Form 8-K

8-K — Vertex, Inc.

Accession: 0001104659-26-056674

Filed: 2026-05-07

Period: 2026-05-07

CIK: 0001806837

SIC: 7372 (SERVICES-PREPACKAGED SOFTWARE)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — verx-20260507x8k.htm (Primary)

EX-99.1 (verx-20260507xex99d1.htm)

GRAPHIC (verx-20260507xex99d1001.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: verx-20260507x8k.htm · Sequence: 1

VERTEX, INC._May 7, 2026

0001806837false00018068372026-05-072026-05-07

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 7, 2026

VERTEX, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-39413

23-2081753

(State or other jurisdiction

of incorporation or organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

2301 Renaissance Blvd.

King of Prussia, Pennsylvania 19406

(Address of principal executive offices) (Zip Code)

(800) 355-3500

(Registrant’s telephone number, include area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.001 par value per share

VERX

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On May 7, 2026, Vertex, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

Exhibit

No.

Description

99.1

Press Release dated May 7, 2026

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VERTEX, INC.

Date: May 7, 2026

By:

/s/ Bryan Rowland

Name:

Bryan Rowland

Title:

General Counsel and Secretary

EX-99.1

Filename: verx-20260507xex99d1.htm · Sequence: 2

Exhibit 99.1

Vertex Announces First Quarter 2026 Financial Results

KING OF PRUSSIA, PA – May 7, 2026: Vertex, Inc. (NASDAQ: VERX) (“Vertex” or the “Company”), a leading provider of enterprise compliance technology for global commerce, today announced financial results for its first quarter ended March 31, 2026.

“We delivered a strong first quarter, with revenue and adjusted EBITDA above the higher end of our guidance as well as stability across customer demand and retention,” said Chris Young, President and Chief Executive Officer of Vertex. “As we exited the quarter, we were encouraged by consistent customer behavior and solid execution across the business, even within a mixed macro environment.”

Mr. Young continued, “In addition, in the first quarter we acquired Brinta, an AI-first e-invoicing startup in Latin America. The acquisition of Brinta enables us to expedite our country coverage in Latin America while bringing an AI-native architecture built for one of the most complex real-time compliance environments in the world. That capability includes automation with control and speed with auditability which is where global compliance is heading.”

Mr. Young concluded, “In April, we announced our Value Creation Plan, which is expected to further transform Vertex into a more effective, AI-leading organization. The Value Creation Plan is expected to accelerate profitability and free cash flow while providing resources to invest in the opportunities that matter most. This is not a short-term cost exercise—it is a deliberate reset designed to build a stronger, more profitable foundation that gives us greater flexibility to invest in innovation and long-term growth. We remain confident in the strength of our customer relationships, our market position, and the significant opportunity ahead.”

First Quarter 2026 Financial Results

● Total revenues of $196.6 million, up 11.1% year-over-year.

● Software subscription revenues of $167.1 million, up 10.9% year-over-year.

● Cloud revenues of $96.8 million, up 20.7% year-over-year.

● Annual Recurring Revenue (“ARR”) was $687.6 million, up 11.2% year-over-year.

● Average Annual Revenue per direct customer (“AARPC”) was $140,464 at March 31, 2026, compared to $126,534 at March 31, 2025, and $137,867 at December 31, 2025.

● Net Revenue Retention (“NRR”) was 105%, compared to 109% at March 31, 2025, and 105% at December 31, 2025.

● Gross Revenue Retention (“GRR”) was 95%, compared to 95% at March 31, 2025, and 94% at December 31, 2025.

● Income (loss) from operations of $(10.6) million, compared to $4.5 million for the same period in the prior year.

● Non-GAAP operating income of $37.6 million, compared to $31.3 million for the same period in the prior year.

● Net income (loss) of $(2.5) million, compared to $11.1 million for the same period in the prior year.

● Net loss per basic and diluted Class A and Class B shares of $0.02, compared to net income per basic and diluted Class A and Class B shares of $0.07 for the same period in the prior year.

● Non-GAAP net income of $28.7 million and Non-GAAP diluted earnings per share (“EPS”) of $0.17.

● Adjusted EBITDA of $44.1 million, compared to $37.2 million for the same period in the prior year. Adjusted EBITDA margin of 22.4%, compared to 21.0% for the same period in 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.”

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Financial Outlook

For the second quarter of 2026, the Company currently expects:

● Revenues of $200.0 million to $204.0 million;

● Adjusted EBITDA of $47.0 million to $50.0 million.

For the full-year 2026, the Company currently expects:

● Revenues of $823.5 million to $831.5 million;

● Cloud revenue growth of 25 percent; and

● Adjusted EBITDA of $202.0 million to $208.0 million.

