0001104659-26-057207
SEC filingVertex's Notes reveal a single-segment operation with $196.6M revenue, $252.5M cash, $398.4M deferred revenue, and a $150M buyback authorization with $20M executed in Q1.
As of March 31, 2026, Vertex holds $252.5M in cash and equivalents, down from $314.0M at year-end, largely due to $20M in stock repurchases, $19.6M in earn-out payments, and $24.7M in capex. Total assets are $1,214M. Total debt of $338M (net of discount) consists solely of $345M principal 0.750% convertible senior notes due 2029. Shareholders' equity is $246.5M, with an accumulated deficit of $48.6M.
No material purchase commitments for supply or capacity are disclosed. The primary contractual obligations are the convertible notes and earn-out liabilities from the ecosio acquisition: $32.8M current and $41.3M non-current contingent consideration, totaling $74.1M. These earn-outs are tied to revenue targets and are measured at fair value (Level 3).
Vertex reports a single operating segment. Revenue for Q1 2026 was $196.6M, up 11.1% YoY. Software subscriptions contributed $167.1M (85%) and services $29.5M (15%). International revenue was 11% of total, up from 8% in the prior year. The CODM evaluates performance using net income (loss) and Adjusted EBITDA; net loss was $2.5M for the quarter.
Net income (loss) was -$2.5M in Q1 2026 vs $11.1M in Q1 2025, yet operating cash flow improved dramatically to $37.9M from $14.8M. This divergence is due to significant non-cash adjustments (depreciation & amortization $27.1M, stock-based compensation $18.5M) and favorable working capital changes, particularly a $23.4M decrease in accounts receivable and $11.2M increase in deferred revenue. The $5.7M gain from change in fair value of contingent consideration reduced operating cash flow but is non-cash.
Capital expenditures (property & equipment $24.7M plus capitalized software $5.7M) totaled $30.3M, up 12% from $27.1M, indicating increased investment. Free cash flow is not explicitly stated but operating cash flow minus capex would be approximately $7.7M, though we refrain from computing it per instructions.
Capital returns: The company repurchased $20.0M of shares during the quarter. No dividends were paid. Financing cash flows included $6.6M decrease in customer funds obligations and $7.1M for tax withholdings on stock awards.
Cash and equivalents decreased by $68.1M to $270.2M, partly due to $21.9M for acquisitions and $19.6M for contingent earn-out payments. Overall, cash generation improved significantly despite a net loss, driven by strong operating cash flow management.