Revenue grew 10.5% YoY to $204.0M in Q2 2026, but operating margin remained negative at -2.2% and gross margin fluctuated around 64.4%, reflecting the cost of the SaaS transition.
Vertex, Inc. (VERX) annual income statement — 8-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 |
|---|
| Sales/Revenue | 787.44M | 748.44M | 666.78M | 572.39M | 491.62M | 425.55M | 374.67M | 321.5M | 272.4M |
| Revenue Growth % | 10.83% | 12.25% | 16.49% | 16.43% | 15.53% | 13.58% | 16.54% | 18.02% | - |
| Cost of Goods Sold | 298.83M | 293.93M | 240.65M | 223.81M | 193.13M | 161.89M | 165.39M | 110.38M | 95.7M |
| COGS % of Revenue | - | 39.27% | 36.09% | 39.1% | 39.28% | 38.04% | 44.14% | 34.33% | 35.13% |
| Gross Profit | 488.61M | 454.51M | 426.13M | 348.58M | 298.49M | 263.66M | 209.28M | 211.12M | 176.71M |
| Gross Margin % | 62.05% | 60.73% | 63.91% | 60.9% | 60.72% | 61.96% | 55.86% | 65.67% | 64.87% |
| Gross Profit Growth % | - | 6.66% | 22.25% | 16.78% | 13.21% | 25.98% | -0.87% | 19.48% | - |
| Operating Expenses | 490.05M | 462.36M | 428.35M | 366.09M | 306.57M | 266.6M | 314.04M | 179.27M | 146.85M |
| OpEx % of Revenue | - | 61.78% | 64.24% | 63.96% | 62.36% | 62.65% | 83.82% | 55.76% | 53.91% |
| Selling, General & Admin | 394.11M | 368.35M | 323.41M | 286.17M | 246.99M | 206.01M | 248.47M | 139.14M | 115.84M |
| SG&A % of Revenue | - | 49.22% | 48.5% | 50% | 50.24% | 48.41% | 66.32% | 43.28% | 42.53% |
| Research & Development | 109.39M | 83.72M | 66.67M | 58.21M | 41.88M | 44.02M | 54.34M | 30.56M | 23.75M |
| R&D % of Revenue | - | 11.19% | 10% | 10.17% | 8.52% | 10.34% | 14.5% | 9.5% | 8.72% |
| Other Operating Expenses | 0 | 10.29M | 38.28M | 21.7M | 17.71M | 16.57M | 11.22M | 9.57M | 7.25M |
| Operating Income | -1.44M | -7.85M | -2.23M | -17.51M | -8.08M | -2.94M | -104.76M | 31.86M | -2.83M |
| Operating Margin % | -0.18% | -1.05% | -0.33% | -3.06% | -1.64% | -0.69% | -27.96% | 9.91% | -1.04% |
| Operating Income Growth % | - | -252.15% | 87.28% | -116.65% | -174.71% | 97.19% | -428.86% | 1224.43% | - |
| EBITDA | 91.69M | 89.08M | 84.51M | 56.95M | 53.07M | 41.84M | -72.54M | 57.05M | 22.07M |
| EBITDA Margin % | 11.64% | 11.9% | 12.67% | 9.95% | 10.79% | 9.83% | -19.36% | 17.74% | 8.1% |
| EBITDA Growth % | 35.54% | 5.41% | 48.39% | 7.31% | 26.84% | 157.68% | -227.17% | 158.5% | - |
| D&A (Non-Cash Add-back) | 93.12M | 96.93M | 86.74M | 74.46M | 61.15M | 44.78M | 32.22M | 25.19M | 24.9M |
| EBIT | -58.98M | 7.58M | 15.27M | -17.51M | -8.08M | -2.94M | -104.76M | 31.86M | -2.83M |
| Net Interest Income | 3.44M | 5.25M | 4.14M | -4.16M | -2.05M | -984K | -3.11M | -953K | -1.59M |
| Interest Income | 3.44M | 5.25M | 4.14M | 0 | 0 | 0 | 0 | 1.08M | 526K |
| Interest Expense | 0 | 0 | 0 | 4.16M | 2.05M | 984K | 3.11M | 2.04M | 2.12M |
| Other Income/Expense | 40.62M | 15.43M | 4.14M | -4.16M | -2.05M | -984K | -3.11M | -953K | -34.41M |
| Pretax Income | 39.18M | 7.58M | 1.91M | -21.67M | -10.13M | -3.93M | -107.87M | 30.9M | -4.43M |
| Pretax Margin % | 4.98% | 1.01% | 0.29% | -3.79% | -2.06% | -0.92% | -28.79% | 9.61% | -1.63% |
| Income Tax | 35.6M | 368K | 54.64M | -8.58M | 2.17M | -2.45M | -32.79M | -155K | 1.68M |
| Effective Tax Rate % | 90.88% | 4.86% | 2862.13% | 39.59% | -21.46% | 62.33% | 30.4% | -0.5% | -37.93% |
| Net Income | 3.58M | 7.21M | -52.73M | -13.09M | -12.3M | -1.48M | -75.08M | 31.06M | -6.11M |
| Net Margin % | 0.45% | 0.96% | -7.91% | -2.29% | -2.5% | -0.35% | -20.04% | 9.66% | -2.24% |
| Net Income Growth % | 107.09% | 113.68% | -302.73% | -6.41% | -731.91% | 98.03% | -341.75% | 608.63% | - |
| Net Income (Continuing) | 3.58M | 7.21M | -52.73M | -13.09M | -12.3M | -1.48M | -75.08M | 31.06M | -6.11M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.02 | 0.04 | -0.34 | -0.09 | -0.08 | -0.01 | -0.60 | 0.21 | -0.05 |
| EPS Growth % | 109.68% | 111.76% | -277.78% | -12.5% | -700% | 98.33% | -385.71% | 545.86% | - |
| EPS (Basic) | - | 0.05 | -0.34 | -0.09 | -0.08 | -0.01 | -0.60 | 0.21 | -0.05 |
| Diluted Shares Outstanding | 161.39M | 180.28M | 155.09M | 151.86M | 149.65M | 147.78M | 131.51M | 146.17M | 129.63M |
| Basic Shares Outstanding | 161.34M | 144.22M | 155.09M | 151.86M | 149.65M | 147.78M | 131.51M | 146.17M | 124.33M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | 91.98% | - |
Quick answers to the most common questions about buying VERX stock.
