Yext Inc
For the period ended Apr 30, 2025. Filed Jun 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2025 · Filed Jun 9, 2025
YEXT$7.57-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-10-31; filed 2024-12-09.
0001614178-24-000140
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-04-30; filed 2025-06-09.
0001614178-25-000077
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 127 previous paragraphs and 124 current paragraphs.
74 unchanged; 27 reworded; 20 added; 20 removed; 6 previous and 3 current paragraphs rearranged.
Tables are not compared: 15 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
On February 7, 2025, we completed an acquisition of KabanaSoft, LLC, doing business as Places Scout (“Places Scout”), for a purchase price of $20.3 million in cash, subject to customary adjustments as set forth in the Unit Purchase Agreement. The acquisition strengthens Yext’s ability to provide best-in-class competitive intelligence, benchmarking, and AI-powered insights. In addition, subject to the terms of the Unit Purchase Agreement, we agreed to grant approximately $10.0 million of incentive equity, based on current trading prices of Yext’s common stock, to certain key employees of Places Scout.
Current report
On May 15, 2025, we entered into a credit agreement with funds and accounts managed by BlackRock as lenders, and Acquiom Agency Services LLC, as Administrative Agent (the “May 2025 Credit Agreement”), which provides for term loan facilities in aggregate principal amounts of up to $200.0 million. In connection with entry into the May 2025 Credit Agreement, we used a portion of the proceeds under the May 2025 Credit Agreement to pay all outstanding principal, interest and other amounts owing under our existing credit facility with Silicon Valley Bank, which was then terminated. See Note 16 "Subsequent Events" to our condensed consolidated financial statements for additional information.
Current report
We calculate usage by annualizing monthly amounts in excess of contractual minimum commitments in the current month.
Current report
(1)ARR as of April 30, 2025, is inclusive of Hearsay's results.
Current report
Dollar-Based Gross Retention Rate
Current report
We also evaluate our ability to retain customers and the ARR they generate for us over time, excluding the impact of expansion. We assess our performance in this area using a metric we refer to as dollar-based gross retention rate. We believe this metric provides insight into the stability of our customer base and our ability to deliver sustained value to customers independent of growth through expansion.
Current report
Operating Expenses
Current report
Operating Expenses
Current report
Research and development expense was $21.9 million for the three months ended April 30, 2025, compared to $17.1 million for the three months ended April 30, 2024, an increase of $4.8 million or 28%. The increase was primarily driven by employee-related costs as personnel-related costs increased $3.2 million, reflecting higher headcount, and stock-based compensation expense increased $0.4 million.
Current report
Net Income (Loss)
Current report
Net income was $0.8 million and net loss was $3.8 million for the three months ended April 30, 2025 and 2024, respectively.
Current report
Silicon Valley Bank
Current report
BlackRock
Current report
On May 15, 2025 we entered into the May 2025 Credit Agreement which provides for (i) a senior secured initial term loan facility (the “Initial Term Loan Facility”) in an aggregate principal amount of up to $100,000,000, (ii) a secured delayed draw term loan facility in an aggregate principal amount of up to $50,000,000 (the “Delayed Draw Term Loan Facility”), and (iii) an uncommitted secured discretionary delayed draw term loan facility in an aggregate principal amount of up to $50,000,000 (the “Discretionary Delayed Draw Term Loan Facility”, and together with the Initial Term Loan Facility and the Delayed Draw Term Loan Facility, the “Term Loan Facilities”). The Term Loan Facilities mature on May 15, 2030. We will use the proceeds of the term loans made under the Initial Term Loan Facility (the “Initial Term Loans”) to repay existing debt and related fees and expenses associated with Term Loan Facilities, with the remainder available for general corporate purposes. The proceeds of the term loans made under the Delayed Draw Term Loan Facility (the “Delayed Draw Term Loans”) may be used for general corporate purposes. We borrowed $100,000,000 of Initial Term Loans on the Closing Date. The Delayed Draw Term Loans may be borrowed by us, subject to the satisfaction of certain conditions, during the period from the Closing Date through November 15, 2026.
Current report
Under the May 2025 Credit Agreement, the Term Loan Facilities bear interest, at our option, at an annual rate based on an adjusted term SOFR rate or a base rate. Term Loans based on the adjusted term SOFR rate shall bear interest at a per annum rate equal to term SOFR plus 5.25% (subject to a 1.00% floor). Term Loans based on the base rate shall bear interest at a per annum rate equal to the greatest of (i) the prime rate then in effect, (ii) the greater of the federal funds effective rate then in effect, plus 0.50% per annum, (iii) an adjusted term SOFR rate determined on the basis of a one-month interest period, plus 1.00% per annum, and (iv) 2.00%, in each case, plus a margin of 4.25%. Interest is due and payable in arrears quarterly for Term Loans bearing interest at the base rate and at the end of an interest period (or quarterly, in the case of any interest period longer than 3 months) in the case of Term Loans bearing interest at the adjusted term SOFR rate.
