Yext, Inc. (NYSE:YEXT) Q3 2023 Results Conference Call November 30, 2022 5:00 PM ET
Company Participants
Nils Erdmann - Senior Vice President, Investor Relations
Mike Walrath - Chair of the Board, CEO
Marc Ferrentino - President and COO
Darryl Bond - CFO
Conference Call Participants
Naved Khan - Truist
Ryan MacDonald - Needham
Wyatt Swanson - D.A. Davidson & Co
Rohit Kulkarni - MKM Partners
Operator
Good day, and welcome to the Yext Third Quarter Fiscal 2023 Financial Results Conference Call [Operator Instructions]. Please note this event is being recorded.
I would now like to turn the conference over to Nils Erdmann, Senior Vice President of Investor Relations. Please go ahead.
Nils Erdmann
Thank you, operator, and good afternoon, everyone. Welcome to the Yext Fiscal Third Quarter 2023 Conference Call. With me today are CEO and Chair of the Board, Mike Walrath; COO and President, Marc Ferrentino; and CFO, Darryl Bond. During this call, we will make forward-looking statements, including statements related to our future financial performance, expectations regarding the growth of our business, our outlook for the fourth quarter and fiscal year 2023, our strategy and estimates of financial and operating metrics, capital expenditures and other indications of future opportunities, as further described in our third quarter earnings press release.
These forward-looking statements are subject to certain risks, uncertainties and assumptions, including those related to Yext's 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 differ materially from these forward-looking statements are discussed in our reports filed with the SEC, including our most recent Form 10-Q for the quarter ended July 31, 2022, our annual report on Form 10-K for the fiscal year ended January 31, 2022, and our press release that was issued this afternoon. During the call, we also refer to non-GAAP financial measures. Reconciliations with the most comparable GAAP measures are available in the earnings press release, which is available at investors.yext.com.
I will now turn the call over to Mike.
Mike Walrath
Thanks, Nils, and thanks, everyone, for joining us today. We are pleased to report Q3 results that demonstrate the continued execution of our strategy to drive efficient and profitable growth by delivering best-in-class products and services that create tremendous value for our customers. I'll start with a brief rundown of our financial performance. In Q3, our revenue was $99.3 million. On a constant currency basis, our quarterly revenue increased roughly 4% over the prior year period, primarily driven by new customers and upsells. Our non-GAAP net income per share was $0.02 compared to a non-GAAP net loss per share of $0.04 in the same period last year. This improvement was largely driven by our success in streamlining our business and improving our operating efficiencies. What this illustrates is that the groundwork we laid in the first half of this year is paying off and we're delivering on the financial commitments we made while continuing to find ways to improve our margins and successfully manage costs to increase our profitability. This quarter, we were able to further reduce our non-GAAP operating expenses as a percentage of revenue to 73%, down from 81% in the same period a year ago. In addition, sales and marketing as a percentage of revenue was 44%, down from 52% in the year ago period, while our direct ARR growth was up 3% year-over-year or 6% on a constant currency basis. In other words, we generated ARR growth with a significantly reduced sales and marketing budget. Our sales team has grown increasingly productive as we align around our highest priorities; customer satisfaction, operational efficiency and product innovation.