What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2022-03-18 compared with 2021-03-16 · 86 added, 114 removed, 829 unchanged (19% of the section changed)

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Index to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 16, 2021 expressed an adverse opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 18, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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As described in Note 2 to the consolidated financial statements, capitalized costs are inclusive of sales commissions and any associated payroll taxes or fringe benefit costs that are incremental to obtain the contract with the customer but expected to be recoverable.

Auditing the costs capitalized to obtain contracts with the customers required complex auditor judgment and was especially challenging due to the material weakness identified by the Company and the impact it had on management’s evaluation of completeness and measurement of these costs.

The Company has a high volume of sales commission plans with various underlying criteria and inputs used to calculate amounts capitalized to obtain contracts with the customers.

The material weakness required an increased extent of audit effort to test the completeness and accuracy of inputs of the commission-eligible revenue contracts and measurement of incremental costs eligible for capitalization.

Auditing the costs capitalized to obtain revenue contracts required complex auditor judgment and was especially challenging due to the volume of sales commission plans with various underlying criteria and inputs used to calculate amounts capitalized to obtain revenue contracts.

This involved an increased extent of audit effort to test the completeness and accuracy of inputs of the commission-eligible revenue contracts and measurement of incremental costs eligible for capitalization.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s internal controls over the costs to obtain revenue contracts process.

For example, we tested controls over the Company’s processes to evaluate the completeness and accuracy of the underlying criteria and inputs used to calculate amounts capitalized.

This included testing relevant controls over the IT systems that are important to the initiation, processing and recording of amounts capitalized to obtain revenue contracts.

We performed audit procedures that included, among others, assessing whether those costs capitalized were eligible costs and met the criteria of incremental and recoverable.

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We validated that each commission earned and capitalized was an incremental cost to obtain a revenue contract.

To respond to the material weakness, we performed incremental audit procedures, for instance, by increasing our sample size related to commission transactions.

Our procedures also included reconciling the capitalized commission population to sales commissions paid throughout the year.

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We performed audit procedures that included, among others, reading a sample of revenue contracts to evaluate the contractual terms and conditions, identify performance obligations, assess the fixed and variable components to determine the transaction price, and assess the measurement and timing of revenue recognized and unearned revenue recorded as of year-end.

We tested the revenue recognized and unearned revenue as of year-end through analytical procedures, including the recalculation of balances on a disaggregated basis.

We tested the revenue recognized and unearned revenue as of year-end through tests of details and analytical procedures, including the recalculation of balances on a disaggregated basis.

Finally, we assessed the appropriateness of the related disclosures in the consolidated financial statements.

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We have audited Yext, Inc.’s internal control over financial reporting as of January 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Yext, Inc.

(the Company) has not maintained effective internal control over financial reporting as of January 31, 2021, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness related to the Company’s processes to calculate, record and account for sales commissions.

In our opinion, Yext, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2022, based on t he COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Yext, Inc.

as of January 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended January 31, 2021, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2021 consolidated financial statements, and this report does not affect our report dated March 16, 2021 which expressed an unqualified opinion thereon.

as of January 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended January 31, 2022, and the related notes and our report dated March 18, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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410,353 376,184

Restricted cash

Property and equipment, net

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Operating lease liabilities, current

18,845 14,165

Total current liabilities

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834,429 733,933

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income

( 187 ) 2,422

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Interest income

532 4,099 1,711

Interest expense

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127,814,447 119,690,378 111,758,946

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustment

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Balance, January 31, 2019

Cumulative effect adjustment in connection with the adoption of ASU 2014-09 — — — 3 7,178 — 7,181

102,173 $ 109 $ 398,882 $ ( 1,428 ) $ ( 301,109 ) $ ( 11,905 ) $ 84,549

Common stock offering, net of issuance costs of $ 530

7,000 7 146,463 — — — 146,470

Exercise of stock options 3,308 3 14,852 — — — 14,855

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Balance, January 31, 2020

Common stock offering, net of issuance costs of $ 530

115,830 122 636,008 ( 360 ) ( 422,653 ) ( 11,905 ) 201,212

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Balance, January 31, 2021

123,989 130 733,933 2,422 ( 517,345 ) ( 11,905 ) 207,235

Exercise of stock options 2,220 2 19,195 — — — 19,197

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Stock-based compensation — — 74,821 — — — 74,821

Other comprehensive income — — — 2,782 — — 2,782

Other comprehensive loss — — — ( 2,609 ) — — ( 2,609 )

Net loss — — — — ( 93,259 ) — ( 93,259 )

Balance, January 31, 2022

131,157 $ 137 $ 834,429 $ ( 187 ) $ ( 610,604 ) $ ( 11,905 ) $ 211,870

See the accompanying notes to the consolidated financial statements.

