Why Yext Inc (NYSE: YEXT) stock is under pressure

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Yext Inc (NYSE: YEXT) stock fell 3.6% on 8th June, 2020 (as of 11:39 am GMT-4; Source: Google finance) after the company posted lower than expected topline results for the first quarter of FY 20. In the first quarter, the company had closed 73 deals with at least $100,000 in total contract value. This includes three deals that resulted in at least $1 million of total contract value, including new logos and renewals of existing customers. The total number of customers rose 36% year-over-year to about 2,100 customers, excluding the SMB and third-party reseller customers. For that ARR at the end of Q1 was $326 million, which increased 24% year-over-year from the $262 million in the year ago quarter. Cash and cash equivalents were $249 million at the end of April 30. In March of 2020, the company has replaced the prior revolving credit facility with a new $50 million credit facility. Overall, the company has reported Q1 non-GAAP loss excluding stock-based comp of $11.9 million compared to $5.7 million loss in the year ago quarter. The company has generated negative net cash flow from operations for Q1 of $700,000 as compared to a positive $800,000 a year ago period. Further, the company incurred capex of $21.3 million in the first quarter of FY 21  compared to $800,000 in the year ago quarter. The company is continuing to make progress with the building projects in New York, Washington DC, Tokyo and Paris and the company expects the remaining capex related to these projects to be about $49 million and the remaining costs to occur within fiscal year 2021.

YEXT in the first quarter of FY 21 has reported the adjusted loss per share of 10 cents, while reported the adjusted revenue growth of 24 percent to $85.4 million in the first quarter of FY 21, missing the analysts’ estimates for revenue by 0.05%. Unearned revenue rose 22% year-over-year to a $153 million.

For the second quarter of FY 21, the company expects revenue to be between $84 million and $86 million and anticipates the non-GAAP loss per share to be of between $0.11 and $0.13. The company has withdrawn the guidance for fiscal year 2021 due to the limited visibility of future periods at this period of uncertainty.

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