What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-13 compared with 2024-03-13 · 402 added, 131 removed, 821 unchanged (39% of the section changed)

27 unchanged sentences

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 FDIC was appointed as receiver for SVB.

Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.

were each swept into receivership.

In addition, on May 1, 2023, the FDIC seized First Republic Bank and sold its assets to JPMorgan Chase & Co.

We do not expect further developments with such banks 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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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition

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Auditing the timing and measurement of the Company's revenue recognition was especially challenging due to the volume of executed contracts and the assessment of the unique terms.

This involved assessing the contractual terms and conditions of both new and modified contracts to determine the contract period, identifying all performance obligations, and determine if the transaction price expected to be received was fixed or variable.

This involved assessing the contractual terms and conditions of both new and modified contracts to determine the contract period and identifying all performance obligations.

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 accounting for revenue.

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

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

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

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

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

Accounting for the Hearsay Social, Inc.

Description of the Matter

On August 1, 2024, the Company completed the acquisition of Hearsay Social, Inc.

(“Hearsay”) for total purchase consideration of $180.4 million, including contingent consideration of $39.5 million.

This transaction was accounted for as a business combination as outlined in Note 4 using the acquisition method of accounting which requires, among other things, the identifiable assets acquired and liabilities assumed in the acquiree, to be measured at their fair values, as of the acquisition date.

Any excess of the fair value of consideration transferred over the fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill.

Auditing the Company’s accounting for its acquisition of Hearsay was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of the acquired customer relationships intangible asset, which was valued and recorded at $76.2 million, as well as the contingent consideration liability, which was valued and recorded at $39.5 million as part of the total purchase consideration of $180.4 million.

The significant assumptions used in the valuation of the customer relationships intangible asset included a discount rate and certain assumptions that form the basis of the forecasted results including revenue and annual revenue growth rates, EBITDA margin, customer attrition rates, and certain contributory asset charges.

The Company used the Multi-Period Excess-Earnings Method to measure the customer relationships intangible asset with the assistance of a third-party valuation specialist.

The significant assumptions used in the valuation of the contingent consideration liability included a discount rate and projected Annual Recurring Revenue (“ARR”) values.

The Company used the Monte Carlo model to measure the fair value of the contingent consideration liability with the assistance of a third-party valuation specialist.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s accounting for the Hearsay acquisition.

For example, we tested controls over management’s review of the valuation of the customer relationships intangible asset and contingent consideration liability, including management’s review of the valuation models applied and significant underlying assumptions.

We also tested management’s internal controls to validate that the data used in the valuation models was complete and accurate.

To test the estimated fair value of the acquired customer relationships intangible asset and contingent consideration liability, we performed audit procedures that included, among others, evaluating the Company’s valuation methodology used, evaluating the significant assumptions discussed above, and testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates used by the Company in the valuation.

We involved our valuation specialists to assist in evaluating the methodology used to estimate the fair value of the acquired customer relationships intangible asset as well as the contingent consideration liability, and to test certain significant assumptions including discount rates, among others.

We tested significant assumptions through a combination of procedures, as applicable for each assumption.

For the acquired customer relationships intangible asset, we tested the forecasted revenue, annual revenue growth rates, and EBITDA margin by comparing the selected rates to current and forecasted industry and economic trends, the historical results of the acquired business, and other guideline companies within the same industry.

For the customer attrition rates within the acquired customer relationships intangible, we tested the completeness and accuracy of the underlying data used to calculate the basis for the customer attrition rate, and compared to guideline companies within the same industry.

For certain contributory asset charges within the acquired customer relationships intangible, we developed independent assumptions utilizing market data to evaluate the reasonableness of the assumption used by management.

For all significant assumptions within the acquired customer relationships intangible asset, we performed sensitivity analyses to evaluate the changes in fair value of the acquired customer relationship intangible asset that would result from changes in the significant assumptions.

For the ARR values within the contingent consideration liability, we performed audit procedures that included, among others, assessing the terms of the arrangement, including the conditions that must be met for the contingent consideration to become payable, testing the completeness and accuracy of the underlying data used in the assumption, and comparing the significant assumptions to the Company’s historical trends and forecasts.

We also performed sensitivity analyses to evaluate the changes in fair value of the contingent consideration liability that would result from changes in the significant assumptions.

/s/ Ernst & Young, LLP

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2025, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Hearsay Social, Inc., which is included in the January 31, 2025 consolidated financial statements of the Company as of January 31, 2025 and constituted 9% of Yext’s total assets, excluding the preliminary value of goodwill and other intangible assets as of January 31, 2025, and 8% of Yext’s total revenue for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Hearsay Social, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2025, and the related notes and our report dated March 13, 2025 expressed an unqualified opinion thereon.

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$ 123,133 $ 210,184

Restricted cash, current 9,671 —

Accounts receivable, net of allowances of $ 2,014 and $ 1,013 , respectively

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Operating lease right-of-use assets 67,452 75,989

Restricted cash, non-current 5,850 —

Costs to obtain revenue contracts, non-current

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18,604 16,798

Contingent consideration, current

Total current liabilities

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76,809 89,562

Contingent consideration, non-current 18,056 —

Other long term liabilities

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( 28,058 ) ( 338 ) ( 63,858 )

Provision for income taxes ( 2,292 ) ( 2,080 ) ( 1,277 )

Benefit from (provision for) income taxes 110 ( 2,292 ) ( 2,080 )

$ ( 27,948 ) $ ( 2,630 ) $ ( 65,938 )

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Comprehensive Accumulated Treasury Total Stockholders’

Shares Amount Capital Income (Loss) Deficit Stock Equity

Shares Amount Capital Loss

Deficit Stock Equity

Balance, January 31, 2022 131,157 $ 137 $ 834,429 $ ( 187 ) $ ( 610,604 ) $ ( 11,905 ) $ 211,870

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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Vested restricted stock units converted to common shares, net of shares withheld for employee taxes 2,952 3 ( 13,017 ) — — — ( 13,014 )

Issuance of restricted stock 75 — — — — — —

Issuance of common stock under employee stock purchase plan 782 1 3,671 — — — 3,672

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8,729 8,804 8,799

Adjustments to contingent consideration 5,500 — —

Other, net ( 2,597 ) 540 1,195

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in a business acquisition:

Accounts receivable

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( 2,085 ) ( 2,728 ) ( 6,193 )