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Investing activities:

Purchases of marketable securities

— — ( 52,916 )

Maturities of marketable securities

— 51,197 86,320

Capital expenditures

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( 2,249 ) 3,594 ( 492 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 37,765 ) 176,421 57,388

Net increase (decrease) in cash, cash equivalents and restricted cash 30,799 ( 37,765 ) 176,421

Cash, cash equivalents and restricted cash at beginning of period

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All significant intercompany balances and transactions have been eliminated in consolidation.

Certain prior period amounts have been reclassified to conform to the current period presentation.

There were no prior period amounts that have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of those financial statements and the reported amounts of revenue and expense during the reporting period.

These estimates include, but are not limited to, the standalone selling prices ("SSP") of performance obligations, the incremental borrowing rate associated with lease liabilities, the useful life of capitalized costs to obtain revenue contracts, income taxes, and the valuation and assumptions underlying stock-based compensation.

These estimates include, but are not limited to, the standalone selling prices of performance obligations, the incremental borrowing rate associated with lease liabilities, the useful life of capitalized costs to obtain revenue contracts, income taxes, and the valuation and assumptions underlying stock-based compensation.

Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that it believes to be reasonable under the circumstances.

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The Company defines its CODM as its executive officers, and their role is to make decisions about allocating resources and assessing performance.

The Company's business operates in one operating segment as all of the Company's offerings operate on the Yext platform and are deployed in an identical way, with its CODM evaluating the Company's financial information, resources and performance of these resources on a consolidated basis.

Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements.

The Company's business operates as one operating segment as all of the Company's offerings operate on the Yext platform and are deployed in an identical way, with its CODM evaluating the Company's financial information, resources and performance of these resources on a consolidated basis.

Since the Company operates as one operating segment, all required financial segment information can be found in the consolidated financial statements.

Revenue Recognition

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The Company's subscriptions do not provide customers with the right to take possession of the software supporting the applications and, as a result, are accounted for as service contracts.

The Company adopted on a modified retrospective basis ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09") in its fourth quarter of the fiscal year ended January 31, 2019, the effects of which were recognized effective February 1, 2018.

The Company recognizes revenue upon transfer of control of services to its customers in an amount that reflects the consideration it expects to receive in exchange for those services.

The Company accounts for revenue in accordance with ASC Topic 606, "Revenue from Contracts with Customers." The Company recognizes revenue upon transfer of control of services to its customers in an amount that reflects the consideration it expects to receive in exchange for those services.

The recognition of revenue is determined through application of the following five-step model:

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Capitalized software development costs incurred in connection with additional functionality to the Yext platform are recognized in cost of revenue as depreciation expense in accordance with the “capitalized software development costs” section of this Note.

Cost of revenue also includes operating and short-term lease expenses, software expense, and depreciation expense, each of which are allocated based on employee headcount.

Cost of revenue also includes lease expenses, software expense, and depreciation expense, each of which are allocated based on employee headcount.

Stock-Based Compensation

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The fair value of employee stock options is estimated on the date of grant using a Black-Scholes option-pricing model.

Stock-based compensation expense is recognized over the requisite service periods of awards, which is typically one to four years for restricted stock units and restricted stock and four years for options.

Stock-based compensation expense is generally recognized over the requisite service periods of awards, which is typically one to four years for restricted stock units and restricted stock and four years for options.

The estimated forfeiture rate applied is based on historical forfeiture rates.

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Stock-based compensation expense associated with the Company's Employee Stock Purchase Plan (“ESPP”) is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period.

The Company prospectively adopted ASU 2018-07 on February 1, 2019.

As a result, the Company measures stock-based compensation associated with stock-based awards issued to non-employees at the grant date, based on the estimated fair value of the award, and recognizes expense on a straight-line basis over the requisite service period.

