Q3 2025 Vertex Inc Earnings Call Transcript
Key Points
- Vertex Inc (VERX) reported a 12.7% year-over-year increase in revenue for the third quarter, reaching $192.1 million.
- Cloud revenue growth was particularly strong at 29.6%, highlighting the company's successful transition to cloud-based solutions.
- Adjusted EBITDA exceeded expectations, reaching a record $43.5 million, with an EBITDA margin of 22.6%.
- The company saw a 12.4% increase in annual recurring revenue (ARR), reaching $648.2 million.
- Vertex Inc (VERX) announced a $150 million share repurchase program, demonstrating confidence in its long-term growth prospects.
- Customer retention metrics were negatively impacted by the bankruptcy of three large enterprise customers, including Big Lots and Party City.
- Net revenue retention (NRR) decreased to 107%, down from 108% in the previous quarter, due to faster-than-expected migrations to the new cloud platform.
- The company experienced lower-than-typical growth from existing customer entitlements, affecting revenue expectations.
- Guidance for the fourth quarter was adjusted downward, reflecting challenges such as customer bankruptcies and migration impacts.
- Gross margin on services revenue decreased to 28.8% from 35% in the same period last year, due to investments in automation.
Good day and welcome to the Vertex Inc third-quarter 2025 earnings conference call. (Operator Instructions) Please note that this conference is being recorded. I would now like to turn the conference over to Joe Crivelli, Vice President, Investor Relations. Thank you and over to you.
Hello and thanks for joining us to discuss Vertex's third-quarter results. David Destefano, our President and CEO; and John Schwab , our CFO, are also with us today.
During this call, we may make forward-looking statements about expected future results. Actual results may differ due to risks and uncertainties. These risks and uncertainties are described in our filings with the Securities and Exchange Commission.
Our remarks today will also include references to non-GAAP metrics. A reconciliation of these metrics to GAAP is also provided in today's press release. This call is being recorded and will be available for replay on our investor relations website. I'll now turn the call over to David.
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