Vertex (VERX) Q4 2025 earnings summary

Executive summary

• Fourth quarter revenue reached $194.7 million, up 9.1% year-over-year and in line with guidance.

• Full-year revenue grew 12.2% to $748.4 million, with double-digit growth and solid profitability.

• Adjusted EBITDA for the quarter was $42.5 million, exceeding the high end of guidance.

• New CEO emphasized accelerating innovation, especially in AI and e-invoicing, and addressing customer attrition.

• E-invoicing business accelerated, positioning for mandates in France and Germany, and early traction for AI-driven Smart Categorization.

Financial highlights

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

• Cloud revenue for Q4 was $94.6 million, up 23% year-over-year; full-year cloud revenue grew 27.9%.

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

• Adjusted EBITDA for 2025 was $161.5 million (21.6% margin), up from $151.9 million prior 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 million–$831.5 million, with cloud revenue growth of 25%.

• Adjusted EBITDA expected at $188 million–$192 million for 2026, with a 23% margin at midpoint.

• Q1 2026 revenue guidance is $193.5 million–$196.5 million; adjusted EBITDA $40.5 million–$43.5 million.

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