What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-03-16 compared with 2020-03-20 · 88 added, 66 removed, 169 unchanged (48% of the section changed)

("Yext" or the "Company"), a search experience cloud company, puts businesses in control of their facts online by delivering brand-verified answers.

Our platform lets businesses structure the facts about their brands in a database called a Knowledge Graph.

Our platform is built to leverage the structured data stored in the Knowledge Graph to power direct answers on a business’s own website, as well as across approximately 175 service and application providers, which we refer to as our Knowledge Network, and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.

("Yext" or the "Company") organizes a business's facts so it can provide official answers to consumer questions starting with the business's own website and then extending across search engines and voice assistants.

Our platform lets businesses structure the facts about their brands in a database called the Knowledge Graph.

Our platform is built to leverage the structured data stored in the Knowledge Graph to deliver a modern search experience on a business’s or organization's own website, as well as across approximately 200 service and application providers, which we refer to as our Knowledge Network, and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.

Our platform powers all of our key features, including Listings, Pages, and Answers, along with its other features and capabilities.

We believe a business is the ultimate authority on its own facts, and it is our mission to put that business in control of it, everywhere.

3 unchanged sentences

As search continues to evolve, and increasingly leverages AI, consumers are more likely to rely on these direct answers.

The challenge for businesses is to provide accurate answers to these questions that are more prominent than those of their competitors or other third-party sources.

Many answers and results provided by searches currently come from third-party sources such as data aggregators, governmental agencies and consumers.

The net result of this third-party sourcing has been to produce “best guess” data that can often be incomplete, misleading or incorrect.

Furthermore, while consumer online search behavior has changed, the site search experience on many businesses’ websites has not evolved to meet consumer expectations.

While consumer online search behavior has changed, the site search experience on many businesses’ websites has not evolved to meet consumer expectations.

Numerous site searches are unable to understand natural language queries instead returning a list of links based on keywords rather than direct answers.

Poor user experience on a business’s own website may result in lost sales opportunities or may cause consumers to visit a competitor’s website.

The challenge for businesses is to understand and provide accurate answers to consumer’s questions while delivering a rich, consistent search experience on their website as well as third-party applications.

Many answers and results provided by searches currently come from third-party sources such as data aggregators, governmental agencies and consumers.

The net result of this third-party sourcing has been to produce “best guess” data that can often be incomplete, misleading or incorrect.

Yext pioneered a better way for businesses to control and publish the critical facts about themselves to answer consumer questions.

We have built our business on the fundamental premise that the best source of accurate and timely information about a business is the business itself.

We do this first by empowering brands to structure the public facts about themselves in a database called a Knowledge Graph.

A Knowledge Graph organizes data in a way that can answer complex questions by storing both data points themselves and the multiple relationships between data points.

Our products and features are built to leverage the structured data stored in the Knowledge Graph to help businesses control their facts online and deliver verified answers to consumers.

We do this first by empowering brands to structure the public facts about themselves in a database called the Knowledge Graph.

The Knowledge Graph organizes data in a way that can answer complex questions by storing both data points themselves and the multiple relationships between data points.

Our products and features are built to leverage the structured data stored in the Knowledge Graph so businesses can provide official answers to consumer questions.

Businesses of nearly all sizes and in a diverse set of industries can benefit from our platform and capabilities.

6 unchanged sentences

• analyze how features in the platform drive consumer engagement and revenue for our customers.

For the fiscal years ended January 31, 2020, 2019 and 2018, our revenue was $298.8 million, $228.3 million and $170.2 million, respectively, and our net loss was $121.5 million, $74.8 million and $66.6 million, respectively.

Industry Background

10 unchanged sentences

Search Drives Commerce.

When searching for a business, consumers need to know many relevant attributes such as qualifications of a wealth advisor, amenities at a hotel, or the agenda of an event.

When searching for a business, consumers need to know many relevant attributes such as qualifications of a wealth advisor, amenities at a hotel, or course offerings at a university.

As a result, businesses must ensure that the facts about their business are available, accurate and consistent online so that they can be found.

20 unchanged sentences

Poor Site Search Experience Results in Lost Transactions.

While consumer online search behavior has changed, we believe the site search experience on many business’s websites has not evolved to meet consumer expectations.

While consumer online search behavior has changed, we believe the site search experience on many businesses' websites has not evolved to meet consumer expectations.

Many site searches are unable to understand natural language queries and instead return a list of links based on keywords rather than direct answers.

Poor site search experience on a business’s own website may result in lost sales opportunities or may cause consumers to visit a competitor’s website.

