&type=chunk) - Yext also competes with smaller firms offering lower-priced products or a subset of its features[62](index=62&type=chunk) - Competitive strengths include the breadth of its **Knowledge Network**, platform features, ease of integration, and customer **ROI**[63](index=63&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) Yext faces significant risks including persistent net losses, rapid growth management, reliance on key partners, security breaches, and material weaknesses in internal controls - The company has a history of losses, with a net loss of **$74.8 million** in fiscal 2019 and an accumulated deficit of **$301.1 million** as of January 31, 2019[68](index=68&type=chunk) - Growth is highly dependent on expanding the direct sales force and successfully managing international operations, which expose the company to regulatory, economic, and political risks[75](index=75&type=chunk)[77](index=77&type=chunk) - The business relies on strategic relationships with over **150** third-party application providers in its **Knowledge Network**, where the loss of a key partner like **Google** could significantly impact customer retention[81](index=81&type=chunk) - A material weakness in internal control over financial reporting related to information technology general controls was identified as of January 31, 2019, potentially affecting investor confidence[112](index=112&type=chunk)[114](index=114&type=chunk) - The company is subject to evolving data privacy laws such as **GDPR** and the **California Consumer Privacy Act (CCPA)**, potentially increasing compliance costs and liability[132](index=132&type=chunk)[134](index=134&type=chunk) [Unresolved Staff Comments](index=37&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[192](index=192&type=chunk) [Properties](index=37&type=section&id=Item%202.%20Properties) Yext's corporate headquarters are in New York, NY, occupying 95,000 sq ft of leased space, with other domestic and international leased offices deemed adequate - Corporate headquarters are in **New York, NY**, with approximately **95,000 sq. ft.** of leased space[193](index=193&type=chunk) - All facilities are leased, and the company believes existing space is adequate for current needs[193](index=193&type=chunk) [Legal Proceedings](index=37&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings material to its business or financial condition - The company is not currently a party to any material legal proceedings[194](index=194&type=chunk) [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[195](index=195&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Yext's common stock trades on the NYSE since April 2017, with no dividends paid, and details on equity compensation plans are provided - Common stock trades on the **NYSE** under the symbol **"YEXT"** since April 13, 2017[198](index=198&type=chunk) - The company has never paid dividends and does not anticipate paying them in the foreseeable future[199](index=199&type=chunk) Equity Compensation Plan Information (as of Jan 31, 2019) | Plan Category | Securities to be issued upon exercise/vesting | Weighted-average exercise price of outstanding options | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 23,680,940 | $6.54 | 2,966,657 | [Selected Financial Data](index=40&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data shows consistent revenue growth from $60.0 million in FY2015 to $228.3 million in FY2019, alongside widening net losses and increased operating expenses Selected Consolidated Statements of Operations Data (in thousands) | Fiscal year ended January 31, | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$228,283** | **$170,201** | **$124,261** | **$89,724** | **$60,002** | | Gross profit | $170,870 | $126,106 | $87,311 | $58,691 | $35,170 | | Loss from operations | $(75,645) | $(66,640) | $(42,700) | $(26,138) | $(17,351) | | **Net loss** | **$(74,837)** | **$(66,565)** | **$(43,150)** | **$(26,495)** | **$(17,273)** | Selected Consolidated Balance Sheet Data (in thousands) | As of January 31, | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $91,755 | $34,367 | $24,420 | $30,028 | | Total assets | $267,128 | $203,489 | $86,465 | $85,497 | | Total liabilities | $182,579 | $122,036 | $93,605 | $60,118 | | Total stockholders' equity (deficit) | $84,549 | $81,453 | $(127,755) | $(95,236) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses FY2019 financial performance, noting a 34% revenue increase to $228.3 million, a $74.8 million net loss due to rising expenses, and $142.8 million in liquidity - Revenue for fiscal 2019 was **$228.3 million**, a **34%** increase from **$170.2 million** in fiscal 2018, driven by new customers and expanded subscriptions[222](index=222&type=chunk)[232](index=232&type=chunk) - Net loss increased to **$74.8 million** in fiscal 2019 from **$66.6 million** in fiscal 2018, driven by higher operating expenses across sales & marketing, R&D, and G&A to support growth[229](index=229&type=chunk) - The company adopted the new revenue recognition standard **ASU 2014-09** on a modified retrospective basis effective February 1, 2018, resulting in increased capitalization and longer amortization of contract acquisition costs[236](index=236&type=chunk)[302](index=302&type=chunk) - As of January 31, 2019, the company held **$142.8 million** in cash, cash equivalents, and marketable securities, deemed sufficient for at least the next **12 months** of operating requirements[255](index=255&type=chunk) [Results of Operations](index=44&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) Fiscal 2019 revenue grew 34% to $228.3 million with improved gross margin, while operating expenses rose 