What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-17 compared with 2022-03-18 · 206 added, 169 removed, 229 unchanged (62% of the section changed)

3 unchanged sentences

Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section titled "Risk Factors" under Part I, Item 1A in this Annual Report on Form 10-K.

Yext 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.

Yext organizes a business's facts so it can deliver relevant, actionable answers to consumer questions throughout the digital ecosystem.

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.

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 over 200 service and application providers, which we refer to as our Publisher 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 Search, along with its other features and capabilities.

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 party to the transaction with the reseller and are not a party to the reseller's transaction with its customer.

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.

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.

We offer subscriptions in a discrete range of packages, with pricing based on specified feature sets and the number of licenses managed by the customer as well as on a capacity-basis.

1 unchanged sentence

References to fiscal 2023, for example, are to the fiscal year ended January 31, 2023.

COVID-19 Update

The COVID-19 pandemic has significantly disrupted business operations for us and our customers, as well as suppliers, and other parties with whom we do business.

Such disruptions are expected to continue for an indefinite period of time.

We have adopted several measures in response to the COVID-19 pandemic and continue to monitor regional developments to inform our operational decisions.

Our offices have been open on a voluntary basis in accordance with guidance provided by government agencies, although currently the majority of our employees are still working remotely.

While we continue to hold virtual events, we have also resumed in-person marketing events.

The uncertain duration of these measures have had and may continue to have negative effects on our sales efforts and revenue growth rates.

Macroeconomic Conditions

Our results of operations may be influenced by general macroeconomic conditions, including, but not limited to, the impact of foreign currency fluctuations, interest rates, inflation, recession risks and the COVID-19 pandemic.

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.

The uncertain duration of these measures 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.

We may continue to see some existing and potential customers, in particular customers in industries that have been highly impacted by the pandemic such as retail and food services as well as certain geographies such as Europe, reduce, suspend or delay technology spending, request to renegotiate contracts to obtain concessions such as, extended billing and payment terms;

Near-term revenues are relatively predictable as a result of our subscription-based business model.

However, if the macroeconomic uncertainty increases, we may continue to experience a negative impact on existing and potential customers that may reduce, suspend or delay technology spending, request to renegotiate contracts to obtain concessions such as, extended billing and payment terms;

shorten the duration of contracts;

or elect not to renew their subscriptions which could materially adversely impact our business, financial condition and results of operations in future periods.

The ultimate extent of the impact of the pandemic will depend on future developments, which continue to be highly uncertain and cannot be predicted, including the severity and duration of the COVID-19 pandemic and its variants, vaccination rates and efficacy and the actions taken to contain and address the impact of the pandemic, among others.

However, because we generally recognize revenue from our customer contracts ratably over the term of the contract, changes in our contracting activity in the near term may not be fully reflected in our results of operations and overall financial performance until future periods.

See Part I Item 1A “Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on our business.

Recent Developments

On March 7, 2022, Howard Lerman notified our Board of Directors of his intention to step down from his position as Chief Executive Officer of the Company effective March 25, 2022.

Michael Walrath, the Chairman of the Board of Directors, will succeed Mr.

Lerman as Chief Executive Officer, principal executive officer and principal operating officer of the Company, effective March 25, 2022.

On March 7, 2022, Steven Cakebread notified our Board of Directors of his intention to step down from his position as Chief Financial Officer of the Company effective March 25, 2022.

Darryl Bond, the Company’s Executive Vice President and Chief

Accounting Officer, will succeed Mr.

Cakebread as Chief Financial Officer and principal financial officer of the Company, effective March 25, 2022.

Bond will continue to serve as the Company’s Chief Accounting Officer.

On March 7, 2022, the Board also appointed Marc Ferrentino, the Company’s Chief Strategy Officer, as President and Chief Operating Officer of the Company.

In connection with the changes in our senior management, our Board of Directors and new management anticipate certain additional changes to our strategy and personnel that have not yet been determined.

Therefore, changes in our contracting activity in the near term may not be fully reflected in our results of operations and overall financial performance until future periods.

See Part I Item 1A “Risk Factors” for further discussion of the possible impact of the current macroeconomic conditions on our business.

We monitor the following key operational and financial metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.

Customer Count

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.

As of January 31, 2023, customer count increased 7% year-over-year to over 2,960.

Annual Recurring Revenue ("ARR")

Annual recurring revenue, or ARR, for Direct customers is defined as the annualized recurring amount of all contracts in our enterprise, mid-size and small business customer base 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.

Contracts include portions of professional services contracts that are recurring in nature.

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 I Item 1A “Risk Factors" for further discussion of Third-party reseller customers.

Total ARR is defined as the annualized recurring amount of all contracts executed as of the last day of the reporting period.

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.

ARR is independent of historical revenue, unearned revenue, remaining performance obligations or any other accounting principles generally accepted in the United States of America, ("GAAP"), financial measure over any period.

It should be considered in addition to, not as a substitute for, nor superior to or in isolation from, these measures and other measures prepared in accordance with GAAP.

We believe ARR-based metrics provides insight into the performance of our recurring revenue business model while mitigating for fluctuations in billing and contract terms.

January 31, Variance

2023 2022 Dollars Percent

Annual Recurring Revenue

Direct Customers $ 327,017 $ 312,132 $ 14,885 5 %

Third-Party Reseller Customers 73,343 78,353 (5,010) (6) %

Total Annual Recurring Revenue $ 400,360 $ 390,485 $ 9,875 3 %

Dollar-Based Net Retention Rate

We believe that our ability to retain our customers and expand the ARR 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 area using a metric we refer to as our dollar-based net retention rate, which compares the ARR from a set of subscription customers across comparable periods.

