Yext, Inc. (YEXT) Q3 2018 Earnings Report, Transcript and Summary

Good day, everyone and welcome to the Yext Third Quarter Fiscal 2018 Earnings Conference Call. [Operator Instructions] And please note that today’s event is being recorded. I would now like to turn the conference over to James Hart, Vice President of Investor Relations.

Thank you, William, and good afternoon, everyone. Welcome to our quarterly conference call. With me today are Howard Lerman, CEO of Yext; Steve Cakebread, CFO and Jim Steele, President and Chief Revenue Officer. As a reminder, this call cannot be taped or otherwise duplicated without the Company's prior consent. Before we begin, I would like to remind everyone that this call may contain forward-looking statements, including statements about our industry outlook, market opportunities, business performance, financial outlook and other non-historical statements as further described in our press release. These forward-looking statements are subject to certain risks, uncertainties, and assumptions, including those related to Yext's growth, industry, product development, market opportunities and general economic and business conditions. These statements reflect the Company's current expectations based on its beliefs, assumptions and information currently available to it. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in our reports with the SEC, including our most recent report on Form 10-Q and our press release that was issued this afternoon. During the call, we will also refer to non-GAAP financial measures. Reconciliations with the most comparable GAAP measures are also available in the press release which you may find at investors.yext.com. With that, we will begin by turning the call over to Howard.

