Yext, Inc.

And welcome to the next third quarter fiscal 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jeff Houston, Head of Investor Relations. Please go ahead.

Thank you, Sarah, and good afternoon, everyone. Welcome to the Yext Fiscal Third Quarter 2022 Conference Call. With me today are CEO Howard Lerman, President and Chief Revenue Officer David Radnitsky, and CFO Steve Cakebright. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements. including statements about revenue, non-GAAP loss, growth of our business, including with listings and answers, as well as geographies such as Europe, gross margins, operating margins, net dollar-based retention, capital expenditures, and other non-historical statements as further described in our press release. These forward-looking statements are subject to certain risks, uncertainties, and assumptions, including those related to Yext's growth, the evolution of our industry, our product development and success, including answers, and general economic and business conditions, such as the impact of COVID-19 pandemic. We undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to have a material difference from these forward-looking statements are discussed in our reports filed with the SEC. including our most recent quarterly and annual reports and our press release that was issued this afternoon. During the call, we also referred to non-GAAP financial measures. Reconciliations with the most comparable GAAP measures are also available in the press release, which is available at investors.yext.com. With that, I will turn the call over to Howard. Howard?

Thank you, Jeff. Hi, everyone. Welcome to our third quarter earnings call. We had a solid quarter. Revenue of $99.5 million exceeded the high end of our guidance by $1 million, reflecting strong execution against our growth plan, including renewals. This quarter makes us optimistic about the future. We're seeing positive signs that our listings business is beginning to recover. Answers is growing. Our land and expand sales strategy is coming together. Europe's growth is re-accelerating. And we still have yet many new growth vectors to tap. Let me start with listings. Listings ARR bottomed out at 1% growth year-over-year in Q4 of last year and has since re-accelerated to 5% year-over-year growth most recently in Q3. While listings is showing signs of recovery, Answers is growing quickly. Answers has sustained triple-digit ARR growth exceeding 130% on a year-over-year basis for the past 12 months and is now a significant portion of our incremental ARR mix. And we are landing and successfully expanding. Several leading global brands, all of whom landed with a small footprint in listings or answers, now have an ARR base with millions of dollars of ARR as they expanded with a deeper foothold across the platform. So, for example, a large telco, we landed in Q1 fiscal of 2016 for just a couple hundred thousand dollars in ARR, has increased over 11x to an ARR base of more than $3 million as of the third quarter this year by expanding across our ARR search platform with more products and solutions. With more products and solutions to sell and demand from our clients recovering, sales productivity of ramped reps in our direct channels has increased over 50% year-to-date compared to last year. Europe. Europe grew ARR in excess of 30% year-over-year during the third quarter. Renewals. Renewals in financial services and healthcare were strong this quarter, and we're starting to see some industries impacted by the pandemic return, such as retail, restaurants, and luxury brands. This quarter's renewals included Dolce & Gabbana, Krispy Kreme, P.F. Chang's, Topgolf, and fashion brand YSL. The data from the third quarter suggests that we've reached the bottom in Q4 last year, and we are on the road to resuming our pre-pandemic state. We're optimistic about the future growth opportunity of our business because of these trends, and also because of new growth factors as we continue to innovate. We've built a robust platform that enables us to innovate quickly, launch new search products in adjacent categories for cross-sell and and layer on solutions specific to an industry or business based on their knowledge graph. This quarter, we launched new AI search industry solutions in healthcare and FinServ and announced a strategic partnership with Acquia, following partnerships with other technology platforms that expand our market opportunity, like the collaboration with Salesforce we discussed last quarter. We will continue to innovate and create unique solutions for our customers and partners every quarter, and we're bringing new AI search ideas and product categories to our customers, driving further upside to our plans. I'll highlight just a few. First, product listings. They're for products what location listings are for physical locations. For example, many cosmetics originate on Revlon.com, but the product content for makeup items, beauty tools, and hair products must also end up on dozens of e-commerce sites. Content like pictures, product specifications, prices, and more must be synced from a single source of truth across multiple endpoints, which is the exact same problem we solve for locations. Product listings is an area, a new area, where we are well-positioned to enter and compete. I'll talk about chat and guided search. They're rising in popularity, and our ability to answer questions completely freeform is the perfect overlay for existing chat offerings that blend the best of natural language understanding which we do, with future workflow, which we plan to develop. Based on the knowledge graph powering conversational AI, search, listings, and everything from one spot, we see a huge opportunity to compete in this market. Finally, workplace answers, or what others call enterprise search behind the firewall, is one of the most commonly requested features from our customers, and we're building the scale, connectors, and security features to enter this market. With this level of innovation, we are well positioned for the future. I've never been more confident in our vision. Speaking of, I'll turn the call over to Dave Vernitsky, our president and CRO, to share more information about the third quarter. Dave?