Vertex Swings To Q2 Profit Above Estimates; To Acquire Ecosio By Initially Paying $69 Mln; Stock Up

(RTTNews) - Vertex, Inc. (VERX), a provider of indirect tax solutions, Wednesday reported a profit for the second quarter compared with loss last year, helped by growth in revenue. Earnings as well as revenue surpassed the Street expectations. The stock was up more than 7 percent in pre-market to $39.

Additionally, the company announced its decision to acquire ecosio, a B2B integration provider specializing in electronic data interchange and e-invoicing.

The company reported net income of $5.16 million or $0.03 per share for the second quarter compared with net loss of $6.90 million or $0.05 per share in the same quarter a year ago.

Excluding one-time items, earnings were $24.99 million or $0.15 per share, that beat the analysts' average estimate of $0.13 per share. Analysts' estimates typically exclude special items.

Revenue for the quarter increased to $161.10 million from $139.70 million in the previous year. The consensus estimate was for $160.66 million.

Looking ahead to the third quarter, the company expects revenues in the range of $164 million to $167 million. The Street is looking for revenue of $165.05 million.

For the full year, Vertex sees revenue between $654 million and $660 million. Analysts expect revenue of $656.77 million for the year.

Acquisition of ecosio:

Commenting on the acquisition, Vertex CEO David DeStefano said, "By acquiring ecosio's advanced technology and their team's extensive e-invoicing and EDI experience, we are committed to delivering a differentiated global compliance solution that simplifies both e-invoicing and VAT complexities."

As per the deal, Vertex will pay an upfront payment of $69 million as well as a targeted earn-out of $76 million in cash and $35 million of Vertex shares, based on ecosio achieving certain financial targets over the next three years.

Closing of the deal is expected by the end of the third quarter of 2024.

Vertex stock had closed at $36.17, down 0.11 percent on Tuesday. It has traded in the range of $18.41 - $40.05 in the last 1 year.