Cash paid in acquisition, net of cash acquired ( 89,407 ) — —

Net cash used in investing activities

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( 853 ) ( 452 ) ( 509 )

Deferred acquisition payments ( 3,542 ) — —

Proceeds, net from employee stock purchase plan withholdings

3,297 3,894 3,153

Net cash (used in) provided by financing activities

( 23,254 ) ( 79,021 ) 24,617

Effect of exchange rate changes on cash and cash equivalents

( 205 ) ( 3,635 ) ( 2,249 )

Net increase (decrease) in cash and cash equivalents 19,970 ( 70,996 ) 30,799

Cash and cash equivalents at beginning of period

190,214 261,210 230,411

Cash and cash equivalents at end of period

Net cash used in financing activities

( 28,541 ) ( 23,254 ) ( 79,021 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1,708 ) ( 205 ) ( 3,635 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 71,530 ) 19,970 ( 70,996 )

Cash, cash equivalents and restricted cash at beginning of period 210,184 190,214 261,210

Cash, cash equivalents and restricted cash at end of period $ 138,654 $ 210,184 $ 190,214

Supplemental disclosure of cash flow data:

Cash paid on interest

$ — $ 41 $ 75

Cash paid on income taxes

$ 3,176 $ 2,716 $ 1,046

Supplemental reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:

Fiscal year ended January 31,

(in thousands) 2025 2024 2023

Cash and cash equivalents $ 123,133 $ 210,184 $ 190,214

Restricted cash, current and non-current 15,521 — —

Total cash, cash equivalents and restricted cash $ 138,654 $ 210,184 $ 190,214

See the accompanying notes to the consolidated financial statements.

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The Company's digital presence platform (also known as the Answers Platform) lets businesses structure and organize information about their brands in the Company's knowledge graph, Yext Content (also known as the Knowledge Graph), which is then delivered across first- and third-party websites and applications through its network of over 200 service and application providers, which the Company refers to as its Publisher Network.

These publishers include, among others, Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.

The Company's platform powers all of the Company's key products, including Listings, Reviews, Pages, and Search, each with robust analytics capabilities for businesses to easily track performance across customer experiences.

In August 2024, the Company acquired Hearsay Social, Inc., a digital client engagement platform for financial services ("Hearsay").

See Note 4 "Business Combination" for additional information.

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

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

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting, which requires identifiable assets acquired and liabilities assumed in the acquiree, to be measured at their fair values, as of the acquisition date.

Any excess of the fair value of consideration transferred over the fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill.

The determination of fair value requires management to make significant estimates, particularly with respect to intangible assets.

These estimates are inherently uncertain and subject to change as additional information is obtained during the measurement period, which lasts for up to one year from the acquisition date.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statement of operations and comprehensive loss.

See Note 4 "Business Combination" for details.

Use of Estimates

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

These estimates include, but are not limited to, the standalone selling prices of performance obligations, the incremental borrowing rate associated with lease liabilities, the useful life of capitalized costs to obtain revenue contracts, income taxes including tax-related valuation allowances, the valuation and assumptions underlying stock-based compensation, the fair value of acquired assets and assumed liabilities from business combinations, contingent consideration, as well as the fair value of acquiree exchanged stock-based compensation awards, and useful lives and recoverability of intangible assets.

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

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The Company is the provider of the 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 Company's 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.

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

The CODM of the Company is the Chief Executive Officer.

The CODM evaluates the Company's financial information, resources and performance 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.

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Capitalized software development costs incurred in connection with additional functionality to the Company's 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.

Cost of revenue also includes amortization expense, which includes amounts related to intangible assets arising from acquisitions, as well as lease expenses, software expense, and depreciation expense, each of which are allocated based on employee headcount.

Stock-Based Compensation

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

Liability classified awards are remeasured at fair value at each reporting date until the award is settled.

Advertising and Other Promotional Costs

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Capitalized software development costs incurred in internal-use projects are recognized as depreciation expense and are allocated based on employee headcount.

Capitalized software development costs, net were $ 2.1 million and $ 3.9 million as of January 31, 2024 and 2023, respectively, and primarily related to costs incurred in connection with additional functionality to its platform.

Capitalized software development costs, net were $ 2.1 million as of both January 31, 2025 and 2024, respectively, and primarily related to costs incurred in connection with additional functionality to its platform.

Depreciation expense associated with capitalized software development costs was $ 1.8 million, $ 3.2 million and $ 4.9 million during the fiscal years ended January 31, 2025, 2024 and 2023, respectively.

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

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

future taxable income and tax-planning strategies.

See Note 13 "Income Taxes" to the Company's consolidated financial statements for additional information on the composition of these valuation allowances.

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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.

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.

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At January 31, 2025 and 2024, no single customer accounted for more than 10% of the Company's accounts receivable.

No single customer accounted for more than 10% of the Company's revenue for the fiscal years ended January 31, 2024, 2023 and 2022, respectively.

No single customer accounted for more than 10% of the Company's total revenue for the fiscal years ended January 31, 2025, 2024 and 2023, respectively.

Cash and Cash Equivalents

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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.

Restricted cash as of January 31, 2025, consists of $ 15.5 million of funds held in escrow in connection with the acquisition of Hearsay for certain post-closing indemnification obligations.

Marketable Securities

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Additions 1,665

Additions related to Hearsay beginning balance at August 1, 2024 94

Deductions - write offs ( 758 )

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

A qualitative assessment is performed to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount.

A quantitative assessment is performed if the qualitative assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed.

The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent that the reporting unit’s carrying value exceeds its fair value.

Intangible assets are amortized over their estimated useful lives.

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

The Company's intangible assets included domains with a net book value of $ 0.2 million as of both January 31, 2024 and 2023.

Deferred Financing Costs

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Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

The updated standard is effective for the Company's annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting ASU 2023-07.

The Company adopted this accounting standard on January 31, 2025.

While the adoption has no impact on our financial statements, it has resulted in incremental disclosures within the footnotes to the consolidated financial statements.

See Note 17 "Segment Information" for additional information.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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The Company is currently evaluating the impact of ASU 2023-09.

In November 2024, the FASB issued 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement.

The updated standard is effective for the Company's annual periods beginning in fiscal 2028 and interim periods beginning in the first quarter of fiscal 2029.

Early adoption is permitted.

ASU 2024-03 is required to be applied prospectively, with retrospective application permitted.

