Friday, and I'm an analyst on the enterprise software team here at Needham. This morning, we're excited to have Vertex, including CEO David DeStefano and CFO John Schwab. I think this is an interesting time to be looking at Vertex, so I think this fireside should be pertinent. We have some more detailed questions than maybe just, you know, topical overviews that I get from investors. I think this should be good stuff. David, maybe you can start off with an overview of Vertex for those less familiar. Yeah, sure, Josh. And thanks for having us on the call. Really looking forward to connecting with the group today. Yeah, Vertex has been around for 47 years. The history of the company started in content for sales and use tax in the U.S. back in the late 1970s, really producing specific data. Sales and use tax eventually evolved into VAT, so handling now globally all indirect taxes or transaction taxes, sales tax, use tax, VAT, you know, fees that are incurred. Basically what now Vertex has evolved from is a content company, which was one of our core assets as we grew into a software company that integrates that content into technology, plugs into the largest ecosystems, you know, financial systems in the world for the largest enterprise customers in the world. We represent about 60% of the Fortune 500, have over 4,000 customers worldwide, and basically solving a key friction point as companies look to expand into different geographies and the challenges they face as they adopt new technologies that were never designed for indirect tax. We deal with it all the way through the life cycle. Got it. And then just as a reminder, I forgot to mention this at the top, but we will leave maybe three to five minutes at the end. If anybody has any questions, they can either email me at jryleigh@needhamco.com or enter them in the chat box. All right, so one of the questions I get quite a bit is, how has inflation impacted your business over the last several years? And can you maybe explain your pricing model and rough vertical and market exposure? And have you benefited from higher nominal dollars running through the economy? Yeah, I'll start here. John, you're welcome to join in as needed. Inflation, obviously, we raise prices annually. We've learned over the years with enterprise customers, we raise all customers for the following year in the middle of the summer. They get a chance to put it into their budget. We've learned by working together with them, this is a much easier way to get our price increases approved because they've already factored it in. They don't get surprised. Whether you bill in January 1 or December of the following year, you already know what our price increase is going to be. Typically, we realize about a 4%-5% bump from the increases. A lot of our customers are on three-year contracts. What'll happen is they'll have a set price with increments for the three years. We'll get inflation on or price increases on those customers who have come due for a new one, and then it'll cycle through as it works out. You know, it's moved kind of nice and consistently. You know, some customers who are on legacy products might receive a, you know, a 10%-15% price increase because we're supporting older lines to meet them where they are in their migration journey. The benefit for us ultimately is they're going to migrate with us when they move. The pricing model itself is based on bands. It's not transaction-based for the core business. It's based on revenue bands. We look at the revenue that the customer is running through our system, and basically that's what we're charging on. As the company grows, it'll go through different brackets. There's enough wiggle room that gives them a lot of predictability in their pricing. We have the opportunity, and we do see that as customers grow through, they'll make a big acquisition or something, and we'll get moved on to that. They'll push them into a higher bracket for all of it. As far as our business, the way it works, because of the diversity of all of our customer base, I mean, tax is like the ultimate horizontal. It affects all companies. We don't have any focus on anyone, you know, deep area that would cause us to be at risk relative to market performance. We're strong in manufacturing, retail, the technology space, you know, oil and gas now. Basically, you name a vertical, and Vertex has got a strong presence in any one of them, giving us a lot of protection from, you know, anomalies in the market. John, feel free to add to that. No, I think from a pricing model standpoint, you hit it. I mean, the revenue bands are critical for us. And, you know, we do not see a lot of variability in normal day-to-day activities with customers. Again, they have a good year. They do not typically go through bands. A lot of the expansion we see is when companies are adding additional units or different segments into the mix. They had the Southeast division. They get the Northeast division. They then go through a revenue band. We see that happen very frequently. That is really one of the key drivers there as people expand through that over time. Got it. Very helpful. One of the items that I do not believe got discussed at the analyst day, but I get asked quite a bit, is the mix of your business by product area. Maybe you can just discuss, you know, broadly, is tax determination