Yext (YEXT) 6 Mar 242024 Q4 Earnings call transcript

Good afternoon, and welcome to the Yext, Inc. Fourth Quarter Fiscal 2024 Financial Results Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Nils Erdmann, Senior Vice President, Investor Relations. ahead. go Please

and and Quarter operator, today everyone. to Mike Welcome CEO Thank XXXX good Earnings Fourth Walrath Board, the Fiscal Chair me Darryl Conference Yext's Bond. and you, of afternoon, CFO, Call. are With

make call, operating the XXXX, statements regarding related statements, this capital quarter fiscal our and our of of strategy business, future During and opportunities future fourth described for forward-looking performance, and the year quarter our first financial including and expenditures other our estimates will letter. shareholder we of metrics, expectations growth to our further outlook financial full indications as in

development certain related and performance success, economic conditions. forward-looking represent are the These our and call. our obligation statements growth, of general after that These business assumptions the undertake and only revise product occur assumptions, made, of risks, and to subject to or and as beliefs Yext no including and those update to any we management evolution changes to statements forward-looking our date our reflect uncertainties statements this industry,

Statements and including factors on titled and on forward-looking our afternoon. in letter Risk these Form reports cause included regarding that shareholder the statements risks materially months this and most October section report differ our XXXX, XX, Note information Further was XX-Q Factors, X from recent actual quarterly in ended for results forward-looking with filed our the in is could the that issued SEC, to other Special

at which comparable historical in are financial to metrics, non-GAAP most Reconciliations we investors.yext.com. the is measures. with available refer call, the measures also available certain the shareholder letter, During GAAP including

will With the metrics shareholder letter. now over Mike. of in definitions to these that, provide also turn We call the I

Thanks, Nils. thank today. and everyone, for you Good us joining afternoon,

high-level last There and quarter, themes our quarterly discussed few published here are taking look we our today. website, forward before we letter call we our out investor and your Q&A. from commentary questions into a financial have letter on I As would to shareholder we dive

we despite with fiscal increases pleased the our the will be and drive difficult are and XXXX record in more made made operating the company year productivity we well we focused, decisions sales to very of First, some in progress serve in the more difficult environment. We growth. profitability believe efficient a future

is As I've of roles. growth increased talked investment revenue-generating about ability recipe productivity we our increase direct measure efficient a that and sales the the qualified pipeline for in in past, to so the can combination

we seen ready We will development selling continue but have future. the investment operations, be to enough direct growth to into to direct to more focus efficient on sales drive in and

highest year shifting customers' more map Second, great our our around core in have our focus offerings our we to customers strides made last the road value of reoriented most and product priorities.

support, in also have customer reallocated We satisfaction investment to success services and drive value. customer our and

across our and of us our truth application and 'XX, core in continue that new fiscal management customer product well an cases will in social generative including as by to value as customers. reviews and source our use our data all deliver proactively In more deliver environment adjacent customers generation graph will of innovation we fewer strength product particularly robust ROI. partners where analytics products, the single features. search content a These breadth advantage well the The are of most serve as listings, features, year of and want pages, platform, service technology, and more system of include for much content AI functionality areas and product customers in valued broader knowledge support driving our

the focused such into generative will technologies, than more AI but high R&D past. measured as to and in continue will these be chat investments customer other We potential invest areas, and priorities on

take Finally, of uptake scale. view generative conservative we solutions AI of continue the at a environment the market to of timing on point and

the in some and of Our after largest continue investment. they brands stack of a the customers optimize to world, over decade include their digest technology and

Our this more continues. around to uncertainty continue prudent year that as our interest rate customers' will this inflation our economy, and believe this trend platform with We anticipates do to outlook support and and will environment areas identify is work the be more efficient.