This metric is calculated first by 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 expansion, contraction and churn.

The current period ARR is then divided by the prior period ARR to arrive at our dollar-based net retention rate.

The cohorts of customers that we present dollar-based net retention rate for include direct, third-party reseller, and total customers.

Direct customers include enterprise, mid-size and small business customers.

The following table provides our dollar-based net retention rate for the fiscal years ended January 31, 2023, 2022 and 2021:

2023 2022 2021

Dollar-Based Net Retention Rate (ARR)

Direct Customers 97% 101% 100%

Third-Party Reseller Customers 92% 101% 92%

Total Customers 96% 101% 98%

Historically, we presented dollar-based net retention rate on a revenue basis whereby we first established a cohort of enterprise, mid-size, and third-party reseller customers, who had active contracts at the end of each month of the same period in the prior year.

We divided 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 determined the dollar-based weighted average of each of the monthly rates, which represented the dollar-based net retention rate for the period.

Under this prior methodology, our dollar-based net retention rate was 95%, 98%, and 102% for the fiscal years ended January 31, 2023, 2022 and 2021, respectively.

We believe that the change in methodology in our dollar-based net retention rate from a revenue basis to an ARR basis is more meaningful to investors as it aligns more closely with how management views growth in the business, assesses Company performance, and provides better insight into the directional movements within ARR.

Components of Results of Operations

We derive our revenue primarily from subscription and associated support to our Yext platform.

We derive our revenue primarily from subscription and associated support to our Answers platform.

Our contracts are typically one year in length, but may be up to three years or longer in length.

6 unchanged sentences

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 Knowledge 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, including with respect to certain capitalized software development costs incurred in connection with additional functionality to our platform.

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 lease expenses associated with our office spaces, which are allocated based on employee headcount.

10 unchanged sentences

Capitalized software development costs related to additional functionality to our platform are excluded from research and development expenses as they are capitalized as a component of property and equipment, net and depreciated to cost of revenue over the term of their useful life.

Research and development expenses also include lease expenses associated with our office spaces, as well as software expense, each of which are allocated based on employee headcount.

Research and development expenses also include data centers costs associated with pre-production costs for testing and quality assurance, as well as lease expenses associated with our office spaces, and software expense, each of which are allocated based on employee headcount.

General and administrative expenses .

3 unchanged sentences

Results of Operations

The following table sets forth selected consolidated statement of operations data for each of the periods indicated:

(in thousands) Fiscal year ended January 31,

19 unchanged sentences

(63,858) (91,982) (94,595)

(Provision for) benefit from income taxes (1,277) (97) (1,097)

Provision for income taxes (2,080) (1,277) (97)

$ (65,938) $ (93,259) $ (94,692)

11 unchanged sentences

$ 63,078 $ 73,480 $ 72,294

Decreases in stock-based compensation expense for the fiscal year ended January 31, 2023, compared to the fiscal year ended January 31, 2022 are largely due to decreases in the fair value of awards granted.

The following table sets forth selected consolidated statements of operations data for each of the periods indicated as a percentage of total revenue:

14 unchanged sentences

Loss from operations before income taxes (16) (23) (27)

(Provision for) benefit from income taxes — — (1)

Provision for income taxes — — —

Net loss (16) % (23) % (27) %

Numbers rounded for presentation purposes and may not sum.

Fiscal Year Ended January 31, 2023 Compared to Fiscal Year Ended January 31, 2022

Revenue and Cost of Revenue

Fiscal year ended January 31, Variance

5 unchanged sentences

74.1 % 74.8 %

Total revenue was $390.6 million for the fiscal year ended January 31, 2022, compared to $354.7 million for the fiscal year ended January 31, 2021, an increase of $35.9 million or 10%, primarily driven by new customer subscriptions to our platform, and to a lesser extent included expanded subscriptions for existing customers.

Our revenue is predominately derived from our enterprise, mid-size, and third-party reseller customers.

Revenue recognized from subscriptions and associated support to our platform was 92% and revenue recognized from professional services was 8%, for the fiscal year ended January 31, 2022, compared to 93% and 7%, respectively, for the fiscal year ended January 31, 2021.

Total revenue was $400.9 million for the fiscal year ended January 31, 2023, compared to $390.6 million for the fiscal year ended January 31, 2022, an increase of $10.3 million or 3%, primarily driven by new customer subscriptions to our platform, as well as expanded subscriptions for existing customers.

Revenue recognized from subscriptions and associated support to our platform was 91% and 92%, while revenue recognized from professional services was 9% and 8%, for the fiscal years ended January 31, 2023 and 2022, respectively.

Revenue for the fiscal year ended January 31, 2023 included a negative impact from foreign currency exchange rates of approximately $10.2 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.

The following table summarizes our revenue by sales channel for the periods presented:

Fiscal year ended January 31, Variance

2023 2022 Dollars Percent

(in thousands)

Direct Customers $ 318,032 $ 303,338 $ 14,694 5 %

Third-Party Reseller Customers 82,818 87,239 (4,421) (5) %

Total Revenue $ 400,850 $ 390,577 $ 10,273 3 %

Revenue attributable to direct customers was $318.0 million for the fiscal year ended January 31, 2023, compared to $303.3 million for the fiscal year ended January 31, 2022, an increase of $14.7 million or 5%, primarily driven by new customer subscriptions to our platform, as well as expanded subscriptions for existing customers.

Revenue attributable to third-party reseller customers was $82.8 million for the fiscal year ended January 31, 2023, compared to $87.2 million for the fiscal year ended January 31, 2022, a decrease of $4.4 million or 5% primarily due to customer attrition.