and remittance the largest source of revenue? And maybe what are some other significant products in terms of generating revenue? Yeah, so being starting here in North America, sales and use tax determination is by far the largest source of our opportunity. But it's important to understand that when we get invited in to solve a customer's problem, it's typically for just one part of their business. If you think about a large multinational, they're running on probably 6 to 12 ERP systems. They've got business operations all over the world. We're brought in, like, let's say it's a large auto manufacturer. We're brought in to solve sales tax on automobile manufacturer, their auto. We don't get trucks. Like, trucks is run by a different ERP. Maybe it's a different operation. Maybe they acquired it. So you're solving one problem. And then over time, through our land and expand model, you're building out that opportunity to expand wallet share. Basically, it's sales tax and use tax determination, and that would be then the third. You move into, as you said, remittance or compliance, where you're handling basically the processing of the return and ultimately the customer filing it. If you look beyond that, you know, this is where we continue to add new products. We've been building a lot of things around, like Certificate Center, which is handling all of the exemption certificates customers have to deal with, or our accelerators, which are improving the experience they're going to have in the ERPs, especially as our customers are moving to the cloud. Our SAP Accelerator has been a great add to us. We've added things like Edge, which is actually, as customers are moving their infrastructure to the edge, they need to have tax at the edge as well. If you imagine, you know, now tax being calculated on a mobile phone because somebody's delivering that service to your house and they need to be able to calculate the sale at your house, we had to build an edge-capable solution to just componentize our solution down to that level and still have it communicate with the master system. That's kin of the breakdown of how it works. Typically, you know, our model has been proven, you see our NRR, it's a highly land and expand model where we're in solving problem one. Then over time, it might be sales tax determination today. Three years from now, we get VAT determination. Two years after that, you know, they've got a use tax problem because they've gone into a new business line. It really follows that pattern for all customers. Got it. All right. As we look at your customer base, you have, I believe, approximately 4,900 plus direct customers. Can you discuss the opportunity to migrate the 9,000 SAP ERP ECC? It is a bit of a word fill there and give us a sense of how much this could drive new logos for you and, you know, how significant is the pipeline? Yeah, sure. Obviously, an end of life is forcing a lot of customers to think through when they want to migrate and what are going to be the disruptions to their business as they go through that. Vertex has about, I don't know, about 40% roughly of our customers are currently SAP users, of which maybe 1,000 of those are already our ECC users. Within our customer base, we're seeing some discussions, and we are involved in opportunities, and we've started to see migrations happen. On top of that, there are a lot of other SAP ECC users we've never had the good fortune of working with. That means typically, given we're the largest provider to the enterprise market, they're largely doing in-house solutions. That could be because it was good enough for what their tax problem was, or they customized something with their in-house team and it worked. The challenge they face is as they move to the cloud, what they had custom is not going to integrate well into the way the SAP cloud works. That is going to create an opportunity for them or a requirement for them to rethink how are they going to solve tax. We are definitely seeing, as we look at our new logos over the past, I would say, three quarters for sure, as we have really started to see a little bit of a steadier increase in migrations, new logos that we never historically had had the opportunity to work with. We are getting after that a couple of different ways. One way is we have a direct sales team, and obviously we work very closely with the Big Four as they are the large influencers as customers are going through that base or going through that transition. The other piece that's really exciting for us is we've had the opportunity to work now with SAP salespeople, both here in the U.S. and following on, but now building momentum over in Europe, where we're working directly with SAP sales rep as they are talking to the customer about going through a migration to say, how are you going to solve for tax? They are getting quota relief by referring Vertex in. Clearly, we view this as a mission-critical part of our growth story for the next couple of years because it's a natural tailwind. We positioned ourselves strongly with the Big Four, with the SAP sales reps getting quota relief, and then our direct team. You know, we're kind of swarming as much of this base as we can to try to expand wallet share with existing customers and land new logos. Got it. That's helpful. In terms of products, you know, e-invoicing is clearly