In accordance with ASU 2018-07, the Company measures stock-based compensation associated with stock-based awards issued to non-employees at the grant date, based on the estimated fair value of the award, and recognizes expense on a straight-line basis over the requisite service period.

The Company does not apply a forfeiture rate assumption to value such awards, given the nature of the services provided.

Prior to adoption, during the fiscal year ended January 31,

2019 stock-based compensation associated with stock-based awards issued to non-employees was re-measured each period until fully vested.

Advertising and Other Promotional Costs

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Research and development costs are generally expensed as incurred, including personnel-related costs.

Research and development costs also include operating and short-term lease expenses and software expense, each of which are allocated based on employee headcount.

Research and development costs also include lease expenses and software expense, each of which are allocated based on employee headcount.

Research and development costs exclude capitalized software development costs.

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Software costs that meet the cloud computing arrangements criteria are capitalized in accordance with ASC 350 “Intangibles—Goodwill and Other” and are recognized on a straight-line basis over the term of the arrangement, plus reasonably certain renewals.

Capitalized costs included in prepaid expenses and other current assets were $ 2.5 million and $ 1.2 million as of January 31, 2021 and 2020, respectively, and $ 0.8 million and zero were amortized during the fiscal years ended January 31, 2021 and 2020, respectively.

Capitalized costs included in prepaid expenses and other current assets were $ 2.4 million and $ 2.5 million as of January 31, 2022 and 2021, respectively, and $ 2.1 million and $ 0.8 million were amortized during the fiscal years ended January 31, 2022 and 2021, respectively.

Software costs that do not meet the capitalization criteria, including costs incurred in the maintenance and minor upgrade and enhancement of software without additional functionality, are expensed as incurred.

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The Company reduces deferred tax assets, if necessary, by a valuation allowance if it is more likely than not that the Company will not realize some or all of the deferred tax assets.

In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

In making such a determination, the Company considers all available positive and negative evidence, including results of recent operations, future reversals of existing taxable temporary differences, projected future taxable income and tax-planning strategies.

See Note 11 "Income Taxes" to the Company's consolidated financial statements for additional information on the composition of these valuation allowances.

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dollars using month-end exchange rates for assets and liabilities, and average exchange rates for revenue, costs and expenses.

The Company records translation gains and losses in accumulated other comprehensive loss as a component of stockholders’ equity.

The Company records translation gains and losses in accumulated other

comprehensive loss as a component of stockholders’ equity.

Foreign currency transaction gains and losses are included within other expense, net in the consolidated statements of operations and comprehensive loss .

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Repairs and maintenance costs are expensed as incurred.

Effective February 1, 2019, the Company adopted ASU 2016-02, "Leases (Topic ASC 842)" ("ASU 2016-02"), utilizing the modified retrospective adoption approach.

The Company elected the package of practical expedients to not reassess prior conclusions related to lease identification, classification, and initial direct costs, and did not elect the hindsight practical expedient which would have permitted the use of hindsight in determining the lease term and assessing impairment.

Under ASC 842, lease expense is recognized as a single lease cost on a straight-line basis over the lease term.

The Company accounts for leases in accordance with ASC Topic 842, "Leases." Lease expense is recognized as a single lease cost on a straight-line basis over the lease term.

The lease term consists of non-cancelable periods, and may include options to extend or terminate the lease term, when it is reasonably certain such options will be exercised.

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The Company classifies leases as operating or financing in nature, and records the associated lease liability and right-of-use asset on its balance sheet.

The lease liability represents the present value of future lease payments, net of lease incentives, discounted using an incremental borrowing rate, which is a management estimate based on the information available

at the commencement date of a lease arrangement.

With respect to operating lease arrangements, the Company accounts for lease components, and non-lease components that are fixed, as a single lease component.

Non-lease components that are variable are expensed as incurred as in the statement of operations and comprehensive loss.

Non-lease components that are variable are expensed as incurred in the statement of operations and comprehensive loss.

The Company recognizes costs associated with lease arrangements having an initial term of 12 months or less ("short-term leases") on a straight-line basis over the lease term;

such short-term leases are not recorded on the balance sheet.

Prior to adoption, during the fiscal year ended January 31, 2019, the Company accounted for leases under ASC 840, whereby rent expense associated with operating leases was recognized on a straight-line basis over the lease term.

