Executive Summary
Yext delivered a mixed QQ4 2025 performance characterized by solid revenue growth and a continued path to profitability driven by run-rate improvements and cost synergies from the Hearsay integration. Revenue for Q4 2025 was $113.091 million, up about 11.9% year over year, while gross margin remained healthy at roughly 76.8%. However, the quarter still posted a net loss and a small EBITDA shortfall, highlighting the ongoing investments to reposition the business toward higher-value ARR growth and multi-product cross-sell. Management underscored a constructive outlook for FY2026, targeting more than $100 million of EBITDA and signaling that ARR growth should re-accelerate as the company leverages Scout and expanded product offerings (Yext Social, Hearsay integrations). Cash flow remains robust, with free cash flow of $38.0 million and operating cash flow of $38.3 million in the quarter, supporting a net-cash-positive balance sheet (net debt of approximately $27.7 million). The company emphasizes retention improvement (gross ARR retention in the high-80% range) and a strong desire to balance organic growth with opportunistic M&A and stock repurchases. Key near-term risks include FX headwinds, ongoing ARR restructuring, macro softness, and integration risks related to acquisitions. Overall, the investment thesis rests on: (1) ARR stabilization and cross-sell from Hearsay and Scout; (2) efficiency-driven EBITDA expansion in FY2026; (3) continued cash generation supporting capital allocation flexibility; and (4) an addressing of fragmentation in local search through AI-driven data insights.
Key Performance Indicators
QoQ: 12.35% | YoY:-971.33%
QoQ: 43.16% | YoY:-531.24%
QoQ: 42.90% | YoY:-519.85%
Key Insights
Revenue (Q4 2025): $113.091M, +11.9% YoY; QoQ: -0.8%
Gross Profit: $86.813M, Gross Margin 76.76%, +9.27% YoY, -1.06% QoQ
Operating Income: -$9.089M, -8.04% margin (YoY operating income deterioration cited by management as a result of ongoing investments and integration work)
EBITDA: -$0.224M, EBITDA Margin -0.20%
Net Income: -$7.275M, Net Margin -6.43%
EPS (Diluted): -$0.0571
Weighted Avg Diluted Shares: 127.394M
Free Cash Flow (FCF): $38.030M; Operating Cash Flow: $38.346M; Capex: -$0.316M
Cash...
Financial Highlights
Revenue (Q4 2025): $113.091M, +11.9% YoY; QoQ: -0.8%
Gross Profit: $86.813M, Gross Margin 76.76%, +9.27% YoY, -1.06% QoQ
Operating Income: -$9.089M, -8.04% margin (YoY operating income deterioration cited by management as a result of ongoing investments and integration work)
EBITDA: -$0.224M, EBITDA Margin -0.20%
Net Income: -$7.275M, Net Margin -6.43%
EPS (Diluted): -$0.0571
Weighted Avg Diluted Shares: 127.394M
Free Cash Flow (FCF): $38.030M; Operating Cash Flow: $38.346M; Capex: -$0.316M
Cash and Equivalents: $123.133M; Cash at End of Period: $138.654M
Total Assets: $610.078M; Total Liabilities: $456.885M; Total Stockholders’ Equity: $153.193M
Total Debt: $95.413M; Net Debt: -$27.722M
Current Ratio: 0.829; Quick Ratio: 0.829; Cash Ratio: 0.357
Gross Profit Margin: 76.8%; Operating Margin: -8.0%; Net Margin: -6.4%
P/BV: 5.47; P/S: 7.41; P/FCF: 22.04; P/CF: 21.86
Payout Ratio: 0%
ARR indicators: Gross ARR retention in the high-80% range; net retention up across direct and reseller channels; uncommitted ARR disclosed alongside reported ARR
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
113.09M |
11.85% |
-0.79% |
| Gross Profit |
86.81M |
9.27% |
-1.06% |
| Operating Income |
-9.09M |
-971.33% |
12.35% |
| Net Income |
-7.28M |
-531.24% |
43.16% |
| EPS |
-0.06 |
-519.85% |
42.90% |
Key Financial Ratios
operatingProfitMargin
-8.04%
operatingCashFlowPerShare
$0.3
freeCashFlowPerShare
$0.3
priceEarningsRatio
-28.81
Management Commentary
Management commentary highlights:
- Strategy and product: Yext emphasizes integration of Hearsay, expansion of product roadmap, and the accelerated pace of product innovation (including Scout) as drivers of growth in a more complex AI-enabled local search landscape.
- Operations and market conditions: Management notes improving renewal trends (gross ARR retention in the high-80s and improving net retention across direct and reseller channels) and EBITDA margins north of 20%; they expect FY2026 EBITDA of >$100 million, signaling confidence in operating leverage and synergies from the Hearsay integration.
- Market dynamics: Scout is positioned as a catalyst for data insights, knowledge graph expansion, and competitive visibility across an expanding set of AI-enabled search experiences (ChatGPT, Grok, Perplexity, etc.). Management views fragmentation as a growth opportunity rather than a headwind, with customer enthusiasm for Scout evident in beta demand and waitlist responses.
- Capital allocation and M&A: The company remains opportunistic on buybacks and potential M&A, guided by free cash flow generation and a healthy balance sheet. Management notes that the new ARR disclosures provide a clearer forward picture for modeling.
"Our EBITDA margins are north of 20%, and our outlook for over $100 million in EBITDA in fiscal year '26 points to the financial strength of our business."
— Michael Walrath
"I've never experienced a more enthusiastic response from our customers to one of our products announcements."
— Michael Walrath
Forward Guidance
Guidance framework and near-term outlook:
- Top-line guidance: Management does not provide a full-year revenue forecast for FY2026. Instead, it provides a more detailed ARR picture, including uncommitted ARR, to offer visibility into the revenue trajectory and contract lifecycle dynamics. FX headwinds were noted as a factor in Q4 ARR movements.
- Profitability trajectory: The company reaffirmed a plan to achieve EBITDA in excess of $100 million in FY2026, indicating a path to operating leverage as the Hearsay integration matures and cross-sell opportunities scale. The EBITDA framework suggests a conservative stance on expense growth until ARR improvements become more durable, with potential upside if ARR recovers more quickly or if productisation accelerates.
- Growth drivers: ARR expansion supported by multi-product offerings (Hearsay Social, Yext Social), ongoing Scout adoption, and higher retention rates. Cross-sell and expanded knowledge graph capabilities are expected to improve gross retention and contribute to ARR growth over the next four quarters.
- Monitoring points for investors: (1) ARR growth rate and uncommitted ARR evolution; (2) renewal rates and gross/net retention metrics; (3) Scout adoption metrics and revenue/ARR impact (early-stage indicators); (4) FX sensitivity and contract restructurings; (5) integration milestones with Hearsay and related operating improvements; (6) capital allocation signals (share buybacks vs. M&A vs. reinvestment in growth).
- Assessment of achievability: The >$100M EBITDA target appears achievable if ARR stabilizes and grows from improved retention and cross-sell, and if cost synergies from Hearsay scale as planned. The lack of top-line guidance introduces some revenue-readthrough uncertainty, but the ARR overlay provides a clearer view of gross revenue progression and long-term profitability potential.