as enterprise. highly of of AI increased adoption positive future efficiency we the of features. on drive early the for seeing And We response generative generative review adoption to AI evidenced signs are are by

acknowledge continue to have grateful take been questions. take to X-year future. I'm This of company our to task and the proud my challenging environment, has the in marks transformation. I'm the to team's adjusting years finish moment team. that, work our last on the I'd up operating recommitting years resilience many profile, like position, to that customers. years X global reshaping have the to ex-operating like for incredibly to X incredibly our it than past on to I'd for our their believe and harder of commitment a been a week anniversary the ago willingness and for the I difficult With and of CEO the we will of our anticipated for work team couple taking difficult would the levels open

Instructions]. [Operator

with The is William Arjun first Blair. Bhatia question from

to Mike, for Perfect. start. maybe you one

road talking How right with like letter, some product these some shareholder about media refocusing map, like management you build us a like capabilities platform social front little investments to also we're new you maybe these a I of March Can management. just it the and social sense what might look in there's And in of like product do listings. if where On the of of are focused? new capabilities bit the the versus talked in some plan the you December give on now? on think media going sounds a core

Sure. Yes. Hey, Thanks question. Arjun. for the

right the on customers were in to We couple various add the seen my journey. need than of last about and get direction. value we everything, businesses on like paying solutions. refocus you this value we I -- think software to of in do more? started listings the deliver talked I our the my longer for as we technologies things us or focus Am this new do think stack? How reviews years and talked is think to about things So that with we've I how the going I it multiproduct and to paying And I over one and getting things I'm vertical takes pages core that less, new I the in mean search. when do the experiment

all that them a vendors. heard see is and also to lot a thing bit demonstrating to these with innovation sense of and out. an But They social, visibility. And it's our really area them that the it the more I from where comes we're core. do our more want to makes And I I functions. different our that clearly we've letter We say, structure little really the they further think think happening -- They need cross-platform previously, other product. we want in focus are to a there's customers allows had is in to this want -- data we've product social always demonstrate, inside fewer When think I'd features I and more of that the this. they mentioned want,

products, we as we cycle increasingly get half there something the on to so, but this into really the the and into a the we year will innovation continue of more all coming get of is side work as on that through be social expect media And second the well. on, lot product

I the I right, terms to mentioned, this increase that marketing you what as the sales and benchmarking And in just hear be we it's being curious to Okay. it's time what hiring, sales some invest expense right are yourself -- and in seeing you are compare about you're certainly the Got trends given sales can seeing and think right incremental it. talk would industry, expect of how and Yext kind why But for in time the how you're productivity maybe both seem you're the the then side? -- and on capacity of to trends promised promising. much of pipeline you're pipeline. where the best-in-class is,

Yes.

at start in sales this because to when seeing in we're growing we nice best-in-class are believe, X, was you're pipeline. seen again. X X seen, that years improvement we yet. we've in which in last there, you over I our our the create when can That's I've capacity and demand, also quarters best-in-class consistent a is the the but last sales the direct letter. obviously, and the or increase stated both talked a I'm really seen over we we've we're look, tell improvement measure So productivity we've X qualified productivity quarters, not not what the highest our to is about But sales lot ability to last going marked something X

cost the half efficiency And find a and we'll actually optimize from headcount that expense, areas first we structure our be expect to your revenue generating the way time, of year. of where so over doing continue year, the At see the in the second same that's contribution to measured question of and start pretty to the growing half to in incremental we the direct of business. about

is and mostly in or into baked all sales revenue-generating is our quota-carrying for And year. the representatives really the of of cost the additional so, capacity, development which heads form development outlook business the

revenue-generating So a efficiency the into incremental highest our there's of really there. not roles. what investment just We're lot focusing work a back of unbudgeted expense and drives sort

Davidson. The next D.A. from White question with Tom is

the in various give some increase of been the or that driven of is little letter, in the demand And that guys higher have or then bit the around uplift kind sort pipeline -- from environment Curious volume gen up if to you maybe and on? on of of the perking tactics Mike, by I kind few the of year-over-year -- degree I you like significant being in exiting you earlier a have spending that's what front? of Two, quarter an maybe kind then just working there year? of could the kind guidance. a lead could. most follow-up the channels a just on And versus creation. successful initiatives Maybe examples client mentioned year in the

no Yes, problem.

