Vertex, Inc. (NASDAQ: VERX) (“Vertex” or the “Company”), a leading
global provider of indirect tax solutions, today announced
financial results for its fourth quarter and full year ended
December 31, 2023.
“The Vertex execution engine delivered
exceptionally strong financial results in the fourth quarter,”
stated David DeStefano, President, Chief Executive Officer, and
Chairperson of the Board. “Our year-over-year revenue growth
increased to 18.1%, the highest we've achieved since becoming a
public company. Moreover, our cash provided by operating activities
increased by over 16% compared to 2022, and we generated our
strongest quarterly free cash flow in over three years, resulting
in positive free cash flow for the full year. We believe this
robust finish to the year paves the way for continued profitable
growth with increasing earnings leverage in 2024.”
DeStefano added, “These results once again
demonstrate our market leadership, the strength of our brand and
the durability of our business. The growth investments we’ve made
are building momentum and have positioned us well to capitalize on
the growth opportunities ahead. I’m incredibly proud of the focused
execution from all our 1,500 employees in serving our distinguished
customers and partners.”
Fourth Quarter 2023 Financial Results
- Total revenues of $154.9 million,
up 18.1% year-over-year.
- Software subscription revenues of
$130.7 million, up 17.9% year-over-year.
- Cloud revenues of $60.6 million, up
29.9% year-over-year.
- Annual Recurring Revenue (“ARR”)
was $512.5 million, up 18.9% year-over-year.
- Average Annual Revenue per direct
customer (“AARPC”) was $118,910 at December 31, 2023, compared to
$100,500 at December 31, 2022 and $112,690 at September 30,
2023.
- Net Revenue Retention (“NRR”) was
113%, compared to 110% at December 31, 2022, and 111% at September
30, 2023.
- Gross Revenue Retention (“GRR”) was
95%, compared to 96% at both December 31, 2022, and September 30,
2023.
- Loss from operations of $(2.5)
million, compared to loss from operations of $(3.4) million for the
same period prior year. Non-GAAP operating income of $28.2 million,
compared to $17.7 million for the same period prior year.
- Net income of $15.3 million,
compared to net loss of $(5.3) million for the same period prior
year.
- Net income per basic Class A and
Class B shares of $0.10, and diluted Class A and Class B shares of
$0.09 for 2023, compared to net loss per basic and diluted Class A
and Class B of $(0.04) for the same period prior year.
- Non-GAAP net income of $21.0
million and Non-GAAP diluted EPS of $0.13.
- Adjusted EBITDA of $32.0 million,
compared to $21.0 million for the same period prior year. Adjusted
EBITDA margin of 20.7%, compared to 16.0% for the same period prior
year.
Full-Year 2023 Financial Results
- Total revenues of $572.4 million,
up 16.4% year-over-year.
- Software subscription revenues of
$480.8 million, up 15.7% year-over-year.
- Cloud revenues of $214.6 million,
up 27.1% year-over-year.
- Loss from operations of $(17.5)
million, compared to a loss from operations of $(8.1) million for
the same period prior year. Non-GAAP operating income of $85.6
million, compared to $66.2 million for the prior year.
- Net loss of $(13.1) million,
compared to a net loss of $(12.3) million for the prior year.
- Net loss per basic and diluted
Class A and Class B share was $(0.09) compared to net loss per
basic and diluted Class A and Class B of $(0.08) for the prior
year.
- Non-GAAP net income of $63.7
million and Non-GAAP diluted EPS of $0.39.
- Adjusted EBITDA of $100.8 million,
compared to $78.7 million for the prior year. Adjusted EBITDA
margin of 17.6%, compared to 16.0% for the prior year.
- Cash provided by operating
activities of $74.3 million, compared to $63.8 million for the
prior year. Free cash flow of $6.1 million, compared to $3.4
million for the prior year.
Definitions of certain key business metrics and
the non-GAAP financial measures used in this press release and
reconciliations of such measures to the most directly comparable
GAAP financial measures are included below under the headings
“Definitions of Certain Key Business Metrics” and “Use and
Reconciliation of Non-GAAP Financial Measures.”
Financial Outlook
For the first quarter of 2024, the Company
currently expects:
- Revenues of $152 million to $156
million; and
- Adjusted EBITDA of $29 million to
$31 million.
For the full-year 2024, the Company currently
expects:
- Revenues of $650 to $660
million;
- Cloud revenue growth of 28%;
and
- Adjusted EBITDA of $130 to $135
million.
John Schwab, Chief Financial Officer added, “We
believe we have multiple drivers in our business to deliver ongoing
revenue growth into the mid to high teens, as well as significant
earnings leverage. Accordingly, our guidance for 2024 reflects
continued confidence in the path ahead.”
The Company is unable to reconcile
forward-looking Adjusted EBITDA to net income (loss), the most
directly comparable GAAP financial measure, without unreasonable
efforts because the Company is currently unable to predict with a
reasonable degree of certainty the type and extent of certain items
that would be expected to impact net income (loss) for these
periods but would not impact Adjusted EBITDA. Such items may
include stock-based compensation expense, depreciation and
amortization of capitalized software costs and acquired intangible
assets, severance expense, acquisition contingent consideration,
amortization of cloud computing implementation costs in general and
administrative expense, adjustments to the settlement value of
deferred purchase commitment liabilities, litigation settlements,
transaction costs, and other items. The unavailable information
could have a significant impact on the Company’s net income (loss).
The foregoing forward-looking statements reflect the Company’s
expectations as of today's date. Given the number of risk factors,
uncertainties and assumptions discussed below, actual results may
differ materially. The Company does not intend to update its
financial outlook until its next quarterly results
announcement.
Important disclosures in this earnings release
about and reconciliations of non-GAAP financial measures to the
most directly comparable GAAP financial measures are provided below
under “Use and Reconciliation of Non-GAAP Financial Measures.”
Conference Call and Webcast Information
Vertex will host a conference call at 8:30 a.m. Eastern Time
today, February 29, 2024, to discuss its fourth quarter and full
year 2023 financial results.
