GET DAILY SIGNALSVertex (VERX) Delivers Adjusted Earnings Beat and Raises 2026 Outlook
Key Takeaways
- Adjusted EPS beat expectations: Vertex, Inc. posted non-GAAP (non-Generally Accepted Accounting Principles) earnings of $0.26 per share, above the $0.22 consensus estimate.
- Revenue topped guidance and estimates: Total revenue of $213.3 million rose 11% year over year, exceeding the company's guidance range of $208 million to $211 million.
- GAAP results were weighed down by a one-time item: A $47.3 million income tax charge pushed the company to a GAAP net loss of $46.6 million, masking an otherwise strong adjusted quarter.
- Profitability surged: Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached $64.8 million, with the margin expanding to 30.4% from 22.6% a year earlier.
- Recurring revenue stayed resilient: Annual Recurring Revenue (ARR) grew 11.7% to $724.3 million, while cloud revenue accelerated 20.4%.
- Guidance was raised: Management lifted its full-year 2026 revenue outlook to $828.9 million to $830.9 million and increased adjusted EBITDA guidance.
Why the Quarter Matters
Vertex, Inc. (VERX) provides indirect tax and compliance software under its Decision-to-Defense brand. The business model centers on recurring subscriptions, so metrics such as ARR and net revenue retention serve as important indicators of sustained performance. The third quarter of 2026 stood out because management continued executing its Value Creation Plan, a restructuring initiative designed to create a more efficient operating structure and expand margins. I was interested to see whether those efforts would produce lasting earnings leverage while cloud and e-invoicing segments gained traction ahead of European regulatory changes.
Quarterly Results in Detail
For the period ended September 30, 2026, VERX reported total revenue of $213.3 million, up 11% from the prior year. Subscription revenue increased 10.2% to $181.7 million, and cloud revenue rose 20.4% to $110.8 million, reflecting a continued shift toward hosted solutions. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Adjusted earnings per share came in at $0.26, ahead of the $0.22 consensus by about 18% and marking the seventh straight quarter of beats. GAAP results showed a net loss of $46.6 million due to a one-time $47.3 million tax charge. Adjusted EBITDA reached $64.8 million, exceeding the guided range of $55 million to $57 million, and the margin improved to 30.4% from 22.6% a year earlier. ARR climbed 11.7% to $724.3 million, while net revenue retention held at 106%, down slightly year over year but improved from the previous quarter. Management raised full-year 2026 revenue guidance to $828.9 million to $830.9 million and lifted its adjusted EBITDA target.
Market Response
Shares of VERX moved higher in after-hours trading as investors focused on the adjusted results rather than the one-time tax item. The earnings beat, revenue above guidance, stronger margins, and raised outlook all supported confidence in the ongoing turnaround. The size of the beat, the largest in the recent streak, suggests analysts may have underestimated the impact of the Value Creation Plan.
What to Watch Going Forward
With updated guidance in place, VERX enters the final quarter of 2026 on firmer footing. Fourth-quarter revenue is expected between $215.0 million and $217.0 million. Key areas to monitor include whether cloud growth stays in the high teens and whether ARR maintains double-digit expansion.
Two developments stand out. E-invoicing demand linked to mandates in France, Belgium, and Germany could support new wins and expansions. At the same time, the durability of margin gains from the Value Creation Plan will be tested as the company continues to invest in growth. Net revenue retention at 106% is a notch below last year’s level, so the balance between new customer additions and cloud conversions will remain important. Results remain subject to execution and demand conditions.
Refining Research with AI Tools
When reviewing earnings like these, I often turn to Tickeron’s AI Screener to scan for comparable companies and evaluate relative strength across technical and fundamental factors. It provides a structured way to surface ideas and context that complements the reported numbers.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
VERX in upward trend: 10-day moving average broke above 50-day moving average on October 16, 2026
The 10-day moving average for VERX crossed bullishly above the 50-day moving average on October 16, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 13 of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 01, 2026. You may want to consider a long position or call options on VERX as a result. In 64 of 90 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 71%.
The Moving Average Convergence Divergence (MACD) for VERX just turned positive on October 02, 2026. Looking at past instances where VERX's MACD turned positive, the stock continued to rise in 30 of 41 cases over the following month. The odds of a continued upward trend are 73%.
VERX moved above its 50-day moving average on October 08, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +6.53% 3-day Advance, the price is estimated to grow further. Considering data from situations where VERX advanced for three days, in 238 of 308 cases, the price rose further within the following month. The odds of a continued upward trend are 77%.
The Aroon Indicator entered an Uptrend today. In 171 of 233 cases where VERX Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 73%.
Bearish Trend Analysis
The 10-day RSI Indicator for VERX moved out of overbought territory on November 03, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 37 similar instances where the indicator moved out of overbought territory. In 26 of the 37 cases, the stock moved lower in the following days. This puts the odds of a move lower at 70%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 21 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where VERX declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 75%.
VERX broke above its upper Bollinger Band on October 20, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 8 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 37 (best 1 - 100 worst), indicating steady price growth. VERX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 89 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 99 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (10.711) is normal, around the industry mean (-1.902). VERX's P/E Ratio (530.667) is considerably higher than the industry average of (15.583). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.824). Dividend Yield (0.000) settles around the average of (0.072) among similar stocks. P/S Ratio (2.601) is also within normal values, averaging (70.854).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. VERX’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock worse than average.
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a company, which engages in the provision of tax compliance software solutions
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