VTEX - Earnings call transcript Q4 2024

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Julia Fernandez

Hello, everyone, and welcome to the VTEX Earnings Conference Call for the quarter ended December 31, 2024. I am Julia Vater Fernandez, VP of Investor Relations for VTEX.

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

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

While we believe that our assumptions, expectations, and projections are reasonable in view of the current available information, you are cautioned not to place undue reliance on these forward-looking statements. Certain risks and uncertainties are described on the risk factors and forward-looking statements section of VTEX Form 20-F for the year-ended December 31, 2024, and other VTEX filings within the U.S. which on Commission, website. Investor Exchange and are our available Relations Securities

non-GAAP of I you comparable fourth call, XXXX Relations this some remind like GAAP Investor we on our earnings A during discuss Finally, found to quarter of measures that can would in the measures those to the be course might press measures. nearest available reconciliation our website. conference release

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

Geraldo do Carmo Thomaz

thanks business for conference and our than you, fourth the earnings everyone, Thank Julia. XXXX joining call. year quarter Welcome ever. with remaining closed We our underlying stronger

commerce. at for long VTEX. Looking our term, year significant delivered a digital milestones in transformative global to medium We a evolution XXXX the as was in leader

robust of customers year pay $XXX,XXX First, in the increasing to see momentum from onto customers than continue signing that number Platform, enterprise to demonstrated the XXX per VTEX a sales us more by new we XXX.

churn the landscape. satisfaction our position competitive and the remains customer Second, in stable our our digit revenue mid percentage an of in annual strong evidence range, single

new and success. highlighted delivering innovative customers products long-term key introduced business and that contributing our above, business Ads, add-ons Data our are revenue with such designed maintaining tangible and to we Third, empower as potentially capabilities. The churn, pillars Shield, monetization customers launching and for and VTEX's outcomes enhance adding efficiency AI-supported products to and customers, generation, X VTEX operational VTEX's low new enterprise Pipeline, to medium results

the success coming This and our with introduces commerce, GMV, model, on aligns revenue benefits growth our customer it digital customers X/Xs volatility. with also take-rate of a of short-term our While spending to the us and from on significant from coming that year, in and this further amidst evident weaker FX financial consumer softer with due section. revenue was particularly Ricardo devaluation. elaborate in this will Brazil, same-store-sales, expectations below closely quarter

a enterprise new the contributions On Brazil a highlight the we half. key from with customers. to momentum, throughout saw operational the in as adding going and growth strong X back and contract out Europe second In year Now, with drivers. U.S. signature XXXX, the standing notable

and our and our the connected being software for VTEX's U.S.; commerce, Latin customers for OBI India; result, and choosing in Shop, Sweden that reaffirm stable among low MyEyeDr, upmarket provider, Hmart, Fast XX% Whirlpool commerce than revenue. In Europe; our Hortifruti, in recurring in proposition revenue renewal-after-renewal year-over-year, becoming net testament and across and Elektra of and attractiveness America; including comprehensive and with Brazil, a generating with a deferred of in enterprise an VTEX. top-tier multinational which XXXX, over increased These Pashmina to value keeping existing number a solidified backbone a Adidas, of new several and Jeffers is global and the As partnerships ones in we XX% preferred Heart's ongoing go-lives churn, keep key demonstrating the ambitions Pet, increase a retailers, CIOs expansion but Motorola in customers, our $XXX,XXX and just fashion Nike, Bemol CEOs more we suite brands ongoing others. annual in the customers by many the worldwide. On bold achievements further celebrated Poland; in retailer of trajectory

a by strategic VTEX. has financially relevant are customers of number customers nor total slightly year-over-year, that lower small intake our not of decreased Although, that's driven for

stable churn revenue annual remains Our the mid-single-digits. in

platform solutions. from time, and suite base compounds an $XX,XXX in our strengthens is over ARR into growth paying launching resilience. On more integrated innovations, grows a customers of us VTEX and of VTEX's transitioning further it long-term than product single-product As successfully

empowering span Pipeline, offerings Retail and more, Security well-connected Media, Data businesses many Pack, Our & Shield, ecosystem. now App, Pick Sales through BXC, BXB, a

the and Retail customers' Synerise This in and serve in stake a and strengthens enter Media including new beyond commerce to diversification Weni, Post-Sales while acquisition expanded growth solutions, executing position commerce going suite ally of a X to us as conversational software our segments: strategies. trusted enabling AI our the comprehensive investments, most of markets. capabilities strategic Our as our

