Yext, Inc. Announces Third Quarter Fiscal 2018 Results

NEW YORK, Nov. 30, 2017 /PRNewswire/ -- Yext, Inc. (NYSE: YEXT), the leader in digital knowledge management, today announced its results for the three months ended October 31, 2017, or the Company's third quarter of fiscal 2018.

"We are very pleased with our results this quarter, highlighted by revenue growth of 39% over the third quarter last year and the continued expansion of our gross margins, which increased 290 basis points over the year ago quarter," said Howard Lerman, Co-Founder and Chief Executive Officer of Yext.

"We experienced record attendance at our recent ONWARD user conference, where this year's theme was the Intelligent Future.  A world-class line-up of speakers, including technology leaders from Amazon, Google, Microsoft and others, discussed how artificial intelligence, machine learning and voice search are revolutionizing the way businesses need to engage with their customers.  Yext is ideally positioned to provide our customers with the tools and resources they need to respond to the Intelligent Future.

"With the launch of our new services, such as Yext for Food and Yext for Events, and new features, like Yext Knowledge Assistant - which lets companies keep all of their critical information up to date through a conversational user interface - our addressable market continues to grow and we continue to make it even easier for customers to work with Yext.  We continue to believe we are well positioned for long-term success."

Third Quarter Fiscal 2018 Highlights:

• Revenue of $44.3 million, a 39% increase as compared to the $31.9 million reported in third quarter fiscal 2017.  The revenue increase was primarily due to the continued growth of our customer base and higher revenue from existing customers, primarily due to expanded subscriptions.
• Gross Profit of $32.7 million, a 45% increase as compared to the $22.6 million reported in third quarter fiscal 2017.  Gross margin of 73.7% as compared to the 70.8% reported in third quarter fiscal 2017.
• Net Loss and Non-GAAP Net Loss:
• Net loss of $17.1 million as compared to the $10.2 million net loss in third quarter fiscal 2017.  The increased loss was driven by increased operating expenses, primarily in sales and marketing, due to efforts to acquire new customers.
• Non-GAAP net loss of $11.1 million as compared to the $7.7 million non-GAAP net loss in the third quarter fiscal 2017.
• Net Loss Per Share and Non-GAAP Net Loss Per Share:
• Net loss per share of $0.19 based on 90.4 million weighted-average shares outstanding, compared to the net loss per share of $0.33 based on 31.1 million weighted-average shares outstanding in the third quarter fiscal 2017.
• Non-GAAP net loss per share of $0.12 based on 90.4 million weighted-average shares outstanding at quarter end, as compared to the $0.25 non-GAAP net loss per share in the third quarter fiscal 2017 based on 31.1 million weighted-average shares outstanding at quarter end.
• Readers are encouraged to review the tables labeled "Reconciliation of GAAP to Non-GAAP Financial Measures" at the end of this release.
• Balance Sheet:  Cash, cash equivalents and marketable securities of $113.5 million as of October 31, 2017. 
• Cash Flow:  Cash used in operating activities for the third quarter of fiscal 2018 was $16.4 million as compared to cash used in operating activities of $9.0 million in the same period in fiscal 2017.  The higher use of cash in the current period reflects a greater use from working capital, driven primarily by a higher balance in accounts receivable due to the timing of new business signed during the quarter.

Third Quarter Fiscal 2018 and Other Recent Business Highlights:

• Managed approximately 27.1 million attributes through approximately 1.4 million licenses¹ to Yext's digital knowledge platform as of October 31, 2017, representing increases of 66% and 58%, respectively, as compared to October 31, 2016.
• Announced the appointment of Tamar Yehoshua, Google's Vice President of Product Management for Search, to the Company's Board of Directors.
• Expanded the capabilities of the Yext App Directory through additional integrations with the world's leading business technologies, including Salesforce, StoreForce, Trabon, Radar, Dasheroo, Tiger Pistol and Hotfrog.  The Yext App Directory allows customers to connect the digital knowledge they are managing within Yext to other software systems used across their enterprise.
• Expanded the global reach of the industry-leading PowerListings^® Network with new publishing partners in North America (Public Reputation, YellowPages.ca), South America (Paginas Amarillas), and Europe (golocal, Meinungsmeister), and enhanced the Reviews service by launching monitoring with TripAdvisor.
• Awarded a Best in Biz International Award (silver) for Enterprise Product of the Year in Software.
• Named one of the 100 Best Workplaces for Women by Great Place to Work^® and Fortune Magazine.

