VTEX - Earnings call transcript Q1 2024

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Operator

Thank you for standing by and welcome to the VTEX First Quarter 2024 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.I'd now like to turn the call over to Julia Vater Fernandez, Investor Relations Director.

You may begin.

Julia Fernandez

to March earnings XX, welcome the call and ended quarter XXXX. everyone, the conference VTEX for Hello I'm Julia Vater Fernandez, Investor Relations Director for VTEX.

presenting Ricardo Financial executives and senior today Thomaz Geraldo Our Junior Co-CEO and Camatta Officer. Chief Sodre, are Founder

Additionally, initiatives.These session. Spolidoro, be Strategy Andre Co-CEO related Chief make like as would de to matters Mariano assumptions, and today's growth prospects are that company, available Officer, the currently trends Q&A forward-looking technology management Faria, may about Gomide expectations during future current and continued for and product events. industry Founder information and to statements available projections I will our remind you on based statements such and and

our Commission, discuss are A of U.S. current undue believe not course other assumptions, quarter Exchange GAAP comparable XX-F While that Factors within available for the described that found on are reliance those of our this earnings to and expectations you be ended the our in Statements filings reasonable XX, Risk Relations the Form we to remind which are are forward-looking would and first and to uncertainties measures. projections Forward-Looking Relations the XXXX, risks VTEX cautioned XXXX sections and December available statements. you during Investor of on release in of Certain place we call, and the information, these the in nearest conference website.Finally, some Investor year Securities view on non-GAAP VTEX I may our like measures available reconciliation measures can website. press

the floor turn call to over Now, the Geraldo. is yours. let Geraldo, me

Geraldo do Carmo Thomaz

earnings thanks Welcome our for Julia. first quarter everyone conference XXXX joining Thank and call. you

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commerce As of The retail. sales global to that rates the dynamic VTEX and remain enhance between stay maintenance margins. ahead business enabling its organic world balance event must interest customers optimize low the channels flexibility technology, in and demonstrated strikes high,

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on let's matters Now, our what focus most, customers.

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VTEX network automation Interfood the can our third-party primary catering been needs. grocery pick its was control sellers experiences Cloe and customer pricing operation pickup VTEX, thereby regions, with and platform platform fourth beverage live innovation. while management. Chile into composable XXX a the a Dimak to to its BXB Skin product partnered experienced innovation continued offering physical increase as and integrated experiences vendor products. of its customers Recognizing It's operations, chose unified Mexico, for established from Hearst such for credit XX% orders, traffic, customer by BXB end leading composable underscores Personal implementation decision methods

base. with KFC, Professionals, launched of and and specific giant, Brazilian months. VTEX's ordering Mezzo their power website, that with apps, chain methods requirements two the aligning and IO Romania needs their products their ready to four stores within white expanding meet mobile three iOS quick states, a say to be the source in box representing the streamlining data am leading a customer a label VTEX tailored stores the partnering to territories. optimal service all seller, across team Mezzo and BXC connectivity stores, and to management seamless inventory develop for for proud in from Interfood Additionally, out tax only individual Cosmetics able launched KFC both account nine a swiftly KFC franchisee with VTEX's to serves VTEX Remarkably, team a Android, app VTEX meeting operations.Each demo physical they months. physical dedication Mezzo, exemplifying BXB swiftly as precisely functionalities, restaurant requirements VTEX's tailor leveraging met to launch was project and cosmetics platforms, I with a unified single completed ensuring mere was adapt, selected VTEX a to code and operations.Seamlessly payment exceeding to expectations. BXC

New sneakers Brazil. Balance their migrated in website brand doubled conversion to rates VTEX global the and the enthusiasts catering

a and costs deliver month want high over sales New some reach XX,XXX revenue platform, migration basic platform, the was limited to from The Day. has development tax VTEX This experiences year's ecosystem. for their promotion allocation Balance composable and resource With announcements due journey post-migration.Before a event to plug increase autonomously. constraints.The conversions innovative previous handing Ricardo, e-commerce over VTEX product e-commerce, to struggled and led to ecosystem XML I the caught of extensive double page catalogs partners labor-intensive Once revisit integration discounts and manual growth of VTEX facilitated boasted Balance's results which and became New attendees, to and highlighting New exciting and to visits, seamless within to VTEX with functionalities manage teams automation rapid impressive significant their attention. to in Balance's API pricing empowering play integrations,

