Vertex, Inc. · NASDAQ:VERX
Vertex — Q1 2026 Earnings Presentation
23 slides from Vertex's earnings presentation, May 7, 2026
Slide 1: First Quarter 2026 Earnings Conference Call
NASDAQ: VERX First Quarter 2026 Earnings Conference Call May 7, 2026
Slide 2: Safe Harbor
Safe Harbor Forward Looking Statements Any statements made in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerni
Slide 3: Christopher Young, President and Chief Executive Officer
Christopher Young President and Chief Executive Officer 3
Slide 4: First Quarter 2026 Highlights
First Quarter 2026 Highlights Revenue of Adjusted EBITDA of $196.6 million $44.1 million up 11% up 18.4% compared to first quarter 2025 compared to first quarter 2025 First quarter guidance: $194 to $196 million Adjusted EBTIDA margin of 22.4 percent First quarter guidance: $40.5 to $43.5 million Cu
Slide 5: April 2026 Value Creation Plan: Execution Reset to Reinvest
April 2026 Value Creation Plan: Execution Reset to Reinvest Improving operating leverage, speed, and focus while continuing to invest in the highest-impact growth initiatives What we’re doing • Tighter prioritization and sequencing of initiatives (focus on highest ROI) • Simplify operating model; st
Slide 6: E-invoicing Update and Brinta Acquisition
E-invoicing Update Brinta Acquisition • Continued strong growth in ARR and Business Description revenue across the Compliance business • Based in Montevideo, Uruguay • Accelerating ARR ahead of key upcoming • AI-native, cloud-based tax compliance solution for e-commerce mandates in Europe and digita
Slide 7: Artificial Intelligence Strategy Overview
Artificial Intelligence Strategy Overview 7
Slide 8: Vertex's AI Moat: Why AI Expands Our Advantage
Vertex’s AI Moat: Why AI Expands Our Advantage Deterministic Core Proprietary Process Deeply Embedded in Complexity is an AI as an Offensive with Auditable for Tax Law Enterprise Order-to- Economic Moat Weapon Outcomes Interpretation Cash Workflows • Enterprise tax must • Ambiguous • Vertex sits bet
Slide 9: AI Product Strategy
AI Product Strategy Improving the way customers work with an AI-powered Vertex platform Embedded AI Data Insights AI-Infused Ecosystem AI User Experience Enhance user experience Leveraging AI agents Streamline workflows through automation to detect patterns and Enhance usability, and connect across
Slide 10: Smart Categorization Solution Summary
Smart Categorization Solution Summary Smart Categorization is an AI-powered application that automates the classification of products into correct taxability categories and drives greater accuracy for O Series configuration. It reduces manual effort, minimizes errors, and ensures O Series is optimiz
Slide 11: Where Smart Categorization helps
Companies may carry more than 30,000 items. These products can be classified hundreds Where Smart Categorization helps of ways based on ingredients, components, package type, size, quantity and more Volume and Granularity Recurring Product Categorization for Supply Chain Management Manual tax catego
Slide 12: Examples of AI Use to Drive Internal Efficiency
Examples of AI Use to Drive Internal Efficiency Customer Success Managed Services Sales Tax Research Engineering & Support • Reduce manual • Boost precision • Accelerate • Drive proactive, • Streamline effort and targeting and seller regulatory analysis predictive care workflows, strengthen effectiv
Slide 13: Q1 2026 New Business Wins
Q1 2026 New Business Wins YANERTEX
Slide 14: Select Existing Customer New Business Wins
Select Existing Customer New Business Wins Industry New Revenue Ecosystem Catalyst Solution E-invoicing, O Series Artificial Intelligence Business expansion Cloud for North Low seven figures Oracle LLMs and complexity American Sales Tax, Value-Added Tax O Series Cloud, North SAP cloud America Use Ta
Slide 15: Select New Logos
Select New Logos Industry New ACV Ecosystem Catalyst Solution O Series Cloud for Competitive North American Sales Healthcare Low six figures Workday displacement Tax and Use Tax, Vertex Consulting O Series Cloud, North Chemical New business America Use Tax, Plus Mid six figures SAP Manufacturing seg
Slide 16: Financial Overview & Outlook
Financial Overview & Outlook Quarter Ended – March 31, 2026 16
Slide 17: Q1 2026 Results – Revenue
Q1 2026 Results – Revenue TOTAL REVENUE SOFTWARE SUBSCRIPTION REVENUE SERVICES REVENUE $196.6M $167.1M $29.5M +11.1% +10.9% +12.2% Year-Over-Year Change Year-Over-Year Change Year-Over-Year Change CLOUD REVENUE ANNUAL RECURRING REVENUE (ARR) $96.8M $687.6M +20.7% +11.2% Year-Over-Year Change Year-Ov
Slide 18: Q1 2026 Results – Customer Metrics
Q1 2026 Results – Customer Metrics Gross Revenue Retention Net Revenue Retention Scaled Customer Growth (Count) 95% 105% +12% +1% Q/Q Stable Q/Q Stable Q/Q Average Annual Revenue Per Direct Customer (AARPC) $140,464 +11% YoY Notes: 1. Based on information as of March 31, 2026. 18 16
Slide 19: Q1 2026 Results – Profitability (Non-GAAP Metrics)
Q1 2026 Results – Profitability (Non-GAAP Metrics) Overall Gross Margin Software Subscription Gross Margin Services Gross Margin Adjusted EBITDA 75.5% 82.4% 35.9% $44.1M +50 bps YoY -20 bps YoY +480 bps YoY +18.4% YoY AEBITDA Margin Free Cash Flow Free Cash Flow Margin 22.4% 7.7M 3.9% +140 bps YoY +
Slide 20: April 2026 Value Creation Plan Overview FY 2026 Impact
April 2026 Value Creation Plan Overview FY 2026 Impact 9% Q1 pretax charge of $6.2 million Fully annualized cash savings of approximately workforce reduction $60 to $70 Significant Approximately million reduction in $14-$16 million per year beginning in 2027 third party spend increase in 2026 AEBITD
Slide 21: Q2 and FY 2026 Financial Guidance
Q2 and FY 2026 Financial Guidance Q2 2026 FY 2026 Revenue expected to be Revenue expected to be $200 to $204 million $823.5 to $831.5 million 25% Cloud Revenue Growth Adjusted EBITDA expected to be Adjusted EBITDA expected to be $47 to $50 million $202 to $208 million 21
Slide 22: Appendix
Appendix 22
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (1) ($ in Thousands) Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Q4’25 Q1’26 Adjusted EBITDA Net Income (Loss) (18,132) (6,896) (3,399) 15,334 2,684 5,164 7,221 (67,798) 11,130 (961) 4,045 (7,003) (2,510) Interest expense, net (350) (105) 597 4,02