Online reputation and search platform Yext (NYSE: YEXT) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 14.1% year on year to $109.5 million. Guidance for next quarter’s revenue was better than expected at $111.3 million at the midpoint, 1.7% above analysts’ estimates. Its non-GAAP profit of $0.12 per share was in line with analysts’ consensus estimates.
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Yext (YEXT) Q1 CY2025 Highlights:
- Revenue: $109.5 million vs analyst estimates of $107.6 million (14.1% year-on-year growth, 1.8% beat)
- Adjusted EPS: $0.12 vs analyst estimates of $0.11 (in line)
- Adjusted EBITDA: $24.68 million vs analyst estimates of $21.79 million (22.5% margin, 13.3% beat)
- Revenue Guidance for Q2 CY2025 is $111.3 million at the midpoint, above analyst estimates of $109.4 million
- Adjusted EPS guidance for the full year is $0.53 at the midpoint, beating analyst estimates by 5%
- EBITDA guidance for the full year is $104 million at the midpoint, above analyst estimates of $101.2 million
- Operating Margin: 1%, up from -5.7% in the same quarter last year
- Free Cash Flow Margin: 33.9%, similar to the previous quarter
- Billings: $87.8 million at quarter end, up 27.2% year on year
- Market Capitalization: $833.5 million
Company Overview
Founded in 2006 by Howard Lerman, Yext (NYSE: YEXT) offers software as a service that helps their clients manage and monitor their online listings and customer reviews across all relevant databases, from Google Maps to Alexa or Siri.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Yext’s sales grew at a weak 3% compounded annual growth rate over the last three years. This was below our standard for the software sector and is a tough starting point for our analysis.
This quarter, Yext reported year-on-year revenue growth of 14.1%, and its $109.5 million of revenue exceeded Wall Street’s estimates by 1.8%. Company management is currently guiding for a 13.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 4% over the next 12 months, similar to its three-year rate. This projection is underwhelming and indicates its newer products and services will not catalyze better top-line performance yet.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Yext’s billings punched in at $87.8 million in Q1, and over the last four quarters, its growth was impressive as it averaged 20.6% year-on-year increases. This alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
Yext’s recent customer acquisition efforts haven’t yielded returns as its CAC payback period was negative this quarter, meaning its incremental sales and marketing investments outpaced its revenue. The company’s inefficiency indicates it operates in a competitive market and must continue investing to grow.
Key Takeaways from Yext’s Q1 Results
We were impressed by how significantly Yext blew past analysts’ billings and EBITDA expectations this quarter. We were also excited its full-year guidance topped estimates. Zooming out, we think this was a solid print. The stock remained flat at $6.82 immediately following the results.
Yext may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
