NEW YORK — Yext, which lets customers control their business information online, announced its results for the three months ended April 30, 2019, or the Company’s first quarter of fiscal 2020. Revenues were up 35% in the first quarter but the company still lost $19 million.
“We are pleased to report another record quarter highlighted by our strong financial performance – including 35% revenue growth over the year-ago period, improved margins and positive operating cash flow – as well as the continued expansion of our customer base, with more than 50 new Enterprise logos this quarter,” said Howard Lerman, Founder and Chief Executive Officer of Yext.
“There is a massive paradigm shift going on in the world of search from keyword searches to questions. People are asking for what they want as they perform searches in their quest for specific and relevant answers about companies, products, professionals, locations and services. They are asking detailed questions rather than “browsing.”
“Yext makes it possible for companies to provide verified answers for consumers asking questions online. With our technology, companies can implement brand verified answers across the digital universe.
“We provide a single source of truth for the facts about a business online. Our platform contains hundreds of millions of facts about our customers’ businesses and is updated constantly with new information. With its authority, companies can be answers-ready and drive digital discovery, customer engagement and reputation enhancement.
“We also advanced many strategic objectives this quarter, including the deepening of our relationship with Adobe to better target marketers; we expanded our facilities in key markets including New York, London, and Washington, D.C., where we continue to grow; and we completed the single largest funding raise in our history through an equity offering, considerably strengthening our balance sheet and positioning us well going forward.
“With our mission of perfect answers everywhere, we are leading brands into the future of search.”
First Quarter Fiscal 2020 Highlights:
Note to the reader: Yext adopted the revenue accounting standard ASC 606 for its fiscal year ended January 31, 2019and the results for all periods presented below are reported on that basis.
- Revenue of $68.7 million, a 35% increase as compared to the $51.0 million reported in first quarter fiscal 2019.
- Gross Profit of $52.2 million, a 37% increase as compared to the $38.2 million reported in first quarter fiscal 2019. Gross margin of 76.0% as compared to the 74.9% reported in first quarter fiscal 2019.
- Net Loss and Non-GAAP Net Loss:
- Net loss of $19.0 million increased 11% as compared to the $17.0 million net loss in first quarter fiscal 2019. The increased loss was driven by higher operating expenses, primarily in sales and marketing due to increased headcount in connection with efforts to acquire new customers.
- Non-GAAP net loss of $5.7 million improved 37% as compared to the $9.0 million non-GAAP net loss in the first quarter fiscal 2019. The reduced loss was due to improvements in operating efficiencies as the company benefits from greater economies of scale.
- Net Loss Per Share and Non-GAAP Net Loss Per Share:
- Net loss per share of $0.18 in the first quarter of fiscal 2020 compared to a net loss per share of $0.18 in the first quarter of fiscal 2019.
- Non-GAAP net loss per share of $0.05 in the first quarter of fiscal 2020 compared to a non-GAAP net loss per share of $0.10 in the first quarter of fiscal 2019.
- Net loss per share and non-GAAP net loss per share were based on 106.5 million weighted-average basic shares outstanding for the first quarter of fiscal 2020 and 94.9 million weighted-average basic shares outstanding for the first quarter of fiscal 2019.
- Balance Sheet: Cash, cash equivalents and marketable securities of $284.1 million as of April 30, 2019, an increase of $141.3 million from January 31, 2019.
- Cash Flow: Net cash provided by operating activities for the first quarter of fiscal 2020 was $0.8 million as compared to net cash provided by operating activities of $1.4 million in the same period in fiscal 2019.
- Remaining Performance Obligations (“RPO”): RPO as of April 30, 2019 was $256.3 million, with $240.2 millionexpected to be recognized over the next 24 months and the balance to be recognized thereafter. RPO does not include amounts under contracts subject to certain accounting exclusions.
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:
- Issued 7,000,000 shares of common stock through an underwritten public offering. The aggregate proceeds from the offering, after underwriting discounts and commissions, but before offering expenses, was $147.0 million.
- Launched four new integrations with the Adobe Experience Cloud to allow customers to easily connect the digital knowledge managed in Yext with the assets created and managed by the customer within Adobe, including their websites, mobile apps, email systems, and the Internet of Things, while Adobe customers can leverage Yext to give them control of their brand and increase the ways that brand is discovered.
- Announced general access for the Spring ’19 Release, providing new services and features, including: integrations with some of the largest services used by Chinese travelers, such as Baidu Map (Overseas), Fliggy, CK Map and PIRT; the ability for businesses to monitor and answer questions that consumers ask about them on Google in the Q&A search results; and enhanced AI-Ready pages with new customization options, letting a business create a smart landing page on their website for any entity stored in Yext.
- Unveiled multiple new facilities, including: The Yext Building, the new global headquarters in New York City with 142,500 square feet of space; the new Northern European headquarters in London, with 15,600 square feet of space in UK House; and its new Washington, D.C.-area headquarters with 42,500 square feet of space in Rosslyn, Virginia.
- Named Organization of the Year for the software category in the 2019 Excellence in Customer Service Awards presented by Business Intelligence Group.
Yext is also providing the following guidance for its second fiscal quarter ending July 31, 2019 and the fiscal year ending January 31, 2020.
- Second Quarter Fiscal 2020 Outlook:
- Revenue is projected to be $70.8 million to $71.8 million.
- Non-GAAP net loss per share is projected to be $0.12 to $0.14, which assumes 111.8 million weighted-average basic shares outstanding.
- Full Year Fiscal 2020 Outlook:
- Revenue is projected to be $297 million to $300 million.
- Non-GAAP net loss per share is projected to be $0.40 to $0.44, which assumes 111.9 million weighted-average basic shares outstanding.