Greetings, and welcome to the Vertex, Inc. First Quarter 2021 Earnings Conference Call. 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ankit Hira, Vertex Investor Relations. Thank you, Ankit. You may begin. One moment please, while we deal with some technical issues. Thank you. Good morning, everyone, and thank you for joining us for Vertex's financial results conference call for the first quarter ending March 31st 2021. 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. With that, I'll now turn the call over to David. Thanks, Ankit, thank you all for joining us today. We had a strong start to the year, and we're very pleased with our performance, with strength across all our key market segments, product lines, and verticals. We continue to execute on our strategies and focus on our customers. The result, another strong quarter outperforming our Q1 guidance. We grew quarterly total revenue to $98.2 million in Q1, and annual recurring revenue grew to $320.1 million. The outstanding efforts of our teams around the globe and the investments we are making to accelerate go-to-market, deliver new products, and enable great customer experiences are building strong momentum in our business as we move forward. We believe that as tax revenues continue to be a key part of our global economic recovery, the mission-critical role of our solutions to enable growth and reduce friction will continue to increase. The investments we are making in our cloud platform keep us well positioned to seize these opportunities and deliver innovative end-to-end solutions to companies wherever and however they do business. We are incredibly excited about the acquisition of Taxamo, which we announced earlier today, bringing new and differentiated capabilities to our portfolio and significant growth opportunities in e-commerce and marketplaces. Our vision is simple, but it is bold. We intend to accelerate global commerce. Why? Because it benefits everyone, companies, consumers, and governments. Because of our breadth of enterprise-grade cloud and end-to-end product offerings, we are ideally positioned at the intersection of where most of the world's commerce happens and the compliance required in it. What's so exciting is how fast this vision is playing out. The global fabric of commerce can mean incredible opportunity and expansion across all channels, but also comes with complexity from a tax perspective. It requires intelligent tax technology throughout every aspect of the commerce transaction, connecting enterprise back-office applications to manage core procure-to-pay, order-to-cash, and front-office applications like billing, CRM, and e-commerce, as well as e-commerce platforms and multi-seller marketplace supporting both B2B and B2C. We continue to pioneer the world's most trusted tax technologies for business to transact, comply, and grow. That is why we're so excited about the growth opportunities ahead. As I have shared in previous quarters, we believe our unified platform, multi-cloud strategy, and deep partnerships are a powerful trio that allows us to meet our customers where they are at and consistently differentiates us in competitive sales cycles. Our win rate in the enterprise market remains dominant, and we've seen continued momentum of the value proposition and competitiveness that our cloud products offer middle-market companies as they grow and take on increased tax complexity that other vendors are not able to address. 34% of our new sales in Q1 were new logos, and of that, 92% were cloud deals. We believe this will continue throughout the year as our customers continue to deal with an increasing pace of change in their business models while they pursue global omni-channel operations and digital transformations, along with the continued and increasing regulatory change, such as the new legislation around cross-border transactions that will be going live in Europe in July and are following what the U.K. initiated in January. The highlights I will share in a moment reinforce this with a common scenario. As companies shift their business models, diversify their offerings, expand globally, or acquire new companies, their existing systems, whether homegrown or with another vendor, are no longer able to meet their needs. The fact that we can deliver a single platform for all indirect tax types that interfaces with an infinite number of systems is critical. I've been in this business for over 20 years. I can tell you that while much has changed, one thing has not changed. Customers, big, mid-size, global or local, they need improved accuracy in their tax calculation and compliance filings. In choosing Vertex, we support their tax complexity today, and when moving to the cloud, they have confidence that we are the premier cloud-native solution that provides a precise tax result amidst ever-changing tax rules, regardless of the application, business process, or region. Keep in mind, as I have said, and our recent customer win examples demonstrate, we often coexist with our customers in both cloud-based front office and traditional back-office applications. For most companies, moving to the cloud is not a like-for-like swap or full-blown migration. Customers are adding pieces over time. Not surprisingly, the trusted foundation we have built and the footprint we have established makes it easier and far more logical for them to adopt our cloud solutions because they trust the data they receive and can maintain consistency. For us, we have a great opportunity to grow our ARR within these accounts, sometimes significantly, as they move from point solutions. As we often experience when they go from one offering, sales tax, for example, to a complete end-to-end solution across multiple tax types, sales, consumer use, seller use, VAT, and communication services as part of their migration process. Again, our single platform approach differentiates us in these scenarios. Let me give you an example. One of our existing customers in the digital entertainment industry, who has been using our on-premise tax engine to support their business, found themselves ready to migrate to the cloud. With growth opportunities in front of them, they specifically wanted a provider with a single cloud platform to manage all their tax compliance needs across sales, use, and communication tax, and one who could also connect seamlessly to their front-end CRM and billing systems. The tax team also wanted to take control of their tax data and the ability to manage and maintain their solutions locally, taking it out of the hands of IT. This company has been with us for a long time and has been very happy with the support and enhanced accuracy and timeliness they receive. As such, when it came time to move to the cloud, it was a natural progression to move there with us, their preferred tax solution provider, because we were able to help them manage tax across multiple types with tightly integrated and not cobbled together point tools. As a result of the value we delivered, we were