Yext, Inc. Announces First Quarter Fiscal 2021 Results
NEW YORK, June 4, 2020 /PRNewswire/ -- Yext, Inc. (NYSE: YEXT), the Search Experience Cloud company, today announced its results for the three months ended April 30, 2020, or the Company's first quarter of fiscal 2021.
"We have seen the rise of questions on the internet accelerate the digital transformation of every business, particularly in the last couple of months," said Howard Lerman, Founder and Chief Executive Officer of Yext. "Our platform is mission-critical to providing accurate and timely official answers to urgent questions. Given the large TAM opportunity and strong demand for our Yext Answers product, we are continuing to position Yext as The Official Answers Company. We have transitioned to a 'Lead with Answers' sales motion, and our 90-Day Yext Answers Free Trial will allow any company to quickly see ROI and how important site search is to their customers' digital experiences."
Last week, Yext announced it is the first search technology partner to join the Adobe Exchange program at the premier level, the top tier of Adobe's technology partner program. "We're thrilled to work more closely with Adobe, the behemoth in the digital experience space, to extend Yext's Search Experience Cloud to an even wider pool of marketers," said Lerman. "Now, every Adobe rep in the world can refer Yext Answers to their customers, and Yext can show customers how Answers will deliver lower support costs, higher revenue conversion, and deep customer insights on their websites."
First Quarter Fiscal 2021 Highlights:
-- Revenue of $85.4 million, a 24% increase compared to the $68.7 million
reported in the first quarter fiscal 2020.
-- Gross Profit of $64.2 million, a 23% increase compared to the $52.2
million reported in the first quarter fiscal 2020. Gross margin of 75.2%
compared to 76.0% reported in first quarter fiscal 2020.
-- Net Loss and Non-GAAP Net Loss:
-- Net loss of $29.2 million compared to the net loss of $19.0 million
in the first quarter fiscal 2020. The increased net loss was driven
primarily by higher operating expenses, due to an overall increase
in employee-related costs, as well as an increase in lease expenses,
primarily as a result of our new lease arrangement for our corporate
headquarters in New York, NY which commenced in May 2019.
-- Non-GAAP net loss of $11.9 million compared to the non-GAAP net loss
of $5.7 million in the first quarter fiscal 2020. The increase in
non-GAAP net loss was primarily attributable to the higher operating
expenses as described above.
-- Net Loss Per Share and Non-GAAP Net Loss Per Share:
-- Net loss per share of $0.25 in the first quarter fiscal 2021
compared to net loss per share of $0.18 in the first quarter fiscal
2020.
-- Non-GAAP net loss per share of $0.10 in the first quarter fiscal
2021 compared to non-GAAP net loss per share of $0.05 in the first
quarter fiscal 2020.
-- Net loss per share and non-GAAP net loss per share were based on
116.6 million and 106.5 million weighted-average basic shares
outstanding for the first quarter fiscal 2021 and fiscal 2020,
respectively.
-- Balance Sheet: Cash and cash equivalents of $248.8 million as of April
30, 2020. Unearned revenue of $152.6 million as of April 30, 2020, a 22%
increase compared to $125.4 million as of April 30, 2019.
-- Remaining Performance Obligations ("RPO"): RPO of $293.8 million as of
April 30, 2020. RPO expected to be recognized over the next 24 months of
$277.8 million with the remaining balance expected to be recognized
thereafter. RPO does not include amounts under contract subject to
certain accounting exclusions.
-- Cash Flow: Net cash used in operating activities was $0.7 million for
the first quarter fiscal 2021 compared to net cash provided by operating
activities of $0.8 million for the same period of fiscal 2020.
Readers are encouraged to review the tables labeled "Reconciliation of GAAP to Non-GAAP Financial Measures" at the end of this release.
Recent Business Highlights:
-- Announced global technology partnership with Adobe. Yext is joining the
Adobe Exchange program at the premier level, the top tier of Adobe's
technology partner program. Adobe content management system clients can
choose to upgrade their search experience with Yext's innovative site
search product, Answers.
-- Offered our new site search product, Yext Answers, for a 90-day free
trial.
-- Launched No Wrong Answers integrated marketing campaign to help more
organizations across industries transform their websites with Yext
Answers and provide consumers with official answers.
-- Announced collaborations with the States of New Jersey and Alabama to
launch a comprehensive information hub, powered by Yext Answers, that
centralizes accurate information and updates about the COVID-19
pandemic.
