Vertex, Inc. (VERX): Results of Operations and Financial Condition
Vertex, Inc. (VERX) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Vertex Announces Second Quarter 2026 Financial Results KING OF PRUSSIA, PA – August 3, 2026: Vertex, Inc. (NASDAQ: VERX) (“Vertex” or the “Company”), the Decision-to-Defense™ global indirect tax and compliance company, today announced financial results for its seco
How this was made
The 30-second read
Why it matters
Traders can reprice the stock based on the disclosed guidance ranges and margin/EBITDA trajectory, while monitoring whether ARR growth and NRR stability persist into Q3.
Market read
A primary earnings-and-guidance disclosure with specific revenue and adjusted EBITDA ranges for Q3 and full-year 2026, plus improving adjusted EBITDA margin and ARR growth.
What to watch
The company notes it will not update outlook until next quarterly results, and forward-looking adjusted EBITDA is not reconciled to GAAP net income, leaving potential GAAP volatility risk.
Vertex announced second-quarter revenues of $204.0 million, up 10.5% year-over-year, and Adjusted EBITDA of $51.0 million.
Revenue was at the high end of the Company's guidance, while Adjusted EBITDA exceeded expectations. Revenue, cloud revenue, ARR, non-GAAP operating income, net income, and Adjusted EBITDA all increased year-over-year, although NRR declined from the prior year and the GAAP operating loss widened.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $204.0 million | – | up 10.5% year-over-year |
| Software subscription revenuesGAAP | $174.8 million | – | up 10.7% year-over-year |
| Cloud revenuesGAAP | $101.7 million | – | up 17.9% year-over-year |
| Annual Recurring Revenue (ARR)other | $703.4 million | – | up 10.5% year-over-year |
| Average Annual Revenue per direct customer (AARPC)other | $142,997 at June 30, 2026 | – | – |
| Net Revenue Retention (NRR)other | 105% | – | – |
| Gross Revenue Retention (GRR)other | 95% | – | – |
| Loss from operationsGAAP | $4.4 million | – | – |
| Non-GAAP operating incomenon-GAAP | $44.3 million | – | – |
| Net income (loss)GAAP | $9.0 million | – | – |
| Net income per basic and diluted Class A and Class B sharesGAAP | $0.06 | – | – |
| Non-GAAP net incomenon-GAAP | $33.3 million | – | – |
| Non-GAAP diluted earnings per share (EPS)non-GAAP | $0.20 | – | – |
| Adjusted EBITDAnon-GAAP | $51.0 million | – | – |
| Adjusted EBITDA marginnon-GAAP | 25.0% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Software subscription revenuesNot provided. | $174.8 million | – | up 10.7% year-over-year |
| Cloud revenuesE-invoicing momentum improved as enterprises prepare for expanding global mandates and seek more comprehensive compliance solutions. | $101.7 million | – | up 17.9% year-over-year |
Third quarter of 2026 and full-year 2026 outlook
- RevenueThird quarter of 2026: $208.0 million to $211.0 million; full-year 2026: $825.0 million to $830.0 million
- NoteThird quarter of 2026 Adjusted EBITDA: $55.0 million to $57.0 million.
- NoteFull-year 2026 cloud revenue growth: 18%.
- NoteFull-year 2026 Adjusted EBITDA: $206.0 million to $210.0 million.
What drove it
- Customer retention remained stable.
- E-invoicing momentum improved as enterprises prepare for expanding global mandates and seek more comprehensive compliance solutions.
- The Company's “AI-First” strategy is beginning to improve the speed and efficiency of selected engineering and customer-delivery workflows.
- AARPC was $142,997 at June 30, 2026, compared to $130,934 at June 30, 2025, and $140,464 at March 31, 2026.
- GRR was 95%, consistent with June 30, 2025 and March 31, 2026.
Concerns
- NRR was 105%, compared to 108% at June 30, 2025.
- Loss from operations was $4.4 million, compared to $3.9 million for the same period in the prior year.
- The Company said it has more work to do in the transformation of Vertex.
- Forward-looking risks cited include maintaining and growing revenue from existing and new customers, technological change, e-invoicing reliance on government infrastructure, Artificial Intelligence, competition, international operations, cybersecurity, and indebtedness.
What to watch
- Third-quarter revenues guidance of $208.0 million to $211.0 million.
- Third-quarter Adjusted EBITDA guidance of $55.0 million to $57.0 million.
- Full-year 2026 revenue guidance of $825.0 million to $830.0 million and Adjusted EBITDA guidance of $206.0 million to $210.0 million.
- Full-year 2026 cloud revenue growth expectation of 18%.
- Whether NRR improves from 105% and whether customer retention remains stable.
- Execution of the “AI-First” strategy and e-invoicing opportunity.