able to grow our ARR by 300% with this customer. With our customers, regardless of how they do business or how their business models and needs change, we believe we are uniquely positioned to help them by addressing multi-cloud, multi-application, multi-tax sites on one unified platform. That makes us different and why we're trusted by so many companies worldwide. When we look at our addressable market today and our core focus, we see tremendous greenfield and expansion opportunities everywhere to land new logos across middle and enterprise markets, but also within existing customer accounts. Many of our customers have multiple subsidiaries, often with separate systems and data sets that require consistency from a tax perspective. As we bring new offerings and capabilities to market, this gives us cross-sell opportunities to support their business growth. One of the new logos we won in the first quarter replaced a competitor's cloud solution with ours to support the growing complexity of their business as they broaden their distribution of engineering software products and services to customers around the world. One of their greatest challenges, like many others, was the need to ensure that the multiple front office and back office systems they rely on day in and day out could connect and work in concert to support their omni-channel business. This is where our experience working with complex companies in the mid-market and the strength of our partnerships was so important. In this case, the customer depends on both Salesforce and Oracle systems. When we talk about the mid-market, it's important to understand that we have been in this space for years. In fact, nearly 35% of our customers are in the middle market already. What we have seen time and again is that many of these companies begin experiencing increasing tax complexity as they head towards being enterprise-sized companies. What distinguishes our entry point on mid-market deals is often their starting point. As many did not grow up with larger ERPs, they may be starting with a front-end solution for e-commerce or procurement. When it comes to tax, they want the same level of trust, consistency, and scale that our larger enterprise customers demand. They need solutions that grow with their business. Frankly, some mid-market companies hit a wall when their current solutions can't scale. That is sometimes the case with larger enterprise customers as well, as shown by another one of our Q1 new logo deals. As the largest travel retailer in North America was continuing its omni-channel growth, they reached a tipping point requiring a more holistic approach to indirect tax management. They needed to calculate tax down to a detailed item level and required a robust, multifaceted solution as they were connecting into their POS system and Magento Adobe for e-commerce, where we are the bundled tax provider. To add to the complexity, the retail locations are within airport terminals. The ability to maintain the speed of transaction and improved accuracy of tax calculation at the local level, if and when internet connection is weak, is critical to their customer experience. The breadth of our content, depth of our jurisdictional compliance, and our ability to connect into multiple complex systems made the difference with this new customer. Let me talk about how we're expanding our offerings organically to capture more of our TAM and deepen our customer relationships. Today's tax department is one of the largest consumers of data in the enterprise, because tax data touches almost every key business application. None of those systems were built for tax and the delicate transfer from general ledger to legal entity that's required for tax filing. This creates an insidious problem for tax teams, how to get good, clean data from the source and catch bad data as early as possible. That is what inspired us to create our new data integrity solution, which we announced in April. This is a cloud-based, tax specific solution which automates the data validation, analysis, and transformation steps that increase data quality. The solution helps our customers address their data challenges from two angles. One is providing timely data they have confidence in to support real-time filing and helping customers who are pulling data from multiple sources to cleanse it prior to putting it into the form. We also continue to build on the strength of our partner ecosystem to expand our capabilities to support the platforms that our customers run their businesses on. As you may recall, I spoke about the late year release of the Chain Flow Accelerator for SAP ERP in Q1. We've seen nice momentum this quarter as we extend this offering out to SAP's extensive install base. Once installed, customers don't need to worry about coding scenarios. They can simply use the graphical interface to set up their supply chains. We're already seeing how our customers value the accelerator in deals. The accelerator was a key factor for one of our consumer goods customers from an integration and reporting perspective, along with the fact we had a cloud solution and a European data center to support their move to a global instance of SAP. Our ability to leverage native ERP and improve the user experience is what we did with our new Indirect Tax Accelerator for Oracle Fusion Cloud ERP, which we launched in Q1. The accelerator, which is hosted on Oracle Cloud Infrastructure, makes it easier for customers to configure our solution to their needs and more granular transaction data to make their tax result as accurate as possible. It represents the natural evolution of our 25-year partnership with Oracle, enabling Vertex to further differentiate its offerings and support a diverse set of customer requirements. What these accelerators represent is our commitment to bringing forward a differentiated customer experience, reducing the friction of tax compliance within those native applications that the customers are using every day. We've been incredibly fortunate these past 40 years to work with the brightest minds in indirect tax technology to inspire insight and collaborate with us to inform products and capabilities we're delivering to the market. In fact, we just held our semiannual customer advisory board meeting. It's amazing to me, they represent some of the largest innovators on the planet with some of the most complex global tax requirements. I'll tell you, the common theme coming out of the discussion was the desire for Vertex to be not only their sole provider for indirect tax automation, calculation and compliance, but also for e-invoicing, tax data analytics, and beyond. There was significant interest in how we're thinking of edge computing and our recent acquisition of Tellutax, which I had mentioned in Q4. They're also affirming the huge potential for us as their businesses continue their own digital transformation in the new digital economy. I'm going to highlight two areas where they are focusing. First, we've all been experiencing