the standout item that investors are currently focused on. Maybe just cover a couple of items here. How is the market for e-invoicing developed? What do customers do currently? Are these, well, let's start with that. There are a couple of items. I don't want to over, yeah, go ahead. Thank you, Josh. It's a lot of questions in one question. Yeah, e-invoicing has emerged as a new regulatory or a recently heated up regulatory requirement. E-invoicing, the concept has been around for several years now, started in Latin America, but it has moved into Europe. What has gotten the attention of a lot of global multinationals is some of the biggest economies in the world are adopting it. What the requirement is, just as a baseline, Josh, to make sure we are all understanding it, is in real time, in many jurisdictions, you are now having to send your invoice to the government. Instead of just having an electronic invoice between a buyer and a seller, you actually have to have it go first or simultaneously up to the government. The government is collecting all that data, and they are then holding it. At the end of the month, when you file your VAT return, they can compare all of the invoice data and what you charge in VAT with what you paid in VAT at the return and decide, is in fact, you know, does it reconcile and did you pay us the right amount? They are doing this because there is a very significant VAT gap out there. IDC and Billentis have some reports out there that show the VAT gap being, you know, hundreds of millions of dollars that governments are trying to get their fair share on because they feel like there is either incorrect filing or potentially fraud. This is their way to try to address that. It has become an extremely hot item because a lot of multinationals who have historically used a point solution in Ecuador and a different provider in Brazil and maybe a third provider in, you know, Hungary are now saying, you know what, if, you know, people like PwC are saying 200 regimes around the world are going to adopt some form of e-invoicing over the next, you know, five years, we want a global provider. We want a single throat to choke that's handling all this on a global basis. That is why it becomes so exciting for us is because we see it as a great opportunity to get involved with all of our multinationals who have the largest invoicing volume as being the provider of choice around the globe wherever they have to deal with this requirement. Got it. Maybe just to touch on a couple of follow-up items with that, what do customers do currently or how does the workflow work? Are these going to be primarily greenfield opportunities for you because they do not have any solution whatsoever right now? That's what I was saying about they have point solutions and different point providers in some of the countries that currently require e-invoicing: Ecuador, Brazil, Hungary, examples. We're going to be using different providers. What they're saying to us is, I want one provider who can handle my e-invoicing in every jurisdiction I do business. On one hand, it's a replacement of what they're doing in some of those existing countries like Ecuador, my example. In the new regimes where it's being adopted, France and Germany, two of the largest economies in the world, it'll be a greenfield for us because they currently don't have to deal with it, but they're going to have to. They're going to have to in 2026 for France and over a phased approach in 2026 and 2027 for Germany. That is where there is greenfield. Obviously, if PwC is accurate in their forecast, there are about 55 countries or so that require it now, and we are headed towards 200. As more and more regimes are adopting it, countries are adopting it, it becomes a greenfield in every new country that is requiring this. The challenge for business is the points of data that the government of France wants off of the invoice for it to validate you paid the right amount is not the same as the points of data that Brazil wants, is different than what Malaysia wants. The complexity just escalates because governments are looking for different points of data off of the invoice. What we have built is a solution that is able to scale and pull, harvest the right invoice data for each jurisdiction that we are covering. Got it. That's very helpful. Like in France and Germany, where they don't have to do e-invoicing right now, they still have to file the VAT returns at the end of the month in some way, right? Just maybe not in real time. Is that the right way to interpret that? 100%. Yeah. We call it, we call it like real-time filing and periodic filing because you do periodic is like once a month. And e-invoicing is like real-time or, you know, continuous, you know, continuous transaction control. Sure. Yep. Okay. As we look at the product functionality for e-invoice, do you ultimately feel the differentiation comes from having a broader indirect tax compliance functionality, an end-to-end solution for VAT compliance, or do you think a standalone e-invoicing solution can be differentiated? A little bit of a leading question. No, it's a fair question. No, obviously the transmission of, you know, if you think about what EDI is, which e-invoicing is leveraging off of that basic technology concepts that EDI has been around forever, the transmission of an invoice is a