Goodwill and Intangible Assets

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significant underperformance relative to historical or projected future operating results, significant changes in the Company’s use of acquired assets or the strategy of the Company’s overall business, significant negative industry or economic trends and a significant decline in the value of the Company’s enterprise value for a sustained period.

The Company’s intangible assets with definite lives consist of customer relationships and domains, which are amortized on a straight-line basis over their estimated useful lives of 7 and 15 years, respectively.

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable in accordance with ASC Topic 360, “Property, Plant, and Equipment.” The Company assesses the impairment of long-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Intangible assets are amortized over their estimated useful lives.

The Company assesses the impairment of long-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company has not recorded impairment charges on intangible assets for the periods presented in these consolidated financial statements.

As of January 31, 2022, the Company's intangible assets included domains with a net book value of $ 0.2 million.

Deferred Financing Costs

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Recent Accounting Pronouncements

New Accounting Standard To Be Adopted - ASU 2019-12

In December 2019, the FASB issued ASU 2019-12 "Simplifying the Accounting for Income Taxes", which simplifies the accounting for income taxes, eliminates certain exceptions within ASC Topic 740, "Income Taxes," and clarifies certain aspects of the current guidance to promote consistency among reporting entities.

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

The Company plans to adopt this standard on February 1, 2021 and does not expect the adoption to have a material impact on the Company's consolidated financial statements.

Disaggregation of Revenue

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts, provided such contracts had been appropriately accounted for under ASC 606 by the acquiree, rather than recognizing them at their estimated fair value on the acquisition date as required under the existing guidance.

The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 on a prospective basis, with early adoption permitted.

We do not expect the adoption of this standard to have a significant impact on our consolidated financial statements.

Geographic Region

The Company disaggregates its revenue from contracts with customers by geographic region, as it believes this best depicts how the nature, amount, timing, and uncertainty of its revenues and cash flows are affected by economic factors.

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Total revenue $ 390,577 $ 354,661 $ 298,829

North America revenue is predominantly attributable to the United States, but also includes Canada.

North America revenue is predominantly attributable to the United States.

International revenue is predominantly attributable to European countries, but also includes Japan.

The Company's revenue attributable to the United States represented 80 %, 82 %, and 85 % of total revenue, and revenue attributable to Switzerland, which serves as one of the Company's contracting entities for Europe, represented 16 %, 14 %, and less than 10% of total revenue, respectively, for the fiscal years ended January 31, 2021, 2020 and 2019.

No other individual country represented more than 10% of total revenue during the fiscal years ended January 31, 2021, 2020 and 2019.

The Company's revenue attributable to the United States represented 79 %, 80 %, and 82 % for the fiscal years ended January 31, 2022, 2021 and 2020, respectively.

Revenue attributable to England, which serves as the Company's main contracting entity for Europe effective February 1, 2021, represented 19% of total revenue for the fiscal year ended January 31, 2022.

Revenue attributable to Switzerland, which served as one of the Company's contracting entities for Europe prior to February 1, 2021, represented 16 %, and 14 % of total revenue for the fiscal years ended January 31, 2021 and 2020.

No other individual country represented more than 10% of total revenue for the fiscal years ended January 31, 2022, 2021 and 2020.

Significant Judgments

Significant judgments and estimates may be required to determine the appropriate application of accounting related to revenue, including whether performance obligations are distinct and assessments regarding the transaction price.

Performance Obligations

The Company has identified that it has two distinct performance obligations.

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Level 3 inputs are based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities, and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

As of January 31, 2021 the Company had $ 138.8 million of money market funds included in cash and cash equivalents.

As of January 31, 2020, the Company had $ 190.8 million of money market funds included in cash and cash equivalents and $ 12.1 million of money market funds included in restricted cash on the Company's consolidated balance sheet.

These assets were valued using quoted market prices and accordingly were classified as Level 1.

As of January 31, 2022 and January 31, 2021, the Company had money market funds included in cash and cash equivalents of $ 138.5 million and $ 138.8 million, respectively.

These assets were valued using quoted market prices and were classified as Level 1 accordingly.

Goodwill and Intangible Assets

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Goodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level, which is at or one level below the operating segment level.

The Company conducted its annual impairment test for goodwill as of November 1 st for each of the fiscal years ended January 31, 2021 and 2020.