Current report
The obligations under the May 2025 Credit Agreement are guaranteed by certain subsidiaries and secured by a lien on substantially all of our property and certain subsidiary guarantors.
Current report
The May 2025 Credit Agreement contains customary affirmative and negative covenants and restrictions typical for a financing of this type that, among other things, restricts our and our subsidiaries' ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate. The May 2025 Credit Agreement also contains financial covenants that require us to maintain minimum qualified cash of at least $35,000,000 at all times and minimum consolidated EBITDA for relevant test periods, tested on a quarterly basis. The May 2025 Credit Agreement contains customary events of default relating to, among other things, payment defaults, breach of covenants, cross acceleration to material indebtedness, bankruptcy-related defaults, judgment defaults, and the occurrence of certain change of control events. Non-compliance with one or more of the covenants and restrictions or the occurrence of an event of default could result in the full or partial principal balance of the May 2025 Credit Agreement becoming immediately due and payable and termination of the commitments.
Current report
In addition, the Term Loans are subject to certain mandatory prepayment events, including an excess cash flow sweep of up to 30% for excess cash flow periods in which our annualized recurring revenue is less than $350,000,000.
Current report
Termination of SVB Credit Facility
Current report
On May 15, 2025, in connection with entry into the May 2025 Credit Agreement, we used a portion of the proceeds of the Initial Term Loans under the May 2025 Credit Agreement to pay all outstanding principal, interest and other amounts owing under our existing Credit Facility which was then terminated.
Removed paragraphs (20)
Previous report
On June 4, 2024, we committed to a restructuring plan in response to evolving business needs to reduce operating expenses and position Yext for profitable future growth (the “Plan”). The Plan reduced the size of our workforce by approximately 12 percent of our full-time employees as compared to our headcount as of January 31, 2024. We incurred approximately $5 million in costs in connection with the Plan during our second quarter of fiscal year 2025, consisting primarily of severance payments, payments in lieu of notice, employee benefits and related costs.
Previous report
Following approval by our Board of Directors, on June 10, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) for the acquisition of Hearsay Social, Inc. (“Hearsay”). Pursuant to the Merger Agreement, Hearsay became a wholly owned subsidiary of Yext upon closing of the transaction on August 1, 2024. The acquisition of Hearsay is intended to produce an end-to-end digital presence platform, combining Yext’s cutting-edge digital presence management capabilities with Hearsay’s compliant engagement solutions across social media, websites, text, and voice. We acquired Hearsay for approximately $125 million in cash, as adjusted for customary adjustments set forth in the Merger Agreement and the assumption of Hearsay employee equity awards. We also offered participation rights to key employees and former founders of Hearsay in a bonus pool of $20 million that can be settled in cash or our common stock and shall be subject to 100% vesting on the first anniversary of closing, generally subject to continued employment. In addition, subject to the terms of the Merger Agreement, we may also be required to pay additional contingent consideration of up to $75 million to Hearsay based on the achievement of certain milestones (the “Earnout”). The Earnout shall be payable based on achievement of certain annual recurring revenue targets. The targets shall be measured at the end of the first and second anniversaries of closing. The Earnout may be settled in cash or our common stock at our election. See Note 4 "Business Combination" to our condensed consolidated financial statements for additional information.
Previous report
(1)ARR as of October 31, 2024, includes approximately $62.8 million from the acquisition of Hearsay.
Previous report
(2)ARR as of October 31, 2024 includes a decrease of $10.8 million related to the attrition of a large customer, which occurred during the three months ended January 31, 2024.
Previous report
(1)Dollar-Based Net Retention Rate as of October 31, 2024 reflects the attrition of a large customer, which occurred during the three months ended January 31, 2024.
Previous report
Customer Count
Previous report
Customer count is defined as the total number of customers with contracts executed as of the last day of the reporting period and a unique administrative account identifier on our platform. Generally, we assign unique administrative accounts to each separate and distinct entity (such as a company or government institution) or a business unit of a large corporation, that has its own separate contract with us to access our platform. We believe that customer count provides insight into our ability to grow our enterprise and mid-size customer base. As such, customer count excludes third-party reseller customers and small business customers as well as customers only receiving free trials. From time to time, some customers previously characterized as small business customers may transition to mid-size customers, and customer count includes these changes resulting from any recharacterization. As of October 31, 2024, customer count was over 3,000.
Previous report
Sales and marketing expense was $43.7 million for the three months ended October 31, 2024, compared to $45.4 million for the three months ended October 31, 2023, a decrease of $1.7 million or 4%. The decrease was primarily driven by employee-related costs as personnel-related costs decreased $1.6 million and stock-based compensation expense decreased $0.2 million, reflecting lower headcount. The overall decrease in personnel-related costs noted is inclusive of incremental costs of $5.6 million associated with the acquisition of Hearsay. In addition, there were smaller decreases in depreciation expense and conferences and events, among others.
