Core Insights - Vertex Pharmaceuticals announced that Senior Vice President Paul Negulescu has been awarded the Lasker~DeBakey Clinical Medical Research Award for his contributions to the development of TRIKAFTA®, a triple-drug combination therapy for cystic fibrosis [1] Company Highlights - The award recognizes the significant impact of TRIKAFTA® in providing life-saving treatment for cystic fibrosis patients [1] - Paul Negulescu is one of three recipients of this prestigious award, highlighting the importance of his work in the field of clinical medical research [1]

Company Overview - Vertex, Inc. is a leading global provider of indirect tax solutions, focusing on delivering trusted tax technology for global businesses to transact, comply, and grow with confidence [3] - The company offers tailored solutions for major lines of indirect tax, including sales and consumer use, value added, and payroll [3] - Vertex is headquartered in North America and has offices in South America and Europe, helping major brands simplify the complexity of continuous compliance [3] Upcoming Events - David DeStefano, CEO, and John Schwab, CFO of Vertex, will participate in a fireside chat at the Goldman Sachs Communacopia + Technology Conference [1] - The event is scheduled for September 11, 2025, at 9:30 AM Pacific Time [1] - A live webcast and replay of the presentation will be available on Vertex's investor relations website [2]

Core Insights - The article highlights a shift in consumer shopping behavior, with 85% of consumers starting summer shopping earlier, indicating a new peak season for businesses and tax professionals [1][3] - The traditional peak shopping season has expanded beyond the holidays, with summer travel, back-to-school shopping, and Halloween contributing to increased consumer demand [2] - Automated tax technology is essential for businesses to manage the complexities of tax compliance during these new peak shopping periods [4][5] Consumer Behavior - 53% of consumers are purchasing items earlier due to concerns about price increases and product availability [3] - 55% of consumers prefer a blended shopping experience, shopping both in-store and online [7] - 69% of consumers take advantage of summer holiday weekend sales, which can challenge retailers in maintaining compliance [7] Business Implications - Businesses must prepare for peak shopping periods by implementing automated tax solutions to ensure compliance and accuracy [4][5] - The need for precision in tax operations is paramount, as 76% of consumers buy summer clothing and accessories, and 71% shop for summer hobbies [4] - Automated tax platforms help reduce errors and ensure accurate tax treatment across various sales channels [9][14] Tax Compliance Challenges - Seasonal shopping spikes introduce complex tax challenges due to varying tax rates and rules across jurisdictions [6] - Different fulfillment methods can trigger varying tax rules, complicating compliance for businesses [9] - Automated tax solutions are crucial for handling high volumes of transactions without disruption [14] Company Overview - Vertex Inc. is a global provider of indirect tax solutions, helping businesses manage tax compliance and operational efficiency [11] - The company offers tailored solutions for various industries, focusing on major lines of indirect tax [11]

Core Viewpoint - Vertex Pharmaceuticals has experienced a significant decline in its stock price, dropping 17% over the past year, despite previously strong performance and growth potential [1][2]. Financial Performance - In the most recent quarter ending June 30, Vertex reported a revenue increase of over 12% year-over-year, reaching just under $3 billion, and is on track to meet its full-year revenue guidance of around $12 billion, which would represent a 9% increase from the previous year [6]. - The company's net income for the last quarter was $1 billion, equating to a profit margin of 35% [8]. Product Portfolio and Market Position - Vertex is a leader in cystic fibrosis treatments, which account for nearly all of its revenue, but is expanding its portfolio with new products like Journavx and Casgevy [7]. - Journavx, recently launched, generated $12 million in revenue over the last three months, while Casgevy has brought in over $30 million [8]. Recent Developments - The stock price fell sharply following the announcement that VX-993, a treatment for acute pain, did not meet its primary endpoint in a phase 2 trial, leading to the decision not to proceed with further trials [4][5]. - Prior to this news, Vertex's stock was trading around $470 but has since dropped to approximately $396 [5]. Valuation and Investment Potential - Vertex's stock is currently trading at 22 times its projected future earnings, which is considered modest compared to the average S&P 500 stock trading at a forward price-to-earnings multiple of 24 [9]. - Despite the recent setback with VX-993, Vertex is viewed as a potential growth stock due to its expanding drug portfolio and strong profitability [10].

