What happened

Shares of Yext (NYSE:YEXT) have plummeted today, down by 13% as of 11:15 a.m. EDT, after the company reported fiscal second-quarter earnings. The brand marketing specialist's outlook came in a little light.

So what

Revenue in the fiscal second quarter grew 32% to $72.4 million, with gross margin contracting to 73.4%. The company attributed the reduced profitability to higher cost of revenue. That all translated into an adjusted net loss of $12.7 million, or $0.11 per share. That was slightly less red ink than the $0.12 per share in adjusted losses that analysts were modeling for.

Red stock chart going down

Image source: Getty Images.

"We closed another strong quarter, with solid revenue growth driven by some of the biggest brands worldwide, including our first CPG brand with no physical retail stores," CEO Howard Lerman said in a statement. "The second quarter represented a tipping point for Yext, from a product-based solution to a platform-based solution for our customers."

Now what

Investors appear to be disappointed with Yext's guidance. The company, which utilizes a subscription model, expects fiscal third-quarter revenue to be in the range of $75.5 million to $76.5 million, shy of the $76.6 million in sales that the market was anticipating. Adjusted net loss per share is forecast at $0.18 to $0.19, compared to the consensus estimate of $0.13 per share in adjusted losses.

Yext did modestly increase its full-year revenue outlook while tightening its bottom-line forecast for fiscal 2020. Full-year revenue is now expected to be $299 million to $301 million, up from its prior expectation of $297 million to $300 million. Adjusted net losses for fiscal 2020 are now expected at $0.41 to $0.43 per share, a narrower range compared to the previous outlook of $0.40 to $0.44 per share.