Good afternoon, and welcome to the Yext Fourth Quarter Fiscal 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Yuka Broderick, Head of Investor Relations. Please go ahead.

Thank you, Gary, and good afternoon, everyone. Welcome to Yext’s fiscal fourth quarter 2021 conference call. With me today are CEO, Howard Lerman; President and Chief Revenue Officers, David Rudnitsky; and CFO, Steve Cakebread. Before we begin, I’d like to remind everyone that this call may contain forward-looking statements, including statements about revenue, non-GAAP net income, operating cash flow, sales efficiency, hiring targets, expense margins, market opportunities, business performance, including of our Listings and Answers products, capital expenditures, 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, the evolution of our industry, our product development and success, including with Answers, and general economic and business conditions such as the impact of the COVID-19 pandemic. We undertake no obligation to revise any statements 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 filed with the SEC, including our most recent quarterly and annual reports, 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 is available at investors.yext.com. With that, I will turn the call over to Howard.

Thanks, Yuka. I couldn’t be more proud of what we accomplished during a challenging year. First, despite extraordinary headwinds from location lockdowns that disrupted the core value proposition of Listings, its product annually recurring revenue still grew this year. Next, we build a more durable and sustainable business model going forward. We were operating cash flow positive for the year, non-GAAP net income positive for Q4, and we showed a tremendous 16-point improvement in non-GAAP operating margin versus a year ago quarter. Finally, we stood up a new search category disruptive product in Yext Answers. As the world comes back, we’re ready. But, it has not been easy. Our fiscal year started last February, and in a matter of days, we were dealing with the onslaught of a global pandemic. Like every business, we faced challenges and had to make a number of adjustments. Our typical event and in-person sales approach was severely hampered. But, this forced us and led us to focus on efficiency. And you can see that quantitatively, a dramatic 7-point improvement in our non-GAAP sales and marketing percentage -- spend as a percentage of revenue, from 61% in the year ago quarter to 54% in Q4. Listings felt the force of the macroeconomic headwinds that brought foot traffic to businesses to a halt. Now, people still search for a lot of important answers that our listing solution provides. These include answers on products and doctors, FAQs and jobs, just to name a few. This was and still is critical across most industries. But the reality is seeking information about physical locations, like driving directions or operating hours, has been severely impacted by COVID. In fact, in Q4, Google Maps views for our customers declined over 50% year-over-year on a per location basis. Now recall, we told…

Thanks, Howard. I’m excited to be leading the team as we look to scale Yext to much greater levels in the years ahead. Given the continued challenging environment, we had a solid Q4. We saw renewed strength in EMEA, following a tough beginning of the year due to their strict lockdowns and a solid second-half for mid-market. Our enterprise team fought hard in a tough macroeconomic environment. The total number of Yext direct customers, which excludes SMB and third-party resell customers, increased 21% year-over-year to over 2,400. We’re introducing a new metric for investors this quarter, which we believe is a good indicator for our business and our progress with larger customers. Our direct customers, excluding SMB and reseller, with ARR over $100,000 totaled 550 at the end of Q4, up 12% year-over-year. This metric is replacing deals closed after this quarter. In Q4, Yext overall closed 216 new and renewal deals with at least $100,000 of total contract value. This includes 22 deals with more than $1 million of total contract value. We ended the fiscal year with nearly 250 quota-carrying reps, roughly in line with our target of 255. Our new logo signings included La Poste, the French national postal service; Endeavor, Casio Computer and Popeyes. Financial services, including insurance, showed continued strength for the year with upsells from JPMorgan Chase, Liberty Mutual and Farmers. Other upsell deals during the quarter included United Healthcare Service and Core Hotels as well as Panera. We’re cautiously optimistic about our opportunities with foodservices companies when businesses begin to reopen. Renewal deals included AT&T and Luxottica. We continue to see momentum with Answers site search. As Howard mentioned, we closed 130 Answers-led deals in Q4, which included the first quarter significant contribution from EMEA and Japan, following the release of Answers in…