John Schwab, Chief Financial Officer added, “The cost actions we took in April due to the Value Creation Plan are expected to significantly increase earnings leverage in 2026 and beyond. Accordingly, we are increasing our Adjusted EBITDA guidance for the full year. On a fully annualized basis we expect the cost actions to save approximately $60 to $70 million dollars of cash spend beginning in 2027.”

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, changes in the fair value of acquisition contingent earn-outs, amortization of cloud computing implementation costs, severance expenses, acquisition-related retained employee compensation, 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, May 7, 2026, to discuss its first quarter 2026 financial results.

Those wishing to participate should register in advance for the live conference call at https://vertex-earnings-q1-2026.open-exchange.net/registration.

A live webcast of the call will also be available at the Company’s investor relations website at https://ir.vertexinc.com. An audio-only replay of the conference call will be available on the investor relations website for one year.

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 empowers the world’s leading brands to simplify the complexity of continuous compliance.

For more information, visit www.vertexinc.com; follow us on X and LinkedIn; or subscribe on YouTube.

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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, and our stock repurchase program. 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 maintain and grow revenue from existing customers and new customers, and expand their usage of our solutions; our ability to maintain and expand our strategic relationships with third parties; our ability to adapt to technological change and successfully introduce new solutions or provide updates to existing solutions; risks related to failures in information technology or infrastructure; risks related to our reliance on government infrastructure to support our e-invoicing services; challenges in using and managing use of Artificial Intelligence in our business; incorrect or improper implementation, integration or use of our solutions; failure to attract and retain qualified technical and tax-content personnel; competitive pressures from other tax software and service providers and challenges of convincing businesses using native enterprise resource planning functions to switch to our software; our ability to accurately forecast our revenue and other future results of operations based on recent success; our ability to offer specific software deployment methods based on changes to customers’ and partners’ software systems; our ability to continue making significant investments in software development and equipment; our ability to sustain and expand revenues, maintain profitability, and to effectively manage our anticipated growth; our ability to successfully diversify our solutions by developing or introducing new solutions or acquiring and integrating additional businesses, products, services, or content; our ability to successfully integrate acquired businesses and to realize the anticipated benefits of such acquisitions; risks related to the fluctuations in our results of operations; risks related to our expanding international operations; our exposure to liability from errors, delays, fraud or system failures, which may not be covered by insurance; our ability to adapt to organizational changes and effectively implement strategic initiatives; risks related to our determinations of customers’ transaction tax and tax payments; risks related to changes in tax laws and regulations or their interpretation or enforcement; our ability to manage cybersecurity and data privacy risks; our involvement in material legal proceedings and audits; risks related to undetected errors, bugs or defects in our software; risks related to utilization of open-source software, business processes and information systems; our ability to effectively protect, maintain, and enhance our brand; changes in application, scope, interpretation or enforcement of laws and regulations; global economic weakness and uncertainties, including the economic uncertainty created by the changing legal, regulatory, or taxation landscape in the United States, and disruption in the capital and credit markets; business disruptions related to natural disasters, epidemic outbreaks, including a global endemic or pandemic, terrorist acts, political events, or other events outside of our control; our ability to comply with anti-corruption, anti-bribery, and similar laws; our ability to protect our intellectual property; changes in interest rates, security ratings and market perceptions of the industry in which we operate, or our ability to obtain capital on commercially reasonable terms or at all; our ability to maintain an effective system of disclosure controls and internal control over financial reporting, or ability to remediate any material weakness in our internal controls; risks related to our Class A common stock and controlled company status; risks related to our stock repurchase program; risks related to our indebtedness and adherence to the covenants under our debt instruments; our expectations regarding the effects of the Capped Call Transactions (as defined in our Form 10-K) and regarding actions of the Option Counterparties (as defined in our Form 10-K) and/or their respective affiliates; risks associated with our Value Creation Plan; 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, 2025 (“Form 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2026, 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

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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 (“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 (“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

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Direct

4,888

4,862

4,856

4,867

4,895

Indirect

481

504

516

515

530

Total

5,369

5,366

5,372

5,382

5,425

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, 2025, as filed with the SEC on February 24, 2026 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, to be filed with the SEC.

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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 and transaction costs related to acquired technology 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, severance expense, acquisition-related retained employee compensation, and transaction costs 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, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, 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 income or loss income tax benefit or expense, stock-based compensation expense, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP loss or income from operations for the respective periods, to determine non-GAAP income or loss before income taxes. Non-GAAP income or loss 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. Additionally, the dilutive effect of shares issuable upon conversion of the senior convertible notes is included in the calculation of Non-GAAP diluted EPS by application of the if-converted method.