As a result of the annual tests and interim impairment assessments, the Company determined that goodwill was not impaired and that no events occurred or circumstances changed that would more likely than not reduce the fair value of the Company's reporting unit below its carrying amount.

The Company operates as one operating segment, which represents its one reporting unit.

The test for impairment is conducted annually each November 1 st , or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company determined that no events occurred or circumstances changed that would more likely than not reduce the fair value of the Company's reporting unit below its carrying amount during the fiscal years ended January 31, 2022 and 2021.

However, if certain events occur or circumstances change, it may be necessary to record impairment charges in the future.

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As of January 31, 2022 and 2021, the Company had intangible assets, net of $ 0.2 million and $ 0.8 million, respectively.

Intangible assets, net included customer relationships of $ 0.5 million and $ 1.1 million as well as domains of $ 0.2 million and $ 0.3 million, as of January 31, 2021 and 2020, respectively.

Customer relationships had a weighted average remaining useful life of 0.9 years and domains had a weighted average remaining useful life of 10.0 years as of January 31, 2021.

For the fiscal years ended January 31, 2021, 2020 and 2019, amortization expense related to intangible assets totaled $ 0.6 million for each period.

As of January 31, 2021, the future amortization expense of intangible assets is expected to be $ 0.6 million for the fiscal year ending January 31, 2022 and less than $ 0.1 million per year through the fiscal year ending January 31, 2032.

Amortization expense related to intangible assets totaled $ 0.6 million, $ 0.6 million and $ 0.6 million for the fiscal years ended January 31, 2022, 2021 and 2020, respectively.

Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

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Total property and equipment, net $ 74,604 $ 80,344

Construction in progress consists primarily of leasehold improvements related to operating lease arrangements for office space primarily associated with the Company's new corporate headquarters in New York, NY.

Software in progress consists of costs incurred in connection with additional functionality to the Yext platform.

As of January 31, 2021 and 2020, the Company's property and equipment, net attributable to the United States was 88 % for each period.

As of January 31, 2022 and 2021, the Company's property and equipment, net attributable to the United States was 90 % and 88 %, respectively.

No other individual country represented more than 10% of the total property and equipment, net as of those periods.

For the fiscal years ended January 31, 2021, 2020 and 2019, depreciation expense was $ 10.0 million, $ 7.5 million and $ 6.2 million, respectively.

Depreciation expense was $ 16.2 million, $ 10.0 million and $ 7.5 million for the fiscal years ended January 31, 2022, 2021 and 2020, respectively.

Accounts Payable, Accrued Expenses and Other Current Liabilities

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Total accounts payable, accrued expenses and other current liabilities $ 48,432 $ 54,186

(1) - As of January 31, 2021 and 2020, accounts payable includes capital expenditures of $ 1.5 million and $ 2.2 million, respectively.

(2) - As of January 31, 2021 and 2020, other current liabilities include capital expenditures of $ 3.0 million and $ 7.0 million, respectively.

As of January 31, 2022 and 2021, capital expenditures of $ 0.9 million and $ 4.5 million were included in accounts payable, accrued expenses and other current liabilities, respectively.

Stock-Based Compensation

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No ISO or NQSO is exercisable after 10 years from the date of grant, and option awards will typically vest over a four-year period.

The 2008 Plan was terminated in connection with the adoption of the Company's 2016 Equity Incentive Plan (the "2016 Plan") in December 2016, and since the 2008 Plan termination the Company has not granted and will not grant any additional awards under the

However, the 2008 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

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The dividend yield assumption was zero as the Company has not historically paid any dividends and does not expect to declare or pay any dividends in the foreseeable future.

During the fiscal years ended January 31, 2021, 2020 and 2019, the Company recorded $ 2.8 million, $ 2.7 million and $ 2.1 million, respectively, of stock-based compensation expense associated with the ESPP.

During the fiscal years ended January 31, 2022, 2021 and 2020, the Company recorded stock-based compensation expense associated with the ESPP of $ 2.2 million, $ 2.8 million and $ 2.7 million, respectively.

As of January 31, 2022, total unrecognized compensation cost related to ESPP was $ 0.3 million, net of estimated forfeitures, which will be amortized over a weighted-average remaining period of 0.12 years.

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Participants may purchase the Company’s common stock through payroll deductions, up to a maximum of 15 % of their eligible compensation.

