Vertex(VERX) - 2023 Q4 - Annual Results

Financial Performance - Total revenues for Q4 2023 were $154.9 million, representing an 18.1% year-over-year increase[5] - Software subscription revenues reached $130.7 million, up 17.9% year-over-year[5] - Cloud revenues grew to $60.6 million, marking a 29.9% year-over-year increase[5] - Annual Recurring Revenue (ARR) was $512.5 million, reflecting an 18.9% year-over-year growth[5] - Net income for Q4 2023 was $15.3 million, compared to a net loss of $(5.3) million in Q4 2022[5] - Non-GAAP operating income for Q4 2023 was $28.2 million, up from $17.7 million in the same period last year[5] - Adjusted EBITDA for Q4 2023 was $32.0 million, compared to $21.0 million for the same period prior year[5] - Total revenues for Q4 2023 reached $154.9 million, a 17.5% increase from $131.1 million in Q4 2022[30] - Software subscription revenues increased to $130.7 million, up 17.9% from $110.9 million year-over-year[30] - The company reported a net income of $15.3 million for Q4 2023, compared to a net loss of $5.3 million in Q4 2022[30] - Non-GAAP net income for Q4 2023 was $21,037,000, compared to $12,473,000 in Q4 2022, representing a 68.5% year-over-year increase[42] - Adjusted EBITDA for Q4 2023 was $32,040,000, up from $21,031,000 in Q4 2022, reflecting a 52.4% increase[43] - The company reported a net income (loss) of $15,334,000 for Q4 2023, compared to a loss of $5,309,000 in Q4 2022[43] Revenue Projections - The company expects full-year 2024 revenues to be between $650 million and $660 million, with cloud revenue growth projected at 28%[10] Customer Metrics - Net Revenue Retention (NRR) was 113%, up from 110% at December 31, 2022[5] - Average Annual Revenue per direct customer (AARPC) increased to $118,910 from $100,500 at December 31, 2022[5] Expenses - Research and development expenses for Q4 2023 were $12.9 million, compared to $11.6 million in Q4 2022, reflecting a 11.4% increase[30] - Selling and marketing expenses rose to $37.0 million in Q4 2023, up from $35.7 million in the same quarter last year[30] - General and administrative expenses increased to $36.9 million in Q4 2023, compared to $31.1 million in Q4 2022[30] - Research and development expenses increased to $52,218,000 for the year, up from $40,079,000 in 2022, representing a rise of 30.2%[39] - The company’s stock-based compensation expense for the year was $33,919,000, compared to $19,729,000 in 2022, reflecting an increase of 71.7%[39] - Stock-based compensation expense increased to $7,691,000 in Q4 2023 from $5,346,000 in Q4 2022[43] - The company incurred transaction costs of $4,853,000 in Q4 2023 related to a public tender offer[44] Cash Flow and Assets - Free cash flow for the year was $6,099,000, a significant increase from $3,428,000 in 2022, representing an 78.1% growth[37] - Free cash flow for Q4 2023 was $28,843,000, compared to $23,663,000 in Q4 2022, indicating a 21.5% increase[45] - The company experienced a net cash provided by operating activities of $74,332,000, an increase from $63,848,000 in 2022, indicating a growth of 16.4%[34] - The company’s cash and cash equivalents at the end of the period were $68,175,000, down from $91,803,000 at the beginning of the period[34] - Total assets as of December 31, 2023, were $759.9 million, an increase from $719.2 million at the end of 2022[27] Profitability Metrics - Gross profit for the year was $348.6 million, representing a gross margin of approximately 60.9%[30] - Non-GAAP gross profit for the year was $407,307,000, up from $346,949,000 in 2022, reflecting a growth of approximately 17.3%[37] - Non-GAAP gross margin for the year was 71.2%, compared to 70.6% in the previous year, showing an improvement of 0.6 percentage points[37] - Adjusted EBITDA margin improved to 20.7% in Q4 2023 from 16.0% in Q4 2022[43] - Free cash flow margin for Q4 2023 was 18.6%, slightly up from 18.0% in Q4 2022[45] Yearly Overview - The company’s total revenues for the year were $572,387,000, up from $491,624,000 in 2022, marking an increase of approximately 16.4%[39] - Non-GAAP operating income for the year was $85,646,000, compared to $66,233,000 in 2022, reflecting a growth of 29.5%[41] - The company reported a net loss of $13,093,000 for the year ended December 31, 2023, compared to a net loss of $12,304,000 in 2022, indicating a slight increase in losses[34]