Good morning, welcome to Vertex's fourth quarter and full year 2020 conference call. As a reminder, today's call is being recorded, and your participation implies consent to such recording. At this time, all participants are in a listen-only mode. A brief question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. With that, I would like to turn the call over to Ankit Hira, Investor Relations. Thank you, sir. Please begin. Thank you. Good morning, everyone, and thank you for joining us for Vertex's financial results conference call for the fourth quarter and full year ending December 31st, 2020. On the call today, we have Vertex CEO, David DeStefano, and CFO, John Schwab. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results for our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release. This conference call will be available for replay via webcast through Vertex's Investor Relations website at ir.vertexinc.com. David will begin with an overview of Vertex, followed by our fourth quarter and full- year highlights. John will take you through a review of the financials before we proceed to Q&A. With that, I'll now turn the call over to David. Thanks, Ankit, and thanks everyone for joining us on the call today. This year was remarkable in many ways, and we continue to see the pace of change in the global business, technology, and regulatory environments creating entirely new complexities and challenges in managing indirect tax. We believe our solutions will play an essential role as companies adapt their business models to support revenue growth through e-commerce platforms and marketplaces, drive resiliency in their global supply chains, and accelerate their move to the cloud. We are very pleased with our fourth quarter results as we close out the year. We continue to deliver strong fiscal year performance, which reflects the durability of our business, the strength of our customer and partner relationships, and our focus on driving sustainable, profitable growth. We grew our total revenues by 16.5% for the full year to $374.7 million. Our adjusted EBITDA was up 15.5% year-over-year. We ended 2020 with annual recurring revenue per customer of over $78,000, up from $65,000 at the end of 2019. Our performance was driven by the outstanding efforts of our Vertex team and partners around the world, whose dedication and focus to our customers during these extraordinary times was on full display every day. We are pleased with the continued growth of our cloud business. For the full year, we grew our cloud revenues by 65% over 2019. In Q4, we saw cloud revenue growth of 70% compared to 54% in Q3. We believe the pandemic may have accelerated the migration of customers' infrastructure and applications to the cloud, leading to increased adoption of our cloud solutions among our existing customers. Among our new logos, the vast majority of wins were cloud deals, especially in the middle market, where tax complexity continues to increase. Going forward, as we estimate our cloud-based subscription revenues to exceed $100 million in revenue in 2021, we expect a more normalized growth rate of 35%+ for the year. Our fourth quarter results also demonstrate that we continue to expand our revenues among large, global multinational customers who, while they continue to move many of their applications to the cloud, still want to keep their order-to-cash applications behind the firewall, especially outside of the United States. We believe our hybrid approach to serving both cloud and on-premise customer needs gives us a differentiated competitive advantage going forward as we pursue our addressable market globally. Now, I'd like to share some notable highlights from the fourth quarter. First, I'd like to start with our progress outside of the United States, which as I have discussed, remains a key vector of growth for us going forward. We continue to see increased demand for our solutions in both Europe and Brazil, where businesses face significant regulatory change and tax complexity. We continue to invest in these regions to further capitalize on emerging growth opportunities. In Q4, we had a strategic win with the world's largest industrial manufacturing company. They look to us for an end-to-end solution for indirect tax management as part of their global SAP S/4HANA implementation. This win speaks to the differentiated value of our end-to-end capabilities, our strong relationships with global technology, and accounting partners. This customer is a good example of challenges many multinational organizations face when they move their infrastructure to the cloud. They want to leverage the cloud as much as possible, but for either specific business or IT reasons, they want to keep their order-to-cash process behind the firewall. Without an on-premise option, this customer would have continued using native functionality and internal workarounds. In choosing Vertex, they can address their tax complexities today and have the confidence that we have an enterprise-scaled cloud solution when they are ready to migrate. This customer is also implementing our Chain Flow Accelerator for SAP, which we just released in the fourth quarter. As global enterprises continue to build resilient and dynamic supply chains, the cross-border shipping and moving of goods has significantly increased VAT compliance, complexity, and risk. We developed the Chain Flow Accelerator to help companies address this challenge. This solution combines intelligent data visualization and data mapping within the SAP user interface to streamline the management of VAT complex scenarios associated with cross-border supply chain transactions without manual effort or modifications. This win is also notable because it leveraged our strong relationships with the tax technology advisory practices of the major accounting firms in both the U.S. and Europe to coordinate a truly global solution. These