Consumer Reviews Are of Critical and Growing Importance.

Many major applications now include consumer review data in their search results and may rank businesses and professional service providers based on the number, quality and recency of reviews.

Consumer Reviews Are of Critical Importance.

Many major applications include consumer review data in their search results and may rank businesses and professional service providers based on the number, quality and recency of reviews.

A limited number of reviews or a few poor reviews without offsetting positive reviews may result in an otherwise lower search ranking in certain applications.

2 unchanged sentences

• Grow Our Customer Base.

We believe that there is a substantial opportunity to continue to increase the size of our customer base across a broad range of industries and companies, and to include more professional service providers, such as individual doctors, insurance agents and financial services professionals, in addition to businesses.

We believe that there is a substantial opportunity to continue to increase the size of our customer base across a broad range of industries and companies.

In October 2019 with the launch of Yext Answers, our site search product, we further expanded our customer base to include businesses that maintain websites but without physical locations, such as consumer product businesses.

3 unchanged sentences

For example, some businesses may initially purchase our platform only for their stores in a particular country with opportunities to expand to other stores in the geographic region.

We continue to sell additional features, such as Pages, Reviews and Answers, to existing customers.

We continue to sell additional features, such as Pages,

Reviews and Answers, to existing customers.

See "—Sales and Marketing" for a discussion of customer retention and our ability to expand customer relationships.

5 unchanged sentences

For example, in October 2019 we launched Yext Answers, our site search product.

In the fiscal year ended January 31, 2021, we expanded Yext Answers into five new languages, French, German, Italian, Spanish and Japanese, and enhanced Yext Answers with two major algorithm upgrades.

• Drive Usage of Our Platform.

Our customer success professionals are responsible for building relationships with customers, increasing customer’s adoption and engagement with the Yext platform.

In the fiscal year ended January 31, 2021, we launched the Hitchhikers program, a comprehensive training program and community for professionals to develop the skills to build custom search solutions for their business using our platform.

• Extend the Knowledge Network.

2 unchanged sentences

We are increasing our focus on adding more industry vertical-specific and international services to our Knowledge Network as well as including new services that may become more commonly used in the future.

For example, in the fiscal year ended January 31, 2019 we launched a global integration with Amazon to give businesses control over the answers Amazon Alexa provides about them, and in the fiscal year ended January 31, 2020, we launched integrations with some of the largest services used by Chinese travelers, such as Baidu Map (Overseas), Fliggy and CK Map.

For example, in the fiscal year ended January 31, 2019 we launched a global integration with Amazon to give businesses control over the answers Amazon Alexa provides about them, and in the fiscal year ended January 31, 2021, we launched an integration with WebMD, while expanding the global reach of the Knowledge Network through multiple integrations with international applications.

• Expand Our App Directory.

2 unchanged sentences

As the number of integrations in the Yext App Directory grows, we believe that it will further expand the ways that our platform can be utilized and increase customer retention.

For example, in the fiscal year ended January 31, 2020, we launched four new integrations with the Adobe Experience Cloud to allow our customers to easily connect the data managed in Yext with the assets they create and manage within Adobe.

For example, in the fiscal year ended January 31, 2021, we launched the WordPress Answers Connector, a plugin that allows WordPress users to seamlessly integrate Yext Answers into WordPress pages.

Key Benefits of Our Platform

1 unchanged sentence

• Control over Facts.

Our platform is the system of record that enables our customers to control and centralize the facts about their businesses.

Our customers quickly gain control of their information, such as their location data, listings and related attributes, resulting in the elimination of inaccurate and duplicate data and the ability to seamlessly update data across our Knowledge Network.

Our platform is the system of record that enables our customers to control and centralize the facts about their businesses, resulting in the elimination of inaccurate and duplicate data and the ability to seamlessly update data across our Knowledge Network.

• Flexibility for Optimized Management of Business Attributes.

4 unchanged sentences

• Increased Discoverability and Conversions.

With structured data stored in the Knowledge Graph coupled with the applications in our Knowledge Network, our customers provide search engines and voice assistants with the data they

need to answer questions about their businesses.

With structured data stored in the Knowledge Graph coupled with the applications in our Knowledge Network, our customers provide search engines and voice assistants with the data they need to answer questions about their businesses.

By providing accurate and direct answers to questions and guiding consumers to transact directly from search results, we believe businesses are able to capture, convert and retain more of their customers.

• Ability to Create Compelling Landing Pages for Consumers.

Yext Pages enables businesses to create landing pages on their website to capture traffic from search engines and establish a call to action for consumers who reach those pages.