Brazil; As let to we remain Ireland; DNA of XXXX, to look customers also multinational relationships added our at in in fourth we during our digital including leadership solidify on our Corporation Chile; enterprise this and Torre and building in actively Donna retailer trust guide quarter Portugal; ahead, focused of in customers will with our is the initiatives. ecosystem on the we the promises in customers, partners. newly continue Criacoes, an as me core Dakota and alongside go in our commerce. With with U.S. We've us existing Bakery steadfast segue, VTEX's Hanes delivering Trust Sameca Rahr supporting in and and Coolbox their fashion in the strengthening Rissul Ortobom, Lyon Hortifruti, growth Carioca, Mexico; and

BXB in country; X brand Solla the its with in has accounts, U.K. its now existing and Keune brands U.S.; U.S., adding its with continues several quarter, stores expanded is Colombia BXB, Mazda to the Grimaud VTEX operations which now presence European has its BXC premier is Distraves new in BXC X its stores to in of and to and Brazil; the in VOIT operations to including: expand Beleza fourth their to Mascavo, has their X in BXC expand strengthening us, Germany into the and in across expanded Europe operations brand, Amo France, X adding a X BXC BXB Mexico. presence with new stores operating complementing its introduced in France, addition launched retailers chose BXB countries; the Belgium, and operates extending has the Europe, its During to Cartamundi operations; addition France, presence further to Netherlands, Solla

This U.S. thrilled market empowers challenges. With enterprises pursuit trends collaboration Logic, fostering their partnership of to launched their Accenture's for that at the Systems continued and highlighting in expertise modernize dynamic closures Integrator. in Accenture by brands the companies Accenture are commerce retail today's platform growth forefront retail landscape. VTEX's announce united shifting VTEX business rising help our U.S. with and to driving trusted and addressing our record strategic of positions urgency we're VTEX in we've technology partnership buyer and a digital Additionally, for ecosystem, agile resilience to This through stay transformation. retail competitive infrastructure, leveraging transformation,

some potential. Now, partnered overcome in stage operational would VTEX tangible and significant retailer to the enterprise leaving with before platform's fashion and Ricardo, share like to Ireland I to demonstrating impact success multinational our technical cases An challenges. customer

redesigned an digital core on This ranging primary and suggest boosted a VTEX. inventory with objectives options. needs by from integrating improved and PIX support solutions that and smart to Weni e-commerce products, updates, and sales, return average commerce sizing improvements. VTEX investment Before with The centers, invoice Carajas Carajas, further from enhanced financial Carajas a XX driving color order a read payments. distribution and to XXX from above post-sales by recovery, white-label optional usability VTEX, stores, incremental well than user on were and address WhatsApp needed checkout. was and sales improvement in service ambitions. the experience platform out-of-the-box textile home stores, enhance expansion lacked platform as: such over end centralizing a results and flexibility and construction revenue conversion Weni retailer its integrations and efficient an the experience features cart physical functionalities, Brazil, XX,XXX like by decoration operation commerce transformed architecture rate, by message processes, Logic. Early middleware facilitated key segment assistance, rate in strengthened automation with in over in with conversational With the sales Their integrating customer implemented higher cart growing the by company retrieval these platform and double-digits; and dedicated XX% efficiency the BXC a X scalability, for integrating front XX%-XX% including abandoned like efficiency with drive indications email; channel customer to the SKUs partner, needed reached emails. our its to over leading VTEX, its revenue. By remarkable automated relied digital human led and which their to recovery XXx