Hey. Thanks, David. As Dave said, we had a solid quarter. Revenue above our guided range, achieving breakeven for the first time ever on a non-GAAP EPS basis, positive operating cash flow and continued improvement in sales and marketing efficiency. I just want to thank the finance and IT teams who are executing incredibly well and delivering these results in a challenging work environment and setting us up for economies of scale as the economy recovers. We’re really well positioned for growth going forward. Our fourth quarter revenue grew 13% year-over-year to $92.2 million. Fiscal year, ‘21 revenue grew to $355 million, which is an increase of 19% over last year. Unearned revenue increased 8% year-over-year to $192 million. And annual recurring revenue, or ARR, at the end of Q4 was $354 million, and that’s up 8% year-over-year from the year ago quarter. Our trailing 12-month net dollar-based retention, which excludes our small business customers, was 102%. And our trailing 12-month net dollar-based retention for direct, which also excludes small business and our third-party reseller customers, was 103%. Our retention in Q4 was impacted again by muted upsells in this tough macro environment. Before turning to margins and expenses, I’d just like to note that I’ll be discussing non-GAAP results, unless I otherwise say. And we provided, as Yuka’s mentioned, a reconciliation of GAAP to non-GAAP financials in our earnings release. So, Q4 gross margins were 78.4% this quarter. That compared to 75.7% in the year ago quarter. This increase in margin was primarily driven by leverage on employee costs and publisher fees, and was partially offset by higher data center costs. Fiscal year ‘21 gross margin was 77.3%, and that compares to 75.6% a year ago. Q4 operating expenses were $73 million or 79% of revenues, and that’s down…

Thanks, Steve. Before we move on to Q&A, we’d like to invite you to register for our Investor Day on Wednesday, March 17, 2021. Please go to investors.yext.com for more details. Joining the Q&A session will be CEO, Howard Lerman; President and Chief Revenue Officer, David Rudnitsky; and CFO, Steve Cakebread. Gary, can we please open to questions?

We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Naved Khan with Truist Securities. Please go ahead.

Yes. Thanks a lot. Just a couple of questions. So, I’m trying to understand the outlook for Q1 and the sequential decline versus the fourth quarter, and what the components of that might be. And then, maybe a related question, just on the -- can you give us some color on the type of wins, customer wins you might be getting? Are they smaller deal sizes? And maybe talk about your pipeline a little bit? Any color would be helpful? Thank you.

Yes. Why don’t I start with the quarter? We recognize our revenues daily. So, the fourth quarter has three more days than the first quarter does because of February. So, that accounts for a couple of million dollars of the sequential decline and predominantly most of it. So, I don’t see real problems with the decline in terms of dollars. It’s more of a math exercise. Clearly, we didn’t have upsells as much as in the Q4 as we’d wish. So, that contributes to it as well. But it’s mostly a day count for us. Customer wins, David or Howard, do you want to take that?

Yes. We -- I think, we’ve talked about some of our customer wins in Q4. One of the places you can always follow for what’s going on, follow us on Twitter. Our social media team is very active. And almost every day, we tweet a new Yext Answers experience that has gone live. I think, a couple of days ago, we tweeted Northern Trust where I am sitting in a building right now. It’s kind of neat to just watch all these great site search experiences come up where customers can get answers. We talk about some of the -- DR talked about some of the -- DR is Dave, by the way, not doctor, talked about some of the logos we won in Q4, the French post office, La Poste, Endeavor, Casio Computer, Popeyes. And then, I retweet all of the stuff that we’re tweeting, so you can follow me @Howard on Twitter to see each day the new Answers experience is going live. Q1 pipe looks solid. We continue to be conservative with our outlook with regard to the current macroeconomic pressures that are happening in the world. We are in the business primarily or have been primarily in the business of serving location-based businesses. As locations are closed, that is a bit more challenging in certain location-based verticals. As the world comes back, we’ll invest and continue to get back into those industries as things open up as those companies get back to business.

