What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-03-17 compared with 2022-03-18 · 173 added, 139 removed, 776 unchanged (29% of the section changed)

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dollar from rates on January 31, 2023 to have a material effect on our financial position or results of operations.

These exposures may change over time as business practices evolve and economic conditions change, including market impacts associated with COVID-19.

These exposures may change over time as business practices evolve and economic conditions change, including recent foreign currency impacts due to the macroeconomic environment.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations, other than its impact on the general economy.

Nonetheless, if our costs were to become subject to inflationary pressures, we may not be able to fully offset such higher costs through price increases.

We do not believe that inflation has had a material effect on our business, financial condition or results of operations, other than its impact on the general economy which includes labor costs.

Nonetheless, if our costs, in particular personnel-related costs, continue to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.

Our inability or failure to do so could harm our business, financial condition and results of operations.

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A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our financial statements.

Financial Institution Risk

While we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our balances in a number of large financial institutions.

Notwithstanding, those institutions are subject to risk of failure and our balances may be uninsured in certain cases.

For example, on March 10, 2023, SVB was unable to continue their operations and 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.

As of March 15, 2023, substantially all of our cash and cash equivalents are held with other large financial institutions and we do not expect further developments with SVB to have a material impact on our cash and cash equivalents balance, expected results of operations or financial performance for the foreseeable future.

However, if further failures in financial institutions occur where we hold deposits, we could experience additional risk.

Consolidated Financial Statements and Supplementary Data

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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.

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.

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Description of the Matter

The Company recorded consolidated revenue and unearned revenue of $390.6 million and $223.9 million, respectively, for the year ended January 31, 2022.

The Company recorded consolidated revenue of $400.9 million for the year ended January 31, 2023, and $223.8 million of unearned revenue as of January 31, 2023.

As described in Note 2 to the consolidated financial statements, the Company primarily earns revenue from subscriptions and associated support to the platform.

88 unchanged sentences

897,368 834,429

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

( 3,617 ) ( 187 )

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

(Provision for) benefit from income taxes

Provision for income taxes

( 2,080 ) ( 1,277 ) ( 97 )

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$ ( 3,421 ) $ ( 2,609 ) $ 2,782

Unrealized (loss) gain on marketable securities, net — — ( 129 )

Unrealized loss on marketable securities, net ( 9 ) — —

Total comprehensive loss $ ( 69,368 ) $ ( 95,868 ) $ ( 91,910 )

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Balance, January 31, 2020 115,830 $ 122 $ 636,008 $ ( 360 ) $ ( 422,653 ) $ ( 11,905 ) $ 201,212

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 3,064 3 16,513 — — — 16,516

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Balance, January 31, 2021 123,989 130 733,933 2,422 ( 517,345 ) ( 11,905 ) 207,235

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

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

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

Exercise of stock options 259 — 711 — — — 711

Vested restricted stock units converted to common shares 4,402 4 ( 4 ) — — — —

Issuance of restricted stock 15 — — — — — —

Vested restricted stock units converted to common shares, net of shares withheld for employee taxes 3,967 4 ( 5,137 ) — — — ( 5,133 )

Issuance of common stock under employee stock purchase plan 796 1 3,814 — — — 3,815

Stock-based compensation — — 63,551 — — — 63,551

Repurchase of common stock ( 13,844 ) — — — — ( 77,423 ) ( 77,423 )

Other comprehensive loss — — — ( 3,430 ) — — ( 3,430 )

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Balance, January 31, 2023 122,335 $ 142 $ 897,368 $ ( 3,617 ) $ ( 676,542 ) $ ( 89,328 ) $ 128,023

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

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization expense

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873 ( 1,198 ) 1,720

Net cash provided by (used in) operating activities

Net cash provided by operating activities

17,853 21,849 1,204

Investing activities:

Maturities of marketable securities

Capital expenditures

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

Net cash (used in) provided by investing activities

Net cash used in investing activities

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

Financing activities:

Proceeds from common stock offering, net of underwriting discounts and commissions — — 147,000

Payments of common stock deferred offering costs

Proceeds from exercise of stock options

714 19,228 16,464

Repurchase of common stock ( 77,250 ) — —

Payments for taxes related to net share settlement of stock-based compensation awards ( 5,129 ) — —