Cost of Revenue and Gross Margin

Cost of revenue was $104.0 million for the fiscal year ended January 31, 2023, compared to $98.3 million for the fiscal year ended January 31, 2022, an increase of $5.7 million, or 6%.

This increase was primarily driven by employee-related costs, as personnel-related costs increased $8.8 million and stock-based compensation expense increased $1.4 million, reflecting higher headcount and employee stock grants.

In addition, depreciation expense increased $2.2 million and costs associated with our data centers increased $1.5 million.

These increases were partially offset by Knowledge Network application provider fees which decreased $5.1 million due to favorable contract renewal terms with certain providers in the prior year.

The increase was primarily driven by a $5.1 million increase in personnel-related costs, reflecting higher headcount, a $1.7 million increase in costs associated with our data centers and a $1.4 million increase in depreciation expense.

These increases were partially offset by a $2.1 million decrease in stock-based compensation expense, largely due to decreases in the fair value of awards granted, as well as a $1.2 million decrease in Publisher Network provider fees due to favorable contract renewal terms with certain providers in the prior year.

Gross margin was 74.1% for the fiscal year ended January 31, 2023, compared to 74.8% for the fiscal year ended January 31, 2022 as reflected in the discussion above.

8 unchanged sentences

$ 79,336 $ 83,420 $ (4,084) (5) %

Sales and marketing expense was $230.5 million for the fiscal year ended January 31, 2022, compared to $228.4 million for the fiscal year ended January 31, 2021, an increase of $2.1 million, or 1%.

The increase reflected a $5.5 million increase in personnel-

related costs, inclusive of a $3.5 million increase in costs to obtain revenue contracts.

In addition, there was a $2.3 million increase in depreciation expense and a $0.9 million increase in advertising costs associated with certain brand media campaigns.

These increases were largely offset by a $6.1 million decrease in stock-based compensation expense, which is lower in the current period reflecting the impact of certain departures of senior management in the prior periods.

Sales and marketing expense was $211.5 million for the fiscal year ended January 31, 2023, compared to $230.5 million for the fiscal year ended January 31, 2022, a decrease of $19.0 million, or 8%.

The decrease was primarily driven by employee-related costs, as personnel-related costs decreased $10.4 million, reflecting lower headcount, and stock-based compensation expense which decreased $3.5 million, largely due to decreases in the fair value of awards granted.

In addition, advertising costs decreased $4.9 million due to certain brand media campaigns in the prior period and professional related costs decreased $2.8 million.

These decreases were partially offset by a $3.1 million increase in conferences and events and a $2.8 million increase in employee travel.

Research and development expense was $70.9 million for the fiscal year ended January 31, 2023, compared to $68.4 million for the fiscal year ended January 31, 2022, an increase of $2.6 million, or 4%.

The increase was primarily driven by a $3.6 million increase in stock-based compensation expense due to employee stock grants, a $3.6 million increase in personnel-related costs, reflecting higher headcount, which mainly consisted of salaries and wages, as well as a $0.8 million increase in depreciation expense.

General and administrative expense was $83.4 million for the fiscal year ended January 31, 2022, compared to $76.0 million for the fiscal year ended January 31, 2021, an increase of $7.4 million or 10%.

The increase was primarily driven by a $2.6 million increase in personnel-related costs, a $2.3 million increase in stock-based compensation due to employee stock grants, as well as a $0.9 million increase in depreciation expense.

This was partially offset by a $1.3 million decrease in bad debt expense as the prior year period had higher expense to reflect the initial impacts of the COVID-19 pandemic.

The increase was primarily driven by a $4.9 million increase in personnel-related costs and a $1.3 million increase in costs associated with our data centers.

These increases were partially offset by a $4.3 million decrease in stock-based compensation expense, largely due to decreases in the fair value of awards granted.

General and administrative expense was $79.3 million for the fiscal year ended January 31, 2023, compared to $83.4 million for the fiscal year ended January 31, 2022, a decrease of $4.1 million or 5%.

The decrease was primarily driven by a $4.2 million decrease in professional related costs, a $1.1 million decrease in bad debt expense and a $0.6 million decrease in stock-based compensation expense, largely due to decreases in the fair value of awards granted.

This was partially offset by a $0.7 million increase in personnel-related costs, reflecting higher headcount, a $0.7 million increase in software expense and a $0.4 million increase in depreciation expense.

Fiscal Year Ended January 31, 2022 Compared to Fiscal Year Ended January 31, 2021

9 unchanged sentences

Our revenue is predominately derived from our enterprise, mid-size, and third-party reseller customers.

Revenue from our small business customers represented less than 5% of total revenue for each period.

Revenue recognized from subscriptions and associated support to our platform was 93% and 95%, while revenue recognized from professional services was 7% and 5%, for the fiscal years ended January 31, 2021 and 2020, respectively.

The following table summarizes our revenue by sales channel for the periods presented:

Fiscal year ended January 31, Variance

2022 2021 Dollars Percent

(in thousands)

Direct Customers $ 303,338 $ 265,756 $ 37,582 14 %

Third-Party Reseller Customers 87,239 88,905 (1,666) (2) %

Total Revenue $ 390,577 $ 354,661 $ 35,916 10 %

Revenue attributable to direct customers was $303.3 million for the fiscal year ended January 31, 2022, compared to $265.8 million for the fiscal year ended January 31, 2021, an increase of $37.6 million or 14%, primarily driven by new customer subscriptions to our platform, as well as expanded subscriptions for existing customers.

