Executive Summary
- Overview: Yext reported QQ3 2025 revenue of $113.99 million, up ~13% YoY largely due to the inclusion of Hearsay Systems, while the legacy Yext business remained stable. Gross profit was $87.74 million (gross margin ~77%), and operating loss was $10.37 million, with a net loss of $12.80 million (EPS -$0.10). EBITDA was negative at -$10.37 million. The mix shift to Hearsay contributed to top-line growth, but profitability remains pressured by ongoing investments and integration costs.
- What drove the results: The company highlighted a fragmented AI-enabled search environment as a strategic tailwind, with brands needing to structure data for diverse consumer-find experiences. Healthcare logos expanded (new logos and expansion activity cited in the call), and Hearsay provided a material growth contribution post-acquisition. Management stressed that the core Yext ARR was stable, with modest improvement in retention; Hearsay ARR was contributing meaningfully to growth. FX movements created a notable impact on the quarterly guide, with guidance reflecting post-period FX levels.
- Outlook and positioning: Management signaled ongoing focus on margin expansion and growth acceleration, aiming for Rule of 40 progress through a combination of improved monetization, organic growth, and selective M&A. They stated that deals are starting to accelerate in certain tailwinds from digital transformation, and that the integration of Hearsay is tracking to be largely complete by year-end. The near-term uncertainty centers on FX volatility and the pace of ARR expansion; longer-term catalysts include AI-driven fragmentation, a unified data platform, and expanding Yext Social/Hearsay-enabled capabilities.
Key Performance Indicators
QoQ: -37.03% | YoY:-482.14%
QoQ: -215.48% | YoY:-2 634.83%
QoQ: -211.53% | YoY:-2 531.58%
Key Insights
Revenue: $113.99M (+12.7% YoY, +16.5% QoQ). Gross profit: $87.74M (gross margin 76.97%). Operating income: -$10.37M (operating margin -9.10%). Net income: -$12.80M (net margin -11.23%). EPS: -$0.10. EBITDA: -$10.37M (EBITDA margin -9.10%). Weighted average diluted shares: 128.04M. Hearsay contribution: Q3 revenue of $16.4M from Hearsay; Hearsay ARR ~ $62.8M as of Q3 end; legacy Yext ARR described as stable with slight uptick from Q1βQ2 and modest decline to Q3. Cash flow: Operating cash flow -...
Financial Highlights
Revenue: $113.99M (+12.7% YoY, +16.5% QoQ). Gross profit: $87.74M (gross margin 76.97%). Operating income: -$10.37M (operating margin -9.10%). Net income: -$12.80M (net margin -11.23%). EPS: -$0.10. EBITDA: -$10.37M (EBITDA margin -9.10%). Weighted average diluted shares: 128.04M. Hearsay contribution: Q3 revenue of $16.4M from Hearsay; Hearsay ARR ~ $62.8M as of Q3 end; legacy Yext ARR described as stable with slight uptick from Q1βQ2 and modest decline to Q3. Cash flow: Operating cash flow -$15.80M; Free cash flow -$16.37M. Cash at end of period: $118.01M; total debt: $98.67M; net debt: -$1.81M (net cash). Current ratio: 0.87; Quick ratio: 0.87; Cash ratio: 0.42.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
113.99M |
12.68% |
16.45% |
| Gross Profit |
87.74M |
10.93% |
16.07% |
| Operating Income |
-10.37M |
-482.14% |
-37.03% |
| Net Income |
-12.80M |
-2 634.83% |
-215.48% |
| EPS |
-0.10 |
-2 531.58% |
-211.53% |
Key Financial Ratios
operatingProfitMargin
-9.1%
operatingCashFlowPerShare
$-0.12
freeCashFlowPerShare
$-0.13
priceEarningsRatio
-18.11
Management Commentary
Key management themes from the QQ3 2025 earnings call: (1) Growth mix and stability: Management emphasized that revenue grew 13% YoY with Hearsay, while the core Yext business stayed stable and began contributing an incremental growth path through Hearsay. (2) AI-driven fragmentation as a market driver: The company framed the AI-enabled fragmentation of search as a positive catalyst, underscoring data structure and multi-channel distribution as critical capabilities for brands. (3) Margin and efficiency progress: Executives described the business as βmuch more efficientβ and pointed to ongoing opportunities to improve margins even as growth investments continue. (4) FX and near-term guidance: Guidance for Q4 reflected FX headwinds; management noted upside in Q3 from FX and assumed a downshift in Q4 due to FX movements. (5) Hearsay integration and go-to-market: The integration is progressing, with management expecting most of the integration work to complete by year-end, and Hearsay contributing meaningfully to the top line. (6) Strategic roadmap and M&A: The team signaled continued evaluation of M&A opportunities and a pragmatic approach to expanding the value proposition (e.g., Yext Social, healthcare, data/insights).
Our revenue grew 13% year-over-year with the inclusion of Hearsay Systems. The core Yext business is very stable and we're seeing growth contribution from Hearsay.
β Mike Walrath
FX related; post October 31st we saw the FX rates come down and that's what we used to set our guide.
β Darryl Bond
Forward Guidance
- Near-term: FX remains a material variability driver; management maintains a conservative stance on revenue guidance for the near term, with Q4 guided to be broadly stable after FX normalization. They indicated that Hearsay integration is on track and that legacy ARR is stable, suggesting limited downside risk absent more pronounced churn.
- Medium term: They project margin improvement into Q4 and beyond, with Rule of 40 being aιΏζ objective; growth will be supported by organic initiatives (Yext Social, expanded data/insights) and inorganic opportunities via M&A. The company expects Hearsay and Yext to unlock cross-sell opportunities within a unified platform for customers across healthcare and other verticals.
- Key monitorables for investors: FX rate movements, ARR trajectory (gross/net retention), Hearsay contribution and integration milestones, expansion in strategic verticals (Healthcare, data/analytics), and the pace of free cash flow generation as operating leverage improves.