What happened
Shares of Yext (YEXT -0.55%) were sliding today after the software company reported disappointing fourth-quarter results and offered weak guidance last night. It also announced several changes in its leadership, including a new CEO.
As a result, the stock closed down 9.3% today.
Image source: Getty Images.
So what
Yext, which helps businesses manage online listings to get more local search traffic, posted another quarter of sluggish growth with revenue up just 9% to $100.9 million. That was slightly below estimates at $101.3 million.
Meanwhile, annual recurring revenue (ARR) was up 10% to $390 million, and total customers rose 15% to over 2,700.
Gross margin at the software-as-a-service (SaaS) company fell modestly from 76.6% to 75.7%, and it reported an adjusted loss of $0.03 per share compared to break-even in the quarter a year ago. That was also better than expectations of an $0.08 per-share loss.
Separately, the company said that founder and CEO Howard Lerman will step aside later this month, to be replaced by Michael Walrath, who has been the chairman of the board since 2011. It also made several other changes in the C-suite, including moving Darryl Bond from chief accounting officer to CFO, replacing Steve Cakebread. Chief Strategy Officer Marc Ferrentino will be promoted to chief operating officer.
Walrath, the incoming CEO, said:
I believe our long-term market opportunity is massive and growing and we've only scratched the surface of our potential. We are moving into our next chapter with a heightened focus on our customers and a measured approach to growth.
Now what
Yext's guidance for 2022 didn't seem to inspire confidence either. The company expects $403.3 million to $407.3 million in revenue, just a 4% increase from 2021, which was well below estimates at $444.7 million. On the bottom line, the company also called for a wider loss than expected at $0.17 to $0.19 per share versus the consensus at $0.10.
Given the slowing growth and the poor stock performance, the leadership change doesn't seem surprising, but it won't be easy for the new management team to turn the company around, especially as the once-promising cloud company seems to be losing ground to competitors like Semrush.