retrieval AI-powered agile reviewed with of Some the data and just seamless for the for auctions. VTEX. safeguard VTEX and landscape and and empowering marketplace and include with pick with specifically a and pack solutions store VTEX boosting cases. commerce growth training for and AI-driven revenue.This should at data along for and available business trust, announcements specialized our sharing. store network the enhancements of brands now experiences APIs BXB their handful against advertising preserving advancements ad innovation features through to the both threats revolutionizing on represents front-end and the operations digital pioneering conversion streamlined fresh targeting and shopping experiences tailored BXC use for teams. like offering IT we've user VTEX security and time designed across and journey revenue here search operations, engine and optimizing customers enterprise accelerated products, We're rates pipeline reshaping

while boosting new amplify towards streams teams e-commerce intuitive our are VTEX. IT up implement with empower products conversion will teams empower revenue Ultimately, retention platform products our strategies solutions optimizing their ROI.Moreover, these seamlessly. rates, geared cutting-edge user our end businesses to interface helping their and to attraction, customers Our functionalities, for to optimize open

our the also Ricardo. investors.I I'd will the as for forward valued could my customers, and hand a term our like dedication connected over I'd propel now not express our impact thank and X,XXX to term play unwavering in employees dedicated may call they growth short trajectory. to to VTEX like be gratitude us backbone to whose significant, the partners moment While a long commitment role commerce.

Ricardo Sodre

Thank to by you year year everyone. as I'm results over XXXX growth Geraldo, share $X.X hit marking billion, hi Geraldo, VTEX's our QX pleased a emphasized GMV QX XX% financial of FX in neutral in U.S. XX% XX% This U.S. and on $XX.X neutral. of XX% an dollars led FX year in to basis, growth year dollars million. revenue over a and reaching

impacted growth and macroeconomic coupled million from gross XXXX $XX.X reached annual line, first representing our the value. disciplined of and the our a same XX% approach, XXXX, in significant in encouraging the of improvements and significant up million of VTEX's trajectory.Double quarter over sign witnessed $XX.X operational signatures neutral, this in customers, top in year $X.X momentum while on leverage store Although contract margin That, subscription dollars sales million. with increase relevant results totaled new our an services U.S. quarter existing in expenses operational FX quarter, conditions a profitable revenue of clicking first of revenue year XX% for

Now, we updates. exciting the moving P&L, down have

first pleased in quarters. announce are achieved in observed prospects. weaker We performance the sustainable the positive instills This to inherently with profitability our leverage operational even seasonality confidence our

XX.X% in margin our subscription the efforts costs implying profitability migrate year to non-core an to basis XXX hosting Difficulty] margin quarter XX% improvement the a same Our of growth in point dedication ongoing support non-GAAP last services FX expansion enhancing to gross neutral reached leverage basis year.This and compared and optimize over team's highlights the [Technical middle our efficient XX.X% on of to providers a margin range. operational for the year-over-year more year

continue Argentina's recognizing situation. in XXXX, heightened profitable our growth, strategy year we productivity for macro For full the executing

range XX%, leverage. to We April's of are rate. $XXX $XXX FX to demonstrating million Further based revenue of a on targeting operational implying million FX growth our neutral average year-over-year XX%

high cash free income are We digits. and of operating targeting margins single non-GAAP flow

We are VTEX. future the of excited about

robustness business to in our has brands anticipate a proven retailers, financial proposition achieving value our and their interest operational them rate around our margins environment customers more and and revolves extending cash.We growth, Our expanding while reach in to help supporting business now model worldwide. its high and generating journey objectives

ahead been it open global as solidify we now. backbone that filled Our Thank a commerce.With moments our position you. to and encouraged all far let's about for questions journey has that, so up are connected lies rewarding for with

Operator

of [Operator BBA. Instructions] Thiago question We'll Thank question from answer from the Your you. Itau comes and begin Banco session. first the Kapulskis now line

open. line Your is

Thiago Kapulskis

everyone. Hi hear Can guys me? you

Geraldo do Carmo Thomaz

hear Yes, you can we Thiago.

