What happened?

Shares of Yext (NYSE:YEXT), a leader in Digital Knowledge Management (DKM) -- which enables companies to control public-facing information across the broad spectrum of maps, apps, search engines, and other discovery points -- are down 18% as of 11:10 a.m. EST after releasing third-quarter results.

So what

Yext's third-quarter revenue posted a 33% increase compared to the prior year, up to $58.7 million, topping analysts' estimates calling for $58.3 million. What might have surprised investors was a 45% increase in its net loss, which checked in at a $24.8 million loss during the third quarter, even if its adjusted earnings-per-share loss was in line with analysts' estimates of $0.12.

Howard Lerman, founder and chief executive officer of Yext, commented in a press release:

We believe leading brands are recognizing the highly attractive returns our revolutionary platform can deliver through higher revenue, improved process efficiencies, and better visibility in intelligent services.

Man sitting at desk with laptop, tablet device, and smart phone.

Image source: Getty Images.

Now what

While Yext's net loss increased dramatically, long-term investors should focus more on the company's ability to expand its reach and brand awareness. For instance, if the company can ink more partnerships like its agreement with Amazon.com, which connected Yext's information to tens of millions of smart speakers, it'll be a solid boost for the company's reach. During the third quarter, Yext added almost 80 new enterprise logos and has added more than 200 over the first nine months of the year. Management needs to keep that momentum going, even if it weighs on the bottom line in the near term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.