Thank you, Sarah, and good afternoon, everyone. Welcome to Yext's fiscal fourth quarter 2022 call. With me today are Chairman, Mike Walrath; CEO, Howard Lerman; CFO, Steve Cakebread; and Chief Accounting Officer, Darryl Bond. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements, including statements about revenue, non-GAAP net loss, growth of our business, our management and governance plans, gross margins, operating margins, net dollar-based retention, capital expenditures, and other nonhistorical statements as further described in our press release. These forward-looking statements are subject to certain risks, uncertainties, and assumptions, including those related to Yext growth, the evolution of our industry, our product development and success, our management performance, and general economic and business conditions, such as the impact of the COVID-19 pandemic. We undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to have a material difference from these forward-looking statements are discussed in our reports filed with the SEC, including our most recent quarterly and annual reports, and our press release that was issued this afternoon. During the call, we also refer to non-GAAP financial measures. Reconciliations of the most comparable GAAP measures are also available in the press release which is available at investors.yext.com. With that, I would like to turn the call over to Howard. Howard?

Thank you, Jeff. Since we founded this company in 2006, we've been focused on helping businesses and organizations around the world be the authoritative source of delivering their business information everywhere people search, starting with the power of listings. We created products that help companies build their businesses, and most recently with Answers, we help our clients leverage the power of AI-based search technology to provide perfect answers everywhere. Yext has become a powerful AI-based search platform, working with many of the world's most notable brands. I am proud of how far we have come. Today, it's time for me and Yext to take the next step in our journey. Mike Walrath will succeed me as CEO. Mike has been part of Yext's evolution since 2009 when he joined the Board. Since 2011, Mike has helped guide the company as Chairman of the Board. Before he joined the Board, Mike built an innovative technology company called Right Media that he sold to Yahoo, where he managed a team of more than 4,000 people globally. In addition to Right Media, Mike helped build other high-growth software companies, including MOAT, which was acquired by Oracle. He has a track record of creating value, solid experience running complicated businesses at scale, and Mike believes in our vision. Mike can provide a fresh perspective on products, solutions, and successfully lead Yext into the future. With that, I'll turn the call over to Mike to share some of his thoughts as he steps into the role.