Previous report
These decreases were partially offset by a $1.4 million increase in amortization expense related to acquired intangible assets from the Hearsay acquisition.
Previous report
Research and development expense was $21.1 million for the three months ended October 31, 2024, compared to $18.3 million for the three months ended October 31, 2023, an increase of $2.8 million or 15%. The increase was primarily driven by a $2.8 million increase in personnel-related costs, mainly due to incremental costs of $5.4 million associated with the acquisition of Hearsay.
Previous report
Nine Months Ended October 31, 2024 Compared to Nine Months Ended October 31, 2023
Previous report
Revenue
Previous report
Total revenue was $307.9 million for the nine months ended October 31, 2024, compared to $303.2 million for the nine months ended October 31, 2023, an increase of $4.7 million or 2%. The increase was entirely driven by the inclusion of Hearsay’s revenue as a result of the acquisition which did not exist in the comparative period. The increase was negatively affected by the resulting absence of revenue from the attrition of a large customer that did not renew their contract as of January 31, 2024. During the nine months ended October 31, 2024 and 2023, revenue recognized from subscription and associated support to our platform was 93%, while revenue recognized from professional services was 7%, compared to 92% and 8%, respectively.
Previous report
Revenue attributable to direct customers was $252.2 million for the nine months ended October 31, 2024, compared to $245.1 million for the nine months ended October 31, 2023, an increase of $7.0 million, or 3%. The increase was entirely driven by the inclusion of Hearsay’s revenue as a result of the acquisition which did not exist in the comparative period. The increase was negatively affected by the resulting absence of revenue from the attrition of a large customer that did not renew their contract as of January 31, 2024. Revenue attributable to third-party reseller customers was $55.7 million for the nine months ended October 31, 2024, compared to $58.1 million for the nine months ended October 31, 2023, a decrease of $2.4 million or 4%, primarily due to customer attrition.
Previous report
Cost of revenue was $70.1 million for the nine months ended October 31, 2024, compared to $65.8 million for the nine months ended October 31, 2023, an increase of $4.3 million or 6%. The increase was primarily driven by the acquisition of Hearsay which resulted in a $2.0 million increase in amortization expense related to acquired intangible assets, as well as $0.7 million related to royalties and integration fees. In addition, data center costs increased $1.3 million mainly due to incremental costs from Hearsay, professional related costs increased $0.8 million and personnel-related costs increased $0.6 million, mainly due to incremental costs of $0.9 million associated with the acquisition of Hearsay. These increases were partially offset by a $1.9 million decrease in depreciation expense, as certain assets have fully depreciated.
Previous report
Gross margin was 77.2% for the nine months ended October 31, 2024, compared to 78.3% for the nine months ended October 31, 2023 as reflected in the discussion above.
Previous report
Research and development expense was $56.7 million for the nine months ended October 31, 2024, compared to $53.9 million for the nine months ended October 31, 2023, an increase of $2.8 million or 5%. The increase was primarily driven by a $4.4 million increase in personnel-related costs, mainly due to incremental costs of $5.4 million associated with the acquisition of Hearsay. This increase was partially offset by decreases in depreciation expense of $0.5 million, as certain assets have fully depreciated, a $0.5 million decrease in stock-based compensation expense, and a $0.4 million decrease in professional related costs.
Previous report
General and administrative expense was $75.6 million for the nine months ended October 31, 2024, compared to $53.8 million for the nine months ended October 31, 2023, an increase of $21.8 million or 41%. The increase was primarily driven by the acquisition of Hearsay, which resulted in $8.8 million of costs being incurred related to the portion of the incentive pool payable to founders and early employees, as well $0.6 million related to the recognition of changes in the fair value of contingent consideration. The increase was further driven by employee-related costs, as personnel-related costs increased $1.8 million, mainly due to incremental costs of $1.9 million associated with the acquisition of Hearsay, and stock-based compensation expense increased $5.5 million, mainly due to PSUs granted in fiscal year 2024. In addition, professional related costs increased $5.2 million, primarily due to professional services related to the acquisition of Hearsay.
Previous report
Net Loss
Previous report
Net loss was $12.8 million and $20.7 million for the three and nine months ended October 31, 2024, respectively and $0.5 million and $4.3 million for the three and nine months ended October 31, 2023, respectively.