Those wishing to participate may do so by dialing 1-412-317-6026
approximately ten minutes prior to start time. A listen-only
webcast of the call will also be available through the Company’s
Investor Relations website at https://ir.vertexinc.com.
A conference call replay will be available approximately one
hour after the call by dialing 1-412-317-6671 and referencing
passcode 10185697, or via the Company’s Investor Relations website.
The replay will expire on March 14, 2024 at 11:59 p.m. Eastern
Time.
About Vertex
Vertex, Inc. is a leading global provider of
indirect tax solutions. The Company’s mission is to deliver the
most trusted tax technology enabling global businesses to transact,
comply and grow with confidence. Vertex provides solutions that can
be tailored to specific industries for major lines of indirect tax,
including sales and consumer use, value added and payroll.
Headquartered in North America, and with offices in South America
and Europe, Vertex employs over 1,500 professionals and serves
companies across the globe.
For more information, visit www.vertexinc.com or
follow on Twitter and LinkedIn.
Forward Looking Statements
Any statements made in this press release that
are not statements of historical fact, including statements about
our beliefs and expectations, are forward-looking statements and
should be evaluated as such. Forward-looking statements include
information concerning possible or assumed future results of
operations, including descriptions of our business plan and
strategies. Forward-looking statements are based on Vertex
management’s beliefs, as well as assumptions made by, and
information currently available to, them. Because such statements
are based on expectations as to future financial and operating
results and are not statements of fact, actual results may differ
materially from those projected. Factors which may cause actual
results to differ materially from current expectations include, but
are not limited to: our ability to attract new customers on a
cost-effective basis and the extent to which existing customers
renew and upgrade their subscriptions; our ability to sustain and
expand revenues, maintain profitability, and to effectively manage
our anticipated growth; our ability to identify acquisition targets
and to successfully integrate and operate acquired businesses; our
ability to maintain and expand our strategic relationships with
third parties; the potential effects on our business from the
existence of a global endemic or pandemic; and the other factors
described under the heading “Risk Factors” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2023 to be
filed with the Securities Exchange Commission (“SEC”), as may be
subsequently updated by our other SEC filings. Copies of such
filings may be obtained from the Company or the SEC.
All forward-looking statements reflect our
beliefs and assumptions only as of the date of this press release.
We undertake no obligation to update forward-looking statements to
reflect future events or circumstances.
Definitions of Certain Key Business
Metrics
Annual Recurring Revenue (“ARR”)
We derive the vast majority of our revenues from
recurring software subscriptions. We believe ARR provides us with
visibility to our projected software subscription revenues in order
to evaluate the health of our business. Because we recognize
subscription revenues ratably, we believe investors can use ARR to
measure our expansion of existing customer revenues, new customer
activity, and as an indicator of future software subscription
revenues. ARR is based on monthly recurring revenues (“MRR”) from
software subscriptions for the most recent month at period end,
multiplied by twelve. MRR is calculated by dividing the software
subscription price, inclusive of discounts, by the number of
subscription covered months. MRR only includes direct customers
with MRR at the end of the last month of the measurement period.
AARPC represents average annual revenue per direct customer and is
calculated by dividing ARR by the number of software subscription
direct customers at the end of the respective period.
Net Revenue Retention Rate (“NRR”)
We believe that our NRR provides insight into
our ability to retain and grow revenues from our direct customers,
as well as their potential long-term value to us. We also believe
it demonstrates to investors our ability to expand existing
customer revenues, which is one of our key growth strategies. Our
NRR refers to the ARR expansion during the 12 months of a reporting
period for all direct customers who were part of our customer base
at the beginning of the reporting period. Our NRR calculation takes
into account any revenues lost from departing direct customers or
those who have downgraded or reduced usage, as well as any revenue
expansion from migrations, new licenses for additional products or
contractual and usage-based price changes.
Gross Revenue Retention Rate (“GRR”)
We believe our GRR provides insight into and
demonstrates to investors our ability to retain revenues from our
existing direct customers. Our GRR refers to how much of our MRR we
retain each month after reduction for the effects of revenues lost
from departing direct customers or those who have downgraded or
reduced usage. GRR does not take into account revenue expansion
from migrations, new licenses for additional products or
contractual and usage-based price changes. GRR does not include
revenue reductions resulting from cancellations of customer
subscriptions that are replaced by new subscriptions associated
with customer migrations to a newer version of the related software
solution.
Customer Count
The following table shows Vertex’s direct customers, as well as
indirect small business customers sold and serviced through the
company’s one-to-many channel strategy:
Customers |
Q4 2022 |
Q1 2023 |
Q2 2023 |
Q3 2023 |
Q4 2023 |
Direct |
4,289 |
4,278 |
4,284 |
4,303 |
4,310 |
Indirect |
270 |
291 |
329 |
373 |
404 |
Total |
4,559 |
4,569 |
4,613 |
4,676 |
4,714 |
Use and Reconciliation of Non-GAAP Financial
Measures
In addition to our results determined in
accordance with accounting principles generally accepted in the
U.S. (“GAAP”) and key business metrics described above, we have
calculated non-GAAP cost of revenues, non-GAAP gross profit,
non-GAAP gross margin, non-GAAP research and development expense,
non-GAAP selling and marketing expense, non-GAAP general and
administrative expense, non-GAAP operating income, non-GAAP net
income, non-GAAP diluted EPS, Adjusted EBITDA, Adjusted EBITDA
margin, free cash flow and free cash flow margin, which are each
non-GAAP financial measures. We have provided tabular
reconciliations of each of these non-GAAP financial measures to its
most directly comparable GAAP financial measure.