Heineken We of their digital for managing options home run business on above-average empowered trust, Heineken's return the scalability, currency offer customers rich Through customer the a journey. Heineken the to India. and powered their competitive some help Carajas platform shopping Australia, indicators in platform while global coming convenience, targeting Brazil, This platform digital and channel, and redefine transaction from we the comprehensive the actionable all and insights new It fourth and XXXX. pashminas, Pashmina.com its Brazil and behavior efficient maximum transition accelerate impact global to through Pashmina.com campaigns. to key are shopper VTEX's the data, specializing handcrafted the by high of with approach, its to commerce on Kashmiri celebrating and set of U.S., delivering local platform. By of and analyzing already XX% most beverage growth. for craftsmanship, strategically retail its the presence, brands, ecommerce digital conversational to burden and Zona identifying helping Kashmiri exceptional consumers has beloved WhatsApp including in campaigns operations first-party transform operational where global across support, audience into to Ads brand VTEX qualified exports, chose multilingual was aim enhance throughout its ensuring VTEX their With quarter them strategy share, provided across achieved were BXC VTEX with and of This its become refine this like legacy SKUs. differentiation ecommerce journey, results. Pashmina.com, data-driven highly efficiency. This from landscape purchase partnership international embark Ads insights its infrastructure. Together, expand to experiences, spend the performance ad flexibility, results, Sul's Europe, search benchmarks personalized in better proud optimized, intent, many market even of sell-out without innovation. intent with luxury to web has India's alcoholic on allows leading success heritage with partnered migrated

VTEX with becoming App renowned App, and global stores sales already Sales the manage their main Sony, implementation This ecosystem X needs, electronics across stores. with extended their operational has the has first multi-country systems. using Sony integrating to specific as Sales the within LatAm selected their operations Jitterbit, meet App across it partnership of in-store existing primary the Sales its Chile sales platform company, Ecuador represents platform. To

solution Smart Guatemala. improves infrastructure a business new a a seamless Walmart of a Smart navigation support. load and catalog the is proudly with over across setting the conclude BXB our VTEX VTEX Supermarkets pivotal this XX. its and countries retail rollout Sitecore platform from Stores. Leveraging expand proven from intuitive browsing flexible, development and in website, Stanley all time full and Storage Rica the to purchasing section, advanced launched Sales satisfaction. Sony VTEX assortment to our commerce Black prominent & for App standards offer it new this employees making operations, additional backbone to Stanley's for exclusive X while experience significant enhancing API-first XXXX. for our of to commerce availability largest commerce and and also website go for retail step This in Vidmar, on launching X,XXX discuss apps Solutions and Decker to LatAm, LISTA, Storage one plans its shopping and usage to efficiency platform. This Smart content-only Colombia, the approach, industry, Panama, to customers. Sales the set the used app's brands format, just shopping Built drive Engineered operator region brands digital I represents to stores engagement successfully the migrating enhances customers, unit to by capabilities, in total is for across Peru, store, like Central discount store investors. With driving financial for delivers country store demand transforming and new VTEX, powered by the the to VTEX multinational each FastStore App for that, Storage positioning With platform performance, global The customized Ricardo want digital the and additional network. Walmart, IO architecture America, America global and we and higher experience expands of migration underscores my innovation to performance gratitude CribMaster. digital a customer partners, commerce. To Discount express quarter in Costa the the Walmart to dedicated bringing Supercenters user apps in results The to architecture live. Through I BXB year the to now beginning, and its hand of the the potential number operational connected call is in our meet across its Central as Sony's Mexico, experience, regional and corporations customer digitally-native mobile expansion, The rising Fastening's will

Ricardo Sodre

Thank growth In the update growth you, to a respectively. dollars and in billion, on concluded reached GMV, GMV increase fourth XXXX, XX% $XX.X XX% reaching XXXX, our U.S. quarter flat financial year in you and dollars of in year-over-year it's pleasure full U.S. Hi everyone, the Geraldo. we performance. representing a our and XX% FX-neutral. With representing $X.X this, billion FX-neutral, in

dollars Brazilian FX-neutral a came XXXX, and appreciation versus for U.S. meaningful and XX% currencies, stable remain FX-neutral, softer-than-expected in as FX-neutral a reached the in FX-neutral, Despite results of growth. XX.X% U.S. spending our recent a The came year's Our quarter in dollar further confident dollar customers, most million $XXX.X primary churn, our representing for growth last momentum revenue the in reported top revenues, totaled launches. Double-clicking and our expectations new fourth reached on FX-neutral robust and in range existing and sustain of our and full Brazil's where XX.X% fourth enterprise XXXX, against this, XX% in trajectory the representing Geraldo, X% X% gap our the XX% XXXX, product on XX% growing guidance of to subscription consumer the a to full $XX.X of innovation the U.S. to low in the increase our dollar and XX% below year-over-year our challenging growth softened. On in profitable for ability These in quarter $XX.X top XX% U.S. and fourth the quarter results. scenario, in million, million Real, and consumption revenue especially on year-over-year in U.S. from FX-neutral of year. mentioned adding customers XX% in for and respectively. the based year GMV U.S. our XX% Brazil, by from driver of we dollar pressured dollar