The Company is currently evaluating the impact of adopting ASU 2024-03.

Geographic Region

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The Company records a contract asset when revenue is recognized prior to being billed.

Contract assets are included in prepaid expenses and other current assets on the consolidated balance sheet and were not significant as of January 31, 2024 and 2023.

Contract assets were $ 1.7 million as of January 31, 2025 and not significant as January 31, 2024.

Contract assets are included in prepaid expenses and other current assets on the consolidated balance sheet.

Contract Liabilities

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Unearned revenue represents amounts billed, or payments received, in advance of revenue recognition for which the Company has an unconditional obligation to transfer goods or services associated with a non-cancelable contract.

revenue is subsequently recognized as revenue when transfer of control to a customer has occurred.

Unearned revenue is subsequently recognized as revenue when transfer of control to a customer has occurred.

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 $ 223.7 million of unearned revenue, current as of January 31, 2023 was subsequently recognized as revenue during the fiscal year ended January 31, 2024.

Revenue recognized of $ 208.7 million during the fiscal year ended January 31, 2025 was included in unearned revenue, current as of January 31, 2024.

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.

As of January 31, 2024 and 2023, customer deposits of $ 0.2 million and $ 0.3 million were included in accounts payable, accrued expenses and other current liabilities on the Company's consolidated balance sheet, respectively.

Customer deposits was $ 0.2 million as of both, January 31, 2025 and 2024, and was included in accounts payable, accrued expenses and other current liabilities on the Company's consolidated balance sheet, respectively.

Remaining Performance Obligations

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As of January 31, 2024, the Company had $ 465.1 million of remaining performance obligations.

Business Combination

Hearsay Acquisition

On August 1, 2024 (the "Acquisition Date"), Yext completed its acquisition of Hearsay pursuant to an Agreement and Plan of Merger dated June 10, 2024 (such acquisition, the "Acquisition").

At the effective time of the Acquisition, each outstanding share of Hearsay stock was canceled and converted to a right to receive cash consideration, and Hearsay became a wholly owned subsidiary of Yext.

The Acquisition is intended to produce an end-to-end digital presence platform, combining Yext’s digital presence management capabilities with Hearsay's compliant engagement solutions across social media, websites, text, and voice.

The Acquisition Date fair value of consideration transferred for Hearsay consisted of the following:

(in thousands)

Cash consideration and liabilities incurred

Contingent consideration

Fair value of outstanding employee awards assumed

Other transaction related payments (1)

Total consideration transferred

(1) Inclusive of post-closing adjustments of less than $ 0.1 million.

Cash consideration and liabilities incurred of $ 132.5 million includes the base purchase price of $ 125.0 million and customary adjustments set forth in the merger agreement.

The cash consideration includes $ 17.2 million of payments held in escrow as partial security for certain indemnification obligations of the former holders of Hearsay equity.

Amounts held in escrow were reflected on the Company's consolidated balance sheet at the Acquisition Date within restricted cash (current and non-current) as the funds are owned by the Company until settlement.

In connection with the amounts held in escrow, the Company recognized a corresponding liability on its consolidated balance sheet at the Acquisition Date at its present value of $ 16.6 million to reflect the amounts payable to former Hearsay equity holders following the resolution of contingencies surrounding the amounts held in escrow.

The liability will be accreted to its contractual value over the estimated escrow period with changes in the liability being recorded within interest expense on the Company's consolidated statements of operations and comprehensive loss.

For the fiscal year ended January 31, 2025, interest expense was immaterial , and $ 2.0 million was released from amounts held in escrow following the completion of the post-closing process.

As of January 31, 2025, $ 9.7 million of the remaining escrow is estimated to be released during the fiscal year ended January 31, 2026, with the remaining amount thereafter.

The preliminary purchase price also includes $ 39.5 million of contingent consideration related to an earnout arrangement whereby the Company may be required to pay up to $ 75.0 million to the former holders of Hearsay's outstanding equity interests, subject to the achievement of certain Annual Recurring Revenue ("ARR") milestones over a two-year period which will end in September 2026.

The portion of the earnout arrangement included within contingent consideration excludes amounts attributable to employees of Hearsay that held unvested awards as of the Acquisition Date, for which earnout payments are subjected to future service.

Accordingly, these amounts represent compensation expense in the post-Acquisition period.

Payment of the earnout can be settled in cash or shares at the Company's election.

The Company preliminarily estimated the fair value of the contingent consideration as of the Acquisition Date.

This estimate incorporates projected ARR values inclusive of revenue synergies and growth rates, as well as other key inputs.

The key inputs as of the Acquisition Date are outlined below:

Volatility 15.0 %

Revenue beta 0.35

Expected timing of payment FY 2026 - FY 2027

Discount rate 5.90 % - 6.20 %

See Note 6 "Fair Value of Financial Instruments" for additional details on the fair value of contingent consideration.

The Company also issued approximately 2.1 million replacement equity awards with a fair value of $ 11.8 million, of which (i) $ 7.8 million was allocated to consideration transferred for pre-Acquisition services, inclusive of employer related payroll taxes, and (ii) $ 4.2 million was allocated to the post-Acquisition period and expensed over the remaining requisite service period associated with the awards.

The value attributed to consideration transferred was based on the fair value of Hearsay options prior to the exchange.

Approximately 1.5 million equity awards that were granted also vested on the Acquisition Date, and $ 0.6 million was recognized in the post-Acquisition period immediately to reflect the excess of the fair value of the replacement awards over the fair value of the Hearsay options.

These awards were subsequently net settled, which represents an event that is separate from the Acquisition.

In addition, the Company recognized other transaction related payments of $ 0.6 million in the estimated consideration which are comprised primarily of post-closing adjustments, including estimated working capital.

The Company is also required to make additional payments related to a $ 20.0 million incentive pool that can be settled in cash or shares at the Company's election, shortly after the first anniversary of the Acquisition Date.

Approximately $ 8.8 million of this pool is to be paid to Hearsay founders and early employees, and is not contingent on future service being provided.

This amount was recognized immediately in the post-Acquisition period in operating expenses, within general and administrative expenses on the Company's consolidated statements of operations and comprehensive loss.

The remaining amount of the incentive pool is allocated to employees generally subject to continued employment of one-year from the Acquisition Date.

In addition, a transaction bonus of $ 1.5 million is payable to individuals determined by Hearsay and deemed to be compensation expense attributable to the post-Acquisition period.