28% due to increased personnel costs across departments Comparison of Fiscal Years 2019 and 2018 (in thousands) | | FY 2019 | FY 2018 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $228,283 | $170,201 | $58,082 | 34% | | Gross Profit | $170,870 | $126,106 | $44,764 | 35% | | Sales and marketing | $158,845 | $126,980 | $31,865 | 25% | | Research and development | $36,098 | $25,687 | $10,411 | 41% | | General and administrative | $51,572 | $40,079 | $11,493 | 29% | Comparison of Fiscal Years 2018 and 2017 (in thousands) | | FY 2018 | FY 2017 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $170,201 | $124,261 | $45,940 | 37% | | Gross Profit | $126,106 | $87,311 | $38,795 | 44% | | Sales and marketing | $126,980 | $81,529 | $45,451 | 56% | | Research and development | $25,687 | $19,316 | $6,371 | 33% | | General and administrative | $40,079 | $29,166 | $10,913 | 37% | [Liquidity and Capital Resources](index=50&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) As of January 31, 2019, Yext had $142.8 million in liquidity, deemed sufficient for the next 12 months, and a credit facility with Silicon Valley Bank - Principal sources of liquidity as of January 31, 2019, were cash, cash equivalents, and marketable securities totaling **$142.8 million**[255](index=255&type=chunk) - The company maintains a credit agreement with **Silicon Valley Bank** including a **$15.0 million** revolving line (fully available as of January 31, 2019) and a **$7.0 million** Letter of Credit facility[257](index=257&type=chunk)[260](index=260&type=chunk) Cash Flow Summary (in thousands) | Fiscal year ended January 31, | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $5,240 | $(32,409) | $(13,532) | | Net cash provided by (used in) investing activities | $28,134 | $(88,123) | $(3,803) | | Net cash provided by financing activities | $24,384 | $129,604 | $5,968 | [Critical Accounting Policies and Estimates](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies involve significant judgment in revenue recognition, capitalizing contract costs, stock-based compensation, and income taxes - **Revenue Recognition:** The company adopted **ASC 606**, recognizing revenue as services are transferred, requiring judgment in identifying performance obligations and allocating transaction prices[276](index=276&type=chunk)[277](index=277&type=chunk) - **Costs Capitalized to Obtain Revenue Contracts:** Incremental costs like sales commissions are capitalized and amortized straight-line over an estimated **three-year** benefit period for new contracts[279](index=279&type=chunk) - **Stock-Based Compensation:** Fair value of awards is measured at grant date and recognized over the service period, requiring significant judgment for forfeiture rates, volatility, and expected life[281](index=281&type=chunk)[282](index=282&type=chunk) - **Income Taxes:** The company provides for deferred income taxes and establishes a valuation allowance against deferred tax assets if their realization is not probable[285](index=285&type=chunk)[286](index=286&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to foreign currency, inflation, and interest rate risks, though a 10% change in these factors is not expected to materially impact financials - The company is exposed to foreign currency, inflation, and interest rate risks[290](index=290&type=chunk) - A hypothetical **10%** change in foreign exchange rates or interest rates is not expected to materially affect the company's financial position or results[291](index=291&type=chunk)[294](index=294&type=chunk) - The investment portfolio of **$142.8 million** as of January 31, 2019, is primarily for capital preservation and not held for trading or speculative purposes[293](index=293&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=55&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements with an unqualified opinion, but an adverse opinion on internal controls due to a material weakness - Includes audited Consolidated Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Stockholders' Equity, Statements of Cash Flows, and related notes[297](index=297&type=chunk) - The independent auditor, **Ernst & Young LLP**, issued an unqualified opinion on the consolidated financial statements[300](index=300&type=chunk) - The independent auditor issued an adverse opinion on the effectiveness of internal control over financial reporting as of January 31, 2019, due to a material weakness in information technology general controls[301](index=301&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=92&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting or financial disclosure matters - None[461](index=461&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in IT general controls, leading to an adverse auditor opinion, with remediation underway - Management concluded that disclosure controls and procedures were ineffective as of January 31, 2019[463](index=463&type=chunk) - A material weakness was identified in information technology general controls (**ITGC**), impacting controls related to revenue recognition and financial close processes[465](index=465&type=chunk)[468](index=468&type=chunk) - The auditor issued an adverse opinion on the effectiveness of internal control over financial reporting[467](index=467&type=chunk) - Remediation activities are underway, focusing on improving logical security, program change management, computer operations controls, and IT training[471](index=471&type=chunk)[473](index=473&type=chunk) [Other Information](index=93&type=section&id=Item%209B.