partners are a natural extension of our go-to-market motion, and we've closed a number of large deals this quarter and throughout the fiscal year due to the strength of these relationships. Another Q4 highlight is in Brazil, where we've expanded our content database to serve the global breadth and depth required by our multinational customers doing business in one of the most complex tax environments in the world. Our investment in Systax in 2020 has enabled us to deliver new and expanded tax content for some of the biggest companies on the planet. In Q3, we helped one of these companies expand into new states in Brazil, requiring additional content for tax compliance there. In the fourth quarter, we helped them expand even further by supporting five additional states in the country. I'm encouraged by the performance of our global teams and the significant opportunities we have ahead of us in those regions to support our global customers. In Q4, we also continued to broaden and deepen our global technology, channel, and partner ecosystem to strengthen our solutions and extend our go-to-market reach. We expanded our Salesforce integrations, supporting their Lightning B2B Commerce and order management applications. We also added a number of new Microsoft Gold partners in the quarter. I'm excited about the investments we are making in these areas going forward as tax complexity continues to move into the front office CRM, e-commerce, and procurement systems of today's global businesses. We also continue to build on our long-standing partnerships with SAP and Oracle, in particular, our cloud-to-cloud integrations and support for SAP S/4HANA, Oracle ERP Cloud, and Cloud Infrastructure. In Q4, we worked with an SAP Platinum partner who was implementing S/4HANA private cloud for a rapidly growing global healthcare company focused on innovative therapies. They chose us because of our ability to provide strong SAP tax integration with enterprise-scale capabilities for U.S. and global tax. We continue to see increased demand through our Oracle Cloud Infrastructure partnership with prospects and customers, with several Q4 wins attributed to the benefits of our cloud-to-cloud solution. We continue to build industry-specific content and partner relationships to support key verticals. We expanded our partner ecosystem in the fourth quarter with a global leader in the leasing industry, where managing tax continues to be highly complex, particularly with consumers and seller use tax. New logo acquisition remained strong in the fourth quarter among both enterprise and mid-market customers, as growing tax complexity exceeds the capabilities of their native ERP or homegrown systems. This was the case with one of the world's largest quick-service restaurant companies, who chose our solutions as part of their global point-of-sale rollout. We are also enabling an online delivery service provider to scale tax automation within their payment processing systems to support the rapid growth of their business in the pandemic. We signed a premier healthcare network in the U.S. because of the cloud-to-cloud integration with our solutions and their Workday implementation. Average ARR among just our new logos grew to nearly $59,000 in 2020 versus $53,000 in 2019, demonstrating the continued market opportunity and value of our solutions in the enterprise and mid-market segments. Finally, our performance in the quarter was also driven by expanding our revenues from existing customers. As our customers expand globally, accelerate their omnichannel strategies, and adopt best-of-breed front-office applications, we grow with them. In Q4, we expanded our revenues with a number of customers whose e-commerce growth has rapidly increased with the digital economy and in response to the pandemic, including a luxury fashion brand, an online food delivery service company, and one of America's largest sporting good retailers. We continue to see our customers migrating to the cloud as their business needs change, including a large specialty service provider and one of our longtime telecom customers. We believe this reflects the strength of our brand and our customers' confidence in us to support their hybrid IT environments now and in the future as they evolve. I'm so proud of what we accomplished in 2020 and our ability to effectively balance profitable growth with strategic investments in our technology and go-to-market scale. I'm equally encouraged by what we've already accomplished in the first quarter of 2021. In January, we acquired Tellutax Edge Technology, which we believe represents the future of indirect tax technology. Its container architecture enables customers to deliver tax solutions seamlessly at what we call the point of need, wherever transactions are conducted, like mobile applications or connected device, and do this with tremendous scale and simplified management. We believe this acquisition can also enable us to extend our global capabilities into adjacent markets like next-generation payment and IoT platforms for a truly connected commerce experience. The teams are actively working to integrate this technology into our solution roadmaps. In February, we announced that Sal Visca had joined our team as chief technology officer. Sal is a recognized innovator and leader of global technology teams in e-commerce, business intelligence, and enterprise management software. I'm so excited about the strategic value and creative thinking that he brings to Vertex. In closing, our Q4 and full-year results reflect the enduring strength of our business. The experience and brand we have built over the past 40 years remains an essential ingredient to our success. Despite the unique challenges of 2020, our business growth validates our strategies and the global market opportunity that exists for us in 2021 and beyond. We are investing in the talent, technology, and