Q2 2024 Vertex Inc Earnings Call Transcript
Key Points
- Vertex Inc (VERX) reported a 15.3% year-over-year increase in revenue, reaching $161.1 million for Q2 2024.
- The company achieved a record free cash flow of $36.9 million, significantly up from $4 million in Q1.
- Vertex Inc (VERX) completed the acquisition of ecosio, enhancing its e-invoicing and EDI capabilities, which is expected to contribute approximately $15 million in revenue in the first full year.
- The company saw a 14% year-over-year growth in scaled customer count, representing customers delivering annual revenue of over $100,000.
- Cloud revenue grew by nearly 30%, surpassing the full-year guidance and demonstrating strong demand for Vertex Inc (VERX)'s cloud solutions.
- Net Revenue Retention (NRR) decreased to 110%, down 1 percentage point from the previous year and 2 percentage points sequentially.
- The company experienced a planned strategic slowdown in implementation services, impacting overall revenue growth rate.
- There was a noted decrease in cross-sell and upsell activity in the first half of the year, affecting revenue growth.
- Gross margin on services revenue decreased from 40.5% in Q1 2024 to 36.8% in Q2 2024.
- The completion of the Systax acquisition impacted customer metrics, with ARR excluding Systax being slightly lower at $542.3 million.
Good morning, and welcome to the Vertex Inc. second-quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Joe Crivelli. Please go ahead.
Hello, and thanks for joining us to discuss Vertex's second-quarter financial results. I'm Joe Crivelli, Vice President, Investor Relations; David De Stefano, our President and CEO; and John Schwab, our CFO, are also with us today. During this call, we may make forward-looking statements about expected future results. Actual financial results may differ due to risks and uncertainties. These risks and uncertainties are described in our filings with the Securities and Exchange Commission.
In our remarks today, we will also refer to non-GAAP financial metrics. A reconciliation of these metrics to GAAP is provided in today's press release. The call is being recorded and will be available for replay on our Investor Relations website. I'll now turn the call over to
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