commodity. And standalone, while our customers have the largest invoice volume in the world, and there's certainly money to be made by providing that, it's going to be a race to the bottom if all you're doing is e-invoicing. What we have found, though, by talking to a lot of customers in the design of our product is the challenge they face is the invoice data they're sending in in real time doesn't foot, doesn't reconcile with the VAT filing that they have at the end of the period. And that's because of a series of complexities that occur inside of a business that causes that differentiation. They're having to do a lot of manual efforts. Where we're seeing differentiation is now in several key areas. The first is we integrated our product to be integrated of real-time filing, e-invoicing, and VAT compliance. The reconciliation happens inside of the product. You don't have to move the data. You don't have to go to different providers where you might be using three different e-invoice providers and have different VAT return providers. Now you have it all in one. The reality is all those little individual country point providers that are out there don't do VAT returns. Packaging it together and simplifying the reconciliation is differentiation number one that's allowing us to get value for what we're bringing to market versus just commodity. The second piece I would highlight is we have integrated into the financial systems, SAP and Oracle, leveraging our, you know, years of experience about how to integrate in and create a frictionless extraction of data without disrupting the flow of business. By doing that, we're also able to automate how the invoice data is getting into the e-invoicing solution, which our competitors, you know, if you look at a point provider, they have no idea how to integrate into SAP and, you know, and Oracle at the level that we do. They are making more manual requirements on the customer to get the data into the system for e-invoicing. That is a big advantage. The third is tax determinations. If you think about it, every time you send a VAT, an e-invoice up to a government, you are in effect giving them a mini tax document. You're saying on this invoice, I charge the following amount of VAT. The tax department is saying, I want to be sure that I actually had accurate determination of the tax and calculation that went on the invoice before I sent it. We are now seeing this approach of talking to the customer and saying, let's look at all the way from how we integrate to our determination, giving you confidence of what goes on the invoice to then what's filed, to then what's put on the return. That seamless integration all on one platform with a single, you know, single touchpoint on the data all the way through the system is really our key differentiation. Got it. Yeah, that's a great description of the differentiation. Awesome. Okay. As we look at integrating AI into your end markets, there's maybe a couple of items to touch on here. Maybe start off with, there's a concern that AI could impact your value proposition or commoditize your offering. Maybe we'll start with that one and then one follow-up. Yeah, certainly we look at AI as a potential exciting technology to expand what we bring to market and also, you know, trying to understand where there could be risk. One of the things we've learned over the years is that a lot of the requirements of an enterprise customer is to have, they need to customize certain elements of their solution. So being able to configure and write your own custom rules, great example. A lot of enterprise customers, when they locate a facility in a different tax jurisdiction, they will negotiate for special sales tax or use tax exemptions so they can drive better business out of that jurisdiction, which the government, local government can oftentimes be very happy to afford them that. You have to overwrite the rules of how tax will work into your system for those jurisdictions where you've negotiated special, you know, special rights. That can only be done manually, which AI can't solve for. That's problem one. Problem two is a lot of the jurisdictions below the state level in the U.S. don't provide updates digitally. If you want to get the sales and use tax rates in a parish in Louisiana, you have to call the local provider, the local jurisdiction leader there, which we do. We built relationships with all 10,000 around the U.S. to make sure we're getting what's changed lately in your rules, your rates, how do we, and then how do we interpret that, put it into the system. Again, it's a manual part of our process. It impacts our cost of goods sold, why we have over 100 tax professionals that work inside of us making sure our content database is robust. Again, it is not digitized. AI has potential to add certain value, and we can talk about that, but it is really not going to disrupt what we do because of some of the manual and unique things that exist in the space that we are in. Got it. And then just following up on that, then there, you know, there's also opportunity with AI as well with, you know, you have smart categorization out now or coming out. And then is there a pipeline of more opportunities to generate incremental revenue from AI as well? Yes. We're looking at AI a few different ways. We've already launched our Copilot, which is, you