Yext, Inc.

Second Quarter Fiscal 2027 Results

Revenue for the second quarter of fiscal 2027 was $111.1 million, compared to $113.1 million in the second quarter of fiscal 2026, a 2% decrease, driven by the same customer size cohort dynamics described above and consistent with our go-to-market strategy. Gross margin improved to 75.5% on a GAAP basis from 75.2% in the prior year. GAAP net income and earnings per share were $13.1 million and $0.13, respectively, and Non-GAAP net income and earnings per share were $21.2 million and $0.21, respectively. We reduced our weighted average basic share count by 19% year over year to 100.1 million. This is the first quarter to show the full effect of the tender offer we completed in the spring. Adjusted EBITDA was $34.0 million, compared to $26.4 million in the second quarter fiscal 2026, representing an Adjusted EBITDA margin of 31%.

Total ARR ended the quarter at $440.8 million. The composition of ARR continues to evolve in-line with our expectations and strategy, as customers with annual contract value of ≥$50K accounted for $405.9 million, or 92% of our ARR at the end of FY27 Q2, up 2% year over year. ARR growth from this cohort is accelerating on both a sequential and a year-over-year basis. The recovery has been gradual but consistent, and we expect our FY27 Q3 results to reflect continued positive momentum. ARR from sub-$50K customers was $34.9 million, down 22% year over year, consistent with our expectations and the plan we have previously laid out. We have refocused our go-to- market strategy on enterprise customers, and as a result, we are not dedicating material resources to mitigate churn within our current SMB customer base. These numbers reflect the exit of customers who were a poor fit for our enterprise product. We have continued to experiment with better ways to serve SMB customers, and we will discuss our latest offerings in the platform section below.

Gross retention rate within the ≥$50K cohort improved to 90% from 89% a year ago, and net retention rate for this cohort was 98%, up from 96% in FY26 Q2. The improvement in net retention came from both components of the metric: we kept more of the revenue we started the year with, and expansion within the base widened. Combined with new customer additions, net ARR grew $6.6 million in the ≥$50K cohort over the past twelve months. The sub-$50K cohort saw net churn of $10.1 million, consistent with our deliberate shift to focus on our enterprise customers.