Thank you.

The next question is from Mark Murphy with JPMorgan. Please go ahead.

Hi, good afternoon. This is Matt Coss on behalf of Mark Murphy. Thank you for taking my questions. Steve, on the continued improvement in sales and marketing efficiency, can you quantify what that improvement was this year? And then, sort of what you expect that improvement to be going forward as you leverage all these new sales hires?

Yes. I think, the quantitative part, you can just look at -- if you look at our year-over-year dollar spend from last year to this year and then the percent of revenue have been pretty significant. A lot of that is coming from, obviously, as Dave talked about, more tenured sales reps, more effective selling and marketing processes. I think going forward, we’ve always said that we’re going to continue to drive our sales and marketing as a percent of revenue back down in line with what you’ll see from other SaaS companies. How quick that goes is obviously a function of revenue and our efficiencies. So, I don’t really have a timeframe there. But, I think you’ll see it continue to decline over the next couple of years until we get in line with companies in our same size and space.

Very helpful. Thank you. And the way you’re guiding, you make sense based on what you’re able to see in some of the challenges that you’re still seeing in retail businesses. But, are you making any other changes in the way that you guide, perhaps assuming lower close rates or any other big differences versus the way you looked at guidance historically?

Yes. If you go back and look at how we guided Q3, it’s a similar stance. We’ve got this quarter coming up, February, March, April, still a lot of countries and a lot of states are closed. And so, we took the position that we’re only going to be realistic, like we were before. As I said in the prepared comments, we’re not looking or anticipating any openings at this point in time. I think customers, as David talked about, you’re seeing us get a lot of interest and a lot of opportunity. But, as we said in our retention, upsells aren’t happening to the extent that we think they should. And we think that’s a lot to do with macroeconomics. And while there’s a lot of people interested, there are still people being very conservative with how they spend their money until we see, not just the light at the end of the tunnel, but they’re at the end of the tunnel. So, I think let’s stay tuned. I think all of us feel more optimistic about the future with vaccines, et cetera, but the world economy has got to start to come back. And that’s certainly going to be timing is something we just can’t predict right now.

Sure, sure. Thank you very much.

The next question is from Stan Zlotsky with Morgan Stanley. Please go ahead. Mr. Zlotsky, the line is open on our end. Perhaps it’s muted on yours. Moving on, our next question is from Arjun Bhatia with William Blair. Please go ahead.

Hey, thank you. Steve, I maybe want to just follow-up on that last point that you made about the light at the end of the tunnel. It seems like we’re -- the vaccinations are going better than expected, I would say. And it seems like there is some light at the end of the tunnel that’s visible. What are your conversations like with customers that have maybe stopped expanding this year? But as they see that, hey, we might -- things might start to come back to normal over the summer or later on this year. Are they starting to think about expansions? Are they having conversations about Listing or cross-sell with Answers? Just help us understand what you’re hearing from customers as you’re talking about later on fiscal 2022?

Yes. Arjun, that’s a great question. I think David or Howard, you might be better serving Arjun .