Payments of deferred financing costs

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3,153 5,652 6,953

Net cash provided by financing activities

Net cash (used in) provided by financing activities

( 79,021 ) 24,617 22,548

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Effect of exchange rate changes on cash and cash equivalents

( 3,635 ) ( 2,249 ) 3,594

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

Net (decrease) increase in cash and cash equivalents ( 70,996 ) 30,799 ( 37,765 )

Cash and cash equivalents at beginning of period

261,210 230,411 268,176

Cash, cash equivalents and restricted cash at end of period

Cash and cash equivalents at end of period

$ 190,214 $ 261,210 $ 230,411

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$ 1,046 $ 1,325 $ 1,413

Supplemental reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets as of January 31,

(in thousands) 2022 2021 2020

Cash and cash equivalents $ 261,210 $ 230,411 $ 256,076

Restricted cash — — 12,100

Total cash, cash equivalents and restricted cash $ 261,210 $ 230,411 $ 268,176

See the accompanying notes to the consolidated financial statements.

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Description of Business

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

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

The 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 the Company refers to as its Knowledge Network and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.

The Yext platform powers all of the Company's key features, including Listings, Pages, and Answers, along with its other features and capabilities.

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

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

The 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 the Company refers to as its Publisher Network and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.

The Answers platform powers all of the Company's key features, including Listings, Pages, and Search, along with its other features and capabilities.

The Company's fiscal year ends on January 31 st .

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Segment Information

The Company is the provider of the Yext platform and operates as one operating segment.

The Company is the provider of the Answers platform and operates as one operating segment.

An operating segment is defined as a component of an enterprise for which separate financial information is evaluated regularly by the chief operating decision makers ("CODM").

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 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.

The Company's business operates as one operating segment as all of the Company's offerings operate on the Answers 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

The Company derives its revenue primarily from its subscriptions and associated support to the Yext platform.

The Company derives its revenue primarily from its subscriptions and associated support to the Answers platform.

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 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 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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The Company estimates the amount of consideration expected to be received in exchange for transferring services if the consideration promised in a contract includes a variable amount.

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

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

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

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Costs capitalized to obtain new revenue contracts are amortized on a straight-line basis over three years , which reflects the average benefit period, and may be longer than the initial contract period.

The Company determined the average benefit period having considered both qualitative and quantitative factors, including the estimated life of capitalized software development costs resulting from additional functionality to the Yext platform and estimated customer life, among other such factors.

The Company determined the average benefit period having considered both qualitative and quantitative factors, including the estimated life of capitalized software development costs resulting from additional functionality to the Answers platform and estimated customer life, among other such factors.

The Company amortizes costs capitalized for contract renewals over the renewal term, reflecting the average benefit period for such renewals, which is typically one year .

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Cost of Revenue

Cost of revenue is generally expensed as incurred, including personnel-related costs, costs associated with the Company’s Knowledge Network application providers, and data center costs.

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 is generally expensed as incurred, including personnel-related costs, costs associated with the Company’s Publisher Network application providers, and data center costs.

Capitalized software development costs incurred in connection with additional functionality to the Answers 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 lease expenses, software expense, and depreciation expense, each of which are allocated based on employee headcount.

Stock-Based Compensation

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

Stock-based compensation for all 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 the 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 employee stock options is 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.

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.

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 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.

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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 $ 2.4 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.

Capitalized costs included in prepaid expenses and other current assets were $ 1.3 million and $ 2.4 million as of January 31, 2023 and 2022 respectively, and $ 2.5 million, $ 2.1 million, and $ 0.8 million were amortized during the fiscal years ended January 31, 2023, 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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subsidiaries to U.S.

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.

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.

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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The Company considers all highly liquid investments purchased with original maturities of less than three months from the date of purchase to be cash equivalents.

Marketable Securities

The Company's investments in marketable securities may consist of debt securities, including U.S.

treasury securities, corporate bonds, and commercial paper.

The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date.

The Company considers all of its investments in marketable securities, irrespective of the maturity date, as available for use in current operations, and therefore classifies these securities within current assets on the consolidated balance sheets.

All marketable securities are carried at estimated fair value.

Credit losses related to marketable securities are recorded, net in the consolidated statements of operations and comprehensive loss through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.

As of January 31, 2023, 2022, and 2021 no credit losses related to marketable securities were recorded by the Company.

