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What changed in Yext, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Yext, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+323 added−332 removedSource: 10-K (2024-03-13) vs 10-K (2023-03-17)

Top changes in Yext, Inc.'s 2024 10-K

323 paragraphs added · 332 removed · 254 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

60 edited+16 added−11 removed47 unchanged
Biggest changePoor search experience on a business’s own website may result in lost sales opportunities or may cause consumers to visit a competitor’s website. Consumer Reviews Are of Critical Importance. Many major applications include consumer review data in their search results and may rank businesses and professional service providers based on the number, quality and recency of reviews.
Biggest changeMany major applications include consumer review data in their search results and may rank businesses and professional service providers based on the number, quality and recency of reviews. A limited number of reviews or a few poor reviews without offsetting positive reviews may result in an otherwise lower search ranking in certain applications. Search Drives Commerce.
These integrations offer our customers the ability to connect Yext with other systems. The App Directory includes integrations with third-party applications that can supplement our existing platform capabilities. The Connectors framework provides organizations with pre-built or custom integrations that can be used to pull content into the Yext Knowledge Graph.
These integrations offer our customers the ability to connect Yext with other systems. The App Directory includes integrations with third-party applications that can supplement our existing platform capabilities. The Connectors framework provides organizations with pre-built or custom integrations that can be used to pull content into the Knowledge Graph.
For example, we rely on integrations with each of the applications in our Publisher Network to accomplish some or all the following key tasks: • search for existing listings and retrieve details about them, in order to match our customers’ data in the Knowledge Graph to existing listing data; • claim listings and deliver updated content; • retrieve or get notified about reviews and allow review response; and • obtain statistics about traffic on listings to display to our customers in the platform.
For example, we rely on integrations with each of the applications in our Publisher Network to accomplish some or all the following key tasks: • search for existing listings and retrieve details about them, in order to match our customers’ data in the Knowledge Graph to existing listing data; • claim listings and deliver updated content; • retrieve or get notified about reviews and allow review response; and • obtain statistics about traffic on listings to display to our customers in our platform.
Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such 11 material electronically with or furnish it to the Securities and Exchange Commission, or the SEC.
Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the Securities and Exchange Commission, or the SEC.
For additional information about the impact of government regulations on our business, see "Risk Factors—Risks Related to Laws, Regulation and Taxation" in Part I, Item 1A in this Annual Report on Form 10-K. Additional Information We are a Delaware corporation with our headquarters located at 61 Ninth Avenue, New York, NY 10011.
For additional information about the impact of government regulations on our business, see "Risk Factors—Risks Related to Laws, Regulation and Taxation" in Part I, Item 1A in this Annual Report on Form 10-K. 11 Additional Information We are a Delaware corporation with our headquarters located at 61 Ninth Avenue, New York, NY 10011.
From our platform customers can centralize, control and manage data fields, including store information such as name, address, phone number and holiday hours; professional information such as headshots, specialties or education; job information such as title and description; FAQs and more. These and other public facts about a business are stored in a database called the Knowledge Graph.
From our platform customers can centralize, control and manage data fields, including store information such as name, address, phone number and holiday hours; professional information such as headshots, specialties or education; job information such as title and description; FAQs and more. These and other public data about a business are stored in a database called the Knowledge Graph.
However, there can be no assurance that our patent applications will be approved, that any patents issued will adequately protect our intellectual property, or that such patents will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. Trademarks We rely on registered and unregistered trademarks to protect our brand.
However, there can be no assurance that our patent applications will be approved, that any patents issued will adequately protect our intellectual property, or that such patents will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. 10 Trademarks We rely on registered and unregistered trademarks to protect our brand.
For example, some businesses may initially purchase our Listings product for their stores in a particular country with opportunities to expand to other stores in the geographic region. We continue to sell additional features of our platform, such as Pages, Reviews and Search, to existing customers.
For example, some businesses may initially purchase our Listings product for their stores in a particular country with opportunities to expand to other stores in the geographic region. We continue to sell additional products and features of our platform, such as Pages, Reviews and Search, to existing customers.
Brian Distelburger, head of the Company’s international and partner sales and a co-founder of our company, served as interim Chief 5 Revenue Officer until we hired Tom Nielsen as our Chief Revenue Officer in October 2022. Mr. Distelburger stepped back as an executive officer of our business at such time. Mr.
Brian Distelburger, head of the Company’s international and partner sales and a co-founder of our company, served as interim Chief Revenue Officer until we hired Tom Nielsen as our Chief Revenue Officer in October 2022. Mr. Distelburger stepped back as an executive officer of our business at such time. Mr.
Reviews enables customers to encourage and facilitate reviews, thereby increasing the quantity and quality of the reviews available to potential consumers and provides tools to manage their reviews from multiple sources across our Publisher Network from a single location.
Reviews enables customers to encourage and facilitate reviews, thereby increasing the quantity and quality of the reviews available to potential consumers and provides tools to manage their reviews from multiple sources across our Publisher Network from a single location. • Connectors .
We provide basic customer support as well as premier customer support, which may include services such as priority access to technical resources, faster target response times and other additional support services.
We provide basic customer support as well as premier customer support, which may include services such as priority access to technical resources, faster target response times and 9 other additional support services.
Pages enables businesses to create landing pages on their website to capture traffic from search engines and establish a call-to-action for consumers who reach those pages. • Search .
Pages enables businesses to create landing pages on their website to capture traffic from search engines and establish a call-to-action for consumers who reach those pages. • Reviews .
When searching for a business, consumers need to know many relevant attributes such as qualifications of a wealth advisor, amenities at a hotel, or course offerings at a university. As a result, businesses must ensure that the facts about their business are available, accurate and consistent online so that they can be found.
When searching for a business, consumers need to know many relevant attributes such as qualifications of a wealth advisor, amenities at a hotel, or course offerings at a university. As a result, businesses must ensure that the information about their business are available, accurate and consistent online so that they can be found.
Our platform gives businesses the ability to organize, edit and update the facts about their business based on numerous standard attribute fields, such as address and hours of operation, and increase the depth of their data using our extensible custom fields, such as menu options or accepted insurance plans. • Direct Integrations with the Most Relevant Services.
Our platform gives businesses the ability to organize, edit and update the information about their business based on numerous standard attribute fields, such as address and hours of operation, and increase the depth of their data using our extensible custom fields, such as menu options or accepted insurance plans. • Direct Integrations with the Most Relevant Services.
Our platform is the system of record that enables our customers to control and centralize the facts about their businesses, resulting in the elimination of inaccurate and duplicate data and the ability to seamlessly update data across our Publisher Network. • Flexibility for Optimized Management of Business Attributes.
Our platform is the system of record that enables our customers to control and centralize the information about their businesses, resulting in the elimination of inaccurate and duplicate data and the ability to seamlessly update data across our Publisher Network. • Flexibility for Optimized Management of Business Attributes.
In transactions with resellers, we are only a party to the transaction with the reseller and are not a party to the reseller’s transaction with its customer. We continue to develop programs comprised of technology companies and consultants to promote the Answers platform to their customers.
In transactions with resellers, we are only a party to the transaction with the reseller and are not a party to the reseller’s transaction with its customer. We continue to develop programs comprised of technology companies and consultants to promote the Yext platform to their customers.
No single customer accounted for more than 10% of our revenue for the fiscal years ended January 31, 2023, 2022 and 2021, respectively. Customer Support Our customer support group responds to inquiries about the use of our products.
No single customer accounted for more than 10% of our revenue for the fiscal years ended January 31, 2024, 2023 and 2022, respectively. Customer Support Our customer support group responds to inquiries about the use of our products.
As the Answers platform can be used by a number of different roles throughout the organization, for an additional fee, we also offer field user support which includes one-on-one training, review of content based on brand guidelines, and other support services. 9 Professional Services We offer professional services to customize our platform for our customers.
As the Yext platform can be used by a number of different roles throughout the organization, for an additional fee, we also offer field user support which includes one-on-one training, review of content based on brand guidelines, and other support services. Professional Services We offer professional services to customize our platform for our customers.
Moreover, businesses want to make sure that they appear prominently online when nearby consumers search for them. Finally, once a consumer reaches a business’s website ready to transact, the business must be ready to answer the consumer’s specific queries.
Moreover, businesses want to make sure that they appear prominently online when nearby consumers search for them. Finally, once a consumer reaches a business’s website ready to transact, the business must be ready to answer the consumer’s specific queries. Consumers Search Using Natural Language .
To respond to consumer questions, businesses need to be able to define the facts about their business using detailed, category-specific attributes ranging from name, address and phone number to more detailed items such as whether a hotel accepts pets, a restaurant has a gluten-free menu or a doctor accepts certain insurance plans. • Facts About a Business Are Dynamic.
To respond to consumer questions, businesses need to be able to define the information about their business using detailed, category-specific attributes ranging from name, address and phone number to more detailed items such as whether a hotel accepts pets, a restaurant has a gluten-free menu or a doctor accepts certain insurance plans. • Information About a Business Is Dynamic.
The key products and features that comprise the Answers platform include: • Listings . Listings allows our customers to sync and update the content they store in the Answers platform across our Publisher Network providing customers with greater control and consistency over their brand. • Pages .
The key products and features that comprise the Yext platform include: • Listings . Listings allows our customers to sync and update the content they store in the Yext platform across our Publisher Network providing customers with greater control and consistency over their brand. • Content .
As we develop our platform, we will introduce products and features that compete in new markets and as a result we will face more established businesses in these markets. For example, Search, previously known as Answers, was launched in 2019 and competes with more established search products and legacy search features.
As we develop our platform, we will introduce products and features that compete in new markets and as a result we will face more established businesses in these markets. For example, Search was launched in 2019 and competes with more established search products and legacy search features.
We are committed to developing and marketing innovative capabilities, and we will continue to invest in our platform to help our customers better control the facts about their businesses online. • Drive Usage of Our Platform. Our customer success professionals are responsible for building relationships and increasing our customers' adoption of the Answers platform.
We are committed to developing and marketing innovative capabilities, and we will continue to invest in our platform to help our customers better control the information about their businesses online. • Drive Usage of Our Platform. Our customer success professionals are responsible for building relationships and increasing our customers' adoption of the Yext platform.
Traditional methods for managing facts about brands include paper or legacy software-based solutions, such as word processors or spreadsheets.
Traditional methods for managing information about brands include paper or legacy software-based solutions, such as word processors or spreadsheets.
For smaller application providers, we have developed our own API specifications that can be used to build and implement integration with our platform. Our Customers We serve businesses with locations throughout the world. These include many leading businesses in a diverse set of industries, such as healthcare, retail and financial services.
For smaller application providers, we have developed our own Application Programming Interface, or API, specifications that can be used to build and implement integration with our platform. Our Customers We serve businesses with locations throughout the world. These include many leading businesses in a diverse set of industries, such as healthcare, hospitality, food services, retail and financial services.
We also offer broad-based equity awards with multi-year vesting provisions to incentivize and reward our employees for long term corporate performance based on the value of our common stock and promote retention throughout the vesting period. We have invested resources to develop employee talent.
We also offer broad-based equity awards with multi-year vesting provisions to align the interest of employees with Yext stockholders, and reward our employees for long term corporate performance based on the value of our common stock and promote retention throughout the vesting period. We have invested resources to develop employee talent.
As of January 31, 2023, we had 170 trademarks registered globally. “Yext” is a registered trademark in the United States and in certain other countries. 10 Competition The market for our platform is new and rapidly evolving, and we face many competitors with a variety of product offerings.
As of January 31, 2024, we had 162 trademarks registered globally. “Yext” is a registered trademark in the United States and in certain other countries. Competition The market for our platform is new and rapidly evolving, and we face many competitors with a variety of product offerings.
The Answers Platform Yext's cloud-based platform powers products and features that allow our customers to provide accurate and direct answers to consumer questions, to control the facts about their businesses and the content of their landing pages and to manage their consumer reviews, all from a single login.
The Yext Digital Presence Platform Yext's cloud-based platform powers products and features that allow our customers to provide accurate and direct answers to consumer questions, to control the information about their businesses and the content of their landing pages and to manage their consumer reviews, all from a single login.
The facts about a business include dynamic attributes that change frequently, such as opening hours, holiday hours, menus, events and promotions. • Facts About a Business Exist in Many Places.
The information about a business include dynamic attributes that change frequently, such as opening hours, holiday hours, menus, events and promotions. • Information About a Business Exists in Many Places.
Our comprehensive training program and community helps our customers and the developer community develop skills to build custom solutions on our platform. • Extend the Publisher Network. We plan to continue to expand our Publisher Network. As of January 31, 2023, our Publisher Network was comprised of over 200 applications.
Our comprehensive training program and community helps our customers and the developer community develop skills to build custom solutions on our platform. • Extend the Publisher Network. We plan to continue to expand our Publisher Network. As of January 31, 2024, our Publisher Network was comprised of over 200 service and application providers.
Organizational Changes We undertook a substantial management and strategic realignment in our fiscal year ended January 31, 2023. On March 25, 2022, Howard Lerman, our co-founder and former Chief Executive Officer, and Steven Cakebread, our former Chief Financial Officer, departed the Company. Michael Walrath, Chairman of our Board of Directors, succeeded Mr. Lerman as Chief Executive Officer.
Organizational Changes We recently undertook a substantial management and strategic realignment. On March 25, 2022, Howard Lerman, our co-founder and former Chief Executive Officer, and Steven Cakebread, our former Chief Financial Officer, departed the Company. Michael Walrath, Chairman of our Board of Directors, succeeded Mr. Lerman as Chief Executive Officer.
When potential consumers want to make a purchase, businesses need to be able to answer consumers' questions accurately and directly. Inaccurate or incomplete information may result in lost sales opportunities, negative brand experiences and organizational inefficiencies. Search Drives Commerce.
When potential consumers want to make a purchase, businesses need to be able to answer consumers' questions accurately and directly. Inaccurate or incomplete information may result in lost sales opportunities, negative brand experiences and organizational inefficiencies. Businesses Need to Provide Consumers with Relevant and Actionable Information.
Simply managing and updating information within the few core search engines, such as Google and Bing, through these traditional methods is already very challenging, and becomes even more so when implementing updates on an increasing number of other services such as Instagram, Snapchat and Uber. Poor Search Experience Results in Lost Transactions.
Simply managing and updating information within the few core search engines, such as Google and Bing, through these traditional methods is already very challenging, and becomes even more so when implementing updates on an increasing number of other services such as Instagram, Snapchat and Uber. Consumer Reviews Are of Critical Importance.
Analytics provides businesses a holistic view of where and how consumers interact with their brand both on their own websites and on third-party applications as well as insight into consumer interactions on their Yext Listing, Pages and Search experiences that can drive customer revenue. Ultimately, our platform helps businesses deliver accurate, consistent, up to date and compelling information to consumers.
Analytics provides businesses a holistic view of where and how consumers interact with their brand both on their own websites and on third-party applications as well as insight into consumer interactions on their Yext Listing, Pages and Search experiences that can drive customer revenue.
