Vertex, Inc. (VERX): Business Model Canvas [Dec-2025 Updated]

You're looking for the real story behind the tax tech giant, and honestly, it boils down to sticky, recurring revenue fueled by a massive shift to the cloud. As a former BlackRock analyst, I can tell you the numbers back this up: with Annual Recurring Revenue hitting $648.2 million as of Q3 2025 and the company projecting 28% revenue growth for the full year, Vertex, Inc.'s value proposition-automating complex global compliance-is clearly working. See exactly how they lock in customers and spend heavily on R&D to maintain that edge in the full Business Model Canvas below.

Vertex, Inc. (VERX) - Canvas Business Model: Key Partnerships

You're looking at how Vertex, Inc. builds its value through its network, which is critical since their Annual Recurring Revenue (ARR) hit $618.5 million as of Q1 2025, supporting a full-year revenue projection between $760 million and $768 million for 2025. These numbers don't materialize without strong alliances.

ERP system providers like SAP and Oracle for deep integration

The relationship with major Enterprise Resource Planning (ERP) vendors is foundational. Vertex, Inc. has a long-standing commitment here; they have been partnered with SAP for over 25 years and with Oracle for over 30 years. This history translates into deep, certified integrations that support a clean-core ERP strategy for customers.

Here are the concrete integration milestones as of late 2025:

Partner	Integration Status/Product	Duration/Date Highlight
SAP	Vertex Accelerator+ for SAP ERP, Vertex O Series for SAP S/4HANA and SAP ECC (US/CANADA/BRAZIL) on Business Technology Platform	25+ years partnership; New enhancements announced June 26, 2025
Oracle	Oracle Validated Integration for Vertex Accelerator on Oracle ERP; Joined Oracle's enhanced partner programme	30+ years partnership; Joined program June 10, 2025; Validation achieved Oct 14, 2025

This deep alignment helps reduce implementation time and increase real-time accuracy where businesses already manage their operations. It's about embedding tax automation directly into the workflow.

CPA.com and Kintsugi for AI-driven sales tax compliance solutions

Vertex, Inc. is actively expanding its reach into the accounting community via strategic technology alliances. On December 5, 2025, they announced an expanded partnership with CPA.com, incorporating Kintsugi's advanced artificial intelligence capabilities.

This collaboration delivers an AI-driven sales tax compliance solution through the CPA.com Firm Advisor Program, offering firms two paths:

• Manage client compliance directly through a white-labelled platform.
• Refer clients for hands-free automation supported by Vertex and Kintsugi.

The application automates several critical functions for Client Advisory Services (CAS) and State and Local Tax (SALT) teams, including exposure assessment, registration, filing, reporting, and real-time monitoring. Vertex and Kintsugi also debuted their own AI-native solution, Kintsugi Powered by Vertex, aimed at simplifying tax compliance for small and mid-size businesses.

Global system integrators and tax advisory firms

The ecosystem relies heavily on System Integrators (SIs) and consulting firms to deploy and integrate Vertex, Inc.'s technology stack for their enterprise clients. These partners recommend Vertex solutions and integrate them into complex customer environments for maximum efficiency.

Key SIs mentioned as critical components of the ecosystem include:

• Avanade
• Argano
• LTI Mindtree
• Peloton

These relationships are viewed as teammates, not just channels, focusing on shared vision to simplify tax globally.

Cloud platform providers like Microsoft for marketplace distribution

Cloud distribution is a clear focus, especially through the Microsoft ecosystem, where Vertex has maintained a partnership for over 10 years. Vertex, Inc. was the first tax technology provider to integrate with the Microsoft Dynamics 365 Tax Calculation Service.

Recent developments in late 2025 include:

• The Vertex Configuration Agent for Microsoft Dynamics 365 became available in the Microsoft Marketplace as of November 18, 2025.
• Strengthening cloud accessibility via Vertex Tax Calculation on Azure, now available through the Microsoft Marketplace.