Any remaining unrealized gains or losses for marketable securities are included in accumulated other comprehensive income (loss), as a component of stockholders’ equity.

Accounts Receivable and Allowance for Doubtful Accounts

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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.

The Company's intangible assets included domains with a net book value of $ 0.2 million as of both January 31, 2023 and 2022.

Deferred Financing Costs

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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.

This standard will be adopted by the Company in fiscal year 2024, and no significant impact on its consolidated financial statements is expected.

Geographic Region

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Total revenue $ 400,850 $ 390,577 $ 354,661

North America revenue is predominantly attributable to the United States.

North America revenue is 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 %, 79 %, and 80 % for the fiscal years ended January 31, 2023, 2022 and 2021, 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.

Revenue attributable to the United Kingdom, which serves as the Company's main contracting entity for Europe effective February 1, 2021, represented 18 % and 19 % of total revenue for the fiscal years ended January 31, 2023 and 2022, respectively.

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

No other individual country represented more than 10% of total revenue during the fiscal years ended January 31, 2023, 2022 and 2021.

Significant Judgments

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

The Company predominantly recognizes revenue through its performance obligation of a subscription and associated support to the Yext platform.

The 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.

The Company predominantly recognizes revenue through its performance obligation of a subscription and associated support to the Answers platform.

The 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, the Company enters into a contract with a customer that includes a promise to provide certain technical or customized professional services, in addition to a promise to provide its subscription and associated support.

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

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

In those instances when a contract includes more than one performance obligation, the Company must allocate the transaction price to the performance obligations on a relative standalone selling price basis.

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Accordingly, the Company uses the residual method, under which the total transaction price and observable SSP of the professional services performance obligation is used to arrive at the estimated SSP of the subscription and associated support performance obligation.

The Company's revenue is predominantly related to its subscription and associated support to the Yext platform.

The Company's revenue is predominantly related to its subscription and associated support to the Answers platform.

Professional services revenue accounted for approximately 9 %, 8 % and 7 % of the Company's total revenue for the fiscal years ended January 31, 2023, 2022 and 2021, respectively.

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The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, and invoice duration, timing and size.

The portion of unearned revenue expected to be recognized during the succeeding twelve-month period is classified as unearned revenue, current, and the remaining portion is classified within other long term liabilities in the Company’s consolidated balance sheet.

Substantially all of the $ 191.8 million of unearned revenue, current as of January 31, 2021 was subsequently recognized as revenue during the fiscal year ended January 31, 2022.

portion of unearned revenue expected to be recognized during the succeeding twelve-month period is classified as unearned revenue, current, and the remaining portion is classified within other long term liabilities in the Company’s consolidated balance sheet.

During the fiscal year ended January 31, 2023, revenue of $ 220.3 million was recognized related to unearned revenue, current as of January 31, 2022.

Customer deposits represent payments received in advance in instances where a revenue contract is cancelable in nature, and therefore the Company does not have an unconditional obligation to transfer control to a customer.

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As of January 31, 2022, the Company had $ 404.9 million of remaining performance obligations.

Investments in Marketable Securities

The following tables summarize the Company's investments in marketable securities:

January 31, 2023

(in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value

Money market funds $ 68,165 $ — $ — $ 68,165

treasury securities 40,372 — ( 9 ) 40,363

Total marketable securities $ 108,537 $ — $ ( 9 ) $ 108,528

January 31, 2022

(in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value

Money market funds $ 138,470 $ — $ — $ 138,470

treasury securities — — — —

Total marketable securities $ 138,470 $ — $ — $ 138,470

As of January 31, 2023 and 2022, the Company's marketable securities have a maturity of 90 days or less and are classified as cash and cash equivalents.

For the fiscal years ended January 31, 2023, 2022 and 2021, the Company had no material reclassification adjustments from accumulated other comprehensive loss to net loss.

The Company classifies interest income on investments in marketable securities, amortization of premiums and discounts, and realized gains and losses on securities available for sale within interest income in the consolidated statements of operations and comprehensive loss.

The Company regularly reviews its debt securities and monitors the surrounding economic conditions to assess the risk of expected credit losses.

As of January 31, 2023 and 2022, the unrealized losses and the related risk of expected credit losses were not significant.