%20Other%20Information) The company reports no other information to disclose under this item - None[472](index=472&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=94&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2019 Proxy Statement - Information regarding directors, executive officers, corporate governance, and the audit committee is incorporated by reference from the **2019 Proxy Statement**[475](index=475&type=chunk)[479](index=479&type=chunk) [Executive Compensation](index=94&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive and director compensation is incorporated by reference from the 2019 Proxy Statement - Information on executive and director compensation is incorporated by reference from the **2019 Proxy Statement**[480](index=480&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=94&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the 2019 Proxy Statement - Information on security ownership is incorporated by reference from the **2019 Proxy Statement**[482](index=482&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=94&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2019 Proxy Statement - Information on related transactions and director independence is incorporated by reference from the **2019 Proxy Statement**[483](index=483&type=chunk) [Principal Accountant Fees and Services](index=94&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2019 Proxy Statement - Information on principal accountant fees and services is incorporated by reference from the **2019 Proxy Statement**[484](index=484&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=95&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and a comprehensive index of exhibits filed as part of the Form 10-K - This item lists the financial statements, financial statement schedules, and exhibits filed as part of the **Form 10-K**[485](index=485&type=chunk)[486](index=486&type=chunk) [Form 10-K Summary](index=97&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary provided - None[491](index=491&type=chunk)

Financial Data and Key Metrics Changes - Total revenue grew 33% year-over-year in Q4, reaching $63.8 million, exceeding guidance [9][30] - Full year revenue increased 34%, totaling $228.8 million [9][30] - Operating cash flow for Q4 was nearly $31 million, marking the first full year of positive operating cash flow [9][36] - Net loss for Q4 increased to $19.9 million from $17 million a year ago, with a net loss per share of $0.20 [34] Business Line Data and Key Metrics Changes - Signed 128 new enterprise logos in Q4, a 68% increase from the previous year [10][19] - New annual contract value (ACV) from new customers and expansions was balanced, with approximately half coming from each segment [30] - Deferred revenue increased 54% year-over-year to $137.4 million [31] Market Data and Key Metrics Changes - International results were strong, with Japan achieving the largest first-year results in company history [25] - Significant growth in Europe, particularly in northern and southern regions [25] Company Strategy and Development Direction - The company aims to provide verified answers online, positioning itself as a critical technology provider for brands [16][24] - Focus on expanding sales capacity, particularly in mid-market and enterprise segments, with plans to hire more quota-carrying sales representatives [20][63] - Strategic discussions with customers are leading to larger contracts, with 169 deals above $100,000 closed in Q4 [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business's state and growth opportunities, citing strong demand indicators and increased C-level engagement [19][106] - The company plans to continue investing in sales and marketing, as well as R&D, to support growth [38][66] Other Important Information - The company adopted ASC-606 accounting standards, with minimal impact on revenue recognition [27][29] - Remaining performance obligations (RPO) stood at $262 million, with an additional $34 million in backlog [32] Q&A Session Summary Question: Can you discuss the RPO metric and its historical growth? - Management noted that the RPO reflects contracted but unbilled revenue, with the $34 million representing exclusions under ASC-606 [44] Question: How is the focus on mid-market accounts progressing? - The company has ramped up hiring for mid-market sales teams and is seeing significant growth in that segment [46] Question: What is the retention trend for the SMB segment? - Retention for the SMB segment remains in the mid-40% to 50% range, with a strategic shift towards mid-market and enterprise [51] Question: How is sales hiring trending? - The company is aggressively hiring, currently at 18% quota-carrying sales headcount, with a goal of reaching 20% [63] Question: What drove the increase in deferred revenue in Q4? - The increase is attributed to strong new business and renewals, typical for the software industry [92]

You. In Control. Everywhere. JMP Securities 2019 Technology February 26, 2019 Conference PRESENTED TO: DATE: PRESENTED BY: Steve Cakebread, CFO Legal Disclosures These slides and the accompanying oral presentation contain forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements regarding future results of the operations and financial position of Yext, Inc. ("Yext" or the "Company"), financial targets, business strategy, and plan ...

| --- | --- | --- | --- | |-------|-------|-------|-------| | | | | | | | | | | | | | | | "Company"), financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. Yext has based these forward-looking statements primarily on its current expectations and projections about future events and trends that it believes may affect its business, those that may be described in greater detail in the Company's periodic filings with the U.S. Securities and Exchange ...