Vertex Clocks 12% Revenue Growth In Q4 Backed By ARR, NRR Momentum; Issues FY22 Guidance Above Consensus

Vertex Inc VERX reported fourth-quarter FY21 revenue growth of 12.2% year-on-year to $111.7 million, beating the consensus of $109.2 million.
Software subscription revenues rose 11.1% Y/Y to $93.3 million, and Cloud revenues increased 38.9% Y/Y to $34.7 million.
Drivers: Annual Recurring Revenue rose 17% Y/Y to $370.2 million. The Average Annual Revenue per customer was $86,700 on December 31, 2021, compared to $78,700 a year ago. Net Revenue Retention rate was 108% versus 106% last year. Vertex had 4,272 customers on December 31, 2021.
Margins: The non-GAAP gross margin remained stable at 70.7%.
Non-GAAP operating income was $16.4 million, compared to $16.1 million in Q4 FY20.
Non-GAAP EPS of $0.08 beat the consensus of $0.05.
Adjusted EBITDA margin contracted 190 bps to 17.2%.
Vertex generated $26.1 million in free cash flow and held $98.2 million in cash and equivalents.
CFO John Schwab said, "The global Vertex team continued to deliver solid performance this quarter with continued strong growth quarter over quarter and year over year in key metrics including ARR and NRR growth."
Outlook: Vertex sees Q1 FY22 revenue of $112.5 million - $113.5 million, above the consensus of $111.2 million.
Vertex sees FY22 revenue of $479 million - $483 million, above the consensus of $474.6 million.
Price Action: VERX shares traded higher by 2.96% at $13.93 in pre-market on the last check Wednesday.

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