Management uses these non-GAAP financial
measures to understand and compare operating results across
accounting periods, for internal budgeting and forecasting
purposes, and to evaluate financial performance and liquidity. Our
non-GAAP financial measures are presented as supplemental
disclosure as we believe they provide useful information to
investors and others in understanding and evaluating our results,
prospects, and liquidity period-over-period without the impact of
certain items that do not directly correlate to our operating
performance and that may vary significantly from period to period
for reasons unrelated to our operating performance, as well as
comparing our financial results to those of other companies. Our
definitions of these non-GAAP financial measures may differ from
similarly titled measures presented by other companies and
therefore comparability may be limited. In addition, other
companies may not publish these or similar metrics. Thus, our
non-GAAP financial measures should be considered in addition to,
not as a substitute for, or in isolation from, the financial
information prepared in accordance with GAAP, and should be read in
conjunction with the consolidated financial statements included in
our Annual Report on Form 10-K for the year ended December 31,
2023, to be filed with the SEC.
We calculate these non-GAAP financial measures
as follows:
- Non-GAAP cost
of revenues, software subscriptions is determined by adding back to
GAAP cost of revenues, software subscriptions, the stock-based
compensation expense, and depreciation and amortization of
capitalized software and acquired intangible assets included in
cost of subscription revenues for the respective periods.
- Non-GAAP cost
of revenues, services is determined by adding back to GAAP cost of
revenues, services, the stock-based compensation expense included
in cost of revenues, services for the respective periods.
- Non-GAAP gross
profit is determined by adding back to GAAP gross profit the
stock-based compensation expense, and depreciation and amortization
of capitalized software and acquired intangible assets included in
cost of subscription revenues for the respective periods.
- Non-GAAP gross
margin is determined by dividing non-GAAP gross profit by total
revenues for the respective periods.
- Non-GAAP
research and development expense is determined by adding back to
GAAP research and development expense the stock-based compensation
expense included in research and development expense for the
respective periods.
- Non-GAAP
selling and marketing expense is determined by adding back to GAAP
selling and marketing expense the stock-based compensation expense
and the amortization of acquired intangible assets included in
selling and marketing expense for the respective periods.
- Non-GAAP
general and administrative expense is determined by adding back to
GAAP general and administrative expense the stock-based
compensation expense, amortization of cloud computing
implementation costs and severance expense included in general and
administrative expense for the respective periods.
- Non-GAAP operating income is
determined by adding back to GAAP loss or income from operations
the stock-based compensation expense, depreciation and amortization
of capitalized software and acquired intangible assets included in
cost of subscription revenues, amortization of acquired intangible
assets included in selling and marketing expense, amortization of
cloud computing implementation costs in general and administrative
expense, severance expense, acquisition contingent consideration,
litigation settlements, and transaction costs, included in GAAP
loss or income from operations for the respective periods.
- Non-GAAP net income is determined
by adding back to GAAP net loss or income the income tax benefit or
expense, stock-based compensation expense, depreciation and
amortization of capitalized software and acquired intangible assets
included in cost of subscription revenues, amortization of acquired
intangible assets included in selling and marketing expense,
amortization of cloud computing implementation costs in general and
administrative expense, severance expense, acquisition contingent
consideration, changes in the settlement value of deferred purchase
commitment liabilities recorded as interest expense, litigation
settlements, and transaction costs, included in GAAP net loss or
income for the respective periods to determine non-GAAP loss or
income before income taxes. Non-GAAP loss or income before income
taxes is then adjusted for income taxes calculated using the
respective statutory tax rates for applicable jurisdictions, which
for purposes of this determination were assumed to be 25.5%.
- Non-GAAP net
income per diluted share of Class A and Class B common stock
(“Non-GAAP diluted EPS”) is determined by dividing non-GAAP net
income by the weighted average shares outstanding of all classes of
common stock, inclusive of the impact of dilutive common stock
equivalents to purchase such common stock, including stock options,
restricted stock awards, restricted stock units and employee stock
purchase plan shares.
- Adjusted EBITDA
is determined by adding back to GAAP net income or loss the net
interest income or expense (including adjustments to the settlement
value of deferred purchase commitment liabilities), income taxes,
depreciation and amortization of property and equipment,
depreciation and amortization of capitalized software and acquired
intangible assets included in cost of subscription revenues,
amortization of acquired intangible assets included in selling and
marketing expense, amortization of cloud computing implementation
costs in general and administrative expense, asset impairments,
stock-based compensation expense, severance expense, acquisition
contingent consideration, changes in the settlement value of
deferred purchase commitment liabilities recorded as interest
expense, litigation settlements, and transaction costs, included in
GAAP net income or loss for the respective periods.
- Adjusted EBITDA
margin is determined by dividing Adjusted EBITDA by total revenues
for the respective periods.
- Free cash flow
is determined by adjusting net cash provided by (used in) operating
activities by purchases of property and equipment and capitalized
software additions for the respective periods.
- Free cash flow
margin is determined by dividing free cash flow by total revenues
for the respective periods.
We encourage investors and others to review our
financial information in its entirety, not to rely on any single
financial measure and to view these non-GAAP financial measures in
conjunction with the related GAAP financial measures.
