Vertex (VERX) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $213.3M, up 11.0% YoY; Adjusted EBITDA was $64.8M, up 48.9%, with a 30.4% margin.

• E-invoicing supported cloud growth and ARR; GRR was 95% and NRR was 106%.

• The Value Creation Plan improved operating efficiency and profitability ahead of its original timeline.

Financial highlights

• Revenue comprised $181.7M in software subscriptions, up 10.2%, and $31.6M in services, up 15.8%; cloud revenue was $110.8M, up 20.4%.

• Adjusted EBITDA was $64.8M versus $43.5M; non-GAAP gross margin was 77.6%, up 370 bps YoY.

• GAAP net loss was $46.6M versus net income of $4.0M; $47.3M of tax expense contributed to the loss.

• Free cash flow was $25.2M; pro forma free cash flow was $33.8M, or 52% of Adjusted EBITDA.

Outlook and guidance

• Q4 guidance: revenue of $215M–$217M and Adjusted EBITDA of $58M–$60M.

• FY 2026 guidance increased to revenue of $828.9M–$830.9M and Adjusted EBITDA of $217.9M–$219.9M; cloud revenue growth is forecast at 19%.

• 2027 Adjusted EBITDA margin is expected at ~30%, with potential for further expansion; quarterly margins may fluctuate.

• Q4 GRR and NRR are expected to decline ~1 point due to a payroll tax OEM loss; its estimated quarterly revenue impact of ~$1M is included in guidance.