This marketplace availability helps accelerate transformation by enabling seamless integration within the Microsoft environment.

Finance: review Q4 2025 partnership-driven ARR growth against the $618.5 million Q1 ARR base by end of next week.

Vertex, Inc. (VERX) - Canvas Business Model: Key Activities

You're looking to map out what Vertex, Inc. actually does to generate revenue as of late 2025. It's all about keeping up with the relentless pace of global tax law changes while pushing customers to the cloud. Here's the quick math on the core operational drivers.

Developing and maintaining global indirect tax software (SaaS and on-premise)

This is the engine room, focusing on both the established on-premise O Series and the growing cloud offering. The shift is clear in the numbers; the cloud is where the growth is happening. For the full-year 2025, Vertex is projecting its cloud revenue growth to hit 28%. Looking at the third quarter ending September 30, 2025, the company reported cloud revenues of $92.0 million, which was up 29.6% year-over-year. Software subscription revenues, which capture both models, were $164.8 million in that same quarter, showing a 12.7% increase over the prior year. The overall health of the recurring revenue base is shown by the Annual Recurring Revenue (ARR), which reached $648.2 million at the end of Q3 2025.

The performance metrics below show how well they are keeping existing customers engaged:

Metric (as of Q3 2025)	Value	Context
Annual Recurring Revenue (ARR)	$648.2 million	Up 12.4% year-over-year
Net Revenue Retention (NRR)	107%	Indicates expansion within the existing base
Gross Revenue Retention (GRR)	95%	Represents core customer stickiness
Average Annual Revenue per direct customer (AARPC)	$133,484	As of September 30, 2025

Constant research and updating of tax content for thousands of jurisdictions

This activity is the core value proposition that justifies the subscription fees. You need constant content updates to automate compliance across the globe. While the exact number of jurisdictions isn't explicitly stated as a single figure, the volume of necessary updates is concrete. For instance, in the first half of 2025 alone, Vertex's research identified 408 sales tax rate changes and new rates issued in the U.S. through June 30, 2025. That was a 24% increase compared to the first half of 2024, showing the compliance landscape is only getting more fragmented and demanding more active maintenance.

Sales and marketing to drive cloud adoption and new customer acquisition

Driving adoption means selling the future state-the cloud. The sales and marketing focus is clearly translating into customer value, as shown by the AARPC figure of $133,484 at September 30, 2025. The company is guiding for full-year 2025 total revenues between $750.0 million and $754.0 million, with an expected Adjusted EBITDA in the range of $156.0 million to $160.0 million, demonstrating an effort to balance growth investment with profitability.

Strategic M&A (e.g., ecosio, Systax) to expand geographic and product reach

Vertex uses acquisitions to buy capability and accelerate market entry, particularly in the e-invoicing space. The ecosio acquisition, completed in late 2024, had an upfront cash payment of $69 million. By Q1 2025, ecosio was already contributing $8.1 million to ARR. Similarly, the earlier Systax acquisition contributed $6.6 million to ARR in Q1 2025. These moves directly feed the cloud revenue growth engine.

Investing in AI and e-invoicing technology for future compliance mandates

The investment in future-proofing the platform is a dedicated line item. For the full-year 2025, Vertex outlined a specific budget for R&D focused on these innovations. They are planning to invest an estimated $10 to $12 million in research and development for AI-driven products, such as the commercialization of their Smart Categorization solution. This investment supports the integration of e-invoicing capabilities, like those gained from ecosio, to meet growing international mandates for real-time digital tax reporting.

Finance: draft 13-week cash view by Friday.

Vertex, Inc. (VERX) - Canvas Business Model: Key Resources

You're looking at the core assets that make Vertex, Inc. tick as of late 2025. These aren't just line items; they are the engines driving their value proposition in the complex world of indirect tax automation. Honestly, the strength here is in the recurring revenue and the depth of their data moat.

