Yext Reports 5% Revenue Decline, Increased Net Losses in Q2 2024

Yext, Inc. reported its financial results for the three and six months ended July 31, 2024, revealing a decline in revenue and increased net losses compared to the same periods in the previous year. For the three months ended July 31, 2024, Yext generated revenue of $97.9 million, a decrease of 5% from $102.6 million in the same quarter of 2023. For the six months, revenue totaled $193.9 million, down 4% from $202.1 million year-over-year. The decline in revenue was attributed to a reduction in direct customers and the impact of losing a significant customer earlier in the fiscal year.

Gross profit for the three months ended July 31, 2024, was $75.6 million, down from $80.2 million in the prior year, reflecting a gross margin of 77.2%, slightly lower than the 78.2% margin reported in 2023. The company reported a loss from operations of $7.6 million for the quarter, compared to a loss of $4.2 million in the same period last year. The net loss for the three months was $4.1 million, increasing from a loss of $3.4 million in 2023. For the six months, the net loss was $7.9 million, compared to $3.8 million in the previous year.

Yext's total assets decreased to $458.2 million as of July 31, 2024, from $508.8 million at the end of January 2024. Total liabilities also fell to $295.4 million from $361.6 million, while total stockholders' equity increased to $162.8 million from $147.2 million. The company had cash and cash equivalents of $234.8 million, up from $210.2 million at the beginning of the fiscal year.

Strategically, Yext completed the acquisition of Hearsay Social, Inc. on August 1, 2024, for approximately $125 million in cash, with potential additional contingent payments based on revenue targets. The acquisition is part of Yext's strategy to enhance its offerings and integrate Hearsay's capabilities into its platform. Additionally, the company initiated a restructuring plan in June 2024, resulting in a workforce reduction of approximately 12%, aimed at reducing costs and improving profitability.

Yext's revenue model remains subscription-based, with a significant portion of revenue derived from direct customers. However, the company has faced challenges in customer retention and new customer acquisition, exacerbated by macroeconomic conditions. The company is also navigating changes in its operational structure and market dynamics, which may impact future performance.