Core Insights - Vertex (VERX) reported revenue of $194.71 million for Q4 2025, marking a year-over-year increase of 9.1% and exceeding the Zacks Consensus Estimate by 0.29% [1] - The earnings per share (EPS) for the same quarter was $0.17, up from $0.15 a year ago, with an EPS surprise of 1.74% [1] Financial Performance Metrics - Annual Recurring Revenue (ARR) reached $671 million, slightly above the average estimate of $669.76 million [4] - The Net Revenue Retention Rate was reported at 105%, compared to the average estimate of 106.4% [4] - Revenue from Services was $28.49 million, exceeding the average estimate of $25.92 million, reflecting a year-over-year increase of 10.2% [4] - Revenue from Software Subscriptions was $166.23 million, slightly below the average estimate of $168.4 million, with a year-over-year increase of 8.9% [4] Stock Performance - Vertex shares have declined by 24.6% over the past month, contrasting with a minor decline of 0.3% in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Vertex reported quarterly earnings of $0.17 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.15 per share a year ago, resulting in an earnings surprise of +1.74% [1] - The company achieved revenues of $194.71 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.29%, and up from $178.46 million year-over-year [2] - Vertex has exceeded consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times in the same period [2] 分组2 - The stock has underperformed, losing about 25.5% since the beginning of the year, while the S&P 500 has gained 1.4% [3] - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $194.63 million, and for the current fiscal year, it is $0.76 on revenues of $823.73 million [7] - The Internet - Software industry, to which Vertex belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - Revenue for the fourth quarter was $194.7 million, up 9.1% year-over-year, and in line with guidance [21] - Full-year revenue reached $748.4 million, an increase of 12.2% from 2024 [21] - Adjusted EBITDA for the fourth quarter was $42.5 million, an increase of 11.6% year-over-year [28] - Annual recurring revenue (ARR) was $671 million at quarter end, up 11.3% year-over-year [24] - Gross profit for the fourth quarter was $147.4 million, with a gross margin of 75.7% [25] Business Line Data and Key Metrics Changes - Subscription revenue in the fourth quarter increased 8.9% year-over-year to $166.2 million [21] - Services revenue grew 10.2% year-over-year to $28.5 million in the fourth quarter [23] - Cloud revenue for the fourth quarter was $94.6 million, up 23% year-over-year [23] Market Data and Key Metrics Changes - New logos increased by 20% in 2025, indicating healthy revenue from new customers [9] - E-invoicing mandates are expected to drive growth, particularly in the second half of 2026 [39] Company Strategy and Development Direction - The company aims to accelerate revenue growth through AI transformation and innovation [7][10] - Focus on expanding customer success coverage and leveraging AI tools to enhance customer service [9][60] - Plans to broaden the functionality of Smart Categorization and expand into additional industries [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in 2025, including higher customer attrition primarily due to M&A and bankruptcies [8] - Confidence in achieving 2026 revenue guidance of $823.5 million to $831.5 million, with expected cloud revenue growth of 25% [30] - Emphasis on restoring growth and capitalizing on AI and e-invoicing opportunities [20] Other Important Information - The company repurchased approximately $10 million of its shares in the open market [29] - Ended the fourth quarter with over $314 million in unrestricted cash and cash equivalents [29] Q&A Session Summary Question: Can you elaborate on the losses to competitors at the lower end of the market? - Management noted that attrition was higher in 2025, primarily due to M&A and bankruptcies, with the highest churn in smaller customers [35] Question: How confident are you in achieving the guidance for next year? - Management expressed confidence in the guidance, considering various factors and aiming to return to a beat-and-raise cadence [39] Question: What parallels can you draw from your previous experiences that will help at Vertex? - Management highlighted the importance of AI transformation and the need for accuracy in tax compliance, drawing parallels from experiences at Microsoft [44][48] Question: What are your expectations around net retention rates? - Management is focused on improving net retention rates through new product offerings and proactive customer engagement [50] Question: How is the pipeline for 2026 shaping up, particularly with SAP customers? - Management reported steady growth in the SAP pipeline, with ongoing partnerships and win rates remaining strong [55] Question: Have you seen any AI tech budget crowding out affecting entitlement slowdown? - Management has not observed explicit budget crowding out in their business, indicating continued strength in their solutions [88]