the explosive growth in e-commerce across traditional retailers, manufacturers, and e-commerce natives alike, causing businesses to deal with both digital services and physical goods. The brick and mortar companies are continuing to innovate in response, and in doing so, are taking their tax needs to the edge with field services and mobile handheld devices to run transactions in real time. Now you have mobile applications being deployed by thousands to the locations who can't afford to degrade the customer experience with any latency or performance downtime. The reality is digital transformation is happening everywhere, and it's bringing us to the table with entirely new companies operating incredibly diverse business models. Here's another great example. As their digital services footprint continues to grow, we were able to support a leading global audio streaming and media services provider earlier this year adopt our tax engine to automate tax compliance. This new cloud customer needed to ensure streamlined interactions at the point of sale and the flexibility to integrate with their front end systems both on or off the shelf, including a homegrown system for e-commerce and NetSuite for billing. This is also a great example of the value of our deep and trusted relationship with the Big Four. This sale was one of many in the quarter where we teamed up with them to deliver customer value and how investments we are making in our ecosystem relationship are paying off. In March, we expanded our partnership with BigCommerce and our integration to their open SaaS cloud e-commerce platform, empowering thousands of B2B and B2C retailers across 150 countries with our robust sales, use tax, and VAT solution. As BigCommerce extends into the more complex enterprise market, we are scaling the partnership together and supporting their largest companies with global capabilities and industry-specific solutions as their preferred tax technology partner in both the middle and enterprise market. Another key segment of our growth strategy is in marketplaces. We are all seeing businesses leverage third-party marketplaces to extend their reach, and we are investing heavily to support those marketplaces as part of our one-to-many strategy to serve the SMB market. However, the growth opportunity with marketplaces does not end there for us. In our core enterprise market, we have customers that are standing up their own marketplace. These are companies big enough to be the center of gravity for their customers and suppliers and have infrastructures to do it. We are uniquely positioned to support these large companies that are already using us in the back office. As they open up a marketplace, they need our solutions to onboard, address VAT registrations, map products for taxability purposes, and for some, offload the payment and double invoicing requirements that complete the transaction handshake for compliance purposes. A good example of this is with one of the world's largest automobile manufacturers. They are standing up their own marketplace to sell their expansive line of car brands online, but also to create a marketplace for other relevant suppliers to sell. In Q1, this represents our largest European marketplace sale. What I love about this deal, and I can't say it enough, is that it again represents the importance of strong, trusted relationships. This opportunity came to us directly from our partners at commercetools. The company needed to address the complexity of tax compliance as a marketplace provider. Our cloud solutions, supported by the breadth and depth of our content, fit the bill as they prepare to support this new area of strategic growth for their company. When we look at marketplaces overall, we're talking several trillion dollars in gross sales flowing through these channels every year, and it's growing fast. Especially in B2B, which is largely still offline and starting to come into the digital age. Think about wholesale and logistics in verticals like grocery, freight, trucking, auto parts, and even dental supplies. They are very fragmented, with orders and payments being done manually through email, fax, and even paper checks. Each vertical has a different buyer and seller AR and AP workflow, and each represents incredible opportunity for growth for Vertex. From a compliance standpoint, some U.S. states are requiring marketplace facilitators to collect and remit tax on behalf of their sellers. Now that's happening in Europe as well, with similar regulations going into effect this July for EU member countries. All of those are opportunities for us to take what we do really well, enterprise tax automation at global scale, leverage and expand our content and expertise in use tax as well as VAT, and pursue those adjacencies, expanding our TAM to serve the aggregators and access the SMB sellers through that one-to-many relationship. This is why I'm so thrilled with our acquisition of Taxamo, a cloud-native pioneer in tax and payment automation for global e-commerce and marketplaces, which was just announced this morning. Taxamo is a global company based in Kerry, Ireland. Taxamo delivers a unified platform of integrated capabilities to manage VAT, GST, and sales tax with a core focus on e-commerce, payments, and e-invoicing. Taxamo solutions were purpose-built for today's global digital businesses who need to automate compliance and commerce across the entire value chain, from merchant to seller to payer and revenue authority. Their solutions provide differentiating additions to our existing stack and content capabilities, and we believe the addition of Taxamo solutions gives us the greatest breadth of global capabilities to help enterprises, e-commerce providers, and both B2B and B2C marketplaces bring intelligent automation to reduce friction anywhere transactions are being done. This acquisition aligns perfectly with our long-term strategic roadmap, increasing our TAM and helping us accelerate all our key business growth drivers. It will help us advance the e-commerce and marketplace growth that I've been highlighting, as well as expanding our mid-market share in the U.S., Europe, and beyond. We're also excited about the compelling cross-sell opportunity this creates for existing customers of both companies. With the new EU marketplace and e-commerce regulations scheduled to take effect in July, bringing our companies together further supports our customers with these emerging compliance obligations. The tailwinds from adoption will begin later this year and into 2022. The complexity in e-commerce and marketplace taxation is just getting started, with a number of other countries in Asia-Pac and North and South America pursuing similar forms of cross-border tax regulations. We are ideally positioned to address these complexities as the dominant provider to global multinationals and their diverse multi-country supply chains. Our companies share a common vision to accelerate global commerce and enable business growth centered around