Vertex, Inc. reported a total revenue of $184.6 million for the second quarter of 2025, marking a 14.6% increase from $161.1 million in the same period of 2024. The growth was primarily driven by a 15.7% rise in software subscription revenue, which reached $157.8 million, up from $136.4 million. Service revenue also saw an increase of 8.3%, totaling $26.7 million compared to $24.7 million in the prior year. For the first half of 2025, Vertex generated $361.6 million in revenue, a 13.8% increase from $317.9 million in the first half of 2024.
Despite the revenue growth, Vertex reported a net loss of $961,000 for the second quarter, a significant decline from a net income of $5.2 million in the same quarter last year. The loss was attributed to increased operating expenses, which rose by 31.4% to $125.1 million, driven by higher costs in research and development, selling and marketing, and general and administrative expenses. For the first half of 2025, the company recorded a net income of $10.2 million, up from $7.8 million in the same period of 2024.
Strategically, Vertex completed a $15 million investment in Kintsugi AI, Inc., an AI startup focused on automating sales tax compliance for small and mid-sized businesses. This investment is part of Vertex's broader strategy to enhance its tax software solutions through AI technologies. Additionally, the company has been expanding its customer base, reporting 4,862 direct customers as of June 30, 2025, compared to 4,438 a year earlier.
Operationally, Vertex's annual recurring revenue (ARR) increased by 16.1% to $636.6 million, driven by both existing customer growth and new customer acquisitions. The company reported a net revenue retention rate of 108%, indicating strong customer retention and expansion. However, the gross revenue retention rate remained stable at 95%. The company employed over 1,900 professionals and continues to invest in its infrastructure and technology to support future growth.
Looking ahead, Vertex anticipates continued growth in its software subscription revenue, particularly from cloud-based solutions, which accounted for 55% of software subscription revenue in the second quarter of 2025. The company remains focused on leveraging its strategic partnerships and expanding its product offerings to meet the evolving needs of its customers in a complex tax compliance environment.
About Vertex, Inc.
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