Yext 2026 Q3 Earnings Turnaround with 147.9% Net Income Surge

Yext (YEXT) reported fiscal 2026 Q3 earnings on Dec 8, 2025, with revenue declining 1.7% to $112 million. The company returned to profitability with a net income of $6.14 million, a 147.9% improvement from a $12.8 million loss in 2025 Q3. While revenue missed estimates by $1.14 million, non-GAAP EPS of $0.14 beat expectations. The board is evaluating CEO Michael Walrath’s acquisition proposal and other strategic alternatives, with no explicit guidance provided for future quarters.

Revenue

Yext’s total revenue fell to $112 million in Q3 2026, a 1.7% decline from $113.99 million in the prior-year period. Direct customer revenue, which accounts for 83% of total ARR, decreased 2% to $368.6 million. Meanwhile, third-party reseller revenue grew 2% to $75.8 million, representing 17% of total ARR. The company’s gross profit also dipped 6% to $82.8 million, reflecting a 73.9% margin compared to 77.0% in the prior year.

Earnings/Net Income

Yext posted a net income of $6.14 million in Q3 2026, a dramatic turnaround from a $12.8 million loss in the same period last year. On a non-GAAP basis, net income rose to $17.5 million, up from $15.6 million in 2025 Q3. The company achieved a record-high net income for fiscal Q3, driven by cost discipline, with operating expenses falling to 67% of revenue (down from 86% in 2025 Q3). This marked a significant operational improvement and profitability rebound.

Post-Earnings Price Action Review

The stock price of Yext edged down 1.01% during the latest trading day but climbed 4.13% during the most recent full trading week and 3.76% month-to-date. Despite the earnings beat on a non-GAAP basis, the revenue miss and cautious guidance led to mixed market reactions.

CEO Commentary

Michael Walrath highlighted a 2% year-over-year revenue decline to $112.0 million and a 6% drop in gross profit to $82.8 million. The company emphasized cost discipline, reducing operating expenses to 67% of revenue. Walrath noted challenges in maintaining ARR growth, which decreased 1% to $444.4 million, and reiterated the board’s focus on evaluating strategic alternatives, including his non-binding acquisition proposal, while prioritizing shareholder interests.

Guidance

Yext provided no explicit financial guidance for future quarters but outlined strategic priorities: reviewing Walrath’s acquisition proposal and other alternatives. The board emphasized uncertainty around the proposal’s outcome, including regulatory and litigation risks, while maintaining operational focus. Forward-looking statements caution that results may differ materially due to variables such as transaction timelines and operational impacts.

Additional News

1. CEO Acquisition Proposal: Michael Walrath submitted a non-binding $9.00-per-share buyout offer, backed by financing sources, with the board forming a special committee to evaluate it.

2. Debt Facility: Yext secured a $200 million term loan from BlackRock to support growth initiatives and strategic opportunities, replacing its previous revolving credit facility.

3. Share Repurchases: The company repurchased $59.6 million worth of shares year-to-date, with $22.3 million remaining in its buyback program.