UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from                  to                 

Commission File Number: 001-38056

YEXT, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-8059722
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

61 Ninth Avenue

New York, NY 10011

(Address of principal executive offices, including zip code)

(212) 994-3900

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	YEXT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).    Yes  ☐  No  ☒

As of May 24, 2021, the registrant had 126,243,515 shares of common stock, $0.001 par value per share outstanding.

TABLE OF CONTENTS

			PAGE
PART I.		FINANCIAL INFORMATION
	Item 1	Financial Statements	5
		Condensed Consolidated Balance Sheets (Unaudited)	5
		Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	6
		Condensed Consolidated Statements of Stockholders' Equity (Unaudited)	7
		Condensed Consolidated Statements of Cash Flows (Unaudited)	8
		Notes to Condensed Consolidated Financial Statements	9
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	26
	Item 4	Controls and Procedures	27
PART II.		OTHER INFORMATION
	Item 1	Legal Proceedings	28
	Item 1A	Risk Factors	28
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	52
	Item 3	Defaults Upon Senior Securities	52
	Item 4	Mine Safety Disclosures	52
	Item 5	Other Information	52
	Item 6	Exhibits	52
SIGNATURES

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains, and our officers and representatives may from time to time make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "plan," "intend," "could," "would," "expect" and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

•our future revenue, cost of revenue, operating expenses and cash flows;

•anticipated trends, growth rates and challenges in our business and in the markets in which we operate;

•the effect of the novel coronavirus ("COVID-19") pandemic, including the effect of governmental restrictions and regulations as well as precautionary measures undertaken by businesses, on our business, operations, and financial results and the business and operations of our customers and potential customers;

•our beliefs, objectives and strategies for future operations, including plans to invest in international expansion, research and development, and our sales and marketing teams, and the impact of such investments on our operations;

•our ability to increase sales of our products;

•maintaining and expanding our end-customer base and our relationships with our Knowledge Network; and

•sufficiency of cash to meet cash needs for at least the next 12 months.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether written or oral, except as required by law.

In this Quarterly Report on Form 10-Q, the words "we," "us," "our" and "Yext" refer to Yext, Inc. and its wholly owned subsidiaries, unless the context requires otherwise.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

YEXT, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

	April 30, 2021		January 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	272,099	$	230,411
Accounts receivable, net of allowances of $2,246 and $2,528, respectively	55,512		97,455
Prepaid expenses and other current assets	16,454		17,993
Costs to obtain revenue contracts, current	32,145		30,325
Total current assets	376,210		376,184
Property and equipment, net	81,810		80,344
Operating lease right-of-use assets	102,456		104,844
Costs to obtain revenue contracts, non-current	26,380		22,692
Goodwill	4,828		4,842
Intangible assets, net	616		767
Other long term assets	6,373		6,316
Total assets	$	598,673	$	595,989
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	$	50,885	$	54,186
Unearned revenue, current	186,614		191,810
Operating lease liabilities, current	14,285		14,165
Total current liabilities	251,784		260,161
Operating lease liabilities, non-current	120,583		123,584
Other long term liabilities	5,131		5,009
Total liabilities	377,498		388,754
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.001 par value per share; 50,000,000 shares authorized at April 30, 2021 and January 31, 2021; zero shares issued and outstanding at April 30, 2021 and January 31, 2021	—		—
Common stock, $0.001 par value per share; 500,000,000 shares authorized at April 30, 2021 and January 31, 2021; 132,719,885 and 130,494,513 shares issued at April 30, 2021 and January 31, 2021, respectively; 126,214,551 and 123,989,179 shares outstanding at April 30, 2021 and January 31, 2021, respectively	132		130
Additional paid-in capital	765,147		733,933
Accumulated other comprehensive income	2,777		2,422
Accumulated deficit	(534,976)		(517,345)
Treasury stock, at cost	(11,905)		(11,905)
Total stockholders’ equity	221,175		207,235
Total liabilities and stockholders’ equity	$	598,673	$	595,989

See the accompanying notes to the condensed consolidated financial statements.

5

YEXT, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)

	Three months ended April 30,
	2021		2020
Revenue	$	91,992	$	85,351
Cost of revenue	21,854		21,184
Gross profit	70,138		64,167
Operating expenses:
Sales and marketing	55,166		58,520
Research and development	13,857		14,378
General and administrative	18,347		20,458
Total operating expenses	87,370		93,356
Loss from operations	(17,232)		(29,189)
Interest income	6		468
Interest expense	(132)		(137)
Other expense, net	(86)		(84)
Loss from operations before income taxes	(17,444)		(28,942)
(Provision for) benefit from income taxes	(187)		(282)
Net loss	$	(17,631)	$	(29,224)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.14)	$	(0.25)
Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted	125,372,839		116,606,835
Other comprehensive income (loss):
Foreign currency translation adjustment	$	355	$	(1,333)
Total comprehensive loss	$	(17,276)	$	(30,557)

See the accompanying notes to the condensed consolidated financial statements.

6

YEXT, INC.

Condensed Consolidated Statements of Stockholders' Equity

(In thousands)

(Unaudited)

						Accumulated
				Additional		Other						Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Treasury		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Stock		Equity
Balance, January 31, 2020	115,830	$	122	$	636,008	$	(360)	$	(422,653)	$	(11,905)	$	201,212
Exercise of stock options	3,064	3		16,513		—		—		—		16,516
Vested restricted stock units converted to common shares	4,358	4		(4)		—		—		—		—
Issuance of restricted stock	38	—		—		—		—		—		—
Issuance of common stock under employee stock purchase plan	699	1		6,999		—		—		—		7,000
Stock-based compensation	—	—		74,417		—		—		—		74,417
Other comprehensive income	—	—		—		2,782		—		—		2,782
Net loss	—	—		—		—		(94,692)		—		(94,692)
Balance, January 31, 2021	123,989	130		733,933		2,422		(517,345)		(11,905)		207,235
Exercise of stock options	1,069	1		12,110		—		—		—		12,111
Vested restricted stock units converted to common shares	871	1		(1)		—		—		—		—
Issuance of restricted stock	4	—		—		—		—		—		—
Issuance of common stock under employee stock purchase plan	282	—		3,817		—		—		—		3,817
Stock-based compensation	—	—		15,288		—		—		—		15,288
Other comprehensive income	—	—		—		355		—		—		355
Net loss	—	—		—		—		(17,631)		—		(17,631)
Balance, April 30, 2021	126,215	$	132	$	765,147	$	2,777	$	(534,976)	$	(11,905)	$	221,175

See the accompanying notes to the condensed consolidated financial statements.

7

YEXT, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended April 30,
	2021		2020
Operating activities:
Net loss	$	(17,631)	$	(29,224)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	3,717		2,045
Bad debt expense	181		759
Stock-based compensation expense	14,598		17,372
Amortization of operating lease right-of-use assets	2,278		3,457
Other, net	161		190
Changes in operating assets and liabilities:
Accounts receivable	41,914		32,395
Prepaid expenses and other current assets	1,221		(5,064)
Costs to obtain revenue contracts	(5,534)		3,465
Other long term assets	(156)		(479)
Accounts payable, accrued expenses and other current liabilities	1,945		(4,650)
Unearned revenue	(5,186)		(24,161)
Operating lease liabilities	(2,786)		2,679
Other long term liabilities	341		559
Net cash provided by (used in) operating activities	35,063		(657)
Investing activities:
Capital expenditures	(7,457)		(21,275)
Net cash used in investing activities	(7,457)		(21,275)
Financing activities:
Proceeds from exercise of stock options	12,168		1,879
Payments of deferred financing costs	(44)		(394)
Proceeds, net from employee stock purchase plan withholdings	1,483		1,483
Net cash provided by financing activities	13,607		2,968
Effect of exchange rate changes on cash and cash equivalents	475		(416)
Net increase (decrease) in cash and cash equivalents	41,688		(19,380)
Cash and cash equivalents at beginning of period	230,411		268,176
Cash and cash equivalents at end of period	$	272,099	$	248,796

See the accompanying notes to the condensed consolidated financial statements.