Revenue attributable to third-party reseller customers was $87.2 million for the fiscal year ended January 31, 2022, compared to $88.9 million for the fiscal year ended January 31, 2021, a decrease of $1.7 million or 2% primarily due to customer attrition.

Cost of Revenue and Gross Margin

Cost of revenue was $98.3 million for the fiscal year ended January 31, 2022, compared to $86.4 million for the fiscal year ended January 31, 2021, an increase of $11.9 million, or 14%.

This overall increase primarily reflects the increases in costs associated with our data centers of $3.2 million, personnel-related costs of $1.6 million, stock-based compensation expense of $1.6 million, and software expense of $1.4 million.

These increases were partially offset by a decrease in Knowledge Network application provider costs of $1.0 million as a result of more favorable contract terms with certain providers.

In addition, depreciation expense increased $2.2 million and costs associated with our data centers increased $1.5 million.

These increases were partially offset by Publisher Network application provider fees which decreased $5.1 million due to favorable contract renewal terms with certain providers in the prior year.

Gross margin was 74.8% for the fiscal year ended January 31, 2022, compared to 75.6% for the fiscal year ended January 31, 2021 as reflected in the discussion above.

9 unchanged sentences

Sales and marketing expense was $230.5 million for the fiscal year ended January 31, 2022, compared to $228.4 million for the fiscal year ended January 31, 2021, an increase of $2.1 million, or 1%.

The increase was primarily due to a $23.6 million increase in personnel-related costs, reflecting higher headcount, which mainly consisted of salaries and wages and costs to obtain revenue contracts, a $2.8 million increase in software expense, a $1.4 million increase in operating and short-term lease expenses, a $1.3 million increase in depreciation expense, and a $1.2 million increase in stock-based compensation expense.

These increases were partially offset by reductions in light of the COVID-19 pandemic and leveraging costs, including a $10.8 million decrease in employee travel and a $7.6 million decrease in conferences and events.

The increase reflected a $5.5 million increase in personnel-related costs, inclusive of a $3.5 million increase in costs to obtain revenue contracts.

In addition, there was a $2.3 million increase in depreciation expense and a $0.9 million increase in advertising costs associated with certain brand media campaigns.

Research and development expense was $68.4 million for the fiscal year ended January 31, 2022, compared to $58.1 million for the fiscal year ended January 31, 2021, an increase of $10.2 million, or 18%.

The increase was primarily due to a $3.9 million increase

in stock-based compensation expense, a $3.0 million increase in personnel-related costs, reflecting higher headcount, which mainly consisted of salaries and wages, and a $0.8 million increase in software expense.

General and administrative expense was $76.0 million for the fiscal year ended January 31, 2021, relatively consistent compared to $77.2 million for the fiscal year ended January 31, 2020, as decreases of $2.1 million in stock-based compensation expense and $2.0 million in employee travel, were generally offset by a $1.3 million increase in the allowance for doubtful accounts and a $0.8 million increase in software expense.

Net loss was $93.3 million, $94.7 million, and $121.5 million for the fiscal years ended January 31, 2022, 2021 and 2020.

Non-GAAP Net Loss

In addition to our financial results determined in accordance with GAAP, we believe that non-GAAP net loss is useful in evaluating our operating performance and our business.

This was partially offset by a $1.3 million decrease in bad debt expense as the prior year period had higher expense to reflect the initial impacts of the COVID-19 pandemic.

Net loss was $65.9 million, $93.3 million, and $94.7 million for the fiscal years ended January 31, 2023, 2022 and 2021, respectively.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we believe that certain non-GAAP financial measures are useful in evaluating our operating performance and our business.

Non-GAAP net loss is a financial measure that is not calculated in accordance with GAAP.

3 unchanged sentences

We use non-GAAP net loss in conjunction with traditional GAAP net loss as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, and to evaluate the effectiveness of our business strategies.

Our definition may differ from the definitions used by other companies and therefore comparability may be limited.

Adjusted EBITDA is a non-GAAP financial measure that we believe offers a useful view of overall operations used to assess the performance of core business operations and for planning purposes.

We define Adjusted EBITDA as net income (loss) before (1) interest income (expense), net, (2) provision for income taxes, (3) depreciation and amortization, (4) other income (expense), net, and (5) stock-based compensation expense.

The most directly comparable GAAP financial measure to Adjusted EBITDA is GAAP net loss.

Users should consider the limitations of using Adjusted EBITDA, including the fact that this measure does not provide a complete measure of our operating performance.

Adjusted EBITDA is not intended to purport to be an alternate to net loss as a measure of operating performance.

The definitions of our non-GAAP financial measures may differ from the definitions used by other companies and therefore comparability may be limited.

In addition, other companies may not publish this or similar metrics.

Thus, our non-GAAP net loss should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.

Non-GAAP net loss may be limited in its usefulness because it does not present the full economic effect of our use of stock-based compensation.

We compensate for these limitations by providing a reconciliation of non-GAAP net loss to the most closely related GAAP financial measure.

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP net loss in conjunction with GAAP net loss.

The following table provides a reconciliation of GAAP net loss to non-GAAP net loss:

Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.

Our Non-GAAP financial measures may be limited in their usefulness because they do not present the full economic effect of expenses mentioned above.

We compensate for these limitations by providing a reconciliation of our non-GAAP financial measures to the most closely related GAAP financial measures.

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP net loss and Adjusted EBITDA in conjunction with GAAP net loss.

