KING OF PRUSSIA, PA — Vertex, Inc. (NASDAQ: VERX), a leading provider of indirect tax technology solutions, has announced its financial results for the fourth quarter and full year ended December 31, 2024, showing consistent growth in revenue and cloud performance while unveiling strategic plans for 2025.
2024 Financial Highlights
Vertex continued to demonstrate its scalable business model with total revenues increasing by 16.5% to $666.8 million for the year, fueled by software subscription revenues of $567.1 million (up 17.9%) and cloud revenues of $276.0 million (up 28.6%). Annual Recurring Revenue (ARR) grew by 17.7% year-over-year to $603.1 million, with acquisitions—Systax and ecosio—contributing to the strong momentum.
Adjusted EBITDA for the year surged to $151.9 million, representing an adjusted EBITDA margin of 22.8%, a notable improvement from 17.6% in 2023. The company’s free cash flow also saw significant growth, reaching $77.7 million compared to $6.1 million in the previous year.
“Our 2024 financial results demonstrated the power of our business and financial model,” said David DeStefano, Vertex’s President, Chief Executive Officer, and Chairperson of the Board. “We believe the secular tailwinds that enable our performance will accelerate in the coming years as indirect taxes continue to grow in complexity, and enterprise technology continues to evolve and move to the cloud.”
Fourth Quarter Performance
For Q4 2024, Vertex reported revenues of $178.5 million, reflecting a 15.2% increase year-over-year. Key highlights included:
- Software Subscription Revenues: Reached $152.6 million, up 16.8%.
- Cloud Revenue: Achieved $76.9 million, marking a 27.0% growth.
- ARR Growth: Increased by 17.7% year-over-year to $603.1 million. Excluding contributions from Systax and ecosio, ARR growth was 15.0%.
- Adjusted EBITDA: Rose to $38.1 million, up from $32.0 million in Q4 2023, with a margin of 21.3%.
While Vertex experienced non-GAAP operating income of $32.5 million for the quarter, it recorded a GAAP net loss of $(67.8) million due to various non-cash adjustments, including amortization and acquisition-related costs.
Strategic Investments and 2025 Outlook
Vertex has laid out an ambitious plan for 2025, targeting full-year revenues of $760 million to $768 million, driven by a 28% projected growth in its cloud revenue. Adjusted EBITDA is expected to range between $161 million and $165 million.
John Schwab, Chief Financial Officer, outlined key investments for 2025, including an estimated $10 to $12 million in research and development for AI-driven products, such as the commercialization of its Smart Categorization solution and expansion of other innovative technologies. An additional $4 million will be allocated toward accelerating ecosio’s e-invoicing capabilities across emerging international markets.
Schwab explained that these strategic investments would enable Vertex to seize growth opportunities and maintain a competitive edge in a quickly changing environment.
Positioned for Growth
With durable revenue growth, expanding cloud infrastructure, and a focus on innovation, Vertex is maintaining its trajectory as a key player in the enterprise technology and tax automation space. Looking ahead, the company remains confident in its operational strategy and ability to adapt to a dynamic global tax environment.
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