8

YEXT, INC.

Notes to Condensed Consolidated Financial Statements

1. Organization and Description of Business

Description of Business

Yext, Inc. ("Yext" or the "Company") organizes a business's facts so it can provide official answers to consumer questions starting with the business's own website and then extending across search engines and voice assistants. The Yext platform lets businesses structure the facts about their brands in a database called the Knowledge Graph. The 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 approximately 200 service and application providers, which the Company refers to as its Knowledge Network and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp. The Yext platform powers all of the Company's key features, including Listings, Pages, and Answers, along with its other features and capabilities.

Fiscal Year

The Company's fiscal year ends on January 31st. References to fiscal 2022, for example, are to the fiscal year ending January 31, 2022.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2021, filed with the SEC on March 16, 2021 (the "Form 10-K"). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated balance sheet as of January 31, 2021, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis.

In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods. The results for the three months ended April 30, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter, the fiscal year ending January 31, 2022, or any other period.

There have been no material changes to the Company's significant accounting policies as described in the Form 10-K.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of those financial statements and the reported amounts of revenue and expense during the reporting period. These estimates include, but are not limited to, the standalone selling prices of performance obligations, the incremental borrowing rate associated with lease liabilities, the useful life of capitalized costs to obtain revenue contracts, income taxes, and the valuation and assumptions underlying stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations.

Segment Information

The Company is the provider of the Yext platform and operates as one operating segment. An operating segment is defined as a component of an enterprise for which separate financial information is evaluated regularly by the chief operating decision makers ("CODM"). The Company defines its CODM as its executive officers, and their role is to make decisions about allocating resources and assessing performance. The Company's business operates in one operating segment as all of the Company's offerings operate on the Yext platform and are deployed in an identical way, with its CODM evaluating the Company's financial information, resources and performance of these resources on a consolidated basis. Since the Company operates in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements.

9

Concentration of Credit Risk

Certain financial instruments that could be exposed to a concentration of credit risk include cash and cash equivalents and accounts receivable. The Company deposits its cash with financial institutions, and such deposits, at times, may exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents to date. Collateral is not required for accounts receivable. At April 30, 2021 and January 31, 2021, no single customer accounted for more than 10% of the Company's accounts receivable. No single customer accounted for more than 10% of the Company's revenue for the three months ended April 30, 2021 and 2020, respectively.

Recent Accounting Pronouncements

Adoption of Accounting Standard - ASU 2019-12

In December 2019, the FASB issued ASU 2019-12 "Simplifying the Accounting for Income Taxes", which simplifies the accounting for income taxes, eliminates certain exceptions within ASC Topic 740, "Income Taxes," and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The Company adopted this standard on February 1, 2021 and it did not have a material impact on the Company's condensed consolidated financial statements.

3. Revenue

Performance Obligations

The Company has identified that it has two distinct performance obligations: subscription and associated support to the Yext platform and professional services. The Company's revenue is predominantly related to its subscription and associated support to the Yext platform. Professional services revenue accounted for approximately 8% and 7% of the Company's total revenue for the three months ended April 30, 2021 and 2020, respectively.

Geographic Region

The Company disaggregates its revenue from contracts with customers by geographic region, as it believes this best depicts how the nature, amount, timing, and uncertainty of its revenues and cash flows are affected by economic factors. Revenue by geographic region is determined based on the region of the Company's contracting entity, which may be different than the region of its customers. The following table presents the Company's revenue by geographic region:

	Three months ended April 30,
(in thousands)	2021		2020
North America	$	73,060	$	69,227
International	18,932		16,124
Total revenue	$	91,992	$	85,351

North America revenue is predominantly attributable to the United States. International revenue is predominantly attributable to European countries, but also includes Japan.

The Company's revenue attributable to the United States represented 79% and 81% for the three months ended April 30, 2021 and 2020, respectively. Revenue attributable to England, which serves as the Company's main contracting entity for Europe effective February 1, 2021, represented 18% of total revenue for the three months ended April 30, 2021. Revenue attributable to Switzerland, which served as the Company's main contracting entity for Europe prior to February 1, 2021, represented 15% of total revenue for the three months ended April 30, 2020. No other individual country represented more than 10% of total revenue for the three months ended April 30, 2021 and 2020.

Contract Liabilities

A contract liability is an obligation to transfer goods or services for which consideration has been received or is due to a customer. The Company's contract liabilities consist primarily of unearned revenue and, to a lesser extent, customer deposits.

As of April 30, 2021, unearned revenue, current was $186.6 million, while unearned revenue, non-current, which is included within other long term liabilities on the Company's condensed consolidated balance sheet, was less than $0.1 million. Revenue recognized of $76.3 million during the three months ended April 30, 2021 was included in unearned revenue at the beginning of the period.

Customer deposits represent payments received in advance in instances where a revenue contract is cancelable in nature, and therefore the Company does not have an unconditional obligation to transfer control to a customer. As of April 30, 2021 and January 31, 2021, customer deposits of $0.5 million and $0.2 million were included in accounts payable, accrued expenses and other current liabilities on the Company's condensed consolidated balance sheet, respectively.

10

Remaining Performance Obligations

The transaction price allocated to remaining performance obligations represents amounts under non-cancelable contracts expected to be recognized as revenue in future periods, and may be influenced by several factors, including seasonality, the timing of renewals, and contract terms. As of April 30, 2021, the Company had $360.6 million of remaining performance obligations, of which $340.6 million is expected to be recognized as revenue over the next twenty-four months, with the remaining balance expected to be recognized thereafter. As of January 31, 2021, the Company had $351.8 million of remaining performance obligations.

4. Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings or other comprehensive (loss) income when they occur. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurement or assumptions that market participants would use in pricing the assets or liabilities, such as inherent risk, transfer restrictions, and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 inputs are based on quoted prices in active markets for identical assets or liabilities. 

Level 2 inputs are based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. 

Level 3 inputs are based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities, and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

As of each period, April 30, 2021 and January 31, 2021, the Company had $138.8 million of money market funds included in cash and cash equivalents, which were valued using quoted market prices and were classified as Level 1 accordingly.

5. Goodwill and Intangible Assets

Goodwill

The Company had goodwill of $4.8 million as of both April 30, 2021 and January 31, 2021.

Goodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level, which is at or one level below the operating segment level. The Company operates as one operating segment, which represents its one reporting unit. The test for impairment is conducted annually each November 1st, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company determined that no events occurred or circumstances changed during the three months ended April 30, 2021 and 2020 that would more likely than not reduce the fair value of the Company's reporting unit below its carrying amount. However, if certain events occur or circumstances change, it may be necessary to record impairment charges in the future.

Intangible Assets

As of April 30, 2021 and January 31, 2021, the Company had intangible assets, net of $0.6 million and $0.8 million, respectively. The Company's intangible assets are amortized on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company has no indefinite-lived intangible assets.

The Company determined that no events occurred or circumstances changed during the three months ended April 30, 2021 and 2020 that would indicate that its intangible assets with finite lives may not be recoverable. However, if certain events occur or circumstances change, it may be necessary to record impairment charges in the future.

Amortization expense related to intangible assets totaled $0.1 million for each of the three months ended April 30, 2021 and 2020.

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6. Property and Equipment, Net

Property and equipment are recorded at cost and depreciated or amortized on a straight-line basis over their estimated useful lives. Property and equipment, net consisted of the following:

(in thousands)	April 30, 2021		January 31, 2021
Computer software	$	11,406	$	10,719
Office equipment	16,973		14,856
Furniture and fixtures	7,775		7,344
Leasehold improvements	62,152		57,799
Construction in progress	809		4,469
Software in progress	6,830		5,754
Total property and equipment, gross	105,945		100,941
Less: accumulated depreciation	(24,135)		(20,597)
Total property and equipment, net	$	81,810	$	80,344

As of April 30, 2021 and January 31, 2021, the Company's property and equipment, net attributable to the United States was 89% and 88%, respectively. No other individual country represented more than 10% of the total property and equipment, net as of those periods. Depreciation expense was $3.6 million and $1.9 million for the three months ended April 30, 2021 and 2020, respectively.