The following table reconciles our GAAP net loss to non-GAAP net loss:

Fiscal year ended January 31,

(in thousands) 2023 2022 2021

Net loss $ (93,259) $ (94,692) $ (121,544)

GAAP net loss $ (65,938) $ (93,259) $ (94,692)

Stock-based compensation expense 63,078 73,480 72,294

Non-GAAP net loss $ (2,860) $ (19,779) $ (22,398)

Dollar-Based Net Retention Rate

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 98%, 102%, and 106% for the fiscal years ended January 31, 2022, 2021 and 2020, respectively.

The general decline in the net retention rate reflects continued challenges in our ability to retain and expand relationships with existing customers, which has been and may continue to be negatively impacted by the effects of COVID-19 on our customers.

See "—Overview — COVID-19 Update" and "Risk Factors" for the impact of COVID-19 on our business.

We calculate this metric for a particular period by first establishing a cohort of the enterprise, mid-size, and 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.

As a result, if a customer, in particular an enterprise customer, elects to upgrade, downgrade or cancel its subscription, the full impact on dollar-based net retention rate is realized over the subsequent twelve months, thereby mitigating the immediate effect in the quarter when such election was made.

We only consider revenue from our enterprise, mid-size, and third-party reseller customers when calculating this metric since small business customers have limited licenses, experience inherently high turnover, and continue to decline as a percentage of total revenue.

Quarterly Results of Operations

The following tables set forth our unaudited quarterly statements of operations data for each of the eight quarters in the periods ended January 31, 2022 and 2021, respectively.

The information for each of these quarters has been prepared on the same basis as the audited annual consolidated financial statements included elsewhere in this Annual Report on Form 10-K and, in the opinion of management, includes all adjustments, which consist only of normal recurring adjustments, necessary for the fair presentation of the results of operations for these periods in accordance with GAAP.

This data should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

These quarterly operating results are not necessarily indicative of our operating results for a full year or any future period.

Three months ended

(in thousands) Jan.

Revenue $ 100,932 $ 99,529 $ 98,124 $ 91,992 $ 92,194 $ 89,061 $ 88,055 $ 85,351

Cost of revenue $ 24,575 $ 25,255 $ 26,615 $ 21,854 $ 21,597 $ 21,639 $ 21,984 $ 21,184

Gross profit $ 76,357 $ 74,274 $ 71,509 $ 70,138 $ 70,597 $ 67,422 $ 66,071 $ 64,167

Gross margin 75.7 % 74.6 % 72.9 % 76.2 % 76.6 % 75.7 % 75.0 % 75.2 %

Sales and marketing $ 58,175 $ 58,548 $ 58,578 $ 55,166 $ 57,202 $ 56,646 $ 56,049 $ 58,520

Research and development $ 18,007 $ 17,986 $ 18,500 $ 13,857 $ 14,505 $ 14,475 $ 14,788 $ 14,378

General and administrative $ 22,136 $ 22,094 $ 20,843 $ 18,347 $ 18,033 $ 18,061 $ 19,474 $ 20,458

Total operating expenses $ 98,318 $ 98,628 $ 97,921 $ 87,370 $ 89,740 $ 89,182 $ 90,311 $ 93,356

Total operating expenses as a percentage of revenue 97 % 99 % 100 % 95 % 97 % 100 % 103 % 109 %

Loss from operations $ (21,961) $ (24,354) $ (26,412) $ (17,232) $ (19,143) $ (21,760) $ (24,240) $ (29,189)

Net loss $ (23,110) $ (24,926) $ (27,592) $ (17,631) $ (18,311) $ (22,041) $ (25,116) $ (29,224)

Net loss per share attributable to common stockholders, basic and diluted $ (0.18) $ (0.19) $ (0.22) $ (0.14) $ (0.15) $ (0.18) $ (0.21) $ (0.25)

Quarterly Trends

Historically, a higher proportion of new subscription and renewal agreements have occurred within the fourth quarter of the fiscal year, which contributes to driving our revenue recognized for the following fiscal year.

We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers.

At the beginning of each subscription term, we invoice our customers, typically in annual installments, but also monthly, quarterly, and semi-annually.

Amounts that have been invoiced for non-cancelable contracts are recorded in accounts receivable and unearned revenue.

As a result, accounts receivable and unearned revenue are seasonally stronger in the fourth quarter of the fiscal year.

However, the nature of our subscription agreements generally results in revenue recognition ratably over the contract term, thereby mitigating the effect of potential seasonality in our revenue.

Our quarterly revenue has generally increased over the periods presented.

Cost of revenue has moved generally proportional as a percentage of revenue.

Personnel-related costs may generally continue to increase, while Knowledge Network application provider costs have become more stable and may continue to decline as a percentage of revenue, although costs may increase at times as we enter new international markets, or introduce new products and features.

Gross margin has generally stabilized in recent periods, and may decrease at times as we enter new international markets, or introduce new products and features.

Operating expenses as a percentage of revenue have generally decreased in recent quarters, reflecting COVID-19 impacts and strategically leveraging costs.

Operating expenses may increase as a result of employee-related costs, inclusive of costs to obtain revenue contracts, as well as stock-based compensation.

Our quarterly results may fluctuate due to various factors affecting our performance including impacts of the COVID-19 pandemic and its variants.

The ultimate extent of the impact of the pandemic on our business, financial condition and results of operations will depend on future developments, which continue to be highly uncertain and cannot be predicted, including the severity and duration of the COVID-19 pandemic and its variants and the actions taken to contain and address its impact, among others.

However, because we generally recognize revenue from our customer contracts ratably over the term of the contract, changes in our contracting activity in the near term may not be apparent as a change to our reported revenue until future periods.

Most of our expenses are recorded as period costs and thus factors affecting our cost structure may be reflected in our financial results sooner than changes to our revenue.