full year, XXXX, revenue reached from dollar growth million. million, $XXX.X U.S. representing up in XX% million a XXXX revenue existing For increased stores in subscription and $XXX.X the $XXX our and FX-neutral. In XX% to

retention in FX-neutral. reached XXX% revenue Our net

revenue net FX-neutral. As reached same-store a key our in sales to growth driver retention, XX%

of stores' the X the gross model. Existing continued first stores' sale in teens VTEX increase in Platform range, level sale same-store margin at exceeding at of the growth base, Argentina is and with reinforcing QX it upselling X contract XXXX in partially reached stores' our while in and have margin It strong the increased stores, to from was mention the P&L, from same-store our existing progress continued LTV/CAC our highlight cash-on-cash retention at Looking dropped top inflation impact from XX% remains our throughout year, spending consumer in XXXX, single the the the XXXX while our quarters XX% point in year. is marking important attractive attracting XX%, coupled for renewals inherently to significant that revenue digit This adjustments better to revenue. ratio mark. Brazil. net XX% of sales a a contract in customers. On same-store revenue signature of representing momentum comps given operating XXXX, softer our tougher terms that is fold, of new we year-over features, The in percentage our existing million growth, offset adding approximately our weaker strength to business Xx $XX.X solid new

to significantly XX for our significant our percentage existing us of stores' percentage improvement gross confidence above XX and operational and FX-neutral strategically revenue Rule in delivered giving we which P&L Sales point all the maturity. Meanwhile, stores' Marketing, Rule improvement X is XX, seize ahead. at XXX% in a our into in basically given goal of positioned of retention Additionally, were net G&A, margins, in the new margin year-over-year opportunity leverage & point growth R&D re-invested

accounted Now, of generated total our analyzing XX.X% In of revenue. revenues. Brazil the our geographical outside for revenue XXXX, breakdown

rate Looking solid at mentioned sales. Latin Brazil end FX-neutral, year sales same-store year the the softness subscription throughout slight growth the FX-neutral, the revenue mostly Brazil's in in compounding year-over-year at a last relevant X% XX% despite America region: removing momentum and grew subscription FX-neutral, a grew and the the below the year acceleration versus by we FX-neutral even in increased revenue subscription in excluding given Rest region as headwind Argentina revenue slightly grew the pace XX% increase just demonstrating the baseline. Brazil's; a and of World

and maintained strong present expenses. all we that, now non-GAAP. Important on will Moving discipline are have I note P&L, costs down figures our to

measures reached You up relations resulting can margin, in last the from gross XX.X% in of website.\ Our quarter $XX.X those same find release XX.X% earnings subscription investor our GAAP measures to million, reconciliation press subscription period our fourth on the nearest year. XXXX the comparable profit in gross

total services, compared XXXX. to in XX.X%, to QX XX.X% margin, rose which Our gross includes

basket representing in of resiliency margin operational the revenue experienced hedge our gross demonstrates and same the in was flow million cash a same the were million, free relying recorded reaching year-over-year, the of though in operational by mix as strong our prior percentage below clearly was up our communicated income quarter, model fluctuations, cost, the by points. services margin are quarter we margin $XX.X to XX.X% the our approximately our X.X a the the on we against as margin, slightly with free point driven more in our consistent mostly the still flow Aligned the year. an services, equally and quarter. Operating our U.S. operating million margin, margin improvement support XX.X% ecosystem improved against flow target XX.X% depreciated resulting and income X of market. The currencies provide XX% the FX extent, implementation of revenue, our total of operating Our efficiencies and, currency weighted dollars, headwind performance lower free even percentage smaller the by natural average $XX.X operating prior of this, with from expenses to to by despite $XX.X total cash cash in $XX.X in we income million,