Group 1 - The article introduces "The Undercovered Dozen," a selection of twelve actionable investment ideas focusing on tickers with less coverage [1] - Inclusion criteria for the "undercovered" list include a market cap greater than $100 million, over 800 symbol page views in the last 90 days, and fewer than two articles published in the past 30 days [1]

Group 1 - The core investment thesis for Vertex Inc. (NASDAQ: VERX) has been upgraded to a buy rating due to intact growth drivers and a more reasonable valuation [1] - The investment strategy focuses on long-term investments while also incorporating short-term shorts to uncover alpha opportunities [1] - The approach is centered on bottom-up analysis, assessing the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Group 1 - Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) experienced a price decline of approximately 20% over the past month, which aligns with the anticipated correction [1] - The decline was expected, but the specific reasons for the correction were not detailed in the article [1] Group 2 - The article mentions the author's background as a macroeconomist with over 20 years of experience in investment management, stock broking, and investment banking [1] - The author runs a profile called Long Term Tips (LTT), focusing on opportunities in the green economy, and leads an investing group named Green Growth Giants, which explores deeper opportunities in this sector [1]

Core Insights - Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) has been previously analyzed, indicating a consistent interest in the company's performance and potential [1] - The author emphasizes the importance of patient investing and the accumulation of high-quality assets, suggesting a long-term investment strategy [1] Company Overview - Vertex Pharmaceuticals is recognized for its commitment to improving the world through its business practices, aligning with ethical investment principles [1] - The company is involved in transformative technologies, which may present high-risk, high-reward investment opportunities [1] Investment Philosophy - The investment approach combines steady accumulation of quality assets with opportunities in underappreciated turnaround plays [1] - The author advocates for dividend reinvesting as a method to enhance wealth creation over time [1]