With popular services such as Google, Facebook and Yelp, as well as vertical search applications and search leveraging AI using mobile, voice-based and in-app search, businesses need an efficient way to control their facts across these multitude of services. Businesses Need to Provide Consumers with Relevant and Actionable Information.
With popular services such as Google, Facebook and Yelp, as well as vertical search applications and search leveraging AI using mobile, voice-based and in-app search, businesses need an efficient way to control their information across these multitude of services. Consistent Knowledge About a Business Is Fundamental.
Darryl Bond, then the Company’s Executive Vice President and Chief Accounting Officer, succeeded Mr. Cakebread as Chief Financial Officer. Concurrently with these changes, Marc Ferrentino, then our Chief Strategy Officer, was named as President and Chief Operating Officer. Additionally, on June 7, 2022, David Rudnitsky, then our Chief Revenue Officer, resigned from Yext.
Darryl Bond, then the Company’s Executive Vice President and Chief Accounting Officer, succeeded Mr. Cakebread as Chief Financial Officer. Additionally, on June 7, 5 2022, David Rudnitsky, then our Chief Revenue Officer, resigned from Yext.
Human Capital We consider our culture and employees to be vital to our success. Yext is committed to providing a safe, productive, discrimination-free and harassment-free work environment. All employees are responsible for compliance with our Code of Conduct and Employee Handbook, which includes our anti-harassment policy.
Human Capital We believe that creating great customer experiences begins with having a company culture that values the contributions of every employee. Yext is committed to providing a safe, productive, discrimination-free and harassment-free work environment. All employees are responsible for compliance with our Code of Conduct and Employee Handbook, which includes our anti-harassment policy.
Patents and Patent Applications As of January 31, 2023, we had 17 issued U.S. patents, five issued design patents, one issued national stage patent, 25 non-provisional, two U.S. design patent applications, three international design applications, 10 international Patent Cooperation Treaty patent applications pending, and 21 national stage applications outside of the U.S.
Patents and Patent Applications As of January 31, 2024, we had 26 issued U.S. patents, one issued U.S. design patent, seven issued international design patents, four issued national stage patents, 26 non-provisional applications, one provisional application, one U.S. design patent application, one international design application, eight international Patent Cooperation Treaty patent applications pending, and 26 national stage applications outside of the U.S.
Many answers and results provided by searches currently come from third-party sources such as data aggregators, governmental agencies and consumers. The net result of this third-party sourcing has been to produce “best guess” data that can often miss or misstate the true facts about businesses worldwide. • Attributes that Describe the Facts About a Business Are Expanding.
The net result of this third-party sourcing has been to produce “best guess” data that can often miss or misstate the true facts about businesses worldwide. • Attributes that Describe the Information About a Business Are Expanding.
The continued expansion of the Yext App Directory and Yext Connectors framework will give organizations additional flexibility to support new and varied use cases, growing our market opportunity and further increasing customer retention. Key Benefits of Our Platform The Answers platform provides the following benefits depending on a customer’s subscription level and enabled product features: • Control over Facts.
The continued expansion of the Yext App Directory and Yext Connectors framework will give organizations additional flexibility to support new and varied use cases, growing our market opportunity and further increasing customer retention.
We continue to invest in platform and features development to help our customers better control the facts about their business and have released new products and features to all of our customers multiple times a year.
We continue to invest in platform and features development to help our customers better control the information about their business and have released new products and features to all of our customers multiple times a year. 8 Our Technology Our cloud-based platform is designed to scale as we continue to add customers and allows us to support the entities managed with our platform and the millions of associated facts.
We use a microservices-based architecture to maximize the manageability, flexibility and scalability of our software as it continues to grow more complex. We also employ a modern continuous delivery approach to building, testing and deploying our software. 8 Hosting The majority of our customer-facing software is run from two co-location data centers.
Our platform is built primarily with industry-standard open source technology. We use a microservices-based architecture to maximize the manageability, flexibility and scalability of our software as it continues to grow more complex. We also employ a modern continuous delivery approach to building, testing and deploying our software.
We actively monitor and track the schema.org standards so that our platform stores and publishes data in accordance with the most current schema.org specifications. Integrations with our Publisher Network, and App Directory, and Connectors framework The functionality of our platform is dependent on integrations with a variety of third-party technologies that comprise our Publisher Network, App Directory, and Connectors framework.
Integrations with our Publisher Network, and App Directory, and Connectors framework The functionality of our platform is dependent on integrations with a variety of third-party technologies that comprise our Publisher Network, App Directory, and Connectors framework.
While consumer online search behavior has changed, we believe the search experience on many businesses' websites has not evolved to meet consumer expectations. Many searches on a business’s website are unable to understand natural language queries and instead return a list of links based on keywords rather than direct answers.
Many searches on a business’s website are unable to understand natural language queries and instead return a list of links based on keywords rather than direct answers.
To provide the highest level of up-time and lowest latency for our platform capabilities, key high-volume services are hosted by third-party hosting services, which allows easier and greater scalability and provides for redundancy. Data Structure The Answers platform allows customers to collect, store and manage structured data, consistent with standards published by schema.org.
Hosting Our administrative and content management software is run from co-location data centers in the United States and third-party hosting services in the European Union. To provide the highest level of up-time and lowest latency for our platform capabilities, key high-volume services are hosted by third-party hosting services, which allows easier and greater scalability and provides for redundancy.
These policies and practices help us foster a workplace environment that promotes inclusion and diversity. We also support seven employee resource groups, or ERGs, that are led and founded by employees with a senior executive sponsor. ERGs provide a community for underrepresented groups and their allies and offer professional development and mentoring opportunities.
These policies and practices help us foster a workplace environment that promotes high performance and the opportunity for every employee to positively impact the customer experience while valuing inclusion and diversity. We support six employee resource groups, or ERGs, that are led by employees with a senior executive sponsor.
Distelburger further announced in March 2023 that he would be stepping back as an employee as well although he will continue to serve on our Board of Directors. As a result, we have undergone a significant evolution of our strategy and leadership in the past year, and our results and plans reflect those changes.
Distelburger further announced in March 2023 that he would be stepping back as an employee as well although he will continue to serve on our Board of Directors. In September 2023, Marc Ferrentino, our President and Chief Operating Officer, departed the Company.
Numerous searches are unable to understand natural language queries instead returning a list of links based on keywords rather than direct answers. Poor user experience on a business’s own website may result in lost sales opportunities or may cause consumers to visit a competitor’s website.
Poor user experience on a business’s own website may result in lost sales opportunities or may cause consumers to visit a competitor’s website.
Consumers are no longer just typing in individual keywords, but are also using natural language phrases and even asking specific, complex questions. Businesses need to be able to understand those questions and answer them accurately and directly. Facts About a Business Are Fundamental. Businesses spend significant sums on developing their brands and creating product and market awareness.
Consumers are no longer just typing in individual keywords, but are also using natural language phrases and even asking specific, complex questions. Businesses need to be able to understand those questions and answer them accurately and directly. Search Results Provide Direct Answers. Search that is powered by AI has grown significantly in recent years.
Item 1. Business Overview Yext, Inc. (“Yext” or the “Company”) organizes a business’s facts so it can deliver relevant, actionable answers to consumer questions throughout the digital ecosystem. Our platform lets businesses structure the facts about their brands in a database called the Knowledge Graph.
Item 1. Business Overview Yext, Inc. (“Yext” or the “Company”) empowers businesses to manage their knowledge so they can deliver relevant, actionable answers to consumer questions as well as consistent, accurate and engaging experiences to customers throughout the digital ecosystem.
Schema.org is an open and collaborative initiative launched by certain large search engines that defines the vocabulary and format for structured markup. Search engines like Google and Bing consume data through structured markup placed in the underlying code of web pages.
Data Structure The Yext platform allows customers to collect, store and manage structured data, consistent with standards published by schema.org. Schema.org is an open and collaborative initiative launched by certain large search engines that defines the vocabulary and format for structured markup.
To support our employees in the fiscal year ended January 31, 2023 and to promote their health and safety, our offices are open on a voluntary basis in accordance with guidance provided by government agencies, although currently many of our employees are still working remotely. While we continue to hold virtual events, we have also resumed in-person marketing events.
In addition, we conduct an annual employee survey to measure employee engagement and identify areas for improvement over time. To support our employees in the fiscal year ended January 31, 2024 and to promote their health and safety, Yext offices are open on a voluntary basis in accordance with guidance provided by government agencies.
The challenge for businesses is to understand and provide accurate answers to consumer’s questions while delivering a rich, consistent search experience on their website as well as third-party applications. Many answers and results provided by searches currently come from third-party sources such as data aggregators, governmental agencies and consumers.
The challenge for businesses is to understand and provide accurate answers to consumer’s questions while delivering a rich, consistent consumer experience on their website and third-party applications without relying on “best guess” data that can be incomplete, misleading or incorrect.
In addition, our products and features are built to leverage the structured data stored in the Knowledge Graph so businesses can provide official answers to consumer questions. Businesses of nearly all sizes and in a diverse set of industries can benefit from our platform and capabilities.
Businesses of nearly all sizes and in a diverse set of industries can benefit from our platform and capabilities.
The Knowledge Graph organizes data in a way that can answer complex questions by storing both data points themselves and the multiple relationships between data points. Then our platform uses multiple algorithms to better understand user intent and find relevant results from structured data, semi-structured data or unstructured documents.
Content powers the Knowledge Graph that organizes data in a way that can answer complex questions by storing both data points themselves and the multiple relationship between data points. • Pages .
Consumers are no longer just typing in individual keywords like “mortgage” or “menswear,” but are also using natural language phrases like “wealth advisor near me who specializes in healthcare” and even asking specific, complex questions like “what’s the best menswear store in London that sells dress shirts and is open now?” Web and mobile applications and voice and artificial intelligence, or AI, engines are increasingly answering questions directly and in certain cases providing only one answer unlike traditional web-based search where many results are displayed as a list requiring further exploration.
Consumers are no longer using individual keyword searches like “mortgage” or “menswear,” but instead are using natural language phrases like “wealth advisor near me who specializes in healthcare” or asking specific questions like “what’s the best menswear store in London that sells dress shirts and is open now?” Additionally, consumers are leveraging different channels such as online reviews and social media to make a decision both in-person and online.
We provided two weeks of emergency family leave for employees to take care of a child or parent due to COVID-19 disruptions. As of January 31, 2023, we had approximately 1,200 full-time employees, the majority of whom are based in our New York headquarters.
Many of our employees are working remotely or working part time in a Yext office and part time remotely. While we continue to hold virtual events, we have also resumed in-person marketing events. We provided two weeks of emergency family leave for employees to take care of a child or parent due to COVID-19 disruptions.
A limited number of reviews or a few poor reviews without offsetting positive reviews may result in an otherwise lower search ranking in certain applications. 6 Growth Strategy Key elements of our strategy include: • Grow Our Customer Base.
Poor search experience on a business’s own website may result in lost sales opportunities or may cause consumers to visit a competitor’s website. 6 Growth Strategy Key elements of our strategy include: • Grow Our Customer Base.
Managing Facts Online Is Challenging Many businesses lack the capabilities to effectively control, structure and manage facts across the digital ecosystem where consumers discover businesses. This lack of management capability is due to several factors: • Lack of Control of Facts Online.
As a result, we have recently undergone a significant evolution of our strategy and leadership, and our results and plans reflect those changes. Industry Background Managing Information Online Is Challenging. Many businesses struggle to effectively control, structure and manage information across the digital ecosystem where consumers discover their businesses.
As search continues to evolve, and increasingly leverages AI, consumers are more likely to rely on these direct answers. While consumer online search behavior has changed, the search experience on many businesses’ websites has not evolved to meet consumer expectations.
Businesses are now able to leverage search to help consumers discover what they need directly on the search engine results page. Poor Search Experience Results in Lost Transactions. While consumer online search behavior has changed, we believe the search experience on many businesses' websites has not evolved to meet consumer expectations.
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Our platform is built to leverage the structured data stored in the Knowledge Graph to deliver a modern search experience on a business’s or organization’s own website, as well as across over 200 service and application providers, which we refer to as our Publisher Network, previously referred to as our Knowledge Network, and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.
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Our digital presence platform (also known as the Answers Platform) lets businesses structure and organize information about their brands in our knowledge graph, Yext Content (also known as the Knowledge Graph), which is then delivered across first- and third-party websites and applications through our network of over 200 service and application providers, which we refer to as our Publisher Network.
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Our platform powers all of our key features, including Listings, Pages, and Search, along with its other features and capabilities. We believe a business is the ultimate authority on its own facts, and it is our mission to put that business in control of it, everywhere. The online consumer journey continues to change.
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These publishers include, among others, Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp. Our platform powers all of our key products, including Listings, Reviews, Pages and Search, each with robust analytics capabilities for businesses to easily track performance across customer experiences.
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With natural language processing and the growing prevalence of voice assistants and chatbots, search has become more conversational.
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It is our mission to empower businesses to easily manage every aspect of their digital presence to make meaningful connections with their customers across every digital touchpoint. The online consumer journey continues to change with the expansion of artificial intelligence (“AI”) and natural language processing.
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The net result of this third-party sourcing has been to produce “best guess” data that can often be incomplete, misleading or incorrect. Yext pioneered a better way for businesses to control and publish the critical facts about themselves to answer consumer questions.
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Consumers increasingly depend on more tools to find information and interact with brands across search, websites, apps, voice assistants and chatbots.
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We have built our business on the fundamental premise that the best source of accurate and timely information about a business is the business itself. We do this first by empowering brands to structure the public facts about themselves in a database called the Knowledge Graph.
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Publishers are increasingly answering questions directly across these digital touchpoints and basing results on complex algorithms that consider a brand's presence across many places. In order to win customer impressions and conversions, businesses must manage a robust digital presence with proactive knowledge management and customer engagement across as many channels as possible.
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Yext enables businesses to: • provide direct answers to consumer questions about their business on their own website; • modify, enhance and control the facts about each of their locations, professionals, menus, events or other entities managed with our platform; • update once and disseminate changes to their listings across the most widely used third-party maps, apps, search engines, GPS systems, digital assistants, vertical directories and social networks that consumers rely upon today; • create and update search-optimized landing pages for their locations, professionals and events on their own websites; • encourage consumer reviews for inclusion on their landing pages; and • analyze how features in the platform drive consumer engagement and revenue for our customers.
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With the evolution of consumer online behavior and expectations, successful businesses have changed how they market their brands to be discovered and considered. The rapidly evolving AI tool landscape is changing search engine optimization, and it is becoming more challenging for businesses to keep up and manage all of their information and channels at scale, across various locations and regions.
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Industry Background Search Results Provide Direct Answers. Search that is powered by AI has grown significantly in recent years. Businesses are now able to leverage search to help consumers discover what they need directly on the search engine results page. Consumers Search Using Natural Language .
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Yext first pioneered a better way for businesses to control and publish the critical information about themselves to answer consumer questions and now leads the industry in digital presence management. We do so by enabling brands to collect, organize, and deliver their critical knowledge to consumers and manage their digital presence at scale to connect, engage, and convert customers.