Financial Data and Key Metrics Changes - Revenue for the fourth quarter was $194.7 million, up 9.1% year-over-year, and in line with guidance [21] - Full-year revenue reached $748.4 million, an increase of 12.2% from 2024 [21] - Adjusted EBITDA for the fourth quarter was $42.5 million, reflecting an increase of 11.6% year-over-year [28] - Annual recurring revenue (ARR) was $671 million at quarter end, up 11.3% year-over-year [24] - Gross profit for the fourth quarter was $147.4 million, with a gross margin of 75.7% [25] Business Line Data and Key Metrics Changes - Subscription revenue in the fourth quarter increased 8.9% year-over-year to $166.2 million [21] - Services revenue grew 10.2% year-over-year to $28.5 million in the fourth quarter [23] - Cloud revenue for the fourth quarter was $94.6 million, up 23% year-over-year [23] Market Data and Key Metrics Changes - New logo revenue was up 20% in 2025, indicating healthy demand for Vertex's solutions [9] - E-invoicing mandates are expected to drive growth, particularly in the second half of 2026 [39] Company Strategy and Development Direction - The company aims to accelerate revenue growth through AI transformation and innovation [7][10] - Vertex is focusing on expanding its customer success coverage and leveraging AI tools to enhance customer engagement [9] - The company plans to broaden its Smart Categorization offering and expand into additional industries [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in 2025, including lower entitlement growth and higher customer attrition, primarily among smaller accounts [8] - The company is optimistic about restoring growth through new product offerings and proactive customer engagement [20] - Management emphasized the importance of AI in improving workflows and driving future growth [10][12] Other Important Information - The company repurchased approximately $10 million of its shares in the open market [29] - Vertex ended the fourth quarter with over $314 million in unrestricted cash and cash equivalents [29] Q&A Session Summary Question: Can you elaborate on the losses to competitors at the lower end of the market? - Management indicated that attrition was higher in 2025, driven by M&A and bankruptcies, particularly among smaller customers [35] Question: How confident are you in achieving the guidance for next year? - Management expressed confidence in the guidance, citing e-invoicing and AI products as potential growth drivers [39] Question: What parallels can you draw from your previous experiences that will help at Vertex? - Management highlighted the importance of AI and the need for accurate tax compliance as key areas where previous experiences will be beneficial [44][48] Question: What are the expectations around net retention rates? - Management is focused on improving net retention rates through new product offerings and proactive customer engagement [50] Question: How is the pipeline for 2026 shaping up, particularly with SAP customers? - Management noted steady growth in the SAP pipeline, with ongoing partnerships and win rates remaining strong [55] Question: Have you seen any AI tech budget crowding out that might have driven the entitlement slowdown? - Management has not observed explicit budget crowding out affecting their business [88]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $194.7 million, up 9.1% year-over-year, and in line with guidance [20] - Full-year revenue reached $748.4 million, an increase of 12.2% from 2024 [20] - Adjusted EBITDA for Q4 was $42.5 million, reflecting an 11.6% year-over-year increase [27] - Annual recurring revenue (ARR) at year-end was $671 million, up 11.3% year-over-year [23] Business Line Data and Key Metrics Changes - Subscription revenue in Q4 increased 8.9% year-over-year to $166.2 million [20] - Services revenue grew 10.2% year-over-year to $28.5 million in Q4 [22] - Cloud revenue for Q4 was $94.6 million, up 23% year-over-year, with full-year cloud revenue at $352.9 million, up 27.9% [22] Market Data and Key Metrics Changes - New logo revenue was up 20% in 2025, indicating healthy demand from competitive takeaways and customers switching from homegrown solutions [8] - Customer attrition was concentrated in smaller accounts, with the average annual revenue per lost account under $50,000 compared to an overall average of $138,000 [6] Company Strategy and Development Direction - The company aims to accelerate revenue growth through AI transformation and innovation in compliance and e-invoicing [5][19] - Vertex is focusing on expanding customer success coverage and leveraging AI tools to enhance customer engagement and retention [7][9] - The company plans to broaden its Smart Categorization offering and expand into additional industries [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in 2025, including lower entitlement growth and higher customer attrition, primarily driven by M&A and bankruptcies [6] - The company is optimistic about restoring growth, particularly through AI and e-invoicing opportunities [19] - Management emphasized the importance of customer trust and the need for