Reworded paragraphs (27)
Previous wording
Yext empowers businesses to manage their knowledge so they can deliver relevant, actionable answers to consumer questions as well as consistent, accurate and engaging experiences to customers throughout the digital ecosystem. Our digital presence platform (also known as the Answers Platform) lets businesses structure and organize information about their brands in our knowledge graph, Yext Content (also known as the Knowledge Graph), which is then delivered across first-and third-party websites and applications through our network of over 200 service and application providers, which we refer to as our Publisher Network. These publishers include, among others, Amazon Alexa, Apple, Bing, Facebook, Google Business Profile, and Yelp. Our platform powers all of our key products, including Listings, Reviews, Pages and Search, each with robust analytics capabilities for businesses to easily track performance across customer experiences. It is our mission to empower businesses to easily manage every aspect of their digital presence to make meaningful connections with their customers across every digital touchpoint.
Current wording
Yext empowers businesses to manage their knowledge so they can deliver relevant, actionable answers to consumer questions as well as consistent, accurate and engaging experiences to customers throughout the digital ecosystem. Our digital presence platform (also known as the Answers Platform) lets businesses structure and organize information about their brands in our knowledge graph, Yext Content (also known as the Knowledge Graph), which is then delivered across first-and third-party websites and applications through our network of over 200 service and application providers, which we refer to as our Publisher Network. These publishers include, among others, Amazon Alexa, Apple, Bing, Facebook, Google, and Yelp. Our platform powers all of our key products, including Listings, Reviews, Pages and Search, each with robust analytics capabilities for businesses to easily track performance across customer experiences. It is our mission to empower businesses to easily manage every aspect of their digital presence to make meaningful connections with their customers across every digital touchpoint.
Previous wording
In August 2024, we acquired Hearsay Social, Inc., a digital client engagement platform for financial services ("Hearsay"). See Note 4. "Business Combination" to our condensed consolidated financial statements for additional information.
Current wording
In August 2024, we acquired Hearsay Social, Inc., a digital client engagement platform for financial services ("Hearsay"). See Note 4 "Business Combinations" to our condensed consolidated financial statements for additional information.
Previous wording
Our results of operations have been and may continue to be influenced by general macroeconomic conditions, including, but not limited to, the impact of foreign currency fluctuations, interest rates, inflation, recession risks, and geopolitical events and shifts. Fluctuations in foreign exchange rates and rising inflation have had, and may continue to have an adverse impact on our financial condition and operating results in future periods. The extent to which such disruptions will continue in future periods remains uncertain, which has had and may continue to have an adverse impact on our financial condition and operating results in future periods. We continue to be committed to our business, the strength of our platform, our ability to continue to execute on our strategy, and our efforts to support our customers.
Current wording
Our results of operations have been and may continue to be influenced by general macroeconomic conditions, including, but not limited to, the impact of foreign currency fluctuations, interest rates, inflation, recession risks, tariffs and other trade restrictions, geopolitical events and shifts, and changes in government administration policy positions. Fluctuations in foreign exchange rates and rising inflation have had, and may continue to have an adverse impact on our financial condition and operating results in future periods. The extent to which such disruptions will continue in future periods remains uncertain, which has had and may continue to have an adverse impact on our financial condition and operating results in future periods. We continue to be committed to our business, the strength of our platform, our ability to continue to execute on our strategy, and our efforts to support our customers.
Previous wording
See Part II Item 1A “Risk Factors” for further discussion of the possible impact of the current macroeconomic conditions on our business.
Current wording
See Part II Item 1A “Risk Factors” for further discussion of the possible impact of the current macroeconomic conditions and recent developments on our business.
Previous wording
ARR for Third-party Reseller customers is defined as the annualized recurring amount of all contracts with Third-party Reseller customers as of the last day of the reporting period. The recurring amount of a contract is determined based upon the terms of a contract and is calculated by dividing the amount of a contract by the term of the contract and then annualizing such amount. The calculation assumes no subsequent changes to the existing subscription. The calculation includes the annualized contractual minimum commitment and excludes amounts related to overages above the contractual minimum commitment. Contracts include portions of professional services contracts that are recurring in nature. See Part II Item 1A “Risk Factors" for further discussion of Third-party reseller customers.
Current wording
ARR for Third-party Reseller customers is defined as the annualized recurring amount of all contracts with Third-party Reseller customers as of the last day of the reporting period. The recurring amount of a contract is determined based upon the terms of a contract and is calculated by dividing the amount of a contract by the term of the contract and then annualizing such amount. The calculation assumes no subsequent changes to the existing subscription. The calculation includes the annualized contractual minimum commitment and amounts related to usage above the contractual minimum commitment. Contracts include portions of professional services contracts that are recurring in nature. See Part II Item 1A “Risk Factors" for further discussion of Third-party reseller customers.
Previous wording
Total ARR is defined as the annualized recurring amount of all contracts executed as of the last day of the reporting period. The recurring amount of a contract is determined based upon the terms of a contract and is calculated by dividing the amount of a contract by the term of the contract and then annualizing such amount. The calculation assumes no subsequent changes to the existing subscription, and where relevant, includes the annualized contractual minimum commitment and excludes amounts related to overages above the contractual minimum commitment. Contracts include portions of professional services contracts that are recurring in nature.