know, just a user experience allowing the customer to have better value use of our product with leveraging AI. That's kind of table stakes now. SmartCAT is a great example of where we can leverage AI. One of the biggest challenges that customers face is their product categories have to be mapped, however they sell their products, to our tax categories so that it can go through the determination engine and calculate tax properly. The challenge for the customer is their product SKUs are always changing. The business is adding new products. They may bundle a product in a different way for a certain jurisdiction. Hey, we're going to sell this product with this service in this jurisdiction. The tax rules for that may be very different if it is sold as a bundle versus just if it is sold as a product or just as a service. Now they are selling it three different ways inside of the same jurisdiction, and the rules literally can be different depending upon how it is packaged up. Categorization is a challenge the customer's always trying to do. What we are doing is leveraging AI to try to look at how do we identify what a product is and, you know, my bottle of my plastic bottle of water, how is it built? What are the components of it? All of which could affect how it is taxed and then how it might even be consumed. Is it sold as a bundle of 24 or is it sold as a single bottle of water? All those things can impact categorization. Being able to identify that using AI and we start to train a purpose-built model. I say that specifically because the worst fear for a customer is hallucinations when it comes to tax, meaning, you know, I need a one or a zero. I need the confidence. Vertex has built its brand on accuracy and the confidence that we've given customers that our content database is going to be able to get it right. We are working very closely with a number of early adopters with our current release. We've picked some of the hardest retail. Imagine going down a grocery store aisle. We've picked some of the hardest areas where product categorization challenges are. We are working with some customers on bringing our first release out into the market. It's in what we call limited availability already. Over time, we'll build out more rows of the grocery store and then into manufacturing, et cetera. I just came back with John from our European customer conference. A lot of our big manufacturing companies based in Germany are like, when are you going to get to some of the equipment that we want identified so we can use it for categorization? We're getting a lot of good interest. When we look beyond categorization, you know, these agentic, I guess, bots or whatever you want to call them, agentic AI capabilities where we can leverage the data that runs through our entire system. You've got our content database and all the customer's transactional data. We're seeing some very interesting things both in terms of AI insights that we can bring and how we can look at certain workflow challenges that they have to face and where we may be able to automate them using agentic AI. We're clearly exploring a lot of things. What I will say, and the last thing I'll say in this is we've learned over 40 years of bringing product to market. We work very closely with the Big Four and very closely with our customers in co-designing our products because we want to make sure there's actually going to be uptake on what we bring to market. By having them have their fingerprints on the design, that has worked well for us for adoption. Got it. Very helpful. In terms of other product areas, it seems there's a pretty significant opportunity with adjacent products for what you term compliance. Maybe can you just discuss the opportunity there and how have the attach rates trended for these products over the last several years? Yeah, you know, I'm smiling only because, you know, you think 47 years of doing this and we've brought a lot of products to market. We've proven our brand. We've got great GRR. Our customers don't leave us. Every time we bring a new product to market, no matter how long the customer's been working with us, the first thing they ask us is, well, who else is using it? I want to work, I want to know somebody in my industry that's already getting value from it. Our adoption is kind of an interesting process for us, but once we get it, then the flywheel takes off. That's why I'm kind of smiling when you say that, because we're always looking at bringing new products to market. What we have found is obviously e-invoicing is clearly the new hot adjacent product that we're bringing to market. We're seeing some value in the Edge product we launched a couple of years ago. That has been very effective. Some of the new e-commerce capabilities we acquired from the Taximo acquisition a few years ago, we're certainly seeing some stuff around Validator and Invoice IQ, especially again with e-invoicing. We're starting to see some uptick as how those are going. You know, it's one of those things where the customer really, as our customer success function begins to work with them and educate them on all the capabilities, they slowly will adopt more and more over time. It kind of runs like this and then it kind of goes like that. We've seen that in every product launch we've ever done. It just kind of follows that pattern of get me some