Thank you, James and thank you everyone for joining us this afternoon. We are very pleased with our results this quarter. Let me touch on a few of the highlights. Revenue grew 39% over the third quarter last year. We added 55 new enterprise logos, including one of the largest financial service providers in the United States, a large regional bank and one of the leading car rental companies in Europe and we continue to have great success in one of our largest verticals, healthcare, signing new deals this quarter with Boston Medical Center and Rush University’s Medical Center among many others. These brands recognize that the world is undergoing an intelligent transformation. Services powered by artificial intelligence and machine learning are fundamentally changing the way consumers are interacting with the world around them. For 20 years, the web was the centerpiece of every digital experience, fueled by blue links on a page. But today's services don't return web results. They give back direct answers in the form of maps, voice search answers, knowledge cards and conversational UIs. Gone are blue links, web pages and strings replaced by smart answers made up of things. Intelligent services have three parts. A UI for you to engage with it; AI that decides what answers to show you and these intelligent services each have their own knowledge graph that contains everything that they know about the world and how it's related, including what they know about a company. Now, companies cannot control the UI of these services and companies cannot control the AI of these services, but they can control what intelligent services know about them, which helps them to control what’s said about them and that's why just like it’s table stakes for every company to have a website today. We see an intelligent future where it’s table stakes for every company in the world to have their own knowledge graph. A company knowledge graph is a tree like structure that contains all the brands’ public facing information and how it's related. It starts with the schema and that defines all the entities the company has, like places and people, and products and menus and events. Then it's filled with the actual data, a company's knowledge graph provides the foundation for how structured information is discovered, identified and displayed by intelligent services. We believe any information that’s being published today in a company's website will need to be structured in knowledge graph to let intelligent services understand it. And Yext is addressing this fundamental need for businesses, by creating a system of record for digital knowledge in the cloud, synced across intelligent services everywhere. We recently renewed our contract with Arby’s, the second largest quick service sandwich restaurant in the United States. There are more than 1 million restaurants estimated in the US alone and we're working with well less than 10% of those today. So there's a really significant opportunity in food services and Arby's understands the transformation that's happening with intelligent services. At our ONWARD user conference, Arby’s discussed the tremendous impact they've seen since launching with the Yext in 2013, 26% increase in Google search impressions, 1.5 million profile views, 3.4 million phone calls and 11.4 million driving direction requests. That is a lot of curly fries. These stats are stunning and they prove the massive traffic driven off of intelligent services. Now as powerful as these results are, we see opportunities to go even further in the food services vertical. During the quarter, we announced the launch of Yext for Food to give restaurants even more tools like many think. Now, restaurants can easily upload or change their menu details inside Google, Yelp, Facebook, Bing, Foursquare, Allmenu, delivery.com, MenuPages and more and they can also publish deep knowledge about their business like ingredients and the prices and daily specials and photos and more across the entire digital ecosystem. And we added specialty food publishers, including Postmates, Zomato, Slice and MenuPix to our industry leading networks, allowing customers to sync this vital information to the exact places where customers are most likely to look forward. We are really excited about the Yext for Food. Now, earlier this month, we held our annual user conference called ONWARD, bringing together leaders in marketing and technology to discuss how the world is changing through the rise of intelligent services. This year's theme was the intelligent future. We set attendance records for the event with more than 600 of our customers and partners joining us in person and thousands more on the live video feed and on-demand replays as well. Through our success with Yext panels, customers heard about the results we've achieved with leading businesses around the world, like Comcast. Since launching with Yext about a year ago, Comcast has been able to increase visits, increase new product subscriptions and increase orders from their local pages well into the triple digits, in fact 15% of all organic orders come from Yext local pages. Volvo highlighted the greater control that they now have over their brand experience. Since launching with Yext about six months ago, Volvo has published more than 109,000 dealer updates across its listings and discovered and corrected more than 53,000 data errors. And Marriott, who saw a nearly 42x return on investment for US hotels by tracking the lift in listings click through rates, rooms books and revenue generating. ONWARD brought together an elite group of thought leaders, including Amazon's Chief Evangelists for Alexa, Google’s Head of Strategic Partners and the Co-Founder of Cortana and Microsoft’s Director of Artificial Intelligence, just to name a few. These speakers spoke about how AI, machine learning and voice search are transforming the way that businesses need to engage with their customers. And to help our customers stay ahead in this intelligent transformation, we announced some incredible new features to our knowledge engine, given the customer even more powerful ways to connect with the world around them. The first new product we announced was Yext for Events. Now when you search in your phone for events or events near me in Google, many users now get a calendar containing local events. This is an example of structured knowledge, supplanting blue links. Yext for Events lets businesses manage and sync the details about their events. This ensures key details like the starting time, location, the agenda, the bios of the speakers and more of this kind of deep knowledge are available in voice search and available in conversational UI. This gives the targeted audience the best opportunity to discover events that are of interest to them. Our knowledge engine already included integrations with Google, Facebook, Apple and dozens of other publishers where consumers may look and with the launch of Yext for Events, we added event specific sites that consumers frequently find -- frequently use to find things to do, like Eventbrite and Eventful through our network. We believe the market opportunity for events is substantial, mainly because there are so many different reasons companies hold one to promote their brand, to introduce something new to demonstrate, to peach, entertain, inform, interact. For example, in the financial services industry, there are wealth management seminars or in healthcare, there are wellness fairs, there's medical conferences. Nearly every business in the world today uses events to engage with their targeted audience. In the intelligent future, Yext for Events can become the single source of truth for marketing teams ensuring that all the details about the event are accurate and broadly available. Yext for Events is a great example of the growing number of opportunities where we can solve problems for our customers as they prepare for the intelligent future. The second new service we announced at ONWARD and revealed its power through a live demonstration was a revolutionary new feature that we call Knowledge Assistant. Knowledge Assistant lets businesses text us updates without ever having to log in or download an app. For example, a store manager could text us a photo of a new product and we update it across the network. Customers can text photos, change hours, even respond to reviews in real time simply via SMS or Facebook Messenger. And Knowledge Assistant is proactive and is intelligent. It reaches out when we think an update might be necessary. Like to ask, are you really open on Christmas? This breakthrough conversational UI functions as a business assistant, letting companies keep their critical information up to date through easy to use Facebook messenger or SMS. The intelligent transformation is about more than just responding to changes in consumer behavior. It's also about putting new tools into the hands of our business customers, making their lives easier and improving their performance. The third new feature we announced at ONWARD was our integration with WeChat. Developed by TenCent, WeChat is one of the most popular social media technologies in China and it's got more than 980 million monthly active users around the world. It's been called one of the world's most powerful apps, because it is used by consumers to do everything from discovery information of our brands to paying for goods and interacting with friends. Our integration with WeChat allows Western businesses with a presence in China to push their digital knowledge into the WeChat platform just as they were already able to do with Google and Facebook and Apple and others around the world. But now in China and now in WeChat, the WeChat location mini program is similar to a mobile store locator. Once synced to the Yext knowledge engine, customers can be sure their stores will appear in WeChat near me searches. In Mandarin, [Foreign Language] If our customers left ONWARD with one thought, it’s that it's time to start their own intelligent transformation. Many of the presentations our customers saw at ONWARD are now available online. We think seeing these will help you better understand the problems our customers face and how we are providing specific solutions that will help our customers prepare for the world of intelligence and thrive in the opportunities it creates. Please reach out to James for details on how you can view them. And of course, we hope to see more of you at ONWARD 2018. We could not be more excited about our progress, our new product to support our vision and the huge opportunities we have ahead. And with that, I'll turn the call over to Steve.