continuous innovation to maintain market leadership [47][48] Other Important Information - The company repurchased approximately $10 million of its shares in Q4 under its stock buyback authorization [28] - Vertex ended Q4 with over $314 million in unrestricted cash and cash equivalents [28] Q&A Session Summary Question: Can you elaborate on the losses to competitors at the lower end of the market? - Management noted that attrition was higher in 2025, primarily due to M&A and bankruptcies, with the highest churn in smaller customers [35] Question: How confident are you in achieving the guidance for next year? - Management expressed confidence in the guidance, citing e-invoicing and AI products as potential growth drivers [37][39] Question: What parallels can you draw from your previous experiences that will help at Vertex? - Management highlighted the importance of AI transformation and the need for accurate tax compliance as key areas of focus [44][47] Question: What is the outlook for net retention rates? - Management is focused on improving net retention rates through new product offerings and proactive customer engagement [49][51] Question: How is the pipeline for 2026 shaping up, particularly with SAP customers? - Management indicated steady growth in the SAP pipeline, with ongoing partnerships and win rates remaining strong [55][57] Question: Have you seen any AI tech budget crowding out affecting entitlement slowdown? - Management has not observed explicit budget crowding out in their business, indicating continued demand for their solutions [90]

Financial Performance - Total revenues for 2025 were $748.4 million, representing a 12.2% year-over-year increase[5] - Software subscription revenues reached $639.7 million, up 12.8% year-over-year[5] - Cloud revenues grew to $352.9 million, marking a 27.9% year-over-year increase[5] - Annual Recurring Revenue (ARR) was $671.0 million, up 11.3% year-over-year[5] - Total revenues for the year ended December 31, 2025, reached $748.4 million, a 12.2% increase from $666.8 million in 2024[30] - Total revenues for the year ended December 31, 2025, were $748,444,000, compared to $666,776,000 in 2024, indicating a 12.2% increase[39] Net Income and Earnings - Net income for Q4 2025 was $7.2 million, compared to a net loss of $(52.7) million for the prior year[5] - Non-GAAP net income for Q4 2025 was $27.8 million, with a Non-GAAP diluted EPS of $0.17[5] - Non-GAAP net income for the year ended December 31, 2025, was $7.2 million, compared to a net loss of $52.7 million in 2024[30] - Net income for the year ended December 31, 2025, was $7,211, compared to a net loss of $52,729 in 2024[32] - Non-GAAP diluted EPS for the year ended December 31, 2025, was $0.64, compared to $0.61 in 2024[34] - Non-GAAP diluted EPS for Q4 2025 was $0.17, up from $0.15 in Q4 2024, representing a 13.3% increase[39] Profitability Metrics - Adjusted EBITDA for 2025 was $161.5 million, with an adjusted EBITDA margin of 21.6%[9] - Adjusted EBITDA for Q4 2025 reached $42,459,000, an increase from $38,061,000 in Q4 2024, marking a 6.3% rise[39] - The adjusted EBITDA margin for Q4 2025 was 21.8%, slightly up from 21.3% in Q4 2024[39] - Non-GAAP operating income for the year ended December 31, 2025, was $136,728, compared to $130,989 in 2024[34] - Non-GAAP operating income for Q4 2025 was $36,086,000, up from $32,540,000 in Q4 2024, representing a 4.7% increase[37] Expenses - Research and development expenses for Q4 2025 were $22.3 million, an increase of 13.9% from $19.6 million in Q4 2024[30] - Selling and marketing expenses for the year ended December 31, 2025, totaled $196.5 million, up from $170.6 million in 2024[30] - Non-GAAP research and development expense for the year ended December 31, 2025, was $71,273, up from $56,395 in 2024[34] - Non-GAAP selling and marketing expense for the year ended December 31, 2025, was $178,595, compared to $154,892 in 2024[34] - Stock-based compensation expense for the year ended December 31, 2025, was $57,763,000, compared to $47,425,000 in 2024, a 21.8% increase[37] Cash Flow and Assets - Free cash flow for the year ended December 31, 2025, was not explicitly stated but is calculated by adjusting net cash from operating activities[30] - Free cash flow for the year ended December 31, 2025, was $47,589, down from $77,708 in 2024, resulting in a free cash flow margin of 6.4%[34] - Free cash flow for Q4 2025 was $10,100,000, down from $17,897,000 in Q4 2024, showing a decrease of 43.8%[39] - Free cash flow margin for the year ended December 31, 2025, was 6.4%, compared to 11.7% in 2024, reflecting a decline[39] - Cash, cash equivalents, and restricted cash at the end of the period increased to $338,295 from $326,066 at the end of 2024[32] - Net cash provided by operating activities for the year ended December 31, 2025, was $165,543, slightly up from $164,821 in 2024[32] Balance Sheet - Total assets as of December 31, 2025, were $1.27 billion, an increase from $1.17 billion in 2024[28] - Total liabilities as of December 31, 2025, were $1.01 billion, compared to $987.4 million in 