Current wording
Total ARR is defined as the annualized recurring amount of all contracts executed as of the last day of the reporting period. The recurring amount of a contract is determined based upon the terms of a contract and is calculated by dividing the amount of a contract by the term of the contract and then annualizing such amount. The calculation assumes no subsequent changes to the existing subscription, and where relevant, includes the annualized contractual minimum commitment and amounts related to usage above the contractual minimum commitment. Contracts include portions of professional services contracts that are recurring in nature.
Previous wording
Cost of revenue consists primarily of employee-related costs, including personnel-related costs, which mainly consist of salaries and wages, and stock-based compensation expense. Cost of revenue also includes fees associated with our Publisher Network application provider arrangements, the nature of which may be unpaid, fixed, or variable, and are unpaid with many of our larger providers, as well as the costs associated with our data centers. In addition, cost of revenue includes depreciation expense, which includes amounts allocated based on employee headcount, as well as amounts related to certain capitalized software development costs incurred in connection with additional functionality to our platform. Cost of revenue also includes amortization expense, which includes amounts related to intangible assets arising from acquisitions and lease expenses associated with our office spaces, which are allocated based on employee headcount. In addition, cost of revenue includes software expense, which relates to licenses, professional services, and other costs associated with software for use in the operations of our business, which is also allocated based on employee headcount.
Current wording
Cost of revenue consists primarily of employee-related costs, including personnel-related costs, which mainly consist of salaries and wages, and stock-based compensation expense. Cost of revenue also includes fees associated with our Publisher Network application provider arrangements, the nature of which may be unpaid, fixed, or variable, and are unpaid with many of our larger providers, as well as the costs associated with our data centers. In addition, cost of revenue includes depreciation expense, which includes amounts allocated based on employee headcount, as well as amounts related to certain capitalized software development costs incurred in connection with additional functionality to our platform. Cost of revenue also includes amortization expense, which includes amounts related to intangible assets arising from acquisitions and lease expenses associated with our office spaces, which are allocated based on employee headcount. In addition, cost of revenue includes professional related costs and software expense, which relates to licenses, professional services, and other costs associated with software for use in the operations of our business, which is also allocated based on employee headcount.
Previous wording
Total revenue was $114.0 million for the three months ended October 31, 2024, compared to $101.2 million for the three months ended October 31, 2023, an increase of $12.8 million or 13%. The increase was entirely driven by the inclusion of Hearsay’s revenue as a result of the acquisition which did not exist in the comparative period. The increase was negatively affected by the resulting absence of revenue from the attrition of a large customer that did not renew their contract as of January 31, 2024. During the three months ended October 31, 2024 and 2023, revenue recognized from subscription and associated support to our platform was 94%, while revenue recognized from professional services was 6%, compared to 92% and 8%, respectively.
Current wording
Total revenue was $109.5 million for the three months ended April 30, 2025, compared to $96.0 million for the three months ended April 30, 2024, an increase of $13.5 million or 14%. The increase was entirely driven by the inclusion of Hearsay’s revenue as a result of the acquisition which was completed on August 1, 2024. For both the three months ended April 30, 2025 and 2024, revenue recognized from subscription and associated support to our platform was 93%, while revenue recognized from professional services was 7%.
Previous wording
Revenue for the three months ended October 31, 2024, included a positive impact from foreign currency exchange rates of approximately $1.3 million, using a constant currency basis. We calculate constant currency by translating our current period results for entities reporting in currencies other than U.S. Dollars (“USD”) into USD at the average monthly exchange rates in effect during the comparative period, as opposed to the average monthly exchange rates in effect during the current period.
Current wording
Revenue for the three months ended April 30, 2025, included a positive impact from foreign currency exchange rates of approximately $0.5 million, using a constant currency basis. We calculate constant currency by translating our current period results for entities reporting in currencies other than U.S. Dollars (“USD”) into USD at the average monthly exchange rates in effect during the comparative period, as opposed to the average monthly exchange rates in effect during the current period.
Previous wording
Revenue attributable to direct customers was $95.5 million for the three months ended October 31, 2024, compared to $82.3 million for the three months ended October 31, 2023, an increase of $13.2 million, or 16%. The increase was entirely driven by the inclusion of Hearsay’s revenue as a result of the acquisition which did not exist in the comparative period. The increase was negatively affected by the resulting absence of revenue from the attrition of a large customer that did not renew their contract as of January 31, 2024. Revenue attributable to third-party reseller customers was $18.5 million for the three months ended October 31, 2024, compared to $18.9 million for the three months ended October 31, 2023, a decrease of $0.4 million or 2%, primarily due to customer attrition.