Proprietary, constantly updated global tax content and data

The foundation of Vertex, Inc.'s offering is its content. This isn't just a static database; it's a constantly refreshed knowledge base that keeps customers compliant across shifting global rules. For instance, their capability for VAT ID validation now supports over 67-plus countries with localized authoritative data. This deep, broad coverage is a massive barrier to entry for competitors.

The company is actively investing in future-proofing this data, with spending on e-invoicing solutions, like ACOSIO, estimated between $16-20 million for the full year 2025. This investment directly feeds the proprietary data and compliance engine.

Core software platform (Vertex Indirect Tax O Series, Vertex Cloud)

The platform itself is the delivery mechanism for that content. You see the success of this in the growth of their cloud offering. As of Q3 2025, Cloud revenues hit $92.0 million, marking a 29.6% year-over-year jump. To put that in perspective, the cloud business now represents approximately 57% of total revenue for Vertex, Inc..

The core platforms, including the Vertex Indirect Tax O Series and Vertex Cloud Indirect Tax, are being enhanced with new certified integrations across ERP, e-commerce, and procurement systems, including SAP, Oracle, Coupa, and Shopify, which simplifies global compliance for users.

Annual Recurring Revenue (ARR) base of $648.2 million (Q3 2025)

This is the financial bedrock. The Annual Recurring Revenue (ARR) stood at $648.2 million at the end of Q3 2025, representing a 12.4% year-over-year increase. This metric shows the stickiness of their subscription model. You can see how this scales with their customer base, as the Average Annual Revenue per direct customer (AARPC) reached $133,484 at September 30, 2025.

Here's a quick look at the key financial scale metrics from that Q3 2025 report:

Metric	Value (Q3 2025)	Year-over-Year Change
Total Revenues	$192.1 million	12.7% growth
Software Subscription Revenues	$164.8 million	12.7% growth
Free Cash Flow	$30.2 million	Very strong
Gross Revenue Retention (GRR)	95%	Consistent

Intellectual property and patents in tax technology automation

While specific patent counts aren't public knowledge, the focus on innovation is a resource in itself. Vertex, Inc. is embedding AI into its ecosystem, introducing Vertex Copilot, an AI-powered assistant. Furthermore, they are investing heavily in productization related to AI, budgeted at around ~$10-12 million for 2025, which protects and advances their technological lead in automation.

The company's ability to offer scalable, pre-built solutions that reduce implementation time is a direct result of this IP development. This focus helps organizations modernize tax without disrupting operations.

Highly specialized tax and software engineering talent

You can't automate complex global tax without smart people. Vertex, Inc. employs approximately 1,100 people. The leadership transition, bringing in a new CEO with deep experience scaling large technology companies, including time at Microsoft, signals a commitment to leveraging this human capital for the next phase of growth.

The talent pool is critical for several functions:

• Supporting the 14% year-over-year growth in the Scaled Customer Count.
• Developing and maintaining the proprietary tax content supporting $648.2 million in ARR.
• Driving the aggressive investment in AI and e-invoicing initiatives.

If onboarding new specialized engineers takes longer than, say, 90 days, the pace of feature deployment could slow, which is a defintely near-term risk to monitor.

Finance: draft 13-week cash view by Friday.

Vertex, Inc. (VERX) - Canvas Business Model: Value Propositions

You're looking at the core reasons why businesses choose Vertex, Inc. to handle their indirect tax complexity. It boils down to confidence in compliance, which translates directly to operational efficiency and reduced risk. The value proposition isn't just software; it's the assurance that your transactions, whether they happen in your established ERP or a new e-commerce channel, are taxed correctly, every single time.

The foundation of this value is automated, accurate tax determination. This is critical because global tax laws are always shifting. Vertex, Inc. maintains the content and logic to handle this dynamic environment, which is why their Gross Revenue Retention (GRR) is so telling. As of the third quarter of 2025, GRR was reported at a steady 95%, consistent with the prior quarter and the year before. That level of retention shows customers aren't leaving because the core promise-accurate determination-is being met, even as regulations change.