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During the fiscal year ended January 31, 2023, we added several new integrations to the App Directory and Connectors framework, including Freshworks, Outreach, Snowflake and WordPress, amongst others. We also made significant updates to many of our existing integrations.
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With one central platform, businesses can efficiently manage their digital presence at scale while maintaining a consistent and compelling brand story that resonates with their customers. Businesses can select as many products as needed to meet their goals, powered by multiple algorithms that learn user intent and find relevant results from structured data, semi-structured data or unstructured documents.
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Our Technology Our cloud-based platform is designed to scale as we continue to add customers and allows us to support the entities managed with our platform and the millions of associated facts. The platform is built primarily with industry-standard open source technology.
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Yext enables businesses to: • manage a consistent brand experience across all digital channels; • increase local engagement by ensuring all publishers have accurate information about their business; • access one platform for all digital marketing channels, with the ability to integrate with their existing marketing solutions and consolidate marketing data; • make data-driven marketing decisions with access to real-time data and trend analysis across digital channels; • leverage AI to deliver accurate information in a timely fashion and engage with consumers more efficiently and effectively while automating and optimizing workflows; and • modify, enhance and control the information about each of their locations, professionals, menus, events or other entities in one place.
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In addition, our diversity and inclusion team develops and implements diversity and inclusion strategies to improve our recruitment process, performance management, leadership development, employee engagement and retention. To attract and retain highly capable and innovative employees, we have developed competitive compensation packages and benefits programs.
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This is due to several factors: • Lack of Control of Information Online. Many answers and results provided by searches currently come from third-party sources such as data aggregators, governmental agencies and consumers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could be adversely affected. 35 We do not intend to pay dividends for the foreseeable future. We may not declare or pay cash dividends on our capital stock in the near future.
Biggest changeIf we were to register the resale of such shares, they could be freely sold in the public market. If such additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could be adversely affected.
In addition, third parties may have different assessments of the size of the markets in which in our products compete. These estimates of total addressable market and growth forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate.
In addition, third parties may have different assessments of the size of the markets in which our products compete. These estimates of total addressable market and growth forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate.
Risks Related to Information Technology, Intellectual Property, and Data Security • A security breach, network attack or security incident could delay or interrupt service to our customers, result in the unauthorized access to, or use, modification or publishing of customer content or other information, harm our reputation or subject us to significant liability. • Assertions by third parties of infringement or other violations by us of their intellectual property rights could result in significant costs and harm our business and operating results. • We could incur substantial costs in protecting or defending our intellectual property rights, and any failure to protect our intellectual property could adversely affect our business, results of operations and financial condition. 13 • Our platform utilizes open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business. • We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business. • The reliability of our network and support infrastructure will be critical to our success.
Risks Related to Information Technology, Intellectual Property, and Data Security • A security breach, network attack or security incident could delay or interrupt service to our customers, result in the unauthorized access to, or use, modification or publishing of customer content or other information, harm our reputation or subject us to significant liability. • Assertions by third parties of infringement or other violations by us of their intellectual property rights could result in significant costs and harm our business and operating results. • We could incur substantial costs in protecting or defending our intellectual property rights, and any failure to protect our intellectual property could adversely affect our business, results of operations and financial condition. • Our platform utilizes open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business. • We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business. • The reliability of our network and support infrastructure will be critical to our success.
Our new features or enhancements could fail to attain sufficient market acceptance for many reasons, including: • delays in introducing new, enhanced or modified features; • failure to accurately predict market demand or end consumer preferences; • defects, errors or failures in any of our features or our platform; • introduction of competing products; • poor business conditions for our customers or poor general macroeconomic conditions; • changes in legal or regulatory requirements, or increased legal or regulatory scrutiny, adversely affecting our platform; • failure of our brand promotion activities or negative publicity about the performance or effectiveness of our existing features; and • disruptions or delays in the availability and delivery of our platform.
Our new features or enhancements could fail to attain sufficient market acceptance for many reasons, including: • delays in introducing new, enhanced or modified features; • failure to accurately predict market demand or end consumer preferences; • defects, errors or failures in any of our features or our platform; • introduction of competing products; • poor business conditions for our customers or poor general macroeconomic conditions; 19 • changes in legal or regulatory requirements, or increased legal or regulatory scrutiny, adversely affecting our platform; • failure of our brand promotion activities or negative publicity about the performance or effectiveness of our existing features; and • disruptions or delays in the availability and delivery of our platform.
The market price of our common stock has been and may continue to be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operational and financial results; • addition or loss of significant customers; • addition or loss of significant strategic relationships with application providers in the Publisher Network; • changes in laws or regulations applicable to our platform; • actual or anticipated changes in our growth rate relative to our competitors; • announcements of technological innovations or new offerings by us or our competitors; 34 • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; • additions or departures of key personnel; • changes in our financial guidance or securities analysts' estimates of our financial performance; • discussion of us or our stock price by the financial press and in online investor communities; • reaction to our press releases and filings with the SEC; • changes in accounting principles; • announcements related to litigation, regulation or disputes; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our common stock by us or our stockholders; • effects of inflation and increased interest rates; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • natural disasters, pandemics, acts of terrorism and other events beyond our control; and • general economic and market conditions and overall market slowdowns.
The market price of our common stock has been and may continue to be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operational and financial results; • addition or loss of significant customers; • addition or loss of significant strategic relationships with application providers in the Publisher Network; • changes in laws or regulations applicable to our platform; • actual or anticipated changes in our growth rate relative to our competitors; • announcements of technological innovations or new offerings by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; • additions or departures of key personnel; • changes in our financial guidance or securities analysts' estimates of our financial performance; • discussion of us or our stock price by the financial press and in online investor communities; • reaction to our press releases and filings with the SEC; • changes in accounting principles; • announcements related to litigation, regulation or disputes; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our common stock by us or our stockholders; • effects of inflation and increased interest rates; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • natural disasters, pandemics, acts of terrorism and other events beyond our control; and 35 • general economic and market conditions and overall market slowdowns.
Such endeavors may involve significant risks and uncertainties, including insufficient revenue from such investments to offset any new liabilities assumed and expenses associated with these new 19 investments, inadequate return of capital on our investments, distraction of management from current operations, failure to adequately develop and enhance existing products and unidentified issues not discovered in our due diligence of such strategies and offerings that could cause us to fail to realize the anticipated benefits of such investments and incur unanticipated liabilities.
Such endeavors may involve significant risks and uncertainties, including insufficient revenue from such investments to offset any new liabilities assumed and expenses associated with these new investments, inadequate return of capital on our investments, distraction of management from current operations, failure to adequately develop and enhance existing products and unidentified issues not discovered in our due diligence of such strategies and offerings that could cause us to fail to realize the anticipated benefits of such investments and incur unanticipated liabilities.
If we experience compromises to our security that result in performance or availability problems, the complete shutdown of our platform or the actual or perceived loss of, or unauthorized access to, unavailability of, or unauthorized use, disclosure, destruction, or other unauthorized processing of, personal information or other types of confidential information, our customers or application providers may assert claims against us for credits, refunds or other damages, and may lose trust and confidence in our platform.
If we experience compromises to our security that result in performance or availability problems, the complete shutdown of our platform or the actual or perceived loss of, or unauthorized access to, unavailability of, or unauthorized use, disclosure, destruction, or other unauthorized processing of, personal information or other types of confidential information, our customers or application 25 providers may assert claims against us for credits, refunds or other damages, and may lose trust and confidence in our platform.
If our Publisher Network application providers do not maintain the availability and proper functioning of their software, APIs, websites and applications, our business, operating results and financial condition could be materially affected. We are incorporating generative artificial intelligence, or AI, into some of our products. This technology is new and developing and may present both compliance risks and reputational risks.
If our Publisher Network application providers do not maintain the availability and proper functioning of their software, APIs, websites and applications, our business, operating results and financial condition could be materially affected. We are incorporating generative artificial intelligence ("AI"), into some of our products. This technology is new and developing and may present both compliance risks and reputational risks.
For example, as a result of the COVID-19 pandemic certain customers reduced their subscriptions, elected not to renew their subscriptions, reduced length of contracts, requested extended billing and payment terms or sought more favorable rates, and certain of these trends contributed to a general decline in our retention rate. Challenging macroeconomic conditions may also contribute to similar results.
For example, as a result of the COVID-19 pandemic certain customers reduced their subscriptions, elected not to renew their subscriptions, reduced length of contracts, requested extended billing and payment terms or sought more favorable rates, and certain of these trends contributed to a general decline in our retention 18 rate. Challenging macroeconomic conditions may also contribute to similar results.
As a result, we may change the size of our sales force to reflect strategic realignment in how we go to market, which recently has resulted in a net decrease in sales personnel in the near term before potentially growing headcount again. Identifying and recruiting qualified sales personnel and training them on our products requires significant time, expense and attention.
As a result, we may change the size of our sales force to reflect strategic realignment in how we go to market, which recently has resulted in a net decrease in sales personnel in the near term before potentially growing headcount again. 15 Identifying and recruiting qualified sales personnel and training them on our products requires significant time, expense and attention.
If we are not successful in building our brand, we may become identified with a single industry, which could make it more difficult for us to penetrate other industries. Promotion and enhancement of our brand will depend largely on our success in being able to provide high quality, reliable and cost-effective features.
If we are not successful in building our brand, we may become identified with a single industry, which could make it more difficult for us to penetrate other industries. 23 Promotion and enhancement of our brand will depend largely on our success in being able to provide high quality, reliable and cost-effective features.
This could materially affect our business, operating results, and financial condition. Furthermore, our third-party reseller customers, over which we have more limited control, may not comply with the laws, regulations, and policies described above, which may damage our reputation or subject us to costly legal or regulatory inquiries and liability.
This could materially affect our business, operating results, and financial condition. Furthermore, our third-party reseller customers, over which we have more limited control, may not comply with the laws, regulations, and policies described above, which may damage our reputation or subject us to costly legal or regulatory inquiries and liability or to contractual liability.
Delayed and more complex sales cycles could cause our operating results and financial condition to suffer in a given period. If we cannot adequately expand and scale our sales force, we will experience further delays in signing new customers, which could slow our revenue growth. A portion of our revenue is dependent on a few customers.
Delayed and more complex sales cycles could cause our operating results and financial condition to suffer in a given period. If we cannot adequately expand and scale our sales force, we will experience further delays in signing new customers, which could slow our revenue growth. 20 A portion of our revenue is dependent on a few customers.
In addition, we may discover other control deficiencies in the future, and we cannot assure you that we will not have a material weakness in future periods. Additionally, the process of designing, implementing and maintaining internal control over financial reporting required to comply with Section 404 is time consuming, costly and complicated.
In addition, we may discover other control deficiencies in the future, and we cannot assure you that we will not have a material weakness in future periods. 21 Additionally, the process of designing, implementing and maintaining internal control over financial reporting required to comply with Section 404 is time consuming, costly and complicated.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. During the course of litigation there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could 26 be compromised by disclosure in the event of litigation. During the course of litigation there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Industry consolidation or technological advancements could result in a small number of websites or applications emerging as the predominant sources of information about businesses, thereby creating a less fragmented internet environment for purposes of end consumer searches about businesses. Additionally, we may enter new geographies with less fragmented internet environments.
Industry consolidation or technological advancements could result in a small number of websites or applications emerging as the predominant sources of information about businesses, thereby creating a less fragmented internet environment for purposes of end consumer searches about businesses. Additionally, we may enter new geographies with less 17 fragmented internet environments.
The amount of taxes we pay may depend on the application of the tax laws of various jurisdictions, including the United States, to our business activities, changes in tax rates, new or revised tax laws or 32 interpretations of existing tax laws and policies and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
The amount of taxes we pay may depend on the application of the tax laws of various jurisdictions, including the United States, to our business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business. Compliance with such obligations could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.
We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business. Compliance with such laws and obligations could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.
We may be subject to audits and investigations relating to our government contracts and any violations could result in various civil and criminal penalties and 30 administrative sanctions, including termination of contracts, payment of fines, and suspension or debarment from future government business, as well as harm to our reputation and financial results.
We may be subject to audits and investigations relating to our government contracts and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, payment of fines, and suspension or debarment from future government business, as well as harm to our reputation and financial results.
Factors that may cause fluctuations in our quarterly results include: • our ability to attract new customers; • our ability to execute on our business strategy; • the launch of significant new products and features; 33 • the addition or loss of large customers, including third-party reseller customers, including through acquisitions or consolidations; • the timing of recognition of revenue; • a change in accounting principles; • the timing of billing and cash collections; • the timing of significant marketing events and related expenses; • the amount and timing of operating expenses; • network outages and security breaches and incidents; • natural disasters, pandemics including the COVID-19 pandemic, acts of terrorism and other events beyond our control; • general economic, industry and market conditions; • customer renewal rates; • pricing changes upon any renewals of customer agreements; • changes in our pricing policies or those of our competitors; • the timing and success of new feature introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or application providers; • our ability to adequately scale our sales force and retain key employees; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; and • unforeseen litigation.
Factors that may cause fluctuations in our quarterly results include: • our ability to attract and retain new and existing customers; • our ability to execute on our business strategy; • the launch of significant new products and features; • the addition or loss of large customers, including third-party reseller customers, including through acquisitions or consolidations; • the timing of recognition of revenue; • a change in accounting principles; • the timing of billing and cash collections; • the timing of significant marketing events and related expenses; • the amount and timing of operating expenses; • network outages and security breaches and incidents; • natural disasters, pandemics including the COVID-19 pandemic, acts of terrorism and other events beyond our control; • general economic, industry and market conditions; • customer renewal rates; • pricing changes upon any renewals of customer agreements; • changes in our pricing policies or those of our competitors; 34 • the timing and success of new feature introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or application providers; • our ability to adequately scale our sales force and retain key employees; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; and • unforeseen litigation.
If we fail to successfully manage this organizational complexity, we likely 15 will be unable to successfully execute our business strategy, which could have a negative impact on our business, operating results and financial condition. Failure to adequately manage our sales force will impede our growth. Our revenue growth is substantially reliant on our sales force.
If we fail to successfully manage this organizational complexity, we likely will be unable to successfully execute our business strategy, which could have a negative impact on our business, operating results and financial condition. Failure to adequately manage our sales force will impede our growth. Our revenue growth is substantially reliant on our sales force.
As our products are applied to new uses and in new verticals, we may become subject to additional regulations or legal risks. For example, we have begun selling our platform to government entities. Risks associated with sales to government entities include adherence to complex procurement regulations and other government-specific contractual requirements.
As our products are applied to new uses and in new verticals, we may become subject to additional regulations or legal risks. For example, we have begun selling our platform to government entities. Risks associated with sales to government entities include 30 adherence to complex procurement regulations and other government-specific contractual requirements.
Our credit facility contains restrictive covenants that limit our ability to transfer or dispose of assets, merge with other companies or consummate certain changes of control, acquire other companies, pay dividends or repurchase Yext stock, incur additional indebtedness and liens and enter into new businesses.