Current wording
Revenue attributable to direct customers was $91.4 million for the three months ended April 30, 2025, compared to $77.4 million for the three months ended April 30, 2024, an increase of $14.0 million, or 18%. The increase was entirely driven by the inclusion of Hearsay’s revenue as a result of the acquisition which was completed on August 1, 2024. Revenue attributable to third-party reseller customers was $18.1 million for the three months ended April 30, 2025, compared to $18.6 million for the three months ended April 30, 2024, a decrease of $0.5 million or 3%, primarily due to customer attrition.
Previous wording
Cost of revenue was $26.2 million for the three months ended October 31, 2024, compared to $22.1 million for the three months ended October 31, 2023, an increase of $4.2 million or 19%. The increase was primarily driven by the acquisition of Hearsay which resulted in a $2.0 million increase in amortization expense related to acquired intangible assets, as well as a $0.7 million increase related to royalties and integration fees. In addition, data center costs increased $0.9 million mainly due to incremental costs from Hearsay, and professional related costs increased $0.4 million.
Current wording
Cost of revenue was $27.1 million for the three months ended April 30, 2025, compared to $21.5 million for the three months ended April 30, 2024, an increase of $5.6 million or 26%. The increase was primarily driven by a $2.4 million increase in amortization expense from acquired intangible assets largely related to the acquisition of Hearsay, as well as a $0.8 million increase in royalties and integration fees. In addition, personnel-related costs increased $0.9 million and professional related costs increased $0.4 million.
Previous wording
Gross margin was 77.0% for the three months ended October 31, 2024, compared to 78.2% for the three months ended October 31, 2023 as reflected in the discussion above.
Current wording
Gross margin was 75.2% for the three months ended April 30, 2025, compared to 77.6% for the three months ended April 30, 2024 as reflected in the discussion above.
Previous wording
Sales and marketing expense was $128.9 million for the nine months ended October 31, 2024, compared to $136.9 million for the nine months ended October 31, 2023, a decrease of $8.1 million or 6%. The decrease was primarily driven by employee-related costs, as personnel-related costs decreased $4.2 million and stock-based compensation expense decreased $2.2 million, reflecting lower headcount. The overall decrease in personnel-related costs noted is inclusive of incremental costs of $5.6 million associated with the acquisition of Hearsay. In addition, depreciation expense decreased $1.2 million as certain assets have fully depreciated, and employee travel decreased $0.9 million. These decreases were partially offset by a $1.4 million increase in amortization expense related to acquired intangible assets from the Hearsay acquisition.
Current wording
Sales and marketing expense was $36.2 million for the three months ended April 30, 2025, compared to $43.3 million for the three months ended April 30, 2024, a decrease of $7.0 million or 16%. The decrease was primarily driven by personnel-related costs which decreased $4.1 million, reflecting lower headcount. In addition, conferences and events decreased $1.5 million, and advertising costs decreased $0.7 million. These decreases were offset by a $1.7 million increase in amortization expense related to acquired intangible assets primarily from the Hearsay acquisition.
Previous wording
General and administrative expense was $33.4 million for the three months ended October 31, 2024, compared to $17.2 million for the three months ended October 31, 2023, an increase of $16.1 million or 94%. The increase was primarily driven by the acquisition of Hearsay, which resulted in $8.8 million of costs being incurred related to the portion of the incentive pool payable to founders and early employees, as well as $0.6 million related to the recognition of changes in the fair value of contingent consideration. The increase was further driven by employee-related costs, as personnel-related costs increased $1.3 million, mainly due to incremental costs of $1.9 million associated with the acquisition of Hearsay, and stock-based compensation expense increased $1.5 million, mainly due to performance-based restricted stock units (“PSUs”) granted in fiscal year 2024. In addition, professional related costs increased $2.2 million, largely due to professional services related to the acquisition of Hearsay, and bad debt expense increased $0.7 million.
Current wording
General and administrative expense was $23.2 million for the three months ended April 30, 2025, compared to $19.6 million for the three months ended April 30, 2024, an increase of $3.6 million or 18%. The increase was primarily driven by changes in the fair value of contingent consideration pertaining to the Hearsay acquisition of $1.8 million recognized during the three months ended April 30, 2025. In addition, professional related costs increased $1.1 million and stock-based compensation expense increased $0.6 million mainly due to performance-based restricted stock units granted in fiscal year 2025.
Previous wording
See Note 12" Income Taxes" to our condensed consolidated financial statements for additional information on our provision for income taxes.
Current wording
See Note 12" Income Taxes" to our condensed consolidated financial statements for additional information on our benefit from (provision for) income taxes.
Previous wording
In addition, beginning in fiscal 2025, we are utilizing a projected tax rate of 25% in our computation of the non-GAAP income tax provision. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses and other significant events. Our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.