Hey, thank you, Howard. We had a strong quarter and are very pleased with our results. Over 44.3 million of revenue this quarter and it exceeded the high end of guidance. This increase was 39% over the 31.9 million we reported a year ago. And keep in mind, as we said before, our small business team generates a relatively consistent amount of revenue each quarter and typically contributes little or no to growth to our top line. Small business accounts for about 10% of our total revenue today compared to 14% in the year ago period. And if we were to exclude the impact to small business, our revenue growth would be 45% as compared to third quarter last year. Last quarter, we told you about the merger of two large reseller partners. That merger resulted in a stronger, healthier partner for Yext, though the renegotiated deal with the combined entity created some short-term headwinds for us. We saw the impact of these headwinds in our net retention rate this quarter and which to remind you excludes small business in this calculated on trailing 12 months. Our net revenue retention was towards the lower end of our historical range of 113 to 120. On a logo retention basis however, particularly in enterprise, it continues to be very strong and we continue to add premier logos in the US, in healthcare and in Europe. As of October 31, our customers are managing more than 27 million attributes on our platform. This is an increase of more than 66% from October last year and an acceleration in the growth of our attributes versus last quarter. Also, as of October, we had nearly 1.4 million licenses, which is 58% greater than the year ago period. And just to note about this metric, we previously used the term locations instead of licenses and this made sense in the early days, but we believe licenses is more appropriate term now. Increasingly, we're selling subscriptions to entities that aren't tied to a specific place. Licenses reflects our sale of a subscription package whether that's to an entity, a location, a person or an event. Turning to profitability, gross margins this quarter were 73.7% as compared to 70.8% in the third quarter last year and we remain comfortable that our gross margins will continue to be in the mid-70% range. Quarterly operating expenses increased from 32.7 million a year ago to 49.9 million this quarter. This was driven primarily by higher sales and marketing spend and as we've added headcount especially quota carrying sellers and invested in branding, in field marketing events. Quarterly GAAP net loss increased from 10.2 million a year ago to 17.1 million this quarter. On the basis of 90.4 million weighted average shares outstanding, our net loss per share of $0.19 this quarter compares to $0.33 net loss a year ago. Turning to non-GAAP net loss, which as you know excludes stock compensation, quarterly non-GAAP net loss increased from 7.7 million a year ago to 11.1 million in the current quarter. On the basis of our 90.4 million weighted average shares outstanding, our non-GAAP net loss per share of $0.12 this quarter was in line with our guidance and compares to the $0.25 non-GAAP net loss per share a year ago. You should review the press release we issued earlier today for a comparison of our non-GAAP results to GAAP and for a reconciliation of our share count. Turning to the balance sheet and cash flow, our cash, cash equivalents and marketable securities on the balance sheet totaled more than $113 million. Cash used in operating activities this quarter was 16.4 million and compared to the July balance sheet, primarily driven higher by accounts receivable increasing 9 million due to the timing of new bookings. This created a use in working capital for the quarter. As we look ahead, we would expect to see smaller cash burn in the fourth quarter. Deferred revenue at the end of the period was $59.6 million. This was an increase of 50% from the third quarter of last year and also a $2 million sequential increase from the July balance. Keep in mind, deferreds will always be impacted by seasonality and billing cycle mix. We continue to see an increase in our deferred balances as another directional indicator of our positive momentum. Turning now to expectations as we go forward, last quarter, we told you about the revenue headwind expected from the merger of two large reseller partners. We told you this headwind would negatively impact our full year revenue growth by approximately one percentage point and we continue to believe that's the case. The new agreement for the combined business went into effect in the late third quarter and as a result, we expect to see the majority of the impact of its headwind in our fourth quarter results. Accordingly, we are targeting fourth quarter revenue of between $47.3 million and $48.3 million. This leads to a full year revenue guidance of $169.5 million to $170.5 million, which is consistent with our prior guidance. In terms of profitability, we expect fourth quarter non-GAAP net loss per share of between $0.10 and $0.12. This assumes a weighted average share count of 91.9 million shares. For the full year, we expect non-GAAP net loss per share of between $0.48 and $0.50 and is based on an assumed non-GAAP share count of 93.2 million shares. In conclusion, we believe our addressable market stands well in excess of $10 billion and our TAM only continues to grow as we add new services like events and food. As demonstrated at our ONWARD conference, our product roadmap is very strong and the world's leading technology companies share our vision of the intelligent future. We're still in the very early stages of educating both the market and the investment community about the implications of the intelligent future. To continue this education, earlier this month, we participated in our first investor conference. We'll be able to introduce Yext in our vision to many new investors. As we head into 2018, we are planning to attend several additional conferences, including Needham's Growth Conference, Morgan Stanley's TMT and Keybanc’s Emerging Tech Summit. We'll announce the details of our participation at the appropriate time and hope to see many of you there. With that, I'll turn it back to James.