Our credit facility contains restrictive covenants that limit our ability to transfer or dispose of assets, merge with other companies or consummate certain changes of control, acquire other companies, pay dividends or repurchase Yext stock, incur additional 24 indebtedness and liens and enter into new businesses.
Risks Related to Our Business and Industry • Our revenue growth rate has slowed in recent periods. • We have a history of losses and may not achieve profitability in the future. • Adverse economic conditions including inflation or reduced technology spending may adversely impact our business. • Because we recognize revenue from subscriptions for our platform over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results. • We have a limited operating history and our business has evolved, which makes it difficult to predict our future operating results. • We have experienced significant changes to our organization and structure and may not be able to effectively manage such changes. • Failure to adequately manage our sales force will impede our growth. • We have expanded our international operations, which exposes us to significant risks. • Our growth depends in part on the success of our strategic relationships with existing and prospective Publisher Network application providers. • Changes in our pricing models could adversely affect our operating results. • Our success depends on a fragmented internet environment for finding information, particularly information about businesses. • Our platform faces competition in the marketplace.
Risks Related to Our Business and Industry • Our revenue growth rate has slowed in recent periods. • We have a history of losses and may not achieve profitability in the future. • Adverse economic conditions including inflation or reduced technology spending may adversely impact our business. • Because we recognize revenue from subscriptions for our platform over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results. • Our business has evolved, which makes it difficult to predict our future operating results. • We have experienced significant changes to our organization and structure and may not be able to effectively manage such changes. • Failure to adequately manage our sales force will impede our growth. • We have significant international operations, which exposes us to risk. • Our growth depends in part on the success of our strategic relationships with existing and prospective Publisher Network application providers. • Changes to our pricing models could adversely affect our operating results. • Our success depends on a fragmented internet environment for finding information, particularly information about businesses. • Our platform faces competition in the marketplace.
While we believe these will be of long term value to our stockholders, the resulting changes and related disruption has and will continue to have near-term effects on our business, growth and profitability. We believe that our corporate culture has been a critical component of our success.
While we believe these will be of long term value to our stockholders, the resulting changes and related disruption have and may continue to have near-term effects on our business, growth and profitability. We believe that our corporate culture has been a critical component of our success.
Our ability to increase revenue and achieve profitability depends, in large part, on widespread acceptance of our platform by enterprises. As we target our sales efforts at these customers, we face greater costs, longer sales cycles and less predictability in 20 completing some of our sales.
Our ability to increase revenue and achieve profitability depends, in large part, on widespread acceptance of our platform by enterprises. As we target our sales efforts at these customers, we face greater costs, longer sales cycles and less predictability in completing some of our sales.
Accordingly, our efforts to protect our intellectual property rights in such countries may be 27 inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of intellectual property.
Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of intellectual property.
The target markets in which we operate are also subject to a high degree of uncertainty and risk. Our customers as well as analysts, market participants, and others may disagree with 24 our assessment of our target markets and we may never successfully compete in these markets.
The target markets in which we operate are also subject to a high degree of uncertainty and risk. Our customers as well as analysts, market participants, and others may disagree with our assessment of our target markets and we may never successfully compete in these markets.
Our business activities are subject to various restrictions under U.S. export and import controls and trade and economic sanctions laws, including U.S. customs regulations, the U.S. Commerce Department's Export Administration Regulations and economic and 31 trade sanctions regulations maintained by the U.S. Treasury Department's Office of Foreign Assets Control.
Our business activities are subject to various restrictions under U.S. export and import controls and trade and economic sanctions laws, including U.S. customs regulations, the U.S. Commerce Department's Export Administration Regulations and economic and trade sanctions regulations maintained by the U.S. Treasury Department's Office of Foreign Assets Control.
In addition, government agencies or private organizations have imposed and may impose additional taxes, fees or other charges for accessing the internet, generally. These laws or charges could limit the use of the internet or decrease the demand for internet-based solutions.
In addition, government agencies or private organizations have imposed and may impose additional taxes, fees or other 32 charges for accessing the internet, generally. These laws or charges could limit the use of the internet or decrease the demand for internet-based solutions.
From time to time, we may be involved in disputes or regulatory inquiries that arise in the ordinary course of business. We expect that the number and significance of potential disputes may increase as our business expands and our company grows larger.
From time to time, we are and may be involved in disputes or regulatory inquiries that arise in the ordinary course of business. We expect that the number and significance of potential disputes may increase as our business expands and our company grows larger.
These enactments could adversely affect our sales activity due to the inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows.
These enactments could adversely affect our sales 33 activity due to the inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows.
These negative effects could be exacerbated by customer consolidation, changes in technologies or solutions used by customers, changes in demand for our features, selection of suppliers other than us, customer bankruptcies or customer departures from their respective industries, pricing competition or deviation from marketing and sales methods away from physical location retailing, any one of which may result in even fewer customers accounting for a high percentage of our revenue and reduced demand from any single significant customer.
These negative effects could be exacerbated by customer consolidation, changes in technologies or solutions used by customers, changes in demand for our features, selection of suppliers other than us, customer bankruptcies or customer departures from their respective industries, pricing competition or deviation from marketing and sales methods away from physical location retailing, any one of which may result in even fewer customers accounting for a high percentage of our revenue and reduced demand from any single large customer.
Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter. Any such decline, however, will negatively affect our revenue in future quarters.
Consequently, a decline in new or renewed subscriptions in any one quarter may not 14 be reflected in our revenue results for that quarter. Any such decline, however, will negatively affect our revenue in future quarters.
We rely on internal systems and third-party service providers, including data center, cloud computing, bandwidth and telecommunications equipment providers, to maintain the availability of our platform.
We rely on internal systems and third-party service providers, including data center, cloud 27 computing, bandwidth and telecommunications equipment providers, to maintain the availability of our platform.
If our revenue does not increase to offset these and other potential increases in operating expenses, we may not be profitable in future periods. If we are unable to achieve and sustain profitability, the market price of our common stock may significantly decrease. Adverse economic conditions or reduced technology spending may adversely impact our business.
If our revenue does not increase to offset these and other potential increases in operating expenses, we may not be profitable in future periods. If we are unable to achieve and sustain profitability, the market price of our common stock may significantly decrease. Adverse economic conditions, including inflation or reduced technology spending, may adversely impact our business.
Moreover, large customers, which have historically been the focus of our sales efforts, may demand greater price discounts. As we expand internationally, we also must determine the appropriate price to enable us to compete effectively internationally. In addition, if the mix of features we sell changes, then we may need to, or choose to, revise our pricing.
Moreover, large customers, which have historically been the focus of our sales efforts, may demand greater price discounts. As we expand internationally, we also must determine the appropriate price to enable us to compete effectively internationally. In addition, if the mix of products and features we sell changes, then we may need to, or choose to, revise our pricing.
We expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy, data protection, marketing, consumer communications, information security and cross-border data transfer in the United States, the European Union and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.
We expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy, data protection, marketing, advertising, communications, information security and cross-border data transfer in the United States, the European Union and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.
Any resulting increase in our tax obligation or cash taxes paid could adversely affect our results of operations and financial condition. The United States recently enacted the Inflation Reduction Act which introduced several tax provisions including a 1% excise tax on certain stock repurchases made after December 31, 2022.
Any resulting increase in our tax obligation or cash taxes paid could adversely affect our results of operations and financial condition. The United States enacted the Inflation Reduction Act in August 2022 which introduced several tax provisions including a 1% excise tax on certain stock repurchases made after December 31, 2022.
Efforts to build our brand may involve significant expense and may not generate customer awareness or increase revenue at all, or in an amount sufficient to offset expenses we incur in building our brand. In addition, we sell our features to companies in a number of industries, including healthcare, retail and financial services.
Efforts to build our brand may involve significant expense and may not generate customer awareness or increase revenue at all, or in an amount sufficient to offset expenses we incur in building our brand. In addition, we sell our features to companies in a number of industries, including healthcare, hospitality, food services, retail and financial services.
These new obligations and constituents will require significant attention from our senior management, particularly from our chief executive officer and chief financial officer, and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, operating results and financial condition. We are exposed to fluctuations in currency exchange rates.
These obligations and constituents require significant attention from our senior management, particularly from our chief executive officer and chief financial officer, and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, operating results and financial condition. We are exposed to fluctuations in currency exchange rates.
There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire, decrease in value or otherwise be unavailable to offset future income tax liabilities.
There is also a risk that due to regulatory changes, such as suspensions on the use of tax attributes, or other unforeseen reasons, our existing tax attributes could expire, decrease in value or otherwise be unavailable to offset future income tax liabilities.
Beginning in fiscal year 2023, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures currently and requires taxpayers to amortize such costs over a period of five or fifteen years.
Beginning in fiscal year 2023, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures currently and requires taxpayers to amortize such costs over a period of five or fifteen years.
If new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if we are unable to retain and develop talented sales personnel, we may not be able to realize the expected benefits of this investment or increase our revenue. We have expanded our international operations, which exposes us to significant risks.
If new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if we are unable to retain and develop talented sales personnel, we may not be able to realize the expected benefits of this investment or increase our revenue. We have significant international operations, which exposes us to risk.
If we are unable to compete effectively, our operating results could be adversely affected. The market for our features is competitive, rapidly evolving and fragmented, and is subject to changing technology and shifting customer needs. Many companies develop and market products and services that compete to varying extents with our features, and we expect competition in our market to intensify.
If we are unable to compete effectively, our operating results could be adversely affected. The market for our platform is competitive, rapidly evolving and fragmented, and is subject to changing technology and shifting customer needs. Many companies develop and market products and services that compete to varying extents with ours, and we expect competition in our market to intensify.
Bribery Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell in certain foreign markets, and the risks and costs of non-compliance; • compliance with international laws and regulations, including without limitation, those governing privacy, data security and data transfer, such as the General Data Protection Regulation, or GDPR, which may impair our ability to grow our business or offer our service in some locations, may subject us to liability for non-compliance or may require us to change our business practices; • expanded demands on, and distraction of, senior management; • difficulties with differing technical and environmental standards, data privacy and telecommunications regulations and certification requirements outside the United States; • varying levels of internet technology adoption and infrastructure; 16 • tariffs and other non-tariff barriers, such as quotas and local content rules; • more limited protection for intellectual property rights in some countries; • adverse tax consequences; • currency control regulations, which might restrict or prohibit our conversion of other currencies into U.S. dollars; • restrictions on the transfer of funds, including the repatriation of cash; • deterioration of political relations between the United States and other countries; • natural disasters, pandemics, acts of terrorism and other events beyond our control; and • political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
Bribery Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell in certain foreign markets, and the risks and costs of non-compliance; • compliance with international laws and regulations, including without limitation, those governing privacy, data security and data transfer, such as the General Data Protection Regulation ("GDPR"), which may impair our ability to grow our business or offer our service in some locations, may subject us to liability for non-compliance or may require us to change our business practices; • expanded demands on, and distraction of, senior management; • difficulties with differing technical and environmental standards, data privacy and telecommunications regulations and certification requirements outside the United States; • varying levels of internet technology adoption and infrastructure; • tariffs and other non-tariff barriers, such as quotas and local content rules; • more limited protection for intellectual property rights in some countries; • adverse tax consequences; • currency control regulations, which might restrict or prohibit our conversion of other currencies into U.S. dollars; • restrictions on the transfer of funds, including the repatriation of cash; • deterioration of political relations between the United States and other countries; 16 • natural disasters, pandemics, acts of terrorism, war (including the ongoing military conflicts between Russia and Ukraine and in the Middle East, and resulting sanctions imposed by the United States and other countries), and other events beyond our control; and • political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
In addition, if we do not comply with certain covenants, then other covenants may become applicable that we may not meet. Any inability to make scheduled payments or meet the financial covenants on our credit facility would adversely affect our business. In addition, our credit facility was provided by SVB.
In addition, if we do not comply with certain covenants, then other covenants may become applicable that we may not meet. Any inability to make scheduled payments or meet the financial covenants on our credit facility would adversely affect our business. In addition, our credit facility was provided by Silicon Valley Bank ("SVB").
In general, worldwide economic conditions may remain unstable, including inflation, and these conditions would make it difficult for our customers, prospective customers and us to forecast and plan future business activities accurately, and they could cause our customers or prospective customers to reevaluate their decision to purchase our features.
In general, worldwide economic conditions such as inflation may remain unstable, and these conditions would make it difficult for our customers, prospective customers and us to forecast and plan future business activities accurately, and they could cause our customers or prospective customers to reevaluate their decision to purchase our features.
The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction. 36
The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction. 37
If we are unsuccessful in establishing or maintaining our relationships with third-party application providers, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results could suffer. 17 Changes to our pricing models could adversely affect our operating results.
If we are unsuccessful in establishing or maintaining our relationships with third-party application providers, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results could suffer. Changes to our pricing models could adversely affect our operating results. Any changes we make to our pricing models could adversely affect our operating results.
In addition, there has been uncertainty regarding transfers of certain personal data from the European Economic Area, Switzerland, and the United Kingdom following Brexit as well as the invalidation of both the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield.
In addition, there remains uncertainty regarding transfers of certain personal data from the European Economic Area, Switzerland, and the United Kingdom following Brexit as well as the invalidation of both the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield.
As we adjust our strategies to reflect the recent changes in our business, including transitioning a portion of our services business to various third-party service providers, this may negatively impact our revenue growth rates.
As we adjust our strategies to reflect the recent changes in our business, including transitioning a portion of our services business to various third-party service providers, this has and may continue to negatively impact our revenue growth rates.
Notwithstanding these measures, we could experience security incidents or be subject to liability claims relating to information security by individuals and customers whose data resides in our databases. We are also required to comply with applicable industry standards with respect to our handling of payment card information.
Notwithstanding these measures, we could experience security incidents, fail to handle personal data correctly or be subject to liability claims relating to information security by individuals and customers whose data resides in our databases. We are also required to comply with applicable industry standards with respect to our handling of payment card information.
While certain other executives have such experience, our management team, as a whole, may not successfully or efficiently manage the ongoing transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
While certain other executives have such experience, our management team, as a whole, may not successfully or efficiently manage the significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors to which a public company is subject.
Our data processing also is subject to contractual obligations and industry standards. The U.S. federal and various state governments have adopted requirements related to the collection, distribution, use, storage, and security of personal data.
Our data processing is also subject to contractual obligations and industry standards. The U.S. federal and various state governments have adopted requirements related to the collection, distribution, use, storage and security of personal data, including unique online identifiers.
Any natural disaster or other event affecting our data centers could have an adverse effect on our financial condition and operating results. We depend on our senior management team and the loss of our chief executive officer, president or one or more key employees could adversely affect our business.
Any natural disaster or other event affecting our data centers could have an adverse effect on our financial condition and operating results. 22 We depend on our senior management team, and the loss of one or more of our executive officers or key employees could adversely affect our business.
Our operating results may vary as a result of a number of factors, including our ability to execute on our business strategy, our ability to compete effectively for customers and business partners, the impact of the COVID-19 pandemic on our business, and other factors that are outside of our control.