-- Announced collaboration with the United States Department of State on an
official COVID-19 travel alert and advisory information hub, powered by
Yext Answers.
-- Announced collaboration with the World Health Organization (WHO) to
integrate Yext Answers on its COVID-19 webpage.
-- Customer count, which excludes our small business and third-party
reseller customers, increased 36% year-over-year to nearly 2,100.
-- Executed a new credit agreement which provides a revolving loan facility
of up to $50.0 million.
-- Appointed Seth Waugh, CEO of the PGA of America, to its Board of
Directors, effective March 3, 2020.
Financial Outlook:
Yext is also providing the following guidance for its second fiscal quarter ending July 31, 2020.
-- Second Quarter Fiscal 2021 Outlook:
-- Revenue is projected to be in the range of $84 million to $86
million.
-- Non-GAAP net loss per share is projected to be $0.13 to $0.11 which
assumes 118.5 million weighted-average basic shares outstanding.
With the uncertainty surrounding the ongoing impact of the COVID-19 pandemic, we are withdrawing our previously issued full year fiscal 2021 guidance.
Conference Call Information
Yext will host a conference call today at 4:30 P.M. Eastern Time (1:30 P.M. Pacific Time) to discuss its financial results with the investment community. A live webcast of the call will be available on the Yext Investor Relations website at http://investors.yext.com. A live dial-in is available domestically at (877) 883-0383 and internationally at (412) 902-6506, passcode 6370206.
A replay will be available domestically at (877) 344-7529 or internationally at (412) 317-0088, passcode 10143690, until midnight (ET) June 11, 2020.
About Yext
The ultimate source for official answers about a business online should be the business itself. However, when consumers ask questions on company websites, too often they are left in the dark with wrong answers. Yext (NYSE: YEXT), the Search Experience Cloud, solves this problem by organizing a business's facts so it can provide official answers to consumer questions -- wherever people search. Starting with the company website, then extending across search engines and voice assistants, businesses around the world, like Taco Bell, Marriott, and Jaguar Land Rover--as well as organizations like the U.S. State Department--trust Yext to radically improve the search experience on their websites and across the entire search ecosystem.
Yext's mission is to help businesses and organizations around the world deliver official answers everywhere people search. Yext has been named a Best Place to Work by Fortune and Great Place to Work®, as well as a Best Workplace for Women. Yext is headquartered in New York City with offices in Amsterdam, Berlin, Chicago, Dallas, Geneva, London, Miami, Milan, Paris, San Francisco, Shanghai, Tokyo, and the Washington, D.C. area--and work-from-home offices all around the world.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This release includes forward-looking statements including, but not limited to, statements regarding our revenue, non-GAAP net loss and shares outstanding for our second quarter fiscal 2021 in the paragraphs under "Financial Outlook" above, statements regarding the impact of the COVID-19 pandemic on our business and results of operations and other statements regarding our expectations regarding the growth of our company, our market opportunity and our industry. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential," "might," "would," "continue," or the negative of these terms or other comparable terminology. Actual events or results may differ from those expressed in these forward-looking statements, and these differences may be material and adverse.
We have based the forward-looking statements contained in this release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, strategy, short- and long-term business operations, prospects, business strategy and financial needs. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, the impact of the COVID-19 pandemic on U.S. and global markets, our business, operations, financial results, cash flow, demand for our products, sales cycles, and customer acquisition and retention; our ability to renew existing customers and attract new customers generally; our ability to successfully expand and compete in new geographies and industry verticals; our ability to maintain and scale our sales force; our ability to expand our service and application provider network; our ability to develop new product and platform offerings to expand our market opportunity, including with Yext Answers; our ability to release new products and updates that are adopted by our customers; our ability to manage our growth effectively; changes to our real estate strategy, in particular the timing of our exit of our existing global headquarters in New York, New York and the timing and size of our capital expenditures related to new facilities; weakened global economic conditions; the number of options exercised by our employees and former employees; and the accuracy of the assumptions and estimates underlying our financial projections. For a detailed discussion of these and other risk factors, please refer to the risks detailed in our filings with the Securities and Exchange Commission, including, without limitation, our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K, which are available at http://investors.yext.com and on the SEC's website at https://www.sec.gov. Further information on potential risks that could affect actual results will be included in other filings we make with the SEC from time to time. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this release relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date hereof or to conform such statements to actual results or revised expectations, except as required by law.