Thank you, Howard. When I joined the Yext Board in 2009, the company was just starting out. None of today's products were available then. I want to recognize the significant progress the company has made under Howard's leadership, and I appreciate all he has done to create the opportunities we have today. I believe Yext has great potential, and I'm eager to play an active role in our next phase of growth. I come into this role with a solid understanding of the business, but I know there’s much for me to learn as I focus on day-to-day operations. Yext has developed a unique suite of products that our competitors cannot match. These products remain highly relevant as businesses navigate the complexity of managing their brand's information amid abundant information sources for their customers. Yext helps solve real business challenges throughout the online customer journey with a range of products that allow our clients to control their brand's narrative. I am confident that our long-term market potential is vast and expanding, although we have just begun to tap into it. Nonetheless, we were disappointed with our performance in fiscal year '22. The operating environment has been very challenging, particularly with COVID surges affecting us in Q2 and Q4, and we now recognize that our go-to-market strategy was overly inefficient. We did not achieve the sustained recovery in sales productivity we had anticipated last year, which was reflected in our bookings results and affected revenue in fiscal year '23. There are several areas where we believe we can enhance our performance. First, we have started to streamline our go-to-market strategy with a unified approach to customers and products. Recently, we introduced exciting new products like Answers. While these products and market expansion are positive steps, we have encountered fragmentation in how we interact with customers, which affects our ability to provide premium service and support. This, in turn, impacts customer satisfaction and complicates our retention and upsell efforts. In retrospect, it’s clear we concentrated too much on increasing sales capacity without enough focus on other functions critical to productivity, such as sales enablement, training, client success, and services. We believe that unifying our customer-facing functions—like marketing, sales, support, and services—with our product and engineering teams is the first step toward delivering a better customer experience. This alignment should enhance our operational efficiency, reduce the number of separate teams, and minimize redundancies. Such an approach will help ensure that our new products and features align with customer needs and that our go-to-market strategy evolves with our products. We expect this will also foster accountability to customers throughout the entire product and delivery process. Currently, we are centralizing these functions to heighten our customer focus. We also announced today Marc Ferrentino's promotion to President and COO. Marc is now responsible for ensuring the alignment and delivery of the full customer experience, which encompasses sales, marketing, client success, product strategy, and engineering. In his previous role as Chief Strategy Officer, Marc oversaw product management, user experience, product marketing, customer insights, and the platform developer program. Since joining Yext in 2015, Marc has gained a deep understanding of our customers' needs and how our teams can collaborate to enhance their success. I look forward to partnering with Marc and his talented team to further improve our products and go-to-market strategy. Our second immediate focus is on how we approach investments in growing our business. In the past, we have invested heavily in anticipation of future growth. This approach works well when circumstances align but can also lead to inefficiencies and organizational complexity. Moving forward, while we will continue to experiment, we will only make major investments based on clear evidence of progress. We are adopting a more disciplined strategy regarding investments, with a close eye on productivity and customer base metrics to quickly understand what works and where funding is best allocated. For instance, we have already reduced the number of quota-carrying sales reps from around 225 at the end of last year to about 190. In the future, our investments in expanding our sales team will be driven by increases in productivity rather than preceding them. We will also explore ways to better leverage existing resources for maximum efficiency across the company. As productivity improves, we are ready to expand our current team. To clarify, we will invest in what is effective in a disciplined manner. Fortunately, as Chairman, I’ve had the chance to become more involved in operations recently, and we are already making headway on our priorities. However, I understand this process will take time. I am thankful to have a skilled, focused, and motivated team in place that is enthusiastic about making changes. I am stepping into this role largely because of the exceptional team at Yext, and I look forward to collaborating with them as CEO. Regarding our finance organization, I would like to express my gratitude to Steve Cakebread for his contributions at Yext. Steve has been an invaluable partner, and he leaves the company in good hands with Darryl's promotion from Chief Accounting Officer to CFO. Now, I will turn the call over to Steve.

All right, Mike. Thank you. When I came to Yext in 2014, we were a private company, a few hundred employees, three people in finance, a few products, and a lot of enthusiasm. Today, we’re a public company, a global base of employees and thousands of world-class brands on our platform. The company's enthusiasm remains, and I'm thankful to have been part of this team. I'm also grateful to have had the opportunity to build a world-class finance organization ready to move the company forward. I'm handing the reins over to Darryl Bond, who will succeed me as CFO. Darryl was one of my first hires at Yext and someone I had hoped would succeed me when I eventually left. He's worked alongside me and the management team at Yext for years, has a deep understanding of the company. He’s likely a familiar face to many of our analysts and investors as he’s been heavily involved in Investor Relations over the years. And I know that I’m leaving the CFO role in capable hands. With that, I’m going to turn the call over to Darryl and congratulate him on his promotion. Darryl?

