NASDAQ$VERX

Vertex Inc · Q1 2021 earnings

Q1 2021 earnings · · Investor relations

Briefing

Vertex's first quarter results for 2021 showed revenue growth and improved profitability.

Vertex announced strong first quarter results with a 10.1% increase in total revenues year-over-year, reaching $98.2 million. The company also reported a significant improvement in operating income and net income compared to the same period last year.

  • Total revenues increased by 10.1% year-over-year, reaching $98.2 million.
  • Software subscription revenues grew by 9.9% year-over-year, amounting to $83.3 million.
  • Annual Recurring Revenue (ARR) increased by 12.6% year-over-year, totaling $320.1 million.
  • The company acquired Taxamo, a cloud-based tax automation provider, and Tellutax, an edge-computing startup.

Headline financials

Total Revenue

$98.2M

Previous: $89.2M+10.1%
EPS (adj)

$0.07

Previous: -$0.15+146.6%
Annual Recurring Revenue

$320M

No prior period
Capital Expenditures

-$6.2M

No prior period
Free Cash Flow

-$3.91M

No prior period
Net Income

$2.29M

Previous: -$21.5M+110.6%
Operating Income

$2.14M

Previous: -$28.2M+107.6%
Gross Profit

$61.3M

Previous: $49.8M+23.1%
Cash & Equivalents

$278M

No prior period
Total Assets

$558M

No prior period

Revenue & EPS history

Vertex · Revenue · Quarterly

$98.2M

Q1 2021+10.1%vs Q1 2020
Beat estimate in 9 of 10 quarters(90%)
ActualEstimate

Revenue by segment

Vertex · $23.7M total across 1 segment · Q3 2023

  • Services
    $23.7M+19.5%

Forward guidance

For the second quarter of 2021, Vertex expects revenues in the range of $99.0 million to $100.0 million, representing growth of 8.5% to 9.6% from the second quarter of 2020, and Adjusted EBITDA in the range of $15.5 million to $16.5 million, representing a decrease of $6.0 million to $5.0 million from the second quarter of 2020.

Tailwinds

  • Revenues in the range of $99.0 million to $100.0 million, representing growth of 8.5% to 9.6% from the second quarter of 2020.
  • Full-year 2021 revenue is expected to be in the range of $410 million to $414 million, representing growth of 9.4% to 10.5% from the full-year 2020.
  • The Taxamo acquisition is expected to contribute $0.5 million to revenues in the second quarter of 2021.
  • The Taxamo acquisition is expected to contribute $9.0 million to revenues for the full-year 2021.
  • Expect Taxamo to have a more significant impact on 2022 revenues due to the timing of the acquisition and the tailwinds from new and pending marketplace facilitator VAT regulations.

Headwinds

  • Adjusted EBITDA in the range of $15.5 million to $16.5 million, representing a decrease of $6.0 million to $5.0 million from the second quarter of 2020.
  • Full-year 2021 Adjusted EBITDA is expected to be in the range of $66 million to $70 million, representing a decrease of $12.4 million to $8.4 million from the full-year 2020 due to the acceleration of our growth investments.
  • The Taxamo acquisition is expected to decrease Adjusted EBITDA by $0.5 million in the second quarter of 2021.
  • The Taxamo acquisition is expected to decrease Adjusted EBITDA by $2.0 million for the full-year 2021 primarily attributable to integration costs.
  • Certain non-GAAP financial measures included in our financial outlook were not reconciled to the comparable GAAP financial measures because the GAAP financial measures are not accessible on a forward-looking basis.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2021

Historical avgQ1 2021

+0.5%

Avg return

Earnings day

+0.3%

Avg return

5 days after

+4.2%

Avg return

30 days after

50%

12 / 24 earnings

Positive

+32.1%

Q4 2023

Best reaction

-20.9%

Q4 2020

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-5.2%+6.8%+3.9%
Q4 2025-13.8%-14.3%-10.6%
Q3 2025-8.5%-14.8%-13.6%
Q2 2025-18.0%-24.4%-27.3%
Q1 2025-3.1%-3.3%+6.1%
Q4 2024-19.0%-24.4%-16.6%
Q3 2024+17.4%+12.8%+28.8%
Q2 2024-1.4%-1.5%-2.5%
Q1 2024+1.3%+5.1%+13.7%
Q4 2023+32.1%+17.9%+25.0%
Q3 2023+21.3%+23.7%+27.6%
Q2 2023+8.2%+9.9%+23.1%
Q1 2023-5.9%-7.0%+8.7%
Q4 2022+20.2%+21.2%+48.4%
Q3 2022+11.3%+3.1%-7.0%
Q2 2022+10.1%+10.4%+13.6%
Q1 2022-19.7%-5.5%-13.2%
Q4 2021+1.1%-5.6%+16.0%
Q3 2021+1.4%+1.1%-14.2%
Q2 2021-0.2%+3.0%+1.7%
Q1 2021+13.5%+20.4%+16.7%
Q4 2020-20.9%-16.6%-34.3%
Q3 2020-10.2%-8.8%-1.2%
Q2 2020+0.7%-2.0%+8.4%
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Q1 2019

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