Non-GAAP Measurements
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables include non-GAAP net loss, non-GAAP net loss per share and non-GAAP net loss margin. Non-GAAP net loss, non-GAAP net loss per share and non-GAAP net loss margin are financial measures that are not calculated in accordance with GAAP. We define these non-GAAP net loss financial measures as our GAAP net loss as adjusted to exclude the effects of stock-based compensation expenses. Non-GAAP net loss per share is defined as non-GAAP net loss on a per share basis. See "Reconciliation of GAAP to Non-GAAP Financial Measures" for a discussion of the applicable weighted-average shares outstanding. Non-GAAP net loss margin is defined as non-GAAP net loss divided by revenue. We believe these non-GAAP financial measures provide investors and other users of our financial information consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our results of operations. With respect to non-GAAP net loss margin, we believe this metric is useful in evaluating our profitability relative to the amount of revenue generated, excluding the impact of stock-based compensation expense. We also believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics eliminate the effects of stock-based compensation, which may vary for reasons unrelated to overall operating performance.
We use these non-GAAP financial measures in conjunction with traditional GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our Board of Directors concerning our financial performance. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish this or similar metrics. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.
These non-GAAP financial measures may be limited in their usefulness because they do not present the full economic effect of our use of stock-based compensation. We compensate for these limitations by providing investors and other users of our financial information a reconciliation of non-GAAP net loss to net loss, non-GAAP net loss per share to net loss per share and non-GAAP net loss margin to net loss margin, the most closely related GAAP financial measures. However, we have not reconciled the non-GAAP guidance measures disclosed under "Financial Outlook" to their corresponding GAAP measures because certain reconciling items such as stock-based compensation and the corresponding provision for income taxes depend on factors such as the stock price at the time of award of future grants and thus cannot be reasonably predicted. Accordingly, reconciliations to the non-GAAP guidance measures is not available without unreasonable effort. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP net loss and non-GAAP net loss per share in conjunction with net loss and net loss per share.
For Further Information Contact:
Investor Relations:
Yuka Broderick
IR@yext.com
Public Relations:
Amanda Kontor
PR@yext.com
YEXT, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
April 30, 2020 January 31, 2020
Assets
Current assets:
Cash and cash equivalents $
248,796 $
256,076
Accounts receivable, net of
allowances of $1,741 and $995,
respectively 47,308 80,583
Prepaid expenses and other
current assets 17,202 12,730
Costs to obtain revenue
contracts, current 28,143 28,423
Total current assets 341,449 377,812
Restricted cash - 12,100
Property and equipment, net 49,033 26,200
Operating lease right-of-use
assets 114,101 111,973
Costs to obtain revenue
contracts, non-current 22,694 26,051
Goodwill 4,494 4,534
Intangible assets, net 1,148 1,343
Other long term assets 3,871 3,607
Total assets $
536,790 $
563,620
Liabilities and stockholders' equity
Current liabilities:
Accounts payable, accrued
expenses and other current
liabilities $
55,799 $
59,482
Unearned revenue, current 152,565 176,806
Operating lease liabilities,
current 8,796 8,640
Total current liabilities 217,160 244,928
Operating lease liabilities,
non-current 123,109 115,187
Other long term liabilities 2,610 2,293
Total liabilities 342,879 362,408
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par
value per share; 50,000,000
shares authorized at April 30,
2020 and January 31, 2020; zero
shares issued and outstanding
at April 30, 2020 and January
31, 2020 -
Common stock, $0.001 par value
per share; 500,000,000 shares
authorized at April 30, 2020
and January 31, 2020;
124,029,508 and 122,335,709
shares issued at April 30, 2020
and January 31, 2020,
respectively; 117,524,174 and
115,830,375 shares outstanding
at April 30, 2020 and January
31, 2020, respectively 124 122
Additional paid-in capital 659,262 636,008
Accumulated other comprehensive
loss (1,693) (360)
Accumulated deficit (451,877) (422,653)
Treasury stock, at cost (11,905) (11,905)
Total stockholders' equity 193,911 201,212
Total liabilities and
stockholders' equity $
536,790 $
563,620