Thank you, Steve. William, we're now ready to begin the question-and-answer portion of the call. Could you please give the instructions again?

[Operator Instructions] And the first questioner today will be Alex Zukin with Piper Jaffray.

So maybe first for you guys, 55 enterprise deals, some large enterprise marquee logos, very impressive, so maybe you can comment on how that compares with the previous two quarters and maybe just go a little bit deeper on the growth of the enterprise business as you see it and what kind of growth you see actually in the fourth quarter as well? And then I've got one follow up.

So I think we were 57 last quarter, consistent with Q1 and Q2 in terms of what we added, in terms of new logos this quarter.

Yeah. In terms of the growth, we talked about the 45% ex-small business. If you keep looking at that enterprise and mid-market, as we've always described, this has been the strong point of our business and that's why we're investing in the sellers and the opportunities around the world in those market places. For our Q4 growth, it obviously is impacted when you just do full business by the partner reseller merger that we had. So we see that as a bit of an anomaly, but we're really excited about the mid market and enterprise and the investments that we're making there and the growth that we're seeing.

And then maybe as a follow up, can you talk a little bit about enterprise sales rep productivity, maybe how many kind of hiring plans, how many reps you hired over the past quarter and then with respect to the cash burn going down in the fourth quarter, is it possible to get your kind of timing expectations or updated timing expectations for breakeven free cash flow?

Hey, Alex. This is Jim Steele. I'll talk to the enterprise hiring and investment. We're not going to share the numbers, but you recall in the beginning of the year, during the roadshow, we talked about how the beginning of last year, we were about 11% of our headcount for the company was in sales, direct sellers and we finished the year, last year at 15% in our plan that we talked about in the surge in hiring for sales was to get to 20%. We are absolutely on track. We are recruiting. We've been hiring and we are attracting some great talent people with tremendous experience as software salespeople, SASP in particular, industry expertise around marketing as well as vertical skills. So the hiring is aggressive and we're on track to get to that plan that we talked about at 20%. So definitely on track. And in terms of productivity, I mean, we talked about how the typical ramp for enterprise sales is very similar to the industry at about 12 months. We're seeing about the same thing with our hiring in the enterprise, but clearly, the enterprise and midmarket were making major investments and after ONWARD, we saw just a tremendous amount of excitement from the enterprise customers, a lot of great customer stories. We’re obviously innovating. You saw lot of new announcements in terms of products and innovation. The solution set and roadmap are strong and what's most exciting is you look by industry, by geography, by product, by vertical and we’re only single digit penetration. So that's what -- that's what gets people excited and that's why we've been able to recruit very aggressively.