• Create and Manage Compelling Landing Pages for Consumers at Scale.

Yext Pages enables businesses to create and manage compelling landing pages on their website at scale using the Knowledge Graph.

When data is updated on a business’s Knowledge Graph, Yext automatically publishes the changes to a business's website, so that the most accurate, up-to-date answers are available to customers on and off a business's website.

• Ability to Drive More Reviews and Increase Consumer Engagement.

2 unchanged sentences

Our platform's advanced analytics inform businesses about their digital public presence and consumer interactions on their Yext Listing, Pages and Answers experiences that can drive customer revenue.

• Reduced Support Costs.

Yext Answers helps consumers find information quickly and easily on a business’s own website without having to contact a support center or chatbot.

• Global Reach and Local Expertise.

Our platform integrates with both global and country-specific search engines and applications, accepts international address and phone number data, and allows local employees to contribute individual expertise, providing a consumer experience that respects local languages, address formats and customs.

The Yext Search Experience Cloud

The Yext Search Experience Cloud is our cloud-based platform that powers our products and features allowing customers to provide accurate and direct answers to consumer questions, to control the facts about their businesses and the content of their landing pages and to manage their consumer reviews, all from a single login.

The Yext Platform

Yext's cloud-based platform powers products and features that allow our customers to provide accurate and direct answers to consumer questions, to control the facts about their businesses and the content of their landing pages and to manage their consumer reviews, all from a single login.

From our platform customers can centralize, control and manage data fields, including store information such as name, address, phone number and holiday hours;

3 unchanged sentences

Our customers can then use this data to answer consumers' questions, to power and update their landing pages and to make this information available through our Knowledge Network of approximately 200 maps, apps, search engines, intelligent GPS systems, digital assistants, vertical directories and social networks in a complete, up to date and accurate manner.

The key products and features that comprise the Search Experience Cloud include:

The key products and features that comprise the Yext platform include:

Listings allows our customers to sync and update the content they store in the Yext platform across our Knowledge Network providing customers with greater control and consistency over their brand.

5 unchanged sentences

Ultimately, our platform helps businesses deliver accurate, consistent, up to date and compelling information to consumers.

We offer our cloud-based platform to customers on a subscription basis in several packages.

Each package provides varying levels of access to our key products and features.

In September 2020, Yext announced the general availability of Hitchhikers, a comprehensive training program and community for professionals, who use Yext.

With the launch of Hitchhikers, professionals are now able to build custom search solutions for their business using our platform.

We continue to invest in platform and features development to help our customers better control the facts about their business and have released new products and features to all of our customers multiple times a year.

8 unchanged sentences

The Yext platform allows customers to collect, store and manage structured data, consistent with standards published by schema.org.

Schema.org is an open and collaborative initiative launched by certain large search engines that defines the vocabulary and format for structured markup.

Schema.org is an open and collaborative initiative launched by certain large search engines that defines the vocabulary

and format for structured markup.

Search engines like Google and Bing consume data through structured markup placed in the underlying code of web pages.

We actively monitor and track the schema.org standards so that our platform stores and publishes data in accordance with the most current schema.org specifications.

Interfaces with our Knowledge Network

We rely on integrations with each of the applications in our Knowledge Network that enable us to accomplish some or all of the following key tasks with members of our Knowledge Network:

Integrations with our Knowledge Network and App Directory

The functionality of our platform is dependent on integrations with a variety of third-party technologies that comprise our Knowledge Network and App Directory.

For example, we rely on integrations with each of the applications in our Knowledge Network to accomplish some or all of the following key tasks with members of our Knowledge Network:

• search for existing listings and retrieve details about them, in order to match our customers’ data in the Knowledge Graph to existing listing data;

2 unchanged sentences

• obtain statistics about traffic on listings to display to our customers in the platform.

Over the years, we have developed special integrations with a number of the applications in our Knowledge Network.

We have also worked with the major application providers in the Knowledge Network to develop trust and strong working relationships, resulting in specific operational workflows, processes for issue resolution, and specialized technology and processes tailored to the nuances of each.

For smaller Knowledge Network application providers, we have developed our own application program interface, or API specifications that each provider builds and implements for integration with our platform.

Yext’s integrations through its App Directory offer our customers the ability to connect Yext with other systems to enable customers to accomplish key tasks including the following:

• powering chatbots with data stored in the Knowledge Graph;

• joining insights from Yext with other platforms to perform deeper business analysis;

• optimize marketing campaigns with location data stored in the Knowledge Graph;

• optimize scheduling and appointment bookings.