Unless changed by the administrator, the purchase price for each share of common stock purchased under the ESPP will be 85 % of the lower of the fair market value per share on the first trading day of the applicable offering period or the fair market value per share on the last trading day of the applicable offering period.

Unless changed by the administrator, the purchase price for each share of

common stock purchased under the ESPP will be 85 % of the lower of the fair market value per share on the first trading day of the applicable offering period or the fair market value per share on the last trading day of the applicable offering period.

Stock-Based Compensation Expense

Stock-based compensation represents the cost related to stock-based awards granted in lieu of monetary payment.

The Company measures stock-based compensation associated with stock-based awards issued to employees at the grant date, based on the estimated fair value of the award, and recognizes expense on a straight-line basis net of estimated forfeitures over the requisite service period in the consolidated statements of operations and comprehensive loss.

The Company measures stock-based compensation associated with stock-based awards issued to employees at the grant date, based on the estimated fair value of the award, and recognizes expense net of estimated forfeitures over the vesting period of the applicable award using the straight-line method.

The Company's stock-based compensation expense for the periods presented was as follows:

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Total stock-based compensation expense $ 73,480 $ 72,294 $ 67,770

General and administrative stock-based compensation expense for the fiscal year ended January 31, 2020 included a $ 3.6 million one-time RSU cancellation-related expense.

As of January 31, 2022, there was approximately $ 136.3 million of total unrecognized compensation cost related to unvested stock-based awards.

This unrecognized compensation cost is expected to be recognized over an estimated remaining weighted-average vesting period of approximately 2.64 years.

During the fiscal years ended January 31, 2021, 2020 and 2019, the Company capitalized $ 2.1 million, $ 1.4 million and $ 0.7 million, respectively, of stock-based compensation related to software development of additional functionality to the Yext platform.

During the fiscal years ended January 31, 2022, 2021 and 2020, the Company capitalized $ 1.3 million, $ 2.1 million and $ 1.4 million, respectively of stock-based compensation related to software development .

Preferred Stock

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As of January 31, 2022 and 2021, the Company had 6,505,334 shares of treasury stock which are carried at its cost basis of $ 11.9 million on the Company's consolidated balance sheets.

On March 11, 2020, the Company entered into a new credit agreement with Silicon Valley Bank (the “Credit Agreement”).

On March 11, 2020, the Company entered into a credit agreement with Silicon Valley Bank (the “Credit Agreement”).

No significant debt issuance costs were incurred in association with the Credit Agreement.

In January 2021, the Company amended the Credit Agreement which modified the conditions pursuant to which subsidiaries are required to become guarantors.

The Credit Agreement provides for a senior secured revolving loan facility of up to $ 50.0 million that matures three years after the effective date, with the right subject to certain conditions to add an incremental revolving loan facility of up to $ 50.0 million in the aggregate.

The three -year revolving loan facility provides for borrowings up to the amount of the facility with sub-limits of up to (i) $ 30.0 million to be available for the issuance of letters of credit and (ii) $ 10.0 million to be available for swingline loans.

Under the Credit Agreement, loans bear interest, at the Company's option, at an annual rate based on LIBOR or a base rate.

Loans based on LIBOR shall bear interest at a rate between LIBOR plus 2.50 % and LIBOR plus 3.00 %, depending on the Company's

average daily usage of the revolving loan facility.

Loans based on LIBOR shall bear interest at a rate between LIBOR plus 2.50 % and LIBOR plus 3.00 %, depending on the Company's average daily usage of the revolving loan facility.

Loans based on the base rate shall bear interest at a rate between the base rate minus 0.50 % and the base rate plus 0.00 %, depending on the Company's average daily usage of the revolving loan facility.

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The Credit Agreement contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require the Company to maintain the year-over-year growth rate of its ordinary course recurring revenue for a trailing four fiscal quarter period above specified rates when certain liquidity thresholds are not met and to maintain a consolidated quick ratio of at least 1.50 to 1.00 tested on a monthly basis.

As of January 31, 2020, the Company had back-to-back standby letters of credit for $ 12.1 million, which were fully secured by a $ 12.1 million cash deposit and classified as restricted cash on the Company's consolidated balance sheet.