Jim gets all the exciting stuff. I guess to talk about cash burn.

I get exciting stuff too.

So, it is true that Q3 in terms of our cash from operations is it's all about timing. I mean, the receivables are up. Some of that's billing, some of that's collection. We also, as a company, operate on a payroll cycle of every two weeks and we had three payroll cycles in September. So that had an obvious impact. And then as you guys all know, we had ONWARD the first week of November and so we spent some money in Q4. So, sorry, Q3. So I think it's a bit of an anomaly. We expect to return back to what you've seen in the first couple of quarters at roughly a 4 million quarter cash burn, 4 million to 5 million. That's not guidance by the way guys. It's just what we expect to do is get back to that if you do the math. We're still on track to look at cash flow breakeven late next year as we described before.

And our next questioner today will be Brent Bracelin with KeyBanc Capital Markets.

Wanted to start out with a question for Jim on the enterprise side. If I would kind of back out SMB from Enterprise, it looks like we have now two consecutive quarters of accelerating growth in the enterprise side. If I look at kind of new enterprise logo adds, it's kind of 50 to 57 range. So no big material change there, so walk me through the dynamics of what's driving the acceleration and enterprise growth, is this just bigger new logo adds that you're adding? Is this kind of footprint expansion at existing enterprises, walk me through the drivers of the acceleration of growth in Enterprise.

Yeah. I think, well clearly, the new logos are big and that's a big part of it. The 55 that we talked about and then the upsell, what we're seeing is our enterprise customers are -- the retention is very high. And that helps us a lot and that means that our customers are seeing a good return. They're seeing good value and they're coming back for more. They're adding both locations and as Howard and Steve have talked about, we're kind of changing from what we used to count as just locations to now licenses. So we have an opportunity now to sell additional entities that are not location based. We talked about healthcare with doctors for example and other entities as we get into our new products that round food and event. So it's really the upsell and it's the expansion of the existing footprint, companies that begin with maybe a region or a country and then they add to that. So it's selling into our existing install base as well as expanding to new logos. That's what's driving it and plus, building our capacity of our sales organization or go to market, we're hiring people out in the geographies, a couple of years ago, all the hires were pretty much in New York. We're now hiring in the regions where our customers are and we're hiring people with the skillset and that's the result of some amazing talent that we’re attracting to the company. So -- and if you saw like, I wish I could take like a just a summary of the ONWARD, our conference, the presentations by the customers, I mean, it was just incredibly exciting. Our existing customers were thrilled because they see that this where a couple of years ago they might have been the early adopters. Now, they see that there's a lot of other companies and a lot of different industries. We talk about financial services and healthcare, two of our top ones obviously, food services and auto, retail. These are all huge growth opportunities for us. So it's by industry, it's by geography and it's by additional entities which drive additional licenses.

Shifting gears to Steve here, as we think about kind of the change in net retention rates. You talked a little bit about kind of the two partners merging, having some impact towards the lower end of the range. You also talked about a bigger impact, a full quarter impact in Q4. One of the components impacting the retention rate here, is this mostly SMB and mid-market that's being impacted by the two partners merging, is this upsells that are being disrupted, is this actually logo renewals that are being disruptive, could you provide a little more color on what's driving the change in retention rate with the two partners merging?

