Vertex

Q2 FY2026 EarningsQ2 FY26 results delivered a beat on both top and bottom lines: revenue was $204.0M vs. $202.2M expected, and Normalized EPS reached ~$0.21 vs. $0.19 consensus. Software subscription growth remained steady at 10.7% YoY, driven by cloud-based solutions which now represent 58% of sub revenue. However, Free Cash Flow of $2.7M significantly missed the $19.0M consensus floor due to timing-related working capital outflows and restructuring costs from the newly launched Value Creation Plan. While GAAP earnings were bolstered by a significant one-time tax benefit, the underlying operating leverage improved with Non-GAAP gross margins reaching 76.1%.