the the significant. more full improvements year, have at been Looking even

basis XXX $X.X gross gross from subscription by XXX XX.X%, million cash reaching margin reaching in $XX.X points, XX%, $XX.X million improved from overall points, margin margin to going XXXX. improved also Our to XXXX increased, points, in while million in XXXX XX.X%. Operating significantly expanded flow X basis reaching percentage Free $X.X XXXX. million in our

until We like Weni on launched and allocations, directors up in million to XXXX. In of $XX.X Synerise, XXXX, common in also December of continue investment term Approved per a investors. did strategic program to an the fourth program. and our a will X.X XXXX, with in the with quarter new authorizes aiming allocate share-repurchase effect X, returns to strategic price of by $XX.X and of December remain Class and employees, We'll and shares at X, common we A our and generation repurchase capital minority capital board A share, maximize VTEX, million vision partners, shares average long Class diligence, repurchased for totaling our million. customers, aligned $X.XX value the

growth to the targeting of market, and are products outlook, subscription in base, we opportunity to to operational revenue customers, attract with the As leverage. Considering currently softness and expenses quarter range. efficiently our manage to an GMV outperform new a of million we help remain in suite year-over-year confident to this, customers' see implying for million business resiliency. our we short of Despite term, cross-sell our our our existing the first Brazil's XX% $XX business our FX-neutral customers attractive FX move XX% we and XXXX, volatility costs $XX forward deliver

to For million the FX to full our continue XX% million based average are on quarter-to-date FX-neutral year-over-year we revenue XX%, as we range strategy, a executing $XXX XXXX, year rate. profitable the of subscription targeting growth implying $XXX growth of

of flow free margins We are non-GAAP operating targeting cash income and mid-teens.

integrators short-term the for on evolution growth by the plan consumption to devaluation We ecosystem, rate increasingly as we softening view a ecosystem influenced of new Given of customer our FX our implementations. temporary, abrupt lower system in partner and VTEX's of Brazil. rely

strong ahead, long-term and are operational showing Looking indicators performance. our

deferred a significant by We $XXX,XXX the have in customers our and in increase XX% increased generating XX% seen over revenue has ARR, meaningfully of year-over-year. also number

mid-single Our with low-single-digit digits, annual revenue larger churn customers churn. experiencing remains in the

we Finally, questions lie look that that be to Thank products important, are compelling to we in up you. expanding and less excited opportunities and offerings. let's now. the the are it open Overall, with about that, optimistic years. With new enhancing coming remain future ahead not our for the forward

Operator

question [Operator first Instructions] We'll our from Marcelo take at Santos JPMorgan.

Marcelo Santos

the the remarks, second transitioning forgot different more we exact -- comparing for that you you commented be is they of to over in lines? such expect like impact guidance but in The that question main long bit XXXX. What have revenue how FX-neutral term what single growth the of first question, transition? on the product guidance? question. And subscription What that the you you into grew that platform discuss I this the company Could opening word, moving are the a projecting of from you're terms operate, regarding guidance kind solutions. would P&L first the of should parts more last regions the year, the a think a more maybe you That's I

Ricardo Sodre

regarding for for question. first Happy XXXX. thanks the one to the the guidance Marcelo, take

our and So reflect guidance strength headwinds a our consumption operational of balanced continued execution. view assumptions full QX XXXX of the year and

QX, in remember decelerated prepared are pressures, the FX-neutral, of in was XXXX, remarks, this what during Brazil. for XXXX, front, we particularly QX. a to growth we and that X growth quarters in sales rate in aligned same-store same-store assuming the consumption single sales ongoing factoring digits as the roughly with in saw in on the level mentioned So it teens first And in but

speed year-over-year are to to should consumption And a with are like in return talk are embedding grow positive we the we side, geographical the recovery we growth Argentina, new signs of we average question in of well uncertainty as your expect and where than that, right separate are we assuming going the it as less the improvement. the We company on given starting of then of to to Argentina although we customers recovery some country. still existing see to And customers. of XXXX, as

time midpoint of we our assumption. of On the question, full go-lives operational the QX increase the guidance. the implied the the by is new acceleration are if we driven not in midpoint macro customer backlog assuming that, new repeat you have mix enterprise average basically operational second guidance world. And new to customers you already given year currently and ramp-up customers. And signed in larger front, mostly customers it, could can of is XXXX, drivers, Marcelo, signed on that is meaningful an there in note some plus the by across implementation acceleration with given the already the from And our expected this please? of And recovery driver the