In connection with the Credit Agreement, the $ 12.1 million cash deposit was released and is no longer classified as restricted cash on the Company's consolidated balance sheet as of January 31, 2021.

As of January 31, 2022, the Company was in compliance with all debt covenants.

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Total (provision for) benefit from income taxes $ ( 1,277 ) $ ( 97 ) $ ( 1,097 )

The Company’s (provision for) benefit from income taxes is primarily attributable to profitable jurisdictions outside of the United States and U.S.

The Company’s current tax provision is primarily attributable to profitable jurisdictions outside of the United States and U.S.

state income taxes.

In the fiscal year ended January 31, 2021, the Company released a portion of its valuation allowance against certain foreign deferred tax assets resulting in an income tax benefit of $ 0.7 million, and recorded a U.S.

tax benefit of $ 0.2 million due the expiration of certain statutes of limitations of unrecognized tax benefits.

tax benefit of $ 0.2 million due to the expiration of certain statutes of limitations of unrecognized tax benefits.

The Company reconciled its income taxes at the federal statutory income tax rate to the (provision for) benefit from income taxes included within its consolidated statements of operations and comprehensive loss.

The Company elected to account its Global Intangible Low-Taxed Income as an expense in the period it is incurred.

The reconciliation is as follows:

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Return to provision adjustment 1,718 16 ( 2,323 )

Global intangible low-taxes income ( 6,129 ) — —

Global intangible low-taxed income — ( 6,129 ) —

Intra-entity asset transfer — 3,944 —

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Unearned revenue 61 52

Property and equipment — 730

Intangible assets 10,625 11,570

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Property and equipment ( 2,440 ) ( 2,062 )

Intangible assets — ( 1,479 )

Costs to obtain revenue contracts ( 11,041 ) ( 9,904 )

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As of January 31, 2022, for federal income tax purposes, the Company had $ 501.0 million of gross U.S.

federal NOL carryforwards, with pre-2018 NOL expiring starting in fiscal 2028 and others indefinitely carried forward.

As of January 31, 2021, for state income tax purposes, the Company had $ 18.5 million of post-apportioned, tax-effected NOL carryforwards, which expire in fiscal 2024 through fiscal 2040.

As of January 31, 2021, the Company had $ 7.8 million of tax-effected foreign NOL carryforwards which expires starting in fiscal 2026.

federal NOL carryforwards, with pre-2018 NOL expiring starting in fiscal year 2028 and others indefinitely carried forward.

As of January 31, 2022, for state income tax purposes, the Company had $ 23.6 million of post-apportioned, tax-effected NOL carryforwards, which expire in fiscal year 2023 through fiscal year 2040.

As of January 31, 2022, the Company had $ 7.5 million of tax-effected foreign NOL carryforwards which expires starting in fiscal year 2026.

Utilization of the Company’s NOL carryforwards in the future will be dependent upon its ability to generate taxable income and could be limited due to ownership changes, as defined under the provisions of Section 382 of the Code and similar state provisions.

Utilization of the Company’s foreign NOL carryforwards in the future will be dependent upon the local tax law and regulation.

During the fiscal year ended January 31, 2021, the Company completed transfers of certain non-U.S.

customer contracts and the related intangible assets from one of its local subsidiaries to the U.S.

in order to better align the ownership of these rights with how the business operates.

The transfer resulted in no incremental tax expense in the local jurisdiction, as there were sufficient NOL available to fully offset the tax gain.

Additionally, the Company recognized deferred tax assets for the book and tax basis difference on the transferred assets in the U.S., which were fully offset against its valuation allowance.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized.

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Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome.

During the fiscal year ended January 31, 2021, the valuation allowance had a net increase of $ 23.9 million from approximately $ 105.3 million to $ 129.2 million, primarily due to the impact of the NOL carryforwards established in the current period and other increases in U.S.

During the fiscal year ended January 31, 2022, the valuation allowance had a net increase of $ 22.0 million from approximately $ 129.2 million to $ 151.2 million, primarily due to the impact of the NOL carryforwards established in the current period net with other changes in U.S.

deferred tax assets.

The increase in the valuation allowance was partially offset by the use of the NOL in the local jurisdiction due to the intra-entity asset transfer.

The Company also released a portion of the valuation allowance in certain foreign jurisdictions, as these jurisdictions demonstrated a sustained profitability evidenced by three consecutive years of positive earnings as well as forecasted continuing profitability.