Thanks, Steve. I appreciate the opportunity and have enjoyed working so closely with you over the last seven years. I’m excited about my new role and the future of Yext. As Steve mentioned, I’ve met many of our investors and analysts in the past, and I look forward to continuing the dialogue with you. But for now, let’s begin with our Q4 and fiscal '22 results. Our fourth quarter revenue grew 9% year-over-year to $101 million. Fiscal year '22 revenue grew 10% to $391 million. Unearned revenue increased 16% year-over-year to $223 million. And annual recurring revenue, or ARR, was $390 million at the end of Q4, up 10% year-over-year. Our trailing 12-month net dollar-based retention, which excludes our small business customers, was 98%. In our trailing 12-month, net dollar-based retention for direct, which also excludes small businesses, as well as our third-party reseller customers, was 99%. We've seen improvements in gross retention in the past couple of quarters, and we believe our renewed focus on customer centricity will drive greater renewal rates and upsells, which should improve net dollar-based retention. Keeping in mind, this is a trailing 12-month number. Separately, the total number of Yext direct customers, excluding SMB and third-party reseller customers, increased 15% year-over-year and is over 2,700. Our direct ex SMB and reseller customers with ARR over 100,000 was 605 at the end of Q4, up 10% year-over-year. Turning to non-GAAP results, which are reconciled to GAAP in our press release. Q4 gross margin was 77.1% this quarter compared to 78.4% in the year-ago quarter. We continue to be in the range of our long-term non-GAAP gross margin target of 75% to 80%. Fiscal year '22 gross margin was 76.6% compared to 77.3% a year ago. Sales and marketing as a percentage of revenue declined from 54% in the fourth quarter last year to 51% as of Q4 of fiscal '22. For the full year, it also declined from 55% in fiscal '21 to 52% in fiscal '22. On an annual basis, we expect that this metric will continue to improve. G&A as a percentage of revenue increased from 15% in the year-ago quarter to 17% in the fourth quarter. Fiscal '22 G&A as a percentage of revenue improved marginally over fiscal year '21, and we expect to drive continued efficiencies in G&A going forward. Q4 operating expenses were $80.8 million or 80% of revenue compared to $73 million or 79% in the year-ago quarter. Fiscal year '22 operating expenses were $315.9 million or 81% of revenue; that compared to $296 million or 83% of revenue a year ago. Our Q4 net loss was $4.1 million compared to net income of $94,000 in the year-ago quarter, and our Q4 net loss per share of $0.03 compared to breakeven last year. Fiscal '22 net loss was $20 million compared to $22 million in fiscal '21. Cash and cash equivalents were $261 million at the end of fiscal '22. This is compared to $230 million at the end of fiscal '21. We intend to maintain a strong balance sheet and cash position going forward. Net cash flow from operations for Q4 was $29.1 million compared to $24.9 million in the year-ago quarter. For the fiscal year, net cash flow from operations was $21.8 million compared to $1.2 million for fiscal year '21. The increase in cash flow generation was primarily related to the previously mentioned operating expense improvements. We have generated positive operating cash flow in three of the last four fiscal years and expect to continue generating annual positive operating cash flow in fiscal '23 and going forward. CapEx was $1.1 million in the fourth quarter compared to $11.2 million in the quarter ended January '21. CapEx for fiscal '22 was $13.4 million compared to $65.1 million in fiscal '21, as we have returned to a normalized annual CapEx run rate. Turning to our outlook. We expect Q1 revenue to be between $96.3 million and $97.3 million. We expect non-GAAP net loss per share between $0.07 and $0.08, assuming a weighted average basic share count of approximately 131.9 million shares. For the full year of fiscal '23, we expect revenue of $403.3 million to $407.3 million. Our non-GAAP loss per share is expected to be between $0.17 and $0.19. This assumes a basic weighted average share count of approximately 134.3 million shares. Operator, we are ready to open it up for Q&A.

Our first question comes from Arjun Bhatia with William Blair.

This is Chris speaking for Arjun. The first topic I wanted to address was the customer capital, which remained flat from the third quarter to the fourth quarter. Considering this and your revenue guidance for the next year, are you experiencing significant churn in any part of the customer base? How should we view how this may develop?

Chris, this is Darryl. Thanks for the question. We've seen some really positive gross retention over the last couple of quarters. I think last quarter, we mentioned we've seen gross retention start to come back to historical levels, and we saw that again. So we're really, really encouraged by the signs that we're seeing in gross retention. We've made a bunch of improvements in that area over the past few quarters. And as Mike mentioned in his remarks, we continue to focus on customer centricity, and it will certainly be an area of focus going forward.