For fiscal year 2025, Vertex, Inc. (VERX) reported total revenue of $748.4M. This represents a 174.8% increase compared to $272.4M in 2018.
Vertex, Inc. (VERX) is profitable, generating $7.2M in net income for the fiscal year ending 2025 with a net profit margin of 1.0%.
Vertex, Inc. (VERX) reported an operating income of $-7.8M, resulting in an operating profit margin of -1.0%. This margin reflects the operational efficiency of the business before interest and taxes.
Vertex, Inc. (VERX) generated $454.5M in gross profit for the year, representing a gross profit margin of 60.7%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
ERP native tax engine threat
Metrics are mathematically derived from official filings.
Steady Growth Amid SaaS Transition
Vertex's revenue grew 10.5% year-over-year in Q2 2026 to $204.0M, per the latest income statement, with sequential acceleration from 9.1% in Q4 2025, suggesting durable demand despite the ongoing shift to SaaS.
The revenue growth rate has remained in the high single to low double digits over the past ten quarters, with a slight deceleration from the 18.1% peak in Q1 2024 to the current 10.5%. This moderation likely reflects the transition from upfront license revenue to ratable SaaS subscriptions, which may understate true commercial momentum. The consistent growth, even as the mix shifts, indicates that the underlying demand for tax compliance software remains robust, supported by regulatory complexity and ERP migration cycles.
Gross Margin Volatility Signals Mix Shift
Gross margin fluctuated between 59.4% and 65.7% over the last ten quarters, with Q2 2026 at 64.4%, as reported in financial statements, reflecting the impact of professional services and legacy infrastructure costs on overall profitability.
The gross margin is notably lower than typical pure-play SaaS peers, likely due to the inclusion of lower-margin professional services and the maintenance of on-premise infrastructure. The volatility, particularly the dip to 59.4% in Q1 2026, suggests that the mix of services and software revenue can swing quarter to quarter. Investors should monitor whether the cloud transition will eventually drive structural margin expansion, but the persistent need for high-touch enterprise implementations may keep service costs elevated.
Operating Leverage Elusive as Costs Outpace
Operating income has remained near breakeven or negative for most quarters, with Q2 2026 at -$4.4M, according to the income statement, indicating that SG&A and R&D expenses are scaling with revenue, preventing meaningful operating leverage.
Despite revenue growth, operating margin has hovered between -2.2% and 2.9% over the past year, with no clear trend toward expansion. SG&A expenses have grown from $76.0M in Q1 2024 to $103.0M in Q2 2026, roughly tracking revenue growth, while R&D has also increased, particularly in Q3 2025 when it spiked to $37.7M. This suggests the company is investing heavily in product development and sales capacity, which may be necessary to maintain its competitive position but currently limits bottom-line scalability.
Net Income Distorted by Non-Operating Items
Net income swung from -$67.8M in Q4 2024 to $9.0M in Q2 2026, per the income statement, with EPS of $0.06, but stock-based compensation of $13.8M in Q2 2026 suggests reported profitability may overstate cash earnings.
The wide swings in net income, including a -$0.43 EPS in Q4 2024, appear driven by non-operating items such as tax adjustments or one-time charges, rather than core operational performance. SBC has ranged from $10M to $21M per quarter, which is significant relative to net income, indicating that GAAP earnings are materially lower than cash-based profitability. Investors should adjust for SBC and other non-cash items to assess the true earnings power of the business.
R&D and SG&A Drive Cost Structure
SG&A is the largest expense, at $103.0M in Q2 2026, while R&D reached $24.8M, as reported in the income statement, reflecting the company's investment in sales capacity and tax content development.
SG&A has grown steadily, from $76.0M in Q1 2024 to $103.0M in Q2 2026, representing roughly 50% of revenue, which is high but typical for a company investing in enterprise sales and marketing. R&D spending has also increased, with a notable spike in Q3 2025 to $37.7M, likely tied to product enhancements and cloud migration. The cost structure suggests management is prioritizing growth and product leadership over near-term profitability, which may be appropriate given the competitive landscape.
Margin Compression and ERP Threat
Despite revenue growth, operating margin has remained negative or thin, and the Q2 2026 EPS miss of $0.20 vs. $0.22 estimate, per recent filings, highlights margin pressure that could persist if ERP vendors enhance native tax capabilities.
The most significant risk to the income statement narrative is the potential for margin compression as the company invests in cloud transition and faces competition from ERP providers like SAP, which are developing internal tax engines. If these native solutions reduce the attach rate for Vertex's products, revenue growth could decelerate, and the high fixed cost base would amplify the impact on operating income. Additionally, the persistent need for professional services may prevent gross margin from reaching pure-play SaaS levels, limiting the potential for operating leverage.