^{1. The term licenses represents the number of entities subscribed to the Yext Knowledge Manager, and includes not only the number of physical locations but also the number of persons and other entities managed with our platform, such as physicians, wealth advisors, insurance agents, etc.  It is comparable to previous disclosures under the term locations and was changed to reflect the broadening of our business into new services as well as our current pricing methodology.}

Financial Outlook:

Yext is also providing the following guidance for its fourth fiscal quarter ending January 31, 2018 and the fiscal year ending January 31, 2018. 

• Fourth Quarter Fiscal 2018 Outlook:
• Revenue is projected to be $47.3 million to $48.3 million.
• Non-GAAP net loss per share is projected to be $0.10 to $0.12, which assumes 91.9 million weighted-average shares outstanding.
• Full Year Fiscal 2018 Outlook:
• Revenue is projected to be $169.5 million to $170.5 million.
• Non-GAAP net loss per share is projected to be $0.48 to $0.50, which assumes 93.2 million non-GAAP shares outstanding.
• Readers are encouraged to review the tables labeled "Reconciliation of GAAP to Non-GAAP Financial Measures" at the end of this release.

Conference Call Information
Yext will host a conference call at 5:00 P.M. Eastern Time (2:00 P.M. Pacific Time) today to discuss its financial results.  To join, participants may call 1.877.883.0383 (U.S. callers) or 1.412.902.6506 (international callers) using conference ID number 9855093.  A live audio webcast of the call will also be available on the Investor Relations section of the Company's website at investors.yext.com.  A replay of the call will be available until December 7, 2017 at 11:59 P.M. Eastern Time by dialing 1.877.344.7529 (U.S. callers) or 1.412.317.0088 (international) and entering passcode 10114295.

About Yext
Yext is pioneering a new category called Digital Knowledge Management, which gives businesses control of all of the public facts that they want consumers to know across the intelligent ecosystem.  The Yext Knowledge Engine™ lets companies manage their digital knowledge in the cloud and sync it to over 100 services in the PowerListings^® Network.  Yext Listings, Pages, and Reviews help businesses around the globe to facilitate face-to-face and digital interactions that boost brand awareness, drive foot traffic, and increase sales.

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 and non-GAAP net loss and shares outstanding for our fourth quarter of fiscal 2018 and full-year fiscal 2018 in the paragraphs under "Financial Outlook" above, and other statements regarding our expectations regarding the growth of our company 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, our ability to renew existing customers and attract new customers; our ability to successfully compete in new geographies; our ability to recruit and retain our enterprise-level sales force; our ability to expand our publishing network to obtain new partners; our ability to develop new product and platform offerings; our ability to manage our growth effectively; and the number of options exercised by our employees and former employees.  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, which is available at http://investors.yext.com and on the SEC's website at http://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 and non-GAAP net loss per share.  Non-GAAP net loss and non-GAAP net loss per share are financial measures that are not calculated in accordance with GAAP.  We define these non-GAAP financial measures as our GAAP net loss as adjusted to exclude the effects of stock-based compensation expenses.  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.  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 and non-GAAP net loss per share to net loss per share, 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:
James Hart
Yext Investor Relations
212.994.6768
IR@yext.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: the Company's IPO transaction closed on April 19, 2017, at which time the Company's convertible preferred stock converted to approximately 43.5 million shares and the Company issued an additional 12.1 million shares to investors in that offering.  In order to serve as a better comparison for future periods, the Company calculated non-GAAP net loss per share for the nine months ended October 31, 2017, and 2016 on a comparative basis, using the shares outstanding as of the end of the period, as if they had been outstanding for the whole period.

The Company calculated non-GAAP net loss per share for the three months ended October 31, 2017 and 2016 using the weighted-average number of shares outstanding for the respective periods.

 

 

 

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SOURCE Yext, Inc.