partnerships needed to advance our vision to accelerate global commerce, and our team remains resilient and committed to our success and our customer. With that, I now turn it over to John to discuss our full-year results and outlook for 2021. Thank you, David, and thanks everyone for your time. Today, I'm going to discuss our fourth quarter and full year 2020 results, and then we'll wrap up with comments on our capital structure and provide our first quarter and full year guidance. Total fourth quarter revenues grew 15.7% year-over-year to reach $99.5 million. Subscription revenues grew 15.1% year-over-year to $83.9 million. These revenues were benefited by annual transaction-based subscription adjustments, accounting for approximately $1.5 million of additional revenue. Our services revenue increased 19% over the same period last year to $15.6 million due to a significant number of year-end implementation and upgrade projects. Total revenues for 2020 were $374.7 million, up 16.5% from 2019. Our annual recurring revenue or ARR grew to $316.4 million as of the end of 2020. This represents a 13.6% year-over-year growth. As David mentioned, we continue to see strong growth in our cloud-based solutions among both existing customers and new customers. For the fourth quarter, cloud revenue grew 70%, which is up from 54% in the third quarter of 2020. We ended the full year 2020 with our cloud revenues growing 65% over the full year of 2019. Going forward, as our cloud base crosses $100 million in revenue in 2021, we are targeting a more normalized growth rate of approximately 35% for the year. We continue to lead cloud first on all our new opportunities and believe that the shift to cloud presents a unique opportunity for the company to drive additional revenues and ARR growth. We believe our hybrid approach to serving both cloud and on-premise customer needs gives us a differentiated competitive advantage going forward as we pursue our addressable market globally. Our net revenue retention rate or NRR was 106% as of the end of 2020, demonstrating our customers' continued commitment to our software and solutions. Our gross revenue retention remained at 91%, which is consistent throughout the 2020 quarters. Notably here, our GRR was impacted by approximately 300 basis points due to cloud migrations that occurred during 2020. In discussing the remainder of the income statement, please note that unless otherwise stated, the references to our expenses, operating results, and per share results are on a non-GAAP basis and are reconciled to our GAAP results in the earnings press release that was issued today. On an overall basis, gross profit for the fourth quarter was $70.4 million, representing a 70.7% gross margin. This compares with gross profit of $61.8 million and a 71.7% gross margin in the same period last year. The 100 basis point change reflects our investment in cloud infrastructure, tax content, and customer success management areas. From a subscription software standpoint, our gross margin was 76.8% as compared to 78.5% in the prior year, driven by continued investment in our cloud infrastructure, tax content, and customer success management. Our gross margin in our services business increased to 38.4% from 34.0% in the prior year. We continue to see demand for services from implementation of new software as well as from existing customer projects but anticipate that the margins will moderate. For the full year, subscription software gross margin was 77.9% compared to 78.2% in 2019. For the full year, our services gross margin was 34% in 2020 as compared to 30.9% in 2019. Our fourth quarter research and development expense was $10.4 million or 10.5% of revenues, an increase of 130 basis points year-over-year, reflecting the increased spend on new solutions to expand our end-to-end capabilities. For the full year, R&D expense was 10.6%, compared with 9.2% in 2019. Our selling and marketing expense was $19.7 million in Q4, or 19.7% of total revenues, a decrease of 100 basis points year-over-year, which was primarily driven by a reduction in travel and in-person marketing events due to COVID-19 restrictions. However, these expenses increased by $3.2 million, or 230 basis points from the third quarter as we ramped up sales and marketing investments heading into 2021. For the full year, selling and marketing expense was 18.6% in 2020 as compared to 20.6% in 2019. Our fourth quarter general administrative expense was $21.2 million or 21.3% of revenues versus 21.7% of revenues in the Q4 of 2019. This decrease was driven by information technology infrastructure and other initiatives in 2019 that did not recur but were partially offset by increases in public company operating costs in 2020. For the full year, general and administrative expense was 21% in 2020 as compared to 20.3% in 2019. Our quarterly GAAP net income was $200,000 compared to GAAP net income of $4.7 million for the same period last year. GAAP net income per basic and diluted Class A and Class B share was effectively zero, compared to GAAP net income per basic and diluted Class A and Class B share of $0.04 for the same period last year. Non-GAAP net income was $12.3 million, compared to non-GAAP net income of $14.2 million in the same period last year. Non-GAAP net income per diluted Class A and Class B share was $0.08, compared to non-GAAP net income per diluted Class A and Class B share of $0.11 for the same period last year. Our quarterly adjusted EBITDA was $19.1 million, up 11.2% year-over-year, while adjusted EBITDA margin of 19.1% was approximately 80 basis points lower than the same period last year, reflecting our investments in our research and development activities, as well as the acceleration of our selling and marketing efforts. For the full year, our adjusted EBITDA was $78.4 million, or 20.9% of revenues, as compared to $67.9 million, or 21.1% of revenues. Turning to