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Yext Upgrade Amid CEO Buyout Offer and Improving Margins
ByAinvest
Monday, Sep 15, 2025 1:05 pm ET1min read
Yext's financial performance has improved, with the company benefiting from a CEO buyout offer. Margins have strengthened, and investors are favoring large-cap growth stocks, leading to unbalanced valuations in the market.
Yext Inc. (NYSE: YEXT), the leading brand visibility platform, has announced its second quarter fiscal 2026 results, demonstrating significant financial improvements. The company reported revenue of $113.1 million, up 16% year-over-year, driven by the integration of Hearsay Systems and KabanaSoft, doing business as Places Scout [1].The company's gross profit increased by 12% to $85.0 million, and non-GAAP gross profit rose by 16% to $88.3 million. This led to a gross margin of 75.2%, compared to 77.2% in the previous quarter. Adjusted EBITDA also improved to $26.4 million, resulting in an Adjusted EBITDA margin of 23%.
Yext's net income improved to $26.8 million, compared to a net loss of $4.1 million in the second quarter of fiscal 2025. Non-GAAP net income was $16.3 million, up from $6.8 million in the same period last year. Operating expenses were $55.4 million, or 49% of revenue, down from $83.2 million, or 85% of revenue in the previous quarter.
The company's annual recurring revenue (ARR) increased by 15% year-over-year to $444.4 million, with direct customers representing 83% of total ARR, totaling $369.5 million. Third-party Reseller customers accounted for 17% of total ARR, totaling $74.8 million.
Yext's CEO, Michael Walrath, submitted a non-binding proposal to acquire all outstanding shares of Yext not already owned by him at a price of $9.00 per share in cash. This proposal, announced on August 18, 2025, is likely contributing to the company's strong performance and investor interest [1].
The market's focus on large-cap growth stocks has led to unbalanced valuations, with investors favoring companies with significant financial improvements and growth potential. Yext's strong second quarter results and the CEO buyout offer are likely driving investor interest in the company.
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