For you, the integration story is just as important. You don't want a standalone tax silo. Vertex, Inc. focuses on seamless integration with major ERP and e-commerce platforms. This is evidenced by the momentum in their cloud offerings, which saw revenue jump 29.6% year-over-year in the third quarter of 2025, reaching $92.0 million. This cloud shift is the engine for modern integration, making it easier to embed tax logic directly where the transaction occurs. Also, their Annual Recurring Revenue (ARR) hit $648.2 million as of September 30, 2025, showing deep embedding within customer systems.

Risk mitigation is the financial payoff of this accuracy. By ensuring compliance with dynamic tax regulations, Vertex, Inc. helps you avoid penalties and audits. The company's focus on this is backed by its financial targets. For the full-year 2025, Vertex, Inc. is projecting cloud revenue growth of 28%, which signals strong demand for their scalable, compliant cloud solutions that manage this risk globally. Honestly, that cloud growth is the real story here.

The reliability of the service is quantified by that high GRR, but also by the growth in customer spend. You want to see that existing customers are spending more, not just staying put. Here's the quick math on their recurring revenue health as of the latest reported quarter:

Metric	Value as of Q3 2025	Context
Gross Revenue Retention (GRR)	95%	High service reliability
Annual Recurring Revenue (ARR)	$648.2 million	Total recurring revenue base
ARR Year-over-Year Growth	12.4%	Overall recurring revenue expansion
Average Annual Revenue per direct customer (AARPC)	$133,484	Average spend per customer

The value proposition is further supported by the company's overall financial outlook, which points to continued scaling:

• Projected full-year 2025 total revenues between $750.0 million and $754.0 million.
• Projected full-year 2025 Adjusted EBITDA between $159.1 million and $161.1 million.
• Cloud revenue growth projected at 28% for FY 2025.
• Cloud revenue reached $92.0 million in Q3 2025, up 29.6% year-over-year.
• The company's mission is to deliver the most trusted tax technology enabling global businesses to transact, comply and grow with confidence.

If onboarding takes 14+ days, churn risk rises, so the seamless integration capability is a direct action to support that high GRR. Finance: draft 13-week cash view by Friday.

Vertex, Inc. (VERX) - Canvas Business Model: Customer Relationships

You're looking at how Vertex, Inc. keeps its customers close, which is key when your revenue is tied to subscriptions and compliance complexity keeps rising.

High-touch, dedicated enterprise sales and support for large accounts is clearly the focus for the biggest spenders. The Average Annual Revenue per direct customer ("AARPC") for Vertex stand-alone was reported at $142,600 as of Q2 2025. This high per-customer value suggests significant, dedicated resources are deployed to onboard and maintain these relationships. The stickiness is further evidenced by the Gross Revenue Retention ("GRR") remaining consistent at 95% across Q2 and Q3 2025.

The subscription-based model fostering long-term, sticky relationships is the engine here. By the end of Q3 2025, Vertex, Inc. reported Annual Recurring Revenue ("ARR") of $648.2 million, up 12.4% year-over-year. Software subscription revenues were $164.8 million in Q3 2025. The subscription software gross margin was 82.6% in Q1 2025. Net Revenue Retention ("NRR") was 107% as of September 30, 2025, meaning existing customers grew their spend, even though it was down from 111% a year prior.

Here's a quick look at how those key recurring metrics trended through the first three quarters of 2025:

Metric (as of End of Quarter)	Q1 2025	Q2 2025	Q3 2025
Annual Recurring Revenue (ARR)	$618.5 million	$636.6 million	$648.2 million
Net Revenue Retention (NRR)	N/A	108%	107%
Gross Revenue Retention (GRR)	95%	95%	95%
Avg. Annual Revenue per Direct Customer (AARPC)	$126,534 (Mar 31)	$130,934 (Jun 30)	$133,484 (Sep 30)

Partner-led service delivery through the CPA.com Firm Advisor Program is definitely a channel for relationship building and scale. Vertex, Inc. and CPA.com announced an expansion of this program on December 5, 2025, incorporating an AI-driven solution with Kintsugi. This lets accounting firms either manage client compliance on a white-labelled platform or refer clients for hands-free automation. The goal is helping CPA firms unlock new revenue streams.

