Vertex, Inc. (NASDAQ:VERX) Q3 2023 Earnings Conference Call November 9, 2023 8:30 AM ET

Company Participants

Joe Crivelli - Vice President, Investor Relations

David DeStefano - President & Chief Executive Officer

John Schwab - Chief Financial Officer

Conference Call Participants

Chris Quintero - Morgan Stanley

Matt Stotler - William Blair

Joshua Reilly - Needham

Steve Enders - Citi

Adam Hotchkiss - Goldman Sachs

Alex Sklar - Raymond James

Pat Walravens - JMP Securities

Kyle Aberasturi - BMO Capital

Operator

Hello, good morning and greetings. Welcome to Vertex's Third Quarter 2023 Earnings Conference Call. Please note this conference is being recorded. At this time, all participants are in listen-only mode.

And at this time I will turn the conference over to Joe Crivelli, Vice President of Investor Relations. Mr. Crivelli, you may now begin.

Joe Crivelli

Hello, and thanks for joining us to discuss Vertex's third quarter financial results. I'm Joe Crivelli, Vice President, Investor Relations. David DeStefano, our President and CEO; and John Schwab our CFO, are on the call with us today. As a reminder, during this call, we may make forward-looking statements about expected future results. Our actual financial results may differ due to risks and uncertainties. These risks and uncertainties are described in our filings with the Securities and Exchange Commission.

Please note that our remarks today will also include references to non-GAAP financial measures. A reconciliation of these non-GAAP metrics to GAAP is also provided in today's press release. This conference call is being recorded and will be available for replay via webcast on our Investor Relations website.

I'll now turn the call over to David.

David DeStefano

Thanks, Joe. Welcome everyone and thank you for joining us. Once again in the third quarter Vertex delivered excellent financial results, driven by consistent strong execution. Revenue in the third quarter was $145 million, up 15% year-over-year. Adjusted EBITDA was $26.6 million, up 30% compared to last year's third quarter. This represents an EBITDA margin of 18.4%. In addition, in the third quarter we delivered 18% year-over-year growth in ARR consistent GRR at a SaaS best-in-class level of 96%, NRR of 111% for the second quarter in a row.

Average annual revenue per customer of nearly $113,000, up 16% year-over-year. And growth in scaled customer count, representing customers with annual revenues greater than $100,000, up 15% year-over-year for the fourth quarter in a row. This reflects our ongoing success in the underpenetrated enterprise market. I'm very proud of these results which demonstrate the outstanding effort of our global teams and the pay-off of our multiyear growth investment that began in 2020 and largely wrapped up in the second quarter with the launch of our new ERP system.