During the fiscal year ended January 31, 2021, the valuation allowance increased $ 23.9 million from approximately $ 105.3 million to $ 129.2 million, primarily due to the impact of the NOL carryforwards established in the current period and other increases in U.S.

deferred tax assets.

The increase in the valuation allowance was partially offset by the use of the NOL in the local jurisdiction due to the intra-entity asset transfer.

The Company will continue to assess the realizability of the deferred tax assets in each applicable jurisdiction going forward.

Other Considerations

The Company has not recorded deferred income taxes and withholding taxes with respect to the undistributed earnings of its foreign subsidiaries as such earnings are determined to be reinvested indefinitely.

Upon distribution of those earnings in the form of dividends or otherwise, the Company may be subject to income taxes and withholding taxes, the determination of which is not practical as it is dependent on the amount of tax losses or other tax attributes available at the time of repatriation.

The Company may be subject to state income taxes and withholding taxes upon distribution of non-U.S.

earnings in the form of dividends.

The Company does not believe these taxes are material.

A reconciliation of the beginning and ending balance of total unrecognized tax benefits for the fiscal years ended January 31, 2022, 2021, and 2020 is as follows:

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As of January 31, 2022, 2021, and 2020 accrued unrecognized tax benefits were $ 0.3 million, $ 0.3 million, and $ 0.5 million, respectively, and if recognized would reduce the (provision for) benefit from income taxes, and the Company's effective tax rate.

During the fiscal year ended January 31, 2021, the Company released $ 0.2 million unrecognized tax benefits due to a lapse in the statute of limitations.

The Company does not expect any significant change in its unrecognized tax benefits during the next twelve months.

The Company anticipates it is reasonably possible that a decrease of unrecognized tax benefits of up to $ 0.3 million may occur in the next twelve months.

The Company is subject to income tax examinations in the United States and various state and foreign jurisdictions.

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During the fiscal year ended January 31, 2022, the Company paid $ 18.9 million for amounts included in the measurement of lease liabilities and obtained $ 2.6 million of operating lease right-of-use assets in exchange for lease obligations.

In May 2020, the Company entered into a Surrender Agreement (the "Surrender Agreement") of its lease arrangement for its prior corporate headquarters in New York, NY.

The previous lease arrangement was scheduled to expire in December 2020.

Pursuant to the Surrender Agreement, the Company's lease obligations continued through August 31, 2020.

During the fiscal years ended January 31, 2021 and 2020, the Company recognized $ 25.7 million and $ 21.2 million, of lease expense, respectively, which consisted of the following:

During the fiscal years ended January 31, 2022, 2021, and 2020, the Company recognized lease expense, which consisted of the following:

Fiscal year ended January 31,

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Operating lease expense is recognized on a straight-line basis over the term of the arrangement beginning on the lease commencement date for lease arrangements that have an initial term greater than twelve months and therefore are recorded on the balance sheet.

For the fiscal year ended January 31, 2021, operating lease expense includes lease expense related to the Company's lease arrangement associated with its new corporate headquarters in New York, NY, which commenced in May 2019.

Short-term lease expense is recognized on a straight-line basis over the lease term for lease arrangements that have an initial term of 12 months or less and therefore are not recorded on the balance sheet.

Variable lease expense is recognized as incurred and consists of real estate taxes and utilities, among other office space related expenses.

During the fiscal year ended January 31, 2019, rent expense was $ 7.3 million.

For the fiscal year ended January 31, 2022, variable lease expense reflected the increased costs of the Company's use of its new offices spaces and certain associated real estate taxes.

The total remaining operating lease payments included in the measurement of lease liabilities on the Company's consolidated balance sheet as of January 31, 2022, was as follows (in thousands):

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Total $ 171,567 $ 64,244

Performance and Payment Bond

The Company's operating lease arrangement associated with its new corporate headquarters in New York, NY requires performance and payment bonds to secure the completion of certain potential construction work, when a reasonable estimate of such work is available.

In connection with these bonds, as of January 31, 2021, the Company paid $ 0.9 million in issuance costs which are recognized as operating expense over the estimated construction period in the Company's consolidated statement of operations.

Legal Proceedings

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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 7A. Quantitative and Qualitative Disclosures About Market Risk