● Adjusted EBITDA is determined by adding back to GAAP net income or loss the net interest income or expense, income tax expense or benefit, depreciation and amortization of property and equipment, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP net income or loss for the respective periods.

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● 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.

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Vertex, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

As of March 31,

As of December 31,

(In thousands, except per share data)

2026

2025

(unaudited)

Assets

Current assets:

Cash and cash equivalents

252,455

314,009

Funds held for customers

17,698

24,286

Accounts receivable, net of allowance of $13,225 and $11,466, respectively

158,998

183,446

Prepaid expenses and other current assets

59,358

38,966

Total current assets

488,509

560,707

Property and equipment, net of accumulated depreciation

220,407

209,727

Capitalized software, net of accumulated amortization

35,253

35,480

Goodwill and other intangible assets

405,355

396,006

Deferred commissions

30,879

31,907

Deferred income tax asset

129

Operating lease right-of-use assets

8,830

9,678

Long-term investment

15,000

Other assets

10,006

12,245

Total assets

1,214,368

1,270,835

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

35,630

37,557

Accrued expenses

36,607

43,642

Customer funds obligations

15,180

21,802

Accrued salaries and benefits

32,199

23,992

Accrued variable compensation

16,682

34,593

Deferred revenue, current

393,107

382,839

Current portion of operating lease liabilities

4,327

4,283

Current portion of finance lease liabilities

Purchase commitment and contingent consideration liabilities, current

32,800

25,900

Total current liabilities

566,576

574,663

Deferred revenue, net of current portion

5,290

5,209

Debt, net of current portion

338,041

337,477

Operating lease liabilities, net of current portion

7,686

8,903

Finance lease liabilities, net of current portion

Purchase commitment and contingent consideration liabilities, net of current portion

41,300

79,600

Deferred income tax liabilities

8,925

5,664

Deferred other liabilities

—

345

Total liabilities

967,864

1,011,915

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; 78,882 and 77,580 shares issued and outstanding, respectively

Class B voting common stock, $0.001 par value, 150,000 shares authorized; 82,156 and 82,156 shares issued and outstanding, respectively

Treasury stock, at cost, 1,875 and 504 shares, respectively

(30,135)

(10,094)

Additional paid in capital

332,910

316,327

Accumulated deficit

(48,614)

(46,104)

Accumulated other comprehensive loss

(7,818)

(1,368)

Total stockholders' equity

246,504

258,920

Total liabilities and stockholders' equity

1,214,368

1,270,835

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Vertex, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

Three months ended

March 31,

(In thousands, except per share data)

2026

2025

(unaudited)

Revenues:

Software subscriptions

167,146

150,761

Services

29,500

26,301

Total revenues

196,646

177,062

Cost of revenues:

Software subscriptions

51,176

44,245

Services

20,601

19,823

Total cost of revenues

71,777

64,068

Gross profit

124,869

112,994

Operating expenses:

Research and development

24,550

20,886

Selling and marketing

52,635

48,155

General and administrative

54,339

45,028

Depreciation and amortization

6,442

5,880

Change in fair value of acquisition contingent earn-outs

(5,738)

(14,700)

Other operating expense, net

3,247

3,259

Total operating expenses

135,475

108,508

Income (loss) from operations

(10,606)

4,486

Interest income, net

(957)

(1,539)

Income (loss) before income taxes

(9,649)

6,025

Income tax benefit

(7,139)

(5,105)

Net income (loss)

(2,510)

11,130

Other comprehensive (income) loss:

Foreign currency translation adjustments, net of tax

6,450

(15,105)

Unrealized loss on investments, net of tax

—

Total other comprehensive income (loss), net of tax

6,450

(15,096)

Total comprehensive income (loss)

(8,960)

26,226

Net income (loss) per share of Class A and Class B, basic

(0.02)

0.07

Net income (loss) per share of Class A and Class B, diluted

(0.02)

0.07

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Vertex, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Three months ended

March 31,

(In thousands)

2026

2025

(unaudited)

Cash flows from operating activities:

Net income (loss)

(2,510)

11,130

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

27,053

22,266

Amortization of cloud computing implementation costs

1,037

1,006

Provision for subscription cancellations and non-renewals

936

192

Amortization of deferred financing costs

680

Change in fair value of contingent consideration liabilities

(5,738)

(14,700)

Stock-based compensation expense

18,508

21,044

Deferred income taxes

1,810

(929)

Non-cash operating lease costs

1,773

779

Other

(7)

Changes in operating assets and liabilities, net of the effects of business acquisition(s):

