KING OF PRUSSIA, Pa., Aug. 11, 2021 (GLOBE NEWSWIRE) — Vertex, Inc. (NASDAQ: VERX), a global provider of tax technology solutions, today announced financial results for its second quarter ended June 30, 2021.
“Our performance reflects strong demand across all our segments and product lines this quarter, as global businesses, governments and communities work to emerge from this past year stronger than ever,” said David DeStefano, Vertex President and Chief Executive Officer. “We continue to execute on our strategy to accelerate global commerce, with investments in go-to-market expansion and our cloud platform driving revenues from our cloud business up 59.5% year-over-year in the second quarter.”
Second Quarter 2021 Financial Results
- Total revenues of $104.9 million, up 15.0% year-over-year.
- Software subscription revenues of $89.6 million, up 15.9% year-over-year.
- Cloud revenues of $32.1 million, up 59.5% year-over-year.
- Annual Recurring Revenue (“ARR”) of $336.2 million, up 14.1% year-over-year. ARR per customer (“ARRPC”) was $80,500 at June 30, 2021.
- Net Revenue Retention (“NRR”) rate was 106% in the second quarter of 2021 as compared to 105% in the first quarter of 2021.
- Loss from operations of $(1.5) million, compared to a loss from operations of $(29.0) million for the same period prior year. Non-GAAP operating income of $16.3 million, compared to $19.0 million for the same period prior year.
- Net income of $0.8 million, compared to a net loss of $(29.1) million for the same period prior year.
- Net income (loss) per basic and diluted Class A and Class B share of $0.01, compared to $(0.24) per basic and diluted Class A and Class B share for the same period prior year.
- Non-GAAP net income of $12.4 million and Non-GAAP diluted EPS of $0.08.
- Adjusted EBITDA of $19.2 million, compared to $21.5 million for the same period prior year. Adjusted EBITDA margin of 18.3%, compared to 23.6% for the same period prior year.
- Over 4,175 customers at June 30, 2021.
Vertex Chief Financial Officer John Schwab said, “Our business performed well this quarter with sequential quarterly growth in software subscription revenues, ARR and NRR, demonstrating a focus on our customers and the ability to unlock long-term, sustainable value from our solutions.”
Definitions of certain key business metrics and the non-GAAP financial measures used in this press release and reconciliations of such measures to the most directly comparable GAAP financial measures are included below under the headings “Definitions of Certain Key Business Metrics” and “Use and Reconciliation of Non-GAAP Financial Measures.”
Recent Business Highlights
- Introduced the Taxamo Assure solution that enables e-commerce sellers to comply with the complex value-added tax (“VAT”) calculation and reporting obligations for the new VAT regulations that went into effect July 1, 2021.
- Announced an expanded partnership and release integration with the Mirakl Marketplace Platform with full VAT support.
- Announced a certified integration with the Coupa Business Spend Management (BSM) Platform.
- Announced the integration of Vertex Lease Tax O Series with Alfa Start, built exclusively for auto leasing operations of all sizes on the cloud-based Alfa Systems.
Financial Outlook
For the third quarter of 2021, the Company currently expects:
- Revenues in the range of $104 million to $106 million, representing growth of 9.9% to 12.1% from the third quarter of 2020; and
- Adjusted EBITDA in the range of $15 million to $17 million, representing a decrease of $(5.5) million to $(7.5) million from the third quarter of 2020.
For the full-year 2021, the Company currently expects:
- Revenues in the range of $414 million to $417 million, representing growth of 10.5% to 11.3% from the full-year 2020;
- Cloud revenues to grow in excess of 40% from the full-year 2020; and
- Adjusted EBITDA in the range of $68 million to $72 million, representing a decrease of $6.4 million to $10.4 million from the full-year 2020, reflecting additional spend in research and development as well as selling and marketing expenses to drive growth.
The Company is unable to reconcile forward-looking Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, without unreasonable efforts because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact net income (loss) for these periods but would not impact Adjusted EBITDA. Such items may include stock-based compensation expense, depreciation and amortization of capitalized software costs and acquired intangible assets, severance, transaction costs, and other items. The unavailable information could have a significant impact on the Company’s net income (loss). The foregoing forward-looking statements reflect the Company’s expectations as of today’s date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. The Company does not intend to update its financial outlook until its next quarterly results announcement.
Important disclosures in this earnings release about and reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below under “Use and Reconciliation of Non-GAAP Financial Measures.”
About Vertex
Vertex, Inc. is a leading global provider of indirect tax software and solutions. The Company’s mission is to deliver the most trusted tax technology enabling global businesses to transact, comply and grow with confidence. Vertex provides cloud-based and on-premise solutions that can be tailored to specific industries for major lines of indirect tax, including sales and consumer use, value added and payroll. Headquartered in North America, and with offices in South America and Europe, Vertex employs over 1,200 professionals and serves companies across the globe. More information can be found at www.vertexinc.com.