our balance sheet and cash flow statement. We finished the year with $303.1 million in cash and cash equivalents, reflecting the completion of our initial public offering, where we raised proceeds net of underwriting fees of $423 million, which was used primarily to repay our $175 million term loan and pay for offering expenses. We generated $30.9 million in free cash flow for the quarter, a decrease from $34.8 million in 2019, also reflecting our investment in product development and selling and marketing efforts. We generated $49.6 million in free cash flow for the full year, a decrease from $54.9 million in 2019. Turning now to our guidance for the first quarter of 2021. We expect total revenues in the range of $94.5 million- $96.5 million, representing year-over-year growth of approximately 5.9%- 8.1%. Adjusted EBITDA to be in the range of $15.5 million-$17.5 million, representing an increase of approximately $200,000-$2.2 million compared to the first quarter of 2020. For the full year 2021, and consistent with the plan we outlined during the IPO, we currently expect total revenues in the range of $401 million-$405 million, representing year-over-year growth of approximately 7%-8.1% compared to 2020. Adjusted EBITDA in the range of $68 million-$72 million, representing year-over-year decrease of approximately $6.4 million-$10.4 million compared to 2020. The adjusted EBITDA includes our acceleration of investments in global sales and marketing capacity, new product development and innovation, plus an additional $2 million of increased operating expenses related to the acquisition of Tellutax in January of 2021. As we had anticipated in 2020, we saw a slowdown of enterprise customer buying activity as some of their system upgrades pushed out into 2021 and 2022. In spite of this, we were able to grow the business during the year. This timing and our acceleration of product development and selling and marketing activities position us nicely as enterprise growth accelerates in 2021 and 2022. This opportunity, as well as continued regulatory changes and increases in complexity, position us for future growth. Additional modeling details underlying the outlook are as follows. Our share count at December 31st, 2020. We had 120,117,000 shares of Class B common stock outstanding and approximately 26,327,000 shares of Class A outstanding. Additionally, we had approximately 12,647,000 common stock equivalents outstanding with a weighted average exercise price of $2.21 per share. Our anticipated tax rate is expected to be approximately 25.5%. Overall, we're pleased with the progress we have made on our strategic initiatives and the performance of our business. With that, we're happy to open it up now for questions. Operator, will you please open up the line for Q&A? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press start two if you would like to remove your question from the queue. For participants using speaker equipment, you may be necessary to pick up your headset before pressing the star keys. One moment please while we pull for your question. Our first questions come from the line of Brad Reback with Stifel. Please proceed with your questions. Oh, hey, guys. How are you? Great, Brad. How about yourself? Very good, very good. Maybe starting from a high level competitively, has anything changed out there? No, Brad, we continue, you know, first and foremost, to compete against the in-house system that's good enough until it's no longer good enough between regulatory change or technology changes that are driving it. We see Thomson Reuters primarily in the global market as our primary competitor. When we go for enterprise deals and as we go into the middle market, we see both Thomson and Avalara. Overseas, we continue to see Sovos as a formidable competitor. Great. Then switching gears on ARR, obviously this year was somewhat impacted by COVID in your commentary on customers pushing out to 2021 and 2022. How should we think about when that growth rate reaccelerates? Yeah, this is John. I'll take that, Brad. I think we think about growth kind of steadily building throughout the year, as we ramp up our sales and marketing efforts like we talked about in the Q4, and we start to gain traction there. We think that'll start to happen a little more heavily towards the back end of the year as that traction comes into play, as well as the new products that hit the market that David talked about. I would see that a little bit more weighted towards the back of the year, back half of the year, for sure. Great. Thanks very much. You bet. Thanks, Brad. Thank you, Brad. Thank you. Our next questions come from the line of Daniel Jester with Citigroup. Please proceed with your questions. Great. Thanks. Good morning, everyone. I just wanted to circle back to something that was said in the prepared remarks. I think, David, you talked about that you noticed some acceleration in digital transformation impacting you in 2020, but then John talked about sort of some enterprise delays. Could you just piece out exactly kind of what you're seeing, maybe small mid-size business versus enterprise, and how COVID has impacted that, and how you see the recovery trajectory going throughout this year? Thanks. Sure. I'll take the start, then John, you can jump in. Thank you, Dan, for the question. I think, where we saw acceleration in the mid-market, as more companies are adopting Workday and Salesforce as operating systems, we saw great opportunity where that complexity of the regulatory environment and their new technologies are creating demand for us. I think that's also where our value prop showed up and why we're able to drive the ARR and our new logos significantly in cloud across the business. Obviously, some of the larger enterprise organizations, we had a lot of conversations, and while we did see good progress, two things of note there. I think one, we saw deals