the needs of our customers, supported by the strength of our ecosystem and driven by technology innovation. We are driving to the same place, and together, we'll get there faster. The synergy between our companies also extends to our culture and core values that drive our business. I've gotten to know John McCarthy, Taxamo's CEO, over the past several months, and I am thrilled he is bringing his passion, vision, and payments expertise to Vertex. He will join in a senior leadership role responsible for e-commerce, payments, and marketplace strategy and service delivery. Our success doesn't come without continuing to bring on great talent. We continue to expand capacity globally, particularly in R&D and our go-to-market organizations, and adding exciting leadership talent like Samrat Tandon from Citrix to expand our customer success management excellence, and Dr. Yvette Burton, after her years at Lockheed Martin, IBM, and Deloitte Consulting to lead our global workforce strategy. I will now turn it over to John Schwab to share more on our Q1 performance. Thank you, David, and good morning, everyone. Today, I will discuss our first quarter 2021 results, and then I will wrap up with comments on our capital structure and provide Q2 and full year 2021 guidance. Our guidance will include the results of our recently announced acquisition of Taxamo. First, on the Q1 financial results. Total first quarter revenues grew 10.1% year-over-year to reach $98.2 million, exceeding the upper end of our quarterly guidance by 176 basis points or $1.7 million in aggregate. Our subscription revenue component expanded 9.9% year-over-year to $83.3 million. Our services revenue grew 10.9% year-over-year to $15 million. Our annual recurring revenue, or ARR, grew to $320.1 million as of the end of March 2021, representing approximately 13% growth year-over-year. Our net revenue retention rate, or NRR, was 105% at quarter end, demonstrating our customers' ongoing commitment to our software and solutions. Our gross revenue retention rate, or GRR, was 95% at quarter end, which excludes the impact of existing customers migrating to our cloud solutions, which was approximately 4%. This is consistent with quarterly performance throughout 2020. We continue to see strong growth in our cloud-based solutions among both existing and new customers. In the first quarter of 2021, cloud-based revenues grew 42% year-over-year and was directionally aligned with the guidance we shared in March. As previously mentioned, we expect our cloud revenue base to exceed over $100 million for the full year of 2021, and are targeting annual growth rate of approximately 35%. We continue to believe that our customer shift to cloud presents a unique opportunity for us to drive additional revenues and ARR growth. We believe the approach to serving both cloud and on-prem customer needs continues to be essential for us to meet the complex needs of those customers. Now some statements on expenses. In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses, operating results, and per share results are on a non-GAAP basis. All non-GAAP financial measures are detailed and reconciled to our GAAP results in the earnings press release that was issued this morning. On an overall basis, gross profit for the first quarter was $68.4 million, representing 69.7% gross margin. This compares with gross profit of $63.1 million and a 70.6% gross margin in the same period last year. The year-over-year 90 basis point change in overall gross margin reflects our substantial investment in our cloud infrastructure as well as our customer service areas. From a subscription software standpoint, our gross margin was 77% as compared to 78.1% in the prior period, with the unfavorable variance driven by continued investment in cloud infrastructure as well as our customer service group. Gross margin on services revenues declined to 28.1% from 29.3% in the prior period. As we mentioned in March, we expected services margins to moderate to these levels based on the normalization of our staff utilization rates. First quarter research and development expense was $10.9 million, or 11.1% of revenues, an increase of 40 basis points year-over-year. Including our quarterly cash investments in capitalized software, our actual R&D product investments approximated 17% of revenues in the 2021 period, reflecting substantial investments in our new solutions to address customers' end-to-end data analysis and compliance needs. Our first quarter selling and marketing expense was $18.8 million, or 19.1% of total revenues, a decrease of 30 basis points on a year-over-year basis, which was primarily driven by a reduction in year-over-year travel and marketing events due to COVID-19 restrictions. First quarter general and administrative expense was $20.6 million, essentially flat compared with $20.7 million in the prior year, reflecting incremental costs of becoming a public company, but that was mostly offset by expense reductions attributable to COVID-19 restrictions. Operating income was $15.4 million compared to $12.4 million for the same period last year, a 23.6% increase. Net income was $11 million compared to $11.6 million in the prior period. Net income for diluted Class A and Class B share was $0.07 compared to $0.09 for the same period last year, down $0.02 on a year-over-year as we issued 24.3 million new shares at our IPO. Adjusted EBITDA was $18.2 million, an increase of $2.9 million on a year-over-year basis, exceeding the upper end of our quarterly guidance by $700,000 in the aggregate. Adjusted EBITDA margin was 18.5% in the current quarter, a 140 basis points improvement versus the prior year. Turning now to our capital structure and liquidity. We soundly ended the first quarter with over $278 million in cash and cash equivalents, and no indebtedness. During the first quarter of 2021, we consumed $11.4 million of free cash flow, reflecting our investments in our R&D and selling and marketing initiatives. Our first quarter free cash flow represents an improvement of $4.4 million as compared to the prior year. Historically, our cash flows in the first quarter are lower than the remaining calendar quarters, as they are heavily influenced by variable compensation payments. Turning now to our guidance. For the second quarter of 2021, we currently expect total revenues in the range of $99 million-$100 million, representing growth of 8.5%-9.6% from the second quarter of 2020, and adjusted EBITDA in the range of $15.5 million-$16.5 million, representing a decrease of $6 million-$5 million from the second quarter of 2020. The Taxamo acquisition was announced and closed on May 12th of 2021. Our guidance for the second quarter of 2021 includes the impact of the acquisition, which includes a contribution of $500,000 of revenues and $500,000 of a decrease to adjusted EBITDA. For the full year 2021, the company currently expects total revenue in the range of $410 million-$414 million, representing annual growth of 9.4%-10.5% for the full year 