The following table reconciles our GAAP net loss to Adjusted EBITDA:

Fiscal year ended January 31,

2023 2022 2021

GAAP net loss to Adjusted EBITDA:

GAAP net loss $ (65,938) $ (93,259) $ (94,692)

Interest (income) expense (1,095) 522 82

Provision for income taxes 2,080 1,277 97

Depreciation and amortization 17,583 16,783 10,612

Other expense (income) 125 1,501 181

Stock-based compensation expense 63,078 73,480 72,294

Adjusted EBITDA $ 15,833 $ 304 $ (11,426)

Constant Currency

We provide revenue, including year-over-year growth rates, adjusted to remove the impact of foreign currency rate fluctuations, which we refer to as constant currency.

We believe providing revenue on a constant currency basis helps our investors to better understand our underlying performance, given the current macroeconomic environment.

We calculate constant currency by using the current period results for entities reporting in currencies other than U.S.

Dollars (“USD”), which are then converted 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.

Our definition may differ from the definitions used by other companies and therefore comparability may be limited.

In addition, other companies may not publish these or similar metrics.

Thus, our revenue on a constant currency basis should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.

We provide a reconciliation of revenue on a constant currency basis to the most closely related GAAP financial measure.

We encourage investors and others to review our financial information in its entirety and to view revenue on a constant currency basis in conjunction with revenue on a GAAP basis.

The following table provides a reconciliation of revenue on a GAAP basis to revenue on a constant currency basis:

Fiscal year ended January 31,

(in thousands) 2023 2022 Growth Rates

Revenue (GAAP) $ 400,850 $ 390,577 3 %

Effects of foreign currency rate fluctuations 10,232

Revenue on a constant currency basis (Non-GAAP) $ 411,082 5 %

Liquidity and Capital Resources

1 unchanged sentence

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, lease payments and capital expenditures, significant marketing events and related expenses, the potential effects of the COVID-19 pandemic, among other factors.

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, and other factors.

Our future capital requirements will depend on many factors, including those set forth under "Risk Factors." We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights.

2 unchanged sentences

If we are unable to raise additional capital when desired, our business, operating results and financial condition would be adversely affected.

Common Stock Offering

On March 20, 2019, we closed a common stock offering, in which we issued and sold 7,000,000 shares of common stock, inclusive of the fully exercised underwriters’ option to purchase additional shares.

The price per share to the public was $21.50.

We received aggregate proceeds of $147.0 million from this offering, net of underwriters’ discounts and commissions, before deducting offering costs of approximately $0.5 million, which were recognized through additional paid in capital.

Credit Arrangements

On March 11, 2020, we 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, we 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.

On December 22, 2022, we entered into a second amendment (“Amendment No.

2”) to the Credit Agreement, dated March 11, 2020, collectively referred to as the Credit Facility.

No significant debt issuance costs were incurred in association with the December 2022 Credit Facility.

Amendment No.

2 amends the Credit Facility to, among other things (i) extend the maturity date of the Credit Facility to December 22, 2025, (ii) amend the interest rate provisions to replace LIBOR with SOFR as the interest rate benchmark, and (iii) amend the recurring revenue growth rate financial covenant.

The Credit Facility 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 our 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 our average daily usage of the revolving loan facility.

As amended, the revolving loans bear interest, at our election, at an annual rate based on SOFR or a base rate.

Loans based on SOFR shall bear interest at a rate between SOFR plus 2.50% and SOFR plus 3.00%, depending on our average daily usage of the revolving loan facility and subject to a SOFR floor of 1.00%.

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 our average daily usage of the revolving loan facility.

See Part I Item 1A “Risk Factors - Our credit facility contains restrictive covenants that may limit our operating flexibility" for discussion of LIBOR being phased out.

The obligations under the Credit Agreement are secured by a lien on substantially all of our tangible and intangible property and by a pledge of all of our equity interests of material direct and indirect domestic subsidiaries and 66% of each class of capital stock of any material first-tier foreign subsidiaries, subject to limited exceptions.

The Credit Agreement contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require us 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.

See Part I Item 1A “Risk Factors - Our credit facility contains restrictive covenants that may limit our operating flexibility".

The obligations under the Credit Facility are secured by a lien on substantially all of our tangible and intangible property and by a pledge of all of our equity interests of material direct and indirect domestic subsidiaries and 66% of each class of capital stock of any material first-tier foreign subsidiaries, subject to limited exceptions.

The Credit Facility contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require us to maintain the year-over-year growth rate of its 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, 2023, we were in compliance with all debt covenants.

As of such date, the $50.0 million revolving loan facility had $35.9 million available and $14.1 million in letters of credit allocated as security in connection with office space.

On March 10, 2023, the Federal Deposit Insurance Corporation was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB after SVB was unable to continue their operations.

While the National Bank of Santa Clara has publicly assured holders of credit facilities that they intend to honor those facilities, our credit agreement may not be available in all or in part in the near future depending on the resolution of SVB.

Share Repurchase Program

In March 2022, our Board of Directors authorized a $100.0 million share repurchase program of our common stock.

As of January 31, 2023, a total of 13,844,279 shares have been purchased at an average price of $5.59 per share for a total cost of $77.4 million since the commencement of the share repurchase program.

As of January 31, 2023, there was approximately $22.6 million that remained available to be purchased under this share repurchase program.