Accounts receivable

23,396

11,772

Prepaid expenses and other current assets

(21,449)

(13,169)

Deferred commissions

1,028

(56)

Accounts payable

(1,968)

(11,279)

Accrued expenses

(7,341)

2,956

Accrued and deferred compensation

(10,562)

(26,785)

Deferred revenue

11,247

11,156

Operating lease liabilities

(2,083)

(1,068)

Other

2,157

(183)

Net cash provided by operating activities

37,975

14,805

Cash flows from investing activities:

Acquisition of businesses and assets, net of cash acquired

(21,968)

—

Property and equipment additions

(24,660)

(21,394)

Capitalized software additions

(5,656)

(5,661)

Purchase of investment securities, available-for-sale

—

(2,398)

Proceeds from sales and maturities of investment securities, available-for-sale

—

11,607

Net cash used in investing activities

(52,284)

(17,846)

Cash flows from financing activities:

Net increase (decrease) in customer funds obligations

(6,621)

3,227

Repurchases of shares

(20,041)

—

Payments for taxes related to net share settlement of stock-based awards

(7,143)

(25,034)

Proceeds from exercise of stock options

1,166

Payments for acquisition contingent cash earn-out

(19,600)

—

Payments of finance lease liabilities

(20)

(12)

Net cash used in financing activities

(53,328)

(20,653)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(505)

1,310

Net decrease in cash, cash equivalents and restricted cash

(68,142)

(22,384)

Cash, cash equivalents and restricted cash, beginning of period

338,295

326,066

Cash, cash equivalents and restricted cash, end of period

270,153

303,682

Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period:

Cash and cash equivalents

252,455

270,395

Restricted cash—funds held for customers

17,698

33,287

Total cash, cash equivalents and restricted cash, end of period

270,153

303,682

- 9 -

Summary of Non-GAAP Financial Measures

(Unaudited)

Three months ended

March 31,

(Dollars in thousands, except per share data)

2026

2025

Non-GAAP cost of revenues, software subscriptions

29,345

26,163

Non-GAAP cost of revenues, services

18,930

18,127

Non-GAAP gross profit

148,371

132,772

Non-GAAP gross margin

75.5

75.0

Non-GAAP research and development expense

20,684

16,534

Non-GAAP selling and marketing expense

46,767

41,818

Non-GAAP general and administrative expense

37,044

36,602

Non-GAAP operating income

37,621

31,339

Non-GAAP net income

28,741

24,494

Non-GAAP diluted EPS

0.17

0.15

Adjusted EBITDA

44,063

37,219

Adjusted EBITDA margin

22.4

21.0

Free cash flow

7,659

(12,250)

Free cash flow margin

3.9

(6.9)

- 10 -

Vertex, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

Three months ended

March 31,

(Dollars in thousands)

2026

2025

Non-GAAP Cost of Revenues, Software Subscriptions:

Cost of revenues, software subscriptions

51,176

44,245

Stock-based compensation expense

(1,745)

(2,227)

Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues

(20,086)

(15,855)

Non-GAAP cost of revenues, software subscriptions

29,345

26,163

Non-GAAP Cost of Revenues, Services:

Cost of revenues, services

20,601

19,823

Stock-based compensation expense

(1,671)

(1,696)

Non-GAAP cost of revenues, services

18,930

18,127

Non-GAAP Gross Profit:

Gross profit

124,869

112,994

Stock-based compensation expense

3,416

3,923

Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues

20,086

15,855

Non-GAAP gross profit

148,371

132,772

Non-GAAP Gross Margin:

Total Revenues

196,646

177,062

Non-GAAP gross margin

75.5

75.0

Non-GAAP Research and Development Expense:

Research and development expense

24,550

20,886

Stock-based compensation expense

(3,866)

(4,352)

Non-GAAP research and development expense

20,684

16,534

Non-GAAP Selling and Marketing Expense:

Selling and marketing expense

52,635

48,155

Stock-based compensation expense

(5,343)

(5,806)

Amortization of acquired intangible assets – selling and marketing expense

(525)

(531)

Non-GAAP selling and marketing expense

46,767

41,818

Non-GAAP General and Administrative Expense:

General and administrative expense

54,339

45,028

Amortization of cloud computing implementation costs – general and administrative expense

(1,037)

(1,006)

Stock-based compensation expense

(5,883)

(6,963)

Severance expense (1)

(7,408)

(457)

Acquisition-related retained employee compensation (2)

(417)

—

Transaction costs (3)

(2,550)

—

Non-GAAP general and administrative expense

37,044

36,602

- 11 -

Vertex, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)