Marcelo Santos

but think single in mentioned to shelf, P&L better would being the from a does products P&L? of of the the is I ecosystem you was product just of such solutions as to and how parts solutions, I a different of to of VTEX be I used impact you the wanted add like word prepared understand solutions. platform the midterm company beginning -- this more what it transition impact forgot, your transitioning that like remarks You an that something your

Ricardo Sodre

Happy Yes. chime start Marcelo. to others Perfect, feel to then in. and free

when can so Media, VTEX but the not mean, platform, this Shield, the App, you are I commerce right? suite, on. Data and talking Sales the already, BXC need about the all transition just this also undergoing BXB, we're are Pipeline we Retail we talking So

quarters. R&D can been actually ideas, have investing So is we past, this the that we let's have it have products few have launched on these so and behind are the customers not these we are been launch These them. using mean, we executing something already that I say, been And products. side, for right?

-- way think the impacts some long-term, of thinking it they commerce products, side about the And being of on. these having then and marketing the So security expect the is buyer also we we side, on VTEX but side, side, other that increase the used have the on so then on the and wouldn't solution any the data investment by on the And these inside the stickiness organization. that you potentially the different just different products a of the side P&L. not relevant of P&L part on

value So and P&L. on customers the of short-term impacts it's more lifetime than about stickiness

Mariano Gomide de Faria

here, retailers something Sodre. and add like are something. them us that suffering add full The solution. I creates a for distress to can out-of-the-box can I integrated give financial brands opportunity company the an

So the that unify the calling some and very in they off simplification can write what are them way simple we revenues. providers of operation, a margins gives more and unlock

That So only ourselves, anymore. we VTEX in explained what XXXX quote, the VTEX will we globally. BXC in not common charter that's when provide we our that call report, suite is CEOs for means the XXXX annual VTEX of choice both and CIOs

those we markets X a we testing years, became common the now are as suite. in last So

example, have Shield, Ads, add-ons you the you BXC the So can the for can such BXB have can you also VTEX Pipeline. Pack, Data have the with & with the us, the Pick but us, as,

the them simplify to serve they and serve. be to is necessary way customers allowing efficiency forced our this it operation to this, of All of will

to we what terms capacity said, it. expect them the So guide Sodre pretty can we clients is What as solution P&L a in of use our inside do using not to strong, are see that can we simple we much. that have is and impact, really

creating this and stickiness X clients products So we VTEX, the future. or that clients using preparing X the is for and have of are more already

Operator

We'll move to Thiago from question next our BBA. Kapulskis with Itau

Thiago Kapulskis

also I X have questions.

color looking regions of you guidance there end out? and year? this by terms thinking that there that also Brazil quarter. on bullishness those environment of little a that just I you the on to into verticals, into one, call related that in. given administration Is lot new in the of you bit incorporating was first would How last QX the also, And the the how question is effects? And are your year, specific more So are you second the more softness saw a in my get know U.S. the full on anything about everything. coming to in sectors,

Just of conversations mood new more bit there guys be want color changes? and to the from hear a would deals the continues on little Any the be you positive, pipeline if great. it to

Ricardo Sodre

here. to one, Mariano Ricardo and believe Thiago. Thanks, can I Happy one. first address take second the the Great.

the question, aligning softness of impact, and do macro take on on revenue the me model step the think I back a GMV answering So it foundations. our a as quick helps and before recap let

it's existing fee, gross strong align revenue and X/X So helping as you structures this our to are short-term performance. GMV. cycles, are revenue customers, their headwind. our customers our long-term to to on success, introduce volatility. us and continued short-term And we perspective, above with From of GMV like new fixed our our in remains high the short-term some provides our from it a and enterprise tied while performance. penetration perspective, model tailwind a the consumption negative protects know, to focus said a inflation. Having the customers' X/X grow our long-term this signing e-commerce In comes also from retention the a the of revenue operational model against exposure the that, market. And Thiago, as success a approximately us automatically keeping it's seeing cycles, positive We an medium- customers' remaining may with