2021. Adjusted EBITDA in the range of $66 million-$70 million, representing a decrease of $12.4 million-$8.4 million for the full year of 2021. The full year 2021 guidance reflects the impact of the Taxamo acquisition for the remainder of the year, which includes a contribution of $9 million of revenues and $2 million decrease to adjusted EBITDA. The reduction in EBITDA is primarily related to integration costs in connection with the acquisition. We expect that Taxamo will have a more significant impact on our 2022 revenues due to the timing of the acquisition close, as well as tailwinds from the new marketplace and e-commerce regulations in Europe. Notably, such regulations are already effective in the United Kingdom and are expected to go into effect throughout the European Union in July. Some additional modeling details underlying our outlook are as follows. Regarding our share count at March 31st, we had 120,117,000 shares of Class B common stock outstanding and approximately 26,972,000 Class A shares outstanding. Additionally, we have 12,064,000 shares of common stock equivalent, with a weighted average exercise price of $2.91 per share. Overall, we're very pleased with the progress we have made on our strategic initiatives and business performance. We are very excited about the Taxamo acquisition and the growth opportunity that it presents and look forward to providing an integration update during our next call. Now, we're happy to open up this call to questions. Operator, will you please open up the line for Q&A? Thank you. You will now be conducting a question and answer session. If you will like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker phone, it may be necessary to pick up your hands before pressing star key. One moment, please, while we pull for questions. Our first question comes from Samad Samana with Jefferies. Please proceed with your question. Hi, good morning, and thanks for taking my questions. Maybe first one, David, for you. When I think about M&A, it seems to be picking up, with the most recent deal this morning and then another one earlier this year, and I think some of your competitors in the market have also been acquisitive. Just how should we think about the consolidation and how that factors into Vertex's strategy, maybe both for this year and maybe on an intermediate-term basis? Yeah, Samad, great to talk to you, and thanks for the question. As we've said all along, we see a balance of opportunity in greenfield that we can grow with what we have in the market and what we're building organically. We also see the opportunity and the need to make acquisitions, in particular in certain tuck-in areas that will complete our end-to-end capabilities. This acquisition of Taxamo is wonderful because it expands our presence in Europe. It will increase our mid-market and enterprise opportunities, and also it really will accelerate our e-commerce and marketplace growth. I think those are the areas we're going to continue to look for opportunity as we continue to expand our portfolio. Great. John, and then maybe one for you. When I think about cloud revenue, I know the company isn't going to guide to that every quarter, but how should we think about how that looked in 1Q, and is it on track to do better or consistent with that 35% outlook provided for the full year? Yeah. Thanks for the question, Samad. I think, again, as we mentioned, we did about 42% in the first quarter. Our full-year expectation, as we mentioned on the call, was about 35%. We expect that it's somewhat in line. We may see some improvement there, but we're not planning it right now. We stand by the 35%, but we think there's opportunity to perhaps increase that. Great. Then just I guess, when I think about the NRR, we definitely appreciate the disclosure down to just a point in the quarter, and I apologize if I miss this, but just was that more as a result of gross retention changing or cloud conversions, or was it just maybe less upsell activity or upsell/cross-sell in the quarter? Just help us maybe unpack. I know it's one point, but just trying to triangulate better there. Yeah, no, our GRR was consistent with where it's been throughout 2020. That hasn't really changed. It really is about the upsell activity with existing customers. That was really the driver there. Great. Thank you so much for taking my question. Good. No problem. Thank you. Our next question comes from Brad Sills with Bank of America. Please proceed with your question. Great. Hey, guys. Thanks for taking my question. I wanted to ask also about net revenue retention. The 105, I guess, given the current penetration in some of these larger accounts, for your footprint and some of the traction you're seeing with the cloud, could the cloud potentially accelerate that net revenue retention? In other words, are cloud customers' propensity to buy more and expand more, is that greater? Are you seeing that type of sign within the cloud installed base, and if so, why? Anything that could get that net revenue retention perhaps accelerating. Thank you, Brad. Appreciate the question. This is David. I think there's a few dimensions to your question. I think the first is, as we continue to bring new products to market, some of the accelerator products we brought, the data integrity offering, those things are all designed to expand our customer experience, improve our customer experience, which will increase NRR as we deliver more value. I think the second thing is, oftentimes the migrations we see, the demand driver behind most migrations of an on-premise solution are typically going to be the complexity of their tax environment. They were using one solution, say, sales tax, and now they're starting to have consumers use tax challenges or VAT challenges. When they're looking to address an upgrade or a migration at that point in time, it allows us to expand our ARR multi-dimensionally. It's not just moving to the cloud, which will improve our ARR and therefore the NRR, but it will also allow us to sell other products. An example of that was what I talked about earlier in the quarter. We drove one client up 300% in ARR just because of their migration process. I think those are sort of tipping points, and then obviously, as customers move their infrastructure to the cloud, our relationships with SAP and Oracle, which are the larger platforms that we support, when they're moving to the cloud, that's a very logical expansion opportunity for us. I think you have to think about it in all those dimensions as we grow our NRR. Great. Thanks so much. Then one more, if I may, just on Taxamo. Will this accelerate the adoption, if you will, of marketplaces for digital tax solutions for their merchant base like yourself? I know, for example, you have certain large marketplace providers as customers. What would it take to get them to sign on as a partner and more materially, resell essentially, Vertex. If you could remind us also what are they offering to customers today for sales tax automation. Thank