Arjun, I’ll take that question. The key stat that we talked about on the call just a minute ago was that Google Maps views have declined 50%, more than 50% year-over-year for our customers on a per location basis. That is a primary value proposition of using the product. It drives foot traffic to physical locations. So, as that happens and has been happening, that has presented challenges for upsell and retention. Now, I don’t believe, like I don’t think anybody believes, in a year that people are going to not be using map services to use driving directions or phone calls to go outside, to drive the places, to go to stores, to go to restaurants and events, and travel and go to hotels. The fact is, in Q4, it was more than 50% lower than it was in the previous year. And looking forward, we have -- we don’t -- we have not seen quantitative evidence of a recovery. Though, like you, we remain optimistic when you read the news that it could happen, but we’re just not going to put it into our outlook until we can quantitatively see it. That said, while we are continuing to see headwind of -- in the location related industries, you’ve seen in our financials, we’ve really focused on getting efficient in sales, we have, which, like Steve said, a 7% year-over-year improvement, efficient with our operating margins, a 17% swapping improvement. We broke even cash flow positive for the year. We focus on building a sustainable, durable approach going forward. And we stood up a whole new category with search and leveraged our wonderful Knowledge Graph technology, which is filled with authoritative primary information to take that to the next level and build a natural language search on top of it, which we closed more than 130 transactions in Q4, up from quite a bit in previous quarters that we had disclosed. So, all-in for the year, we don’t know when Listings will return yet. We haven’t seen it, because people are still not going outside. But, things are starting to open up. I read the news like you do. We can’t call a specific date. When that date comes, this Company is going to be ready with a more sustainable business model, with a product that we hope we’ll see a tailwind from the recovery, and a new category product with extraordinarily large opportunities in a number of categories of site search to work place search to support search, tell you more about that at Investor Day and watch for our spring release with breakthrough extracted Q&A technology. I’ve never been more excited to lead this Company. The opportunities have never been bigger in the long run. We’ll just have to wait and see with what happens with regard to the lockdowns, the shutdowns to locations.

Got it. That’s helpful. And then, on the Answers side of the business, last quarter, we touched on some large deals that came through, some of that were Answers led, some that were mostly Answers. But what can you share with us about deal sizes on Answers as you’ve seen this quarter relative to what we were talking about last quarter earlier in the year?

So Arjun, it’s David Rudnitsky. So, a couple of things on Answers, what we’re seeing is Howard talked about the number that we do. We did 130 Answers-led deals. We’ve got a good motion in terms of how to identify those, qualify them and then close them. It’s shown that we have a little bit of a quicker sales cycle with Answers. We’ve had now demonstrable success. We know how to measure. We know how -- we have customers that we can reference. We have experience under our belt for it. And not only are we seeing a quicker sales cycle on it, we’ve seen a couple of things that are interesting. One, the Answers-led deals -- Answers is getting us into companies that we necessarily would not have sold to when we were talking to a year ago. There’s verticals that we’ve now penetrated as a result of leading with Answers. When you look at higher ed, you look at technology, look at CPG, you look at direct-to-consumer, you look at public sector, you look at NGO, these are customers we’ve acquired, many of which in Q4 where Answers is the opportunity that opened the door for us there.

Your next question is from Rohit Kulkarni with MKM Partners. Please go ahead.

Thank you for taking the questions. A couple. In terms of guidance, Steve, as in, any more color you can give on what are you assuming in terms of beyond first quarter, contribution from Listings versus Answers? And any backward-looking data you can share in terms of how the mix of Listings versus Answers gradually changed as the year progressed? And how do you think that would -- as you think -- as you’re modeling in the guidance? And then, I have one follow-up on…

That’s a lot of questions. First off, again, like I said, we kind of looked at Q1 as if we looked at Q4 and trying to be realistic about the macro economy. Clearly, Listings is a dominant part of our business. But Answers is up and coming, though, but still relatively young. And so, growth rates and numbers look, while big, are still small relative to our installed base. So, when we look at that, we’ve said numerous times, we think Listings will come back. But we don’t see them soon. So, I can’t really give you a mix issues. And keep in mind, we sell a solution. So a customer may come in to talk to David about Answers but start with Listings or vice versa. So, it’s not really -- we’re not really able to give you information about mix at this point. We can look at installed base after the past. But in that, I’ll just tell you, it’s still predominantly Listings business because that’s where we started with and have been selling Listings for over five years now. So, I can’t help you on those particular numbers. We’ll have a little bit more information at Analyst Day. But again, Answers is a new product that you typically get to sell those new products as you get into this. I think it’s been muted only because of the macroeconomics. And so, we’ll look and see as the economy starts to turn around uptake on Answers. But clearly, Listings will -- should start to come back as well, and anticipating that mix shift is going to be pretty hard.

