Vertex (VERX): AI-Focused CEO Shift, 2026 Guide, and an 18.9% Drop - What Executives Should Watch
Vertex reported Q4 2025 revenue of US$194.71 million with a net loss of US$7 million. For 2025, revenue reached US$748.44 million and net income was US$7.21 million.
For 2026, management guided Q1 revenue to US$193.5-US$196.5 million and full-year revenue to US$823.5-US$831.5 million. The company named Christopher Young as President and CEO, highlighting AI-led products (smart categorization, Vertex Copilot) and e-invoicing as growth levers. Shares fell 18.9% as the market weighed the CEO transition and guidance.
The numbers at a glance
- Q4 2025: Revenue US$194.71m; Net loss US$7m.
- FY 2025: Revenue US$748.44m; Net income US$7.21m.
- 2026 Guide: Q1 revenue US$193.5-US$196.5m; FY revenue US$823.5-US$831.5m (about 10-11% year-on-year growth).
- Strategy: Accelerate AI modules (Vertex Copilot, smart categorization) and scale e-invoicing.
What changed in the narrative
The near-term story is about execution, not vision. Regulatory pull in e-invoicing and ERP cloud migrations can be strong, but friction in enterprise deal cycles and higher churn-especially among smaller accounts-can offset that momentum.
Management's 2026 revenue guide (US$823.5m-US$831.5m) is now the scoreboard for whether AI features and e-invoicing translate into higher-quality recurring revenue. The market's reaction suggests investors want earlier proof that these bets will show up in net revenue retention and ARR growth.
Strategic read-through for operators and boards
- Productization of AI: Treat Vertex Copilot and smart categorization as attachable modules with clear ROI stories. Focus on time-to-value and measurable accuracy gains in tax determination and content updates.
- E-invoicing scale: Coverage depth by country, connectors into major ERPs, and proof of compliance outcomes will drive credibility and deal velocity.
- ERP migration timing: Attach to SAP S/4HANA and cloud ERP programs where budgets already exist. Pipeline discipline matters more than broad "AI" messaging. SAP S/4HANA context.
- Sales motion: Enterprise evaluations are slower; mid-market attrition is sensitive to price and onboarding friction. Segment the motion and tailor packaging.
- Pricing and packaging: Make AI value explicit: workflow savings, accuracy lift, and reduced exception handling. Bake that into SKUs and renewals.
KPIs to track in 2026
- Net Revenue Retention (NRR): Direction and drivers (expansion vs. churn).
- Logo churn mix: SMB vs. enterprise; watch whether SMB attrition stabilizes.
- AI attach and ARPU uplift: Percent of customer base adopting Copilot/smart categorization and incremental revenue per customer.
- E-invoicing ARR and coverage: Countries live, connectors launched, and customer count on the module.
- Deal cycle length and win rates: Especially for SAP S/4HANA-related migrations and large compliance-led programs.
- Profitability trajectory: Path from Q4 loss to consistent earnings, with cash conversion as a cross-check.
Does the bull case still hold?
Before this update, the most optimistic models pointed to ~US$1.1 billion revenue and ~US$71.6 million earnings by 2028, with a cited fair value near US$27.29-roughly 114% above the stock at the time. That upside scenario isn't off the table, but it now rests on visible adoption of AI modules and accelerating e-invoicing wins over the next 2-3 quarters.
In practical terms, the bull case needs improving NRR, rising AI attach, and evidence that ERP-driven demand is converting to signed, multi-year commitments. If those proofs don't show up, the story reverts to steady-but unexciting-growth, which likely caps multiple expansion.
Three-scenario framing for planning
- Base case: 10-11% FY26 growth as guided; stable enterprise pipeline; gradual AI attach; NRR improves modestly by year-end.
- Upside case: Faster e-invoicing adoption and strong SAP/Oracle cloud migrations; AI modules lift ARPU; NRR inflects higher, keeping 2028 targets in play.
- Downside case: Deal cycles stretch, SMB churn persists, and AI adoption lags; revenue growth and margins stay under pressure.
Operator checklist for the next two quarters
- Quantify AI module ROI per use case (e.g., reduced exception rates, hours saved) and arm sellers with proofs.
- Bundle e-invoicing with ERP projects already budgeted; prioritize regions with active mandates (EU ViDA context).
- Segment renewals: proactive saves in SMB, value-based expansions in enterprise.
- Publish a simple customer-facing roadmap with quarterly delivery checkpoints for AI and e-invoicing features.
- Align success plans and onboarding to accelerate time-to-first-value for Copilot and e-invoicing.
For strategy and finance leaders
- Model FY26 on the guided 10-11% range and stress-test cash needs under slower enterprise conversions.
- Track Q1 sequential performance vs. Q4 as an early signal on pipeline quality and churn control.
- Require a quarterly readout on AI attach, e-invoicing ARR, and deal cycle length-tie management incentives to these levers.
Bottom line: the thesis can work, but it's execution-heavy. The next few quarters must prove that AI modules and e-invoicing aren't just demos-they need to show up in NRR, ARPU, and signed enterprise deals.
If you're upskilling go-to-market, finance, or ops leaders on AI workflows and metrics, these resources can help: AI courses by job role.
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