The following table summarizes our cash flows:

1 unchanged sentence

(in thousands) 2023 2022 2021

Net cash provided by (used in) operating activities

Net cash provided by operating activities

$ 17,853 $ 21,849 $ 1,204

Net cash (used in) provided by investing activities

Net cash used in investing activities

$ (6,193) $ (13,418) $ (65,111)

Net cash provided by financing activities

Net cash (used in) provided by financing activities

$ (79,021) $ 24,617 $ 22,548

Operating Activities

Net cash provided by operating activities of $21.8 million for the fiscal year ended January 31, 2022 was primarily due to positive adjustments in reconciling our net loss of $93.3 million to net cash provided by operating activities.

These adjustments included stock-based compensation expense of $73.5 million, depreciation and amortization expense of $16.8 million, amortization of operating lease right-of-use assets of $9.3 million, and bad debt expense of $1.3 million.

In addition, there were changes in unearned revenue of $33.3 million and changes in prepaid expenses and other current assets of $4.2 million.

Net cash provided by operating activities of $17.9 million for the fiscal year ended January 31, 2023 reflected our net loss of $65.9 million, adjusted by non-cash charges including stock-based compensation expense of $63.1 million, depreciation and amortization expense of $17.6 million and amortization of operating lease right-of-use assets of $8.8 million.

In addition, there were positive adjustments resulting from changes in costs to obtain revenue contracts of $8.0 million, unearned revenue of $3.5 million and accounts payable, accrued expenses and other current liabilities of $2.7 million.

These increases were partially offset by changes in operating lease liabilities of $11.0 million, accounts receivable of $10.1 million, mainly due to timing of billing and cash collections during the period, and changes in prepaid expenses and other current assets of $2.3 million.

Net cash provided by operating activities of $21.8 million for the fiscal year ended January 31, 2022 reflected our net loss of $93.3 million, adjusted by non-cash charges including stock-based compensation expense of $73.5 million, depreciation and amortization expense of $16.8 million, amortization of operating lease right-of-use assets of $9.3 million, and bad debt expense of $1.3 million.

In addition, there were positive adjustments resulting from changes in unearned revenue of $33.3 million and changes in prepaid expenses and other current assets of $4.2 million.

These increases were partially offset by changes in costs to obtain revenue contracts of $9.1 million, operating lease liabilities of $6.6 million, and accounts receivable of $6.1 million, mainly due to timing of billing and cash collections during the period.

Net cash provided by operating activities of $1.2 million for the fiscal year ended January 31, 2021 was primarily due to positive adjustments in reconciling our net loss of $94.7 million to net cash provided by operating activities.

These adjustments included stock-based compensation expense of $72.3 million, amortization of operating lease right-of-use assets of $12.2 million, depreciation and amortization expense of $10.6 million, and bad debt expense of $2.5 million, reflecting an increase in the allowance for doubtful accounts in light of impacts from the COVID-19 pandemic.

In addition, there were changes in unearned revenue of $12.7 million, operating lease liabilities of $8.9 million, and costs to obtain revenue contracts of $2.4 million.

Net cash provided by operating activities of $1.2 million for the fiscal year ended January 31, 2021 reflected our net loss of $94.7 million, adjusted by non-cash charges including stock-based compensation expense of $72.3 million, amortization of operating lease right-of-use assets of $12.2 million, depreciation and amortization expense of $10.6 million, and bad debt expense of $2.5 million, reflecting an increase in the allowance for doubtful accounts in light of impacts from the COVID-19 pandemic.

In addition, there were positive adjustments resulting from changes in unearned revenue of $12.7 million, operating lease liabilities of $8.9 million, and costs to obtain revenue contracts of $2.4 million.

These increases were partially offset by changes in accounts receivable of $18.0 million, mainly due to timing of billing and cash collections during the period, changes in prepaid expenses and other current assets of $5.5 million, and changes in accounts payable, accrued expenses and other current liabilities of $2.0 million.

Net cash used in operating activities of $30.8 million for the fiscal year ended January 31, 2020 was primarily due to the net loss of $121.5 million, as well as changes in accounts receivable of $27.0 million, mainly due to timing of billing and cash collections during the period, and changes in costs to obtain revenue contracts of $18.3 million.

This was partially offset by positive reconciling adjustments related to non-cash charges of stock-based compensation expense of $67.8 million, amortization of operating lease right-of-use assets of $11.1 million and depreciation and amortization expense of $8.1 million.

In addition, net cash used in operating activities was also partially offset by changes in unearned revenue of $42.3 million and accounts payable, accrued expenses and other liabilities of $8.3 million.

Investing Activities

Net cash used in investing activities of $6.2 million for the fiscal year ended January 31, 2023 reflected capital expenditures.

Net cash used in investing activities of $13.4 million for the fiscal year ended January 31, 2022 reflected capital expenditures primarily associated with our new corporate headquarters in New York, NY.

Net cash used in investing activities of $65.1 million for the fiscal year ended January 31, 2021 reflected capital expenditures primarily associated with our new corporate headquarters in New York, NY, and our office spaces in Rosslyn, VA and Tokyo, Japan, among others.

Net cash provided by investing activities of $39.3 million for the fiscal year ended January 31, 2020 was due to maturities of marketable securities of $51.2 million, partially offset by capital expenditures of $11.9 million.

Financing Activities

Net cash used in financing activities of $79.0 million for the fiscal year ended January 31, 2023 was primarily related to $77.3 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 $5.1 million and payments of deferred financing costs of $0.5 million.

This was partially offset by net proceeds from employee stock purchase plan withholdings of $3.2 million and proceeds from exercise of stock options of $0.7 million.

Net cash provided by financing activities of $24.6 million for the fiscal year ended January 31, 2022 was primarily related to proceeds from exercise of stock options of $19.2 million, and net proceeds from employee stock purchase plan withholdings of $5.7 million, partially offset by payments of deferred financing costs of $0.3 million.

