Episode Details

Yext (YEXT) Q2 FY2027 — YEXT closed the reaction session at $6.53, -3.5% on 2.90m shares, 2.2x the prior session - a beat, sold. Adjusted diluted EPS went $0.12 to $0.21 against a $0.17 bar. Decomposed, 4.4 cents of the 8.1-cent rise is the smaller share count and only 3.8 cents is higher profit - so 54% of the growth came from the denominator, and the share-count effect is larger than the 4.0-cent beat itself. Run the same profit over last year's diluted count and it is $0.162: a miss. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$6.58 vs ~$6.53 today. KEY METRICS: - PERIOD: Q2 of fiscal 2027, the three months ended 31 July 2026 - REVENUE $111.1m (-1.8%) - and $197,000 under the $111.3m consensus - ADJUSTED EPS $0.21 diluted vs a $0.17 bar - but $0.162 at last year's share count, which is a MISS - EPS BRIDGE: of the 8.1-cent rise, 3.8 cents is profit and 4.4 cents is the buyback = 54% - ADJUSTED EBITDA $34.0m (+29.0%), a record 30.6% margin vs 23.3% - ANNUAL RECURRING REVENUE $440.8m (-0.8%) - $50K+ cohort $405.9m (+1.6%), NRR 98% - FIRST HALF: Adjusted EBITDA +19.4% while free cash flow -0.7% - the cash did not follow - SELF-TENDER: 24,347,825 shares at $5.75 for $140m, completed 23 March 2026 - the FLOOR of a $5.75-$6.50 range - THE CEO HAD OFFERED $9.00 a share and WITHDREW it on 2 February 2026 - BALANCE SHEET: cash $154m to $87m, debt $98m to $148m, equity $159m to $36m - VALUATION: EV $707m = 1.60x ARR, 5.8x annualised Adjusted EBITDA, 12.2x trailing free cash flow - FAIR VALUE $6.58 (HOLD, 3/5) vs $6.53 - DCF $6.14, EBITDA $7.39, FCF $6.67 What to watch: Total annual recurring revenue actually printing a positive year - our cohort arithmetic only gets there in year two. Against that: the $50K-plus cohort stalling, cash falling toward the $35m covenant floor, or more borrowing at 9.5% to buy a 8.2% free-cash-flow yield. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.