Thiago Kapulskis

Great.

So same, So But guide, mean, the neutral right. are regarding one the the the than the the thanks, is I numbers year think first growth right. previous nominal right, full lower I guidance FX

I in is previous anything guys you So, in if there guide just And else it's -- I I a QX than about is some there and how business terms or could terms in you back shareholder a that the different quarter. if pipeline AI related lot FX mean, your was doing strength? is the too going last guys the there providing. give you also if this Argentina. you Argentina, in the the mentioned was Is overall know that different or expectations? of products there's in other us that concern are of question could business the letter think color

could So, more bit actually could future comment there? enhance if a on guys from have Thank your and little strategy come that your you the this think you could you you. opportunities how that strategy roadmap or

Ricardo Sodre

Great. Thiago, Happy guidance I'll two the Sodre the to to take about Ricardo on questions AI. Argentina, year pass talk over first to in Geraldo here. it full and Hi

in supported happen in real in consumption as FX performance which the as change although So, impacted uncertain and by through. hasn't they're months of on that we important terms current our also to e-commerce observed Brazil, of of Argentina, guidance, our the going most level, the guidance been mentioned. macro QX, next dollars robust week Colombia, maintaining the midst neutral full And in rates is there a and our situation and volatility the key impacted in in the associated is in Argentina risk maintain led event the one, us their steady couple relevant dollar any especially annual recognize Argentina, terms in significant being guidance considering the in consumption guidance environment of over FX Europe. with will past it's the in revenue their This that and these to situation level severely given Sales in full certain the U.S. U.S. year are that two, for given you markets our Hot year.And guidance that such year, Mexico, for called

Now, are going under our that things back control. to

rates as the was our our this by it slowdown and achievements remained also encouraged cost we are QX our clicking difficult, and by forward, the of can come year have Argentina a forecast our the guidance, predicting from situation to has reflects of financial single year new our income extent mentioned momentum that ability last The the macroeconomic at mid on quarter.So, performance months. margins encouraged past we navigate you we contracts and and challenging throughout has then Looking FX meaningful control this digits raising of adjustment the is to digits economic high significant design just free flow in by remains and few though over high to that adjusted imagine, Argentina. environment while margin This is consumption Even the on these this control. full stable slowdown. operating inflation, to our double we gave have beyond single sales quarter severe decline and unwavering operating confidence in our trajectory in front cash our been improve stability

GMV our significantly basis, year currency weak, instance, customers.For e-commerce reporting year at out single e-commerce due better was in with performance dollars. Argentina, we that stands as than digits on our other over only market resiliency increased look down to above So if our in and overall U.S. performance of a companies, and QX the inflation local in the although said, largely

annual responsible relevant of let Now, neutral our worse us it finally, the also QX guidance point important pass down and situation get bottom most the revenue that responsible relevant most driver the growth on out then the AI. revenue may the reviewing Argentina's to me that, important that being our was to nonetheless, high of over better. Geraldo the this gets And in and for for it's it guidance.With to acknowledge before to performance it's situation closer volatility level driver FX

Geraldo do Carmo Thomaz

Thank you Ricardo. good Thiago very question.

been models AI getting as building building You we and VTEX like blocks and this capabilities to stuff retailers give is in believe We're new brands block, And these LLMs leverage and the created positioned new being know, there's using the like and about many uniquely revolution and so right. by that world. business to meaning manufacturers a that.

people that where important AI imagine, I build to into you Data customers enable think not leveraging in with AI actually we investing and the the creating channels With will four we directives, we have to are we're composable and you right to turn that and very through heading experiences, that, pipelines. will that fast experiences our high, we and it's framework ad completely of their related to, network, data you are roadmap models to So across fulfillment. to latest we're efficient a partners this are that pipeline, lot. and Vision, And data empowering customers customers we fast the revolutionizing gold. blocks explore that faster and as and lot and around website. leverage product All launches think converting I this over know leverage is key a so than more creating FastStore building launched reps we ensuring sales that's is all way can productivity own, boosting much We letting AI, building invite XXXX VTEX did all are talk the leveraging the lot the can to world. our a why AI the spring create see you now.But things customers but about our edition.We This AI. possibilities our

will with self-guarded a well. We sure product these product as value launched ours VTEX with data Shield -- a I the think we launched called that so also like being fundamental is shields more this to value, capture value security software more people is

as And so said, a this we business I lot. are we're to company And give the to right investing revolution. meaning AI