Amounts attributable to the remaining incentive pool and transaction bonus will be expensed in the post-Acquisition period over the requisite service period.

Acquisition-related costs totaled $ 11.2 million for the fiscal year ended January 31, 2025.

These costs were expensed as incurred and include $ 8.8 million related to the portion of the incentive pool attributable to Hearsay founders and early employees, as well as professional fees.

Acquisition-related costs are presented within general and administrative expense in the Company's consolidated statement of operations and comprehensive loss.

The Company's financial results for the fiscal year ended January 31, 2025 reflect inclusion of the business operations of Hearsay from the Acquisition Date, which contributed $ 33.2 million of revenue.

Due to the continued integration of the combined business, it was impractical to determine the impact on earnings.

The following table summarizes the preliminary purchase price allocation of the fair values of the assets acquired and liabilities assumed at the Acquisition Date:

(amounts in thousands)

Assets acquired:

Cash and cash equivalents $ 26,362

Accounts receivable, net 5,619

Prepaid expenses and other current assets 2,454

Property and equipment, net 399

Operating lease right-of-use assets 414

Other long term assets (1)

Liabilities assumed:

Accounts payable, accrued expenses, and other current liabilities ( 5,127 )

Operating lease liabilities, current ( 74 )

Unearned revenue, current ( 37,672 )

Operating lease liabilities, non-current ( 340 )

Other long term liabilities (1)(2)

Identifiable intangible assets acquired 101,200

Net assets acquired $ 87,998

Total consideration $ 180,427

(1) Other long term assets includes a $ 5.9 million indemnification asset, with the underlying indemnified liability of $ 6.2 million recorded within

other long term liabilities.

(2) Included within other long term liabilities is a deferred tax liability of approximately $ 3.4 million.

(3) Inclusive of post-closing adjustments of less than $ 0.1 million.

The Company determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgement related to estimates.

The preliminary fair value estimates and assumptions regarding certain tangible assets acquired and liabilities assumed, and the valuation of intangible assets acquired, income taxes and contingent consideration are subject to change as additional information is obtained during the measurement period.

During the fiscal year ended January 31, 2025, the Company refined its estimates pertaining to the valuation of intangibles which resulted in an increase of $ 9.9 million in intangible assets and $ 1.7 million in deferred tax liabilities.

Additionally, the Company increased the useful life of the customer relationships asset from 12 years to 13 years.

See Note 7 "Goodwill and Intangible Assets" for additional information.

Pursuant to the terms of the merger agreement, the Company was indemnified by the sellers for the pre-Acquisition contingent liability assumed in the Acquisition associated with the Canadian Good and Services Tax (“GST”) and Harmonized sales tax (“HST”) related to certain historical foreign sales transactions.

The indemnification of the indirect tax liability is capped at $ 5.9 million and an escrow fund was established in the same amount.

At the Acquisition Date, the associated indirect tax liability was recorded at the estimated fair value of $ 6.2 million within other long term liabilities, and the Company recorded an indemnification asset up to the amount of the escrow fund balance of $ 5.9 million.

In October 2024, initial filings to settle this matter with the Canada Revenue Agency were initiated and an initial payment of $ 1.9 million was made.

As of January 31, 2025, the remaining indirect tax liability was $ 4.5 million.

Goodwill represents the excess of the purchase consideration over the fair value of the underlying net identifiable assets and is attributable primarily to expected synergies and the assembled workforce of Hearsay.

Goodwill is not deductible for income tax purposes.

Intangible Assets

The following table sets forth the preliminary amounts, allocated to the intangible assets identified and their estimated useful lives as of the Acquisition Date:

Identifiable Intangible Assets Acquired Approximate Fair Value

(In thousands) Estimated Useful Life

(In years) Classification of Amortization

Customer relationships $ 76,200 13 Sales and marketing

Technology 24,200 3 Cost of revenue

Trademark 800 3 Sales and marketing

Total $ 101,200

The fair values of the identifiable intangible assets are based on management’s estimates as of the Acquisition Date.

The fair value of the intangible assets was determined using the excess earnings method and the relief from royalty method, under the income approach.

The Company applied judgment in estimating the fair value of customer relationships using the excess earnings method, which involved the use of significant assumptions with respect to revenue, EBITDA, attrition rate, research and development addback, technology royalty rate, and discount rate.

The fair value of the developed technology and trademark was estimated using the relief from royalty method, which incorporates assumptions including royalty rates, annual obsolescence, tax rates, and discount rates.

Pro Forma Results

The unaudited pro forma financial information presented below was derived from historical financial records of Yext and Hearsay and presents the operating results for the periods presented as if the Acquisition occurred on February 1, 2023.

The pro forma results include adjustments to record additional compensation expense, adjust commission expense, and adjust for the impact of purchase accounting adjustments including amortization and depreciation expense, and the related tax effects.

Accordingly, the following unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Acquisition had occurred at the beginning of fiscal year 2024, nor are they indicative of future results of operations:

(in thousands) Fiscal Year Ended January 31,

Revenue $ 452,129 $ 465,231

$ ( 25,225 ) $ ( 51,878 )

Investments in Marketable Securities

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Money market funds $ 36,371 $ — $ — $ 36,371

treasury securities 82,642 — ( 7 ) 82,635

Total marketable securities $ 36,371 $ — $ — $ 36,371

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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.

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

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

January 31, 2025

(in thousands) Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 36,371 $ — $ — $ 36,371

treasury securities — 82,635 — 82,635

Included in cash and cash equivalents $ 63,966 $ 82,635 $ — $ 146,601

Total assets $ 36,371 $ — $ — $ 36,371

Contingent consideration (1)

$ — $ — $ 45,000 $ 45,000

Total liabilities $ — $ — $ 45,000 $ 45,000

January 31, 2024

(in thousands) Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 63,966 $ — $ — $ 63,966

treasury securities — 82,635 — 82,635

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

Total assets $ 63,966 $ 82,635 $ — $ 146,601

(1) As of January 31, 2025, contingent consideration includes $ 26.9 million classified as current and $ 18.1 million classified as non-current.

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.

The Company had goodwill of $ 4.5 million as of both January 31, 2024 and 2023.

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

As of January 31, 2025, the Company measured its contingent consideration associated with the Acquisition, on a recurring basis using significant unobservable inputs, classified as Level 3.

Contingent Consideration

The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date.

