Vertex, Inc. Q1 FY2026 earnings call

Vertex delivered strong first quarter results. The company is at the center of mission critical, highly regulated workflows. Announced value creation plan in April to improve cost structure, invest in growth areas. E-invoicing business performs well with strong ARR and revenue growth. Acquired Brinta for Latin America coverage and AI capabilities. AI enhances platform, focuses on reshaping operating layer. Highlighted Blue Chip customers' new business and new customer wins. Non-GAAP gross margins increased 50 basis points year over year. Adjusted EBITDA up 18.4% from prior year. Free cash flow positive $7.7 million. April cost actions included workforce reduction and third party spend cuts, expected to save $60 - $70 million annually from 2027. Revised 2026 guidance for second quarter and full year, increased full year adjusted EBITDA guide. Accelerated 2028 targets to 2027.

Revenue was $196.6 million, and adjusted EBITDA was $44.1 million, both above the high end of guidance. Software subscription revenue was up 10.9% and services revenue was up 12.2%. Cloud revenue was up 20.7%, approaching 60% of total subscription revenue. Annual recurring revenue was up 11.2%. Total revenue was up 11.1% year over year to $196.6 million and above the high end of guidance.

Second quarter revenue 200 - $204 million, adjusted EBITDA 47 - $50 million. Full year revenue 823.5 - $831.5 million, unchanged. Full year adjusted EBITDA guide increased to 202 - $208 million from 188 - $192 million. Expect full year cloud revenue growth of 25% driven by e-invoicing revenue ramping. Accelerate 2028 targets to 2027.

Includes questions and answers about value creation plan, 2028 targets, cloud revenue guide, AI in implementation, EBITDA to free cash flow conversion, acquisitions, AI monetization, international business impact, software and cloud subscription growth, contract renewals, industry growth, etc.