Thiago Kapulskis

Great. the Thank content. -- And so explore the I'll for video much the Thank you. guys. definitely answers you

Geraldo do Carmo Thomaz

you. Thank

Operator

Maddie the next question of line from Your Schrage comes from KeyBanc.

is open. line Your

Madison Schrage

for in it? are if my of you just could to wondering your thank partially maybe maybe world some questions. through Thanks. And talk any anything that other Hey, tailwinds taking of offset geographies, of that, Besides guys. like there kind or Argentina wanted rest

Ricardo Sodre

to Happy start Yes. Maddie. and then to feel others Thanks chime free in.

relevant would in even country. So, we have but this Brazil, saw new first momentum and in in the other saw also, the market Europe continues my with well. highlight countries on US, sales, signing that strong Colombia Mexico, as the contracts the performing I we we mentioned new to and show Brazil I share headwind Argentina, answer, that

the have position strong Brazil, integrating our customers retailers, see is that. been their also that has accelerating a stores, in helping ecosystem store same the our the positive. sales fiscal and on strong we Our we way And

see our we overall, sure geographies, for encouraging that Not or if question on which chime want our as answers well. the is in. other So if year others to performance good

Madison Schrage

quick you Yes, a sales mix I Kind maybe for be well. wondering, motion if you think the revenue and backlog kind But the for about between have size could you what's customers could helpful of that'd too. new the follow-up as if maybe I think and I now. talk maybe existing just of right of us,

Mariano Gomide de Faria

positioning we good one to I RFPs to are just understand not a and improvement mention is reports, recognizing the most Gartner and globally.We question, momentum but are analyst such This are of are in consequence here our in bit consistent position correctly we as sales enhancing about on country, momentum. good so we pipeline, receiving of if more Forrester, seeing Hey, more your the companies a Mariano little specific are globally. VTEX's we and IDC invited a

sales the the with plan goals track for on year. are We we

this need world retailers and high manufacturers period we rates. highlight of over the However, environment interest in volatile all the to for

So, this world might up and a being good volatility to this years going in will one end for more it's some ahead bring years, and shift. not year, efficiency solution to will years, we it's be retailers.It's years going a that X X really all X like pursue be for tough

efficient In line. deliver focused environment, integration, organic and the interest really in So, ecosystem and customers we costs are our helping high software very being operations their are to high inflation increasing simplify revenue. new accelerating this opening diligent we active and ready and minimize for and essential are and rate seamless in maintenance on architecture them bottom efficiency to channels profitability

in the and over.Mentioning with provides solution very more comprehensive VTEX XXXX by have of enormous Having Europe. lot discovered. of help still we this we a we IO BXB call VTEX system than have in more to groundwork Nike Latin the have solution live and to significant So cover complete grow can significant than be integrators quarter. the the a a and that an America, retailers room BXC on all we milestone all Colombia is composable third-parties, XXXX go extensions Brazil, to market

Germany into to OBI for sets foundations expansion Our build us with up. solid

of the the Customer positioning to we and award for the experts on major leader the acknowledgment BXB Mainly also branding VTEX. the Gartner So for momentum Choice and the industry Customer achieve the that's the and IDC good a Choice, recognition summary. as main company only were leader on completes VTEX BXC

Ricardo Sodre

there think Maddie well I Mariano, quickly on customers. build to as versus just existing was question maybe a And the new from

So to sales see same our the we level. store mid-teens on in continue

a and the customer the base. revenue roughly the our is for coming at growth two-thirds existing customer of to roughly revenue the on new one that our from GMV If customers basis overall growth see you from coming revenue company, base we of and adding third look on continue to

Madison Schrage

Thank it you. Appreciate guys.

Operator

[Operator Instructions].

the comes America. Bank [indiscernible] of question from line next of from Your

Your line is open.