7. Accounts Payable, Accrued Expenses and Other Current Liabilities

        Accounts payable, accrued expenses and other current liabilities consisted of the following:

(in thousands)	April 30, 2021		January 31, 2021
Accounts payable	$	9,223	$	12,974
Accrued employee compensation	20,839		16,780
Accrued Knowledge Network application provider fees	2,957		3,671
Accrued professional services and associated costs	3,421		2,202
Accrued employee stock purchase plan withholdings liability	896		3,230
Other current liabilities	13,549		15,329
Total accounts payable, accrued expenses and other current liabilities	$	50,885	$	54,186

As of April 30, 2021 and January 31, 2021, capital expenditures of $1.6 million and $4.5 million were included in accounts payable, accrued expenses and other current liabilities, respectively.

8. Stock-Based Compensation

2008 Equity Incentive Plan

        The Company's 2008 Equity Incentive Plan (the "2008 Plan"), as amended on March 10, 2016, allowed for the issuance of up to 25,912,531 shares of common stock. Awards granted under the 2008 Plan may be incentive stock options ("ISOs"), nonqualified stock options ("NQSOs"), restricted stock and restricted stock units. The 2008 Plan is administered by the Company's Board of Directors, which determines the terms of the options granted, the exercise price, the number of shares subject to option and the option vesting period. No ISO or NQSO is exercisable after 10 years from the date of grant, and option awards will typically vest over a four-year period.

        The 2008 Plan was terminated in connection with the adoption of the Company's 2016 Equity Incentive Plan (the "2016 Plan") in December 2016, and since the 2008 Plan termination the Company has not granted and will not grant any additional awards under the 2008 Plan. However, the 2008 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

2016 Equity Incentive Plan

        In December 2016, the Company's Board of Directors adopted, and its stockholders approved, the 2016 Plan. The number of shares reserved for issuance under the 2016 Plan will increase on the first day of each fiscal year during the term of the 2016 Plan by the lesser of: (i) 10,000,000 shares, (ii) 4% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company's Board of Directors may determine. On February 1, 2021, the number of shares of common stock available for issuance under the 2016 Plan was automatically increased according to its terms by 4,959,567 shares. In addition, the shares reserved for issuance under the 2016 Plan also include shares returned to the 2008 Plan as the result of

12

expiration or termination of options or other awards. As of April 30, 2021, the number of shares available for future award under the 2016 Plan is 6,743,758.

Stock Options

       The following table summarizes the activity related to the Company's stock options:

	Outstanding Stock Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Balance, January 31, 2021	8,871,890	$	7.64	4.94	$	81,906
Granted	—	$	—
Exercised	(1,068,915)	$	11.33
Forfeited or canceled	(396)	$	12.31
Balance, April 30, 2021	7,802,579	$	7.13	5.02	$	53,200
Vested and expected to vest	7,717,267	$	7.08	5.01	$	52,988
Exercisable at April 30, 2021	7,363,094	$	6.87	4.94	$	52,094

The aggregate intrinsic value of options vested and expected to vest and exercisable is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of April 30, 2021. The fair value of the common stock is the Company’s closing stock price as reported on the New York Stock Exchange.

The aggregate intrinsic value of exercised options was $6.3 million and $2.5 million for the three months ended April 30, 2021 and 2020, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date.

Restricted Stock and Restricted Stock Units

        The following table summarizes the activity related to the Company's restricted stock and restricted stock units:

	Outstanding	Weighted-Average Grant Date Fair Value
Balance as of January 31, 2021	9,545,352	$	16.71
Granted	732,324	$	15.42
Vested and converted to shares	(883,551)	$	16.61
Forfeited or canceled	(1,015,236)	$	17.85
Balance as of April 30, 2021	8,378,889	$	16.47

The estimated weighted-average grant date fair value of restricted stock and restricted stock units granted was $15.42 and $13.93 per share for the three months ended April 30, 2021 and 2020, respectively. The fair value of the common stock is the Company’s closing stock price as reported on the New York Stock Exchange.

The total fair value of restricted stock and restricted stock units vested was $14.7 million and $15.8 million for the three months ended April 30, 2021 and 2020, respectively.

Employee Stock Purchase Plan

In March 2017, the Company's Board of Directors adopted, and its stockholders approved, the 2017 Employee Stock Purchase Plan ("ESPP"), which became effective on the date it was adopted. The number of shares of the Company's common stock that will be available for sale to employees under the ESPP increases annually on the first day of each fiscal year in an amount equal to the lesser of: (i) 2,500,000 shares; (ii) 1% of the outstanding shares of the Company's common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the administrator may determine. On February 1, 2021, the number of shares of common stock available for issuance under the ESPP was automatically increased according to its terms by 1,239,891 shares. As of April 30, 2021, a total of 3,792,329 shares of the Company's common stock are available for sale to employees under the ESPP.

In connection with the offering period which ended on March 15, 2021, 282,119 shares of common stock were purchased under the ESPP at a purchase price of $13.53 per share for total proceeds of $3.8 million.

A new offering period began on March 15, 2021 and will end on September 15, 2021. As of April 30, 2021, 213,434 shares are estimated to be purchased at the end of the offering period and $0.9 million has been withheld on behalf of employees for these future purchases under the ESPP and is included in accounts payable, accrued expenses and other current liabilities.

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The Black-Scholes option pricing model assumptions estimated at the commencement of the new offering period and used to calculate the fair value of shares to be purchased during an ESPP offering period included expected lives of 0.5 years, expected volatility of 59.24% and 51.44%, and risk-free rates of 0.06% and 0.29%, for the three months ended April 30, 2021 and 2020, respectively.

The expected life assumptions were based on each offering period's respective purchase date. The Company estimated the expected volatility assumption based on the historical volatility of its stock price. The risk-free rate assumptions were based on the U.S. treasury yield curve in effect at commencement of the offering period. The dividend yield assumption was zero as the Company has not historically paid any dividends and does not expect to declare or pay any dividends in the foreseeable future.

During the three months ended April 30, 2021 and 2020, the Company recorded stock-based compensation expense associated with the ESPP of $0.6 million for each period. As of April 30, 2021, total unrecognized compensation cost related to ESPP was $0.8 million, net of estimated forfeitures, which will be amortized over a weighted-average remaining period of 0.38 years.

A new offering period commences on the first trading day on or after March 15th and September 15th each year, or on such other date as the administrator will determine, and will end on the first trading day, approximately six months later, on or after September 15th and March 15th, respectively. Participants may purchase the Company’s common stock through payroll deductions, up to a maximum of 15% of their eligible compensation. Unless changed by the administrator, the purchase price for each share of common stock purchased under the ESPP will be 85% of the lower of the fair market value per share on the first trading day of the applicable offering period or the fair market value per share on the last trading day of the applicable offering period.

Stock-Based Compensation Expense

        Stock-based compensation represents the cost related to stock-based awards granted in lieu of monetary payment. The Company measures stock-based compensation associated with stock-based awards issued to employees at the grant date, based on the estimated fair value of the award, and recognizes expense, net of estimated forfeitures, over the vesting period of the applicable award using the straight-line method.