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Forward-looking statements are subject to risks and uncertainties, with actual results potentially differing due to operational, technological, and economic factors - **Forward-looking statements** in this report are subject to risks, uncertainties, and assumptions, and actual results may differ materially from expectations[9](index=9&type=chunk) - Key risk factors include the ability to maintain and grow revenue, expand strategic relationships, adapt to technological change (including **AI**), manage **IT** risks, attract and retain talent, and navigate competitive and economic pressures[9](index=9&type=chunk) - Additional factors include risks related to failures in information technology, incorrect solution implementation, changes in tax laws, cybersecurity, legal proceedings, global economic weakness, and intellectual property protection[11](index=11&type=chunk) Part I - Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Vertex's unaudited condensed consolidated financial statements for Q2 2025 and FY 2024, covering balance sheets, income, equity, cash flows, and detailed accounting notes Condensed Consolidated Balance Sheets (Amounts in millions) | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :------------------ | | **Assets** | | | | Total current assets | $502.731 | $536.333 | | Property and equipment, net | $195.034 | $177.559 | | Capitalized software, net | $35.659 | $36.350 | | Goodwill and other intangible assets | $397.312 | $363.021 | | Long-term investment | $15.000 | — | | **Total assets** | **$1,198.189** | **$1,166.791** | | **Liabilities** | | | | Total current liabilities | $506.324 | $537.376 | | Debt, net of current portion | $336.349 | $335.220 | | **Total liabilities** | **$950.147** | **$987.439** | | **Stockholders' Equity** | | | | Total stockholders' equity | $248.042 | $179.352 | | **Total liabilities and stockholders' equity** | **$1,198.189** | **$1,166.791** | Condensed Consolidated Statements of Comprehensive Income (Loss) (Amounts in millions, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $184.559 | $161.104 | $361.621 | $317.885 | | Gross profit | $121.200 | $102.688 | $234.194 | $198.480 | | Income (loss) from operations | $(3.864) | $7.545 | $0.622 | $5.980 | | Net income (loss) | $(0.961) | $5.164 | $10.169 | $7.848 | | Net income (loss) per share, basic | $(0.01) | $0.03 | $0.06 | $0.05 | | Net income (loss) per share, dilutive | $(0.01) | $0.03 | $0.06 | $0.05 | Condensed Consolidated Statements of Changes in Stockholders' Equity (Amounts in millions) | Metric | Balance, January 1, 2025 | Balance, June 30, 2025 | Balance, January 1, 2024 | Balance, June 30, 2024 | | :--------------------------------- | :----------------------- | :--------------------- | :----------------------- | :--------------------- | | Total Stockholders' Equity | $179.352 | $248.042 | $252.981 | $233.130 | | Net income (loss) (6 months) | $10.169 | $10.169 | $7.848 | $7.848 | | Stock-based compensation expense (6 months) | $30.325 | $30.325 | $24.769 | $24.769 | | Foreign currency translation adjustments (6 months) | $44.839 | $44.839 | $(7.346) | $(7.346) | Condensed Consolidated Statements of Cash Flows (Amounts in millions) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $60.808 | $82.292 | | Net cash used in investing activities | $(59.262) | $(47.837) | | Net cash provided by (used in) financing activities | $(20.157) | $238.126 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(15.304) | $271.792 | | Cash, cash equivalents and restricted cash, end of period | $310.762 | $360.943 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed explanations for Vertex's condensed consolidated financial statements, covering accounting policies, revenue, investments, and other key financial areas [Note 1. Summary of Significant Accounting Policies](index=10&type=section&id=1.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - **Vertex provides state, local, and value-added tax calculation, compliance, and analytics solutions through software license and cloud subscriptions, along with implementation, training, and tax-related services to U.S. and international customers**[24](index=24&type=chunk) - The company completed the acquisition of **ecosio GmbH** on **August 30, 2024**, and acquired the remaining **20% equity interest** in Systax Sistemas Fiscais LTDA on **June 5, 2024**, making both wholly-owned subsidiaries[26](index=26&type=chunk)[27](index=27&type=chunk) - New accounting pronouncements, **ASU 2023-09** (Income Tax Disclosures) and **ASU 2024-03** (Expense Disaggregation Disclosures), are effective for fiscal years beginning after **December 15, 2024**, and **December 15, 2026**, respectively, and are not expected to materially affect financial statements other than disclosures[32](index=32&type=chunk)[33](index=33&type=chunk) [Note 2. Revenue Recognition](index=12&type=section&id=2.%20REVENUE%20RECOGNITION) Revenue by Major Source (Amounts in millions) | Revenue Source | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Software licenses | $71.632 | $70.098 | $142.243 | $140.092 | | Cloud subscriptions | $86.212 | $66.345 | $166.362 | $128.181 | | Total software subscriptions | $157.844 | $136.443 | $308.605 | $268.273 | | Services | $26.715 | $24.661 | $53.016 | $49.612 | | **Total revenues** | **$184.559** | **$161.104** | **$361.621** | **$

Core Insights - Vertex reported revenue of $184.56 million for the quarter ended June 2025, reflecting a 14.6% increase year-over-year, and EPS remained stable at $0.15 compared to the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $184.25 million by 0.17%, while the EPS surpassed the consensus estimate of $0.14 by 7.14% [1] Financial Performance Metrics - Annual Recurring Revenue (ARR) was reported at $636.6 million, slightly below the estimated $639.12 million [4] - The Net Revenue Retention Rate was 108%, which fell short of the average estimate of 109.5% [4] - Revenue from Services reached $26.72 million, exceeding the estimated $25.58 million, marking an 8.3% increase year-over-year [4] - Revenue from Software Subscriptions was $157.84 million, slightly below the estimated $158.73 million, but represented a 15.7% increase compared to the previous year [4] Stock Performance - Vertex shares have declined by 8.5% over the past month, contrasting with a 0.5% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]