you. Yeah, sure. Every marketplace has a different approach on how they're solving tax. The tailwinds that are coming from the legislation in July, that started in the U.K. in January around the marketplace requirements are going to be significant. I think that's where we see immediate opportunity. Taxamo has well-positioned themselves with a true end-to-end solution. They handle registration, filing, all the qualified tax payments, really the whole end-to-end process through seller validation, liability, invoicing, and payment. That comprehensiveness of suite allows for acceleration. It also allows us to now bring those capabilities to our, as you noted, to our install marketplaces where we already have a presence. We now have a larger opportunity, a portfolio of solutions to bring to that market. We definitely see it as an opportunity to bring to both new marketplaces that Taxamo is well-positioned with, as well as our stable of marketplaces we're already working with. That's great. Thanks so much, David. Sure. Appreciate the question. Thank you. Our next question comes from Pat Walravens with JMP Securities. Please proceed with your question. Oh, great. Thank you. I actually have two. By the way, congratulations on the results. David, it sounds like things are going really well, but when I look at the ARR over the last five quarters, it's gone 17, 16, 15, 14, and now 13. Can you just help us unpack what's going on under the covers that's leading to this consistency? Absolutely acceleration over the last year? Yeah, that would be really helpful. Sure. I think, when you look at the slowdown that SAP, Oracle, and Workday have all been talking about and now starting to see their pipeline build, we're following the exact pattern. I think we saw the same trend play out for our business as they slowed down during the pandemic. It has a lag effect on us, so it hit us a little later into the year. Now as they're starting to talk about, and we're seeing through our pipeline activity, the demand drivers beginning to pick up with the acceleration they're all experiencing. We're seeing the same follow-on discussions now starting with our customer base as they start to plan for the activities that they're being driven through their organizations. It's actually following the pattern I think we've been trying to lay out, Pat, that as those larger companies are moving, the SAP, Oracles, Workdays of the world, we sort of follow that trend. I think the second part of it is the heavy investment we've now been making in channel and e-commerce and now with marketplaces around Taxamo is the other side of the equation, more the front office side, and the acceleration we now start to expect to see there moving forward in the back half of this year and into 2022. Okay. That's super. Thank you. Can you just touch, and you mentioned the changes in the tax rules in Europe in cross-border. Would you mind just touching on sort of what the biggest issue is around cross-border and how those changes fit in? Sure. I think fundamentally, governments are trying to get their fair share as the economy is moving into a new dimension, meaning that commerce is happening in places they historically have not been able to pursue compliance in. What we're seeing is now a great opportunity because they're pursuing that fraud, they're pursuing more accurate filing. They really want to shift the burden to marketplaces and e-commerce vendors as the way to or logistics companies. Even we're seeing the logistics and supply chain companies having to deal with a new form of compliance, all following this legislation that's being brought out in July. Those are now new demand drivers, much like we've seen here in the U.S. with the marketplace facilitators, where some states are starting to pursue liability exposure to the marketplace for third-party sellers. We know it's happening in Europe. There's other countries, both in North America, Latin America, and actually around the world, that we're now seeing opportunities to explore. Great. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. Thank you. Our next question comes from Bhavan Suri with William Blair. Please proceed with your question. Hey, gents. Thanks for taking my question, and nice job on the quarter there. I guess I wanted to touch on something you mentioned really briefly, but the idea that you might be moving into payments with Taxamo. I'd love to understand just a little bit more clarification there and as you think about that and e-invoicing, there is the ability to move into payments, right? BILL does AP, AR, and has a take rate around transactions, too. Is that something you're exploring? Is that something that's further afield? How should we think about that? Obviously that layers in a totally different type of revenue stream with a different margin profile. You're absolutely correct, Bhav, that was a key part. It's a natural adjacency for us. It's something we've been looking at for a while, as we've been working through our strategy, and Taxamo brings those capabilities and an active solution in the market for that. We also partner with other payment providers already. Stripe is a partner of ours, and we're thrilled to have them as a partner. We've been working in this space for a while. The Taxamo acquisition and the capabilities move us closer and deeper into the e-invoicing and payment partnering suite. It is a different model, and it's one we're very excited about looking forward. Got you. I guess what I'd love to understand is how big is that business today, and any sense of, I know it's probably too early to give us any guidance, but some sense of how big that might you think that could be, say, in two or three years, or what your expectations are for that payments part of the business specifically. Maybe the competitive environment there is very different, right? It's a different buyer. It may not be treasury, it may not be tax. It's an operations maybe, or e-commerce buyer. The competitors are different. Maybe how that go-to-market also shifts with you guys and the investment you might make there. A couple of questions there, but I'd love to understand that with a little more color. Thank you. Yeah. Thanks for the question, Bhav. I'll start with it, and maybe David... Sure ...have some other commentary. I think from an overall standpoint, as you saw from some of the guidance that we provided, you can get a feel for the magnitude and the size of where the guys at Taxamo are now in terms of their revenues, and how they've been operating. I think there's an opportunity there as we think and we look into 2022, and we think about what that's going to look like. We do absolutely see the opportunity for significant growth there. Obviously, we're buying at mid-year, so we'll get the full year next year. With the regulation and everything that's going on now-ish in this mid-year timeframe, that's going to only accelerate growth in their business, and it's going to accelerate growth in the businesses that touch on payments