referenceability, get your, you know, we call them the golden 10, get your golden 10 customers who are up and running on the product. Then you can begin to add, you know, then you can start to grow from that, you know, that process. Attach rates really vary by customer profile. We came out with a very specialty product in leasing, and it's been phenomenal in the leasing space, but it only covers, you know, it's only specific to a leasing community. It really depends on what we bring to market, how much of the segment, you know, it can cover. That's kind of the pattern it follows, Josh, pretty straightforward. Very helpful, very helpful. Okay. Moving on to some go-to-market questions. You've always been historically a direct sales business with partners maybe influencing for your products. How has this evolved and how do you maximize the opportunity with multinationals in e-invoicing relative to your historical sales model? Yeah. The great news is the relationship we enjoy between our direct sales team and our customer success function, we're, for our US multinationals, we've just added e-invoicing into their, you know, into their quota requirements and added it into their, you know, the quivers in their arrow. They're having active conversations. We didn't have to add a sales force and we're able to leverage our direct sales force for e-invoicing in particular. What we've seen over time is that the channel and doing more indirect sales is actually becoming an important part of our model, especially as we moved into like the Microsoft ecosystem. Historically, Vertex was largely an SAP and Oracle ecosystem focus because that's where the largest multinationals reside. As Dynamics has taken off, we're seeing more customers want to do that and certainly in Workday. Having to develop new relationships in the channel, we've gone from just the Big Four to now probably the top 15 accounting firms. We've all built significant practices about how they're influencing and getting more into the VAR channel where we're working with, you know, some of the big SIs. Some SIs, Infosys has standardized on Vertex as the, you know, their provider of choice for all their implementations that they're working on for tax, you know, as a tax provider. We are certainly looking at ways we can expand that. As we go into the beauty of the Big Four is they've got, you know, the DOC region covered with PwC or Deloitte or whomever. I can call the US leader of PwC down in Houston that we work with and I can say, hey Tim, I'm going over to meet with some of your customers. Matter of fact, I did this in Tokyo just recently. I said, I was going over to Tokyo. Can I meet with some of your partners there about some opportunities we're looking at in Japan? Next thing you know, I've got, you know, access at the top level. Being able to leverage those relationships of the Big Four where they're located globally will support our e-invoicing and all of our expansion opportunities as we grow. Got it. Yep. There is a nice revenue opportunity for the consultants too, right, in terms of integrating this stuff because some areas of software. It's a very symbiotic relationship because we are partner-led in all of our implementations, meaning we're really pushing them to be the lead on implementing. It's because they are not only implementing our software, but normally they're having to do process reviews and other things which are advisory and not things we even do. They really can expand a relationship inside of that when they refer us in. It has worked well for us to partner with them. Got it. All right. So one of the key items that you've highlighted over the last several years is cloud migrations aren't set to accelerate in any given year. Is that still the case? And do you move to a go-to-market model at some point that incentivizes migrations? Yeah. Yeah. You know, our, you know, we try to meet our customers with a round smiling only because it's something we talk about regularly and we're like, how do we accelerate this? But we've, you know, if I will tell you this, Josh, because this is really not controlled by tax, it's much more controlled by the CIO. And if the CIO is young and looks like you, we have a chance that they're probably accelerating their move to the cloud. And if the CIO looks like me, chances are they're not in a rush to migrate to their infrastructure to the cloud because we're really following what the customer's doing with their infrastructure. While I would never say never that we won't at some point do a forced migration, say we're going to end the life of one of our products, it's not something that we are rushing to do because our customers value how we have stayed with them in their journey. Our GRR approves when they're ready to migrate, they're migrating to us. We're going to get a nice upsell. We typically are going to get probably 25-35% increase in, you know, like for like on the same product and be able to maybe even sell other new stuff as part of the migration. It's not something we're rushing to do. Got it. All right. So we went through a period a few years ago where you accelerated sales investments. Can you discuss where these dollars were allocated and should we be thinking about another wave of sales investments today along with the product investments that are being made? Yeah. The good news is