Yext’s first quarter results were marked by a substantial year-on-year revenue increase, with management highlighting improved customer retention and broadening demand for its digital visibility platform. CEO Michael Walrath pointed to rising net and gross retention rates, attributing this to the growing complexity of managing brand presence across a fragmented digital landscape. He emphasized that recent product enhancements, including the launch of Yext Scout, have strengthened customer perceptions of value and helped offset competitive pressures from lower-cost alternatives. Walrath noted, "We're seeing improvement in both gross and net retention, customer satisfaction and overall value perception across our platform."
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Yext (YEXT) Q1 CY2025 Highlights:
- Revenue: $109.5 million vs analyst estimates of $107.6 million (14.1% year-on-year growth, 1.8% beat)
- Adjusted EPS: $0.12 vs analyst estimates of $0.11 (in line)
- Adjusted Operating Income: $21.97 million vs analyst estimates of $17.03 million (20.1% margin, 29% beat)
- Revenue Guidance for Q2 CY2025 is $111.3 million at the midpoint, above analyst estimates of $109.4 million
- Adjusted EPS guidance for the full year is $0.53 at the midpoint, beating analyst estimates by 5%
- EBITDA guidance for the full year is $104 million at the midpoint, above analyst estimates of $101.1 million
- Operating Margin: 1%, up from -5.7% in the same quarter last year
- Annual Recurring Revenue: $446.5 million at quarter end, up 15.3% year on year
- Billings: $91.03 million at quarter end, up 31.9% year on year
- Market Capitalization: $1.01 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Yext’s Q1 Earnings Call
- Naved Khan (B. Riley Securities) asked about the mix of new versus existing customers for Scout and the timeline for general availability. CEO Michael Walrath explained the waitlist includes both groups and that the team is focused on incremental rollout before setting a firm launch date.
- Ryan MacDonald (Needham & Company) inquired about balancing current business momentum with macroeconomic caution. Walrath cited persistent external uncertainty but highlighted that demand for digital visibility solutions is rising as online search fragments further.
- Tom White (D.A. Davidson) pressed for detail on the sources of revenue outperformance, specifically legacy versus new products and M&A contributions. CFO Darryl Bond pointed to improved retention, positive currency effects, and a tailwind from recent acquisitions as key drivers.
- Rohit Kulkarni (ROTH Capital Partners) asked about what’s driving higher net retention rates and the potential for upsell in the core business. Walrath indicated that increased value perception and the need for advanced visibility tools are supporting both retention and upsell.
- Rohit Kulkarni (ROTH Capital Partners) also questioned the rationale for the new BlackRock credit facility. Bond explained it replaced an expiring agreement and offers greater flexibility for future acquisitions and operational needs.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of Scout’s rollout and customer adoption, (2) the impact of recent M&A integrations on upsell rates and recurring revenue, and (3) management’s ability to maintain or improve retention as renewal periods approach. Progress in developing and monetizing AI-driven features and prudent capital allocation will also be important markers of execution.
Yext currently trades at $8.22, up from $6.81 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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