where a large Oracle or SAP implementation maybe got put on hold, and we have to deal with that, and they'll survive with good enough until 2021 or 2022. Additionally, you know, it's important to remember, we have a hybrid approach, we continue to see large on-premise deals being sold. That's good for us in the long term, because when they're ready to migrate to the cloud, we're doing great on those migrations when they happen. We have to recognize that our hybrid approach gives the customer the opportunity to choose what's best for them. We think that's still a differentiated part of our strategy. Thanks. And then, just on the 2021 revenue guidance, John, I think you mentioned that the framework was consistent with the IPO, but certainly the economy is a lot different than six to nine months ago, and there's a lot more sort of green shoots as we think about how the year progresses. Maybe philosophically, how did you think about approaching the guidance for the full year, and what are your sort of expectations from a sort of macro perspective? Thanks. Yeah, Dan, that's a good question. I think as we think about sort of how things are going to play out, as I mentioned when we talked about ARR, the ARR is going to build itself throughout the year. As you know, as we recognize revenue ratably over the period, it takes a little bit longer for it to kind of pull itself into our revenue stream. That's sort of how I think about sort of the tracking of it and the tracking of revenue. Yeah, we certainly do see opportunity out there, and we're certainly capitalizing on that as well as building our sales force to further capitalize on it. I think over time, that'll continue to work itself into 2021 towards the back end, and again, the revenue follows. Keep in mind, we did have a real nice, you know, we did have a real nice Q4. We did see a lot of activity in Q4, although we were benefited in the fourth quarter by about a million and a half dollars of transaction-based sort of true ups from a volume standpoint. When you kind of compare it on a sequential basis, there's a little bit of that that plays in there as well. Thank you. Thanks very much for the question. Thank you. Thank you. Our next questions come from the line of Brad Sills with Bank of America Securities. Please proceed with your questions. Oh, great. Hey, guys. Thanks for taking my question. Wanted to ask about the cloud. You had good results this year, 65% growth in cloud ARR. You know, I think you're forecasting a deceleration there to 35%. Was the pandemic an accelerant, if you will, for cloud deployments? In other words, with work remote, it's easier to deploy in the cloud versus on-prem. If so, is that tailwind in the business perhaps over? Is that implied in the guidance, or is there something else going on with the deceleration in cloud ARR outlook? Thank you. I'll start, and then John. I'll jump in. Yeah, feel free to jump in. I think, fundamentally, it's now going to be over $100 million base. 35%+ growth was, we felt, a more normalized, just top- of- the- trees answer. I think it's important to remember, Brad, we lead everything cloud- first in our sales, and we see pretty consistently the overwhelming majority of our new logos are all cloud deals. As our customers are expanding on omnichannel and existing customers continue to grow, allow us to grow our footprint within their base, those are largely cloud deals. We see it as three different tranches. It's the new logos, largely cloud, overwhelmingly cloud. The upsells and the new sales to existing customers, I'd say a majority of those are. Existing customers, though, are still slow to migrate. I think we saw a little bit of acceleration there, but nothing material that we would suggest we've got a new trajectory for 2021 around existing customers migrating off of their on-premise solution. Just to add to that a little bit, Brad, what I would say is, as David and I both mentioned, the growth was about 65% on a year-over-year basis for the full year. Some of that is impacted by a couple of things. We did have a monster Q4 2019 in terms of our cloud sales, and it was really just an absolute banner blowout quarter. We certainly are dealing with a tough comp quarter. Secondly, keep in mind, we did close on the Systax acquisition in January of 2020. That's also in those numbers sort of pulling that. When you look at sort of the little bit of the pullback, that pullback has a couple of things going against it, the acquisition certainly notably being a decent-sized piece of that. I just thought I'd point that out as well. Great. Thanks so much, guys. Then one more if I may, please. Just on some of the headwinds you noticed in the business this year with some of the deals delays. Is that largely over? Do you have visibility for those deals coming back here, you know, with the pandemic and reopening kind of happening gradually? What would you say there? Thank you so much. Yeah, I think, in the beginning of the pandemic, it was all IT shops were all hands on deck to get their entire workforces global. Obviously, large multinational enterprises, that was a bigger challenge. I think the sales conversations are good going forward here in terms of people are getting, as you say, more back to normal in terms of thinking about their IT roadmaps. We're really pleased with the Oracle OCI and SAP S/4HANA migrations that are now starting to resume. Those are obviously longer, depending upon the size of the project. Those can be, you know, 6-24-month implementations of which we fit in at a certain slot. It's really understanding where they are in their timing, where we best fit into those projects. Thanks so much, guys. Yeah. Thank you, Brad. