Yext (YEXT) 4 Sep 24 2025 Q2 Earnings call transcript

In the recent earnings call of Yext Inc., key themes and trends emerged, providing insights into the company's performance and future outlook. The call, led by CEO and Chair of the Board, Michael Walrath, and CFO, Darryl Bond, highlighted several important aspects of Yext's financial health and growth prospects.

Focus on Synergies from Hearsay Acquisition

One of the most significant topics discussed during the call was the acquisition of Hearsay Systems in August 2024. The integration of Hearsay is a key focus for Yext, and the company expects to realize significant synergies from the deal. The acquisition is expected to contribute to the revenue guide for the rest of the fiscal year, with the Hearsay business adding to Yext's portfolio and creating opportunities for cross-selling and upselling to joint customers. The management team is optimistic about the potential for revenue growth and cost savings, with a goal of achieving a low 20s consolidated adjusted EBITDA margin by the end of the year.

Customer-Centric Strategy and Consolidation Trends

Another topic of interest during the call was Yext's customer-centric strategy and the consolidation trend in the software industry. The company is seeing a trend of customers looking to consolidate their software vendors, seeking to reduce operational complexity and costs. Yext's acquisition of Hearsay is part of this consolidation trend, and the company is well-positioned to benefit from the increasing demand for unified platforms and data layers. The management team emphasized the importance of a cohesive data strategy and efficient workflows in delivering value to customers, particularly in the context of generative AI and its potential impact on the industry.

Operational Efficiency and Financial Performance

The call also touched on operational efficiency and financial performance, with the management team discussing the importance of managing costs and improving margins. Yext is focusing on optimizing its portfolio of investments and allocating capital effectively to drive growth and profitability. The company's adjusted EBITDA margin is expected to improve in the coming years, with a goal of achieving a low 20s margin by the end of the current fiscal year and further improvements in the next year.

Investor and Analyst Interactions

The earnings call included questions from key shareholders and investors, providing valuable insights into their concerns and priorities. These interactions highlighted the importance of the Hearsay acquisition and the potential for revenue growth and synergies, as well as the company's customer-centric strategy and focus on operational efficiency. The management team's responses demonstrated a clear understanding of the market dynamics and the company's position within the industry, providing confidence to investors and stakeholders.

Looking Ahead

Overall, Yext Inc.'s second quarter fiscal 2025 earnings call painted a picture of a company well-positioned for growth and profitability, with a focus on operational efficiency, customer value, and strategic acquisitions. The acquisition of Hearsay Systems is expected to contribute significantly to the company's revenue and margin growth, and the management team's strategic vision and customer-centric approach bode well for Yext's future success. As the company continues to navigate the complex software landscape, its focus on innovation, efficiency, and customer satisfaction will be critical to its long-term value creation.