Over the years, we have developed special integrations with a number of the applications in our Knowledge Network and App Directory.

We have also worked with the major application providers to develop trust and strong working relationships, resulting in specific operational workflows, processes for issue resolution, and specialized technology and processes tailored to the nuances of each.

For smaller application providers, we have developed our own application programming interface, or API specifications that each provider builds and implements for integration with our platform.

Our Customers

11 unchanged sentences

Sales and Marketing

We sell our platform throughout the world and intend to continue to expand our international sales efforts.

Through our direct sales efforts, we sell to customers of all sizes, and primarily focus these efforts on our enterprise and mid-size customers, including our third-party reseller customers.

We sell our platform throughout the world to customers of all sizes, including our enterprise, mid-size, and third-party reseller customers.

In transactions with resellers, we are only a party to the transaction with the reseller and are not a party to the reseller’s transaction with its customer.

We are also developing programs comprised of technology companies and consultants to promote the Yext platform to their customers.

Our sales organization varies by market within each country and will change over time as we build critical mass and address various verticals within a market.

As of January 31, 2020, we had approximately 250 quota-carrying sales representatives compared to approximately 170 as of January 31, 2019.

We plan to continue to grow our sales and marketing organization as we expand globally.

Our quota-carrying sales representatives were approximately 250 at both January 31, 2021 and 2020.

We offer annual and multi-year subscriptions to our platform.

Revenue is a function of the number of customers, the number of licenses with each customer, the package to which each customer subscribes, the price of the package and renewal rates.

Beginning in October 2015, we began pricing new subscriptions in a discrete range of packages, with pricing based on specified feature sets and the number of locations managed by the customer with our platform.

More recently, we began pricing subscriptions based not only on the number of physical locations, but also on the number of persons and other entities managed on our platform, such as physicians,

wealth advisors and insurance agents and events among others.

We refer to these locations, persons and other entities collectively as "licenses," which we believe reflects the breadth of our business and our current pricing methodology.

We categorize our current packages as Base, Starter, Professional and Ultimate, which start with basic access to the Knowledge Graph and successively include access to additional capabilities at a higher cost.

Our customers may initially deploy a Starter or Professional subscription to control and manage their facts online using the Listings feature.

Some customers may start with the Base subscription if they only need internal data management or data management for their own website and digital properties.

As customers realize the benefits of our platform, they may increase or expand their existing subscription levels to obtain greater access to our key features, such as Pages and Answers, as they need them.

We believe that our ability to retain our customers and expand the revenue they generate for us over time is an important component of our growth strategy and reflects the long term value of our customer relationships.

We assess our performance in this respect using a metric we refer to as our dollar-based net retention rate.

Our dollar-based net retention rate was 106%, 110%, and 109% for the fiscal years ended January 31, 2020, 2019 and 2018, respectively.

We calculate this metric for a particular period by first establishing a cohort of the enterprise and mid-size customers, including third-party reseller customers, who had active contracts at the end of each month of the same period in the prior year.

We divide the single month revenue from each of those customer cohorts for the applicable month in the current year by the single month revenue of that same customer cohort for the corresponding month in the prior year.

We then determine the dollar-based weighted average of each of the monthly rates, and this average represents the dollar-based net retention rate for the period.

We only consider revenue from our enterprise and mid-size customers, including third-party reseller customers, when calculating this metric since small business customers have limited licenses experience inherently high turnover.

Our revenue from small business customers represented less than 5%, less than 10%, and less than 20% of our total revenue in the fiscal years ended January 31, 2020, 2019, and 2018, respectively, and we expect it will continue to decline as a percentage of total revenue.

Revenue is a function of the number of customers, the number of licenses or capacity purchased by each customer, the package to which each customer subscribes, the price of the package and renewal rates.

Our subscriptions are offered in a discrete range of packages, with pricing based on specified feature sets and the number of entities managed on our platform, such as locations, persons and events among others.

We refer to these locations, persons, and other entities collectively as “licenses.”

Our packages start with basic access to the Knowledge Graph and successively include access to additional capabilities at a higher cost.

During the fiscal year ended January 31, 2021, we offered unbundled products for our enterprise and mid-size customers enabling them to purchase each of our products separately rather than in packages with pricing based on capacity or licenses.

Our marketing efforts are focused on promoting our brand and generating demand for our products.

We use a variety of marketing programs across traditional and social channels to target our prospective and current customers.

Our primary marketing activities include integrated marketing campaigns, sponsorships of leading industry conferences, and thought leadership such as webinars, whitepapers and blog posts.