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from the line of Pat Walravens with JMP Group. Please proceed with your questions. Oh, great. Thank you. Congratulations, you guys. I want to talk about Tellutax and then Sal Visca. I guess Tellutax first, can you just go over again why you bought it? It's Eric and Chris, right? Are they both joining Vertex? Eric. Yes, Eric joined. Eric obviously has a steep history in the industry, having architected Intacct technology for years, and we really were pleased with some of the innovations when he had gone out on his own about where he was taking the indirect solutions at that point of need for mobile and IoT-level container, where you can really shrink the footprint of an enterprise solution down into that container, which we think will make it very attractive from a deployment perspective for our customers. We saw great value in what they were building, and wanted to make sure we got that integrated into our products as quick as possible. Okay. I messed up my question. There were two Erics, right? There's Eric Rudd and Eric Christian. There were. Okay. Yeah. Are they both joining, or just Eric Christian? No, just the technology Eric. Eric Christian. Okay. His role is going to be what? He's working in our innovation group, driving the implementation as a lead architect around driving the integration of that product into our product stack. Okay, great. At the same time, you have Sal Visca coming in, so I'm sure you talked to a gazillion candidates. Why did you pick this one, and you know, what are you going to tell him his top priority is coming into this? Yeah. Sal has an extraordinary background and experience that he spent the last 10 years in e-commerce, which is really critical to the front office space that we see as great growth opportunity, where complexity is accelerating. He brings that. He used to be the CTO of Business Objects, so he has played in the data and BI space, which I think there's opportunity there for us, given the large data sets that we touch and interact with regularly. He spent some time in enterprise software, so he certainly understands our, through his experience at SAP, our ERP and back-office footprint, and the need to be at scale for the type of enterprise customer. Sal brings just a great wealth of innovation and experience to our team, and we just couldn't be any more excited to have him join. Great. What would you say the top priority is for him coming in here? Sal is focused across everything I just said. He's accelerating our expansion in our e-commerce platform area. He's accelerating our product roadmap. He's got some nice innovation about how we can accelerate certain deliveries of products. He's also very much focused on some of the inorganic things like Tellutax and Systax and other things we're looking at, given his background in M&A, about how we can accelerate that. Those are probably his top three priorities. Okay, perfect. Thank you. Thank you, Pat. Thank you. Our next questions come from the line of Chris Merwin with Goldman Sachs. Please proceed with your questions. Okay. Thanks very much for taking my question. I wanted to ask about net retention. I know that dipped slightly in the quarter. I imagine that's the impact, I guess, of lingering effects from the pandemic. As we move into 2021 here, just curious how we should be thinking about the trajectory of that metric. I know cross-sell is a very important focus for you all with the breadth of product suite that you have. Just curious any comment you could share about the trajectory of that metric. Thank you. Chris, thanks very much for the question, a very good one at that. I think you're right. As we looked at sort of the decrease, a little bit of a drop here that we saw in the fourth quarter from an NRR standpoint, it's really driven by two things. You know, really, it's the cross-sell migrations and the additional volume we get with existing customers. They were the two pieces that fell probably similarly, each side kind of taking that down a little bit. As we think about where we are from that standpoint and think how this will impact going forward, as I mentioned, since this is largely driven by ARR activity, we'll start to see some of that ARR pick itself up in the back half of the year. As that picks itself back up, we'll start to see improvements in this area. It'll moderate, you know, it'll moderate where it is now, maybe down a little bit, but then start to move itself back as we get more volume coming in through ARR. Again, we feel pretty good about it. Again, our customer base is very strong. It's very durable. They continue to buy additional entitlements and additional enhancements to the products that they have. We feel pretty good about it as we move through. Again, as we continue to migrate certain customers across the map from on-prem to the cloud, there's opportunity there as well. Great. Maybe just to follow up on that last point around migrations, I think you said that in the prepared remarks, gross retention was around 91%, and there was some impact to that number from cloud migration. To the extent you're obviously keeping the customers and migrating them to cloud, just want to make sure I understand the puts and takes around how migration would impact your gross retention rate. Yeah, Chris, great point. As we measure and we monitor sort of our GRR to NRR, that walk that I've walked many people through, when customers move out of one solution into another solution, it shows initially getting to GRR that they have left that solution, so that shows as a loss. Then when it comes back in as a new sale, it shows and it adds into the NRR. It's a decrease for the GRR, and it's included in the increase in the final NRR number. However, it shows it going down when you get to the GRR calculation. That's about 300 basis points, and because of the conversion, that movement there, that movement certainly impacts GRR initially. As people look at it and say, "Hey, how can you guys be at 91% with such stickiness and such enterprise software?" It's being impacted because of that