KING OF PRUSSIA, PA — Vertex, Inc. (NASDAQ: VERX) this week announced its preliminary financial results for the first quarter ended March 31, 2024, signaling robust growth across its operations. David DeStefano, the company’s President, Chief Executive Officer, and Chairperson of the Board, highlighted the strength of the quarter’s performance and promised more detailed insights during the full earnings announcement scheduled for early May.
The company expects to report revenues between $155.5 million and $157.5 million for the quarter, marking a significant increase of approximately 17% to 19% from $132.8 million in the same period last year. This growth underscores Vertex’s expanding influence in the tax technology sector and its ability to capitalize on the growing demand for its services.
Another key metric, Annual Recurring Revenue (ARR), is anticipated to reach between $523.5 million to $525.5 million by March 31, 2024, up from $446.5 million a year earlier, reflecting an increase of about 17% to 18%. The ARR’s rise is a testament to Vertex’s sustainable business model and its success in securing long-term revenue streams.
Net revenue retention, which measures the company’s ability to retain and grow revenue from existing customers, is expected to be between 111% and 113%, slightly above the 110% recorded last year. This indicates robust customer loyalty and satisfaction with Vertex’s offerings. Conversely, Gross Revenue Retention is projected to be slightly lower, between 94% and 96%, compared to 96% the previous year, suggesting a slight increase in customer turnover.
In a remarkable turnaround, Vertex forecasts a net income between $2.4 million and $3.1 million for the quarter, a stark contrast to the net loss of $18.1 million reported in the first quarter of 2023. This shift towards profitability highlights the company’s improved operational efficiency and cost management strategies.
Adjusted EBITDA for the quarter is also expected to show a substantial increase, ranging from $35.5 million to $37.5 million, up from $20.2 million in the prior-year period, indicating an improvement of approximately 76% to 86%. Notably, this outperformance is partly attributed to $2 million in expenses deferred to future quarters and a higher proportion of R&D costs being capitalized rather than expensed.
Vertex’s upcoming full earnings announcement on May 8, 2024, is eagerly awaited by investors and industry analysts alike, as it will provide further details on the company’s financial health and strategic direction. The conference call on the same day will offer an opportunity for stakeholders to gain deeper insights into the company’s operational successes and future plans.
These promising preliminary results reflect Vertex’s resilience and adaptability in a dynamic market environment. The company’s focus on innovation and customer-centric solutions continues to drive its growth trajectory, reinforcing its position as a leading player in the tax technology space.
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