Our operating results may vary as a result of a number of factors, including our ability to execute on our business strategy, our ability to compete effectively for customers and business partners, the impact of public health emergencies, such as the COVID-19 pandemic and other macroeconomic factors on our business, and other factors that are outside of our control.
We are subject to anti-corruption and anti-bribery laws, and anti-money laundering laws and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation. We are subject to anti-corruption and anti-bribery and similar laws, such as the U.S.
We are subject to anti-corruption and anti-bribery laws, and anti-money laundering laws and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.
These companies have developed, or are developing, products that currently, or in the future are likely to, compete with some or all of our features.
These companies have developed, or are developing, products that currently, or in the future are likely to, compete with some or all of ours.
If we were to lose any of our significant customers, our revenue could decline and our business and results of operations could be materially and adversely affected.
If we were to lose any more of our large customers, our revenue could decline and our business and results of operations could be materially and adversely affected.
Further, while we are reducing operating expenses in the near term, we expect our operating expenses may increase in the coming years as we hire additional personnel, expand our distribution channels, develop our technology and new features, face increased compliance costs associated with our growth and entry into new markets and geographies and adopt new systems to scale and automate our operations.
Further, while we have recently reduced operating expenses, we expect our operating expenses may increase in the coming years as we hire additional personnel, expand our distribution channels, develop our technology and new features, face increased compliance costs associated with our growth and entry into new markets and geographies and adopt new systems to scale and automate our operations.
Any errors, bugs, or vulnerabilities discovered in our software after it has been deployed could result in damage to our reputation, loss of customers, partners or application providers, loss of revenue or liability for damages.
Some errors in our software may only be discovered after the software has been deployed. Any errors, bugs, or vulnerabilities discovered in our software after it has been deployed could result in damage to our reputation, loss of customers, partners or application providers, loss of revenue or liability for damages.
Laws and regulations in these jurisdictions can apply broadly to the collection, use, storage, disclosure, and security of various types of data, including personal data, such as names, email addresses and in some jurisdictions, Internet Protocol, or IP, addresses. In particular, the European Union General Data Protection Regulation, or GDPR, became effective in May 2018.
Laws and regulations in these jurisdictions can apply broadly to the collection, use, storage, disclosure, and security of various types of data, including personal data, such as names, email addresses and in some jurisdictions, unique online identifiers like Internet Protocol, or IP, addresses. In particular, in the European Union, the GDPR became effective in May 2018.
If we are unable to maintain or replace our contractual relationships with our existing reseller customers, efficiently manage our relationships with them or establish new contractual relationships with other third parties, we may fail to retain customers or acquire potential new customers and may experience delays and increased costs in adding or replacing customers that were lost, any of which could materially adversely affect our business, operating results and financial condition. 21 We previously identified material weaknesses in our internal control over financial reporting.
If we are unable to maintain or replace our contractual relationships with our existing reseller customers, efficiently manage our relationships with them or establish new contractual relationships with other third parties, we may fail to retain customers or acquire potential new customers and may experience delays and increased costs in adding or replacing customers that were lost, any of which could materially adversely affect our business, operating results and financial condition.
We may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting, and as a result, investor confidence in us and the value of our common stock could be materially and adversely affected. As a public company, we are required to establish and maintain internal control over financial reporting.
We previously identified material weaknesses in our internal control over financial reporting. We may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting, and as a result, investor confidence in us and the value of our common stock could be materially and adversely affected.
Additionally, certain existing holders of our common stock, or their transferees, will have rights, subject to specified conditions, to require us to file one or more registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
Additionally, certain holders of our common stock may negotiate to obtain rights, subject to specified conditions, to require us to file one or more registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an ownership change, which is generally defined as a greater than 50-percentage-point cumulative change by value in the equity ownership of certain stockholders over a rolling three-year period, is subject to limitations on its ability to utilize its pre-change NOLs to offset post-change taxable income.
In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an ownership change, which is generally defined as a greater than 50-percentage-point cumulative change by value in the equity ownership of certain stockholders over a rolling three-year period, is subject to limitations on its ability to utilize its pre-change tax attributes to offset income tax liabilities arising from post-change taxable income.
The effects of such state privacy laws are potentially significant and may require us to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation. We expect additional states may also enact legislation similar to the state privacy laws already adopted.
The effects of such state privacy laws are potentially significant and may require us to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation. We expect additional states may continue to enact data protection legislation that may be similar to or different from the state privacy laws already adopted.
Our existing NOLs may be subject to limitations arising from previous ownership changes, and if we undergo an ownership change our ability to utilize NOLs could be further limited by Section 382 of the Code and similar state provisions.
Our existing tax attributes may be subject to limitations arising from previous ownership changes, and if we undergo an ownership change our ability to utilize these tax attributes could be further limited by Sections 382 and 383 of the Code and similar state provisions.
Future changes in our stock ownership, some of which may be outside of our control, could result in an ownership change under Section 382 of the Code. Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations.
Future changes in our stock ownership, some of which may be outside of our control, could result in an ownership change under Sections 382 and 383 of the Code. Furthermore, our ability to utilize tax attributes of companies that we may acquire in the future may be subject to limitations.
We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: • unanticipated liabilities associated with the acquisition; • difficulty incorporating acquired technology and rights into our platform and of maintaining quality and security standards consistent with our brand; • inability to generate sufficient revenue to offset acquisition or investment costs; • incurrence of acquisition-related costs; • difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; • difficulty converting the customers of the acquired business into our customers; • diversion of our management's attention from other business concerns; • adverse effects to our existing business relationships as a result of the acquisition; • potential loss of key employees; • use of resources that are needed in other parts of our business; and • use of substantial portions of our available cash to consummate the acquisition. 22 In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and intangible assets, which must be assessed for impairment at least annually.
We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: • unanticipated liabilities associated with the acquisition; • difficulty incorporating acquired technology and rights into our platform and of maintaining quality and security standards consistent with our brand; • inability to generate sufficient revenue to offset acquisition or investment costs; • incurrence of acquisition-related costs; • difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; • difficulty converting the customers of the acquired business into our customers; • diversion of our management's attention from other business concerns; • adverse effects to our existing business relationships as a result of the acquisition; • potential loss of key employees; • use of resources that are needed in other parts of our business; and • use of substantial portions of our available cash to consummate the acquisition.
For example, we currently serve our customers from third-party data center hosting facilities and cloud computing providers located in the United States, Germany and Japan. Our primary data center is in New Jersey, and our backup data center is in Texas.
For example, we currently serve our customers from third-party data center hosting facilities and cloud computing providers located in the United States, Germany and Japan. We operate infrastructure in two colocation data center facilities in New Jersey and Texas.
We generated a net loss of $65.9 million, $93.3 million and $94.7 million for the fiscal years ended January 31, 2023, 2022 and 2021, respectively. As of January 31, 2023, we had an accumulated deficit of $676.5 million, reflecting our losses recognized historically on a GAAP basis.
We generated a net loss of $2.6 million, $65.9 million and $93.3 million for the fiscal years ended January 31, 2024, 2023 and 2022, respectively. As of January 31, 2024, we had an accumulated deficit of $679.2 million, reflecting our losses recognized historically on a GAAP basis.
Any changes we make to our pricing models could adversely affect our operating results. For example, we recently began offering capacity-based pricing for our Pages and Search products. There is no assurance that this new pricing and distribution model will be successful thus adversely affecting our financial results.
For example, we recently began offering capacity-based pricing for our Pages and Search products. There is no assurance that this new pricing and distribution model will be successful thus adversely affecting our financial results.
Sustained failures or outages could lead to significant costs and service disruptions, which could negatively affect our business, financial results and reputation. • Real or perceived errors, failures or bugs in our software, or in the software or systems of our third-party application providers and partners, could materially and adversely affect our operating results and growth prospects.
Sustained failures or outages could lead to significant costs and service disruptions, which could negatively affect our business, financial results and reputation. 13 • Real or perceived errors, failures or bugs in our software, or in the software or systems of our third-party application providers and partners, could materially and adversely affect our operating results and growth prospects. • We are incorporating generative artificial intelligence ("AI"), into some of our products.
This type of unauthorized activity could negatively affect our ability to attract new customers and application providers, deter current customers and application providers from using our platform, subject us to third-party lawsuits, regulatory fines, indemnification requests or additional liability under customer contracts, or other action or liability, any of which could materially harm our business, operating results and financial condition. 26 Assertions by third parties of infringement or other violations by us of their intellectual property rights could result in significant costs and harm our business and operating results.
This type of unauthorized activity could negatively affect our ability to attract new customers and application providers, deter current customers and application providers from using our platform, subject us to third-party lawsuits, regulatory fines, indemnification requests or additional liability under customer contracts, or other action or liability, any of which could materially harm our business, operating results and financial condition.
Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on internal control over financial reporting.
As a public company, we are required to establish and maintain internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on internal control over financial reporting.
This may require us to execute HIPAA business associate agreements, or BAAs, with certain customers that are “covered entities” under HIPAA, which would subject us to additional liabilities, penalties and fines in the event we fail to comply with the terms of such agreements.
We may execute HIPAA business associate agreements, or BAAs, with certain customers that are “covered entities” under HIPAA, which would subject us to additional liabilities, penalties and fines in the event we fail to comply with the terms of such agreements. The storage of such information may require us to modify and enhance our platform at a significant cost.
Risks Related to Laws, Regulation and Taxation • We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business.
This technology is new and developing and may present both compliance risks and reputational risks. Risks Related to Laws, Regulation and Taxation • We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business.
Any failure to manage organizational changes in a manner that preserves the key aspects of our culture could hurt our chance for future success, including our ability to recruit and retain personnel and effectively focus on and pursue our corporate objectives.
Any failure to manage organizational changes in a manner that preserves the key aspects of our culture could hurt our chance for future success, including our ability to recruit and retain personnel and effectively focus on and pursue our corporate objectives. Furthermore, our corporate culture may be more difficult to maintain as many employees work remotely.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are not currently a party to any legal proceedings that are material to our business or financial condition. From time to time, we may become party to various litigation matters and subject to claims that arise in the ordinary course of business.
Biggest changeItem 3. Legal Proceedings We are not currently a party to any legal proceedings that are material to our business or financial condition. From time to time, we have and may become party to various litigation matters and subject to claims that arise in the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer The following table sets forth issuer purchases of equity securities related to our share repurchase program for the fiscal year ended January 31, 2023: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Approximate dollar value of shares that may yet to be purchased under the program (in millions) March 1, 2022 - March 31, 2022 665,366 $ 7.06 665,366 $ 95.3 April 1, 2022 - April 30, 2022 4,172,818 $ 6.20 4,172,818 $ 69.4 May 1, 2022 - May 31, 2022 4,558,694 $ 5.33 4,558,694 $ 45.2 June 1, 2022 - June 30, 2022 391,858 $ 5.30 391,858 $ 43.1 July 1, 2022 - July 31, 2022 435,359 $ 4.65 435,359 $ 41.1 August 1, 2022 - August 31, 2022 512,573 $ 4.68 512,573 $ 38.7 September 1, 2022 - September 30, 2022 464,858 $ 4.56 464,858 $ 36.5 October 1, 2022 - October 31, 2022 1,204,269 $ 4.66 1,204,269 $ 30.9 November 1, 2022 - November 30, 2022 799,035 $ 5.30 799,035 $ 26.7 December 1, 2022 - December 31, 2022 331,490 $ 6.36 331,490 $ 24.6 January 1, 2023 - January 31, 2023 307,959 $ 6.51 307,959 $ 22.6 38 Securities Authorized for Issuance under Equity Compensation Plans The following table sets forth information regarding our equity compensation plans as of January 31, 2023.
Biggest changePurchases of Equity Securities by the Issuer The following table sets forth issuer purchases of equity securities related to our share repurchase program for the fiscal year ended January 31, 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Approximate dollar value of shares that may yet to be purchased under the program (in millions) February 1, 2023 - February 28, 2023 254,515 7.35 254,515 $ 20.7 March 1, 2023 - March 31, 2023 192,023 8.92 192,023 $ 19.0 April 1, 2023 - April 30, 2023 117,031 8.80 117,031 $ 18.0 May 1, 2023 - May 31, 2023 278,939 8.21 278,939 $ 15.7 June 1, 2023 - June 30, 2023 182,351 11.53 182,351 $ 13.6 July 1, 2023 - July 31, 2023 201,203 10.03 201,203 $ 11.6 August 1, 2023 - August 31, 2023 259,937 8.85 259,937 $ 9.3 September 1, 2023 - September 30, 2023 (1) 1,240,741 6.45 1,240,741 $ 51.2 October 1, 2023 - October 31, 2023 253,901 6.22 253,901 $ 49.7 November 1, 2023 - November 30, 2023 — — — $ 49.7 December 1, 2023 - December 31, 2023 — — — $ 49.7 January 1, 2024 - January 31, 2024 — — — $ 49.7 Total 2,980,641 2,980,641 (1) In September 2023, the Board of Directors authorized an additional $50.0 million to the share repurchase program.
This grant was outside of the Company’s 2016 Equity Incentive Plan in reliance on the inducement award exception contained in NYSE Listing Rule 303A.08. 39 Performance Graph The following shall not be deemed soliciting material or to be filed with the SEC, nor shall such information be incorporated by reference into any of our other filings under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended.
This grant was outside of the Company’s 2016 Equity Incentive Plan in reliance on the inducement award exception contained in NYSE Listing Rule 303A.08. 41 Performance Graph The following shall not be deemed soliciting material or to be filed with the SEC, nor shall such information be incorporated by reference into any of our other filings under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended.
It does not reflect the shares of our common stock that will be issued upon the vesting of outstanding restricted stock and restricted stock units. (2) These plans consist of our 2008 Equity Incentive Plan, 2016 Equity Incentive Plan and 2017 Employee Stock Purchase Plan.
It does not reflect the shares of our common stock that will be issued upon the vesting of outstanding restricted stock, restricted stock units and performance-based restricted stock units. (2) These plans consist of our 2008 Equity Incentive Plan, 2016 Equity Incentive Plan and 2017 Employee Stock Purchase Plan.
In addition, our revolving credit facility agreement contains customary covenants restricting our ability to pay dividends. Stockholders As of March 1, 2023, there were 37 registered stockholders of record of our common stock. The number of registered stockholders of record does not include beneficial holders whose shares are held by banks, brokers and other institutions.
In addition, our revolving credit facility agreement contains customary covenants restricting our ability to pay dividends. Stockholders As of February 28, 2024, there were 35 registered stockholders of record of our common stock. The number of registered stockholders of record does not include beneficial holders whose shares are held by banks, brokers and other institutions.
Plan category (a) Number of securities to be issued upon exercise of outstanding options, and vesting of restricted stock and restricted stock units (b) Weighted-average exercise price of outstanding options (1) (c) Number of securities remaining available for future issuance under equity compensation plans (excludes securities reflected in column (a)) Equity compensation plans approved by security holders (2) 16,158,571 (3) $ 6.45 7,130,994 (4) Equity compensation plans not approved by security holders 2,000,000 — — (5) Total 18,158,571 $ 6.45 7,130,994 (1) The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options to purchase shares of our common stock.