YEXT, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share data)
(Unaudited)
Three months ended April 30,
2020 2019
Revenue $
85,351 $
68,708
Cost of revenue 21,184 16,473
Gross profit 64,167 52,235
Operating expenses:
Sales and marketing 58,520 46,398
Research and development 14,378 9,906
General and administrative 20,458 15,191
Total operating expenses 93,356 71,495
Loss from operations (29,189) (19,260)
Interest income 468 906
Interest expense (137) (53)
Other expense, net (84) (206)
Loss from operations before income taxes (28,942) (18,613)
(Provision for) benefit from income taxes (282) (346)
Net loss $
(29,224) $
(18,959)
Net loss per share attributable to common stockholders, basic and
diluted $
(0.25) $
(0.18)
Weighted-average number of shares used in computing net loss per
share attributable to common stockholders, basic and diluted 116,606,835 106,453,558
Other comprehensive (loss) income:
Foreign currency translation adjustment $
(1,333) $
314
Unrealized gain on marketable securities, net - 35
Total comprehensive loss $
(30,557) $
(18,610)
YEXT, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited
Three months ended April 30,
2020 2019
---
Operating activities:
Net loss $
(29,224) $
(18,959)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization 2,045 1,941
Bad debt expense 759 40
Stock-based compensation expense 17,372 13,216
Amortization of operating lease right-
of-use assets 3,457 1,578
Other, net 190 (32)
Changes in operating assets and liabilities:
Accounts receivable 32,395 22,195
Prepaid expenses and other current
assets (5,064) 60
Costs to obtain revenue contracts 3,465 (365)
Other long term assets (479) (1,913)
Accounts payable, accrued expenses and
other current liabilities (4,650) (6,338)
Unearned revenue (24,161) (9,708)
Operating lease liabilities 2,679 (1,242)
Other long term liabilities 559 346
Net cash (used in) provided by
operating activities (657) 819
Investing activities:
Maturities of marketable securities - 24,697
Capital expenditures (21,275) (831)
Net cash (used in) provided by
investing activities (21,275) 23,866
Financing activities:
Proceeds from common stock offering,
net of underwriting discounts and
commissions - 147,000
Payments of common stock deferred
offering issuance costs - (208)
Proceeds from exercise of stock options 1,879 5,000
Payments of deferred financing costs (394) (163)
Proceeds, net from employee stock
purchase plan withholdings 1,483 1,868
Net cash provided by financing
activities 2,968 153,497
Effect of exchange rate changes on
cash, cash equivalents and restricted
cash (416) (174)
Net (decrease) increase in cash, cash
equivalents and restricted cash (19,380) 178,008
Cash, cash equivalents and restricted
cash at beginning of period 268,176 91,755
Cash, cash equivalents and restricted
cash at end of period $
248,796 $
269,763
Supplemental reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets:
(in thousands) April 30, 2020 April 30, 2019
Cash and cash equivalents $
248,796 $
257,663
Restricted cash - 12,100
Total cash, cash equivalents and
restricted cash $
248,796 $
269,763
YEXT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited
Three months ended April 30, 2020
GAAP Stock-Based Non-GAAP
Compensation
Expense
Cost and expenses:
Cost of revenue $
21,184 $
(1,233) $
19,951
Gross profit $
64,167 $
1,233 $
65,400
Sales and marketing $
58,520 $
(7,781) $
50,739
Research and
development $
14,378 $
(3,943) $
10,435
General and
administrative $
20,458 $
(4,415) $
16,043
Loss from
operations $
(29,189) $
17,372 $
(11,817)
Net loss $
(29,224) $
17,372 $
(11,852)
Net loss margin (34.2)% 20.3% (13.9)%
Three months ended April 30, 2019
GAAP Stock-Based Non-GAAP
Compensation
Expense
Cost and expenses:
Cost of revenue $
16,473 $
(818) $
15,655
Gross profit $
52,235 $
818 $
53,053
Sales and marketing $
46,398 $
(6,840) $
39,558
Research and
development $
9,906 $
(2,572) $
7,334
General and
administrative $
15,191 $
(2,986) $
12,205
Loss from
operations $
(19,260) $
13,216 $
(6,044)
Net loss $
(18,959) $
13,216 $
(5,743)
Net loss margin (27.6)% 19.2% (8.4)%
YEXT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except share and per share data)
(Unaudited)
Three months ended April 30,
2020 2019
Net loss $
(29,224) $
(18,959)
Stock-based compensation
expense 17,372 13,216
Non-GAAP net loss $
(11,852) $
(5,743)
Net loss per share
attributable to common
stockholders, basic and
diluted $
(0.25) $
(0.18)
Stock-based compensation
expense per share 0.15 0.13
Non-GAAP net loss per
share attributable to
common stockholders,
basic and diluted $
(0.10) $
(0.05)
Weighted-average number
of shares used in
computing net loss per
share attributable to
common stockholders,
basic and diluted 116,606,835 106,453,558
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SOURCE Yext, Inc.