The Company's stock-based compensation expense for the periods presented was as follows:

	Three months ended April 30,
(in thousands)	2021		2020
Cost of revenue	$	1,445	$	1,233
Sales and marketing	5,501		7,781
Research and development	3,988		3,943
General and administrative	3,664		4,415
Total stock-based compensation expense	$	14,598	$	17,372

As of April 30, 2021, there was approximately $130.8 million of total unrecognized compensation cost related to unvested stock-based awards. This unrecognized compensation cost is expected to be recognized over an estimated remaining weighted-average vesting period of approximately 2.58 years. During the three months ended April 30, 2021 and 2020, the Company capitalized $0.7 million and $0.2 million, respectively, of stock-based compensation related to software development of additional functionality to the Yext platform.

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9. Equity

The following table summarizes the changes in stockholders' equity during the three months ended April 30, 2021:

						Accumulated
				Additional		Other						Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Treasury		Stockholders’
(in thousands)	Shares	Amount		Capital		Income		Deficit		Stock		Equity
Balance, January 31, 2021	123,989	$	130	$	733,933	$	2,422	$	(517,345)	$	(11,905)	$	207,235
Exercise of stock options	1,069	1		12,110		—		—		—		12,111
Vested restricted stock units converted to common shares	871	1		(1)		—		—		—		—
Issuance of restricted stock	4	—		—		—		—		—		—
Issuance of common stock under employee stock purchase plan	282	—		3,817		—		—		—		3,817
Stock-based compensation	—	—		15,288		—		—		—		15,288
Other comprehensive income	—	—		—		355		—		—		355
Net loss	—	—		—		—		(17,631)		—		(17,631)
Balance, April 30, 2021	126,215	$	132	$	765,147	$	2,777	$	(534,976)	$	(11,905)	$	221,175

The following table summarizes the changes in stockholders' equity during the three months ended April 30, 2020:

						Accumulated
				Additional		Other						Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Treasury		Stockholders’
(in thousands)	Shares	Amount		Capital		Loss		Deficit		Stock		Equity
Balance, January 31, 2020	115,830	$	122	$	636,008	$	(360)	$	(422,653)	$	(11,905)	$	201,212
Exercise of stock options	391	1		1,895		—		—		—		1,896
Vested restricted stock units converted to common shares	903	1		(1)		—		—		—		—
Issuance of restricted stock	26	—		—		—		—		—		—
Issuance of common stock under employee stock purchase plan	374	—		3,743		—		—		—		3,743
Stock-based compensation	—	—		17,617		—		—		—		17,617
Other comprehensive loss	—	—		—		(1,333)		—		—		(1,333)
Net loss	—	—		—		—		(29,224)		—		(29,224)
Balance, April 30, 2020	117,524	$	124	$	659,262	$	(1,693)	$	(451,877)	$	(11,905)	$	193,911

Preferred Stock

Effective April 2017, the Company’s Board of Directors is authorized to issue up to 50,000,000 shares of preferred stock, $0.001 par value, in one or more series without stockholder approval. The Company's Board of Directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. The issuance of preferred stock could have the effect of restricting dividends on the Company’s common stock, diluting the voting power of its common stock, impairing the liquidation rights of its common stock, or delaying or preventing changes in control or management of the Company. As of April 30, 2021 and January 31, 2021, no shares of preferred stock were issued or outstanding.

Common Stock

        As of April 30, 2021 and January 31, 2021, the Company had authorized 500,000,000 shares of voting $0.001 par value common stock. Each holder of the Company's common stock is entitled to one vote for each share on all matters to be voted upon by the stockholders and there are no cumulative rights. Subject to any preferential rights of any outstanding preferred stock, holders of the Company's common stock are entitled to receive ratably the dividends, if any, as may be declared from time to time by the Company's Board of Directors out of legally available funds. If there is a liquidation, dissolution or winding up of the Company, holders of the Company's common stock would be entitled to share in the Company's assets remaining after the payment of liabilities and any preferential rights of any outstanding preferred stock.

        Holders of the Company's common stock have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of the Company's common stock will be fully paid and non-assessable. The rights, preferences and privileges of the holders of the Company's common stock are subject to,

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and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which the Company may designate and issue in the future.

Treasury Stock

 As of April 30, 2021 and January 31, 2021, the Company had 6,505,334 shares of treasury stock which are carried at its cost basis of $11.9 million on the Company's condensed consolidated balance sheets.

10. Debt

On March 11, 2020, the Company entered into a new credit agreement with Silicon Valley Bank (the “Credit Agreement”). No significant debt issuance costs were incurred in association with the Credit Agreement. In January 2021, the Company amended the Credit Agreement which modified the conditions pursuant to which subsidiaries are required to become guarantors.

The Credit Agreement provides for a senior secured revolving loan facility of up to $50.0 million that matures three years after the effective date, with the right subject to certain conditions to add an incremental revolving loan facility of up to $50.0 million in the aggregate. The three year revolving loan facility provides for borrowings up to the amount of the facility with sub-limits of up to (i) $30.0 million to be available for the issuance of letters of credit and (ii) $10.0 million to be available for swingline loans.

Under the Credit Agreement, loans bear interest, at the Company's option, at an annual rate based on LIBOR or a base rate. Loans based on LIBOR shall bear interest at a rate between LIBOR plus 2.50% and LIBOR plus 3.00%, depending on the Company's average daily usage of the revolving loan facility. 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 the Company's average daily usage of the revolving loan facility.

The obligations under the Credit Agreement are secured by a lien on substantially all of the tangible and intangible property of the Company and by a pledge of all of the equity interests of the Company's material direct and indirect domestic subsidiaries and 66% of each class of capital stock of any material first-tier foreign subsidiaries, subject to limited exceptions.

The Credit Agreement contains customary affirmative and negative covenants and restrictions, as well as financial covenants that require the Company to maintain the year-over-year growth rate of its ordinary course 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.

        As of April 30, 2021, the Company was in compliance with all debt covenants. As of such date, the $50.0 million revolving loan facility had $35.7 million available and $14.3 million in letters of credit allocated as security in connection with office space.

11. Income Taxes

The Company calculates its year-to-date (provision for) benefit from income taxes by applying the estimated annual effective tax rate ("AETR") to year-to-date income or loss from operations before income taxes and adjusts for discrete tax items recorded in the period. During the three months ended April 30, 2021 and 2020, the Company recorded a (provision for) benefit from income taxes of $(0.2) million and $(0.3) million, respectively.

The Company's effective tax rate generally differs from the U.S. federal statutory tax rate primarily due to a full valuation allowance related to the Company's net deferred tax assets in the U.S. and in certain foreign jurisdictions, partially offset by the foreign tax rate differential on non-U.S. income. The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance on a jurisdictional basis if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax-planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. To the extent sufficient positive evidence becomes available, a portion of the valuation allowance against certain net deferred tax assets could be released in the future and would result in a non-cash income tax benefit in the period of release.

12. Leases

The Company's operating lease arrangements are principally for office space. As of April 30, 2021, the Company had $14.3 million of operating lease liabilities, current, $120.6 million of operating lease liabilities, non-current, $102.5 million of operating lease right-of-use assets, and no financing leases, on its condensed consolidated balance sheet. The operating lease arrangements included in the measurement of lease liabilities do not include short-term leases, and had a weighted-average remaining lease term of 9.3 years and a weighted-average discount rate of 5.7%, as of April 30, 2021. During the three months ended April 30, 2021, the Company paid $4.8 million for amounts included in the measurement of lease liabilities and did not enter into any new lease arrangements.

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During the three months ended April 30, 2021 and 2020, the Company recognized $6.6 million and $6.8 million, of lease expense, respectively, which consisted of the following:

	Three months ended April 30,
(in thousands)	2021		2020
Operating lease expense	$	4,259	$	5,612
Short-term lease expense	188		524
Variable lease expense	2,165		683
Total lease expense	$	6,612	$	6,819

Operating lease expense is recognized on a straight-line basis over the term of the arrangement beginning on the lease commencement date for lease arrangements that have an initial term greater than twelve months and therefore are recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term for lease arrangements that have an initial term of 12 months or less and therefore are not recorded on the balance sheet. Variable lease expense is recognized as incurred and consists of real estate taxes and utilities, among other office space related expenses. For the three months ended April 30, 2021, variable lease expense reflected the increased costs of the Company's use of its new office spaces, as well as certain associated real estate taxes.