think is maybe around don't laid be like will think take our there's we've And environment a environment. the seeing accused that of spending. on I think I more an a seen macro we've out which dour if that that rates our our that And I'll being last uptick the that first, the I and expect, on we're our in been the stuff. -- we seen But slightly big this first the and stabilization. is uncertainty as inflation spending this outlook some outlook in I or So think anything, we've of than we calling snapback -- I necessarily question all this, the And expect interest and just expectation, some in long letter as for have is as while. don't peers.

generation it demand core core expertise about Ran of been expertise CMO since I and things efficient developing to this around her a few as really machine really comes is get to and right. and think you team's sort we've brought when a we talking and have this her

and top get use to So qualification then the like of the of drive you you obviously that it need content funnel mechanisms media paid top structurally, have that And the channels to the machine framework. the various so you through into a funnel. to right and move take can

into So ultimately, job that to is and hard the trust of have in of an building massive and order have that machine. amazing the that done be all going you're structural pipeline operating the very done and very right to into work are top qualified a funnel in coming teams bookings. convert that's And seeing there mechanisms to whole of what kind

second get you have right to match environment. is to have to thing The your the campaigns you

snapback more it's time I future I could we as last a a I have, when we for one marketing we well so maybe think think faster. probably I was expecting do And think we're state the that's is market platform at lot the use of think -- our as come cases didn't were quite year that the would still of that things

around in part we it And much happened we machine there, products so the of demand the because to see of really campaigns really generation coming that the what demand built, funnel weren't the is geared watch and interesting through top could have the that core. were was as

the of So those was more core. leading we AI more were lot And with we messaging. transformational things and then converting messaging CMS in a were were that what finding

so execution. miss of half that call it -- And is it's I marketing terms like would a the in

centers to of things shifted breadth around can As and messaging the start value-based in the do, more that vertical are with -- one. solutions how matching either interested how buying platform are of the fragmented I today, do which more what you is capability I to more do have campaigns where I into that set you're we've much improve broader a our do or more up a

another this better year. that's that we run campaigns so thing And expect we as

the that really are think and machine the whole of of sense. better. system with of part generation ultimately, in We matching Hopefully, our is customers that expansion and that work interested our that areas demand what today. most the marketing they're some interested campaigns in makes making

color. helpful very was That Yes.

wants. full guidance down the you $XX implies you year year. you impact maybe you on a Darryl take follow-up just maybe of weigh little maybe I here too which talked can out midpoint, the bit Can year-over-year. full of sort a I EBITDA the about a last changes little the have some then in expenses are for bit parse at operational of and guess some if ramp. he But drivers year. But guess the million made heads, more the time adjusted adding that year about to outlook will this of Just the

some kind you the much full to the further kind if it more like stuff kind just from of how or will, implemented benefit, base the of the you've And is baked rationalization last like understand is kind of trying just year? cost outlook into year of of of

Yes.

continue the a start, and will But do this numbers. something more getting is efficient. I'll on It's is talking view start focused colors efficient by Darryl find way, of part various think So organization ways the you I really in see that principally, that you job sure what opportunities environment we're through better on of the be to to the I'm -- customers some we doing. once our like thing the doing operations, our and to

duplication silos spans can about within be the and be that for So and of couple this a can all years. talking that layers we've been organization

lot into a a really in finer the lifting perfect but gets world, less think obviously, get as and ends, I never optimization. finer heavy it we

line, just So to here the to more the critical in show for revenue the the be and -- probably I the driving. phase in and And become product going efficient course line. that across be And the part of investments that allows to year. really impact it's I are think us the that's investments -- the board. about continue we're to improvement making efficiency this opportunities really the think, EBITDA expense culture of It's that the -- on while to think on