Yes. It's Mike. So one of the things we've looked at closely over the last couple of months is our historicals here. As Darryl mentioned, historically, we were in the mid- to high 80s and even low 90s with gross retention. We saw that drop to a low in the low 80s during fiscal '21. And we saw in the second half of fiscal '22 our gross retention recover into the mid- to high 80s. So we're not at all satisfied with that number, but the trend is actually in the right direction. And what it reinforces for me is that focus on customer centricity is what's going to get us back to where we were.

Got it. That makes sense. Given the significant changes in the management team, what are some of the main priorities as we move into 2022?

It's Mike. I'll take that one. There has been a lot of change, but fortunately, everyone at this table has been here, providing a solid understanding of the business. There is still much work to be done. The focuses I've mentioned are already in progress, specifically the unification of the go-to-market strategy and the emphasis on efficiency between our product and engineering teams. When discussing our investment approach, it all revolves around being more disciplined and ensuring we have data indicating when we are prepared to expand functions. As I delve deeper into the business, these are the key areas we will concentrate on.

Our next question comes from Naved Khan with Truist Securities.

I have a few questions. Looking at the guidance for the full year, the revenue growth is expected to be in the low single digits, and there's a sequential decline for Q1. I'm curious about the reasons behind this decline. Is it mainly due to the listings business, or is there a loss of momentum in the Answers segment? What gives you confidence that you can still achieve full-year growth? My second question is about the changes you're planning to implement regarding the sales headcount. How precise is this approach in terms of reducing headcount, and what areas are you now prioritizing with your existing team? Could you provide some insight on this?

Thanks, Naved. This is Darryl. I'll address the question a bit out of sequence. Your first question was regarding the guidance. We certainly faced challenges in fiscal '22, as Mike noted earlier. The bookings in Q4 had a significant effect on the revenue we expect in fiscal '23, and that dynamic is reflected in our results. Regarding the quarter-to-quarter decline, it's important to remember that we recognize revenue on a daily basis. Q4 consists of 91 days, while Q1 has 88 days, so that difference accounts for a few million dollars in revenue. That's the reason behind our observations. On the momentum front, Answers continues to grow exceptionally well, and we're maintaining a triple-digit growth rate, which gives us confidence in the product. As Mike mentioned, our primary focus remains on enhancing sales productivity. When we developed our guidance, we aimed to be careful, given the macro uncertainties. However, we established the guidance based on the visibility we currently have into the business, and we believe it is an achievable goal. I'll pass it to Mike to add more.

Yes, I’m happy to. Regarding the guidance, as mentioned by Darryl in Q4 and Q2, we experienced significant disruptions in our business. For instance, in Q4, over 50% of our in-person events were canceled due to the Omicron surges, which is a critical aspect of our sales strategy. We can certainly improve our sales approach to be more efficient during such disruptions, but these events do impact us. In terms of our sales team, our changes have been carefully considered and focused on productivity and areas where we believe we can be effective. To me, productivity is a key indicator of the health of our go-to-market strategy. I would like to focus on how we manage productivity before moving on to capacity modeling and increasing our quota-carrying personnel to ensure we can meet the existing demand.

I would like to follow up on that. We seem to be experiencing a reopening phase of the economy related to COVID. Shouldn't that position you to benefit, and what are you projecting in relation to that? Also, I'm curious about the recent developments in Europe regarding Ukraine and whether you've noticed any impact from those events.

Sure. Regarding the reopening, it's worth noting that a year ago, we felt the reopening tailwinds were on the horizon. We are being cautious in how we build our plan, which ultimately influences our guidance. We are hopeful to experience those tailwinds as we enter this year. Concerning the situation in Ukraine, we have no direct exposure to either Russia or Ukraine, and so far, we haven't noticed any impact on our business.

Our next question comes from Ryan MacDonald with Needham.