move. On an overall basis, if you did it on a customer basis, I think it would tell a bit of a different story, certainly, as that movement takes place. Does that make, does that clear that up a little bit? Definitely. Thanks very much. Great. Thank you. Our next question comes from the line of Stan Zlotsky with Morgan Stanley. Please proceed with your questions. Perfect. Thank you so much, guys. Thank you for taking my questions. Maybe just following up on Chris's question before, on the cloud migrations right now, how are you thinking about it into 2021? How much does that play into the 35% guidance that you have for cloud subscription revenue growth in the year? I have a quick follow-up. Yeah. I guess, you want to start? No, go ahead. I'll just start and tell you, Stan, as we built and we modeled this out, we didn't take any significant changes in assumptions from cloud migration because, again, as David had mentioned in some of his remarks, we're not really pushing customers and accelerating customers to move over to the cloud. If the opportunity presents itself, we're certainly going and talking to them about that, but there's no forced migration that's taking place. Our anticipation for migration to the cloud from on-prem is really consistent with how it's been, the level that it's been in the past. We're not anticipating any big jump there in terms of how that activity plays. Just on a bigger base now. For sure. So, we thought that we try to be a little more thoughtful about what would be a good cloud growth rate, and feel like we should be able to do 35%+. Okay, perfect. This is a little bit nuanced, but if we do the math of taking your average revenue per customer that you disclosed and divide that into the ending ARR, it looks like the customer count has been declining for the last three quarters. Is that just a function of maybe some churn at the low end? Is there something going on with the calculation that we need to be mindful of? Just anything you can help us with, that would be great. Thank you. I think, Stan, as you heard, there's nothing going on with the calculation. I think a lot of it really has more to do with the churn at the lower end. A lot of smaller type customers, there is a little bit more churn there perhaps than at the higher end, but I think that's what you're seeing. We're doing some levels of consolidation as we think about that can impact it slightly. I wouldn't tell you that our number of customers is dropping precipitously at all. It really more has to do with some of the churn at the low end. Again, as David talked about, we continue to see a rise in the average ARR per customer. Got it. Thank you so much. Thank you. Thank you, Stan. Thank you. Our next question comes from the line of Bhavan Suri with William Blair. Please proceed with your questions. Hey, guys. Thanks for taking my question, and congrats on that cloud growth. That was pretty solid there. I want to touch a little bit on sort of a more strategic question here, which is, you've seen a bunch of consolidation, or at least you're starting to see a bunch of consolidation in that office of the CFO space, whether it's compliance and tax, whether it's AR, AP and tax, whether it's treasury and tax. How do you guys think about your role there and sort of maybe help us again, I know you can't give us an exact product roadmap, but how do you think the company starts to address that consolidation, that broader space in, say, the next three to five years? It's a very good question, Bhavan. It is an evolving world for sure. I think it's important to note that a big part of our element is also in the IT function. We play very heavily, because of the line item invasiveness of our product. It's very much. So, at the income tax level, you're seeing more of that consolidation in the indirect tax space. That consolidation plays out a little differently because regulatory and compliance is often a different part of the organization than the CFO. That said, I think because of the strength of our partnerships with the global Big Four, and other big alliance firms, as well as the technology partners, the deep integration we have with them, it positions us well as those conversations continue to evolve. I would also tie it back to some of the conversations that was asked previously, about Sal Visca joining us. I think we see an opportunity for Sal to bring some nice innovation there, and expanding our product suite that will help us in that space. Thanks, David. Then maybe one for John and it may have two parts. John, quickly on the NRR, which was 106%, typically you guys have a 5% price increase annually. Maybe help me bridge that, I think it might just be the churn that plays into it, help me understand that. Do you see any pressure on that 5% price increase this year? Did you give any concessions? Did you waive a little bit of it? How should we think about that? Second part is there any way to quantify the tailwinds from the things you're seeing at Oracle and SAP HANA? It was obviously a headwind this year, we can think over like not even next year, but over 24 months. Does that provide, you know, two, 300 basis point tailwind? How should we think about that? Thank you. Yep. No, thank you for the question. Let me take the first one first. As it relates to sort of the NRR, you think about the 106%, you said, hey, you have about a 5% price increase. Keep in mind, as we build there, that 5% price increase really has to start with the GRR number. It starts with the 91%, and it builds itself up. We've not seen any impact from a pricing standpoint. Our ability to pass price increases along to our customers is very consistent with where we were last year, as I look at the numbers. There's really been no impact there in terms of how that's going. We feel pretty good about the product we deliver, the tax content that gets delivered. Our customers continue to buy