XX% churn range, of ones in growing with than remains churn customers historical pace, reflected digits. revenue the also lower where in single is above and New of signatures in the our annual levels our XX% fastest-growing our -- mid-single-digit is paying continue the $XXX,XXX, us the customer revenue solid low revenue customers, number deferred clusters even at our line in year, $XXX,XXX which and contract a per growing more

quarter QX X some GMV sales same-store instance, The which devaluation So consumer in let decelerated try share points interest in on know, the existing segments FX you we we the deceleration. also volatile. just the further pressure in this saw particularly as growth of is Brazil. dollars by rising of customer abrupt But from Brazil on weighted more the and but bit, neutral some year-over-year specific changes currencies, softness, spending Brazil, this saw to in electronics. against that QX. Hopefully, significant question. unexpectedly the this and relevant consumption sales GMV answers same-store real to were context me those is a type deceleration home that appreciation the that in FX behavior. On U.S. of of the for a saw and appliance percentage segments, The most rates growth we Every base, Brazilian roughly our your the key

Operator

from next Leonardo UBS. comes Olmos Our question at

Ricardo Sodre

-- a there Sorry, question. sorry I second think was question, second

Mariano Gomide de Faria

It's new administration U.S. Yes. second There that Is correct? the was about a one. in

Thiago Kapulskis

about the yes, and remember by if positive still year, was I the new Yes, environment deals that U.S. environment, end for of guess good that very in, administration in would last everything. be the the and I'm the overall

from understand how want move Just that negotiating how the and of perspective and deals eventually the the to you thing. signing in see administration or came new kind deals of

Mariano Gomide de Faria

Okay.

X So answer aspects. in I will

The is for matters one in what first VTEX.

in the So BXB we BXC, momentum, seeing keep the U.S. the sales grocery. in same pipeline increasing

cannot scenario, to affect momentum and specifically. But that kind States. good And let a companies for interest momentum a will will and can United new change VTEX affect trend same what affect administration that sure this be momentum? and more of say am do to to the in the not affect the see the will inflation, brands the if the volatility retail predict, rates, will their that, affected. And on the operations. creates like that you simplify course, to me of if administration have this be macro created continue I this if we new we So

always see own simplify their because process. that's custom a a decisions pretty to their to retail as the VTEX that the companies we momentum make maintain, have crisis to to expensive So platform use used the good the crisis on for

VTEX the seeing we So companies be volatility the lot when the we like to bad even momentum that in anticipate good we or very for will pipeline. a cannot that creates But us. are small our crisis country change, this for and and for is U.S. a in

Operator

we'll Olmos to UBS. now go And Leonardo at

Leonardo Olmos

we the the Marcelo I'm go question. to in growing understand, America bit assumptions sorry But little for you ex X% Brazil XXXX. just a guidance? saw Thiago's back to and to so Latin Can discuss

You may go said that X. to Argentina

And ex great. doing you a challenges has Argentina. little the been bit other in and if Brazil Brazil discuss ex So could LatAm,

some sense. retraction the in assume makes a you're So of lot I guidance, which, of putting course,

which world, the of is rest U.S. the the However, in mentioned that relevant. is not

down And XX% the XX% you're rest to almost. in what the there 'XX seeing is growth going world. in then So assuming deceleration a still was of

know well give you just hoping I discuss just guidance, bit. I question Marcelo's but other is assumptions online. could you don't So countries in to understand the as Argentina little with was a

Ricardo Sodre

Thanks, here. sure. Ricardo Yes,

subscription Brazil So are year-over-year, the roughly this in relevant expected the year, part quarter. that guidance we we have unexpected quarter, Argentina growth we XX% X there same-store we how been right? And we our at of saw customers, this the on fourth existing is revenue in growth right, neutral our grew growth, FX deceleration is was sales for this in in exiting the So mentioning, QX. fourth the that when point growth look was the percentage this from as The headwind right? rate if deceleration we issued a on the roughly

growth this from QX, year. a you accelerates XX.X% midpoint the roughly at XX% the that base And for the of if saw starting QX. guidance we to look guidance, right? that for So we then of is midpoint XX%, And the of in

versus the the acceleration QX of part So this headwind Argentina. of decrease of is

they the some to in assumptions grow than recovery recovery the As starting I some still said, going we less are of to but are They territory, company. they and Argentina. that still the will -- assuming overall see positive

lower consumption there this level. although is there headwind still of and now with see. But do is at we a headwind lower there, So some Brazil sales this same-store then this

of assuming side, moving question, as of mentioned the customer new in the in to And the the plus are have the we average that time, first on we ramp-up mix So given I this is increase backlog. some the implementation key guidance. on Marcelo customers pieces larger

also customers that U.S. the there, kind across impact more that's we of and on larger the as world, and side. is some implementation under are there have including Europe So

Operator

America. Brendim of to at Bank Lucca we'll move Next,

Lucca Brendim

I have X here.