with the acquisition of e-invoicing, the bulk of that is going into our existing sales base and the other things we're looking at like SmartCAT and some of the data management capabilities do not really require adding salespeople. The around e-invoicing specific to the Ocosio acquisition outside of the U.S. is where we're is probably the only place I see real true organic growth requirements in capacity. There are some jurisdictions, Europe, a little different than the U.S. market. Salesmen can be based in Oklahoma and selling to Texas, except for maybe when it is football season, but largely they can sell. However, when you move into Europe, you need a French team in France. You need a German team in Germany. So for the larger economies, you really have to have everybody partnered together in the like jurisdiction. So for e-invoicing, we're looking to add some capacity. Other than that, it would really only be based on opportunistic demand that would require us to ever add sales capacity. I think you've seen some of the leverage from our sales and revenue line in terms of our sales and marketing costs relative to revenue over the past couple of years because we've started to cross over that threshold. I don't think that's going to change. Talked about a little bit some incremental around e-invoicing in sales. I think we're pretty well positioned right now. Got it. And then just within Europe, do you think the plan ultimately becomes to build a team out in all of the 26 EU countries or is that a bit? No, that's not going to be, you know, like, you know, I think there's some jurisdictions we absolutely, you know, if you're based in London, you seem to be able to sell well into Scotland or Ireland. There, I don't, or if you're in, you know, I think Spain and Portugal, it seems to work pretty well from what we're hearing and what we know. There's some jurisdictions that won't be required for. You can get some synergies there. Yeah, absolutely. All right. In terms of the competitive landscape, I generally highlight that this is an area where you really differentiate with your tax content and the software that you've developed. How do you view your differentiation and how much is the library of tax content driving that differentiation? That's a question I get a lot from investors. Yeah, you know, I really view our differentiation as far broader than that. I think that, you know, tax content is certainly something I'm really proud of. We do have the largest database and the customers appreciate the accuracy we provide from it. Although they're always asking us for more content because things are always changing, it definitely is a part of where we always are going to invest. I view it as far broader. Simple ones, certainly the influencers, the Big Four, huge part of our differentiation. They've all built the largest practices. A lot of them use our software internally for their own outsourcing practices. That makes them very aligned to Vertex. I think reference ability is enormous. If you're leaving an in-house solution and you are migrating to a new provider, you're looking at trust and you're looking at who else in my space have you done business with that's as complex as I am. And they all think they're the most complex in the world. Having, you know, seven or eight of the top 10 in every major vertical, the Fortune 500, gives us incredible referenceability. The technology capability to configure to the rules and the customization custom that is required for a unique enterprise customer that we can do inside of our software is differentiated. Lastly, our ability to network and connect four or five multiple disparate systems into a single tax solution is clearly something we differentiate. The reason why I highlight all that, Josh, is it takes all that to win a deal. When a competitor says, oh, I'm going to move into your space, it's like if you don't have all of that, you're not moving into my space. You're just, you know, you're going to compete on one element, but really for the sophisticated customer, that's not going to be enough. Got it. That's very helpful. All right. Moving on to some financial questions. If we look back at the financial targets outlined at the analyst day, my take is they were better than what investors were expecting in terms of software subscription growth of 20% plus and EBITDA margins of high 20s, 70% plus conversion of EBITDA to free cash flow. I think were the real highlights. Maybe we can just unpack these a little bit and in terms of accelerating subscription growth rate, what are the kind of the key factors there? Yeah. John, you want to go? Yeah. Yeah. I'm happy to take that. You know, from a subscription growth standpoint, I think you heard David really outline a number of different things that were out there. Certainly that ERP tailwind that's out there as people are moving to the cloud and they're moving things there. That is certainly one that is a major driver, right? It's not just SAP. It's some of the others as well. You heard us mention on the call this past quarter, you know, Oracle continues to be a big driver of opportunity for us. As our customers are moving to the cloud, no matter what ERP they're in, it's bringing up the logical question of, okay, what are we going to do? That's going to continue. That tailwind, whether there's the SAP kind of ECC