more and to get that, and because of that, they continue to invest in our product. Again, price increases unaffected by anything. Again, the walks, just again, to the point that I made earlier, it's a little bit lower from a cross-sell migration as well as additional volumes that are going through, again, as volume may have slowed for certain of our customers. Not a real big change there from a price increase standpoint, really in the other two pieces that drove it. That's sort of how that walk goes. I guess from the other standpoint, kind of the tailwind that you talked about, yeah, again, as I mentioned in my remarks, we did see a little bit of a pullback from those big enterprise customers. Listen, I think we don't see, as we look out, we think those opportunities are still certainly there, and as those movements and that migration and that activity takes place, as they migrate their systems to other things, that should provide opportunity for us to be in the game and certainly driving additional revenue as those things come to be. Great. That's very helpful. Gentlemen, thank you. All right. Thank you, Bhavan. Thank you, Bhavan. Thank you. Our next questions come from the line of Samad Samana with Jefferies. Please proceed with your questions. Hey, guys. This is Jordan Barett on for Samad. Thanks for taking my question and congrats on a strong quarter. I just wanted to follow up on Pat's question. Last year you acquired Systax, and now this year Tellutax. Could you just remind us of your strategy around M&A? Jordan, appreciate you joining the call. We continue to see opportunity to expand, and it was a key part of our decision going public was to have more resources to make acquisitions. As we expand globally, I think there's a lot of opportunity to add content, and select technology niche and tuck-in acquisitions that will support the end-to-end suite that we continue to fill out. As complexity continues to show up in the tax department, they're now looking for cross-border customs and duties and other types of capabilities going forward. We're consciously engaging in the market around those opportunities. Great. Thank you. Sure. Thank you. Our next questions come from the line of Josh Reilly with Needham & Company. Please proceed with your question. Hey there, guys. Thanks for taking my question. If we look at the ARR growth over the last several quarters and now your subscription revenue guidance for Q1 in the year, I'm just trying to understand the delta there. It seems a little bit wider than what I would expect. Is it primarily conservatism around the macro environment right now, or how should we think about the puts and takes there? Yeah, a couple of things, Josh. Thanks for the question. We feel good about what we've seen from a marketplace in terms of the activity that's out there. The ARR growth is good. As we think about the quarter, and we think about the growth in the quarter, and as it translates into guidance, a couple of things. First, keep in mind, services does take a little bit of a dip in the first quarter. We had a real strong Q4 from a services standpoint, with customers trying to get some year-end implementations in up and running. That was really good for us. Again, on the back side of that, it sort of drops a little bit from a total revenue standpoint. From an invoicing standpoint, when we take a look at 2020, we had a real nice year, and there were some anomalies, a little bit, in Q4, as I had mentioned, some of that transaction-based pricing true-ups that happened in the fourth quarter. Not giant, certainly impacting as we move forward. We continue to see momentum from a revenue standpoint. It continues to grow. Again, some of the activity, and a little bit of the slowness, and some of that push-out that I talked about in my remarks that we saw in 2020 sort of manifests itself in revenue as it rolls into 2021. That's how I would summarize it. Okay, got it. Just to follow up, which go-to-market technology partners have been strongest in driving new business during the COVID era? ERP obviously took a hit maybe at the high end, but in the mid-market ERP, is that more of a driver? Point-of-sale procurement. Just trying to understand what the drivers are there. Do you expect any shift in those technology partners driving business in the post-COVID macro? I certainly think we're seeing good momentum in Salesforce and Workday and sort of the emerging, as you say, mid-market players. Also at the enterprise level. We play with both of them very well at the enterprise level. I think that space, Acumatica, and Microsoft would be our primary drivers in the mid-market. The relationship we have at Avanade and some of the additional Gold partners that we've added in the Microsoft space have played well to be drivers. Certainly going forward, the procurement and e-commerce space is where we see great opportunity for expanding relationships and integrations. Some of the partnerships we added in Q4 were specific to that space. Got it. Thanks, guys. Happy to, Josh. Thank you. There are no further questions at this time. I would like to turn the call back over to David DeStefano for any closing comments. Thank you. In closing, I think we're well-positioned to continue the momentum in our business heading into 2021. I'm confident in our ability to capitalize on the significant growth opportunities ahead while delivering significant value to our customers, partners, and shareholder. I'd also like to thank the entire Vertex team for their tremendous efforts and commitment in what was truly an unprecedented year. Thank you again for your interest in Vertex and for joining our call today. We hope you and your family stay safe and healthy, and we look forward to reconnecting soon. Thank you. This does conclude today's teleconference, and thank you for your participation. You may disconnect your lines at this time. Have a great day.