as well as the areas of their business that are focused around the marketplaces. I think it's a combination of all of the above that are going to really fuel the growth that we're going to see from them. Bhav, and I would just add, the founders of Taxamo came out of the payment space. That's where their expertise actually lies, and they backed into tax as a short-term opportunity. That connection for them is a very natural one. That go-to-market motion that you asked about, while it being different than our historical go-to-market motion, is actually very native to the Taxamo team, because that's where they grew their chops over the years. I think that's, again, the synergy we see and the natural connection between their business and ours. Got you. Interesting acquisition. Sounds like a bunch of different areas, but nicely expansive in the TAM. Thanks for taking my questions, guys. Yeah, it's definitely going to be increasing our TAM. Very excited about that. Thank you. Our next question comes from Brad Reback with Stifel. Please proceed with your question. Great. Thanks very much. John, on the 35% cloud growth, does that include Taxamo, or is that on top of that? Well, the 35% growth, first of all, for the first quarter, we came in at 42%. When we gave that growth estimate out, that was at the beginning of the year for the first quarter, and we said that was for the full year. That does not include the Taxamo growth. That was excluding that. The 35% guide for the year, should we think of that as inclusive of Taxamo? That did not. No, that did not. That's a great question. Thanks for clarifying that, Brad. It did not include that. Taxamo will certainly increase that to the extent that the majority of their activity is cloud-based. Okay. On the cloud revenue, specifically for 1Q, the sequential dollar increase was pretty modest compared to what you saw in 4Q and 3Q, which is running at about $2.5 million plus per quarter. Is there seasonality in 1Q, or are there some other things going on that weighed on that sequential absolute growth? Thanks. No. I think, again, as we've talked a little bit about, we still offer a hybrid solution, right? We have the opportunity for customers to buy both cloud and on-prem. As we talked about, I think at the end of the year in our March call, on occasion, we'll have customers that come in and want a real big opportunity in on-prem, and that'll kind of move things around a little bit. We're not seeing anything unusual happening in the business. It's kind of as we had anticipated that we would see, so there's no real big movement going on there. Again, the fact that we offer both of the products, customers can choose to go on-prem, and that impacts a little bit of what's going into that cloud revenue growth. In fact, as we talked about in Q4, our fifth largest deal in the history of the company was an on-prem deal. Then this quarter, we had some very large Brazil deals that were all on-prem. Again, it's just the nature of the buyer. Sometimes at the larger enterprise level, will want to keep it behind the firewall, and that's something we can differentiate with when we need to. Okay in everything we do, at the end of the day, we're about customer experience and giving them what they need to support their tax operations. Got it. Thanks very much. Thank you. Thank you. Our next question comes from Joshua Reilly with Needham & Company. Please proceed with your question. Hey, guys. Nice job on the quarter. If you look at the pipeline of increased Oracle and SAP activity, is that primarily on on-premise installations going to cloud, or is on-premise customers buying more solutions? Just generally, how should we think about that and the implications for ARR growth later in the year? Obviously if you're converting, migrating them, the impact to ARR would be greater. Thanks. Absolutely. You're right. The growth is, remember, it's both new logos and existing customers migrating. Yes, certainly the SAP S/4HANA platform is beginning to gain more traction, and we're in much more pipeline discussions there than ever before. Some new logos, some migrations. I think OCI and what Oracle's doing has been really a solid partner for us for 25+ years, and they're seeing really nice traction there, and we continue to support that. We're very fortunate to work with them the way we are. I think both organizations, candidly, are seeing the type of cloud lift we would expect, as they move year to year, especially coming out of the pandemic now and feeling stronger about the economy. I think the businesses are getting more bullish on it, and we're seeing that in our pipeline discussions as well. Okay, great. It sounds like a mix. Just a follow-up. If you look at the sales go-to-market kind of post-COVID, pre-COVID, you guys were a heavy in-person sale type process. Obviously, you've moved to virtual. What do you see as a post-COVID sales dynamic in terms of hybrid versus in-person? In terms of sales, I think, obviously our sales team's anxious to get back in front of our customers and continue to support them and build the trusted relationships that we've enjoyed for all these years. I would definitely expect it will, at very least, be a hybrid. I think every customer is going to be different, though. I think some customers don't want people on site yet, and they may not want them on site for a considerable period of time. They may not be having their tax team in the office anymore, in which case it would limit our ability to go meet them in person. I think it will really be driven by what our customers are doing, consistent with our practice for 40 years of working, meeting our customer where they're at. I see that following suit with our sales organization. If our customers are in, we'll be there. If our customers are working remote, we'll happily work with them in the virtual environment we've been. Okay, great. Thanks. Sure. Thank you, Josh. Thank you. Our next question comes from Daniel Jester with Citi. Please proceed with your question. Great. Thanks for taking my question. Good morning, everyone. Maybe another one on Taxamo and some of the VAT rule changes. You mentioned that the U.K. went live with those changes already earlier this year. We've got maybe four months of data. How did Taxamo benefit from that? Can you quantify at all? Just as a point of clarification, is this going to be a driver of new logos, like i.e., people don't have something for this compliance change, they have to get something? Is this going to be a situation in which many customers already have, but they need to provide an additional service in order to get into compliance as the year progresses? Yeah. On the latter question, obviously, we see this as an opportunity to We're expanding our new logos around the e-commerce capabilities they bring, as well as the marketplace. The marketplaces are now having to deal with this, Dan. This legislation is just coming on stream here in July. It's really just new conversations that are starting with