13. Commitments and Contingencies

Contractual Obligations

The Company is obligated to make payments under certain non-cancelable contractual obligations in the normal course of business. The Company's contractual obligations primarily relate to its operating lease arrangements for office space. Its other contractual obligations include contracts with its Knowledge Network application providers, which generally have a term of one year, although some have a term of several years, and its software vendors, among others. These obligations represent minimum contractual payments, or the Company's best estimate for variable elements based on historical payments. The Company's contractual obligations have various expiry dates between fiscal years 2022 and 2035.

        As of April 30, 2021, the Company's contractual obligations are as follows (in thousands):

Fiscal year ending January 31:	Operating Leases		Other
2022 (remainder of fiscal year)	$	14,504	$	20,570
2023	19,150		11,626
2024	18,875		5,551
2025	18,319		1,942
2026	19,008		1,829
2027 and thereafter	92,806		1,972
Total	$	182,662	$	43,490

Performance and Payment Bond

The Company's operating lease arrangement associated with its new corporate headquarters in New York, NY required performance and payment bonds to secure the completion of certain construction work. As of April 30, 2021, the Company was not required to pay any amounts associated with non-performance or non-payment related to the bonds.

Legal Proceedings

       The Company is and may be involved in various legal proceedings arising in the normal course of business. Although the results of litigation and claims cannot be predicted with certainty, currently, in the opinion of the Company, the likelihood of any material adverse impact on the Company's results of operations, cash flows or the Company's financial position for any such litigation or claims is deemed to be remote. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense costs, diversion of management resources and other factors.

Warranties and Indemnifications

The Yext platform is in some cases warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company's product specifications.

The Company's arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party's intellectual property rights and/or if the Company breaches its contractual agreements with a customer or in instances of negligence, fraud or willful misconduct by the Company. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the accompanying condensed consolidated financial statements.

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The Company has also agreed to indemnify certain of its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person's service as a director or officer, including any action by the Company, arising out of that person's services as the Company's director or officer or that person's services provided to any other company or enterprise at the Company's request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

14. Net Loss Per Share Attributable to Common Stockholders

The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders:

	Three months ended April 30,
(in thousands, except share and per share data)	2021		2020
Numerator:
Net loss attributable to common stockholders	$	(17,631)	$	(29,224)
Denominator:
Weighted-average common shares outstanding	125,372,839		116,606,835
Net loss per share attributable to common stockholders, basic and diluted	$	(0.14)	$	(0.25)

        Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Unvested restricted stock and restricted stock units are excluded from the denominator of basic net loss per share. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares plus common equivalent shares for the period, including any dilutive effect from such shares.

        Since the Company was in a net loss position for all periods presented, net loss per share attributable to common stockholders was the same on a basic and diluted basis, as the inclusion of all potential common equivalent shares outstanding would have been anti-dilutive. Anti-dilutive common equivalent shares were as follows:

	As of April 30,
	2021	2020
Options to purchase common stock	7,802,579	11,897,734
Restricted stock and restricted stock units	8,378,889	9,329,277
Shares estimated to be purchased under ESPP	213,434	330,046
Total anti-dilutive common equivalent shares	16,394,902	21,557,057

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021, filed with the SEC on March 16, 2021. As discussed in the section titled "Special Note Regarding Forward Looking Statements," the following discussion and analysis contains forward looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward looking statements. 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 II, Item 1A in this Quarterly Report on Form 10-Q.

Overview

Yext organizes a business's facts so it can provide official answers to consumer questions starting with the business's own website and then extending across search engines and voice assistants. Our platform lets businesses structure the facts about their brands in a database called the Knowledge Graph. 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 approximately 200 service and application providers, which we refer to as our Knowledge Network and includes Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri and Yelp. Our platform powers all of our key features, including Listings, Pages, and Answers, 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. In transactions with resellers, we are only party to the transaction with the reseller and are not a party to the reseller's transaction with its customer.

Revenue is a function of the number of customers, the number of licenses with each customer, the package to which each customer subscribes, the price of the package and renewal rates. 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 31st. References to fiscal 2022, for example, are to the fiscal year ending January 31, 2022.

COVID-19 Update

The COVID-19 pandemic has disrupted business operations for us and our customers, as well as suppliers, and other parties with whom we do business. Such disruptions are expected to continue for an indefinite period of time.

We have adopted several measures in response to the COVID-19 pandemic and continue to monitor regional developments to inform our operational decisions. We have begun voluntary phased re-openings in our offices in accordance with guidance provided by government agencies, although currently the majority of our employees are still working remotely. Non-essential business travel remains restricted and in-person marketing events have been canceled or replaced with virtual events. The uncertain duration of these measures have had and may continue to have negative effects on our sales efforts and revenue growth rates. 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, such as our #Back2Biz campaign which for a period of time offers certain businesses promotional pricing to our platform as businesses begin to re-open.

We may continue to see some existing and potential customers, in particular customers in industries that have been highly impacted by the pandemic such as retail and food services, as well as certain geographies such as Europe, 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. The ultimate extent of the impact of the pandemic will depend on future developments, which continue to be highly uncertain and cannot be predicted, including the severity and duration of the COVID-19 pandemic and the actions taken to contain and address its impact, among others. However, because we generally recognize revenue from our customer contracts ratably over the term of the contract, changes in our contracting activity in the near term may not be fully reflected in our results of operations and overall financial performance until future periods. See Part II Item 1A “Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on our business.

Components of Results of Operations

Revenue

We derive our revenue primarily from subscription and associated support to our Yext platform. 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. Revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract, which is

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the date our platform is made available to customers. At the beginning of each subscription term we invoice our customers, typically in annual installments, but also monthly, quarterly, and semi-annually. Amounts that have been invoiced for non-cancelable contracts are recorded in accounts receivable and unearned revenue. Unearned revenue is subsequently recognized as revenue when transfer of control to a customer has occurred.

Cost of Revenue

Cost of revenue consists primarily of employee-related costs, including personnel-related costs, which mainly consist of salaries and wages, and stock-based compensation expense. Cost of revenue also includes fees associated with our Knowledge Network application provider arrangements, the nature of which may be unpaid, fixed, or variable, and are unpaid with many of our larger providers, as well as the costs associated with our data centers. In addition, cost of revenue includes depreciation expense, including with respect to certain capitalized software development costs incurred in connection with additional functionality to our platform. Cost of revenue also includes operating and short-term lease expenses associated with our office spaces, which are allocated based on employee headcount. In addition, cost of revenue includes software expense, which relates to licenses, professional services, and other costs associated with software for use in the operations of our business, which is also allocated based on employee headcount.

Operating Expenses

Sales and marketing expenses. Sales and marketing expenses consist primarily of employee-related costs which are comprised of personnel-related costs and stock-based compensation expense. Personnel-related costs mainly consist of salaries and wages and costs of obtaining revenue contracts. Sales and marketing expenses also include operating and short-term lease expenses associated with our office spaces, as well as software expense, each of which are allocated based on employee headcount. In addition, sales and marketing expenses include costs related to advertising and conferences and brand awareness events.

Research and development expenses. Research and development expenses consist primarily of employee-related costs which are comprised of personnel-related costs and stock-based compensation expense. Personnel-related costs mainly consist of salaries and wages. Capitalized software development costs related to additional functionality to our platform are excluded from research and development expenses as they are capitalized as a component of property and equipment, net and depreciated to cost of revenue over the term of their useful life. Research and development expenses also include operating and short-term lease expenses associated with our office spaces, as well as software expense, each of which are allocated based on employee headcount.

General and administrative expenses. General and administrative expenses consist primarily of employee-related costs which are comprised of personnel-related costs and stock-based compensation expense for our finance and accounting, human resources, information technology and legal support departments. Personnel-related costs mainly consist of salaries and wages. General and administrative expenses also include operating and short-term 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.