Maybe the first one for Michael. As we start to think about this, I guess, slower growth period going into calendar year '22 here, how should we think about reps as you work through the year and some of these changes about sort of a more balanced approach to growth and profitability? And obviously, within what's built into the guide today, obviously, a little bit lower in terms of EPS and perhaps the Street was expecting. Are there any, I guess, charges or sort of one-time costs that you have to incur early in the year that is maybe preventing you from being able to ramp margins more quickly?

Thank you, Ryan. I'll let Darryl handle the accounting questions, which is something you’ll come to expect from me. You made a crucial point about change management in a company of our size; it takes time and isn't as simple as just flipping switches. While we have started to become more efficient, implementing these changes requires time to permeate the system. We are committed to these changes but want to ensure they are the right ones—carefully considered, without affecting the core of our business, which remains very strong. Regarding efficiency, one key takeaway is that we anticipate maintaining a positive operating cash flow, which I believe is one of the most vital metrics for our business. Generating operating cash flow provides us with significantly more flexibility compared to experiencing cash burn, which we do not expect to encounter.

Yes. And Ryan, just to capture your question about the one-time expenses, there will be some, but not incredibly meaningful in Q1. One thing that we are going to focus on is a lot of operational efficiencies and continuing to look at where we're spending, how we're spending, and reallocating as needed. So throughout the year, we're going to probably look at R&D and may spend a little bit more there as we have an opportunity to improve the product to make them easier for customers to use. And that's going to be an area where we'll continue to focus. As well, we mentioned in the past that we've made some investments in customer success and customer support. We'll continue to look at that area as an opportunity to create better customer experiences to help continue to drive retention improvements. And the one thing that we've been talking about for quite some time and have demonstrated some pretty good success is continuing to drive efficiencies on the sales and marketing line, and we expect to continue to do that.

Excellent. That's helpful. As a follow-up regarding the go-to-market strategy, you mentioned that the unification of this strategy is already in progress. Considering the product set that includes listings, pages, and the Answers suite, do you still see strong synergy and cross-selling opportunities between them? If not, should we anticipate any product rationalization as part of these changes?

From my perspective, across our product range, non-listing products continue to grow at about 30%, indicating strength in that area. Listings constitute the largest portion of our offerings. Our strategies for upselling and cross-selling are critical to our market approach and represent significant opportunities for us. We will know we're improving our customer engagement when we see higher gross retention rates and increased upsell, which was a challenge for us in fiscal year '22 in terms of new bookings. I firmly believe, based on my extensive experience in developing solutions focused on customer needs, that every product in our portfolio addresses a significant customer issue. We must enhance our efforts in coordinating how we present these solutions to our customers and in supporting them once we secure those contracts.

Our next question comes from Pinjalim Bora with JPMorgan.

I wanted to take a moment to discuss what surprised you regarding Q4 bookings. It appears the ARR numbers fell short of your expectations. Can you elaborate on what you found surprising and why the results were not as strong? Additionally, let's touch on the core business, which showed some recovery. Last quarter it grew about 5%, compared to a mere 1% growth in Q4 of the previous year. Did that growth decline in Q4 impact bookings? Furthermore, I noticed you mentioned having 225 sales reps, down from 250 the year before. Did you experience higher sales attrition at the end of the year, and could that have affected bookings? Please help clarify what influenced the bookings.

Yes. I can start with that. When we discuss Q4, we noticed similar patterns in Q2. In Q3, we indicated that we would focus heavily on customer-facing events and reconnecting with our clients. However, between December and January, we had to cancel more than half of those events, which was unexpected due to the impact of the Omicron surges. This disruption in the market affected our bookings more than anticipated, especially since we did not foresee such a significant impact when we wrapped up Q3. Additionally, regarding sales attrition, as we transition from a capacity-driven model to one that emphasizes productivity, there will be a natural turnover in the organization, particularly as we have fewer sales representatives meeting their quotas. The decrease in the number of reps from 225 to 190 reflects our proactive measures to enhance productivity.