For smaller businesses, the focus shifts toward automation. Vertex announced an equity investment in Kintsugi in Q1 2025, specifically highlighting its potential for the SMB market for AI-driven sales tax compliance. The expanded CPA.com offering itself is designed to help mid-market and SMB firms access enterprise-level compliance that is right-sized for their business.

• The AI-driven solution with Kintsugi delivers end-to-end sales tax compliance.
• The partnership aims to simplify return filing with innovative automation.
• The new application includes dedicated support and seamless integration with leading ERP, billing, and e-commerce platforms.
• The solution will be showcased at the Digital CPA Conference, December 7-10, 2025.

Finance: draft the Q4 2025 ARR projection based on Q3 NRR and GRR trends by next Tuesday.

Vertex, Inc. (VERX) - Canvas Business Model: Channels

You're looking at how Vertex, Inc. gets its solutions into the hands of global businesses, and it's a multi-pronged approach that relies heavily on established enterprise relationships.

Direct sales force targeting large multinational corporations

The direct sales team focuses on landing the big fish, the large enterprises that need comprehensive, global indirect tax management. As of late 2025, Vertex, Inc. serves over 4,000 organizations worldwide. Critically, this includes more than 60% of the Fortune 500. The average Annual Revenue per direct customer (AARPC) as of September 30, 2025, stood at $133,484. This number shows the high-value nature of the direct sales contracts they secure.

ERP partner ecosystem (e.g., SAP, Oracle) for embedded sales

A huge part of the channel strategy is embedding Vertex, Inc.'s technology directly where customers run their core operations-their Enterprise Resource Planning (ERP) systems. These are not just casual integrations; some are decades-long commitments. This embedded approach is key to driving the Cloud revenue, which was projected to grow by 28% for the full fiscal year 2025. The company highlights its success in multi-ecosystem wins across SAP, Oracle, and Microsoft.

Here's a quick look at the tenure and depth of these foundational ERP relationships:

ERP Platform	Relationship Duration	Recent Milestone/Status
Oracle	30+ years	Selected as Oracle's primary vendor for tax integration testing
SAP	25+ years	Launched Vertex Accelerator+ for SAP ERP, certified on SAP S/4HANA Cloud
Microsoft	10+ years	First tax technology provider to integrate with Microsoft Dynamics 365 Tax Calculation Service
NetSuite	10+ years	Committed member of the SuiteCloud Developer Network

The focus on clean-core ERP strategies means these deep integrations reduce implementation time for joint customers.

Cloud marketplaces (e.g., Microsoft Dynamics 365 marketplace)

Tapping into the cloud marketplaces allows Vertex, Inc. to reach customers already committed to a specific cloud environment, often accelerating adoption. A concrete example of this channel activation is the launch of the Vertex Configuration Agent for Microsoft Dynamics 365 marketplace, which happened in November 2025. This is a direct play to capture spend within that ecosystem. The overall success of this cloud-first approach is visible in the financials; Cloud revenues for Q3 2025 hit $92.0 million, marking a 29.6% year-over-year increase.

Accounting and advisory firms (CPA.com) for client referral and white-label

This channel leverages trusted advisors to bring Vertex, Inc.'s solutions to a broader set of businesses, often through referral or white-labeling. Vertex, Inc. and CPA.com expanded their partnership on December 5, 2025, introducing an AI-driven sales tax compliance solution built with Kintsugi into the CPA.com Firm Advisor Program.

