Vertex (VERX) investor relations material

Strategic vision and business evolution

• Aims to expand from tax calculation to full Decision-to-Defense lifecycle, covering categorization, compliance, filing, payment, and audit support, with continuous feedback integration.

• Sees significant opportunity to automate manual compliance processes using AI, enabling faster, more confident, and less outsourced financial closes.

• E-invoicing expansion is a key growth area, with mandates in countries like France, Germany, and Spain driving adoption and cross-sell opportunities.

• Acquisitions such as ecosio and Brinta have broadened geographic reach and product capabilities, especially in Latin America.

• The goal is to consolidate customer compliance needs onto a single platform, leveraging expertise and AI.

Operational transformation and AI integration

• AI is being embedded across internal processes, reducing contractor reliance and increasing efficiency in product development and customer support.

• The value creation plan is driving Cash EBITDA and free cash flow growth, with operational benefits expected to fully materialize by 2027.

• AI-driven products like Smart Categorization are generating revenue and improving customer outcomes, though require significant change management.

• An AI Trust Center is being developed to let customers govern the level of AI autonomy in their processes, balancing automation with auditability.

• Filing and compliance processes are targeted for further automation, aiming to cover more jurisdictions and reduce manual effort.

Market opportunities and customer expansion

• Over 60% of Fortune 500 companies are customers, with high retention and expansion potential through cross-selling and up-selling, especially in e-invoicing.

• Mandates act as catalysts for initial adoption, but platform consolidation across countries is the long-term growth driver.

• The land-and-expand model starts with tax determination and grows into VAT, exemption management, and e-invoicing across multiple geographies.

• Early indicators of success include reduced headcount, increased product throughput, and improved financial metrics.

• Customer relationships deepen as more compliance functions are consolidated, increasing stickiness and platform value.