Vertex, known by its ticker VERX, has achieved a significant milestone by securing a place in Oracle's highest-level partner program for Independent Software Vendors. This affiliation highlights Vertex's extensive expertise in providing tax automation solutions tailored for sectors like retail, manufacturing, and technology. Oracle's partnership initiative, established over four decades ago, aims to foster collaborative growth and success, and Vertex's inclusion further solidifies its position as a leader in the industry.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Vertex Inc (VERX, Financial) is $46.37 with a high estimate of $61.00 and a low estimate of $31.00. The average target implies an upside of 14.02% from the current price of $40.67. More detailed estimate data can be found on the Vertex Inc (VERX) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Vertex Inc's (VERX, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Vertex Inc (VERX, Financial) in one year is $32.07, suggesting a downside of 21.15% from the current price of $40.67. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Vertex Inc (VERX) Summary page.
VERX Key Business Developments
Release Date: May 07, 2025
- Revenue: $177.1 million, up 12.9% year over year.
- Subscription Revenue: Increased 14.4% to $150.8 million.
- Cloud Revenue: $80.2 million, up 29.6% from last year's first quarter.
- Adjusted EBITDA: $37.8 million, representing an EBITDA margin of 21.3%.
- Annual Recurring Revenue (ARR): Grew 17.9% to $618.5 million.
- Net Revenue Retention (NRR): 109%.
- Gross Revenue Retention (GRR): 95%.
- Average Annual Revenue Per Customer (AARPC): $140,943, up 14.1% year over year.
- Gross Margin: 75%.
- Operating Cash Flow: $14.8 million.
- Free Cash Flow: Negative $12.3 million.
- Unrestricted Cash and Cash Equivalents: Over $270.4 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vertex Inc (VERX, Financial) reported a strong start to 2025 with a 12.9% year-over-year increase in revenue, reaching $177.1 million.
- Subscription revenue grew by 14.4%, and cloud revenue saw a significant increase of 29.6% in the first quarter.
- Annual recurring revenue (ARR) increased by 17.9% to $618.5 million, indicating strong customer retention and growth.
- Vertex Inc (VERX) announced an equity investment in Kintsugi, a startup focused on AI technology for indirect tax, which could enhance their offerings in the SMB market.
- The company achieved a gross recurring revenue (GRR) of 95%, within their targeted best-in-class range of 94% to 96%.
Negative Points
- Net revenue retention (NRR) decreased to 109% from 112% in the previous year's first quarter.
- Free cash flow was negative at $12.3 million, impacted by seasonal cash flow patterns and accelerated investments.
- The company experienced a decline in direct customers, attributed to lower-end customers migrating away.
- Gross margin on services decreased to 31.1% from 40.5% in the previous year's first quarter, driven by higher compensation expenses and lower-margin services.
- Adjusted EBITDA showed only a modest increase of 1.3% year over year, with expectations of a slight decrease in the second quarter.