The structure of this channel offers flexibility to accounting firms:

• Manage clients' compliance directly via a white-labelled platform.
• Refer clients for hands-free automation supported jointly by Vertex, Inc. and Kintsugi.

This move is explicitly designed to help CPA firms unlock new revenue streams by simplifying return filing with automation. The total revenue for Vertex, Inc. in Q3 2025 was $192.1 million, and the full-year 2025 revenue guidance is between $745.7 million and $749.7 million. Finance: draft Q4 2025 channel contribution analysis by next Tuesday.

Vertex, Inc. (VERX) - Canvas Business Model: Customer Segments

You're looking at where Vertex, Inc. pulls in its revenue as of late 2025. It's a mix, but the big enterprise deals defintely anchor the top line.

Large multinational corporations with complex indirect tax needs

This group is the bedrock, the ones needing the most comprehensive global coverage. They are the reason Vertex has offices in North America and Europe. You see their commitment in the product adoption numbers. As of the third quarter of 2025, more than half of the world's Fortune 500 companies rely on Vertex for tax management technology. Specifically for the enterprise-grade solution, Vertex announced that more than 1,000 companies are using the Vertex Indirect Tax O Series.

Mid-market companies migrating ERP systems to the cloud

This segment is crucial for the cloud growth story, though you saw some near-term friction here. The Average Annual Revenue per direct customer (AARPC) across the entire base was reported at $133,484 as of September 30, 2025. This metric gives you a sense of the deal size for these growing, often cloud-migrating, entities. However, management noted a slowdown in large ERP migrations during the second quarter of 2025, which elongated deal cycles. Still, the overall Cloud revenues hit $92.0 million in Q3 2025, up 29.6% year-over-year, showing the underlying trend is strong.

Accounting firms (CPA/SALT teams) seeking automated compliance tools

These service providers use Vertex technology to calculate tax and file returns for their end-customers. While their end-users aren't in the direct customer count, Vertex has a strong foothold here. They support service providers such as outsourcing and accounting firms using the technology for end-customer compliance.

E-commerce and SaaS businesses (targeted by Kintsugi AI solutions)

This is the emerging, smaller end of the market that Vertex is targeting with newer tech. Vertex empowers the world's leading brands, and this includes a distinct and growing subset of marketplaces. Vertex supports 7 of the top 10 marketplace providers in North America by revenue. Furthermore, the strategic investment in Kintsugi AI is explicitly aimed at accelerating AI-driven tax compliance solutions for small and mid-size businesses.

Here's a quick look at the overall customer base metrics as of the latest reported quarter:

Metric	Value (Q3 2025)
Total Direct Customers	4,856
Annual Recurring Revenue (ARR)	$648.2 million
Average Annual Revenue per direct customer (AARPC)	$133,484
Gross Revenue Retention (GRR)	95%
Net Revenue Retention (NRR)	107%

The total direct customer count was 4,856 in Q3 2025, down slightly from 4,915 in Q4 2024. The overall Annual Recurring Revenue (ARR) hit $648.2 million as of Q3 2025.

You should track the NRR, which was 107% in Q3 2025, showing that existing customers are still expanding their usage, albeit at a slightly slower pace than the 111% seen in Q3 2024.

Finance: draft 13-week cash view by Friday.

Vertex, Inc. (VERX) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Vertex, Inc.'s operations, which is crucial for understanding their path to profitability. For a high-growth SaaS company like Vertex, Inc., the cost structure is heavily weighted toward scaling the product and acquiring customers.

The cost of revenue for software subscriptions, while high in absolute terms to support the platform, still yields a strong gross margin. For the second quarter ended June 30, 2025, Vertex, Inc. reported a total gross margin of 75.9%. Digging deeper, the gross margin on subscription software was 83.2% for that quarter, though services revenue carried a much lower gross margin of 33.1%.