Fair Value of Financial Instruments

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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, 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

The Company's assets measured at fair value on a recurring basis, by level, within the fair value hierarchy are as follows:

January 31, 2023

(in thousands) Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 68,165 $ — $ — $ 68,165

treasury securities (1)

— 40,363 — 40,363

Included in cash and cash equivalents $ 68,165 $ 40,363 $ — $ 108,528

January 31, 2022

(in thousands) Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 138,470 $ — $ — $ 138,470

treasury securities (1)

Included in cash and cash equivalents $ 138,470 $ — $ — $ 138,470

(1) The Company's U.S.

treasury securities purchased with an original maturity of less than three months from the purchase date are classified as cash and cash equivalents on its consolidated balance sheet.

The Company’s cash equivalents and marketable securities for the periods presented were valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs and were classified as Level 1 or Level 2, accordingly.

As of January 31, 2023 and 2022, the Company had goodwill of $ 4.5 million and $ 4.6 million, respectively.

The changes to goodwill during these periods were due to foreign currency translation adjustments.

The changes to goodwill during these periods relate to foreign currency translation adjustments.

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.

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

Intangible Assets

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

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.

The Company has no indefinite-lived intangible assets.

The Company determined that no events occurred or circumstances changed during the fiscal years ended January 31, 2022 and 2021 that would indicate that its intangible assets with finite lives may not be recoverable.

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

Property and Equipment, Net

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Accrued employee compensation 23,621 17,589

Accrued Knowledge Network application provider fees 2,885 3,671

Accrued Publisher Network fees 3,220 2,885

Accrued professional services and associated costs 2,328 2,663

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Total accounts payable, accrued expenses and other current liabilities $ 49,017 $ 48,432

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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Granted — $ —

Vested ( 344,515 ) $ 5.25

Forfeited ( 200,000 ) $ 6.06

Balance as of January 31, 2023

200,000 $ 6.06

The aggregate intrinsic value of options vested and expected to vest and exercisable is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of January 31, 2023.

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As of January 31, 2023, a total of 4,058,651 shares of the Company's common stock are available for sale to employees under the ESPP.

A new offering period commences on the first trading day on or after March 15 th and September 15 th each year, or on such other date as the administrator will determine and will end on the first trading day, approximately six months later, on or after September 15 th and March 15 th , respectively.

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.

In connection with the offering period which ended on March 15, 2022, 457,595 shares of common stock were purchased under the ESPP at a purchase price of $ 5.14 per share for total proceeds of $ 2.4 million.

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As of January 31, 2023, total unrecognized compensation cost related to ESPP was $ 0.2 million, net of estimated forfeitures, which will be amortized over a weighted-average remaining period of 0.12 years.

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.

Performance-Based Restricted Stock Units

In March 2022, the Company made a grant to an executive in the form of 2,000,000 performance-based restricted stock units.

This grant was outside of the Company’s 2016 Equity Incentive Plan.

These performance-based restricted stock units are subject to the achievement of certain stock price targets.

The Company uses a Monte Carlo simulation model to determine the fair value of this award and recognizes expense using the accelerated attribution method over the requisite service period.

As of January 31, 2023, the market conditions accompanying the performance-based restricted stock units were not satisfied and therefore, no shares vested.

Stock-based compensation expense recognized for performance-based restricted stock was approximately $ 2.9 million and total unrecognized stock-based compensation expense was $ 8.5 million for the fiscal year ended January 31, 2023.

This expense is expected to be amortized over a weighted-average vesting period of 3.14 years.

No stock-based compensation expense was recognized for the fiscal years ended January 31, 2022 and 2021 for performance based restricted stock units.

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

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, 2023, 2022 and 2021, the Company capitalized $ 0.5 million, $ 1.3 million and $ 2.1 million, respectively, of stock-based compensation related to software development.

As of January 31, 2023, there was approximately $ 93.6 million of total unrecognized compensation cost related to unvested stock-based awards, which are expected to be recognized over an estimated remaining weighted-average vesting period of approximately 2.72 years.

Preferred Stock

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Treasury Stock

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.

As of January 31, 2023, the Company had 20,349,613 shares of treasury stock carried at its cost basis of $ 89.3 million.

As of January 31, 2022, the Company had 6,505,334 shares of treasury stock carried at its cost basis of $ 11.9 million.

Share Repurchase Program

In March 2022, the Company's Board of Directors authorized a $ 100.0 million share repurchase program of the Company’s 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.