Unknown Analyst

on good everyone. questions. you my my Hi, two afternoon for taking I side. Thank have here

in getting guys years, what and gross target was First model it said strong the the quarter to for close it's you coming of really even a quarter. all on soft margin, this as

probably higher for margins be year. gross full to expect the we should So

also this was line think question, levels? gross So that Thank do how wanted do be this could Should forward. think looking be you to nominal first a company? it little it see, year reaching what think could revenues expand should understand ties model in the target just going then you going and service forward, or levels or you I the but margin second, on we continue current to guys how think to similar and I about it about over can when forward?And year we at just from the bit down could you. rates, for Maturity wanted

Ricardo Sodre

Mariano that for to start with ], Thanks I'll regarding pass and gross over up. I'll revenue. it thanks margin [ Luca bringing then services

over on to of closer XX%, us we So subscription brings our the also overall And for basis this gross in year the Investor of typical margin Day marking XXX subscription right? margin year we and to our XX% it's QX gross you for achieved gross margin. as effects target achieved seasonal expansion over margin, and a gross XX% XX% a GAAP points mentioned, despite non of QX the

migrating cost approximately there we So and costs or optimizing reducing include hosting, while our as related out maintaining efficiency.These performance right. our and getting cloud subscription to and to and caching always through enhanced And also all CPU efforts two-thirds improving significantly are scaling have well. of Linux, usage systems

So lot our subscription helping that has a margin. been gross

over our observed, customers yet margin improvement what away remain after. like it the we focused some a modes our although moving visibility the the me Regarding we to in the enhance model, was medium has goal next been we U.S. primarily years, anticipate gross to the overall strategic subscription the in gross improvement hyper With margin disclosed let that, in to we're a for opportunity the attributed X volatility years. have while terminal and talk It's services future years key the and adjustment, pass going margin for in the inherent X area don't that this to gross services last the towards Investor margin are subscription go on these they care our that's of not side, volatility X about to and our as some margin gross in model for is new services We XX% to but next terminal goal and revenue. from Mariano term margin XX% Day the gross gross years business, is that's Europe live.So and for further growth. overall X

Mariano Gomide de Faria

and service as on bit volatility during are stage which live some our development revenue, major of little more margin accounts a the service clarifying implementations, Yes, goes includes of offering new naturally our the expanding. experienced geos customer architect solution

have model. to just time for few That it's implementation phase, would accounts design in we that OBI, is some in while more expand had so like last expected example a care This said, bit announced hyper little on a volatility. we year, expected.But by care a the expected hyper we So volatility execute. are changes the significant we model mature. will We no that's and more we continue of system aside and on our as mentioned, service are remain from to and are integrator integrators optimistic in there already services report, design increasing volatility, system more what I to the reach becoming that

will the bring mature on ecosystem and VTEX service volatility more little service and a bit expenses of the broader revenue So down.

with able a the us. service be we that's VTEX will platform the goal design, scale So, and by deliveries of to direct like less for ultimate

Unknown Analyst

clear. Perfect. Very you Thank the for answers.

Operator

question-and-answer will That concludes over turn I the remarks. to some our call final for Geraldo session. now back closing

Geraldo do Carmo Thomaz

even solutions innovation-driven actionable committed future customer commerce, not and unwavering and insights, to BXC channels. integrating providing By In in rate is fully margins audiences evident innovations, is and of enterprise VTEX customers to that need enhance tools it. elevated shaping more organic effective dedication brands conclusion, interest platforms. sales maximize strategies BXB redefining environment, it's engagement.Our we're ROI cutting-edge is to and today's and high consumer our fresh empowering to achieve unveil the ready retailers and centricity impactful urgently to e-commerce it merely for optimize to

about and on excited We Thank remarkable foundation are profitable and the first margins growth to this before. our we a ever more earnings ready week. This operating stronger are expansion and growth. for journey. remarkably of a margin gross underpinned We wonderful margin you quarter, of and everyone sets next at a results was being the our At sustainable, than strong exciting VTEX, forward we Have model. We updated stand positioned our by focus robustly for keeping strong time you business look part our it. is to call. and seize

Operator

Thank concludes participation. your teleconference. This you today's for

You may disconnect. now

VTEX (VTEX) 7 May 242024 Q1 Earnings call transcript