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Mar 31
Vertex Q1 2025 Earnings Report
Vertex reported a solid performance in Q1 2025 with revenue growth and profitability improvements.
Key Takeaways
Vertex delivered strong Q1 2025 results with a 12.9% increase in revenue, notable growth in cloud and subscription services, and a rise in net income. The company also maintained robust customer retention metrics and strategic investments in AI and acquisitions.
Total revenue rose to $177.1 million, driven by 14.4% growth in software subscriptions and 29.6% in cloud revenue.
Net income increased to $11.1 million, up from $2.7 million in the prior year.
Annual Recurring Revenue reached $618.5 million, boosted by acquisitions and organic growth.
Free cash flow turned negative at -$12.25 million due to increased capital expenditures.
Vertex
Vertex
Vertex Revenue by Segment
Revenue by Segment
Software Subscriptions Revenue
CapyFin.comServices Revenue
CapyFin.comCloud Revenue
CapyFin.com Forward Guidance
Vertex expects continued growth in Q2 and full-year 2025, with revenue and EBITDA gains supported by strategic investments and secular tailwinds.
Positive Outlook
- Q2 2025 revenue expected to be between $182M and $187M.
- Full-year 2025 revenue guidance of $760M to $768M.
- Cloud revenue expected to grow 28% for FY2025.
- Adjusted EBITDA forecasted between $161M and $165M for FY2025.
- Strategic investment in Kintsugi AI aimed at accelerating AI product development.
Challenges Ahead
- $1M to $2M in deferred Q1 expenses will impact Q2 EBITDA.
- Adjusted EBITDA margin declined to 21.0% from 23.4% YoY.
- Free cash flow turned negative due to higher capital expenditures.
- Reduced Net Revenue Retention from 112% to 109% YoY.
- Customer count slightly decreased from Q4 2024 to Q1 2025.
Revenue & Expenses
Visualization of income flow from segment revenue to net income