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YI

Yext, Inc. (YEXT)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 delivered revenue of $113.1M (+16% YoY) and Adjusted EBITDA of $26.4M (23% margin), exceeding prior quarterly guidance; non-GAAP diluted EPS was $0.12, at the high end of the guided range .
  • Versus consensus, revenue modestly beat ($113.1M vs ~$111.2M*) and EPS matched ($0.12 vs $0.12*); four estimates covered both revenue and EPS* .
  • Management withdrew full-year FY26 guidance and did not host a Q2 call due to the CEO’s non-binding $9.00/share take-private proposal; a special committee is reviewing alternatives .
  • KPIs showed healthy trends: ARR $444.4M (+15% YoY), NRR 95% (Total/Direct) and 98% (Reseller), RPO $445.0M with $407.2M to be recognized in 24 months .

What Went Well and What Went Wrong

What Went Well

  • Revenue and profitability surpassed guidance; Adjusted EBITDA rose to $26.4M with a 23.3% margin, reflecting operating discipline and acquisition integration benefits .
  • ARR growth (+15% YoY) and improved retention (NRR 95% Total/Direct; 98% Reseller) underscore strengthening customer health and platform stickiness .
  • Management emphasized secular tailwinds from AI-driven search fragmentation: “fragmentation of the consumer search market continues to accelerate… elevates the importance for brands of managing digital visibility” (CEO) .

What Went Wrong

  • Gross margin compressed YoY to 75.2% (vs. 77.2% in Q2 FY25) as mix and acquisition-related amortization impacted COGS .
  • Unearned revenue fell sequentially to $185.6M (from $210.7M in Q1), reflecting timing of billings/renewals .
  • Visibility reduced near term: company withdrew FY26 guidance and canceled the Q2 earnings call due to the pending CEO proposal, limiting forward commentary .

Financial Results

Income Statement Progression (oldest → newest)

MetricQ4 FY25Q1 FY26Q2 FY26
Revenue ($USD Millions)$113.1 $109.5 $113.1
GAAP EPS (Diluted) ($)$(0.06) $0.01 $0.03
Non-GAAP EPS (Diluted) ($)$0.12 $0.12 $0.12
Adjusted EBITDA ($USD Millions)$24.6 $24.7 $26.4
Adjusted EBITDA Margin (%)21.7% 22.5% 23.3%
GAAP Net Income Margin (%)(6.4)% 0.7% 23.7%
GAAP Gross Margin (%)—75.2% 75.2%
Non-GAAP Gross Margin (%)—78.6% 78.1%

Year-over-Year Comparison (Q2 FY25 vs Q2 FY26)

MetricQ2 FY25Q2 FY26
Revenue ($USD Millions)$97.9 $113.1
GAAP Gross Profit ($USD Millions)$75.6 $85.0
GAAP Gross Margin (%)77.2% 75.2%
Non-GAAP Gross Margin (%)77.9% 78.1%
GAAP Net Income ($USD Millions)$(4.1) $26.8
Non-GAAP Net Income ($USD Millions)$6.8 $16.3
Non-GAAP EPS (Diluted) ($)$0.05 $0.12

Segment/KPI Trends

KPI ($USD Millions unless noted)Jan 31, 2025Apr 30, 2025Jul 31, 2025
ARR – Total$442.7 $446.5 $444.4
ARR – Direct$368.2 $371.9 $369.5
ARR – Reseller$74.5 $74.6 $74.8
Dollar-Based NRR – Total (%)93% 95% 95%
Dollar-Based NRR – Direct (%)92% 95% 95%
Dollar-Based NRR – Reseller (%)95% 96% 98%
RPO (Total)—$469.2 $445.0
RPO to be recognized in 24 months—$428.6 $407.2
Unearned Revenue$229.1 $210.7 $185.6
Cash, Cash Equivalents & Restricted Cash$138.7 $132.0 $209.5
Long-term Debt (Net)——$98.3

Estimates vs Actuals (Q2 FY26)

MetricConsensusActual
Revenue ($USD)$111,222,750*$113,094,000
Primary EPS (Diluted) ($)$0.12*$0.12
# of Estimates (Revenue / EPS)4 / 4*—

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q2 FY26$111.0–$111.5M N/A (Quarter reported)Beat prior guidance; actual $113.1M
Adjusted EBITDA ($USD)Q2 FY26$24.5–$25.0M N/A (Quarter reported)Beat prior guidance; actual $26.4M
Non-GAAP EPS (Diluted) ($)Q2 FY26$0.12–$0.13 N/A (Quarter reported)At high end; actual $0.12
Adjusted EBITDA ($USD)FY26$103–$105M Withdrawn Withdrawn
Non-GAAP Tax Rate Assumption (%)FY2623.5% 25.5% (updated in Q2) Raised
Earnings CallQ2 FY26Typical quarterly call Call canceled Canceled due to CEO proposal