The Company generally determines the fair value of contingent consideration using the Real Options Method that employs a Monte Carlo simulation model.

Each reporting period thereafter, these obligations are revalued and changes in their fair values are recorded within general and administrative expenses within the consolidated statements of operations and comprehensive loss.

Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates, and from changes pertaining to the estimated or actual achievement of the defined milestones.

Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period.

Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the fair value and corresponding changes in fair value of the contingent consideration the Company records in any given period.

In connection with the Acquisition, the estimated fair value of the contingent consideration incorporates projected ARR values inclusive of revenue synergies and growth rates, as well as other key inputs.

The key inputs as of January 31, 2025 are outlined below:

Volatility 14.5 %

Revenue beta 0.26

Expected timing of payment FY 2026 - FY 2027

Discount rate 6.76 %- 6.84 %

A rollforward of the fair value of the contingent consideration liability for the fiscal year ended January 31, 2025 is as follows:

(in thousands)

Balance as of August 1, 2024 $ 39,500

Change in fair value 5,500

Balance as of January 31, 2025

Goodwill and Intangible Assets

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

The Company determined that no events occurred or circumstances changed that would more likely than not reduce the fair value of the Company's reporting unit below its carrying amount during the fiscal years ended January 31, 2024 and 2023.

On August 1, 2024, the Acquisition was completed, resulting in the following changes in the carrying amount of goodwill for the fiscal year ended January 31, 2025, inclusive of measurement period adjustments.

See Note 4 "Business Combination" for additional information.

The following table presents a reconciliation of the beginning and ending balances of goodwill:

Balance as of January 31, 2024 $ 4,478

Goodwill acquired - Hearsay Social, Inc 100,530

Measurement period adjustments ( 8,101 )

Effect of foreign currency translation on Goodwill acquired ( 125 )

Balance as of January 31, 2025

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

Intangible Assets

The Company’s intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives, which range from 3 to 15 years.

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 reporting periods ended January 31, 2025 and 2024 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.

Amortization expense was $ 7.1 million for the fiscal year ended January 31, 2025, and less than $ 0.1 million for each the fiscal years ended January 31, 2024 and 2023, respectively.

The gross carrying amount and accumulated amortization of intangible assets other than goodwill are as follows:

As of January 31, 2025

(in thousands) Gross Carrying Amount Accumulated

Amortization Net Carrying Value Weighted Average Remaining Useful Life

Domains $ 365 $ ( 221 ) $ 144 6.0

Customer relationships (1)

76,200 ( 2,931 ) 73,269 12.5

Technology (1)

24,200 ( 4,033 ) 20,167 2.5

Trademarks (1)

800 ( 133 ) 667 2.5

Total as of January 31, 2025

$ 101,565 $ ( 7,318 ) $ 94,247 10.1

As of January 31, 2024

(in thousands) Gross Carrying Amount Accumulated

Amortization Net Carrying Value Weighted Average

Remaining Useful Life

Domains $ 365 $ ( 197 ) $ 168 7.0

Total as of January 31, 2024

$ 365 $ ( 197 ) $ 168

(1 ) Recognized in connection with the Acquisition.

The estimated future aggregate amortization expense as of January 31, 2025 is as follows (in thousands):

Fiscal Year Ending January 31,

2026 $ 14,219

2031 and thereafter 43,988

Total $ 94,247

Property and Equipment, Net

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Accrued employee compensation (1)

29,153 15,961

Accrued Publisher Network fees 4,051 1,839

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Total accounts payable, accrued expenses and other current liabilities $ 70,022 $ 38,766

(1) As of January 31, 2025, accrued employee compensation included $ 8.6 million related to the portion of the incentive pool and other retention arrangements where continuing service is required arising from the Acquisition.

(2) As of January 31, 2025, other current liabilities included $ 9.7 million payable to Hearsay owners in connection with escrow funds held by Yext related to indemnity claims in connection with the Acquisition.

(3) As of January 31, 2025, other current liabilities included $ 8.8 million related to the incentive pool allocated to founders and early employees in connection with the Acquisition.

Stock-Based Compensation

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As of January 31, 2025, the number of shares available for future award under the 2016 Plan is 8,352,951 .

Hearsay Social, Inc.

2019 Equity Incentive Plan

In connection with the Acquisition, the Company assumed the Hearsay Social, Inc.

2019 Equity Incentive Plan (the "Hearsay Plan"), including all outstanding restricted stock units ("RSUs") held by continuing Hearsay employees.

These assumed awards were converted into approximately 2.1 million RSUs to receive shares of the Company’s common stock at the effective time of the Acquisition and are generally subject to their original terms and conditions under the Hearsay Plan.

The Hearsay Plan allows for the issuance of up to approximately 6.0 million shares of the Company’s common stock.

Under the Hearsay Plan, the Company may grant stock options with an exercise price that is no less than the fair market value on the date of grant, restricted stock, RSUs, and other stock-based awards to the Company’s employees.

Equity awards granted under the Hearsay Plan following the Acquisition are expected to be on similar terms and consistent with similar grants made pursuant the Company’s 2016 Equity Incentive Plan.

Awards canceled and forfeited and shares withheld to satisfy tax withholding obligations become further available for future issuance under the Hearsay Plan.

As of January 31, 2025, the number of shares available for future award under the Hearsay Plan is 3,565,676 .

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 requisite service period of the applicable award generally using the straight-line method or accelerated attribution method.

The following table summarizes the Company's stock-based compensation expense for equity classified awards for the periods presented:

Fiscal year ended January 31,

(in thousands) 2025 2024 2023

Equity classified awards:

Cost of revenue $ 2,753 $ 2,900 $ 5,042

Sales and marketing 15,583 15,067 22,961

Research and development 10,265 11,349 16,401

General and administrative 23,179 15,645 18,674

Total stock-based compensation expense $ 51,780 $ 44,961 $ 63,078

During the fiscal years ended January 31, 2025, 2024 and 2023, the Company capitalized $ 0.3 million, $ 0.3 million and $ 0.5 million, respectively, of stock-based compensation related to software development.

As of January 31, 2025, there was approximately $ 52.5 million of total unrecognized compensation cost related to unvested stock-based awards, which is expected to be recognized over an estimated remaining weighted-average vesting period of approximately 1.79 years.

In addition, certain liability classified awards were granted in connection with the Acquisition and relate to portions of the incentive pool and earnout that generally vest over one year from the Acquisition Date.

