Yext, Inc. (NYSE:YEXT) Q3 2020 Earnings Conference Call - Final Transcript

Dec 05, 2019 • 05:00 pm ET

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Yext, Inc. (NYSE:YEXT) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator instructions] Our first question comes from Koji Ikeda with Oppenheimer. Please go ahead.

Analyst
Koji Ikeda

Oh, hey, great, guys. Thanks for taking my question. So I had a question, kind of thinking about the future growth profile of the business here, specifically next year. So, with the -- it sounds like you had a great launch of Answers but that really pushed out some of the sales cycles, resulting in that fourth quarter guide looking kind of at the mid-20s. So considering that you guys are a subscription business and you have talked about 30% sustained growth in the past, do you still feel confident that you can grow 30% next year? Thank you.

Executive
Howard Lerman

Thanks, Koji. This is Howard. I'll take that question first. Look, we launched an amazing new product in Answers in Q3. And anytime you launch a new product, it's going to be a little bit disruptive. This is the first major product that we've launched in five or six years. And it slowed the deal cycles down a little bit for upsells for new customers. Think about, for example, if you were launching -- if you broke your iPhone, and then in 30 days, Apple was releasing the iPhone 11 and you had an iPhone 10, you'd think a little bit about, am I going to buy the 10 now or am I going to wait 30 days and buy the 11? So we had some deals that slowed, and -- as a consequence of launching this product.

Second, we started the quarter off by kicking off a planned enablement roadshow in preparation. It took about 200 reps off the field for a couple weeks. We knew we'd give them a little bit less time to sell. But we didn't expect it quite to elongate the deal cycle in the quarter.

And then, the final thing I'll just say about the sales execution issue that we experienced with the launch of Answers is that, look, 45% of our reps are new this year. They all are getting comfortable with our existing products and starting to be able to sell them. But then throwing a brand new product at them with some new buyers and some new different types of dynamics involved was a little bit of a curveball, and it took a little bit longer for them to digest that. So that's kind of our view on the sales execution in Q3. But that said, we've never seen a stronger pipeline, we've never felt stronger market demand for the Yext Search Experience Cloud and we see the early feedback from all of the new initiatives we're launching.

And I want to say just one other thing, which is that, we're an innovative company. We believe every company in the world that has a knowledge graph -- I'm sorry, we believe every company in the world that has a website is going to need a knowledge graph in order to sort out all the different facts about