Vertex, Inc. and
SubsidiariesConsolidated Balance
Sheets(Unaudited) |
|
|
|
|
|
|
|
|
As of December 31, |
|
(In thousands, except
per share data) |
2023 |
|
|
2022 |
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
68,175 |
|
|
$ |
91,803 |
|
|
Funds held for customers |
|
20,976 |
|
|
|
14,945 |
|
|
Accounts receivable, net of allowance of $16,272 and $9,554,
respectively |
|
141,752 |
|
|
|
102,885 |
|
|
Prepaid expenses and other current assets |
|
26,173 |
|
|
|
22,340 |
|
(A) |
Investment securities available-for-sale, at fair value (amortized
cost of $9,550 and $11,220, respectively) |
|
9,545 |
|
|
|
11,173 |
|
|
Total current assets |
|
266,621 |
|
|
|
243,146 |
|
(A) |
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation |
|
100,734 |
|
|
|
101,090 |
|
(A) |
Capitalized software, net of accumulated amortization |
|
38,771 |
|
|
|
39,012 |
|
|
Goodwill and other intangible assets |
|
260,238 |
|
|
|
257,023 |
|
|
Deferred commissions |
|
21,237 |
|
|
|
15,463 |
|
|
Deferred income tax asset |
|
41,708 |
|
|
|
30,938 |
|
|
Operating lease right-of-use assets |
|
14,605 |
|
|
|
17,187 |
|
|
Other assets |
|
16,013 |
|
|
|
15,333 |
|
(A) |
Total assets |
$ |
759,927 |
|
|
$ |
719,192 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current portion of long-term debt |
$ |
2,500 |
|
|
$ |
2,188 |
|
|
Accounts payable |
|
23,596 |
|
|
|
14,329 |
|
|
Accrued expenses |
|
44,735 |
|
|
|
38,234 |
|
|
Customer funds obligations |
|
17,731 |
|
|
|
12,121 |
|
|
Accrued salaries and benefits |
|
12,277 |
|
|
|
10,790 |
|
|
Accrued variable compensation |
|
34,105 |
|
|
|
23,729 |
|
|
Deferred compensation, current |
|
— |
|
|
|
2,809 |
|
|
Deferred revenue, current |
|
290,143 |
|
|
|
268,847 |
|
|
Current portion of operating lease liabilities |
|
3,717 |
|
|
|
4,086 |
|
|
Current portion of finance lease liabilities |
|
74 |
|
|
|
103 |
|
|
Deferred purchase consideration, current |
|
— |
|
|
|
19,824 |
|
|
Purchase commitment and contingent consideration liabilities,
current |
|
11,901 |
|
|
|
6,149 |
|
|
Total current liabilities |
|
440,779 |
|
|
|
403,209 |
|
|
Deferred revenue, net of current portion |
|
2,577 |
|
|
|
10,289 |
|
|
Debt, net of current portion |
|
44,059 |
|
|
|
46,709 |
|
|
Operating lease liabilities, net of current portion |
|
16,567 |
|
|
|
20,421 |
|
|
Finance lease liabilities, net of current portion |
|
51 |
|
|
|
10 |
|
|
Purchase commitment and contingent consideration liabilities, net
of current portion |
|
2,600 |
|
|
|
8,412 |
|
|
Deferred other liabilities |
|
313 |
|
|
|
417 |
|
|
Total liabilities |
|
506,946 |
|
|
|
489,467 |
|
|
Stockholders' equity: |
|
|
|
|
|
|
Preferred shares, $0.001 par value, 30,000 shares authorized; no
shares issued and outstanding |
|
— |
|
|
|
— |
|
|
Class A voting common stock, $0.001 par value, 300,000 shares
authorized; 60,989 and 50,014 shares issued and outstanding,
respectively |
|
61 |
|
|
|
50 |
|
|
Class B voting common stock, $0.001 par value, 150,000 shares
authorized; 92,661 and 100,307 shares issued and outstanding,
respectively |
|
93 |
|
|
|
100 |
|
|
Additional paid in capital |
|
275,155 |
|
|
|
244,820 |
|
|
(Accumulated deficit) retained earnings |
|
(586 |
) |
|
|
12,507 |
|
|
Accumulated other comprehensive loss |
|
(21,742 |
) |
|
|
(27,752 |
) |
|
Total stockholders'
equity |
|
252,981 |
|
|
|
229,725 |
|
|
Total liabilities and stockholders' equity |
$ |
759,927 |
|
|
$ |
719,192 |
|
|
|
|
|
|
|
|
|
(A) December 31, 2022
ending balances reflect an immaterial error correction related to
an understatement of prepaid expenses and other current assets of
$1,957, an overstatement of property and equipment, net of
accumulated depreciation of $14,678, and an understatement of other
assets of $12,721, recorded to correct the presentation of
capitalized cloud computing implementation costs. |
|
|
|
|
|
|
|
Vertex, Inc. and
SubsidiariesConsolidated Statements of
Comprehensive Loss(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
(In thousands, except
per share data) |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions |
$ |
130,695 |
|
|
$ |
110,886 |
|
|
$ |
480,830 |
|
|
$ |
415,473 |
|
Services |
|
24,219 |
|
|
|
20,240 |
|
|
|
91,557 |
|
|
|
76,151 |
|
Total revenues |
|
154,914 |
|
|
|
131,126 |
|
|
|
572,387 |
|
|
|
491,624 |
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions |
|
45,946 |
|
|
|
36,311 |
|
|
|
162,920 |
|
|
|
142,071 |
|
Services |
|
15,365 |
|
|
|
13,168 |
|
|
|
60,888 |
|
|
|
51,061 |
|
Total cost of revenues |
|
61,311 |
|
|
|
49,479 |
|
|
|
223,808 |
|
|
|
193,132 |
|
Gross profit |
|
93,603 |
|
|
|
81,647 |
|
|
|
348,579 |
|
|
|
298,492 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
12,898 |
|
|
|
11,583 |
|
|
|
58,212 |
|
|
|
41,877 |
|
Selling and marketing |
|
37,041 |
|
|
|
35,652 |
|
|
|
140,237 |
|
|
|
125,335 |
|
General and administrative |
|
36,865 |
