VERX · Vertex, Inc.

Vertex delivered strong Q1 2026 results with total revenues of $196.6 million, surpassing the higher end of prior guidance, driven by 10.9% growth in software subscriptions to $167.1 million and robust 20.7% expansion in cloud revenues to $96.8 million. ARR reached $687.6 million, up 11.2% year-over-year, supported by AARPC of $140,464, though NRR softened slightly to 105% from 109% last year while GRR held steady at 95%. CEO Chris Young highlighted stability in customer demand and retention amid a mixed macro environment, crediting solid execution. GAAP operating loss widened to $(10.6) million from prior-year income of $4.5 million, but non-GAAP metrics improved with operating income at $37.6 million and Adjusted EBITDA rising 18.5% to $44.1 million, yielding a 22.4% margin. The quarter included the acquisition of Brinta, an AI-first e-invoicing startup, to accelerate Latin America coverage with advanced real-time compliance capabilities. In April, Vertex launched its Value Creation Plan, a strategic reset to enhance profitability, accelerate free cash flow, and fund AI innovation, with CFO John Schwab noting expected $60-70 million annualized cash savings from 2027 via cost actions. Guidance was raised for full-year 2026 to $823.5-831.5 million in revenues (implying ~17% growth at midpoint) and $202-208 million Adjusted EBITDA, plus 25% cloud growth, signaling confidence in sustained momentum and transformation into an AI-leading organization despite forward-looking risks.