NASDAQ$VERX

Vertex Inc · Q3 2024 earnings

Q3 2024 earnings · · Investor relations

Briefing

Vertex's third quarter performance in 2024 was marked by revenue exceeding guidance, mid-teens organic revenue growth, GAAP earnings positivity, strong Adjusted EBITDA, and significant cash flow from operating activities and free cash flow.

Vertex reported strong Q3 2024 results with revenue above guidance, mid-teens organic growth, GAAP profitability, and significant cash flow. The acquisition of ecosio was completed, expanding the company's global cloud platform for e-invoicing and VAT compliance.

  • Total revenues reached $170.4 million, reflecting a 17.5% year-over-year increase.
  • Software subscription revenues grew to $146.3 million, a 20.6% increase year-over-year.
  • ARR increased by 19.0% year-over-year to $576.8 million, with organic growth at 16.1% excluding acquisitions.
  • Net income was $7.2 million, a significant improvement from the $(3.4) million net loss in the prior year.

Headline financials

Total Revenue

$170M

Previous: $145M+17.5%
EPS (adj)

$0.16

Previous: $0.10+60.0%
Annual Recurring Revenue

$577M

Previous: $485M+19.0%
Net Revenue Retention

111.0%

No prior period
Gross Revenue Retention

95.0%

No prior period
Average Annual Revenue per direct customer

$119K

No prior period
Direct Customers

4.9K

No prior period
Indirect Customers

448

No prior period
Adjusted EBITDA

$38.6M

No prior period
Adjusted EBITDA Margin

22.7%

No prior period
Free Cash Flow Margin

10.8%

No prior period
Capital Expenditures

-$23M

Previous: -$35.4M+34.9%
Free Cash Flow

$7.22M

Previous: -$38.8M+118.6%
Net Income

$7.22M

Previous: -$3.4M+312.4%
Operating Income

$4.9M

Previous: -$2.02M+342.6%
Gross Profit

$111M

Previous: $88.2M+25.4%
Cash & Equivalents

$279M

Previous: $49.5M+463.6%
Total Assets

$1.19B

Previous: $720M+65.4%
R&D Expense

$15.6M

Previous: $16.8M-6.9%

Revenue & EPS history

Vertex · Revenue · Quarterly

$170M

Q3 2024+17.5%vs Q3 2023
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Revenue by segment

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

  • Services
    $23.7M+19.5%

Forward guidance

For Q4 2024, Vertex expects revenues of $175 million to $178 million and Adjusted EBITDA of $33 million to $37 million. For the full year 2024, the company expects revenues of $663.3 million to $666.3 million, cloud revenue growth of 29%, and Adjusted EBITDA of $146.9 million to $150.9 million.

Tailwinds

  • Revenues of $175 million to $178 million for Q4 2024.
  • Adjusted EBITDA of $33 million to $37 million for Q4 2024.
  • Revenues of $663.3 million to $666.3 million for the full year 2024.
  • Cloud revenue growth of 29% for the full year 2024.
  • Adjusted EBITDA of $146.9 million to $150.9 million for the full year 2024.

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 Q3 2024

Historical avgQ3 2024

+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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