Okay. And just on sales and kind of self-service way of selling as well as partner-led selling, be it Adobe or likes like that. Any new -- any updates, anything noteworthy? I know you’ve mentioned both of them as new channels that could help drive leverage going forward.

Well, I think you quantitatively can see 7-point improvement year-over-year in sales and marketing. And remember, all of our reps were grounded this year and saw them over Zoom and we classically held events and dinners, and we didn’t do any of that this year. So, I think you are seeing leverage from partners bringing us into deals and from bottom-up self-serve, and we will continue to lean into that going forward.

The next question is from Brett Knoblauch with Berenberg Capital Markets.

Maybe just curious, as you look to some of the customers you have, maybe down south in Florida or Texas, are you seeing anything different given those states are a bit more open compared to, I guess, other regions…?

Yes. We still have $1 billion of Listings in Texas after we announced the -- I’m just kidding. We -- it’s very hard to make geographical kind of new quantifications like that because companies are headquartered, large enterprises are headquartered all over the world. And so, you do see a mix around the world, but it generally typically mirrors the country, not at the state level.

That makes sense. And then, maybe just one more. As hopefully economy reopens kind of sooner than faster, I guess, what gives you confidence that Yext is going to be one of the first solutions that they turned back on? I would imagine a lot of these retailers are going to be fighting for every single dollar, given they’ve kind of been out of business for so long. And could there be a delayed turn on cycle as that does happen?

Hey Brett, it’s David. Here’s the thing. They never turned it off. So, they still use us. And what Steve referred to in his comments were the muted upsell. And that typically, we would expect a greater upsell for them as they expand their own business. But for the most part, we’ve kept them all. And I think what’s exciting about the opportunity is as they open, it’s not turning it off. It’s actually accelerating what they have. And so, my teams look forward to the seasonal upsell or the continued historical upsell that we had. But they’ve never turned it off because if you think about it, if you’re a business that’s closed, people still want to know about what places are open, what safety protocols you have, what are the revised hours? Do you have in-store pickup, do you have curbside pickup? None of that stuff ever went away and they never dropped their footprint with Yext.

And Brett, that’s how kind of the -- to Steve’s point earlier, that is a bit how we grow with customers. They come up to Yext and often, they’ll start using our Listings product, where they put the data into the Knowledge Graph. We structure that. Then, take the bitcoin company that Dave mentioned earlier in the call, then they want to turn on Answers. And so, they turn on Answers and we start answering questions using our natural language search from the Knowledge Graph. And then, going forward, we’re going to be able to take that Knowledge Graph into more places, support search, other types of search solutions that they want. This all comes down to search. And the number of opportunities we have now with Answers to go into any client, whether they’re retail or food is much larger than it was 12 months ago, given our new product cycle -- given our new set of products where we can go in and we can sell them the site search solution. And then, once they’re on our search platform with natural -- with Knowledge Graph, we can sell them a support search solution. We can sell them whatever type of search solution that they want, we can expand within the client base off the Knowledge Graph that they have with us.

The next question is from Ryan MacDonald with Needham. Please go ahead.

First on Answers. It’s great to see the continued progress and success you’re having there, going from 86 led deals last quarter to 130 this quarter. Just curious, as you look at the pipeline and as you’re closing deals, I think, Steve, you mentioned at our conference in January that you’re seeing an increasing mix of customers that are buying the solution off of a demo versus doing the full 90-day free trial. Can you talk about what sort of mix shift you’re seeing there and how that’s, if at all, compressing on sales cycles?

Yes. Steve, I think -- Ryan, it’s David. I can grab because I see the point-of-sale every day. The reason that we’ve shifted away from that and going right to or close is that we learned over the last year how to sell, we learned what’s important to the customer. And having that historical background on those deals, like what’s driving it, we have a bunch of referenceable customers now. Most customers would prefer to do an evaluation, spend a little time with them and talk to a reference and understand it versus having to go through an entire trial period themselves. They want to go to market with it quicker. And we’ve demonstrated that we’re able to do that. We’ve seen compressed sales cycles, particularly with Answers because we’ve had that under our belt now in terms of demonstrable success.

