Yext(US:YEXT)2022-09-07 23:55Financial Data and Key Metrics Changes - Revenue for Q2 2023 was $100.9 million, representing a 3% year-over-year growth, exceeding the high end of guidance by $0.02 million [10][39] - Non-GAAP net loss per share was $0.03, an improvement from a net loss of $0.06 per share in the same quarter last year [44] - Annual recurring revenue (ARR) was $387 million at the end of Q2, up 2% year-over-year, with a negative impact of approximately $10.8 million from foreign exchange (FX) [40][42] - Cash and cash equivalents decreased to $188 million from $248 million at the end of the previous quarter, primarily due to share repurchases totaling $31.6 million in Q2 [45] Business Line Data and Key Metrics Changes - Direct ARR grew 5% year-over-year to $312 million, while third-party reseller ARR declined by 6% [42] - Gross margin for Q2 was 74.5%, slightly down from 75.2% in the previous year [43] - Operating expenses were $78.6 million, representing 78% of revenue, down from 81% in the same quarter last year [43] Market Data and Key Metrics Changes - The company experienced a negative year-over-year revenue impact of approximately $2.8 million or 3% due to FX, with constant currency growth of approximately 6% [39] - The company noted a global trend towards increased scrutiny on spending and elongated deal cycles, particularly in Europe [85] Company Strategy and Development Direction - The company is focused on driving long-term growth through operational efficiency, product innovation, and customer satisfaction [9] - A rebranding effort was initiated to clarify the company's offerings, transitioning the name of the Answers product to Search and consolidating various products under the Answers platform [11][26] - The appointment of a new Chief Marketing Officer aims to strengthen the brand and increase demand for Yext solutions globally [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving profitability in the second half of the year, despite caution regarding the overall economic environment [10][20] - The company is adapting to a more clinical and efficient operating model, which is expected to yield better customer outcomes and sales effectiveness [21][17] - Management acknowledged challenges in customer success and gross retention impacting net dollar retention, which decreased to 98% from 99% [58] Other Important Information - The company plans to continue share repurchases as part of its strategy to maintain a strong balance sheet [45] - The guidance for Q3 revenue is projected to be between $99 million and $100 million, reflecting the negative impact of FX [47] Q&A Session Summary Question: Update on sales and marketing headcount and efficiency - Management emphasized a focus on driving sales productivity rather than increasing headcount, with ongoing evaluations of sales team effectiveness [56] Question: Clarification on net dollar retention decline - The decline to 98% was attributed to challenges in customer success and gross retention, impacting upsells [58] Question: Impact of rebranding on pricing and customer purchasing - The company previously shifted to a capacity-based pricing model, and no immediate changes to pricing are anticipated [66] Question: Timeline for seeing broader impacts from initiatives - Management indicated that while early signs of improvement are visible, significant changes in bookings and retention dynamics may take six to twelve months [69] Question: Retention trends in the Listings business - Gross retention in the Listings business was in the low-80s, with ongoing product enhancements aimed at improving customer satisfaction [75] Question: Potential for M&A activity - While M&A is not a current priority, the company remains open to opportunities that may arise in the future [81]