The first one is on Brazil.

margins Regarding passing that you terms through existing one clients And up. the for new payroll margin can for of that? And also for tax And and XXXX. exemption, and impact for if actually for new stores you went the way? to stores in for what guys showed expect also for the be some the the in we existing the margins went guys stores the second, will stores breakdown down

or I with So profile expansion from just with has expansion for want we And the the about going can to the should check how come if clients? existing see an most larger think to should of we stores continue if forward well? to that if stores as new this do

Ricardo Sodre

Great. Happy here. questions Thanks, Luca. to take the

forth accommodate back payroll tax of on So over reinclusion payroll progressive the next the in with in for Brazil, change after and tax Brazil, seems to potential taxes know, as the few years. situation you some the regulation

continue our of -- diminish of income our half first could our and in for we as current under intact. And single-digit proposed was question, the our that annual the for regardless that not year, sorry, margin. progressively additional have important reinforce also approximately to Shield income, on legislation repeat? that of the have of VTEX any Given operating altogether on current to margin you most the net to and million it's the to expect that the target change Luca, improved time, approved, expenses. Over the you face the impact disappear At VTEX. the potentially operating roughly enhance And our we margins, material payroll have potential taxes low noted, dollars please these impact, could potential impacts impact operating about on should we remains impact an as these VTEX mid-teens

Lucca Brendim

Yes.

And for new The can And think that margins about why clients other existing and store that stores forward? went for larger the margin stores question because stores the down the for for existing we of the was down breakdown in? it new went actually up? is how the new going coming the if stores went

Ricardo Sodre

Yes. Perfect, Lucca.

new the on point the question on And to a and margin strategically your XX points that that's margin improvement the drag we to ecosystem note. and our leverage X we implementations, So reinvest in points these G&A. So improvement side. And for reduces growth then capitalize margin on on operational largely point is realized gross gross on service on chose percentage and operating in marketing percentage R&D percentage achieved leverage the in R&D year-over-year, G&A this improvement the the X we in is which to the from sales and to reliance And the stores, opportunity. important XX increased pressure percentage attributed also right?

And short-term, new change and operating that's expand right, LTV as didn't that, us as this well. And at sales say to the to highlight the and with lose in to CAC, it that level, marketing It look we also get stores that geographically money but So slightly after versus which the company P&L, much. go reduced year. is I prior we customers about long-term. if when you for invest in larger customers important would we the our over think the the for

return a period cash on So think remains above on that invested with payback about way return the about and invested capital. cash that around LTV we it's X.X Xx the capital And years. CAC on is or the

company performance the underscores a is our long-term of and strong the investment customers compelling that as new proposition of making the it this for a attractiveness acquiring So growth in well.

Operator

will turn that Q&A to And conference for I remarks. our the session. over back now concludes Geraldo closing

Geraldo do Carmo Thomaz

innovation, robust VTEX, XXXX was a by for transformative in excellency both and operational contracts. defined and momentum renewed year new

commerce short-term GMV fourth propel VTEX its next the and solution we of fell into expectations the most Shield, enhancing Brazil, While laid as short Ads connected growth to AI-powered foundation into ecosystem due an VTEX suite. phase platform customers' like VTEX comprehensive have and with softness a to our customer volatility in exceptional existing quarter FX strong outcomes for and expanded the positioning company. We

significant streams, profitable our long-term strategic and in Our evolving sustainable confidence towards investments made potential. new progress reinforcing revenue leadership and product strengthened opened have We've portfolio our growth. growth

and delivering step our into for shareholders. to for solid We Thank earnings this next we driving you to at call. look forward As value XXXX, on updating foundation, customers your our innovation partnership. building we're you and trust and committed

Operator

call. Thank participation. And you this your for concludes today's conference

disconnect. You may now

VTEX (VTEX) 25 Feb 252024 Q4 Earnings call transcript