Current wording
Beginning in fiscal year 2026, we utilize a projected tax rate of 23.5% in our computation of the non-GAAP income tax provision, which was updated from 25% in fiscal year 2025. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses and other significant events. Our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.
Previous wording
We have recast our results on the same basis for the prior comparative periods presented, although the effects in those periods remain unchanged notwithstanding as no such acquisition-related activity had occurred.
Current wording
We have recast our results on the same basis for the prior comparative periods presented, although the effects in those periods remain unchanged notwithstanding as no such acquisition-related activity had occurred. The following table reconciles our GAAP net income (loss) to non-GAAP net income (loss):
Previous wording
The following table reconciles our GAAP net loss to Adjusted EBITDA:
Current wording
The following table reconciles our GAAP net income (loss) to Adjusted EBITDA:
Previous wording
As of October 31, 2024, our principal sources of liquidity were cash and cash equivalents of $100.5 million. We believe our existing cash and cash equivalents, will be sufficient to meet our projected operating requirements for at least the next 12 months. Our cash flows, including net cash used in or provided by operating activities, may vary significantly from quarter to quarter, due to the timing of billings, cash collections and lease payments, significant marketing events and related expenses, acquisitions, and other factors.
Current wording
As of April 30, 2025, our principal sources of liquidity were cash and cash equivalents of $115.0 million. We believe our existing cash and cash equivalents, will be sufficient to meet our projected operating requirements for at least the next 12 months. Our cash flows, including net cash used in or provided by operating activities, may vary significantly from quarter to quarter, due to the timing of billings, cash collections and lease payments, significant marketing events and related expenses, acquisitions, and other factors.
Previous wording
As of October 31, 2024, we were in compliance with all debt covenants. As of such date, the $50.0 million revolving loan facility had $36.6 million available and $13.4 million in letters of credit allocated as security in connection with office space.
Current wording
As of April 30, 2025, we were in compliance with all debt covenants. As of such date, the $50.0 million revolving loan facility had $36.8 million available and $13.2 million in letters of credit allocated as security in connection with office space.
Previous wording
In March 2022, our Board of Directors authorized a $100.0 million share repurchase program of our common stock. In September 2023, our Board of Directors authorized an additional $50.0 million to the share repurchase program. During the nine months ended October 31, 2024, 1,083,458 shares were purchased and as of October 31, 2024, approximately $43.1 million remains available for future purchases, exclusive of commissions paid on the repurchase of shares.
Current wording
In March 2022, our Board of Directors authorized a $100.0 million share repurchase program of our common stock which was increased by an additional $50.0 million in September 2023 and an additional $50.0 million in March 2025. During the three months ended April 30, 2025, 4,473,633 shares were purchased and as of April 30, 2025, approximately $54.2 million remains available for future purchases, exclusive of commissions paid on the repurchase of shares.
Previous wording
Net cash provided by operating activities of $11.9 million for the nine months ended October 31, 2024 reflected our net loss of $20.7 million, adjusted by non-cash charges including stock-based compensation expense of $37.1 million, depreciation and amortization expense of $12.1 million, including $3.5 million related to the amortization of acquired intangibles, as well as $6.5 million related to the amortization of operating lease right-of-use assets. In addition, there were positive adjustments resulting from changes in accounts receivable of $55.3 million, mainly due to the timing of billing and cash collections during the period, as well as changes in costs to obtain revenue contracts of $10.5 million and $7.2 million in accounts payable, accrued expenses and other current liabilities. These increases were partially offset by changes in unearned revenue of $89.1 million, and operating lease liabilities of $8.3 million.
Current wording
Net cash provided by operating activities of $37.7 million for the three months ended April 30, 2025 reflected our net income of $0.8 million, adjusted by non-cash charges including stock-based compensation expense of $12.7 million, depreciation and amortization expense of $6.9 million, including $4.1 million related to the amortization of acquired intangibles, as well as $2.3 million related to the amortization of operating lease right-of-use assets and $1.8 million related to adjustments in contingent consideration. In addition, there were positive adjustments resulting from changes in accounts receivable of $43.1 million, mainly due to the timing of billing and cash collections during the period, as well as changes in other long term assets of $5.9 million, costs to obtain revenue contracts of $3.2 million and $0.8 million in accounts payable, accrued expenses and other current liabilities. These increases were offset by changes in unearned revenue of $21.7 million, other long term liabilities of $10.3 million, prepaid expenses and other current assets of $5.0 million and operating lease liabilities of $3.5 million.
Previous wording
Net cash provided by operating activities of $18.l million for the nine months ended October 31, 2023 reflected our net loss of $4.3 million, adjusted by non-cash charges including stock-based compensation expense of $34.3 million, depreciation and amortization expense of $12.6 million, and amortization of operating lease right-of-use assets of $6.7 million. In addition, there were positive adjustments resulting from changes in accounts receivable of $57.3 million, mainly due to the timing of billing and cash collections during the period, as well as changes in costs to obtain revenue contracts of $9.l million. These increases were partially offset by changes in unearned revenue of $78.4 million, as well as changes in accounts payable, accrued expenses and other current liabilities of $9.2 million, and operating lease liabilities of $8.9 million.
