Vertex, Inc. ((VERX)) has held its Q4 earnings call. Read on for the main highlights of the call.
Vertex, Inc. Reports Positive Earnings with Strong Revenue Growth
Vertex, Inc. recently held its earnings call, revealing a generally positive sentiment driven by strong revenue growth and significant achievements. The company surpassed its on-premise revenue with cloud revenue, added a record number of new logos, and formed successful strategic partnerships. Despite challenges such as decreased net revenue retention and increased expenses, the highlights outweighed the concerns, painting an optimistic picture for the company.
Strong Revenue Growth
Vertex achieved impressive financial results, reporting a revenue of $178.5 million in the fourth quarter, marking a 15.2% increase year-over-year. The full-year revenue reached $668.8 million, up 16.5% from the previous year, showcasing the company’s robust growth trajectory.
Cloud Revenue Milestone
In a significant achievement, Vertex’s cloud revenue grew by 28.6% for the full year, now surpassing on-premise revenue for the first time. This milestone aligns with the company’s strategic focus on cloud-based solutions.
Record New Logo Additions
The fourth quarter saw a record number of new logo additions, both in terms of dollar value and unit count. This achievement is expected to drive future cross-sell and up-sell opportunities, further enhancing Vertex’s market position.
Strategic Partnerships and Pipeline Growth
Vertex reported a more than 20% increase in pipeline from its SAP channel, along with a similar increase in referral deals from SAP sales representatives. These strategic partnerships are set to bolster the company’s growth prospects.
Successful Competitive Takeaways
The company secured a major competitive takeaway from a leading AI company, covering 35 regions and handling 500 million transactions annually. This win underscores Vertex’s competitive edge in the market.
Decreased Net Revenue Retention
Vertex experienced a decrease in net revenue retention, dropping to 109% from 113% in the comparable period of 2023. This decline was attributed to the exceptionally strong performance in the fourth quarter of 2023.
Increased Expenses
Research and development expenses rose significantly, from $11.3 million to $17.3 million year-over-year in the fourth quarter. This increase reflects Vertex’s commitment to innovation and product development.
Lower True-Ups
Contract renewals resulted in usage true-ups of approximately $2 million to $3 million, which were lower than typical fourth-quarter run rates, indicating a potential area for improvement.
Forward-Looking Guidance
Looking ahead, Vertex provided guidance for 2025, projecting total revenue between $760 million and $768 million, reflecting an annual growth of 14.6% at the midpoint. Adjusted EBITDA is expected to range from $161 million to $165 million, with a full-year adjusted EBITDA margin of 21.3%. The company anticipates cloud revenue to grow by 28% for the full year. In the first quarter of 2025, Vertex forecasts revenue between $175 million and $178 million, marking a 12.6% increase at the midpoint. Strategic investments in e-invoicing and AI initiatives are planned to drive long-term growth.
In conclusion, Vertex, Inc.’s earnings call highlighted a positive outlook with strong revenue growth and strategic achievements. Despite some challenges, the company’s focus on cloud solutions and strategic partnerships positions it well for future success. Investors and market watchers will be keen to see how Vertex leverages its strengths to maintain its growth momentum.