Vertex, Inc. Q2 2025: Navigating Contradictions in Strategy, Investments, and Growth Plans

Reducing headcount and strategic focus, investment strategy and market growth expectations, revenue growth and strategic goals, cloud migration and ERP system growth, and hiring plans and strategic focus are the key contradictions discussed in Vertex, Inc.'s latest 2025Q2 earnings call.



Revenue and Subscription Growth:
- Vertex Inc. reported revenue of $184.6 million for Q2, up 14.6% year-over-year.
- Subscription revenue grew 15.7%, and cloud revenue increased to 29.9%.
- The growth was impacted by macroeconomic factors affecting customer activity and slower ERP migrations, necessitating a reduction in full-year guidance.

Annual Recurring Revenue (ARR) and Customer Engagement:
- ARR grew 16.1% to $636.6 million.
- The average annual revenue per customer increased 12.7% to $142,600.
- The increase in ARR and customer engagement was driven by strong customer satisfaction and product stickiness.

Net Revenue Retention (NRR) and Regulatory Challenges:
- NRR decreased to 108%, down from 110% in the previous quarter.
- The decline was attributed to lower growth in additional entitlements and regulatory changes in Brazil causing compliance confusion.
-Delayed deal activity among multinational customers also affected the NRR.

Investment and Market Expansion:
- Vertex continues to expand its global platform and invest in AI technology, enhancing its global compliance platform.
- The company is actively expanding its country coverage to capitalize on the growing e-invoicing mandates globally.
- These strategic investments are aimed at supporting sustained NRR growth and capturing opportunities in the underpenetrated enterprise market.