Vertex (VERX) Q4 2025 earnings summary

Executive summary

• Fourth quarter revenue reached $194.7 million, up 9.1% year-over-year, and full-year revenue grew 12.2% to $748.4 million, with double-digit growth and improved profitability.

• Adjusted EBITDA for Q4 was $42.5 million, exceeding guidance, and full-year adjusted EBITDA was $161.5 million (21.6% margin).

• The company is accelerating growth through AI-driven innovation, expanding compliance and e-invoicing offerings, and improving customer retention.

• E-invoicing business accelerated, with mandates in France and Germany expected to drive growth, and early traction for AI-driven Smart Categorization.

• Q4 net loss narrowed to $7.0 million from $67.8 million prior year; full-year net income was $7.2 million versus a $52.7 million loss prior year.

Financial highlights

• Q4 2025 total revenues were $194.7 million, up 9.1% year-over-year; cloud revenues grew 23% to $94.6 million.

• Full-year 2025 revenues were $748.4 million, up 12.2%; cloud revenues were $352.9 million, up 27.9%.

• Subscription revenue for Q4 was $166.2 million, up 8.9%; full-year subscription revenue was $639.7 million, up 12.8%.

• Annual recurring revenue (ARR) at year-end was $671 million, up 11.3% year-over-year.

• Free cash flow for 2025 was $47.6 million, down from $77.7 million prior year.

Outlook and guidance

• 2026 revenue guidance is $823.5–$831.5 million, with cloud revenue growth of 25%.

• Adjusted EBITDA for 2026 is expected to be $188–$192 million (23% margin midpoint).

• Q1 2026 revenue guidance is $193.5–$196.5 million; adjusted EBITDA $40.5–$43.5 million (21.5% margin midpoint).

• Management expects continued double-digit revenue growth and improving profit margins.