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25 and Q1 FY26)Current Period (Q2 FY26)Trend
AI/Technology Initiatives (Scout, Social)Q4: Introduced Yext Scout and continued product expansion . Q1: Scout beta expanded (1,000+ waitlist; added 37 customers), strong feedback; Social gaining traction; Hearsay integrated GTM .No call; release notes results include Hearsay and Places Scout; continued platform integration .Positive momentum; continued integration.
Macro/Tariffs/VisibilityQ1: CEO highlighted macro caution vs AI tailwinds in fragmented search .Reduced forward visibility due to guidance withdrawal tied to proposal .Visibility reduced near term.
Capital AllocationQ4: Raised buyback authorization by $50M . Q1: Repurchased $27.7M; ongoing buybacks .YTD repurchases $45.2M; $36.7M remaining .Active buybacks continue.
Debt FacilityQ1: Secured $200M BlackRock facility; rationale to replace SVB facility and enable M&A .Long-term debt net $98.3M on balance sheet .Added flexibility and leverage.
Retention/NRRQ4: Total NRR 93% . Q1: Total/Direct 95%; Reseller 96% .Total/Direct 95%; Reseller 98% .Improving sequentially.
Regulatory/Legal—CEO non-binding $9.00/share proposal; Special Committee formed; no call; guidance withdrawn .Strategic review underway.
FX/RegionalQ1: CFO noted FX tailwind aiding revenue/ARR (GBP) .ARR includes ~$3.2M FX benefit on constant currency basis .FX supportive.

Management Commentary

  • “Fragmentation of the consumer search market continues to accelerate with the advancement of AI search… elevates the importance for brands of managing digital visibility…” — Michael Walrath, CEO .
  • “We continue to believe [buybacks are] a great investment… it becomes a really important tool in our capital allocation belt.” — Darryl Bond, CFO .
  • “So far there’s a 0% disinterest rate in [Scout] and very high value perception… [it] demonstrates value of our core products.” — Michael Walrath, CEO .
  • “Our facility with SVB was expiring… BlackRock… made sense to do something a little bigger… flexibility to invest and grow.” — Darryl Bond, CFO .
  • “While I am prepared to lead [a transaction] at $9.00 per share, I am equally committed to ensuring… the best possible outcome, whether that be through my proposal or a superior alternative.” — Michael Walrath, CEO .

Q&A Highlights

  • Scout monetization and adoption: Early customer feedback strong; sales cycle expected to be shorter due to easier implementation and clear value; beta expanded rapidly .
  • Revenue/ARR drivers: FX tailwinds and improving retention; stronger execution; CFO detailed GBP impact in Q1 .
  • Capital allocation: Elevated buyback activity given valuation; optionality to pursue accretive M&A alongside repurchases .
  • Macro tone: CEO balanced macro caution with structural AI tailwinds in search/discovery .
  • BlackRock debt facility: Replaced SVB facility; improved covenants and flexibility to pursue strategic opportunities .

Estimates Context

  • Q2 FY26 revenue: ~$111.2M consensus vs $113.1M actual — beat*.
  • Q2 FY26 EPS (diluted): $0.12 consensus vs $0.12 actual — in line*.
  • Coverage: four estimates for both revenue and EPS*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Fundamentals strong: Q2 revenue and EBITDA beat guidance; EPS at the high end; margins improved sequentially .
  • Demand tailwinds: AI-driven search fragmentation and Scout are catalyzing multi-product adoption and anti-commoditization of core offerings .
  • Customer health: ARR +15% YoY; NRR improving (Total/Direct 95%; Reseller 98%), supporting durable growth .
  • Capital flexibility: Active buybacks ($45.2M YTD; $36.7M remaining) and $200M debt capacity enable balanced deployment across repurchases and M&A .
  • Near-term catalyst: CEO’s $9.00/share proposal and strategic review could drive stock toward deal value or re-rate on alternative bids; lack of guidance/commentary reduces informational flow until process clarity .
  • Risk considerations: Gross margin pressure vs YoY, sequential decline in unearned revenue, and macro uncertainty temper outlook .
  • Trading setup: With estimates met/beaten and a potential transaction overhang, focus on deal spread, committee updates, and any KPI disclosures; operational beats are supportive but likely secondary to deal dynamics near term .