Vertex, Inc. (NASDAQ: VERX) has reported impressive financial results for the fourth quarter and full year of 2023, showcasing significant growth across various key metrics.
In the fourth quarter of 2023, the company experienced total revenues of $154.9 million, marking an 18.1% increase year-over-year. Notably, software subscription revenues amounted to $130.7 million, up by 17.9% compared to the same period in the previous year. Cloud revenues also exhibited strong growth, reaching $60.6 million, a 29.9% increase from the prior year.
Annual Recurring Revenue (ARR) for the company stood at $512.5 million, reflecting an 18.9% rise year-over-year. Additionally, the average annual revenue per direct customer (AARPC) was reported at $118,910 as of December 31, 2023, compared to $100,500 at the end of 2022 and $112,690 at the end of September 30, 2023. Furthermore, the net revenue retention (NRR) increased to 113% from 110% at the end of December 31, 2022.
The company also reported a significant improvement in its financial performance, with non-GAAP operating income reaching $28.2 million, compared to $17.7 million for the same period in the prior year. Moreover, Vertex achieved a net income of $15.3 million in the fourth quarter of 2023, a substantial improvement from a net loss of $(5.3) million for the same period in the prior year.
Moving to the full-year 2023 financial results, Vertex reported total revenues of $572.4 million, up by 16.4% year-over-year. Software subscription revenues grew to $480.8 million, marking a 15.7% increase from the previous year. Cloud revenues also demonstrated strong growth, reaching $214.6 million, a 27.1% increase year-over-year.
Despite a loss from operations of $(17.5) million, compared to $(8.1) million for the same period in the prior year, the company's non-GAAP operating income surged to $85.6 million, up from $66.2 million for the prior year. The company reported a net loss of $(13.1) million for the full year of 2023, compared to a net loss of $(12.3) million for the prior year.
Furthermore, Vertex showcased robust cash generation, with cash provided by operating activities amounting to $74.3 million for the full year of 2023, compared to $63.8 million for the prior year. The company's free cash flow also demonstrated substantial growth, reaching $6.1 million, compared to $3.4 million for the prior year.
Looking ahead, for the first quarter of 2024, Vertex expects revenues in the range of $152 million to $156 million and adjusted EBITDA of $29 million to $31 million. For the full-year 2024, the company anticipates revenues in the range of $650 million to $660 million, cloud revenue growth of 28%, and adjusted EBITDA of $130 million to $135 million.
Following these announcements, the company's shares moved 25.8%, and are now trading at a price of $31.96. For the full picture, make sure to review Vertex's 8-K report.