Analysis
Vertex reported second-quarter revenues of $204.0 million, up 10.5% year-over-year, with software subscription revenues of $174.8 million, up 10.7%, and cloud revenues of $101.7 million, up 17.9%. ARR was $703.4 million, up 10.5% year-over-year. Management stated that revenue was at the high end of its guidance and that Adjusted EBITDA exceeded expectations.
The operating profile improved on the non-GAAP measures cited in the release. Non-GAAP operating income was $44.3 million compared with $32.2 million in the prior-year period, while Adjusted EBITDA was $51.0 million compared with $38.4 million and Adjusted EBITDA margin was 25.0% compared with 20.8%. GAAP loss from operations was $4.4 million compared with $3.9 million in the prior-year period, while GAAP net income was $9.0 million compared with a net loss of $(1.0) million.
Recurring-customer indicators showed stable gross retention but lower net retention versus the prior year. NRR was 105%, compared with 108% at June 30, 2025 and 105% at March 31, 2026. GRR was 95%, consistent with both comparison dates. AARPC reached $142,997 at June 30, 2026, compared with $130,934 at June 30, 2025 and $140,464 at March 31, 2026. Management highlighted improved e-invoicing momentum and cited enterprise preparation for expanding global mandates and demand for more comprehensive compliance solutions.
For the third quarter, Vertex expects revenues of $208.0 million to $211.0 million and Adjusted EBITDA of $55.0 million to $57.0 million. Full-year expectations are revenues of $825.0 million to $830.0 million, cloud revenue growth of 18%, and Adjusted EBITDA of $206.0 million to $210.0 million. The CFO said the Company narrowed its revenue guidance range and raised its Adjusted EBITDA outlook, citing first-half consistency and the strength of the operating model.
Management also emphasized its transformation and “AI-First” strategy, stating that selected engineering and customer-delivery workflows are seeing speed and efficiency benefits. The filing did not provide cash flow, balance-sheet, debt, detailed capital-return, gross-margin, or operating-expense figures. The key reported areas for follow-through are cloud growth, e-invoicing momentum, NRR, GAAP operating results, and delivery against the higher profitability outlook.
Management, verbatim
Vertex delivered solid second-quarter results, with revenue at the high end of our guidance and adjusted EBITDA exceeding our expectations.
Christopher Young, President and Chief Executive Officer
The quarter demonstrated the durability of our business and the earnings leverage we can generate through greater operating focus and discipline.
Christopher Young, President and Chief Executive Officer
The consistency of our first-half results and the strength of our operating model increased our confidence in the full year, allowing us to narrow our revenue guidance range while raising our adjusted EBITDA outlook.
John Schwab, Chief Financial Officer
Not in the filing
stated, not guessed- GAAP gross margin and non-GAAP gross margin.
- Operating cash flow.
- Free cash flow.
- Cash and cash equivalents.
- Debt balances.
- Stock repurchases, dividends, and other quantified capital returns.
- GAAP and non-GAAP operating expenses.
- Tax rate.
- Prior-quarter figures for revenue, software subscription revenues, cloud revenues, ARR, operating income, net income, EPS, and Adjusted EBITDA.
- Prior-year figures for total revenues, software subscription revenues, cloud revenues, and ARR.
- Prior-year Non-GAAP net income and Non-GAAP diluted EPS.
- Detailed operating segment disclosures beyond software subscription revenues and cloud revenues.
- Prior outlook for comparison.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
SEC 8-K Item 2.02 with Exhibit 99.1 covering Vertex’s Q2 2026 financial results, key operating metrics (ARR, NRR, GRR), and guidance for Q3 and full-year 2026.
Ticker impact
Vertex reported Q2 2026 results and raised/narrowed outlook, including revenue $204.0M (+10.5% YoY) and Q3 adjusted EBITDA $55.0M-$57.0M.
Likely positive bias for the next session and into the Q3 print window, with focus on whether ARR, NRR, and cloud growth sustain.
The filing discloses multiple forward-looking datapoints (Q3 revenue and adjusted EBITDA ranges, full-year revenue and adjusted EBITDA ranges) alongside improving operating metrics (adjusted EBITDA margin 25.0% vs 20.8% YoY).
Market effects
Signals continued demand for indirect tax and compliance software, with e-invoicing momentum and cloud growth supporting the SaaS-like revenue model.
Limited direct regional read-through; primarily a US-listed software/compliance name with global customer base.
Supports the broader theme of expanding global e-invoicing mandates increasing spend on compliance and transaction lifecycle software.
Counterpoint
Despite strong non-GAAP profitability, operating loss persists ($4.4M), and NRR is flat at 105%, so upside may be capped if retention or cloud growth decelerates.
Key entities
- companyVertex, Inc.
Decision-to-Defense global indirect tax and compliance company reporting Q2 2026 results and issuing Q3 and full-year 2026 guidance.
- executiveChristopher Young
CEO quoted on Q2 performance, AI-First strategy progress, and operating discipline.
- executiveJohn Schwab
CFO quoted on narrowing revenue guidance range and raising adjusted EBITDA outlook.