It was more forced than voluntary, is what you're saying?

It was proactive, yes.

Our next question comes from Rohit Kulkarni with MKM Partners.

Good luck, Howard and Steve, and congrats, Mike and Darryl. So just double-clicking on this kind of fragmented product and sales comment. Mike, maybe you can kind of expand on to last year, we kind of heard a lot around lead with Answers and that's going to be the leading product, although Listings remains predominantly the largest driver of all the economics. So perhaps maybe take a step back, how are you thinking next 12 months with regard to go-to-market? And also increasingly, we were hearing around kind of verticalized use cases gaining more traction and that's the way some of the salespeople were being directed to go after specific vertical use cases, e-commerce or whatnot. So as you think through over the next 12 months, what should we expect from kind of a more unified product and sales? Should we expect more of these vertical use cases? Or is there going to be a step back with regard to Listings being the more leading product? Would love to hear your kind of big picture thoughts on that.

I will share my overall thoughts, and we'll provide updates on a quarterly basis as I delve deeper into it. Since I've been Chairman and have been actively involved in recent months, I'm quite familiar with the situation. Our larger deals continue to be driven by the Answers initiative. I believe the potential for Answers remains significant, and we will keep promoting it as a crucial element of our customer solutions. To elaborate, all our products aim to deliver accurate answers. While we differentiate between Listings, Pages, and Answers, it's important to note that Listings was originally an Answers product, focusing on ensuring that local information is accurate everywhere. The goal remains to disseminate the correct answers to our customers. Nothing has changed in that regard, nor has my view of the opportunity shifted; our focus now needs to be on improving execution. This leads to the concept of verticalized selling, which is essential. Expertise and a deep understanding of our customers are more critical than ever in our new approach to market. When I refer to fragmentation, I'm addressing the numerous points of contact our customers experience. For instance, my wife's small restaurant group recently highlighted how they had at least 15 customer touchpoints. This multitude of interactions poses challenges, as we sometimes lose cohesion in our customer communications. The organizational changes we've begun to implement aim to streamline these interfaces, ensuring that our client success, support, professional services, and customer service teams engage with customers consistently and aligned with our go-to-market strategy. I hope this clarifies our direction, as it reflects the methods I've successfully employed in the past with other SaaS solutions.

Okay. And just other question on like upsells and renewals, any specific callout in how that has trended over the last 90, 120 days with regards to kind of any particularly callouts with regard was upsells more stronger or weaker or renewals as an end retention rate? How did that trend?

Yes. So Rob, we've seen some pretty solid improvement in gross retention over the last Q3 and Q4. Where we're really challenged and continue to be challenged is on the upsell. And I think that sort of plays into a lot of what Mike has been talking about, about sales productivity and continuing to refine the go-to-market approach.

I would like to add that when a company gets the customer relationship right and customers are happier, the entire upsell process becomes much easier. However, if we encounter issues with customer satisfaction or success, it makes those conversations more difficult. While we have seen renewals recover closer to historical levels, we are very focused on increasing them to or above where they have been in the past.

Our next question comes from Stan Zlotsky with Morgan Stanley.

This is Elizabeth on for Stan. I wanted to double-click on the go-to-market efficiency. Just given some of the comments last quarter about the 50% improvement in sales productivity of ramped reps, was there anything specific that changed over the last three months outside of just the reduction of in-person events?

Yes. So I think what we saw was the 50% increase in ramped rep productivity; we obviously took a step back in Q4 there. And it certainly had a lot to do with taking a look at what we're seeing on the productivity side of that. We have many reps who are highly successful, and there's a model for success here. We have to get better at replicating it. When I talk about unifying sales training and enablement and making sure that everyone is using the same motions, that's all part of that process. And so...

Ladies and gentlemen, there seems to be a technical problem. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.