These awards may be settled in cash or shares at the Company's election, and are measured at fair value at each reporting date based on their expected value, with compensation cost being recognized over the related service period.

The corresponding liabilities associated with these awards are included within accounts payable, accrued expenses and other current liabilities, and other long term liabilities on the Company's consolidated balance sheet depending on the estimated settlement date of the award.

The following table summarizes the Company's compensation expense for liability classified awards for the periods presented:

Fiscal year ended January 31,

(in thousands) 2025 2024 2023

Liability classified awards:

Cost of revenue $ 201 $ — $ —

Sales and marketing 5,782 — —

Research and development 2,419 — —

General and administrative 703 — —

Total compensation expense $ 9,105 $ — $ —

Stock Options

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Restricted Stock and Restricted Stock Units

The following table summarizes the activity related to the Company's restricted stock and restricted stock units:

The following table summarizes the activity related to the Company's restricted stock and restricted stock units ("RSUs"):

Outstanding Weighted-Average Grant Date Fair Value

Balance as of January 31, 2023

Balance, January 31, 2024

9,790,748 $ 7.54

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Forfeited or canceled ( 2,835,228 ) $ 6.71

Balance as of January 31, 2024

Balance, January 31, 2025

10,315,199 $ 6.37

The estimated weighted-average grant date fair value of restricted stock and restricted stock units granted was $ 8.28 , $ 5.71 , and $ 12.94 per share for the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

The estimated weighted-average grant date fair value of restricted stock and RSUs granted was $ 5.85 , $ 8.28 , and $ 5.71 per share for the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

The fair value of the common stock is the Company’s closing stock price as reported on the New York Stock Exchange.

The total fair value of restricted stock and restricted stock units vested was $ 40.7 million, $ 63.5 million, and $ 69.8 million for the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

The total fair value of restricted stock and RSUs vested was $ 40.6 million, $ 40.7 million, and $ 63.5 million for the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

Employee Stock Purchase Plan

In March 2017, the Company's Board of Directors adopted, and its stockholders approved, the 2017 Employee Stock Purchase Plan ("ESPP"), which became effective on the date it was adopted.

The number of shares of the Company's common stock that will be available for sale to employees under the ESPP increases annually on the first day of each fiscal year, in an amount equal to the lesser of:

(i) 2,500,000 shares;

(ii) 1 % of the outstanding shares of the Company's common stock as of the last day of the immediately preceding fiscal year;

or (iii) such other amount as the administrator may determine.

On February 1, 2023, the number of shares of common stock available for issuance under the ESPP was automatically increased according to its terms by 1,223,345 shares.

As of January 31, 2024, a total of 4,500,768 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.

The Company offers an ESPP to eligible employees.

The ESPP allows employees to purchase shares of common stock at a 15 % discount, based on the lower of the fair market value per share at the commencement of or completion of the offering period.

Offering periods commence on the first trading day on or after March 15 th and September 15 th of each year, and end on the first trading day, approximately six months later.

In connection with the offering period which ended on March 15, 2024, 513,277 shares of common stock were purchased under the ESPP at a purchase price of $ 4.58 per share for total proceeds of $ 2.4 million.

In connection with the offering period which ended

on September 15, 2023, 289,628 shares of common stock were purchased under the ESPP at a purchase price of $ 5.36 per share for total proceeds of $ 1.6 million.

A new offering period began on September 15, 2023 and will end on March 15, 2024.

As of January 31, 2024, 487,529 shares are estimated to be purchased at the end of the offering period and $ 2.0 million has been withheld on behalf of employees for these future purchases under the ESPP and is included in accounts payable, accrued expenses and other current liabilities.

The Black-Scholes option-pricing model assumptions used to calculate the fair value of shares, estimated at commencement of the offering period, to be purchased during an ESPP offering period were as follows:

In connection with the offering period which ended on September 15, 2024, 292,160 shares of common stock were purchased under the ESPP at a purchase price of $ 4.58 per share for total proceeds of $ 1.3 million.

The Black-Scholes option-pricing model assumptions used to calculate the fair value of shares, estimated at commencement of the offering period, were as follows:

Fiscal year ended January 31,

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0.86 % - 3.78 %

The expected life assumptions were based on each offering period's respective purchase date.

The Company estimated the expected volatility assumption based on the historical volatility of its stock price.

The risk-free rate assumptions were based on the U.S.

treasury yield curve in effect at commencement of the offering period.

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

During the fiscal years ended January 31, 2025, 2024 and 2023, the Company recorded stock-based compensation expense associated with the ESPP of $ 1.4 million, $ 1.7 million and $ 1.5 million, respectively.

As of January 31, 2024, total unrecognized compensation cost related to ESPP was $ 0.3 million, net of estimated forfeitures, which will be amortized over a weighted-average remaining period of 0.12 years.

As of January 31, 2025, total unrecognized compensation cost related to the ESPP was $ 0.2 million, net of estimated forfeitures, which will be amortized over a weighted-average remaining period of 0.12 years.

Performance-Based Restricted Stock Units

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As of January 31, 2025, the market conditions accompanying the PSUs were not satisfied and therefore, no shares vested.

During the fiscal years ended January 31, 2024 and 2023, the Company recognized stock-based compensation expense related to PSUs of approximately $ 4.6 million and $ 2.9 million, respectively.

During the fiscal years ended January 31, 2025, 2024 and 2023, the Company recognized stock-based compensation expense related to PSUs of approximately $ 8.3 million, $ 4.6 million and $ 2.9 million, respectively.

As of January 31, 2025, the total unrecognized stock-based compensation expense related to unvested PSUs was $ 4.9 million, which will be amortized over a weighted-average remaining period of 0.98 years.

Stock-Based Compensation Expense

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

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

Fiscal year ended January 31,

(in thousands) 2024 2023 2022

Cost of revenue $ 2,900 $ 5,042 $ 7,099

Sales and marketing 15,067 22,961 26,496

Research and development 11,349 16,401 20,654

General and administrative 15,645 18,674 19,231

Total stock-based compensation expense $ 44,961 $ 63,078 $ 73,480

During the fiscal years ended January 31, 2024, 2023 and 2022, the Company capitalized $ 0.3 million, $ 0.5 million and $ 1.3 million, respectively, of stock-based compensation related to software development.

