Vertex (NASDAQ:VERX) Releases Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Vertex (NASDAQ:VERX) released its quarterly earnings data on Wednesday. The company reported $0.26 earnings per share for the quarter, topping the consensus estimate of $0.22 by $0.04, FiscalAI reports. The company had revenue of $213.28 million for the quarter, compared to analyst estimates of $209.72 million. Vertex had a negative net margin of 5.83% and a positive return on equity of 34.28%. Vertex’s revenue for the quarter was up 11.0% compared to the same quarter last year. During the same period in the previous year, the business earned $0.17 EPS.

Here are the key takeaways from Vertex’s conference call:

• Vertex reported 11% revenue growth to $213.3 million and nearly 50% growth in adjusted EBITDA, with a 30.4% margin. It raised full-year revenue and adjusted EBITDA guidance, with EBITDA guidance up $10.9 million at the midpoint.
• Recurring-revenue momentum improved: ARR grew 11.7% to $724.3 million, cloud revenue growth accelerated to more than 20%, and net revenue retention rose to 106%. E-invoicing ARR more than doubled year over year, though management cautioned that this growth rate is not expected to persist each quarter.
• Vertex expects gross and net revenue retention to each decline by about one point in Q4 due to the loss of a payroll-tax OEM, which management estimated would reduce quarterly revenue by roughly $1 million. The company said the impact is included in guidance and does not indicate broader deterioration in its core business.
• Management said its Value Creation Plan is improving profitability and cash generation ahead of schedule: cash EBITDA rose to $36.7 million from $11.2 million a year earlier. It also cited AI-related engineering efficiency gains of more than 100%, while noting that the longer-term operating benefits remain an opportunity to realize.
• Management sees e-invoicing mandates through 2029, customer demand for global solutions, and new partnerships as opportunities for further growth. It expects e-invoicing to continue growing significantly faster than Vertex overall, while acknowledging that mandate timing and customer implementations can affect quarterly results.

Vertex Price Performance

Shares of VERX opened at $17.59 on Friday. The firm has a market capitalization of $2.85 billion, a PE ratio of -60.66 and a beta of 0.77. The company’s 50-day moving average is $13.36 and its 200-day moving average is $13.29. Vertex has a fifty-two week low of $10.21 and a fifty-two week high of $20.85. The company has a debt-to-equity ratio of 1.40, a current ratio of 0.87 and a quick ratio of 0.87.

Wall Street Analyst Weigh In

A number of equities analysts recently commented on VERX shares. BMO Capital Markets lifted their price target on Vertex from $14.00 to $15.00 and gave the stock a “market perform” rating in a report on Tuesday, August 4th. Morgan Stanley lowered Vertex from an “overweight” rating to an “equal weight” rating and dropped their price objective for the company from $19.00 to $15.00 in a research note on Tuesday, July 21st. Piper Sandler raised their price objective on Vertex from $16.00 to $20.00 and gave the company a “neutral” rating in a research report on Thursday. Stephens cut their price objective on Vertex from $20.00 to $18.00 and set an “overweight” rating for the company in a research report on Tuesday, August 4th. Finally, Weiss Ratings upgraded Vertex from a “sell (d)” rating to a “sell (d+)” rating in a research note on Friday, October 23rd. Six equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Hold” and an average target price of $18.79.

Key Headlines Impacting Vertex

Here are the key news stories impacting Vertex this week:

• Positive Sentiment: Vertex reported third-quarter earnings of $0.26 per share, beating the $0.22 consensus, while revenue of $213.28 million exceeded estimates of $209.72 million and grew 11% year over year. The results and the company’s release of guidance are likely supporting investor optimism. Vertex Announces Third Quarter 2026 Financial Results
• Positive Sentiment: Needham raised its price target to $30 from $20 and maintained a buy rating, signaling increased confidence in the stock’s potential. Needham analyst recommendations
• Neutral Sentiment: Piper Sandler lifted its target to $20 from $16 but kept a neutral rating, reflecting a more measured view despite the higher target. Piper Sandler analyst recommendations
• Negative Sentiment: A Seeking Alpha article recommended locking in gains after the rebound and downgraded Vertex, presenting a cautionary view that could temper enthusiasm following the earnings-driven rise. Vertex Software: Lock In Gains On This Rebound (Rating Downgrade)

About Vertex

Vertex, Inc is a tax technology company that provides software and services to help businesses manage tax determination, compliance and reporting. Its solutions are designed to support complex transaction tax requirements across sales and use tax, value-added tax, goods and services tax, communications tax, and other indirect taxes.

The company’s offerings include cloud-based and enterprise tax software, tax calculation engines, compliance and returns management tools, tax data management, and related professional services.