Plan category (a) Number of securities to be issued upon exercise of outstanding options, vesting of restricted stock, restricted stock units, and performance-based restricted stock units (b) Weighted-average exercise price of outstanding options (1) (c) Number of securities remaining available for future issuance under equity compensation plans (excludes securities reflected in column (a)) Equity compensation plans approved by security holders (2) 14,617,242 (3) $ 6.26 9,345,275 (4) Equity compensation plans not approved by security holders 2,000,000 — — (5) Total 16,617,242 $ 6.26 9,345,275 (1) The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding options to purchase shares of our common stock.
Such future increases are not reflected in the table above. (5) In March 2022, the Company made a grant to an executive in the form of 2,000,000 performance-based restricted stock units.
The number of shares available for issuance under these plans automatically increase each February 1 st subject to the terms of the respective plans and such future increases are not reflected in the table above. (5) In March 2022, we made a grant to an executive in the form of 2,000,000 performance-based restricted stock units.
(3) This amount includes 4,593,704 shares subject to outstanding options and 11,564,867 shares subject to outstanding restricted stock and restricted stock units granted under our 2008 Equity Incentive Plan and 2016 Equity Incentive Plan.
(3) This amount includes 2,021,494 shares subject to outstanding options, 9,790,748 shares subject to outstanding restricted stock and restricted stock units, and 2,805,000 shares subject to outstanding performance-based restricted stock units granted under our 2008 Equity Incentive Plan and 2016 Equity Incentive Plan.
(4) This amount includes 3,072,343 shares of our common stock available for issuance under our 2016 Equity Incentive Plan and 4,058,651 shares of our common stock available for issuance under our 2017 Employee Stock Purchase Plan. The number of shares available for issuance under these plans automatically increase each February 1 st subject to the terms of the respective plans.
(4) This amount includes 4,844,507 shares of our common stock available for issuance under our 2016 Equity Incentive Plan and 4,500,768 shares of our common stock available for issuance under our 2017 Employee Stock Purchase Plan.
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See Note 10. "Equity", to our consolidated financial statements for further discussion on our share repurchase program. 40 Securities Authorized for Issuance under Equity Compensation Plans The following table sets forth information regarding our equity compensation plans as of January 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeGeneral and administrative expenses also include lease expenses associated with our office spaces, as well as software expense, each of which are allocated based on employee headcount, and other professional related costs. 43 Results of Operations The following table sets forth selected consolidated statement of operations data for each of the periods indicated: (in thousands) Fiscal year ended January 31, Statements of Operations Data: 2023 2022 2021 Revenue $ 400,850 $ 390,577 $ 354,661 Cost of revenue (1) 103,960 98,299 86,404 Gross profit 296,890 292,278 268,257 Operating expenses: Sales and marketing (1) 211,479 230,467 228,417 Research and development (1) 70,903 68,350 58,146 General and administrative (1) 79,336 83,420 76,026 Total operating expenses 361,718 382,237 362,589 Loss from operations (64,828) (89,959) (94,332) Interest income 1,684 22 532 Interest expense (589) (544) (614) Other expense, net (125) (1,501) (181) Loss from operations before income taxes (63,858) (91,982) (94,595) Provision for income taxes (2,080) (1,277) (97) Net loss $ (65,938) $ (93,259) $ (94,692) (1) Amounts include stock-based compensation expense as follows: Fiscal year ended January 31, (in thousands) 2023 2022 2021 Cost of revenue $ 5,042 $ 7,099 $ 5,724 Sales and marketing 22,961 26,496 32,581 Research and development 16,401 20,654 17,071 General and administrative 18,674 19,231 16,918 Total stock-based compensation expense $ 63,078 $ 73,480 $ 72,294 Decreases in stock-based compensation expense for the fiscal year ended January 31, 2023, compared to the fiscal year ended January 31, 2022 are largely due to decreases in the fair value of awards granted. 44 The following table sets forth selected consolidated statements of operations data for each of the periods indicated as a percentage of total revenue: Fiscal year ended January 31, 2023 2022 2021 Revenue 100 % 100 % 100 % Cost of revenue 26 25 24 Gross profit 74 75 76 Operating expenses: Sales and marketing 53 59 65 Research and development 17 18 16 General and administrative 20 21 21 Total operating expenses 90 98 102 Loss from operations (16) (23) (26) Interest income — — — Interest expense — — (1) Other expense, net — — — Loss from operations before income taxes (16) (23) (27) Provision for income taxes — — — Net loss (16) % (23) % (27) % Note: Numbers rounded for presentation purposes and may not sum.
Biggest changeThe following table sets forth selected consolidated statement of operations data for each of the periods indicated: (in thousands) Fiscal year ended January 31, Statements of Operations Data: 2024 2023 Revenue $ 404,322 $ 400,850 Cost of revenue (1) 87,468 103,960 Gross profit 316,854 296,890 Operating expenses: Sales and marketing (1) 178,830 211,479 Research and development (1) 72,040 70,903 General and administrative (1) 72,185 79,336 Total operating expenses 323,055 361,718 Loss from operations (6,201) (64,828) Interest income 7,094 1,684 Interest expense (470) (589) Other expense, net (761) (125) Loss from operations before income taxes (338) (63,858) Provision for income taxes (2,292) (2,080) Net loss $ (2,630) $ (65,938) (1) Amounts include stock-based compensation expense as follows: Fiscal year ended January 31, (in thousands) 2024 2023 Cost of revenue $ 2,900 $ 5,042 Sales and marketing 15,067 22,961 Research and development 11,349 16,401 General and administrative 15,645 18,674 Total stock-based compensation expense $ 44,961 $ 63,078 47 The following table sets forth selected consolidated statements of operations data for each of the periods indicated as a percentage of total revenue: Fiscal year ended January 31, 2024 2023 Revenue 100 % 100 % Cost of revenue 22 26 Gross profit 78 74 Operating expenses: Sales and marketing 44 53 Research and development 18 17 General and administrative 18 20 Total operating expenses 80 90 Loss from operations (2) (16) Interest income 2 — Interest expense — — Other expense, net — — Loss from operations before income taxes — (16) Provision for income taxes (1) — Net loss (1) % (16) % Note: Numbers rounded for presentation purposes and may not sum.
We define Adjusted EBITDA as net income (loss) before (1) interest income (expense), net, (2) provision for income taxes, (3) depreciation and amortization, (4) other income (expense), net, and (5) stock-based compensation expense. The most directly comparable GAAP financial measure to Adjusted EBITDA is GAAP net loss.
We define Adjusted EBITDA as GAAP net income (loss) before (1) interest income (expense), net, (2) provision for income taxes, (3) depreciation and amortization, (4) other income (expense), net, and (5) stock-based compensation expense. The most directly comparable GAAP financial measure to Adjusted EBITDA is GAAP net income (loss).
Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP. Our Non-GAAP financial measures may be limited in their usefulness because they do not present the full economic effect of expenses mentioned above.
Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP. Our non-GAAP financial measures may be limited in their usefulness because they do not present the full economic effect of the expenses mentioned above.
The Credit Facility contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require us to maintain the year-over-year growth rate of its recurring revenue for a trailing four fiscal quarter period above specified 49 rates when certain liquidity thresholds are not met and to maintain a consolidated quick ratio of at least 1.50 to 1.00 tested on a monthly basis.
The Credit Facility contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require us to maintain the year-over-year growth rate of its recurring revenue for a trailing four fiscal quarter period above specified rates when certain liquidity thresholds are not met and to maintain a consolidated quick ratio of at least 1.50 to 1.00 tested on a monthly basis.
We compensate for these limitations by providing a reconciliation of our non-GAAP financial measures to the most closely related GAAP financial measures. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP net loss and Adjusted EBITDA in conjunction with GAAP net loss.
We compensate for these limitations by providing a reconciliation of our non-GAAP financial measures to the most closely related GAAP financial measures. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP net income (loss) and Adjusted EBITDA in conjunction with GAAP net income (loss).
In certain instances, we enter into a contract that includes a promise to provide certain technical or customized professional services, in addition to a promise to provide its subscription and associated support. Our professional services performance obligation is distinct as it does not significantly change or enhance the functionality of the Answers platform.
In certain instances, we enter into a contract that includes a promise to provide certain technical or customized professional services, in addition to a promise to provide its subscription and associated support. Our professional services performance obligation is distinct as it does not significantly change or enhance the functionality of our platform.
See Note 2 "Summary of Significant Accounting Policies" to our consolidated financial statements for further discussion on our accounting policies. Our most critical accounting policies and estimates, based on the degree of judgment and complexity, are discussed below. Revenue Recognition We derive our revenue primarily from our subscriptions and associated support to the Answers platform.
See Note 2 "Summary of Significant Accounting Policies" to our consolidated financial statements for further discussion on our accounting policies. Our most critical accounting policies and estimates, based on the degree of judgment and complexity, are discussed below. Revenue Recognition We derive our revenue primarily from our subscriptions and associated support to our platform.
Contractual Obligations See Note 14 "Commitments and Contingencies", to the consolidated financial statements for our discussion on contractual obligations. Critical Accounting Policies and Estimates Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.
Contractual Obligations See Note 14 "Commitments and Contingencies", to the consolidated financial statements for our discussion on contractual obligations. 52 Critical Accounting Policies and Estimates Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.
The recurring amount of a contract is determined based upon the terms of a contract and is calculated by dividing the amount of a contract by the term of the contract and 41 then annualizing such amount. The calculation assumes no subsequent changes to the existing subscription. Contracts include portions of professional services contracts that are recurring in nature.
The recurring amount of a contract is determined based upon the terms of a contract and is calculated by dividing the amount of a contract by the term of the contract and then annualizing such amount. The calculation assumes no subsequent changes to the existing subscription. Contracts include portions of professional services contracts that are recurring in nature.
We also believe non-GAAP net loss is useful in evaluating our operating performance compared to that of other companies in our industry, as it eliminates the effects of stock-based compensation, which may vary for reasons unrelated to overall operating performance.
We also believe non-GAAP net income (loss) is useful in evaluating our operating performance compared to that of other companies in our industry, as it eliminates the effects of stock-based compensation, which may vary for reasons unrelated to overall operating performance.
Credit Arrangements On March 11, 2020, we entered into a credit agreement with Silicon Valley Bank (the “Credit Agreement”). In January 2021, we amended the Credit Agreement which modified the conditions pursuant to which subsidiaries are required to become guarantors.
Credit Arrangements On March 11, 2020, we entered into a credit agreement (the “Credit Agreement”) with Silicon Valley Bank (“SVB”). In January 2021, we amended the Credit Agreement which modified the conditions pursuant to which subsidiaries are required to become guarantors.
We use non-GAAP net loss in conjunction with traditional GAAP net loss as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, and to evaluate the effectiveness of our business strategies.
We use non-GAAP net income (loss) in conjunction with traditional GAAP net income (loss) as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, and to evaluate the effectiveness of our business strategies.
However, if the macroeconomic uncertainty increases, we may continue to experience a negative impact on existing and potential customers that may reduce, suspend or delay technology spending, request to renegotiate contracts to obtain concessions such as, extended billing and payment terms; shorten the duration of contracts; or elect not to renew their subscriptions which could materially adversely impact our business, financial condition and results of operations in future periods.
However, if the macroeconomic uncertainty continues or further increases, we may continue to experience a negative impact on existing and potential customers that may reduce, suspend or delay technology spending, request to renegotiate contracts to obtain concessions such as, extended billing and payment terms; shorten the duration of contracts; or elect not to renew their subscriptions which could materially adversely impact our business, financial condition and results of operations in future periods.
We believe ARR-based metrics provides insight into the performance of our recurring revenue business model while mitigating for fluctuations in billing and contract terms.
We believe ARR-based metrics provides insight into the performance of our recurring revenue business model while mitigating fluctuations in billing and contract terms.
We offer subscriptions in a discrete range of packages, with pricing based on specified feature sets and the number of licenses managed by the customer as well as on a capacity-basis. Fiscal Year Our fiscal year ends on January 31 st . References to fiscal 2023, for example, are to the fiscal year ended January 31, 2023.
We offer subscriptions in a discrete range of packages, with pricing based on specified feature sets and the number of licenses managed by the customer as well as on a capacity-basis. Fiscal Year Our fiscal year ends on January 31 st . References to fiscal 2024, for example, are to the fiscal year ended January 31, 2024.
Our subscription and associated support performance obligation is distinct because a customer's use of the Answers platform is fully functional upon access, does not require any additional development, modification or customization, and is often sold separately.
Our subscription and associated support performance obligation is distinct because a customer's use of our platform is fully functional upon access, does not require any additional development, modification or customization, and is often sold separately.
Revenue recognized from subscriptions and associated support to our platform was 91% and 92%, while revenue recognized from professional services was 9% and 8%, for the fiscal years ended January 31, 2023 and 2022, respectively.
Revenue recognized from subscriptions and associated support to our platform was 92% and 91%, while revenue recognized from professional services was 8% and 9%, for the fiscal years ended January 31, 2024 and 2023, respectively.
We calculate constant currency by translating our current period results for entities reporting in currencies other than USD into USD at the average monthly exchange rates in effect during the comparative period, as opposed to the average monthly exchange rates in effect during the current period.
We calculate constant currency by using the current period results for entities reporting in currencies other than USD, which are then converted into USD at the average monthly exchange rates in effect during the comparative period, as opposed to the average monthly exchange rates in effect during the current period.
Gross margin was 74.1% for the fiscal year ended January 31, 2023, compared to 74.8% for the fiscal year ended January 31, 2022 as reflected in the discussion above.
Gross margin was 78.4% for the fiscal year ended January 31, 2024, compared to 74.1% for the fiscal year ended January 31, 2023 as reflected in the discussion above.
Macroeconomic Conditions Our results of operations may be influenced by general macroeconomic conditions, including, but not limited to, the impact of foreign currency fluctuations, interest rates, inflation, recession risks and the COVID-19 pandemic.
Macroeconomic Conditions Our results of operations have been and may continue to be influenced by general macroeconomic conditions, including, but not limited to, the impact of foreign currency fluctuations, interest rates, inflation, recession risks and public health emergencies, such as the COVID-19 pandemic.
Fluctuations in foreign exchange rates and rising inflation have had, and may continue to have an adverse impact on our financial condition and operating results in future periods. The extent to which such disruptions will continue in future periods remains uncertain.
The extent to which such disruptions will continue in future periods remains uncertain, which has had and may continue to have an adverse impact on our financial condition and operating results in future periods.
In addition, other companies may not publish these or similar metrics. Thus, our revenue on a constant currency basis should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.
Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our revenue on a constant currency basis should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.
As of January 31, 2023, we were in compliance with all debt covenants. As of such date, the $50.0 million revolving loan facility had $35.9 million available and $14.1 million in letters of credit allocated as security in connection with office space.
As of January 31, 2024, we were in compliance with all debt covenants. As of such date, the $50.0 million revolving loan facility had $36.4 million available and $13.6 million in letters of credit allocated as security in connection with office space.
