Yext Reports 13% Revenue Growth to $113.99 Million, Faces Increased Net Loss

Yext, Inc. reported a revenue of $113.99 million for the three months ended October 31, 2024, marking a 13% increase from $101.16 million in the same period last year. For the nine months ending October 31, 2024, revenue reached $307.87 million, a slight increase from $303.22 million in the prior year. The company experienced a net loss of $12.80 million for the quarter, compared to a loss of $0.47 million in the same quarter of 2023. For the nine-month period, the net loss was $20.67 million, up from $4.32 million in the previous year. The increase in losses was attributed to higher operating expenses, particularly in general and administrative costs, which surged by 94% to $33.37 million due to the acquisition of Hearsay Social, Inc.

The acquisition of Hearsay, completed on August 1, 2024, for approximately $125 million, significantly impacted Yext's financials. Hearsay contributed $16.4 million in revenue for the quarter and $7.9 million for the nine-month period. However, the acquisition also led to increased costs, including $8.8 million related to an incentive pool for Hearsay's founders and early employees. The company’s total operating expenses for the quarter rose to $98.11 million, up from $80.88 million a year earlier, driven by increased personnel costs and acquisition-related expenses.

Yext's customer count exceeded 3,000 as of October 31, 2024, with annual recurring revenue (ARR) for direct customers reaching $374.50 million, a 15% increase from the previous year. However, the company faced challenges with customer retention, as it reported a dollar-based net retention rate of 91% for direct customers, down from 97% a year earlier. The decline was attributed to the attrition of a large customer that did not renew its contract. The company also noted a positive impact from foreign currency exchange rates, contributing approximately $1.3 million to revenue.

Looking ahead, Yext's management expressed concerns about macroeconomic conditions, including inflation and reduced technology spending, which could impact future revenue growth. The company is focused on integrating Hearsay into its operations and executing a restructuring plan aimed at reducing operating expenses by approximately 12%. Despite the challenges, Yext remains committed to its strategy of expanding its digital presence platform and enhancing its offerings to meet evolving customer needs. The company believes that its existing cash and cash equivalents of $100.5 million will be sufficient to meet its projected operating requirements for at least the next 12 months.