Current wording
Net cash provided by operating activities of $38.3 million for the three months ended April 30, 2024 reflected our net loss of $3.8 million, adjusted by non-cash charges including stock-based compensation expense of $12.1 million, depreciation and amortization expense of $3.0 million, and amortization of operating lease right-of-use assets of $2.1 million. In addition, there were positive adjustments resulting from changes in accounts receivable of $54.3 million, mainly due to the timing of billing and cash collections during the period, as well as changes in costs to obtain revenue contracts of $4.3 million. These increases were offset by changes in unearned revenue of $26.7 million, as well as changes in accounts payable, accrued expenses and other current liabilities of $4.0 million, and operating lease liabilities of $2.8 million.
Previous wording
Net cash used in investing activities of $91.2 million for the nine months ended October 31, 2024 reflected cash outflows of $89.4 million related to cash paid, net of cash acquired, in the acquisition of Hearsay, as well as capital expenditures of $1.8 million.
Current wording
Net cash used in investing activities of $19.4 million for the three months ended April 30, 2025 reflected cash outflows of $18.8 million related to cash paid, net of cash acquired, in the acquisition of Places Scout, as well as capital expenditures of $0.6 million.
Previous wording
Net cash used in investing activities of $2.3 million for the nine months ended October 31, 2023 reflected capital expenditures.
Current wording
Net cash used in investing activities of $0.6 million for the three months ended April 30, 2024 reflected capital expenditures.
Previous wording
Net cash used in financing activities of $13.2 million for the nine months ended October 31, 2024 was primarily related to cash outflows of $9.0 million associated with payments for taxes related to the net share settlement of stock-based compensation awards, as well as $6.8 million associated with repurchases of common stock as part of our share repurchase program. This was partially offset by net proceeds from employee stock purchase plan withholdings of $2.2 million.
Current wording
Net cash used in financing activities of $29.0 million for the three months ended April 30, 2025 was primarily related to cash outflows of $27.6 million associated with repurchases of common stock as part of our share repurchase program, as well as $2.1 million associated with payments for taxes related to the net share settlement of stock-based compensation awards.
Previous wording
Net cash used in financing activities of $22.9 million for the nine months ended October 31, 2023 was primarily related to $23.1 million in cash outflows associated with repurchases of common stock as part of our share repurchase program, as well as payments for taxes related to the net share settlement of stock-based compensation awards of $10.7 million. This was partially offset by proceeds from exercise of stock options of $8.8 million, as well as net proceeds from employee stock purchase plan withholdings of $2.5 million.
Current wording
Net cash used in financing activities of $1.2 million for the three months ended April 30, 2024 was primarily related to $2.0 million in cash outflows associated with payments for taxes related to the net share settlement of stock-based compensation awards. This was offset by net proceeds from employee stock purchase plan withholdings of $0.9 million.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
This metric is calculated by first determining the ARR generated 12 months prior to the end of the current period for a cohort of customers who had active contracts at that time. We then calculate ARR from the same cohort of customers at the end of the current period, which includes customer contraction and churn, and excludes customer expansion. The current period ARR is then divided by the prior period ARR to arrive at our dollar-based gross retention rate.
Current report — wording carried from elsewhere
The following table provides our dollar-based gross retention rate for the periods presented:
Current report — wording carried from elsewhere
(1)For fiscal year 2026, we utilize a projected tax rate of 23.5% in our computation of the non-GAAP income tax provision.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Revenue for the nine months ended October 31, 2024, included a positive impact from foreign currency exchange rates of approximately $1.6 million, using a constant currency basis. We calculate constant currency by translating our current period results for entities reporting in currencies other than USD into USD at the average monthly exchange rates in effect during the comparative period, as opposed to the average monthly exchange rates in effect during the current period.
Previous report — wording carried elsewhere
The following table summarizes our revenue by sales channel for the periods presented:
Previous report — wording carried elsewhere
Cost of Revenue and Gross Margin
Previous report — wording carried elsewhere
See Note 12" Income Taxes" to our condensed consolidated financial statements for additional information on our provision for income taxes.
Previous report — wording carried elsewhere
The following table reconciles our GAAP net loss to non-GAAP net income:
Previous report — wording carried elsewhere
(1) Beginning in fiscal 2025, we are utilizing a projected tax rate of 25% in our computation of the non-GAAP income tax provision. Our estimated tax rate on non-GAAP income is determined annually and may be adjusted during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, material changes in the geographic mix of revenue and expenses and other significant events. Our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.