The indirect tax software and services company reported net income of $330,000 down sharply from $2.3 million in earnings for last year’s corresponding period, CEO David DeStefano said during the recent earnings webcast that it is continuing to grow sales and marketing and noted Verex is growing its mid-market share. Spending produced a decline in operating income from $468,000 in the most recently ended quarter from $2.4 million a year ago despite a 24.6-percent decline in stock-based compensation. Revenue for the quarter was slightly less than $155 million, rising 17 percent from $98.2 million a year ago. Software subscription revenue increased by 16.6 percent year-over-year to $97.1 million with cloud revenue up 42.1 percent to $38.3 million. Asked about migrating existing customers to the cloud, DeStefano said there is no indication of significant movement but that as the company introduces more cloud products that will pull the installed base to the cloud. Vertex increased sales and marketing spending to. $27.4 million an increase of 36.2 percent from $20.2 million with G&A expenses increasing 15.7 percent to $28.8 million. It cut R&D spending to $96.3 million, off 15.9 percent from $11.5 million. Currency losses cut $2.4 million from net income, compared to a currency gain of $1.3 million a. year ago.
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VERTEX SPENDING CUTS 1Q NET Featured
Vertex is growing its employee base, which contributed to a drop in net income for the first quarter ended March 31.