the area. also impact QX some at And the that point year. and Yes. Mike demand marketing is in certain for into in really pulled And that gen to of was don't thing add happen us happens Tom, look events attack able at only rest the to when up to quarters in look number up the to you we've of making that sales you when the QX, spend got being I'd going marketing the sort other some on spend EBITDA We that that seasonal campaigns of then about year. quarterly which the QX, earlier is number our

is question next B. The with from Naved Riley. Khan

customers? then then if for base? could for there's And customers Ryan is clarity year I that, hoping on follow-up the get was drive after to into This to related to around upsells wondering And the versus opportunity whether customer Naved. you I I customer that. enterprise for upcoming a have was the some and mid-tier the budgets room about also talk

Sure.

think to platform place becomes, think see the things. that of lot platform great -- the start I -- they than this over other which as conversation. And it that this we efficiently more quarters, I'm potentially So to we today. discussions can the a we've Then year do things similar what start it as are the other from expect see last what's getting value I having to the X usually that that's a X of is with that kind been

interest different larger continue very and particularly doing can still in kind see versatile to their marketing customers, software less less of customers, we lots from things vertical in versus that more So software of a specialized solutions having lot of do more. department broader

done, actually and I a are, going bundle form together smart us, not a so upsells really, really the efficiency and is package continue in efficiently a a than I today. to better see it vertical it's or just bit broader than it the kind an management way I I does predict clearly every year. elastic creates in this to who And more was cycle things we'll And conversations teams the same think will opportunity less think think do don't is gets I'm I the to little the will what that more of that, think think, how a for face it and is have was, bit just when bit lot offerings. it's more opportunities are advantages think enterprise are operate whether I -- the challenges -- whether focused companies that of that some where and I those of more how I -- little little work think continue just -- on those we we budget for it software competing about competitive to

dynamics now the kind we what mid-market as across far I or smaller we those about the similar would the and call groups. question different your of see As think enterprise,

reseller on how primarily we one get of benefits between the is access end is smaller that focusing the and having which of robust And is the blurry. higher enterprise. area and certainly mid-market of SMBs can a of that the pretty really are channel the end SMB mid-market the We the

very enabling more our focused of move upmarket our from more resources mid-market that the and the on just SMBs -- pure the to to the allows mid-market because what the would And we're higher much time focus call partners of into so and end enterprise. we and -- to access much on us our

the the customer Okay. it next that's talked I then in also, it year my quarter wondering fiscal to also growth the earnings and the in Got remarks, you of prepared quarters, I but fourth about had few churn guess, you next from in large And the question the impact was last it. call, is, going 'XX, mentioned comps. impact the how

Yes.

So I think mentioned the at ended contract customer about their million end December. an we $XX of it was and

saw we impact. QX. to through it So the obviously, full get revenue see of out And out we X And year. as revenue months month X QX, this impact a this fiscal then of of it we'll in ARR, comes of comes into

it metrics will sort that I will share to think the effect of a best -- customer do lot it singular of it'll that, that to add -- ex to churn. impact just we'll of our

retention going changes. -- giving gross know example, since sorry, we've it we're mentioned been net for and our -- in to XXs -- -- let we I'm you started said for this if So has metric, our that this high the we we

high still there. of large dipped we that sitting the mid-XXs out, With would take we into were it XXs the that the churn, effect in have when

in which a [indiscernible] in see the in like in it So in retention as -- the that all ARR QX certainly year terms revenue single end headwind and and anticipate by into we we'll growth guidance, year. we of you ARR we spite December. revenue, of high and digits gross see of retention baked at of into terms our of lap do terms of things can be through net reacceleration next of the next end the go that, the the will But of growth, that that is

