Company: YEXT
Filing Date: 2025-04-28
Form Type: ARS
Source: 0001614178-25-000048
Chunk: 123

Company: Yext, Inc.
Filing Date: 2025-04-28
Form: ARS
Chunk 123
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 to reflect the amounts payable to former Hearsay equity holders following the resolution of contingencies surrounding the amounts held in escrow. The liability will be accreted to its contractual value over the estimated escrow period with changes in the liability being recorded within interest expense on the Company's consolidated statements of operations and comprehensive loss. For the fiscal year ended January 31, 2025, interest expense was immaterial, and $2.0 million was released from amounts held in escrow following the completion of the post-closing process. As of January 31, 2025, $9.7 million of the remaining escrow is estimated to be released during the fiscal year ended January 31, 2026, with the remaining amount thereafter. The preliminary purchase price also includes $39.5 million of contingent consideration related to an earnout arrangement whereby the Company may be required to pay up to $75.0 million to the former holders of Hearsay's outstanding equity interests, subject to the achievement of certain Annual Recurring Revenue ("ARR") milestones over a two-year period which will end in September 2026. The portion of the earnout arrangement included within contingent consideration excludes amounts attributable to employees of Hearsay that held unvested awards as of the Acquisition Date, for which earnout payments are subjected to future service. Accordingly, these amounts represent compensation expense in the post-Acquisition period. Payment of the earnout can be settled in cash or shares at the Company's election. The Company preliminarily estimated the fair value of the contingent consideration as of the Acquisition Date. This estimate incorporates projected ARR values inclusive of revenue synergies and growth rates, as well as other key inputs. The key inputs as of the Acquisition Date are outlined below: Volatility 15.0% Revenue beta 0.35 Expected timing of payment FY 2026 - FY 2027 Discount rate 5.90% - 6.20% See Note 6 "Fair Value of Financial Instruments" for additional details on the fair value of contingent consideration. The Company also issued approximately 2.1 million replacement equity awards with a fair value of $11.8 million, of which (i) $7.8 million was allocated to consideration transferred for pre-Acquisition services, inclusive of employer related payroll taxes, and (ii) $4.2 million was allocated to the post-Acquisition period and expensed over the remaining requisite service period associated with the awards. The value attributed to consideration transferred was based on