Executive Summary
Yext delivered a solid Q1 2026 performance, surpassing guidance on all metrics and signaling momentum into Q2 as it scales its AI-driven Scout product. Revenue of $109.48 million rose 14.1% year over year, and gross margin remained healthy at about 75.2%, reflecting a stable SaaS mix despite ongoing investments. The quarter featured meaningful improvements in retention dynamics and a sharpened emphasis on product differentiation to combat broader commoditization in brand visibility. Management underscored a disciplined approach to growth, balancing organic initiatives with opportunistic M&A and a newly backed liquidity framework with BlackRock that enhances flexibility for strategic acquisitions and buybacks.
Management stressed the accelerating fragmentation of consumer search driven by AI, which Yext believes creates a fertile backdrop for Scout and related platform modules. While near-term macro uncertainty persists, the company views its differentiated data-quality, listings, and reputation management tools as anti-churn capabilities that can sustain ARR growth through improved retention and higher attach rates. The call highlighted a public beta/early-access phase for Scout with strong early engagement (approximately 45 live customers) and an expectation of broader rollout later in the year, signaling upside if monetization and adoption scale as anticipated. Overall, Yext’s Q1 narrative centers on scalable product-led growth, disciplined capital allocation (share repurchase activity continued), and a readiness to act on accretive M&A in a favorable financing environment.
Key Performance Indicators
QoQ: 112.30% | YoY:120.60%
QoQ: 110.58% | YoY:120.17%
QoQ: 110.68% | YoY:120.07%
Key Insights
Revenue: $109.483M, up 14.1% YoY; QoQ change -3.19%. Gross profit: $82.378M; gross margin 75.24%. Operating income: $1.182M; operating margin ~1.02%. EBITDA: $10.565M; EBITDA margin ~9.65%. Net income: $0.770M; net income margin ~0.70%. Diluted EPS: $0.0059; basic EPS $0.0061. Operating cash flow: $37.725M; free cash flow: $37.163M. Cash at end of period: $132.015M; cash at beginning: $138.654M; net change in cash: -$6.639M. Total assets: $572.356M; total liabilities: $430.331M; stockholders’ ...
Financial Highlights
Revenue: $109.483M, up 14.1% YoY; QoQ change -3.19%. Gross profit: $82.378M; gross margin 75.24%. Operating income: $1.182M; operating margin ~1.02%. EBITDA: $10.565M; EBITDA margin ~9.65%. Net income: $0.770M; net income margin ~0.70%. Diluted EPS: $0.0059; basic EPS $0.0061. Operating cash flow: $37.725M; free cash flow: $37.163M. Cash at end of period: $132.015M; cash at beginning: $138.654M; net change in cash: -$6.639M. Total assets: $572.356M; total liabilities: $430.331M; stockholders’ equity: $142.025M. Cash & equivalents: $114.994M. Deferred revenue: $210.695M. Total debt: $92.771M; net debt: -$22.223M (net cash). Four-quarter ARR progression and other metrics shown in the quarterly data indicate improving revenue mix and stability in core SaaS economics.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
109.48M |
14.06% |
-3.19% |
| Gross Profit |
82.38M |
10.66% |
-5.11% |
| Operating Income |
1.12M |
120.60% |
112.30% |
| Net Income |
770.00K |
120.17% |
110.58% |
| EPS |
0.01 |
120.07% |
110.68% |
Management Commentary
- Strategy and product differentiation: Fragmentation of the consumer search market is accelerating due to AI search, elevating the importance of managing digital visibility and creating fertile ground for Scout. “a fragmentation of the consumer search market continues to accelerate with the advancement of AI search... fertile ground for our latest product release Yext Scout.”
- Core business health and retention: Management highlighted improving gross and net retention, stronger customer satisfaction, and higher value perception across the platform, implying lower churn risk and higher upsell potential.
- Growth orientation and capital allocation: The company emphasized a growth flywheel supported by a strong balance sheet and cash flow, enabling reinvestment in organic initiatives and opportunistic M&A or partnerships. “balance sheet and cash flow to further accelerate our growth while maintaining flexibility.”
- Scout rollout dynamics: Scout is in open beta with rapid rollout (development partners plus public beta), with about 45 live customers; management described a potentially shorter sales cycle and meaningful upside as data and ROI become clearer. “as of yesterday, there were an incremental… 37 customers rolled out over the course of the last 48 hours” and “open beta that will be incrementally rolling out additional customers.”
- Macro backdrop and caution: Management cited macro uncertainty and tariff-related caution, but argued the brand-discovery landscape may benefit from fragmentation, suggesting a cautiously constructive stance on longer-term growth. “the lingering caution is 2 things… the macro… the brand discovery landscape is shifting enormously.”
- Buyback and M&A optionality: The leadership stressed buybacks as a core capital-allocation tool and highlighted the optionality to pursue accretive acquisitions with BlackRock as a financing partner. “buyback is an important tool in our capital allocation belt… optionality around buyback versus M&A is not necessarily an either/or situation.”
- Management quotes include: “we had a very strong Q1, outperforming our guidance on all metrics, and we see continued strength into Q2,” and “we are speeding up our execution… a growth flywheel well into the future.”
fragmentation of the consumer search market continues to accelerate with the advancement of AI search. This trend elevates the importance for brands of managing digital visibility, and it differentiates Yext core products and provides fertile ground for our latest product release Yext Scout.
— Michael Walrath
We have the balance sheet and cash flow to further accelerate our growth while maintaining flexibility. This enables us to strategically reinvest in organic initiatives and pursue opportunistic investments, whether through M&A or partnerships that extend and enhance our business.
— Michael Walrath
Forward Guidance
- Guidance stance: Management did not publish a precise full-year revenue figure in the call, signaling a cautious approach amid macro uncertainty. They noted Q1 outperformed guidance and that they expect continued strength into Q2, but maintained a conservative stance on full-year top-line specificity until macro clarity improves.
- Outlook drivers: Scout’s open-beta traction and potential monetization in late 2024/2025 and into 2026 could meaningfully lift ARR if customer adoption expands and upsell opportunities materialize. The company also cited retention improvements and attachment opportunity across core products as tailwinds for revenue stability.
- Risks to watch: Macro volatility and FX dynamics (though FX tailwinds improved in Q1), rate of Scout adoption and monetization, execution risk around rapid open-beta expansion, and integration risks from M&A.
- Monitoring checklist for investors: Scout uptake and ROI signals; gross and net retention trends; progression of ARR and attachment rates for core products; cadence of buybacks versus opportunistic M&A; debt facility utilization and liquidity posture; and any changes in macro policy or tech-adoption cycles that could impact TAM expansion.