Excellent. And I guess ,as a follow-up for you, David. Now sort of as in the sole CRO structure, just curious, should we expect any sort of changes in terms of org structure, comp structure or perhaps plans for international and CBU sort of now that it’s all sort of under your umbrella?

Yes. So that’s been -- Ryan, that’s been underway over the last couple of weeks. And what I can share with you is that what I took a look at is unifying all of those. So, when you talk about international, you talk about North America, you talk about CBU, they have come together now under this idea of one Yext in terms of really having as many common things as we can to scale the business. I have every Friday -- I have all the leaders every Friday on the call with me. And what we’re looking at is development of playbook, that’s the best of the best. There are nuances in the different theaters. There’s nuances in the different lines of business. But there’s a lot of things that I want our teams to do collectively, to scale the best practices across the universe. And it’s something that I personally have been extremely focused on because that’s the way we scale this thing.

Excellent. And then, maybe just last one for Steve. I just wanted to clarify. Did you say that from an operating cash flow perspective that you’re refocused on a breakeven op cash flow on a quarterly basis moving forward until you start to see some improvements in the economy?

So, what I said was we will be operating cash flow breakeven or better on an annual basis going forward. Every quarter is different, as you know, because of our seasonality. So, operating cash flow positive or breakeven quarterly, it’s a little bit tough depending on when we have events and do other things. But on a full year basis, we’ve modeled out and believe that we’ll be operating cash flow positive or breakeven every year on a full year basis, not a quarterly basis.

The next question is from Stan Zlotsky with Morgan Stanley.

Perfect. Thank you so much. Before I take my question, my apologies about the technical issues we had before. Pretty embarrassing for technical issues for a software analyst. But, a couple of questions from my end. Maybe just on the Answers product. Clearly, you guys are seeing momentum with Answers and the 130 Answers-led deals in the current quarter. When do you think you would get to a point where Answers gets to be material enough as a portion of the overall business to kind of take over the growth baton from some of the other products that you have in the market today?

Stan, I’ll take that. Let’s talk about what we’re trying to do with Answers first, and then I’ll let Steve comment on the materiality. Everything we do at Yext stems from the technology that we went out with on our roadshow 3.5 years ago, which was our Knowledge Graph. Knowledge Graph is a brain-like database with structured information in order to give Google and Apple and Facebook and Amazon information about our companies for our Listings product. They don’t just accept flat files. That data has to be structured. So, it turned out that accidentally, we built a bunch of structured information for each of our clients in a structure or a technology, which we call a Knowledge Graph. And our Knowledge Graph is -- what a Knowledge Graph is what makes natural language search possible. Every other search engine out there, except Google, by the way, but every other search technology company out there uses index-based search to crawl sites and assemble an index and then has a single algorithm that gives you a set of links back. That is how search worked for a long time, and that’s how search engines worked for a long time. And Google took things to the next level by building natural language search on top of a Knowledge Graph. But in order to give an answer back, you have to have a database to contain the answer. And so, we built the database first or knowledge first, whereas every other search engine is algorithm first because when you’re searching or trying to find a ton of content, you want to find a spot, a ton of content, you need to find the place among a number of links and rank those results. So that was all about the algorithm. So, every other…

Yes, I’d agree, Howard. I mean it is a platform. We sell -- and trying to sell to customers, all of our services on the platform. Obviously, as you described, in a week or two, we’re going to announce additional search capabilities. So Stan, I don’t think Answers per se dominates search capability over time, will obviously become a larger part of our business, but it’s going to take a while. And I am also very optimistic like Howard. I think the Listings business, as people turn around and as Dave described, businesses are going to want to make sure they get found and provide even more information because it’s going to be competitive to get your customer back. So, I don’t know what the material transition is. And as the previous question, what’s the mix. Well, we sell a search solution, and I’m going to sell where we are going to sell whatever solution you’re looking for here. But, I do think search will dominate over time, but that timing is uncertain right now given macroeconomics. But I think, clearly, the future of this Company is in search in a wide variety of ways.