We classify all deferred tax assets and liabilities as non-current on the consolidated balance sheet. The effect of a change in tax rates on deferred tax assets and liabilities is recognized within the (provision for) benefit from income taxes on the consolidated statement of operations and comprehensive loss in the period that includes the enactment date.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized within the provision for income taxes on the consolidated statement of operations and comprehensive loss in the period that includes the enactment date.
Net cash provided by operating activities of $21.8 million for the fiscal year ended January 31, 2022 reflected our net loss of $93.3 million, adjusted by non-cash charges including stock-based compensation expense of $73.5 million, depreciation and amortization expense of $16.8 million, amortization of operating lease right-of-use assets of $9.3 million, and bad debt expense of $1.3 million.
Net cash provided by operating activities of $17.9 million for the fiscal year ended January 31, 2023 reflected our net loss of $65.9 million, adjusted by non-cash charges including stock-based compensation expense of $63.1 million, depreciation and amortization expense of $17.6 million and amortization of operating lease right-of-use assets of $8.8 million.
Net cash used in investing activities of $65.1 million for the fiscal year ended January 31, 2021 reflected capital expenditures primarily associated with our new corporate headquarters in New York, NY, and our office spaces in Rosslyn, VA and Tokyo, Japan, among others. 50 Financing Activities Net cash used in financing activities of $79.0 million for the fiscal year ended January 31, 2023 was primarily related to $77.3 million in cash outflows associated with repurchases of common stock as part of our share repurchase program, as well as payments for taxes related to the net share settlement of stock-based compensation awards of $5.1 million and payments of deferred financing costs of $0.5 million.
Net cash used in financing activities of $79.0 million for the fiscal year ended January 31, 2023 was primarily related to $77.3 million in cash outflows associated with repurchases of common stock as part of our share repurchase program, as well as payments for taxes related to the net share settlement of stock-based compensation awards of $5.1 million and payments of deferred financing costs of $0.5 million.
We define non-GAAP net loss as our GAAP net loss as adjusted to exclude the effects of stock-based compensation expense. We believe non-GAAP net loss provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of our results of operations.
We believe non-GAAP net income (loss) provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of our results of operations.
The following table summarizes our revenue by sales channel for the periods presented: Fiscal year ended January 31, Variance 2023 2022 Dollars Percent (in thousands) Direct Customers $ 318,032 $ 303,338 $ 14,694 5 % Third-Party Reseller Customers 82,818 87,239 (4,421) (5) % Total Revenue $ 400,850 $ 390,577 $ 10,273 3 % Revenue attributable to direct customers was $318.0 million for the fiscal year ended January 31, 2023, compared to $303.3 million for the fiscal year ended January 31, 2022, an increase of $14.7 million or 5%, primarily driven by new customer subscriptions to our platform, as well as expanded subscriptions for existing customers.
The following table summarizes our revenue by sales channel for the periods presented: Fiscal year ended January 31, Variance 2024 2023 Dollars Percent (in thousands) Direct Customers $ 327,093 $ 318,032 $ 9,061 3 % Third-Party Reseller Customers 77,229 82,818 (5,589) (7) % Total Revenue $ 404,322 $ 400,850 $ 3,472 1 % Revenue attributable to direct customers was $327.1 million for the fiscal year ended January 31, 2024, compared to $318.0 million for the fiscal year ended January 31, 2023, an increase of $9.1 million or 3%, primarily driven by new customer subscriptions to our platform, as well as expanded subscriptions for existing customers.
The following table provides a reconciliation of revenue on a GAAP basis to revenue on a constant currency basis: Fiscal year ended January 31, (in thousands) 2023 2022 Growth Rates Revenue (GAAP) $ 400,850 $ 390,577 3 % Effects of foreign currency rate fluctuations 10,232 Revenue on a constant currency basis (Non-GAAP) $ 411,082 5 % Liquidity and Capital Resources As of January 31, 2023, our principal sources of liquidity were cash and cash equivalents of $190.2 million.
The following table provides a reconciliation of revenue on a GAAP basis to revenue on a constant currency basis: Fiscal year ended January 31, (in thousands) 2024 2023 Growth Rates Revenue (GAAP) $ 404,322 $ 400,850 1 % Effects of foreign currency rate fluctuations (1,305) Revenue on a constant currency basis (Non-GAAP) $ 403,017 1 % 50 Liquidity and Capital Resources As of January 31, 2024, our principal sources of liquidity were cash and cash equivalents of $210.2 million.
Users should consider the limitations of using Adjusted EBITDA, including the fact that this measure does not provide a complete measure of our operating performance. Adjusted EBITDA is not intended to purport to be an alternate to net loss as a measure of operating performance.
Users should consider the limitations of using Adjusted EBITDA, including the fact that this measure does not provide a complete measure of our operating performance.
Revenue attributable to third-party reseller customers was $87.2 million for the fiscal year ended January 31, 2022, compared to $88.9 million for the fiscal year ended January 31, 2021, a decrease of $1.7 million or 2% primarily due to customer attrition.
Revenue attributable to third-party reseller customers was $77.2 million for the fiscal year ended January 31, 2024, compared to $82.8 million for the fiscal year ended January 31, 2023, a decrease of $5.6 million or 7% primarily due to customer attrition.
Cash Flows The following table summarizes our cash flows: Fiscal year ended January 31, (in thousands) 2023 2022 2021 Net cash provided by operating activities $ 17,853 $ 21,849 $ 1,204 Net cash used in investing activities $ (6,193) $ (13,418) $ (65,111) Net cash (used in) provided by financing activities $ (79,021) $ 24,617 $ 22,548 Operating Activities Net cash provided by operating activities of $17.9 million for the fiscal year ended January 31, 2023 reflected our net loss of $65.9 million, adjusted by non-cash charges including stock-based compensation expense of $63.1 million, depreciation and amortization expense of $17.6 million and amortization of operating lease right-of-use assets of $8.8 million.
The following table summarizes our cash flows: Fiscal year ended January 31, (in thousands) 2024 2023 Net cash provided by operating activities $ 46,157 $ 17,853 Net cash used in investing activities $ (2,728) $ (6,193) Net cash used in financing activities $ (23,254) $ (79,021) Operating Activities Net cash provided by operating activities of $46.2 million for the fiscal year ended January 31, 2024 reflected our net loss of $2.6 million, adjusted by non-cash charges including stock-based compensation expense of $45.0 million, depreciation and amortization expense of $15.8 million and amortization of operating lease right-of-use assets of $8.8 million.
Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section titled "Risk Factors" under Part I, Item 1A in this Annual Report on Form 10-K. Overview Yext organizes a business's facts so it can deliver relevant, actionable answers to consumer questions throughout the digital ecosystem.
Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section titled "Risk Factors" under Part I, Item 1A in this Annual Report on Form 10-K.
The definitions of our non-GAAP financial measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish this or similar metrics.
Adjusted EBITDA is not intended to purport to be an alternate to GAAP net income (loss) as a measure of operating performance. 49 The definitions of our non-GAAP financial measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish this or similar metrics.
The following table reconciles our GAAP net loss to non-GAAP net loss: Fiscal year ended January 31, (in thousands) 2023 2022 2021 GAAP net loss $ (65,938) $ (93,259) $ (94,692) Plus: Stock-based compensation expense 63,078 73,480 72,294 Non-GAAP net loss $ (2,860) $ (19,779) $ (22,398) The following table reconciles our GAAP net loss to Adjusted EBITDA: Fiscal year ended January 31, 2023 2022 2021 GAAP net loss to Adjusted EBITDA: GAAP net loss $ (65,938) $ (93,259) $ (94,692) Interest (income) expense (1,095) 522 82 Provision for income taxes 2,080 1,277 97 Depreciation and amortization 17,583 16,783 10,612 Other expense (income) 125 1,501 181 Stock-based compensation expense 63,078 73,480 72,294 Adjusted EBITDA $ 15,833 $ 304 $ (11,426) 48 Constant Currency We provide revenue, including year-over-year growth rates, adjusted to remove the impact of foreign currency rate fluctuations, which we refer to as constant currency.
The following table reconciles our GAAP net loss to non-GAAP net income (loss): Fiscal year ended January 31, (in thousands) 2024 2023 GAAP net loss $ (2,630) $ (65,938) Plus: Stock-based compensation expense 44,961 63,078 Non-GAAP net income (loss) $ 42,331 $ (2,860) The following table reconciles our GAAP net loss to Adjusted EBITDA: Fiscal year ended January 31, 2024 2023 (in thousands) GAAP net loss $ (2,630) $ (65,938) Interest (income) expense, net (6,624) (1,095) Provision for income taxes 2,292 2,080 Depreciation and amortization 15,805 17,583 Other expense (income), net 761 125 Stock-based compensation expense 44,961 63,078 Adjusted EBITDA $ 54,565 $ 15,833 Constant Currency We provide revenue, including year-over-year growth rates, adjusted to remove the impact of foreign currency rate fluctuations, which we refer to as constant currency.
We believe providing revenue on a constant currency basis helps our investors to better understand our underlying performance, given the current macroeconomic environment. We calculate constant currency by using the current period results for entities reporting in currencies other than U.S.
We believe providing revenue on a constant currency basis helps our investors to better understand our underlying performance, given the current macroeconomic environment.
Revenue is a function of the number of customers, the number of licenses or capacity purchased by each customer, the package to which each customer subscribes, the price of the package and renewal rates.
Our contracts are typically one year in length, but may be up to three years or longer in length. Revenue is a function of the number of customers, the number of licenses or capacity purchased by each customer, the package to which each customer subscribes, the price of the package and renewal rates.
Investing Activities Net cash used in investing activities of $6.2 million for the fiscal year ended January 31, 2023 reflected capital expenditures. Net cash used in investing activities of $13.4 million for the fiscal year ended January 31, 2022 reflected capital expenditures primarily associated with our new corporate headquarters in New York, NY.
Investing Activities Net cash used in investing activities of $2.7 million for the fiscal year ended January 31, 2024 reflected capital expenditures. Net cash used in investing activities of $6.2 million for the fiscal year ended January 31, 2023 reflected capital expenditures.
Operating Expenses Fiscal year ended January 31, Variance (in thousands) 2023 2022 Dollars Percent Sales and marketing $ 211,479 $ 230,467 $ (18,988) (8) % Research and development $ 70,903 $ 68,350 $ 2,553 4 % General and administrative $ 79,336 $ 83,420 $ (4,084) (5) % Sales and marketing expense was $211.5 million for the fiscal year ended January 31, 2023, compared to $230.5 million for the fiscal year ended January 31, 2022, a decrease of $19.0 million, or 8%.
Operating Expenses Fiscal year ended January 31, Variance (in thousands) 2024 2023 Dollars Percent Sales and marketing $ 178,830 $ 211,479 $ (32,649) (15) % Research and development $ 72,040 $ 70,903 $ 1,137 2 % General and administrative $ 72,185 $ 79,336 $ (7,151) (9) % Sales and marketing expense was $178.8 million for the fiscal year ended January 31, 2024, compared to $211.5 million for the fiscal year ended January 31, 2023, a decrease of $32.6 million, or 15%.
Fiscal Year Ended January 31, 2023 Compared to Fiscal Year Ended January 31, 2022 Revenue Fiscal year ended January 31, Variance (in thousands) 2023 2022 Dollars Percent Revenue $ 400,850 $ 390,577 $ 10,273 3 % Cost of revenue 103,960 98,299 $ 5,661 6 % Gross profit $ 296,890 $ 292,278 $ 4,612 2 % Gross margin 74.1 % 74.8 % Total revenue was $400.9 million for the fiscal year ended January 31, 2023, compared to $390.6 million for the fiscal year ended January 31, 2022, an increase of $10.3 million or 3%, primarily driven by new customer subscriptions to our platform, as well as expanded subscriptions for existing customers.
Fiscal Year Ended January 31, 2024 Compared to Fiscal Year Ended January 31, 2023 Revenue Fiscal year ended January 31, Variance (in thousands) 2024 2023 Dollars Percent Revenue $ 404,322 $ 400,850 $ 3,472 1 % Cost of revenue 87,468 103,960 $ (16,492) (16) % Gross profit $ 316,854 $ 296,890 $ 19,964 7 % Gross margin 78.4 % 74.1 % Total revenue was $404.3 million for the fiscal year ended January 31, 2024, compared to $400.9 million for the fiscal year ended January 31, 2023, an increase of $3.5 million or 1%, primarily driven by new customer subscriptions to our platform, expanded subscriptions for existing customers, and the impact of foreign currency exchange rates as discussed below.
Recent Accounting Pronouncements See Note 2 "Summary of Significant Accounting Policies- Recent Accounting Pronouncements", to the consolidated financial statements for our discussion about adopted and pending recent accounting pronouncements. 53
We recognize interest and penalties related to uncertain tax positions within the provision for income taxes on our consolidated statement of operations and comprehensive loss. Recent Accounting Pronouncements See Note 2 "Summary of Significant Accounting Policies- Recent Accounting Pronouncements", to the consolidated financial statements for our discussion about adopted and pending recent accounting pronouncements. 53
If factors change and different assumptions are used, the impact to our stock-based compensation expense could be material. Income Taxes We account for income taxes in accordance with ASC Topic 740, “Income Taxes,” under which deferred income taxes are provided for temporary differences between the financial reporting and tax basis of our assets and liabilities.
Income Taxes We account for income taxes in accordance with ASC Topic 740, “Income Taxes,” under which deferred income taxes are provided for temporary differences between the financial reporting and tax basis of our assets and liabilities. We classify all deferred tax assets and liabilities as non-current on the consolidated balance sheet.
These increases were partially offset by changes in accounts receivable of $18.0 million, mainly due to timing of billing and cash collections during the period, changes in prepaid expenses and other current assets of $5.5 million, and changes in accounts payable, accrued expenses and other current liabilities of $2.0 million.
In addition, there were positive adjustments resulting from changes in costs to obtain revenue contracts of $8.8 million, prepaid expenses and other current assets of $0.8 million and accounts receivable of $0.5 million, mainly due to timing of billing and cash collections during the period.
Non-GAAP Financial Measures In addition to our financial results determined in accordance with GAAP, we believe that certain non-GAAP financial measures are useful in evaluating our operating performance and our business. 47 Non-GAAP net loss is a financial measure that is not calculated in accordance with GAAP.
Net Loss Net loss was $2.6 million and $65.9 million for the fiscal years ended January 31, 2024 and 2023, respectively. Non-GAAP Financial Measures In addition to our financial results determined in accordance with GAAP, we believe that certain non-GAAP financial measures are useful in evaluating our operating performance and our business.
Revenue attributable to third-party reseller customers was $82.8 million for the fiscal year ended January 31, 2023, compared to $87.2 million for the fiscal year ended January 31, 2022, a decrease of $4.4 million or 5% primarily due to customer attrition. 45 Cost of Revenue and Gross Margin Cost of revenue was $104.0 million for the fiscal year ended January 31, 2023, compared to $98.3 million for the fiscal year ended January 31, 2022, an increase of $5.7 million, or 6%.
