Yext, Inc.

Good afternoon and welcome to the Yext Incorporated fourth quarter fiscal 2025 financial results 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 telephone keypad. 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 Nils Erdmann, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Yext's fourth quarter fiscal 2025 earnings conference call. With me today are CEO and Chair of the Board Michael Walrath and CFO Daryl Bond. During this call, we will make forward-looking statements, including statements related to our future financial performance, statements regarding the expected effects of our recent acquisitions, expectations regarding the growth of our business, our outlook for the first quarter and full year fiscal 2026, our strategy, and estimates of financial and operating metrics, capital expenditures, and other indications of future opportunities as further described in our fourth quarter shareholder letter. 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, our ability to integrate acquired businesses with ours, our management performance, and general economic and business conditions. These forward-looking statements represent our beliefs and assumptions only as of the date made, and we undertake no obligation to revise or update any statements to reflect changes that occur after this call. Further information on factors and other risks that could cause actual results to materially differ from these forward-looking statements is included in our reports filed with the SEC including in the sections titled Special Note Regarding Forward-Looking Statements and Risk Factors, and our most recent quarterly report on Form 10Q for the three-month-ended October 31, 2024, our earnings release, and our shareholder letter that were issued this afternoon. During the call, we refer to certain metrics, including non-GAAP financial measures. Definitions of these non-GAAP metrics and other operating metrics, as well as reconciliations with the most comparable historical GAAP measures, are available in the shareholder letter, which is available at investors.yext.com. I will now turn the call over to Mike.

Thanks, Nils, and thanks, everyone, for joining us today. I hope everyone on the call has had a chance to read our fourth quarter fiscal year 25 shareholder letter. In case you missed it, we've included a summary Q&A supplement at the end of the letter below the financial tables to address anticipated top-of-mind questions based on our earnings materials. Before we jump into Q&A, I'd like to highlight some key points. First, the X is incredibly well positioned strategically and competitively. We've made excellent progress with our integration of hearsay, and our combined businesses are generating go-to-market and cost synergies as expected. Our platform and product roadmap has been enhanced significantly with the hearsay products, Yext Social, and just this week with the launch of Yext Scout. Product innovation is accelerating at Yext, and this will be a growth driver for us in the future, particularly as we help our customers grapple with the fast rate of change being driven by AI. In our discussions with customers and prospects, we're hearing excitement and enthusiasm for how our platform is evolving, which is opening up new opportunities. Second, we're seeing positive trends from our performance metrics, despite a mostly unchanged macroeconomic environment. Our gross retention and net retention rates are both increasing, with gross ARR retention increasing to the high 80s and net retention up across both direct and reseller. 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. While the macro environment remains unchanged relative to last quarter and spending scrutiny still persists, we have nonetheless seen changes in the demand environment. These outcomes are the results of our recent product developments and are heightened focused on customer success. Third, the launch of Scout represents a major milestone for Yext. In my 16 year tenure here, I have never experienced a more enthusiastic response from our customers to one of our products announcements. We believe Yext Scout will fundamentally change the way our customers and partners gather data insights, expand their knowledge graph, and prioritize actions to win more visibility in an increasingly complex local marketing world. And our customers are just as optimistic. We announced the closed beta for Scout just two days ago. and already we have had hundreds of waitlist signups. This is a very strong demand signal, especially given the very limited marketing of the launch. And I believe this will be an advantage for Yext as brands increasingly focus on the opportunities and challenges that a fragmented search landscape presents. Finally, I'd like to take the opportunity to thank our entire global team for their ongoing efforts and commitment to our customers and our mission. Now we'd like to open it up for questions.