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Results of Operations

The following table sets forth selected condensed consolidated statement of operations data for each of the periods indicated:

	Three months ended April 30,
(in thousands)	2021		2020
Revenue	$	91,992	$	85,351
Cost of revenue(1)	21,854		21,184
Gross profit	70,138		64,167
Operating expenses:
Sales and marketing(1)	55,166		58,520
Research and development(1)	13,857		14,378
General and administrative(1)	18,347		20,458
Total operating expenses	87,370		93,356
Loss from operations	(17,232)		(29,189)
Interest income	6		468
Interest expense	(132)		(137)
Other expense, net	(86)		(84)
Loss from operations before income taxes	(17,444)		(28,942)
(Provision for) benefit from income taxes	(187)		(282)
Net loss	$	(17,631)	$	(29,224)

(1)Amounts include stock-based compensation expense as follows:

	Three months ended April 30,
(in thousands)	2021		2020
Cost of revenue	$	1,445	$	1,233
Sales and marketing	5,501		7,781
Research and development	3,988		3,943
General and administrative	3,664		4,415
Total stock-based compensation expense	$	14,598	$	17,372

The following table sets forth selected condensed consolidated statements of operations data for each of the periods indicated as a percentage of total revenue: 

	Three months ended April 30,
	2021		2020
Revenue	100	%	100	%
Cost of revenue	24		25
Gross profit	76		75
Operating expenses:
Sales and marketing	60		68
Research and development	15		17
General and administrative	20		24
Total operating expenses	95		109
Loss from operations	(19)		(34)
Interest income	—		—
Interest expense	—		—
Other expense, net	—		—
Loss from operations before income taxes	(19)		(34)
(Provision for) benefit from income taxes	—		—
Net loss	(19)	%	(34)	%

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Three Months Ended April 30, 2021 Compared to Three Months Ended April 30, 2020

Revenue and Cost of Revenue

	Three months ended April 30,						Variance
(in thousands)	2021			2020			Dollars		Percent
Revenue	$	91,992		$	85,351		$	6,641	8	%
Cost of revenue	21,854			21,184			$	670	3	%
Gross profit	$	70,138		$	64,167		$	5,971	9	%
Gross margin	76.2		%	75.2		%

Total revenue was $92.0 million for the three months ended April 30, 2021, compared to $85.4 million for the three months ended April 30, 2020, an increase of $6.6 million or 8%, primarily driven by new customer subscriptions to our platform. For the three months ended April 30, 2021 and 2020, revenue recognized from subscriptions and associated support to our platform was 92% and 93%, while revenue recognized from professional services was 8% and 7%, respectively.

Cost of revenue was $21.9 million for the three months ended April 30, 2021, compared to $21.2 million for the three months ended April 30, 2020, an increase of $0.7 million or 3%. The increase was primarily driven by a $0.7 million increase in personnel-related costs, a $0.6 million increase in costs associated with our data centers, as well as a $0.3 million increase in software expense, a $0.2 million increase in stock-based compensation expense and a $0.2 million increase in depreciation expense. This was largely offset by lower Knowledge Network application provider fees which decreased $1.4 million.

Gross margin was 76.2% for the three months ended April 30, 2021, compared to 75.2% for the three months ended April 30, 2020 as reflected in the discussion above.

Operating Expenses

	Three months ended April 30,				Variance
(in thousands)	2021		2020		Dollars		Percent
Sales and marketing	$	55,166	$	58,520	$	(3,354)	(6)	%
Research and development	$	13,857	$	14,378	$	(521)	(4)	%
General and administrative	$	18,347	$	20,458	$	(2,111)	(10)	%

Sales and marketing expense was $55.2 million for the three months ended April 30, 2021, compared to $58.5 million for the three months ended April 30, 2020, a decrease of $3.4 million or 6%. The decrease was primarily driven by a $2.3 million decrease in stock-based compensation expense, and a $2.2 million decrease in conferences and events and employee travel, reflecting impacts of the COVID-19 pandemic. These decreases were partially offset by a $1.0 million increase in advertising costs associated with certain brand media campaigns, and a $0.9 million increase in depreciation expense, related to certain property and equipment placed into service in our new office buildings, primarily our new corporate headquarters in New York, NY.

Research and development expense was $13.9 million for the three months ended April 30, 2021, relatively consistent compared to $14.4 million for the three months ended April 30, 2020, as decreases including personnel-related costs of $0.9 million were partially offset by increases including depreciation expense and software expense, among others.

General and administrative expense was $18.3 million for the three months ended April 30, 2021, compared to $20.5 million for the three months ended April 30, 2020, a decrease of $2.1 million or 10%. The decrease was primarily driven by a $0.8 million decrease in stock-based compensation expense, a $0.6 million decrease in bad debt expense reflecting the increases to the allowance for doubtful accounts from the initial impacts of the COVID-19 pandemic which were recorded during the three months ended April 30, 2020, and a $0.4 million decrease in personnel-related costs.

Net Loss

Net loss was $17.6 million and $29.2 million for the three months ended April 30, 2021 and 2020, respectively.

Non-GAAP Net Loss

In addition to our financial results determined in accordance with GAAP, we believe that non-GAAP net loss is useful in evaluating our operating performance and our business.

Non-GAAP net loss is a financial measure that is not calculated in accordance with GAAP. 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 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.

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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. Our definition 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. Thus, our non-GAAP net loss should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.

Non-GAAP net loss may be limited in its usefulness because it does not present the full economic effect of our use of stock-based compensation expense. We compensate for these limitations by providing a reconciliation of non-GAAP net loss to the most closely related GAAP financial measure. 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 in conjunction with GAAP net loss.

The following table provides a reconciliation of GAAP net loss to non-GAAP net loss:

	Three months ended April 30,
(in thousands)	2021		2020
Net loss	$	(17,631)	$	(29,224)
Plus: Stock-based compensation expense	14,598		17,372
Non-GAAP net loss	$	(3,033)	$	(11,852)

Liquidity and Capital Resources

As of April 30, 2021, our principal sources of liquidity were cash and cash equivalents of $272.1 million. We believe our existing cash and cash equivalents will be sufficient to meet our projected operating requirements for at least the next 12 months. Our cash flows, including net cash used in or provided by operating activities, may vary significantly from quarter to quarter, due to the timing of billings, cash collections, lease payments and capital expenditures, significant marketing events and related expenses, and the potential effects of the COVID-19 pandemic, among other factors.

Our future capital requirements will depend on many factors, including those set forth under "Risk Factors." We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights. In addition, we may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition would be adversely affected.

Credit Arrangements

On March 11, 2020, we entered into a new credit agreement with Silicon Valley Bank (the “Credit Agreement”). No significant debt issuance costs were incurred in association with the Credit Agreement. In January 2021, we amended the Credit Agreement which modified the conditions pursuant to which subsidiaries are required to become guarantors.

The Credit Agreement provides for a senior secured revolving loan facility of up to $50.0 million that matures three years after the effective date, with the right subject to certain conditions to add an incremental revolving loan facility of up to $50.0 million in the aggregate. The three-year revolving loan facility provides for borrowings up to the amount of the facility with sub-limits of up to (i) $30.0 million to be available for the issuance of letters of credit and (ii) $10.0 million to be available for swingline loans.

Under the Credit Agreement, loans bear interest, at our option, at an annual rate based on LIBOR or a base rate. Loans based on LIBOR shall bear interest at a rate between LIBOR plus 2.50% and LIBOR plus 3.00%, depending on our average daily usage of the revolving loan facility. 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 II Item 1A “Risk Factors - Our credit facility contains restrictive covenants that may limit our operating flexibility" for discussion of LIBOR being phased out.