Cost of Revenue and Gross Margin Cost of revenue was $87.5 million for the fiscal year ended January 31, 2024, compared to $104.0 million for the fiscal year ended January 31, 2023, a decrease of $16.5 million, or 16%.
These decreases were partially offset by a $3.1 million increase in conferences and events and a $2.8 million increase in employee travel. Research and development expense was $70.9 million for the fiscal year ended January 31, 2023, compared to $68.4 million for the fiscal year ended January 31, 2022, an increase of $2.6 million, or 4%.
Research and development expense was $72.0 million for the fiscal year ended January 31, 2024, compared to $70.9 million for the fiscal year ended January 31, 2023, an increase of $1.1 million, or 2%. The increase was primarily driven by a $4.3 million increase in personnel-related costs, as well as smaller increases in depreciation expense, among others.
January 31, Variance 2023 2022 Dollars Percent Annual Recurring Revenue Direct Customers $ 327,017 $ 312,132 $ 14,885 5 % Third-Party Reseller Customers 73,343 78,353 (5,010) (6) % Total Annual Recurring Revenue $ 400,360 $ 390,485 $ 9,875 3 % Dollar-Based Net Retention Rate We believe that our ability to retain our customers and expand the ARR they generate for us over time is an important component of our growth strategy and reflects the long term value of our customer relationships.
Dollar-Based Net Retention Rate We believe that our ability to retain our customers and expand the ARR they generate for us over time is an important component of our growth strategy and reflects the long term value of our customer relationships.
The increase was primarily driven by a $4.9 million increase in personnel-related costs and a $1.3 million increase in costs associated with our data centers. These increases were partially offset by a $4.3 million decrease in stock-based compensation expense, largely due to decreases in the fair value of awards granted.
These increases were partially offset by a $5.1 million decrease in stock-based compensation expense, largely due to decreases in the fair value of awards granted. General and administrative expense was $72.2 million for the fiscal year ended January 31, 2024, compared to $79.3 million for the fiscal year ended January 31, 2023, a decrease of $7.2 million or 9%.
Dollars (“USD”), which are then converted into USD at the average monthly exchange rates in effect during the comparative period, as opposed to the average monthly exchange rates in effect during the current period. Our definition may differ from the definitions used by other companies and therefore comparability may be limited.
Dollars (“USD”) into USD at the average monthly exchange rates in effect during the comparative period, as opposed to the average monthly exchange rates in effect during the current period.
Amounts that have been invoiced for non-cancelable contracts are recorded in accounts receivable and unearned revenue or revenue.
Amounts that have been invoiced for non-cancelable contracts are recorded in accounts receivable and unearned revenue or revenue. See Note 2 "Summary of Significant Accounting Policies" and Note 3 "Revenue" to our consolidated financial statements for further discussion on our revenue recognition.
The decrease was primarily driven by employee-related costs, as personnel-related costs decreased $10.4 million, reflecting lower headcount, and stock-based compensation expense which decreased $3.5 million, largely due to decreases in the fair value of awards granted. In addition, advertising costs decreased $4.9 million due to certain brand media campaigns in the prior period and professional related costs decreased $2.8 million.
The decrease was primarily driven by employee-related costs, as personnel-related costs decreased $20.2 million and stock-based compensation expense decreased $7.9 million, reflecting lower headcount. In addition, conferences and events decreased $1.3 million.
Near-term revenues are relatively predictable as a result of our subscription-based business model.
We continue to be committed to our business, the strength of our platform, our ability to continue to execute on our strategy, and our efforts to support our customers. Near-term revenues are relatively predictable as a result of our subscription-based business model.
Loans based on the base rate shall bear interest at a rate between the base rate minus 0.50% and the base rate plus 0.00%, depending on our average daily usage of the revolving loan facility. See Part I Item 1A “Risk Factors - Our credit facility contains restrictive covenants that may limit our operating flexibility".
Loans based on the base rate shall bear interest at a rate between the base rate minus 0.50% and the base rate plus 0.00%, depending on our average daily usage of the revolving loan facility. We are also obligated to pay a commitment fee on the unused portion of the facility at a rate of 0.25% per annum.
Revenue for the fiscal year ended January 31, 2023 included a negative impact from foreign currency exchange rates of approximately $10.2 million, using a constant currency basis.
Revenue for the fiscal year ended January 31, 2024 included a positive impact from foreign currency exchange rates of approximately $1.3 million, using a constant currency basis. We calculate constant currency by translating our current period results for entities reporting in currencies other than U.S.
This increase was primarily driven by employee-related costs, as personnel-related costs increased $8.8 million and stock-based compensation expense increased $1.4 million, reflecting higher headcount and employee stock grants. In addition, depreciation expense increased $2.2 million and costs associated with our data centers increased $1.5 million.
The decrease was primarily driven by employee related costs, as personnel-related costs decreased $11.3 million and stock-based compensation expense decreased $2.1 million, reflecting lower headcount. In addition, depreciation expense decreased $2.1 million as certain assets have fully depreciated.
Our platform powers all of our key features, including Listings, Pages, and Search, along with its other features and capabilities. We sell our platform throughout the world to customers of all sizes, including our enterprise, mid-size, and third-party reseller customers.
It is our mission to empower businesses to easily manage every aspect of their digital presence to make meaningful connections with their customers across every digital touchpoint. We sell our platform throughout the world to customers of all sizes, including our enterprise, mid-size, and third-party reseller customers.
The decrease was primarily driven by a $4.2 million decrease in professional related costs, a $1.1 million decrease in bad debt expense and a $0.6 million decrease in stock-based compensation expense, largely due to decreases in the fair value of awards granted.
The decrease was primarily driven by employee-related costs, as stock-based compensation expense decreased $3.0 million and personnel-related costs decreased $1.8 million, reflecting lower headcount. In addition, professional related costs decreased $2.8 million. These decreases were partially offset by smaller increases in bad debt expense, among others.
As such, customer count excludes third-party reseller customers and small business customers as well as customers only receiving free trials. As of January 31, 2023, customer count increased 7% year-over-year to over 2,960.
As such, customer count excludes third-party reseller customers and small business customers as well as customers only receiving free trials. From time to time, some customers previously characterized as small business customers may 43 transition to mid-size customers, and customer count includes these changes resulting from any recharacterization. As of January 31, 2024, customer count was approximately 3,000.
The uncertain duration of these measures has had and may continue to have an adverse impact on our financial condition and operating results in future periods. We continue to be committed to our business, the strength of our platform, our ability to continue to execute on our strategy, and our efforts to support our customers.
Fluctuations in foreign exchange rates and rising inflation have had, and may continue to have an adverse impact on our financial condition and operating results in future periods.
Net cash provided by financing activities of $22.5 million for the fiscal year ended January 31, 2021 was primarily related to proceeds from exercise of stock options of $16.5 million, and net proceeds from employee stock purchase plan withholdings of $7.0 million, partially offset by payments of deferred financing costs of $0.9 million.
This was partially offset by proceeds from exercise of stock options of $9.4 million and net proceeds from employee stock purchase plan withholdings of $3.9 million.
Net cash provided by financing activities of $24.6 million for the fiscal year ended January 31, 2022 was primarily related to proceeds from exercise of stock options of $19.2 million, and net proceeds from employee stock purchase plan withholdings of $5.7 million, partially offset by payments of deferred financing costs of $0.3 million.
Financing Activities Net cash used in financing activities of $23.3 million for the fiscal year ended January 31, 2024 was primarily related to $23.1 million in cash outflows associated with repurchases of common stock as part of our share repurchase program, as well as payments for taxes related to the net share settlement of stock-based compensation awards of $13.0 million and payments of deferred financing costs of $0.5 million.
Share Repurchase Program In March 2022, our Board of Directors authorized a $100.0 million share repurchase program of our common stock. As of January 31, 2023, a total of 13,844,279 shares have been purchased at an average price of $5.59 per share for a total cost of $77.4 million since the commencement of the share repurchase program.
As such, First Citizens assumed SVB’s obligations under the Credit Facility. 51 Share Repurchase Program In March 2022, our Board of Directors authorized a $100.0 million share repurchase program of our common stock. In September 2023, our Board of Directors authorized an additional $50.0 million to the share repurchase program.
The following table provides our dollar-based net retention rate for the fiscal years ended January 31, 2023, 2022 and 2021: January 31, 2023 2022 2021 Dollar-Based Net Retention Rate (ARR) Direct Customers 97% 101% 100% Third-Party Reseller Customers 92% 101% 92% Total Customers 96% 101% 98% Historically, we presented dollar-based net retention rate on a revenue basis whereby we first established a cohort of enterprise, mid-size, and third-party reseller customers, who had active contracts at the end of each month of the same period in the prior year.
The following table provides our dollar-based net retention rate for the fiscal years ended January 31, 2024 and 2023: 44 January 31, 2024 2023 Dollar-Based Net Retention Rate (ARR) Direct Customers (1) 91% 97% Third-Party Reseller Customers 95% 92% Total Customers 92% 96% (1) Dollar-Based Net Retention Rate as of January 31, 2024 reflects the attrition of a large customer, which occurred during the three months ended January 31, 2024. 45 Components of Results of Operations Revenue We derive our revenue primarily from subscription and associated support to our platform.
These increases were partially offset by changes in costs to obtain revenue contracts of $9.1 million, operating lease liabilities of $6.6 million, and accounts receivable of $6.1 million, mainly due to timing of billing and cash collections during the period.
These increases were partially offset by changes in operating lease liabilities of $11.7 million, unearned revenue of $11.3 million and accounts payable, accrued expenses and other current liabilities of $10.2 million.
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Our platform lets businesses structure the facts about their brands in a database called the Knowledge Graph.
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Overview Yext empowers businesses to manage their knowledge so they can deliver relevant, actionable answers to consumer questions as well as consistent, accurate and engaging experiences to customers throughout the digital ecosystem.
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Our platform is built to leverage the structured data stored in the Knowledge Graph to deliver a modern search experience on a business's or organization's own website, as well as across over 200 service and application providers, which we refer to as our Publisher Network and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp.
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Our digital presence platform (also known as the Answers Platform) lets businesses structure and organize information about their brands in our knowledge graph, Yext Content (also known as the Knowledge Graph), which is then delivered across first-and third-party websites and applications through our network of over 200 service and application providers, which we refer to as our Publisher Network.
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We divided the single month revenue from each of those customer cohorts for the applicable month in the current year by the single month revenue of that same customer cohort for the corresponding month in the prior year.
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These publishers include, among others, Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp. Our platform powers all of our key products, including Listings, Reviews, Pages and Search, each with robust analytics capabilities for businesses to easily track performance across customer experiences.
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We then determined the dollar-based weighted average of each of the monthly rates, which represented the dollar-based net retention rate for the period.
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January 31, Variance 2024 2023 Dollars Percent Annual Recurring Revenue Direct Customers (1) $ 315,594 $ 327,017 $ (11,423) (3) % Third-Party Reseller Customers 71,784 73,343 (1,559) (2) % Total Annual Recurring Revenue $ 387,378 $ 400,360 $ (12,982) (3) % (1) ARR as of January 31, 2024 includes a decrease of $10.8 million related to the attrition of a large customer, which occurred during the three months ended January 31, 2024.
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Under this prior methodology, our dollar-based net retention rate was 95%, 98%, and 102% for the fiscal years ended January 31, 2023, 2022 and 2021, respectively. 42 We believe that the change in methodology in our dollar-based net retention rate from a revenue basis to an ARR basis is more meaningful to investors as it aligns more closely with how management views growth in the business, assesses Company performance, and provides better insight into the directional movements within ARR.
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General and administrative expenses also include lease expenses associated with our office spaces, as well as software expense, each of which are allocated based on employee headcount, and other professional related costs. 46 Results of Operations In this section, we discuss the results of our operations for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023.
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Components of Results of Operations Revenue We derive our revenue primarily from subscription and associated support to our Answers platform. Our contracts are typically one year in length, but may be up to three years or longer in length.
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For a discussion of our results of operations for the fiscal year ended January 31, 2023 compared to the fiscal year ended January 31, 2022, please refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023.
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The increase was primarily driven by a $5.1 million increase in personnel-related costs, reflecting higher headcount, a $1.7 million increase in costs associated with our data centers and a $1.4 million increase in depreciation expense.
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While the attrition of a large direct customer occurred during the three months ended January 31, 2024, we expect that the corresponding absence of revenue from this customer 48 will become more apparent in our quarterly results for the fiscal year ending January 31, 2025.
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These increases were partially offset by a $2.1 million decrease in stock-based compensation expense, largely due to decreases in the fair value of awards granted, as well as a $1.2 million decrease in Publisher Network provider fees due to favorable contract renewal terms with certain providers in the prior year.
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Non-GAAP net income (loss) is a financial measure that is not calculated in accordance with GAAP. We define non-GAAP net income (loss) as our GAAP net income (loss) as adjusted to exclude the effects of stock-based compensation expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeNotwithstanding, those institutions are subject to risk of failure and our balances may be uninsured in certain cases.
Biggest changeNotwithstanding, those institutions are subject to risk of failure and our balances may be uninsured in certain cases. For example, on March 10, 2023, SVB was unable to continue their operations and the FDIC was appointed as receiver for SVB. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership.
Foreign Currency Risk Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where the local currency is the functional currency, are translated from foreign currencies into U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates for the period derived from month-end spot rates for revenue, costs and expenses.
Foreign Currency Risk Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where the local currency is the functional currency, are translated from foreign currencies into U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates for the period for revenue, costs and expenses.
Based on the size of our international operations and the amount of our expenses denominated in foreign currencies, we would not expect a 10% change in the value of the U.S. dollar from rates on January 31, 2023 to have a material effect on our financial position or results of operations.
Based on the size of our international operations and the amount of our expenses denominated in foreign currencies, we would not expect a 10% change in the value of the U.S. dollar from rates on January 31, 2024 to have a material effect on our financial position or results of operations.
Interest Rate Risk As of January 31, 2023, we had cash and cash equivalents of $190.2 million. The primary objective of our investments is the preservation of capital to fulfill liquidity needs. We do not enter into investments for trading or speculative purposes. We do not believe our cash equivalents have significant risk of default or illiquidity.
Interest Rate Risk As of January 31, 2024, we had cash and cash equivalents of $210.2 million. The primary objective of our investments is the preservation of capital to fulfill liquidity needs. We do not enter into investments for trading or speculative purposes. We do not believe our cash equivalents have significant risk of default or illiquidity.
As of March 15, 2023, substantially all of our cash and cash equivalents are held with other large financial institutions and we do not expect further developments with SVB to have a material impact on our cash and cash equivalents balance, expected results of operations or financial performance for the foreseeable future.
In addition, on May 1, 2023, the FDIC seized First Republic Bank and sold its assets to JPMorgan Chase & Co. We do not expect further developments with such banks to have a material impact on our cash and cash equivalents balance, expected results of operations or financial performance for the foreseeable future.
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For example, on March 10, 2023, SVB was unable to continue their operations and the Federal Deposit Insurance Corporation was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB after SVB was unable to continue their operations.

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