2024[28] Future Outlook - The company expects revenues for Q1 2026 to be between $193.5 million and $196.5 million[10] - The company is well-positioned to benefit from upcoming e-invoicing mandates in France and Germany, the two largest economies in Europe[2]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Vertex, Inc. reported double-digit revenue growth and significant profitability improvements in 2025, while also investing in future growth opportunities [2] - The company maintained its position as a leading provider of indirect tax solutions and experienced strong growth in its e-invoicing business [2] - Upcoming e-invoicing mandates in France and Germany are expected to provide growth tailwinds for Vertex [2] Financial Performance - Total revenues for Q4 2025 were $194.7 million, representing a 9.1% increase year-over-year [5] - Software subscription revenues reached $166.2 million, up 8.9% year-over-year, while cloud revenues grew by 23.0% to $94.6 million [5] - Annual Recurring Revenue (ARR) was $671.0 million, an increase of 11.3% year-over-year [5] - The company reported a net loss of $7.0 million for Q4 2025, a significant improvement from a net loss of $67.8 million in the same period the previous year [5] Profitability Metrics - Non-GAAP operating income for Q4 2025 was $36.1 million, compared to $32.5 million for the same period in the prior year [5] - Adjusted EBITDA for Q4 2025 was $42.5 million, with an adjusted EBITDA margin of 21.8%, slightly up from 21.3% year-over-year [5] - For the full year 2025, Vertex reported a net income of $7.2 million, a turnaround from a net loss of $52.7 million in 2024 [5] Customer Metrics - The average annual revenue per direct customer (AARPC) increased to $137,867 as of December 31, 2025, compared to $122,706 a year earlier [5] - Net Revenue Retention (NRR) was 105%, down from 109% at the end of 2024, while Gross Revenue Retention (GRR) was 94% [5] Cash Flow and Shareholder Returns - Cash provided by operating activities was $165.5 million, slightly up from $164.8 million in the previous year [5] - Free cash flow for 2025 was $47.6 million, down from $77.7 million in 2024 [5] - The company repurchased approximately $10 million of shares in Q4 2025 under its $150 million buyback authorization [6]

Core Viewpoint - Vertex Pharmaceuticals (VRTX) is expected to exceed expectations in its fourth-quarter and full-year 2025 results, with revenue estimates at $3.17 billion and earnings at $5.07 per share [2]. Group 1: Revenue Drivers - The anticipated revenue growth for VRTX in Q4 is primarily driven by strong demand for its cystic fibrosis (CF) medication, Trikafta/Kaftrio, with sales estimated at $2.57 billion [3]. - Despite the growth in Trikafta/Kaftrio sales, there may be a decline in sales for other CF drugs such as Symdeko, Orkambi, and Kalydeco due to market competition [4]. - The sales performance of VRTX's fifth CF drug, Alyftrek, is also a focal point, with expectations of continued sequential sales growth following a positive launch in the U.S. and Europe [5]. Group 2: New Product Sales Expectations - VRTX's gene therapy, Casgevy, is projected to generate around $40 million in sales for Q4 2025, following a successful launch and reimbursement efforts globally [10]. - The non-opioid pain medicine Journavx is expected to see increased sales in Q4 as prescription volumes rise, despite a slower start in the previous quarter [11]. - Updates on VRTX's pipeline candidates for various diseases are anticipated during the upcoming earnings call, indicating ongoing development in multiple therapeutic areas [12]. Group 3: Earnings Surprise History - VRTX has a mixed earnings surprise history, having beaten estimates in two of the last four quarters, with an average surprise of 2.01% [13]. - The company is predicted to achieve an earnings beat this time, supported by a positive Earnings ESP of +5.38% and a Zacks Rank of 3 [16].

Group 1 - Piper Sandler downgraded ratings for three enterprise software stocks: Adobe, Freshworks, and Vertex, from "Overweight" to "Neutral" and significantly reduced their target prices to $330, $12, and $20 respectively [1] - The rationale for the bearish outlook includes concerns that AI-driven efficiency will suppress or reduce employee growth, negatively impacting software companies that charge per seat [1] - The report anticipates that 2026 will mark the fifth consecutive year of slowing growth in the software industry, leading to valuation downgrades for companies on their coverage list [1] Group 2 - Target prices were also lowered for several other companies including Amplitude, Asana, BlackLine, Braze, Figma, HubSpot, Salesforce, Oracle, Klaviyo, monday.com, ServiceTitan, and ZoomInfo [2] - Despite the overall pessimism in the software sector, Piper Sandler remains optimistic about Microsoft and ServiceTitan, naming them as top picks for 2026 [2] - The analysis suggests that Microsoft is potentially the best pure play in the current AI application space, with positive sentiment emerging from CIO surveys regarding Azure and Copilot activities [2]