Investment in the future product is significant. Research and Development (R&D) is a major cost center. For the second quarter of 2025, the total R&D spend, which included capitalized software spend, hit $38.9 million. This level of spend is necessary to keep pace with the ever-increasing complexity of global tax regimes.

Acquiring and supporting that customer base requires substantial outlay in Selling and Marketing (S&M). In Q2 2025, S&M expenses were $44.6 million, which represented 24.2% of total revenues for the period. This focus on sales and marketing is typical when driving Annual Recurring Revenue (ARR), which stood at $636.6 million at the end of Q2 2025.

Here's a quick look at those key Q2 2025 expense metrics:

Cost Category	Amount / Percentage	Period
Total Gross Margin	75.9%	Q2 2025
Subscription Software Gross Margin	83.2%	Q2 2025
Services Revenue Gross Margin	33.1%	Q2 2025
R&D Spend (Including Capitalized Software)	$38.9 million	Q2 2025
Selling and Marketing Expense	$44.6 million	Q2 2025
Selling and Marketing as % of Revenue	24.2%	Q2 2025

The underlying costs to deliver the service involve maintaining the massive, constantly updated tax content library and the infrastructure supporting it. These are the fixed, non-negotiable costs of being a global tax compliance provider.

• Costs tied to maintaining global tax content databases.
• Expenses for operating and securing data centers for cloud delivery.
• Significant personnel costs for specialized tax engineers.
• Salaries for software engineers developing the core platform.

To be fair, a large portion of the R&D and Cost of Revenue is definitely personnel. For instance, the GAAP R&D expense alone in Q2 2025 was $18.1 million, separate from the capitalized portion, reflecting the payroll for the teams building out the product roadmap, including AI enhancements.

Finance: draft 13-week cash view by Friday.

Vertex, Inc. (VERX) - Canvas Business Model: Revenue Streams

You're looking at how Vertex, Inc. actually makes its money as of late 2025. It's not just one thing; it's a mix, but one stream clearly dominates the picture. The core of the business is built around recurring software access, which gives a predictable base for planning.

The Software Subscription Revenue is definitely the dominant stream here. For the third quarter ending September 30, 2025, this segment brought in $164.8 million. That's a 12.7% year-over-year increase, showing consistent growth in their core offering.

The Cloud-based subscription revenue is the fastest-growing piece of that subscription pie. In Q3 2025, this specific component hit $92.0 million, marking a significant 29.6% jump from the prior year. This rapid growth signals where the future value is being built, especially as companies migrate away from older systems.

Here's a quick look at the key revenue figures from the Q3 2025 report and the updated full-year outlook:

Revenue Component	Q3 2025 Amount	Year-over-Year Growth (Q3)
Total Revenue	$192.1 million	12.7%
Software Subscription Revenue	$164.8 million	12.7%
Cloud Revenue	$92.0 million	29.6%
Services Revenue	$27.3 million	12.8%

The full-year 2025 revenue guidance was refined to be between $745.7 million and $749.7 million. That guidance reflects some headwinds, like customer bankruptcies and faster legacy platform migrations, but the company still expects full-year cloud revenue growth to land around 28%.

Beyond the recurring software fees, Vertex, Inc. pulls in revenue from other areas that support the main platform. You see this in the Professional services revenue line, which covers things like implementation, consulting, and training for clients getting set up. This was $27.3 million in the third quarter.

Also embedded in the model are Transaction-based fees for compliance and filing services. While the specific dollar amount for this component wasn't broken out separately from the overall subscription/services mix in the latest release, it's a key part of the value proposition, especially as global tax complexity increases. The Annual Recurring Revenue (ARR) was $648.2 million at the end of the quarter, which is a strong indicator of future committed revenue.

You should keep an eye on these metrics as you evaluate the model:

• Annual Recurring Revenue (ARR) at quarter end: $648.2 million.
• Net Revenue Retention (NRR): 107%.
• Average Annual Revenue per direct customer (AARPC): $133,484.

Finance: draft 13-week cash view by Friday.