marketplace that previously didn't have to deal with this liability. The good news is we've got our footprint in with a lot of the best marketplaces already, given that we've been handling their first-party sales. This new third-party liability and bringing these capabilities to bear is sort of a natural extension of what we've been doing. I don't know if I have, John, if you have data on. Yeah, we don't have data on sort of how just the specific U.K. piece. Again, keep in mind Taxamo offers sales tax solutions across the board. They've had a revenue stream that's flowed in addition to just the U.K. activity that took place that started in January. They have a nice, strong business. They've been growing it very successfully over the last couple of years, and we're excited about what adding the marketplace into it is going to really mean to us. Okay, great. Going back to your own business and the comment about 34%-35% of new bookings in the quarter is from new logos. Can you just remind us, how does that compare to the last couple of quarters? As you think about sort of the guidance for the full year, how do you see sort of the new logo implications into the revenue growth stream? Thanks. Yeah, I think important to note there again is that 92% of those new logos are cloud, and I think that's consistent with our go-to-market strategy, and it's working very well. I think as we continue to expand our investment in the middle market channels, we've been doing, remember, about 35% of our customers are already coming from the middle market, so we're very comfortable in that space and been working there for years. We're now able to expand it, and I think that's because of the complexity challenges that are showing up in the middle market. That's really the green field that we're running to, building from our base within that middle market. I expect that to continue. I think this quarter ran very similar to every other quarter in the last several. I just see it solidly growing as we continue to expand our footprint in our channel and go-to-market investments. Great. Thanks a lot. Happy to, Dan. Good talking to you. Thank you. Our next question comes from Stan Zlotsky with Morgan Stanley. Please proceed with your question. Perfect. Thank you so much, guys. A couple of questions from my end. Just going back to Taxamo for a second. If I recall, you guys already have very strong capabilities in marketplaces. Is the right way for us to think about Taxamo as it adds to your capabilities to really expand internationally and the potential to add more payments capabilities? Is that the right way to think about it? We already had strong relationships with the marketplaces and good capabilities. This expanded to the third-party seller regulations even faster than our roadmap. It was always on our roadmap with these new regulations that are hitting third-party sellers. Taxamo was already there, so they actually just get us further, faster in our roadmap, number one. Number two, clearly expanding our European and rest of world presence. That's really their dominant position of their customer base is European and rest of world. Expanding our footprint, we've talked about the importance of Europe in our strategy. As I mentioned on the call, the ability to take our customers, we have large enterprise customers that are setting up their own marketplaces now, and this is a new experience for the industry. It's not just these third-party marketplaces, it's our own customers, as one of the largest auto manufacturers in the world did this past quarter with us. Having all of the Taxamo capabilities to bring to that are additive. Then, as you noted, appropriately, Stan, the connection to payments and the fact that they're handling that element of the business as well, we see as a big upside going forward. Okay, perfect. John, I had a couple of just some high-level questions. If we look at guidance for the full year and back out Taxamo, and then figure in the beat that you guys put up in Q1, that implies that the guide for the remainder of the year is actually slightly lower than what you guys talked about on the Q4 call. Maybe help us to understand how are you thinking about the remainder of the year given those dynamics. Yeah, Stan, from a guidance standpoint, we feel very good about the end of the year. I think we had a very good quarter, and we feel like there's opportunity there for us to increase over time. That said, we didn't want to use one quarter's results to sort of influence what the rest of the year guide was. We left it as is, and we figured we would adjust as we got into the second quarter and had more visibility into the back half of the year. That's simply how we thought about guidance, and that's what we felt. We feel very good about the numbers that are out there, and we feel very good about our ability to beat. That was our thought process there. Got it. Maybe I missed it in the prepared remarks, but did you guys give us the ARR per customer metric like you guys have done in prior quarters or maybe just the absolute customer account number? Yeah, we did that at year-end, Stan. I don't think we provided it this quarter. I think from an overall customer count, the customer count's very consistent with where it was at the end of the year within a handful of customers. It's not a significant change either way. Got it. As in it stayed flat. Did it go up, or did it continue to decrease slightly like what we saw in Q4? It went up slightly, Stan. Yep. Got it. Understood. Okay. Yep. Last one from my end. I'm getting a lot of questions from investors right now as far as what the actual cloud revenue was in the quarter, and I think if you kind of look back at some of the questions that were being asked, I think that's what people are trying to get to, because depending on what people are assuming was the Q1 of last year cloud revenue, if you put 42% growth on it either implies that cloud revenue was flat in the quarter or maybe up something like $500,000. I just wanted to see if we can get just the raw cloud subscription number to help answer some of those questions. The cloud revenue that drove the 42% was $26.9. Got it. Very helpful. Thank you, guys. Okay. There are no further questions at this time. I would like to turn the floor back over to David DeStefano for closing comments. Yeah. Thank you very much, and thank you for the questions today. Appreciate everybody's time. As we move forward through the year, we will continue to execute on the important advancements we've talked about today, from the acquisition we're making to further expanding and building upon our capabilities and driving additional investments in our partner ecosystem. We also continue to drive R&D investments to accelerate our innovations and coverage of our end-to-end solutions to be wherever commerce is done. We see tremendous opportunity ahead, and we are well-positioned to capitalize on these opportunities. I thank you for your time. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.