The obligations under the Credit Agreement are secured by a lien on substantially all of our tangible and intangible property and by a pledge of all of our equity interests of material direct and indirect domestic subsidiaries and 66% of each class of capital stock of any material first-tier foreign subsidiaries, subject to limited exceptions.

The Credit Agreement 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 ordinary course 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.

        As of April 30, 2021, we were in compliance with all debt covenants. As of such date, the $50.0 million revolving loan facility had $35.7 million available and $14.3 million in letters of credit allocated as security in connection with office space.

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Cash Flows

The following table summarizes our cash flows:

	Three months ended April 30,
(in thousands)	2021		2020
Net cash provided by (used in) operating activities	$	35,063	$	(657)
Net cash (used in) investing activities	$	(7,457)	$	(21,275)
Net cash provided by financing activities	$	13,607	$	2,968

Operating Activities

Net cash provided by operating activities of $35.1 million for the three months ended April 30, 2021 was primarily due to positive adjustments in reconciling our net loss of $17.6 million to net cash provided by operating activities, including changes in accounts receivable of $41.9 million, mainly due to timing of billing and cash collections during the period, stock-based compensation expense of $14.6 million, depreciation and amortization expense of $3.7 million, and amortization of operating lease right-of-use assets of $2.3 million. These increases were partially offset by changes in costs to obtain revenue contracts of $5.5 million and unearned revenue of $5.2 million.

Net cash used in operating activities of $0.7 million for the three months ended April 30, 2020 was primarily due to the net loss of $29.2 million, as well as changes in unearned revenue of $24.2 million, prepaid expenses and other assets of $5.1 million and accounts payable, accrued expenses and other current liabilities of $4.7 million. This was partially offset by positive reconciling adjustments related to changes in accounts receivable of $32.4 million, mainly due to timing of billing and cash collections during the period, as well as changes in costs to obtain revenue contracts of $3.5 million and operating lease liabilities of $2.7 million. In addition, net cash used in operating activities was also partially offset by non-cash charges related to stock-based compensation expense of $17.4 million, amortization of operating lease right-of-use assets of $3.5 million and depreciation and amortization of $2.0 million.

Investing Activities

Net cash used in investing activities of $7.5 million and $21.3 million for the three months ended April 30, 2021 and 2020, respectively, reflected capital expenditures associated with our new office spaces, primarily our new corporate headquarters in New York, NY, among others.

Financing Activities

Net cash provided by financing activities of $13.6 million for the three months ended April 30, 2021 was primarily related to proceeds from exercise of stock options of $12.2 million and net proceeds from employee stock purchase plan withholdings of $1.5 million.

Net cash provided by financing activities of $3.0 million for the three months ended April 30, 2020 was primarily related to proceeds from exercise of stock options of $1.9 million and net proceeds from employee stock purchase plan withholdings of $1.5 million.

Contractual Obligations

We are obligated to make payments under certain non-cancelable contractual obligations in the normal course of business. Our contractual obligations primarily relate to our operating lease arrangements for office space. Our other contractual obligations include contracts with our Knowledge Network application providers, which generally have a term of one year, although some have a term of several years, as well as contracts with our software vendors, among others. These obligations represent minimum contractual payments, or our best estimate for variable elements based on historical payments. Our contractual obligations have various expiry dates between fiscal years 2022 and 2035.

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        As of April 30, 2021, future minimum payments under these contractual obligations are as follows (in thousands):

Fiscal year ending January 31:	Operating Leases		Other
2022 (remainder of fiscal year)	$	14,504	$	20,570
2023	19,150		11,626
2024	18,875		5,551
2025	18,319		1,942
2026	19,008		1,829
2027 and thereafter	92,806		1,972
Total	$	182,662	$	43,490

See Note 13 "Commitments and Contingencies" to our condensed consolidated financial statements for further discussion on contractual obligations.

Off-Balance Sheet Arrangements

We do not engage in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, as part of our ongoing business. Accordingly, our operating results, financial condition and cash flows are not subject to off-balance sheet risks.

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 accounting principles generally accepted in the United States of America ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our Annual Report on Form 10-K.

Recent Accounting Pronouncements

See Note 2 "Summary of Significant Accounting Policies- Recent Accounting Pronouncements," to the condensed consolidated financial statements for our discussion about adopted and pending recent accounting pronouncements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may affect our financial position due to adverse changes in financial market prices and rates. We are exposed to market risks related to foreign currency exchange rates, inflation and interest rates.

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. We record translation gains and losses in accumulated other comprehensive (loss) income as a component of stockholders' equity. We reflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to functional currency as a component of foreign currency exchange losses in other expense, net. 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 April 30, 2021 to have a material effect on our financial position or results of operations. These exposures may change over time as business practices evolve and economic conditions change, including market impacts associated with COVID-19.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations, other than its impact on the general economy. Nonetheless, if our costs were to become subject to inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Interest Rate Risk

As of April 30, 2021, we had cash and cash equivalents of $272.1 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. While we believe our cash equivalents do not contain excessive risk, we cannot assure you that in the future our investments will not be subject to adverse changes in market value. In addition, we maintain significant amounts of cash and cash equivalents at one or more financial institutions that are in excess of federally insured limits and are exposed to counterparty risk. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our financial statements.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of April 30, 2021 due to the material weakness related to the processes to calculate, record and account for sales commissions as described in the Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended April 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We are continuing to take steps to remediate the material weakness in our internal control over financial reporting as identified in the Annual Report on Form 10-K.

Limitations on the Effectiveness of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

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PART II. OTHER INFORMATION

Item 1.    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.

Item 1A. Risk Factors

You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes, before making a decision to invest in our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect our business. If any of the following risks occur, our business, financial condition, operating results and prospects could be materially harmed. In that event, the price of our common stock could decline, and you could lose part or all of your investment.

Risk Factor Summary

This risk factor summary contains a high-level summary of risks associated with our business, but does not address all of the risks that we face. Additional discussion of the risks summarized below, and other risks that we face, may be found immediately following this summary.

Risks Related to Our Business and Industry

•We have a history of losses and may not achieve profitability in the future.

•The effects of the COVID-19 pandemic have had and are expected to continue to have an adverse effect on our business, operations and financial results as well as the business and operations of our customers and potential customers.

•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 revenue growth rate in recent periods may not be indicative of our future performance.

•We have a limited operating history and our business has evolved, which makes it difficult to predict our future operating results.

•We have experienced rapid growth and significant changes to our organization and structure and may not be able to effectively manage such growth.

•Failure to adequately expand and scale our sales force will impede our growth.

•We have expanded and intend to continue to expand 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 Knowledge Network application providers.

•We do not have a long history with our pricing models and changes 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. If we are unable to compete effectively, our operating results could be adversely affected.

•Business and professional service providers may not widely adopt our platform to manage their information or as an important part of their marketing strategy, which would limit our ability to grow our business.

•If customers do not renew their subscriptions for our platform or if they reduce their subscriptions at the time of renewal, our revenue will decline and our business will suffer.

•If we are unable to attract new customers, our revenue growth could be slower than we expect and our business may be harmed.

•If we fail to integrate our platform with a variety of third-party technologies, our platform may become less marketable and less competitive or obsolete and our operating results would be harmed.

•If we are unable to successfully develop and market new features, make enhancements to our existing features, or expand our offerings into new markets, our business, results of operations and competitive position may suffer.

•If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our platform may become less competitive.

•If customers do not expand their use of our platform beyond their current subscriptions and licenses, our ability to grow our business and operating results may be adversely affected.

•Because our platform is sold to enterprises that often have complex operating environments, we may encounter long and unpredictable sales cycles, which could adversely affect our operating results in any given period.

•A portion of our revenue is dependent on a few customers.

•A significant portion of our revenue is dependent on third-party reseller customers, the efforts of which we do not control.

•Adverse economic conditions or reduced technology spending may adversely impact our business.

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•We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

Risks Related to Information Technology, Intellectual Property, and Data Security

•A security breach, network attack or information 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. 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.

