Vertex Reports Q1 Earnings, Exceeds Estimates Despite Challenges

Vertex Inc., a provider of tax software and indirect tax solutions, reported first-quarter 2025 results that exceeded analyst expectations, posting adjusted earnings per share of $0.15 and revenue of $177.1 million, both above consensus estimates. The company saw strong year-over-year growth, with total revenue up 12.9%, cloud revenues rising nearly 30%, and annual recurring revenue increasing by 17.9%. Vertex attributed its positive performance to momentum in cloud offerings and progress on strategic initiatives such as e-invoicing and artificial intelligence, including an investment in an AI startup to automate sales tax compliance. The company maintained its full-year 2025 revenue outlook and expressed optimism about its market opportunities, though its net revenue retention rate slipped slightly from the previous year. Management highlighted persistent secular tailwinds and an underpenetrated market as drivers for future growth. Despite recent stock price underperformance, Vertex’s financial results and guidance signal continued confidence in its long-term prospects.