Why Yext Shares Are Diving Today?

Yext Inc YEXT shares are trading lower by around 12% after it reported mixed Q2 FY24 earnings.

The company reported revenue growth of 2% Y/Y to $102.6 million, beating the consensus of $101.97 million. Revenue included a positive impact of around $0.4 million from foreign currency exchange rates on a constant currency basis. 

As of July 31, 2023, ARR rose 3% Y/Y to $398 million. Adjusted EPS of $0.06 came in line with the consensus.

Gross profit increased 9% Y/Y to $80.2 million, with a margin of 78.2% vs. 73.2% a year ago.

Adjusted EBITDA of $11.8 million came higher than $0.9 million a year ago.

As of July 31, 2023, cash and cash equivalents stood at $201 million, and operating cash flow came in at $19.710 million.

Repurchase:  In September 2023, the Board of Directors increased the share repurchase program by $50.0 million. As of July 31, 2023, the company had about $11.6 million remaining available for future buybacks from the initial $100.0 million program.

"Our sharpened focus on positioning the business for durable and profitable growth enabled us to execute well in the second quarter against our financial and operating objectives. Given the market interest in AI-enabled products and improving the customer experience, and the value of our digital experience platform, we believe we're well positioned to benefit from the opportunity. While the macroeconomic environment remains uncertain, the operational improvements we've made to the business give us reason to be optimistic about our ability to continue executing on our objectives for the remainder of the year," said Michael Walrath, CEO and Chair of the Board.

Outlook: Yext expects Q3 Adjusted EPS of $0.06-$0.07 vs. $0.07 estimate and revenue of $101.5 million-$102.5 million vs. street view of $102.28 million.

The company raised FY24 outlook for Adjusted EPS to $0.29-$0.30 (from $0.28-$0.29 earlier) vs. $0.28 estimate and revised revenue guidance to $405 million-$407 million (from $404.0 million-$407.0 million) vs. consensus of $406.38 million.

Price Action: YEXT shares are down 12.2% at $7.97 premarket on the last check Thursday.