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. Compliance with such laws could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.

Risks Related to Ownership of Our Common Stock and Our Status as a Public Company

•Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

•The market price of our common stock has been and may continue to be volatile and may decline. Market volatility may affect the value of an investment in our common stock and could subject us to litigation.

Risks Related to Our Business and Industry

We have a history of losses and may not achieve profitability in the future.

We generated a net loss of $94.7 million $121.5 million, and $74.8 million for the fiscal years ended January 31, 2021, 2020 and 2019, respectively. As of January 31, 2021, we had an accumulated deficit of $517.3 million, reflecting our losses recognized historically on a GAAP basis. We will need to generate and sustain increased revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability. As a result, we may continue to experience operating losses for the indefinite future. Further, we expect our operating expenses to increase over the next several years as we hire additional personnel, incur additional expenses associated with our new and expanded facilities, expand our distribution channels, develop our technology and new features and face increased compliance costs associated with our growth and entry into new markets and geographies and operations as a public company. 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.

The effects of the COVID-19 pandemic have had and are expected to continue to have an adverse effect on our business, operations and financial results as well as the business and operations of our customers and potential customers.

The COVID-19 pandemic has disrupted business operations for us and our customers as well as suppliers, and other parties with whom we do business. Such disruptions are expected to continue for an indefinite period of time. We have adopted several measures in response to the COVID-19 pandemic and continue to monitor regional developments to inform our operational decisions. We have begun voluntary phased re-openings in our offices in accordance with guidance provided by government agencies, although currently the majority of our employees are still working remotely. Non-essential business travel remains restricted and in-person marketing events have been canceled or replaced with virtual events. While we continue to monitor regional developments relating to the COVID-19 pandemic to inform operational decisions, these efforts may not be successful and may require additional costs. The uncertain duration of these measures have had and may continue to have negative effects on our sales efforts and revenue growth rates. In addition, our management team has, and will likely continue, to spend time, attention and resources monitoring the COVID-19 pandemic and seeking to manage its effects on our business and workforce.

The COVID-19 pandemic has had and we believe will continue to have a negative impact on our sales activities including our ability to attract, retain and sell additional products and features to our customers. In response to the COVID-19 pandemic some existing and potential customers, in particular customers in industries that have been highly impacted by the pandemic, such as retail and food services as well as certain geographies such as Europe, have and we expect other customers may reduce, suspend or delay

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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. If additional customers or potential customers take similar actions, our operating results and financial condition may be materially adversely impacted. Because our platform is offered as a subscription-based service and we generally recognize revenue from our customer contracts ratably over the term of the contract, changes in our contracting activity in the near term may not be fully reflected in our results of operations and overall financial performance until future periods.

The COVID-19 pandemic and measures taken to control its spread may adversely affect other aspects of our business as described in this “Risk Factors” section. As a result of the scale of the pandemic and measures taken to control its spread, our financial and operating results have been adversely affected and may differ materially from our historical results, and such adverse results may continue or worsen.

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 generally recognize revenue from customers ratably over the terms of their agreements, which are typically one year in length but may be up to three years or longer in length. As a result, most of the revenue we report in each quarter is the result of subscription agreements entered into during previous quarters. 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. Accordingly, the effect of significant downturns in sales and market acceptance of our products or a decline in our retention rate, including as a result of the ongoing COVID-19 pandemic, may not be fully apparent or reflected in our results of operations until future periods. Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription term.

Our revenue growth rate in recent periods may not be indicative of our future performance.

We experienced revenue growth rates of 34% from the fiscal year ended January 31, 2018 to the fiscal year ended January 31, 2019, 31% from the fiscal year ended January 31, 2019 to the fiscal year ended January 31, 2020, and 19% from the fiscal year ended January 31, 2020 to the fiscal year ended January 31, 2021. Our historical revenue growth rates are not indicative of future growth, and we may not achieve similar revenue growth rates in future periods. You should not rely on our revenue for any prior quarterly or annual periods as an indication of our future revenue or revenue growth. 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. If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it could be difficult to achieve or maintain profitability.

We have a limited operating history and our business has evolved, which makes it difficult to predict our future operating results.

We were incorporated in 2006 and originally operated as an advertising services company. Our business has evolved several times since then. For example, we sold our advertising business to IAC/InterActiveCorp in 2012 and over the following years have become a platform that puts businesses in control of their facts online with their official answers in search. Many of the most popular features of our platform have only been launched in the past few years.

As a result of our limited operating history and recent changes to our platform and our sales model, our ability to forecast our future operating results is limited and subject to a number of uncertainties, including our ability to plan for and model our future growth. The dynamic nature of our business and our industry may make it difficult to evaluate our current business and future prospects, and as a result our historical performance should not be considered indicative of our future performance. We have encountered and will encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described herein. In addition, the duration and extent of the impact of the COVID-19 pandemic on our business and industry are uncertain and introduce additional uncertainty to our forecasts of future operating results. If our assumptions regarding these risks and uncertainties are incorrect or change due to changes in our industry, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

We have experienced rapid growth and significant changes to our organization and structure and may not be able to effectively manage such growth.

Our headcount and operations have grown substantially in recent years. We increased the number of our full-time employees from over 450 as of January 31, 2016 to over 1,300 as of January 31, 2021 and have hired several members of our senior management team in recent years.

We believe that our corporate culture has been a critical component of our success. We have invested substantial time and resources in building our team and nurturing our culture. As we expand our business and operate as a public company, we may find it difficult to maintain our corporate culture while managing our personnel growth. Any failure to manage our anticipated growth and organizational changes in a manner that preserves the key aspects of our culture could hurt our chance for future success, including our

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ability to recruit and retain personnel and effectively focus on and pursue our corporate objectives. Furthermore, as a result of the COVID-19 pandemic, our corporate culture may be difficult to maintain as the majority of our employees are working remotely.

In addition, to manage the growth of our headcount, customer-base and operations, we will need to continue to improve our information technology infrastructure and our operational, financial and management systems and procedures. We have implemented many of these systems and procedures only recently, and they may not work as we expect or at all. Our anticipated additional headcount and capital investments will increase our costs, which will make it more difficult for us to address any future revenue shortfalls by reducing expenses in the short term. However, to the extent we cannot scale our information technology infrastructure, we will continue to rely on manual processes that are costly, inefficient and subject to error.

Finally, in order to successfully manage our rapid growth, our organizational structure has become more complex. We have added personnel and may need to continue to scale and adapt our operational, financial and management controls, as well as our reporting systems and procedures. The expansion of our systems and infrastructure may require us to commit additional financial, operational and management resources before our revenue increases and without any assurances that our revenue will increase. If we fail to successfully manage our growth, 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 expand and scale our sales force will impede our growth.

Our revenue growth is substantially reliant on our sales force. Much of our sales process is relationship-driven, which requires a significant sales force. While we plan to expand and scale our direct sales force, both domestically and internationally, we have historically had difficulty recruiting and retaining a sufficient number of sales personnel. If we are unable to adequately expand and scale our sales force, we will not be able to reach our market potential and execute our business plan.

Identifying and recruiting qualified sales personnel and training them on our products requires significant time, expense and attention. Our financial results will suffer if our efforts to expand, scale and train our direct sales force do not generate a corresponding increase in revenue. We have hired a significant number of direct sales personnel in recent years. If new direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time, including as a result of the COVID-19 pandemic 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 and intend to continue to expand our international operations, which exposes us to significant risks.

In 2014, we opened our first office outside the United States, and we intend to continue to expand our operations abroad. Our international expansion has created and will create significant challenges for our management, administrative, operational and financial infrastructure. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks in addition to those we already face in the United States. Because of our limited experience with international operations and developing and managing sales in international markets, our international expansion efforts may not be successful.

Some of the specific risks we will face in conducting business internationally that could adversely affect our business include:

•the difficulty of recruiting and managing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations;

•