Vertex reported third quarter 2026 results that surpassed analyst expectations on both top and bottom lines, driven by strong momentum in cloud-based solutions and e-invoicing. Total revenue grew 11% year-over-year to $213.3 million, while cloud revenue growth accelerated to 20.4%, providing evidence of a stabilizing transition to SaaS. Despite a GAAP net loss driven by a significant one-time income tax expense, the company achieved substantial margin expansion and raised its full-year outlook.
Key Highlights
- Cloud revenue reached $110.8 million, growing 20.4% year-over-year and exceeding the reset expectation of 18%.
- Annual Recurring Revenue (ARR) increased 11.7% to $724.3 million, supported by average annual revenue per direct customer rising to $145,793.
- Adjusted EBITDA margin expanded 780 basis points to 30.4% compared to 22.6% in the prior-year period, reflecting increased operating efficiency.
- Net Revenue Retention (NRR) improved to 106% from 105% in the sequential second quarter of 2026.
- Management raised full-year 2026 revenue guidance to a midpoint of $829.9 million and increased its cloud growth target to 19%.