Net cash provided by financing activities of $22.5 million for the fiscal year ended January 31, 2021 was primarily related to proceeds from exercise of stock options of $16.5 million, and net proceeds from employee stock purchase plan withholdings of $7.0 million, partially offset by payments of deferred financing costs of $0.9 million.

Net cash provided by financing activities of $168.4 million for the fiscal year ended January 31, 2020 was primarily related to proceeds from our common stock offering of $147.0 million, net of underwriting discounts and commissions, and to a lesser extent proceeds from exercises of stock options of $14.9 million, and $7.3 million of net proceeds from employee stock purchase plan withholdings.

Contractual Obligations

We are obligated to make payments under certain non-cancelable contractual obligations in the normal course of business.

Our contractual obligations primarily relate to our operating lease arrangements for office space.

Our other contractual obligations include contracts with our Knowledge Network application providers, which generally have a term of one year, although some have a term of several years, as well as contracts with our software vendors, among others.

These obligations represent minimum contractual payments, or our best estimate for variable elements based on historical payments.

Our contractual obligations have various expiry dates between fiscal years 2023 and 2035.

As of January 31, 2022, our contractual obligations are as follows (in thousands):

Fiscal year ending January 31:

Operating Leases Other

2023 $ 19,643 $ 35,460

2024 19,086 16,094

2025 18,576 8,926

2026 19,337 1,825

2027 19,433 1,538

2028 and thereafter

Total $ 171,567 $ 64,244

See Note 13 "Commitments and Contingencies" to our consolidated financial statements for further discussion on contractual obligations.

See Note 14 "Commitments and Contingencies", to the consolidated financial statements for our discussion on contractual obligations.

Critical Accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods.

4 unchanged sentences

Revenue Recognition

We derive our revenue primarily from our subscriptions and associated support to the Yext platform.

We derive our revenue primarily from our subscriptions and associated support to the Answers platform.

Our 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.

Our subscription and associated support performance obligation is distinct because a customer's use of the Yext platform is fully functional upon access, does not require any additional development, modification or customization, and is often sold separately.

Our subscription and associated support performance obligation is distinct because a customer's use of the Answers platform is fully functional upon access, does not require any additional development, modification or customization, and is often sold separately.

In certain instances, we enter into a contract that includes a promise to provide certain technical or customized professional services, in addition to a promise to provide its subscription and associated support.

Our professional services performance obligation is distinct as it does not significantly change or enhance the functionality of the Yext platform.

Our professional services performance obligation is distinct as it does not significantly change or enhance the functionality of the Answers platform.

In instances when a contract includes more than one performance obligation, we must allocate the transaction price to the performance obligations on a relative standalone selling price basis ("SSP").

10 unchanged sentences

Revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract, which is the date our platform is made available to our customers.

Amounts that have been invoiced for non-cancelable contracts are recorded

in accounts receivable and unearned revenue or revenue.

Amounts that have been invoiced for non-cancelable contracts are recorded in accounts receivable and unearned revenue or revenue.

See Note 2 "Summary of Significant Accounting Policies" and Note 3 "Revenue" to our consolidated financial statements for further discussion on our revenue recognition.

3 unchanged sentences

We amortize such costs on a straight-line basis over the average benefit period, which is typically three years for new contracts and one year for renewals.

We determine the average benefit period by considering both qualitative and quantitative factors, which include the estimated life of capitalized software development costs resulting from additional functionality to the Yext platform and estimated customer life, among other such factors.

We determine the average benefit period by considering both qualitative and quantitative factors, which include the estimated life of capitalized software development costs resulting from additional functionality to the Answers platform and estimated customer life, among other such factors.

Amortization of costs capitalized to obtain revenue contracts is included in sales and marketing expense in the consolidated statements of operations and comprehensive loss.

Stock-Based Compensation

Stock-based compensation for all employee and non-employee stock-based awards, including restricted stock units and restricted stock, is measured at fair value on the date of grant and recognized over the service period.

The fair value of restricted stock units and restricted stock are calculated based on the fair value of our common stock on the date of grant, while the fair value of stock options are calculated 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.

Stock-based compensation for all employee and non-employee stock-based awards, including restricted stock units, restricted stock, performance-based restricted stock units, and options to purchase common stock, is measured at fair value on the date of grant and recognized over the service period.

The fair value of restricted stock units and restricted stock are estimated on the date of grant based on the fair value of our Company’s common stock.

The fair value of performance-based restricted stock units are estimated on the date of grant using a Monte Carlo simulation model.

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

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 and performance-based restricted stock units.

The estimated forfeiture rate applied to employee awards is based on historical forfeiture rates.

21 unchanged sentences

The incremental borrowing rate is determined based on what we would estimate to pay for a collateralized loan over a similar term and economic environment for each lease arrangement.

As of January 31, 2022, a hypothetical 100 basis point change in our estimated incremental

borrowing rates for our respective leases would have a less than 10% impact to the aggregated total operating lease liability on the consolidated balance sheet.

With respect to our operating lease arrangements, we account for lease components, and non-lease components that are fixed, as a single lease component in the measurement of operating lease liabilities and right-of-us assets.

2 unchanged sentences

Recent Accounting Pronouncements

See Note 2 "Summary of Significant Accounting Policies" to the consolidated financial statements for our discussion about adopted and pending recent accounting pronouncements.

See Note 2 "Summary of Significant Accounting Policies- Recent Accounting Pronouncements", to the consolidated financial statements for our discussion about adopted and pending recent accounting pronouncements.

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 7. Management’s Discussion and Analysis