Initiate At Buy: Overlooked Accelerating Growth Story

研报英文原文证据摘录

Initiate At Buy: Overlooked Accelerating Growth Story

TD Cowen Vertex

Global Research June 29, 2026

The complexity of indirect taxes is notable, which is a key driver for enterprises

turning to VERX's offerings. Complexity of indirect taxes spans the process of

interpreting tax language, transforming that tax language into tax calculations, and

the lack of availability online of all indirect tax regulations. VERX's tax engine has 1B+

tax rates and rules that it must continually update to keep its clients compliant across

20k+ jurisdictions globally. Its tax engine, including the process of updating the tax

engine, are proprietary to VERX. Any change in tax language within a jurisdiction

requires the involvement of a lawyer due to the level of interpretation needed before

even turning that rule into a calculation for its tax determination engine. VERX

estimates around 70% of the tax rules & rates that go into its tax engine are not

available online, primarily due to municipalities and districts highlighting another

barrier to easily replicating its repository of indirect tax regulations that go into a tax

engine.

Because VERX is deeply embedded within its clients' infrastructure, it is not easily

replaced as switching is expensive and difficult. This includes VERX being integrated

across numerous client systems (such as ERP, billing, POS, CRM) compounded by

clients potentially having multiple instances of these systems and VERX being utilized

across multiple countries. Clients can also overwrite VERX's interpretation of tax rules

within the tax engine, yielding an element of customization that makes for an even

stickier relationship.

Figure 4 AI Moat

Source: Company Reports

VERX is apt to benefit from AI over time in the form of increasing internal efficiencies,