Yext, Inc. Q2 FY2025 earnings call

Mike Walrath and Darryl Bond discussed closing the Hearsay acquisition on August 1, with the Q3 and full-year guide including two full quarters of Hearsay revenue. They highlighted joint go-to-market motions to accelerate both legacy Hearsay and Yext businesses. Mike Walrath talked about the software vendor consolidation theme driven by customers' issues like too much vertical software, data inconsistencies, and inefficient workflows. Positive reactions from shared customers to the Hearsay acquisition for better analytics, data platform, and efficient workflows were noted. Mike also mentioned Gen AI, with a cautious approach but early benefits in platform features like automated review responses. Cultural alignment and team integration post-Hearsay acquisition were emphasized, along with a focus on customer centricity in business decisions.

The Q3 and full-year guide includes two full quarters of Hearsay revenue, considering top line synergies and joint go-to-market motions. Expect stable to modest growth in ARR this year, being conservative due to the operating environment. Guided to consolidated low-20s adjusted EBITDA margin exiting the year, with Hearsay initially dilutive, and improvement expected next year through efficiency and revenue growth.

Forward-looking statements are subject to risks such as industry evolution, product development success, integration of Hearsay, management performance, and general economic conditions. Risk factors include compliance levels for Gen AI use in large enterprises, which may outpace comfort levels.

Q: On updated revenue guide and Hearsay contribution A: Darryl Bond explained the guide includes Hearsay's second-half revenue and top line synergies related to joint go-to-market motions Q: On software consolidation cycle and appetite for adding products A: Mike Walrath discussed customer demand for consolidation and focus on partnership with customers Q: On upsell into Hearsay/Yext and organic ARR growth A: Mike Walrath talked about joint customer opportunities and conservative outlook on ARR growth Q: On Gen AI impact A: Mike Walrath discussed cautious approach but early benefits in platform features Q: On Hearsay integration and EBITDA margin A: Darryl Bond and Mike Walrath discussed Hearsay's initial dilutive effect on margins and future efficiency Q: On Boomerang customers and third-party reseller usage-based change A: Mike Walrath talked about customer-centric shift and reasons for reseller change