deadline or there's just natural migration, I think that's going to, yeah, we're seeing activity there. That accelerating opportunity is one that we think is going to drive business for a number of years. That's one, you know, and certainly e-invoicing is out there. As David articulated, that is, you know, through the new acquisition of Ocosio that we did back in September, that activity is going to continue to ramp not only with leveraging our existing install base of US multinationals, but also as those new countries come up, as those larger countries are coming online with the mandates, that is driving that bigger opportunity to look more broadly and come up with an end-to-end solution. Those are two of the key drivers that are out there. In addition, you know, there's a number of other activities from a, you know, from a revenue standpoint that will continue to go there. Again, complexity is only increasing. We thrive in complex environments with complex, you know, with complex tax problems that our customers have to solve. That is an area where we certainly excel. We do not see that letting up anytime soon. I think those are the, they are kind of the key drivers that are going to help that. In addition to some of the new products that are out there, you mentioned SmartCAT. There is a number of things around data that are going to continue to drive, you know, drive revenue opportunity for us as things, as complexity continues. I think we are well positioned to be able to capture that. Yeah. Going further, John, EBITDA margin though, just make sure we highlight some of the leverage we're starting to see. Yeah. No, certainly. You know, from an adjusted EBITDA standpoint, I think, Josh, you mentioned earlier, we went on an investment phase back at the time we went public. I think when we got to the end of that, we certainly saw ourselves inflect and saw the real strong free cash flow as well as adjusted EBITDA come from that. You know, we continue to see great, you know, great results from, you know, the leveraging of those investments that we had previously done as well. We also expect that we're going to see that start to continue here and here as we get through this investment phase. Now, the difference between the two investments, you know, this investment phase we've talked about really, it's driven by investments in Ocosio to get our country coverage where it needs to be to ensure that we've got go-to-market and SMEs and the places where our customers are going to be. You know, they've got defined terms. We've talked about 18-24 months from the time of acquisition, Josh. What I expect to see is that, you know, we're working through 2025, making those investments as we get through into early part of 2026, you know, mid part of 2026, you'll start to see again that inflection and that leverage start to show itself. You know, we've been able to demonstrate that, you know, in 2023 when we completed our last investment phase. I think you're going to see that happen again. You will see it, you will see us, you know, kind of right now our adjusted EBITDA margin is expected to be about 21% for 2025. You will start to see that move, but much more meaningfully when we get through that investment phase at the end in the middle of 2026. Look for that. I think that is really important. Again, our business has demonstrated that we can get leverage out of the investments that we have made and we will continue to do that. The investments we have made in selling and marketing, G&A, those types of things are bearing fruit. I expect to see real nice leverage come out of G&A. I expect to see some in selling and marketing. What we'll see is we'll see that R&D spend, which is elevated because of the spend that we're making for the Ocosio products and some of the AI investments, start to moderate back to that 18-19% of revenues that has been our historical average. Got it. All right. We only have one minute left, but maybe just to follow up, just one quick item on the financial targets. Once we get past the second half of 2026 and you start, you're talking about this period of leverage from that point to the FY 2028 financial targets, should we then kind of expect linear improvement towards those targets annually or could there be some step function changes to get to them? Yeah, that's a great question, Josh. I think as we get through that 2026 period, I think you'll start to see that, yeah, you'll start to see a bit of a pop there. I think that will start to, you'll start to see some linearity in sort of how this works itself through. I don't know of any particular one-off items that are going to drive a big step function change. Again, if you look in the areas that I mentioned, those, you know, that departmental, that departmental discussion I just had, that's where it's going to come from. I think you're going to start to see some real nice, real nice linearity in sort of how that kind of progresses along. We're excited about that again because we feel like we can see it coming. We have seen it in the past. I think the investments we've made in the business have been good ones and they certainly are demonstrable in the financials. Awesome. All right. With that, unfortunately, we're out of time, but I want to thank the Vertex team for the time today and everybody listening in. Thank you. Excellent. Thanks, Josh.