That's a good question. I mean, the small business retention is not getting impacted by this at all, because this is our direct small business nor is mid-market and enterprise, but when we do have reseller partners like these two guys, when some of the revenue goes away, it impacts our retention calculation. So the retentions -- the decline in the lower end of this is solely due to the merger and not any losses in anyplace else. The rest of our upsells as Jim described in our customer logos, retention remains very strong.

And then the last one for Howard, obviously, coming out of ONWARD, you’ve talked to a lot of customers, what was the one product that stood out that customers were kind of most interested in talking to you about?

Well, it depends if they were speaking to me in Mandarin or English. If they were speaking to me in English, we heard a ton of great feedback about Knowledge Assistant. The ability to have a conversational UI that you can update stuff is a very simple natural way to go, but that's kind of like asking you to pick who your favorite kid is, because we heard amazing feedback about events and that, the TAM there, there's no third party evidence for this, but it's a hugely opportunistic -- opportunity for us in that we're going to be able to synchronize. You should all do these on your phones, search for events or events near me, you'll see that structured calendar pop up in Google. Every brand is going to want to have their information about their events in that calendar, just like every brand wants to have their locations in Google Maps. And so this presents us with an incredibly new big opportunity. I personally am most excited about that opportunity, although I heard customers excited about all three of our major announcements.

Mr. Zlotsky, your line is open.

So, very quick one, just following up on the enterprise line of questioning earlier, so we're going into your big Q4 and -- which is typically a lot of enterprise activity happens and we're also coming out of your big ONWARD User Conference. What are you guys seeing just qualitatively in your pipelines heading into this big enterprise Q4 quarter?

You know what, it's a little too early in the quarter to tell you. I mean, we have a lot of deals on the table obviously and Jim is working hard at them. So, as you know, Stan, we don't talk about our pipelines at all. So it’s tough to characterize that. I will say to Howard's point, a lot of energy and enthusiasm. So, we'll just have to stay tuned for that.

Maybe just a little bit more tactically, as we just sit down with our models and look at billings, calculated Billings, how should we think about deferred revenue builds, once again with, keep in mind the potential for big enterprise activity?

Yeah. Well, some of the -- obviously Q4 will have good deferred revenue numbers. So billing cycles influence your billing calculation dramatically and I don't honestly know what the mix is going to look like. So we haven't seen much change in our mix as your calcs would reflect and deferreds are going to be driven by the business that we do in Q4.

And then maybe just one clarification question, so the build in AR that in the sense, we didn’t see the cash come in on the cash flow statement, but did that – is that also -- do we get the benefit of that in deferred revenue.

Yes. I mean that's why deferreds are up, right.

And then just very last question for me, as far as this guidance for Q4 and obviously the full year revenue guidance not moving up versus the guide that we heard earlier after Q2, is it just the merger between Dex and YP or is there another dynamic there we need to keep in mind.

No. I mean if you look at it and we’ve said that that merger had an impact of about 1% in our revenue. That's pretty large in the quarter for our SaaS business, for the year, but I mean it is moving into this quarter too. So for the year, it's predominantly that, if you do your math and take it out, our growth rates for Q4 are pretty much in line with where we've been. William, next question please.

Yes. And our next questioner will be Mark Mahaney with RBC Capital Markets. Please go ahead.

Thanks. Two questions please. The impact of the Dex YP merger, can you help us think about how long that will last for and then you talked about the integration with both the WeChat and Facebook Messenger, particularly with Facebook Messenger. To what extent do you find that Facebook itself is actively or will actively work to promote integration with Yext? And I say that having looked at Facebook that’s got some huge assets on its hand that are completely unmonetized. So to what extent are they incentivized than they should be to figure out ways to work with Yext to actually start monetizing those messaging platforms?