As of January 31, 2024, there was approximately $ 78.2 million of total unrecognized compensation cost related to unvested stock-based awards, which is expected to be recognized over an estimated remaining weighted-average vesting period of approximately 2.48 years.

Preferred Stock

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In September 2023, the Board of Directors authorized an additional $ 50.0 million to the share repurchase program.

During the fiscal year ended January 31, 2024, 2,980,641 shares were purchased for a total cost of $ 22.9 million, inclusive of broker commissions.

As of January 31, 2024, a total of 16,824,920 shares have been purchased for a total cost of $ 100.3 million since the commencement of program, inclusive of broker commissions, and approximately $ 49.7 million remained available for future purchases.

During the fiscal year ended January 31, 2025, 2,687,528 shares were purchased for a total cost of $ 18.1 million, excluding broker commissions.

As of January 31, 2025, a total of 19,512,448 shares have been purchased for a total cost of $ 118.1 million since the commencement of the program, excluding broker commissions, and approximately $ 31.9 million remained available for future purchases.

In March 2025, the Board of Directors authorized an additional $ 50.0 million to the 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”).

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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.

2”) to the Credit Agreement, dated March 11, 2020, and on July 26, 2024, the Company entered into a third amendment ("Amendment No.

3") to the Credit Agreement collectively referred to as the Credit Facility.

No significant debt issuance costs were incurred in association with Amendment No.2 and Amendment No.3.

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.

2 amended 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.

Amendment No.

3 amended the Credit Facility to, among other things (i) amend the interest rate applicable to loans under the Credit Facility, and (ii) replace the consolidated quick ratio and recurring revenue growth rate financial covenants with consolidated total leverage ratio and minimum liquidity financial covenants.

The Credit Facility provides for a senior secured revolving loan facility of up to $ 50.0 million that matures on December 22, 2025, with the right subject to certain conditions to add an incremental revolving loan facility of up to $ 50.0 million in the aggregate.

The 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.

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.

Loans based on SOFR shall bear interest at a rate between SOFR plus 1.75 % and SOFR plus 2.25 %, depending on the Company’s consolidated total leverage ratio 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 1.25 % and the base rate minus 0.75 %, depending on the Company’s consolidated total leverage ratio.

The Company is also obligated to pay a commitment fee on the unused portion of the facility at a rate of 0.25 % per annum.

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.

The obligations under the Credit Facility are secured by a lien on substantially all of the Company's tangible and intangible property and by a pledge of all of the Company's 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 minimum liquidity of $ 35.0 million at all times and a consolidated total leverage ratio of no greater than 3.00 to 1.00, tested on a quarterly basis.

As of January 31, 2025, the Company was in compliance with all debt covenants.

As of such date, the $ 50.0 million revolving loan facility had $ 36.6 million available and $ 13.4 million in letters of credit allocated as security in connection with office space.

Following the closure of SVB by the California Department of Financial Protection and Innovation on March 10, 2023, and its subsequent receivership by the Federal Deposit Insurance Corporation (“FDIC”), the FDIC announced that all of SVB’s deposits and substantially all of its assets had been transferred to a newly created, full-service FDIC-operated bridge bank, Silicon Valley Bridge Bank N.A.

On March 27, 2023, First Citizens Bank & Trust Company (“First Citizens”) acquired substantially all of the loans and certain other assets of SVBB, and assumed all customer deposits and certain other liabilities of SVBB.

As such, First Citizens assumed SVB’s obligations under the Credit Facility.

The domestic and international components of the Company's loss from operations before income taxes are as follows:

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Total deferred 3,425 ( 75 ) ( 815 )

Total provision for income taxes $ ( 2,292 ) $ ( 2,080 ) $ ( 1,277 )

Total benefit from (provision for) income taxes $ 110 $ ( 2,292 ) $ ( 2,080 )

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 limitations imposed on state net operating loss ("NOL") carryforwards and state margin tax.

state income taxes due to limitations imposed on state operating loss ("NOLs") carryforwards and state margin tax.

During the fiscal year ended January 31, 2025, the Company recorded a tax benefit of $ 3.4 million from a partial release of the valuation allowance in connection with the Acquisition.

The net deferred tax liability from the Acquisition provided a source of additional income to support the realizability of the Company's pre-existing deferred tax assets and as a result, the Company released a portion of its valuation allowance.

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.

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Global intangible low-taxed income ( 1,191 ) — ( 1,096 )

Acquisition-related costs ( 3,532 ) — —

Other, net ( 687 ) 292 ( 239 )

Total provision for income taxes $ ( 2,292 ) $ ( 2,080 ) $ ( 1,277 )

Total benefit from (provision for) income taxes $ 110 $ ( 2,292 ) $ ( 2,080 )

Deferred Income Taxes

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Unearned revenue

Property and equipment

Capitalized research & experimental expenditures 51,062 25,409

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Operating lease right-of-use assets ( 16,638 ) ( 18,573 )

Intangible assets ( 14,427 ) —

Other ( 533 ) ( 700 )

Total deferred tax liabilities ( 37,514 ) ( 27,684 )

Net deferred tax (liability) asset $ ( 136 ) $ ( 61 )

Net deferred tax liability

$ ( 106 ) $ ( 136 )

As of January 31, 2025, for federal income tax purposes, the Company had $ 321.2 million of gross U.S.

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deferred tax assets resulting from capitalization and amortization of research and development expenses, and generation of U.S.

research and development tax credits, then netted with the net deferred tax liability from the Acquisition and impact of NOLs utilized in the current period.

During the fiscal year ended January 31, 2024, the valuation allowance increased $ 13.9 million from approximately $ 155.6 million to $ 169.5 million, primarily due to increases in U.S.

deferred tax assets resulting from

capitalization and amortization of research and development expenses, and generation of U.S.

research and development tax credits, then netted with the impact of NOLs utilized in the current period.

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

deferred tax liabilities and the recording of valuation allowance in certain foreign jurisdictions.

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

Other Considerations

The Company generally does not provide deferred income taxes for the undistributed earnings of its foreign subsidiaries where the Company intends to reinvest such earnings indefinitely.

Should circumstances change and it becomes apparent that some or all of the undistributed earnings will no longer be indefinitely reinvested, the Company will accrue for income taxes not previously recognized, where applicable.

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

earnings in the form of dividends.

As of January 31, 2024, the Company's undistributed foreign earnings and unrecorded deferred income taxes with respect to its undistributed earnings are not material.