Research and Development

11 unchanged sentences

Patents and Patent Applications

As of January 31, 2020, we had ten issued U.S.

patents, nine non-provisional and one provisional U.S.

patent applications, five international Patent Cooperation Treaty patent applications pending, and four national stage applications in the European Union.

As of January 31, 2021, we had twelve issued U.S.

patents, twelve non-provisional and two provisional U.S.

patent applications, four international Patent Cooperation Treaty patent applications pending, and nine national stage applications outside of the U.S.

The issued patents have expiration dates ranging from 2032 to 2037.

7 unchanged sentences

Our competition comes from businesses that choose to manage their online, public-facing data in-house using manual, paper and spreadsheet-based systems that corporate personnel employ in a fragmented manner rather than pay for a third-party product or service.

In addition, some small companies may offer products and services at lower price points than us or that compete with some

but not all of the features present in our platform.

In addition, other companies may offer products and services at lower price points than us or that compete with some of the features present in our platform.

As we develop our platform, we will introduce products and features that compete in new markets and as a result we will face more established businesses in these markets.

2 unchanged sentences

We believe that we generally compete favorably with our competitors because of the size and breadth of our integrations and relationships with the applications in our Knowledge Network, the features and performance of our platform, the ease of integration of our platform with the technological infrastructures of our customers and the incremental marketing benefits and return on investment that our various products and features offer to our customers.

As of January 31, 2020, we had over 1,200 full-time employees, the majority of which are based in our New York headquarters.

Human Capital

We consider our culture and employees to be vital to our success.

None of our domestic employees are represented by a labor union or covered by a collective bargaining agreement.

Yext is committed to providing a safe, productive, discrimination-free and harassment-free work environment.

All employees are responsible for compliance with our Code of Conduct and Employee Handbook, which includes our anti-harassment policy.

These policies and practices help us foster a workplace environment that promotes inclusion and diversity.

We also support seven employee resource groups, or ERGs, that are led and founded by employees with a senior executive sponsor.

ERGs provide a community for underrepresented groups and their allies and offer professional development and mentoring opportunities.

In the fiscal year ended January 31, 2021, the Company made a greater commitment to diversity and inclusion by hiring a senior diversity and inclusion manager to develop and implement diversity and inclusion strategies to improve our recruitment process, performance management, leadership development, employee engagement and retention.

To attract and retain highly capable and innovative employees, we have developed competitive compensation packages and benefits programs.

Our compensation packages include market-competitive pay, an Employee Stock Purchase Plan, healthcare and retirement benefits, paid time off and family leave and flexible work schedules.

We also offer broad-based equity awards with multi-year vesting provisions to incentivize and reward our employees for long term corporate performance based on the value of our common stock and promote retention throughout the vesting period.

We have invested resources to develop employee talent.

Upward, our rotational program, offers analysts early in their careers the opportunity to rotate through three functional areas to gain an understanding not only of how our platform and systems work, but also how our customers interact with our products.

In addition, we conduct an annual employee survey to gauge employee engagement and identify areas of focus.

To support our employees in the fiscal year ended January 31, 2021 and to promote their health and safety, we temporarily closed our offices requiring all of our employees globally to work remotely.

We invested resources in supporting our employees in a shift to remote work, including offering all employees a stipend for supplemental home office equipment and supplies.

We provided two weeks of emergency family leave for employees to take care of a child or parent due to COVID-19 disruptions.

To help mitigate the financial impact of COVID-19 on certain employees in our sales organization, we offered to advance a portion of the employee’s target commission during the fiscal year ended January 31, 2021 and modified certain quota targets.

As of January 31, 2021, we had over 1,300 full-time employees, the majority of which are based in our New York headquarters.

Governmental Regulation

We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security.

Compliance with such laws and regulations could, individually or in the aggregate, increase our cost of doing business, impact our competitive position relative to our peers, and otherwise have an adverse impact on our operating results.

For additional information about the impact of government regulations on our business, see "Risk Factors—Risks Related to Laws, Regulation and Taxation" in Part I, Item 1A in this Annual Report on Form 10-K.

Additional Information

We were incorporated in 2006 as a Delaware corporation.

Our headquarters are located at 1 Madison Avenue, 5 th Floor, New York, NY 10010 and our telephone number is (212) 994-3900.

We are a Delaware corporation with our headquarters located at 61 Ninth Avenue, New York, NY 10011.

You can access our website at www.yext.com and our investor relations website at http://investors.yext.com.

Our telephone number is (212) 994-3900.

Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the Securities and Exchange Commission, or the SEC.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business