|
|
|
31,131 |
|
|
|
145,936 |
|
|
|
121,651 |
|
Depreciation and amortization |
|
3,801 |
|
|
|
3,320 |
|
|
|
15,202 |
|
|
|
12,440 |
|
Other operating expense, net |
|
5,489 |
|
|
|
3,344 |
|
|
|
6,502 |
|
|
|
5,271 |
|
Total operating expenses |
|
96,094 |
|
|
|
85,030 |
|
|
|
366,089 |
|
|
|
306,574 |
|
Loss from operations |
|
(2,491 |
) |
|
|
(3,383 |
) |
|
|
(17,510 |
) |
|
|
(8,082 |
) |
Interest expense, net |
|
4,022 |
|
|
|
969 |
|
|
|
4,164 |
|
|
|
2,048 |
|
Loss before income taxes |
|
(6,513 |
) |
|
|
(4,352 |
) |
|
|
(21,674 |
) |
|
|
(10,130 |
) |
Income tax expense (benefit) |
|
(21,847 |
) |
|
|
957 |
|
|
|
(8,581 |
) |
|
|
2,174 |
|
Net income (loss) |
|
15,334 |
|
|
|
(5,309 |
) |
|
|
(13,093 |
) |
|
|
(12,304 |
) |
Other comprehensive (income)
loss: |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments and revaluations, net of
tax |
|
(7,558 |
) |
|
|
(14,277 |
) |
|
|
(5,978 |
) |
|
|
10,219 |
|
Unrealized (gain) loss on investments, net of tax |
|
(12 |
) |
|
|
10 |
|
|
|
(32 |
) |
|
|
36 |
|
Total other comprehensive
(income) loss, net of tax |
|
(7,570 |
) |
|
|
(14,267 |
) |
|
|
(6,010 |
) |
|
|
10,255 |
|
Total comprehensive income (loss) |
$ |
22,904 |
|
|
$ |
8,958 |
|
|
$ |
(7,083 |
) |
|
$ |
(22,559 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to Class A stockholders, basic |
$ |
5,992 |
|
|
$ |
(1,744 |
) |
|
$ |
(4,721 |
) |
|
$ |
(3,771 |
) |
Net income (loss) per Class A share, basic |
$ |
0.10 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
Weighted average Class A common stock, basic |
|
59,862 |
|
|
|
49,332 |
|
|
|
54,753 |
|
|
|
45,864 |
|
Net income (loss) attributable to Class A stockholders,
diluted |
$ |
6,519 |
|
|
$ |
(1,744 |
) |
|
$ |
(4,721 |
) |
|
$ |
(3,771 |
) |
Net income (loss) per Class A share, diluted |
$ |
0.09 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
Weighted average Class A common stock, diluted |
|
69,027 |
|
|
|
49,332 |
|
|
|
54,753 |
|
|
|
45,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Class B stockholders, basic |
$ |
9,342 |
|
|
$ |
(3,565 |
) |
|
$ |
(8,372 |
) |
|
$ |
(8,533 |
) |
Net income (loss) per Class B share, basic |
$ |
0.10 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
Weighted average Class B common stock, basic |
|
93,342 |
|
|
|
100,807 |
|
|
|
97,106 |
|
|
|
103,781 |
|
Net income (loss) attributable to Class B stockholders,
diluted |
$ |
8,815 |
|
|
$ |
(3,565 |
) |
|
$ |
(8,372 |
) |
|
$ |
(8,533 |
) |
Net income (loss) per Class B share, diluted |
$ |
0.09 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
Weighted average Class B common stock, diluted |
|
93,342 |
|
|
|
100,807 |
|
|
|
97,106 |
|
|
|
103,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vertex, Inc. and
SubsidiariesConsolidated Statements of Cash
Flows (Unaudited) |
|
|
|
|
|
|
|
|
Year ended |
|
|
December 31, |
|
(In
thousands) |
2023 |
|
|
2022 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
$ |
(13,093 |
) |
|
$ |
(12,304 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
71,891 |
|
|
|
61,153 |
|
|
Amortization of cloud computing implementation costs |
|
2,570 |
|
|
|
— |
|
|
Provision for subscription cancellations and non-renewals |
|
2,083 |
|
|
|
(196 |
) |
|
Amortization of deferred financing costs |
|
266 |
|
|
|
245 |
|
|
Write-off of deferred financing costs |
|
— |
|
|
|
370 |
|
|
Stock-based compensation expense |
|
33,919 |
|
|
|
19,729 |
|
|
Deferred income tax benefit |
|
(11,574 |
) |
|
|
(1,345 |
) |
|
Non-cash operating lease costs |
|
2,587 |
|
|
|
3,357 |
|
|
Other |
|
5,335 |
|
|
|
4,052 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(45,222 |
) |
|
|
(25,665 |
) |
|
Prepaid expenses and other current assets |
|
(6,354 |
) |
|
|
(2,171 |
) |
(A) |
Deferred commissions |
|
(5,774 |
) |
|
|
(2,908 |
) |
|
Accounts payable |
|
9,241 |
|
|
|
1,369 |
|
|
Accrued expenses |
|
5,837 |
|
|
|
15,064 |
|
|
Accrued and deferred compensation |
|
7,516 |
|
|
|
(12,005 |
) |
|
Deferred revenue |
|
18,172 |
|
|
|
30,768 |
|
|
Operating lease liabilities |
|
(4,224 |
) |
|
|
(4,041 |
) |
|
Other |
|
1,156 |
|
|
|
(11,624 |
) |
(A) |
Net cash provided by operating activities |
|
74,332 |
|
|
|
63,848 |
|
(A) |
Cash flows from investing
activities: |
|
|
|
|
|
|
Acquisition of business, net of cash acquired |
|
— |
|
|
|
(474 |
) |
|
Property and equipment additions |
|
(49,261 |
) |
|
|
(45,532 |
) |
(A) |
Capitalized software additions |
|
(18,972 |
) |
|
|
(14,888 |
) |
|
Purchase of investment securities, available-for-sale |
|
(16,328 |
) |
|
|
(16,518 |
) |
|
Proceeds from sales and maturities of investment securities,
available-for-sale |
|
18,390 |
|
|
|
5,364 |
|
|
Net cash used in investing activities |
|
(66,171 |
) |
|
|
(72,048 |
) |
(A) |
Cash flows from financing activities: |
|
|
|
|
|
|
Net increase (decrease) in customer funds obligations |
|
5,610 |
|
|
|
