Yext (YEXT) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue was $97.9 million, down 5% year-over-year, mainly due to large customer attrition, with Adjusted EBITDA of $9.8 million and non-GAAP EPS of $0.05, both exceeding guidance due to cost optimization and restructuring.

• Integration of Hearsay Systems is underway following the $125 million acquisition, with joint go-to-market strategies, positive customer feedback, and expected accretion to ARR growth and product portfolio expansion.

• Customers are seeking to simplify tech stacks, reduce operational inefficiencies, and leverage unified data and analytics platforms, driving vendor consolidation.

• A restructuring plan reduced workforce by 12% and incurred $5 million in costs to lower operating expenses and position for future growth.

• Boomerang customers are returning, citing unmet promises from competitors and the value of the unified platform.

Financial highlights

• Total revenue for the quarter was $97.9 million, down 5% year-over-year; six-month revenue was $193.9 million, down 4%.

• Adjusted EBITDA for the quarter was $9.8 million, down from $11.8 million year-over-year; non-GAAP net income was $6.8 million.

• Hearsay ARR was previously around $60 million; revenue guidance reflects integration and synergy expectations.

• Cash and cash equivalents totaled $234.8 million as of July 31, 2024, up from $200.5 million a year ago.

• Q4 implied adjusted EBITDA margin is around 22%, with legacy business at mid-20s% and Hearsay slightly dilutive.

Outlook and guidance

• Q3 FY25 revenue projected at $113.0–$113.5 million, Adjusted EBITDA $21.5–$22.0 million, non-GAAP EPS $0.11–$0.12.

• FY25 revenue expected at $420.0–$421.0 million, Adjusted EBITDA $66.0–$67.0 million, non-GAAP EPS $0.35–$0.36.

• Stable to modest organic ARR growth expected for the year, with a conservative approach due to macroeconomic risks and customer attrition.

• Consolidated adjusted EBITDA margin expected in the low twenties by year-end, with further expansion anticipated next fiscal year.

• Revenue and margin improvements are expected from both operational efficiencies and revenue synergies post-integration.