MacDonald Needham. The from Ryan is next question with

reaccelerating new the to just with pull commentary. perhaps If seeing sort sort most reviews. about signs some search, as there's generation. sort in verticals stages think, of early for signs start of talk Mike, demand Can you and the line confidence you the demand of or And half of given strong you've it's progression you better of pipeline quicker products of then any here, the maybe getting marketing growth on year? maybe the are on, unlock the through some maybe to I we're listing, through that whether what the back able that the that's the idea seeing you're of been year of pages of

I'm it. get sure. Yes, into to happy

I things think of there. bunch there's a different

the letter customers. of in one Boomerang things So is we the mentioned

-- think it's So years. last was for listings well products and listings a documented the competition well -- other of we're around that over seeing there particular the some lot I it's and of few

We're QX. XX an of think seeing we seeing saw and boomerang customers year those out I -- called -- So -- we're last were of acceleration we direct we customers. in XX said

I I think on to able generation where is be talked record They more. want when is content, on think I that vertical customer seeing that which making with customers that -- former that the as well they're some we're want numbers I Yext. focus they think, smaller, just of of the an engaging things, side also do commitment of which you of and about and described, important dynamics the really with, we they more than at it's for can to to do matching up with in virtual the think campaigns to attendance it. can us as they the environment and more some demand and what them Summit with marketing they're the are way is virtual I solutions what great I've messages that we're events start a partly things some had

All last kind it where I create just is. customer. the sort that that with because more that ultimately the you the of faster what action can year you requalifying into opportunity of understand the of mismatched a through some of a It's When against maybe were near-term not need they the prospect is that don't ran time that is. opportunities actually that It's juxtapose customer we door that goes in reestablishing of these things what need. coming that with bit customer and the your have customers little campaigns

And and so now our figuring is it -- Tom their It's this with with surprising, been efficient. what's getting and is or not we're but X the now at teams quarters and machine -- working is whatever out X it getting And really this we've with Ran for better. better. more

much doing when to I with needs the their and you necessarily those next, multiple want And think we're focused things. that from feel systems one customers capabilities. that of discussions more hearing combine with So I and management right? when on about messages and social things what they need talk have these customers don't It's different we is consistently

so increasing that, that, productivity seen, once we the again. that we've combined start related confidence gives all is us And that to with can which

so I direct years. headcount, X for are decreasing which or and most think disclosing the revenue-generating we quota-carrying of we're has numbers, been last not but

we to again ready think we that start really to confident need signal increasing that we're finally I feel because the have there.

That's of about of on the new? net initial of as helpful. when fourth And of the to Or in you? the pipeline relative how versus you just the the size they sort what's land Okay. they mix Of think the we quarter ] land rough customer that's customers. the 'XX that from were Boomerang in then to trending? able left customers fiscal how win ones trend initial the has topic the fourth [ Maybe quarter, Boomerang did super were

so would product. of because again, know that or product versus net I single able customer tell the And could become boomerang don't mix be I multiple you broad, be has to Yes. product our new. the boomerang

quantify able it And so be you I for wouldn't not that we're way. to

of boomerangs. lot drive a are that there think I trends

lot they haven't in -- There have that may platform left a on we're that lot is of I that also, promises didn't cases, deliver were of costly return stood the a what kept. customers cases, they were made that And we wanted. Boomerang customers in these still. the with weren't a investment think less seeing for solution

driven So more the platform that well. innovation creates as we've additional through our value

overall I and is customers think approach package our of we how -- shifts with become we how continue and bundle deliver big become and we more how we our deal one we the and to how will customer-friendly. that how services has to

our services gotten arms of and that customers really types the support we've want. As around our

improve nature area as that's support doing anticipate a another proactive just work overall been course over really that of that front years. the they of experience, year, of to get, on amount I lot the that the support that we've customer that the last X.X we'll So continue the hard of

As further to back turn to our questions, like I this session. no would question-and-answer Walrath concludes conference there are over the any Mike for closing remarks.

like next just to look to and thank everybody forward for we you joining, We'd speaking with quarter.

now you has today's Thank concluded. presentation. conference for attending The

disconnect. now may You