(11,340 |
) |
|
Proceeds from term loan |
|
— |
|
|
|
50,000 |
|
|
Principal payments on long-term debt |
|
(2,188 |
) |
|
|
(938 |
) |
|
Payments for deferred financing costs |
|
(1,001 |
) |
|
|
(983 |
) |
|
Proceeds from purchases of stock under ESPP |
|
2,486 |
|
|
|
1,951 |
|
|
Payments for taxes related to net share settlement of stock-based
awards |
|
(9,701 |
) |
|
|
(1,104 |
) |
|
Proceeds from exercise of stock options |
|
4,839 |
|
|
|
1,821 |
|
|
Distributions under Tax Sharing Agreement |
|
— |
|
|
|
(536 |
) |
|
Payments for purchase commitment and contingent consideration
liabilities |
|
(6,424 |
) |
|
|
(423 |
) |
|
Payments of finance lease liabilities |
|
(103 |
) |
|
|
(1,354 |
) |
|
Payments for deferred purchase commitments |
|
(20,000 |
) |
|
|
(20,000 |
) |
|
Net cash (used in) provided by financing activities |
|
(26,482 |
) |
|
|
17,094 |
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
724 |
|
|
|
(352 |
) |
|
Net (decrease) increase in cash, cash equivalents and restricted
cash |
|
(17,597 |
) |
|
|
8,542 |
|
|
Cash, cash equivalents and restricted cash, beginning of
period |
|
106,748 |
|
|
|
98,206 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
89,151 |
|
|
$ |
106,748 |
|
|
Reconciliation of cash, cash equivalents and restricted cash to the
Consolidated Balance Sheets, end of period: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
68,175 |
|
|
$ |
91,803 |
|
|
Restricted cash—funds held for customers |
|
20,976 |
|
|
|
14,945 |
|
|
Total cash, cash equivalents and restricted cash, end of
period |
$ |
89,151 |
|
|
$ |
106,748 |
|
|
|
|
|
|
|
|
|
(A) The following
line items reflect an immaterial error correction related to a
reclassification of capitalized cloud computing implementation
costs for the year ended December 31, 2022: (i) Prepaid expenses
and other current assets decreased $1,957; (ii) other changes in
operating assets and liabilities decreased $11,041; and (iii) net
cash provided by operating activities, property and equipment
additions and net cash used in investing activities each decreased
$12,998. |
|
|
Summary of Non-GAAP Financial
Measures(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
|
(Dollars in thousands,
except per share data) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Non-GAAP cost of revenues,
software subscriptions |
$ |
30,357 |
|
$ |
23,974 |
|
$ |
106,038 |
|
$ |
95,047 |
|
Non-GAAP cost of revenues,
services |
$ |
14,973 |
|
$ |
12,790 |
|
$ |
59,042 |
|
$ |
49,628 |
|
Non-GAAP gross profit |
$ |
109,584 |
|
$ |
94,362 |
|
$ |
407,307 |
|
$ |
346,949 |
|
Non-GAAP gross margin |
|
70.7 |
% |
|
72.0 |
% |
|
71.2 |
% |
|
70.6 |
% |
Non-GAAP research and
development expense |
$ |
11,311 |
|
$ |
10,978 |
|
$ |
52,218 |
|
$ |
40,079 |
|
Non-GAAP selling and marketing
expense |
$ |
34,371 |
|
$ |
33,206 |
|
$ |
129,216 |
|
$ |
115,272 |
|
Non-GAAP general and
administrative expense |
$ |
31,426 |
|
$ |
28,791 |
|
$ |
124,925 |
|
$ |
112,650 |
|
Non-GAAP operating income |
$ |
28,239 |
|
$ |
17,711 |
|
$ |
85,646 |
|
$ |
66,233 |
|
Non-GAAP net income |
$ |
21,037 |
|
$ |
12,473 |
|
$ |
63,699 |
|
$ |
47,818 |
|
Non-GAAP diluted EPS |
$ |
0.13 |
|
$ |
0.08 |
|
$ |
0.39 |
|
$ |
0.30 |
|
Adjusted EBITDA |
$ |
32,040 |
|
$ |
21,031 |
|
$ |
100,848 |
|
$ |
78,673 |
|
Adjusted EBITDA margin |
|
20.7 |
% |
|
16.0 |
% |
|
17.6 |
% |
|
16.0 |
% |
Free cash flow |
$ |
28,843 |
|
$ |
23,663 |
|
$ |
6,099 |
|
$ |
3,428 |
|
Free cash flow margin |
|
18.6 |
% |
|
18.0 |
% |
|
1.1 |
% |
|
0.7 |
% |
Vertex, Inc. and
SubsidiariesReconciliation of GAAP to Non-GAAP
Financial
Measures(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
|
(Dollars in
thousands) |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Non-GAAP Cost of
Revenues, Software Subscriptions: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues, software subscriptions |
$ |
45,946 |
|
|
$ |
36,311 |
|
|
$ |
162,920 |
|
|
$ |
142,071 |
|
|
Stock-based compensation expense |
|
(691 |
) |
|
|
(588 |
) |
|
|
(2,834 |
) |
|
|
(2,090 |
) |
|
Depreciation and amortization of capitalized software and acquired
intangible assets – cost of subscription revenues |
|
(14,898 |
) |
|
|
(11,749 |
) |
|
|
(54,048 |
) |
|
|
(44,934 |
) |
|
Non-GAAP cost of revenues, software
subscriptions |
$ |
30,357 |
|
|
$ |
23,974 |
|
|
$ |
106,038 |
|
|
$ |
95,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Cost of
Revenues, Services: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues, services |
$ |
15,365 |
|
|
$ |
13,168 |
|
|
$ |
60,888 |
|
|
$ |
51,061 |
|
|
Stock-based compensation expense |
|
(392 |
) |
|
|
(378 |
) |
|
|
(1,846 |
) |
|
|
(1,433 |
) |
|
Non-GAAP cost of revenues, services |
$ |
14,973 |
|
|
$ |
12,790 |
|
|
$ |
59,042 |
|
|
$ |
49,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
93,603 |
|
|
$ |
81,647 |
|
|
$ |
348,579 |
|
|
$ |
298,492 |
|
|