As part of the share repurchase program, shares may be purchased in open market transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The timing, manner, price and amount of any repurchases will be determined at the Company’s discretion, and the share repurchase program may be suspended, terminated or modified at any time for any reason.

The repurchase program does not obligate the Company to acquire any specific number of shares, and all open market repurchases will be made in accordance with Exchange Act Rule 10b-18, which sets certain restrictions on the method, timing, price and volume of open market stock repurchases.

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

On December 22, 2022, the Company 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 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.

As amended, the revolving loans bear interest, at the Company’s 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 the Company’s 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 the Company’s average daily usage of the revolving loan facility.

The obligations under the Credit Agreement are secured by a lien on substantially all of the tangible and intangible property of the Company and by a pledge of all of the equity interests of the Company's 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 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.

The obligations under the Credit Facility are secured by a lien on substantially all of the tangible and intangible property of the Company and by a pledge of all of the equity interests of the Company's 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 the Company to maintain a 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, the Company was in compliance with all debt covenants.

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Total deferred ( 815 ) ( 200 ) 858

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

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

state income taxes.

Total provision for income taxes $ ( 2,080 ) $ ( 1,277 ) $ ( 97 )

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

state income taxes due to mandatory capitalization of research and experimental expenditures.

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

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

The reconciliation is as follows:

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federal tax (provision) benefit at statutory rate $ 13,410 $ 19,316 $ 19,865

State taxes, net of federal (provision) benefit 4,344 5,000 4,124

State taxes, net of federal benefit 479 4,344 5,000

Foreign tax rate differential ( 42 ) ( 132 ) ( 2,130 )

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Rate change 62 ( 66 ) 131

Stock-based compensation expense ( 1,489 ) ( 1,929 ) ( 2,064 )

Net excess tax benefits from stock-based compensation ( 990 ) 3,444 6,519

Stock-based compensation ( 2,500 ) ( 1,489 ) ( 1,929 )

Net excess tax (shortfalls) benefits from stock-based compensation ( 6,498 ) ( 990 ) 3,444

Return to provision adjustment 235 1,718 16

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Other, net ( 239 ) ( 707 ) 1,920

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

Total provision for income taxes $ ( 2,080 ) $ ( 1,277 ) $ ( 97 )

Deferred Income Taxes

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss carryforwards.

The components of the Company's deferred income taxes were as follows:

The components of the Company's deferred income taxes are as follows:

As of January 31,

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Unearned revenue 110 61

Capitalized research & experimental expenditures 12,781 —

Intangible assets 10,943 10,625

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As of January 31, 2023, for federal income tax purposes, the Company had $ 460.4 million of gross U.S.

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.

federal net operating loss carryforwards, with pre-2018 net operating losses expiring starting in fiscal 2033 and others indefinitely carried forward.

As of January 31, 2023, for state income tax purposes, the Company had $ 22.6 million of post-apportioned, tax-effected net operating loss carryforwards, which expire in fiscal 2024 through fiscal 2041.

As of January 31, 2023, the Company had $ 7.3 million of tax-effected foreign net operating loss carryforwards which expires starting in fiscal 2026.

Utilization of the Company’s net operating loss 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 net operating loss carryforwards in the future will be dependent upon the local tax law and regulation.

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, 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.

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.

During the fiscal year ended January 31, 2023, the valuation allowance had a net increase of $ 4.4 million from approximately $ 151.2 million to $ 155.6 million, primarily due to a decrease in U.S.

deferred tax liabilities.

The Company also recorded valuation allowances in certain foreign jurisdictions due to the cumulative book loss in the consolidated group.

During the fiscal year ended January 31, 2022, the valuation allowance increased by $ 22.0 million from approximately $ 129.2 million to $ 151.2 million, primarily due to the impact of the net operating loss 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.

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

Other Considerations

income tax has not been recognized on the excess of the amount for financial reporting over the tax basis of certain investments in foreign subsidiaries that is indefinitely reinvested.

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

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End of period $ — $ 288 $ 267

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the (provision for) benefit from income taxes and recognized less than $ 0.1 million for interest and penalties in each of the fiscal years ended January 31, 2022, 2021, and 2020.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the (provision for) benefit from income taxes and recognized insignificant interest and penalties in each of the fiscal years ended January 31, 2023, 2022, and 2021.

