Yext, Inc. (NYSE: YEXT), known for its pioneering brand visibility platform, released its financial results for the third quarter of fiscal 2026, covering the period that ended on October 31, 2025. The press release, which notably did not include a corresponding conference call, comes at a crucial time as the company's Board of Directors is currently evaluating a non-binding acquisition proposal from Michael Walrath, along with other strategic alternatives, to ensure both shareholder interests and corporate growth.

1. Financial Performance Overview

Revenue Insights

Yext reported revenue of $112.0 million for the third quarter, which represents a slight decline of 2% from the $114.0 million recorded during the same period last year. This decrease was consistent on a constant currency basis, indicating challenges in maintaining revenue growth amid a fluctuating market environment.

Profitability Metrics

The financial metrics reveal a more complex picture regarding profitability.

Gross profit for the quarter stood at $82.8 million, marking a 6% decrease year-over-year from $87.7 million. The gross margin also saw a drop, falling to 73.9% from 77.0% in Q3 of fiscal 2025.

On a non-GAAP basis, gross profit was $86.9 million, down 4% from $90.6 million in the prior year, with a non-GAAP gross margin of 77.6%, down from 79.4%.

Net Income and Non-GAAP Performance

In a notable shift, Yext reported a net income of $6.1 million, a strong recovery compared to a net loss of $12.8 million in Q3 of fiscal 2025. Furthermore, the non-GAAP net income was $17.5 million, up from $15.6 million year-over-year.

Operating Expenses

Yext's operating expenses for the quarter were $75.0 million, representing 67% of total revenue, significantly down from $98.1 million (86% of revenue) in the prior year. This reduction suggests improved operational efficiency, particularly in sales and marketing, which decreased to 30% of revenue from 38% in Q3 of fiscal 2025.

Non-GAAP operating expenses also saw a decline to $62.3 million, or 56% of revenue, from $70.3 million (62% of revenue) the previous year.

Earnings Per Share

Yext's net income per share attributable to common stockholders was $0.05 (basic) with $0.01 diluted, a significant recovery from the net loss per share of $0.10 in Q3 of fiscal 2025. Non-GAAP EPS increased to $0.14, up from $0.12 year-over-year, indicating a positive trend in earnings performance.

2. Annual Recurring Revenue (ARR) and Customer Dynamics

As of October 31, 2025, Yext's Annual Recurring Revenue (ARR) stood at $444.4 million, down 1% from $448.6 million in the previous year. The decline was somewhat mitigated by a $3.0 million positive impact from foreign currency exchange rates.

Direct customers accounted for 83% of total ARR, totaling $368.6 million, reflecting a 2% year-over-year decrease.

Conversely, third-party reseller customers represented 17% of total ARR, amounting to $75.8 million, which saw a 2% increase year-over-year.

Customer Retention Metrics

Yext's Dollar-Based Net Retention Rate (NRR) remained stable at 96% for total and direct customers, while the NRR for third-party reseller customers was notably higher at 99%, underscoring the company's strong customer loyalty and satisfaction in that segment.

3. Future Outlook and Strategic Considerations

Yext's Remaining Performance Obligations (RPO) totaled $415.6 million, with $377.1 million expected to be recognized as revenue within the next 24 months. This indicates a healthy backlog of expected revenue that could support future growth.

The company's cash position improved to $158.9 million as of October 31, 2025, compared to $138.7 million at the start of the fiscal year, providing a solid foundation for potential investments and strategic initiatives.

Share Repurchase Program

Yext's ongoing share repurchase program saw year-to-date repurchases totaling $59.6 million, with approximately $22.3 million remaining available for future purchases. This reflects the company's commitment to returning value to shareholders, even amid ongoing evaluations of strategic options.

4. Conclusion

Yext's third-quarter results for fiscal 2026 showcase a mixed performance against a backdrop of strategic uncertainty. While revenue and profitability metrics reflected some challenges, the company's focus on operational efficiencies and customer retention indicates a potential trajectory for recovery and growth. As the Board continues to evaluate acquisition proposals, stakeholders will be keenly watching how these developments may impact the company's future direction.

Original press release