Stock-based compensation expense |
|
1,083 |
|
|
|
966 |
|
|
|
4,680 |
|
|
|
3,523 |
|
|
Depreciation and amortization of capitalized software and acquired
intangible assets – cost of subscription revenues |
|
14,898 |
|
|
|
11,749 |
|
|
|
54,048 |
|
|
|
44,934 |
|
|
Non-GAAP gross profit |
$ |
109,584 |
|
|
$ |
94,362 |
|
|
$ |
407,307 |
|
|
$ |
346,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
$ |
154,914 |
|
|
$ |
131,126 |
|
|
$ |
572,387 |
|
|
$ |
491,624 |
|
|
Non-GAAP gross margin |
|
70.7 |
|
% |
|
72.0 |
|
% |
|
71.2 |
|
% |
|
70.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Research and
Development Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expense |
$ |
12,898 |
|
|
$ |
11,583 |
|
|
$ |
58,212 |
|
|
$ |
41,877 |
|
|
Stock-based compensation expense |
|
(1,587 |
) |
|
|
(605 |
) |
|
|
(5,994 |
) |
|
|
(1,798 |
) |
|
Non-GAAP research and development expense |
$ |
11,311 |
|
|
$ |
10,978 |
|
|
$ |
52,218 |
|
|
$ |
40,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Selling and
Marketing Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expense |
$ |
37,041 |
|
|
$ |
35,652 |
|
|
$ |
140,237 |
|
|
$ |
125,335 |
|
|
Stock-based compensation expense |
|
(2,075 |
) |
|
|
(1,690 |
) |
|
|
(8,380 |
) |
|
|
(6,284 |
) |
|
Amortization of acquired intangible assets – selling and marketing
expense |
|
(595 |
) |
|
|
(756 |
) |
|
|
(2,641 |
) |
|
|
(3,779 |
) |
|
Non-GAAP selling and marketing expense |
$ |
34,371 |
|
|
$ |
33,206 |
|
|
$ |
129,216 |
|
|
$ |
115,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP General and Administrative Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expense |
$ |
36,865 |
|
|
$ |
31,131 |
|
|
$ |
145,936 |
|
|
$ |
121,651 |
|
|
Stock-based compensation expense |
|
(2,946 |
) |
|
|
(2,085 |
) |
|
|
(14,865 |
) |
|
|
(8,124 |
) |
|
Severance expense |
|
(1,473 |
) |
|
|
(255 |
) |
|
|
(3,576 |
) |
|
|
(877 |
) |
|
Amortization of cloud computing implementation costs – general and
administrative |
|
(1,020 |
) |
|
|
— |
|
|
|
(2,570 |
) |
|
|
— |
|
|
Non-GAAP general and administrative expense |
$ |
31,426 |
|
|
$ |
28,791 |
|
|
$ |
124,925 |
|
|
$ |
112,650 |
|
|
Vertex, Inc. and
SubsidiariesReconciliation of GAAP to Non-GAAP
Financial Measures
(continued)(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
(In thousands, except
per share data) |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Non-GAAP Operating
Income: |
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
$ |
(2,491 |
) |
|
$ |
(3,383 |
) |
|
$ |
(17,510 |
) |
|
$ |
(8,082 |
) |
Stock-based compensation expense |
|
7,691 |
|
|
|
5,346 |
|
|
|
33,919 |
|
|
|
19,729 |
|
Depreciation and amortization of capitalized software and acquired
intangible assets – cost of subscription revenues |
|
14,898 |
|
|
|
11,749 |
|
|
|
54,048 |
|
|
|
44,934 |
|
Amortization of acquired intangible assets – selling and marketing
expense |
|
595 |
|
|
|
756 |
|
|
|
2,641 |
|
|
|
3,779 |
|
Amortization of cloud computing implementation costs – general and
administrative |
|
1,020 |
|
|
|
— |
|
|
|
2,570 |
|
|
|
— |
|
Severance expense |
|
1,473 |
|
|
|
255 |
|
|
|
3,576 |
|
|
|
877 |
|
Acquisition contingent consideration |
|
200 |
|
|
|
300 |
|
|
|
1,549 |
|
|
|
2,300 |
|
Litigation settlement |
|
— |
|
|
|
2,000 |
|
|
|
— |
|
|
|
2,000 |
|
Transaction costs (1) |
|
4,853 |
|
|
|
688 |
|
|
|
4,853 |
|
|
|
696 |
|
Non-GAAP operating income |
$ |
28,239 |
|
|
$ |
17,711 |
|
|
$ |
85,646 |
|
|
$ |
66,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Income: |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
15,334 |
|
|
$ |
(5,309 |
) |
|
$ |
(13,093 |
) |
|
$ |
(12,304 |
) |
Income tax expense |
|
(21,847 |
) |
|
|
957 |
|
|
|
(8,581 |
) |
|
|
2,174 |
|
Stock-based compensation expense |
|
7,691 |
|
|
|
5,346 |
|
|
|
33,919 |
|
|
|
19,729 |
|
Depreciation and amortization of capitalized software and acquired
intangible assets – cost of subscription revenues |
|
14,898 |
|
|
|
11,749 |
|
|
|
54,048 |
|
|
|
44,934 |
|
Amortization of acquired intangible assets – selling and marketing
expense |
|
595 |
|
|
|
756 |
|
|
|
2,641 |
|
|
|
3,779 |
|
Amortization of cloud computing implementation costs – general and
administrative |
|
1,020 |
|
|
|
— |
|
|
|
2,570 |
|
|
|
— |
|
Severance expense |
|
1,473 |
|
|
|
255 |
|
|
|
3,576 |
|
|
|
877 |
|
Change in settlement value of deferred purchase commitment
liability – interest expense |
|
4,020 |
|
|
|
— |
|
|
|
4,020 |
|
|
|
— |
|
Acquisition contingent consideration |
|
200 |
|
|
|
300 |
|
|
|
1,549 |
|
|
|
2,300 |
|
Litigation settlements |
|
— |
|
|
|
2,000 |
|
|
|
— |
|
|
|
2,000 |
|
Transaction costs (1) |
|
4,853 |
|
|
|
688 |
|
|
|
4,853 |
|
|
|
696 |
|
Non-GAAP income before income taxes |
|
28,237 |
|
|
|
16,742 |
|
|
|
85,502 |
|
|
|
64,185 |
|
Income tax adjustment at statutory rate |
|
(7,200 |
) |
|
|
(4,269 |
) |
|
|
(21,803 |
) |