As of January 31, 2023, 2022 and 2021, accrued unrecognized tax benefits were $ — million , $ 0.3 million and $ 0.3 million, respectively, and if recognized would reduce the (provision for) benefit from income taxes, and the Company's effective tax rate.

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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As of January 31, 2023, the Company had $ 18.2 million of operating lease liabilities, current, $ 100.5 million of operating lease liabilities, non-current, $ 85.5 million of operating lease right-of-use assets, and no financing leases, on its consolidated balance sheet.

The operating lease arrangements included in the measurement of lease liabilities do not include short-term leases as discussed in Note 2, "Summary of Significant Accounting Policies", and had a weighted-average remaining lease term of 8.7 years and a weighted-average discount rate of 5.9 %, as of January 31, 2022.

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.

The operating lease arrangements included in the measurement of lease liabilities had a weighted-average remaining lease term of 7.8 years and a weighted-average discount rate of 6.1 %, as of January 31, 2023.

During the fiscal year ended January 31, 2023, the Company paid $ 18.4 million for amounts included in the measurement of lease liabilities and did not enter into any new lease arrangements.

During the fiscal years ended January 31, 2023, 2022 and 2021, the Company recognized lease expense which consisted of the following:

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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.

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.

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

The total remaining operating lease payments included in the measurement of lease liabilities on the Company's consolidated balance sheet as of January 31, 2023, was as follows (in thousands):

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The Company's contractual obligations primarily relate to its operating lease arrangements for office space.

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

Its other contractual obligations include contracts with its Publisher Network application providers, which generally have a term of one year, although some have a term of several years, and its software vendors, among others.

These obligations represent minimum contractual payments, or the Company's best estimate for variable elements based on historical payments.

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Warranties and Indemnifications

The Yext platform is in some cases warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company's product specifications.

The Answers platform is in some cases warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company's product specifications.

The Company's arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party's intellectual property rights and/or if the Company breaches its contractual agreements with a customer or in instances of negligence, fraud or willful misconduct by the Company.

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The Company has also agreed to indemnify certain of its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person's service as a director or officer, including any action by the Company, arising out of that person's services as the Company's director or officer or that person's services provided to any other company or enterprise at the Company's request.

The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of future amounts paid.

The Company maintains director and officer insurance coverage that would generally

enable the Company to recover a portion of future amounts paid.

The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

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Shares estimated to be purchased under ESPP 517,140 291,079 315,718

Performance-based restricted stock units 2,000,000 — —

Total anti-dilutive common equivalent shares 18,675,711 17,095,994 18,732,960

Selected Quarterly Financial Data (Unaudited)

Selected summarized quarterly financial information for the fiscal years ended January 31, 2022 and 2021 was as follows:

Three months ended

(in thousands, except per share data) Jan.

Revenue $ 100,932 $ 99,529 $ 98,124 $ 91,992

Gross profit $ 76,357 $ 74,274 $ 71,509 $ 70,138

Loss from operations $ ( 21,961 ) $ ( 24,354 ) $ ( 26,412 ) $ ( 17,232 )

Net loss $ ( 23,110 ) $ ( 24,926 ) $ ( 27,592 ) $ ( 17,631 )

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

Three months ended

(in thousands, except per share data) Jan.

Revenue $ 92,194 $ 89,061 $ 88,055 $ 85,351

Gross profit $ 70,597 $ 67,422 $ 66,071 $ 64,167

Loss from operations $ ( 19,143 ) $ ( 21,760 ) $ ( 24,240 ) $ ( 29,189 )

Net loss $ ( 18,311 ) $ ( 22,041 ) $ ( 25,116 ) $ ( 29,224 )

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

Subsequent Events

On March 10, 2023, Silicon Valley Bank (“SVB”) was unable to continue their operations and 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.

While the Company's credit facility was provided by SVB, no amounts were drawn on the credit facility as of March 15, 2023, although the facility backs approximately $ 14 million of letters of credit supporting the Company's leases as of that date.

While the National Bank of Santa Clara has publicly assured holders of credit facilities that they intend to honor those facilities, this credit facility may not be available in all or in part in the near future depending on the resolution of SVB, and the Company may also need to replace it, including the letters of credit if required by various landlords.

In addition, as of March 15, 2023, substantially all of the Company's cash and cash equivalents are held at other large financial institutions.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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