Got it. That makes sense. And Steve, maybe a question for you. Looking at the guidance for fiscal ‘22, 6% growth at the midpoint, a little over 6% growth year-on-year. And I do appreciate the focus on cash flow on an annual basis, staying in breakeven or better moving forward. But, what about on the operating income side and on the operating margins? Given the growth of the business, should we be looking for more profitability out of the income statement and just to really help to balance the growth versus margin equation, just a little bit better?

Yes. I mean, clearly, Stan, we talked about this before. Our goal is to get to breakeven operating cash flow and breakeven non-GAAP EPS. Clearly, we’ve made -- and it’s not surprising, right? You’re going to hit cash flow before you’re going to hit non-GAAP EPS. The time frames that we’ll talk about in the future partly because this year is still fickle. I think, as we get back on track, we’re going to see this business get into breakeven operating as well. But right now, I just want to get through Q1 and see how the business starts to come. But, I would say, if you look at our trends, we’re really, really close. Those are two principles that we’ve had. And I think we’ve demonstrated we can get to one, as you know, we’ve been operating cash flow for a full year, two out of the last three years. So we’re clearly on track. And I’d say, the trajectories that you’re seeing with improved sales and marketing spend, improved efficiencies in G&A have us on course to get to non-GAAP breakeven, but the timing is still TBD.

Your next question is from Tom White with D.A. Davidson. Please go ahead.

Just to sort of double click on the kind of gross retention versus upsell dynamics that you guys talked about. I guess, can you just clarify, is the softness that you’re calling out there, is it restricted to kind of retail and restaurants and maybe EMEA, or are you starting to kind of see maybe a broadening of that dynamic across your customer base? And then, just a follow-up on Answers. For folks that don’t convert from the free trial, what’s kind of the main kind of pushback that you get? And curious whether you think there’s a chance for conversion rates from the free trial to kind of meaningfully improve maybe once the macro backdrop looks a little bit more stable for Company?

Steve, do you want to take the retention and upsell dynamic, and then I’ll take free trial dynamic?

Yes. I think in Q4 -- I mean, clearly, our upsells across the board have been challenged primarily in location businesses, as David described. EMEA has been challenged because it’s been locked down. We don’t anticipate much of that change right now. I think in other businesses, the ones that we started to address with the Answers are too new to even start to talk about upsells. We have seen a few customers on a very limited basis hit or exceed their capacity, so they’re upgrading there. But not enough to change our upsell model at the moment. That’s where we’re looking for. And I think, one could suggest that as the macro economy comes back, we’ll see our net retention return to more normal levels. But, it’s just a little too early to do that. But clearly, restaurants are not expanding. Hotels are not expanding, and that’s the major driver right now of our impact.

Yes. And with regard to Answers, Tom, we saw pretty good conversion rates from our free trial industry standard. We’re ending the free trial at the end of the month. In fact, we’re so confident in our ability to sell Answers, we are now just showing up and closing Answers deals. We will do pilots for enterprises that want to validate that our technology works, and you will also continue to see on our website as we target developers that want to kick the tires and the technology. They’ll be able to build accounts and get sandboxes and use parts of the natural language search and Knowledge Graph for some period of time with some capacity limits. But as for the free trial offer, that was a great way to get the product going. We’re excited with where we got. We clearly -- not just got a lot of free trials, but closed a lot of real transactions with some amazing logos and traction. We’re very confident in our ability to continue to sell this going forward without the free trial. As we build up awareness that we can offer a better and faster and cheaper search than any other search technology out there.

This concludes our question-and-answer session. I would like to turn the conference back over to Yuka Broderick for any closing remarks.

Thanks for your time today, everybody. And we’re looking forward to seeing you in a couple of weeks at the Investor Day on March 17th. So, please go register on our website. Talk to you all later. Thank you.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.