During the current year, the Company changed its assertion with respect to certain subsidiaries' undistributed earnings;

however, the Company does not expect any incremental U.S.

income taxes or local withholding taxes.

For the remaining subsidiaries that are permanently reinvested as of January 31, 2025, the Company's undistributed foreign earnings and unrecorded deferred income taxes are not material.

A reconciliation of the beginning and ending balance of total unrecognized tax benefits for the fiscal years ended January 31, 2025, 2024, and 2023 is as follows:

7 unchanged sentences

Gross increases 669 516 —

Lapse of statute of limitations — — —

Currency translation effect — — ( 16 )

End of period $ 6,531 $ 4,920 $ —

During fiscal 2024, the Company completed an analysis of its historical U.S.

During the fiscal year ended January 31, 2024, the Company completed an analysis of its historical U.S.

research and development tax credits and recorded a corresponding increase in the uncertain tax position.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes and recognized insignificant interest and penalties in each of the fiscal years ended January 31, 2024, 2023, and 2022.

As of January 31, 2024 and 2023, none of the accrued unrecognized tax benefits, if recognized, would reduce the provision for income taxes, and the Company's effective tax rate.

As of January 31, 2022, accrued unrecognized tax benefits were $ 0.3 million, which if recognized, would reduce the provision for income taxes, and the Company's effective tax rate.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits within benefit from (provision for) income taxes.

The Company did not recognize interest and penalties in fiscal years ended January 31, 2025 and 2024, and recognized insignificant amounts in fiscal 2023.

As of January 31, 2025 and 2024, none of the accrued unrecognized tax benefits, if recognized, would increase the benefit from or reduce the (provision for) income taxes, respectively, or the Company's effective tax rate.

The Company does not expect any unrecognized tax benefits to be recognized within the next 12 months.

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The operating lease arrangements included in the measurement of lease liabilities had a weighted-average remaining lease term of 5.9 years and a weighted-average discount rate of 6.0 %, as of January 31, 2025.

During the fiscal year ended January 31, 2024, the Company paid $ 18.5 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, 2024, 2023 and 2022, the Company recognized lease expense, respectively, which consisted of the following:

During the fiscal year ended January 31, 2025, the Company paid $ 17.2 million for amounts included in the measurement of lease liabilities and obtained $ 0.4 million of operating lease right-of-use assets in exchange for lease obligations in connection with the Acquisition.

The following table summarizes the Company's lease expense for the periods presented:

Fiscal year ended January 31,

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The Company is obligated to make payments under certain non-cancelable contractual obligations in the normal course of business.

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

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

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.

10 unchanged sentences

Total $ 113,793 $ 75,553

The Company may also be required to pay up to $ 75.0 million to the former holders of Hearsay's outstanding equity interests, subject to the achievement of certain ARR milestones over a two-year period, as well as make payments up to $ 20.0 million related to an incentive pool.

Payments can be settled in cash or shares at the Company's election and are estimated to occur in fiscal years 2026 and 2027.

Additionally, as of January 31, 2025, the remaining escrow balance of $ 15.5 million, held as partial security for certain indemnification obligations, is expected to be released following the resolution of the related contingencies.

See Note 4 "Business Combination" for additional information.

Legal Proceedings

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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.

To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any significant liabilities related to such obligations in the accompanying consolidated financial statements.

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.

To date, the Company has not incurred any material costs

as a result of such obligations and has not accrued any significant liabilities related to such obligations in the accompanying consolidated financial statements.

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

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(1) An additional 1.3 million shares of common stock may be awarded for certain PSUs based on the Company's total shareholder return ("TSR") relative to the TSR of companies in the S&P Software and Services Select Index over specified performance periods.

"Stock-Based Compensation", for further discussion .

See Note 10 "Stock-Based Compensation", for further discussion .

In connection with the Acquisition, the Company may also be required to pay up to $ 75.0 million to the former holders of Hearsay's outstanding equity interests, subject to the achievement of certain ARR milestones over a two-year period.

Payment can be settled in cash or shares at the Company's election.

In addition, an incentive pool of $ 20.0 million is payable to Hearsay founders, early employees and current employees, which can be settled in cash or shares at the Company's election.

Segment Information

The Company operates as one operating segment for which the CODM uses consolidated net (loss) income to measure segment profit or loss.

This measure of segment profit or loss is used by the CODM to allocate resources and assess performance.

See Note 2 "Summary of Significant Accounting Policies" for more information about the Company's segment policy.

The following table is a summary of the significant expenses and consolidated net loss provided to the CODM:

Fiscal year ended January 31,

(in thousands)

2025 2024 2023

Revenue $ 420,957 $ 404,322 $ 400,850

Cost of revenue (1)

89,364 84,568 98,918

Sales and marketing (1)

149,390 163,763 188,518

Research and development (1)

64,319 60,691 54,502

General and administrative (1)

62,279 56,540 60,662

Other segment expenses (2)

83,553 41,390 64,188

Consolidated net loss

$ ( 27,948 ) $ ( 2,630 ) $ ( 65,938 )

(1) Excludes stock-based compensation expense, amortization of acquired intangibles and acquisition-related costs inclusive of transaction and related costs, subsequent fair value movements in contingent consideration, and compensation arrangements.

The significant expense categories align with the information that is regularly provided to the CODM.

(2) Other segment expenses include stock-based compensation expense, amortization of acquired intangibles and acquisition-related costs inclusive of transaction and related costs, subsequent fair value movements in contingent consideration, and compensation arrangements.

Other segment expenses also include interest (income) expense, net, benefit from (provision for) income taxes and other expense (income), net.

Subsequent Events

On February 7, 2025, the Company completed its acquisition of KabanaSoft, LLC, doing business as Places Scout (“Places Scout”), for a purchase price of $ 20.3 million in cash, subject to customary adjustments as set forth in the Unit Purchase Agreement.

The acquisition strengthens Yext’s ability to provide best-in-class competitive intelligence, benchmarking, and AI-powered insights.

In addition, subject to the terms of the Unit Purchase Agreement, the Company agreed to grant approximately $ 10.0 million of incentive equity, based on current trading prices of Yext’s common stock, to certain key employees of Places Scout.

The Company is currently evaluating the impact of this acquisition on its consolidated financial statements.

On March 4, 2025 the Board of Directors authorized an additional $ 50.0 million to the share repurchase program.

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