|
|
(16,367 |
) |
Non-GAAP net
income |
$ |
21,037 |
|
|
$ |
12,473 |
|
|
$ |
63,699 |
|
|
$ |
47,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted
EPS: |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
$ |
21,037 |
|
|
$ |
12,473 |
|
|
$ |
63,699 |
|
|
$ |
47,818 |
|
Weighted average Class A and B common stock, diluted |
|
162,369 |
|
|
|
159,561 |
|
|
|
161,761 |
|
|
|
158,881 |
|
Non-GAAP diluted EPS |
$ |
0.13 |
|
|
$ |
0.08 |
|
|
$ |
0.39 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
transaction costs for both the three months and year ended December
31, 2023 periods reflect costs associated with a public tender
offer, which was withdrawn by the Company on January 14, 2024. Both
the three months and year ended December 31, 2022 periods include
offering costs related to the sale of shares of certain of our
Class B shareholders, which are not representative of normal
business operations. |
|
Vertex, Inc. and
SubsidiariesReconciliation of GAAP to Non-GAAP
Financial Measures
(continued)(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Year ended |
|
|
December 31, |
|
|
December 31, |
|
(Dollars in
thousands) |
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
15,334 |
|
|
$ |
(5,309 |
) |
|
|
$ |
(13,093 |
) |
|
$ |
(12,304 |
) |
|
Interest expense, net (1) |
|
4,022 |
|
|
|
969 |
|
|
|
|
4,164 |
|
|
|
2,048 |
|
|
Income tax expense (benefit) |
|
(21,847 |
) |
|
|
957 |
|
|
|
|
(8,581 |
) |
|
|
2,174 |
|
|
Depreciation and amortization – property and equipment |
|
3,801 |
|
|
|
3,320 |
|
|
|
|
15,202 |
|
|
|
12,440 |
|
|
Depreciation and amortization of capitalized software and acquired
intangible assets – cost of subscription revenues |
|
14,898 |
|
|
|
11,749 |
|
|
|
|
54,048 |
|
|
|
44,934 |
|
|
Amortization of acquired intangible assets – selling and marketing
expense |
|
595 |
|
|
|
756 |
|
|
|
|
2,641 |
|
|
|
3,779 |
|
|
Amortization of cloud computing implementation costs – general and
administrative |
|
1,020 |
|
|
|
— |
|
|
|
|
2,570 |
|
|
|
— |
|
|
Stock-based compensation expense |
|
7,691 |
|
|
|
5,346 |
|
|
|
|
33,919 |
|
|
|
19,729 |
|
|
Severance expense |
|
1,473 |
|
|
|
255 |
|
|
|
|
3,576 |
|
|
|
877 |
|
|
Acquisition contingent consideration |
|
200 |
|
|
|
300 |
|
|
|
|
1,549 |
|
|
|
2,300 |
|
|
Litigation settlements |
|
— |
|
|
|
2,000 |
|
|
|
|
— |
|
|
|
2,000 |
|
|
Transaction costs (2) |
|
4,853 |
|
|
|
688 |
|
|
|
|
4,853 |
|
|
|
696 |
|
|
Adjusted EBITDA |
$ |
32,040 |
|
|
$ |
21,031 |
|
|
|
$ |
100,848 |
|
|
$ |
78,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
$ |
154,914 |
|
|
$ |
131,126 |
|
|
|
$ |
572,387 |
|
|
$ |
491,624 |
|
|
Adjusted EBITDA margin |
|
20.7 |
|
% |
|
16.0 |
|
% |
|
|
17.6 |
|
% |
|
16.0 |
|
% |
(1) The three months
and year ended December 31, 2023 periods include $4,020 for the
change in the settlement value of a deferred purchase commitment
liability recorded as interest expense. |
|
(2) The transaction
costs for both the three months and year ended December 31, 2023
periods reflect costs associated with a public tender offer, which
was withdrawn by the Company on January 14, 2024. Both the three
months and year ended December 31, 2022 periods include offering
costs related to the sale of shares of certain of our Class B
shareholders, which are not representative of normal business
operations. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Year ended |
|
|
December 31, |
|
|
December 31, |
|
(Dollars in
thousands) |
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Free Cash
Flow: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
$ |
47,636 |
|
|
$ |
40,249 |
|
(A) |
|
$ |
74,332 |
|
|
$ |
63,848 |
|
(A) |
Property and equipment additions |
|
(13,904 |
) |
|
|
(11,986 |
) |
(A) |
|
|
(49,261 |
) |
|
|
(45,532 |
) |
(A) |
Capitalized software additions |
|
(4,889 |
) |
|
|
(4,600 |
) |
|
|
|
(18,972 |
) |
|
|
(14,888 |
) |
|
Free cash flow |
$ |
28,843 |
|
|
$ |
23,663 |
|
|
|
$ |
6,099 |
|
|
$ |
3,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
$ |
154,914 |
|
|
$ |
131,126 |
|
|
|
$ |
572,387 |
|
|
$ |
491,624 |
|
|
Free cash flow margin |
|
18.6 |
|
% |
|
18.0 |
|
% |
|
|
1.1 |
|
% |
|
0.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Cash provided by operating activities and
property and equipment additions for the three months and year
ended December 31, 2022 reflect immaterial error corrections of
$3,751 and $12,998, respectively related to the reclassification of
capitalized cloud computing implementation costs from property and
equipment additions to prepaid expenses and other current assets
and other changes in operating assets and liabilities. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact:Joe
CrivelliVertex, Inc.ir@vertexinc.com
Media Contact:
Rachel
LitcofskyVertex, Inc.mediainquiries@vertexinc.com
Vertex (NASDAQ:VERX)
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