Gosh, I mean do you want me to go first or Steve. Mark, to your question about Facebook Messenger, we chose it because Facebook Messenger has a really neat UI that allows for kind of touch with various choices, almost like branches, instead of just straight up SMS. We do support SMS as well, but we can do easier things like, hey, proactively reach out intelligently. When we look for example, let’s say, the knowledge assets that Yext has and all the information about every business is a incredible advantage for things like machine learning. We can look across all the businesses to find potential patterns that may inform a particular thing. So we might say, hey, are you really open on Christmas. If most businesses are closed on Christmas, we might ask a business, are you really open on Christmas. And then with Facebook Messenger, we're able to say yes or no or maybe or don't -- this is not a relevant question to me with just one single tap as opposed to SMS where the user actually has to type in a reply. It basically gives you some nicer branches. Also, a lot of people use it. So, as you say, there's a big unmonetized there. We’re a B2B application for this. So imagine that this is not just a user, an end user using this, this is a store operator of say, Massage Envy using their Facebook account to be able to do this, which is what we demoed at ONWARD. That allows us to be able to do stuff. I think Facebook is hugely incentivized to help any company build a chat application or a chatbot on top of their platform. And by the way, it's not just Facebook. It's in Alexa, it’s Amazon, you saw today they announced their business platform. You can imagine a scenario in the future where people are going to want to tell Alexa that they're closing early for the day and walking out of their store. There's so many B2B use cases. Everybody is focused on the personal assistant. Yext is more focused on helping be the business assistant.

Right. And with the merger market, clearly, takes some of the uplift in Q4. I mean, we're just going through our numbers for next year and looking at that, there's a lot of opportunities in different places. We have a great partner in Dex YP and we'll see what we're going to do with them as well, but it's a little too early for us to talk about what's going on next year. There's a lot and so we're excited about the numbers, but we're not ready to share those yet.

And our last questioner today will be Mark Murphy with JP Morgan. Please go ahead.

This is Albert Chi stepping in for Mark Murphy. One for Howard who's Mandarin is better than mine I think. I wanted to ask about the WeChat in China announced and kind of get a sense of whether you think this deal could be some sort of a tipping point of getting more meaningful -- getting more meaningfully into China and maybe you could help frame the size and the opportunity -- of the opportunity for us.

Well, gosh, I want to start off by saying thank you, although [Foreign Language]. I am not really good at all. That said, the opportunity in China isn’t even contemplated in everything we've shared with you. The 100 million locations, the opportunities for event, the opportunities for all the different types of entities that we manage and the revenue that comes into Yext is all from, it’s all outside of China. And China is totally in addition to everything that we see there. So, that’s -- Google and Facebook are blocked in China as you know. So that said, the opportunity to integrate with Chinese services as a feature for our Western multinational customers is broad. There's a ton of different services in China, an entirely different ecosystem, ranging from bike sharing companies all the way on up to WeChat, to BABA to Baidu to [indiscernible] to all the different places that people look. We're really fired up about helping our Western customers with locations in China for many of whom it's one of their fastest growing markets. We work for example, just raised a bunch of money to do a JV in China and needs to get the word out and to get all their digital presence ready, we’re a great option to be able to do that in China. And so it's easy for us to upsell new entity licenses for domestic Chinese locations, however the contract is still with a Western company.

And one for Steve, so we saw a pretty healthy billing speed, especially off of tough comps in the year ago quarter and so is there any color that we should know about and kind of bouncing what happened with the merger and the headwinds and I know that kind of comes more into Q4, but maybe specifically, could you comment on whether the contract duration is shifting more favorably towards the annual mix.

There's a little bit of that, but I think it's -- as we described it, as we get more experience with existing customers, they start to bake in longer contracts and yeah, we've brought in 55 new logos. So they tend to be shorter contracts right now. So, I don't think any of that has fundamentally changed in the last year for us other than we're just doing better at closing deals and adding capacity to Jim’s sales force.

And this will conclude our question-and-answer session. I would like to turn the conference back over to James Hart for any closing remarks.

All right. Thank you, William. Thank you, everyone for joining us today. That concludes our call. We look forward to coming back to you in the fourth quarter of the New Year to report our fourth quarter results.

Thank you. May the force be with you.

And the conference has now concluded. Thank you all for attending today's presentation. You may now disconnect.