KING OF PRUSSIA, Pa. - Vertex (NASDAQ:VRTX), Inc. (NASDAQ:VERX), a prominent tax technology solutions provider, has announced the acquisition of advanced tax-specific artificial intelligence (AI) capabilities from Ryan, LLC, a recognized tax services and software company. The move aims to enhance the efficiency and accuracy of tax mapping, a crucial process for businesses managing indirect tax compliance on a global scale.
This strategic acquisition is set to bolster Vertex's AI innovation strategy, allowing companies to navigate tax complexities with increased speed and accuracy. Chirag Patel, Vertex's Chief Strategy Officer, commented on the long-standing partnership with Ryan, noting that the integration of Ryan's tax expertise with Vertex's robust technology platform will significantly advance AI's value for tax teams.
The newly acquired AI capabilities utilize proprietary Large Language Models (LLMs) equipped with Generative Pre-Trained Transformer (GPT) technology. This combination, along with human oversight, is designed to maintain a stringent control framework, improving tax compliance accuracy. Vertex emphasizes that their proprietary LLMs offer a trusted AI solution that enhances precision without the need to aggregate, share, or mine customer data, which is common in other AI approaches.
Vertex's tax-intelligent system merges advanced AI with automation, identifying when human intervention is necessary. This integration is expected to deliver greater operational speed, efficiency, and the highest levels of tax accuracy for global tax teams.
Headquartered in North America, with additional offices in South America and Europe, Vertex employs over 1,400 professionals and serves an international clientele. The company's suite of solutions is tailored to specific industry needs, covering major lines of indirect tax, including sales, consumer use, value-added, and payroll taxes.
The financial terms of the transaction were not disclosed.
The information in this article is based on a press release statement from Vertex, Inc.
In other recent news, Vertex Inc. has reported a strong financial performance in the first quarter of 2024, exceeding both revenue and adjusted EBITDA expectations. The company saw an 18.1% increase in total revenue, largely driven by substantial growth in software subscription and cloud services. Adjusted EBITDA experienced a significant 80% increase from the previous year, reaching $36.5 million.
These recent developments indicate a positive trajectory for Vertex, especially with its strategic investments such as a $345 million convertible debt raise and potential inorganic expansions like e-invoicing partnerships. The company's software subscription revenue grew by 18.8% to $131.8 million, while cloud revenue increased by 28.3%.
Vertex's net revenue retention was strong at 112%, indicating customer expansion. The company has also secured new logo wins and is focusing on expanding its cloud portal and compliance capabilities. For Q2 2024, Vertex expects total revenue to range between $159 million to $162 million and adjusted EBITDA between $31 million to $33 million.
The company continues to explore opportunities for inorganic growth, with a disciplined focus on strategic acquisitions, particularly in e-invoicing.
InvestingPro Insights
As Vertex, Inc. (NASDAQ:VERX) strengthens its position in the tax technology sector with its latest AI acquisition, the company's financial metrics provide a backdrop for understanding its market potential. Vertex's market capitalization currently stands at $5.34 billion, reflecting investor confidence in its business model and growth trajectory. The firm's high Price-to-Earnings (P/E) ratio of 675.1, adjusted to 388.31 for the last twelve months as of Q1 2024, suggests that investors are anticipating future earnings growth, which aligns with InvestingPro Tips indicating that net income is expected to grow this year.
Further reinforcing this outlook, three analysts have revised their earnings projections upwards for the upcoming period, signaling optimism about Vertex's financial prospects. The company's revenue has grown by 17.08% over the last twelve months as of Q1 2024, marking a robust upward trend. Additionally, the company has been trading near its 52-week high, with the price at 97.26% of this peak, and has delivered a strong return of 51.05% over the past year.
For investors seeking a deeper dive into Vertex's financial health and future potential, InvestingPro offers a comprehensive list of 13 additional InvestingPro Tips that can be accessed at https://www.investing.com/pro/VERX. Moreover, for those looking to leverage these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing an even greater value on this investment research tool.
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