Three months ended

March 31,

(In thousands, except per share data)

2026

2025

Non-GAAP Operating Income:

Income (loss) from operations

(10,606)

4,486

Stock-based compensation expense

18,508

21,044

Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues

20,086

15,855

Amortization of acquired intangible assets – selling and marketing expense

525

531

Amortization of cloud computing implementation costs – general and administrative expense

1,037

1,006

Severance expense (1)

7,408

457

Change in fair value of acquisition contingent earn-outs

(5,738)

(14,700)

Acquisition-related retained employee compensation (2)

417

—

Transaction costs (3)

5,984

2,660

Non-GAAP operating income

37,621

31,339

Non-GAAP Net Income:

Net income (loss)

(2,510)

11,130

Income tax benefit

(7,139)

(5,105)

Stock-based compensation expense

18,508

21,044

Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues

20,086

15,855

Amortization of acquired intangible assets – selling and marketing expense

525

531

Amortization of cloud computing implementation costs – general and administrative expense

1,037

1,006

Severance expense (1)

7,408

457

Change in fair value of acquisition contingent earn-outs

(5,738)

(14,700)

Acquisition-related retained employee compensation (2)

417

—

Transaction costs (3)

5,984

2,660

Non-GAAP income before income taxes

38,578

32,878

Income tax adjustment at statutory rate (4)

(9,837)

(8,384)

Non-GAAP net income

28,741

24,494

Non-GAAP Diluted EPS:

Non-GAAP net income

28,741

24,494

Interest expense (net of tax), convertible senior notes (5)

903

Non-GAAP net income used in dilutive per share computation

29,644

25,397

Weighted average Class A and B common stock, diluted

161,283

162,724

Dilutive effect of convertible senior notes (5)

9,498

Total average Class A and B shares used in dilutive per share computation

170,781

172,222

Non-GAAP diluted EPS

0.17

0.15

(1) The three months ended March 31, 2026 includes $6,170 in severance costs related to the Value Creation Plan.

(2) The three months ended March 31, 2026 includes compensation expense recognized related to the additional cash consideration payments of $10,000 to the sellers in connection with the acquisition of Brinta (the “Additional Cash Consideration”).

(3) The three months ended March 31, 2026 and 2025 include legal expenses associated with pending litigation related to claims the Company has made against a competitor. The three months ended March 31, 2026 also includes $2,550 in costs incurred to support the execution of our Value Creation Plan.

(4) Non-GAAP income before income taxes is adjusted for income taxes using the respective statutory tax rates for applicable jurisdictions, which for purposes of this determination were assumed to be 25.5%.

(5) We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes. Interest expense and additional dilutive shares related to the notes are added back to the calculation when their impact is dilutive. In periods when the impact is anti-dilutive, there is no add-back of interest expense or additional dilutive shares related to the notes.

- 12 -

Vertex, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(Unaudited)

Three months ended

March 31,

(Dollars in thousands)

2026

2025

Adjusted EBITDA:

Net income (loss)

(2,510)

11,130

Interest income, net

(957)

(1,539)

Income tax benefit

(7,139)

(5,105)

Depreciation and amortization – property and equipment

6,442

5,880

Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues

20,086

15,855

Amortization of acquired intangible assets – selling and marketing expense

525

531

Amortization of cloud computing implementation costs – general and administrative expense

1,037

1,006

Stock-based compensation expense

18,508

21,044

Severance expense (1)

7,408

457

Change in fair value of acquisition contingent earn-outs

(5,738)

(14,700)

Acquisition-related retained employee compensation (2)

417

—

Transaction costs (3)

5,984

2,660

Adjusted EBITDA

44,063

37,219

Adjusted EBITDA Margin:

Total revenues

196,646

177,062

Adjusted EBITDA margin

22.4

21.0

(1) The three months ended March 31, 2026 includes $6,170 in severance costs related to the Value Creation Plan.

(2) The three months ended March 31, 2026 includes compensation expense recognized related to the Additional Cash Consideration obligation associated with the acquisition of Brinta.

Three months ended

March 31,

(Dollars in thousands)

2026

2025

Free Cash Flow:

Cash provided by operating activities

37,975

14,805

Property and equipment additions

(24,660)

(21,394)

Capitalized software additions

(5,656)

(5,661)

Free cash flow

7,659

(12,250)

Free Cash Flow Margin:

Total revenues

196,646

177,062

Free cash flow margin

3.9

(6.9)

Investor Relations Contact:

Joe Crivelli

Vertex, Inc.

investors@vertexinc.com

Media Contact:

Rachel Litcofsky

Vertex, Inc.

mediainquiries@vertexinc.com

- 13 -

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