Earnings call transcript Q4 2022

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Operator

Good morning and thank you for standing by. Welcome to Zenvia's Q4 2022 and full year earnings conference call. Today's speakers are Mr. Cassio Bobsin, Zenvia's Founder and CEO; and Shay Chor, CFO and Investor Relations officer.

Please be advised that today's conference is being recorded and a replay will be available at the company's IR website, where you can also access today's presentation. participants listen-only all time, this are mode. in At will question-and-answer session. the prepared a there remarks, After be [Operator Instructions]

Cassio Bobsin

and are Hello, us for XXXX. Call. Founder at and the Zenvia's Today everyone, thank full Earnings I'm you fourth quarter Cassio year our to review going for and joining CEO. performance we of Bobsin,

on start word I comes my to When that integration. to back Let's look four. mind slide main XXXX, is the

in know, all requires a and acquiring case, a a into building is especially a which integrating company complex business unified task, As our integration. platform we're as you SaaS full

I'm that reached earn than year integrated the So we suite already of accelerate report attraction, to success explore Movidesk offering platform our Zenvia to into happy means from growth. SaaS CX and that the the more outs the end products, full totally now Latin comprehensive and DX we negotiated. of ready America a with and in synergies come conversion service and This with through are most fully

here, there coming CX I with just been huge in like opportunity As we Latin space white big also it. every you. the that a still there market tap But to and saying, we is begun America from in have discuss AI are opportunities SaaS have would quarter to

within insights. the SaaS actionable industry, a are generative personalization, new opportunities prediction of generate dawn and massive the We AI allowing at era, one will where behavioural hyper

we that advantage through the set as widely a be by technology are been world our our ChatGPT new year, of leading already of these brand a and Throughout it are our we excited is platform CX automation we've and platform. whole technologies in a drive efficiency It new we expect very customers. player demanded in being new improvements for take as to to integrating

turn I'll Q&A. back will that to remarks. Shay his be floor for for I now the after the

Shay Chor

I quarter last with growth for Hello, on the today. executing our strategy, did can kept that and focus us thank that. In of we Cassio. everyone, profitability, XXXX, you affirm you, balancing and being we Thank and

We positive and cash EBITDA profit gross are margin, to operating generate us flow. reporting solid which evolutions allowed on and gross

In These profitability where competitive not milestone were but despite We more a only did quarter our experienced surpassed we in the IPO. indeed best the million first challenging BRLXXX quarter, gross metrics we the year. since environment quarterly profit. the this most of this that and

be XX% as focus Even QX year-over-year CPaaS QX a business, though a the our perform growth expansion top-line of revenue to our with in our total dropped the profitable 'XX X% of engine business 'XX. to continues result comparing SaaS when

jumped to Our gross XX%, XX margin, which profitability. our that to our towards adjusted reached adding full percentage commitment points XX.X%, path and profit gross attests

year. the picture take full the look for Let's at same a

all added to to SaaS combination CPaaS focus We strict For excludes gross and and from This the XX our year, earn impairment and leading cash growth double-digit which we of in impacts percentage EBITDA, preservation revenues grew directly million. outs can by margin a by profit metrics. more us XX%, gross year. BRLXX.X control see a of in normalized XX% is on cost to non-cash solid points, growth the by related profitable and

our Let's how look business take of at a contributing profitability. each is to

off. profitability year. increases sequential CPaaS our this the focus the by gross We slide, see can which on margins, in profit CPaaS of breakdown our and can paid throughout and its means see that SaaS and both evolution on Here mix you SaaS

environment. a CPaaS sequential started delivered XX% increase a and we a XX% see more quarter compared expansion when to second when solid the competitive to

was QX, profit and gross profit. to gross BRLXXX.X the in million gross sequential XX%. a leading business mark profit XX% surpassed Comparing to BRLXX SaaS QX this quarter Our increase total increase in million

this Let's weight in now of look our data metrics. financial at in terms

As we've BRLX.XX revenue million And to to into to company. recurring revenue very in mission a in of a been with size report expansion transform December. proud in BRLXXX Zenvia QX on billion saying QX in XXX% annual IPO, SaaS close are business totalled compared I'm reaching is to an we that our since XXX% our 'XX. SaaS Net

sequential Even revenue though services of Friday total. the holiday SaaS of because QX, fourth was in strong QX our like only improvement of the seasonally quarter SaaS is a for when a total XX% Black Christmas, quarter, sales represented high CPaaS large XX% from and

year, we the XX% For see already revenues SaaS. from coming our of

this with we had gross full split of XX% profit profit, representing a for quarter the gross of SaaS terms result In year.

expect Looking our represent XX% ahead profit. to SaaS about gross of we long-term,

SaaS We huge the market the in white are tap just Latin America. beginning in space to

hard are working on our confident planning. strategic and We

Let's evolution slide margin gross now gross to comment the our of of slide, the move on since we the evolution next this On 'XX. margin. present our to beginning

We on IPO. our promises during have delivered the made

QX a of from expansion both from QX significantly, the as as in in IPO We last well same the quarter 'XX have margin double-digit expanded year. our

margin year our margin bar to a proof that the profitability. right. walking path 'XX the you in to are is XX%, range QX of on We This to to XXXX talk than more top our it and of yet updated the From QX, guidance we as the QX can in above see taking full XX% gross for orange almost the doubled. the 'XX, another reached full year

is profit the noting to expect same it gross in here we for QX. not remain ahead, that do at XXXX worth reached level Looking

discuss our more guidance We'll in XXXX in detail this minutes. more

and to BRLXXX million companies acquired inorganic move the recently The revenues the for and revenue. this year. slide. slide, more three Movidesk SenseData Let's to added contributed DX, how to In net our consolidated next XXXX show we growth organic

our BRLXX.X more CPaaS result from to on revenues our of profitability the the consolidated jumped SenseData noting gross contribution margin to increasing year-over-year, months X% focus in that again of ex-M&A full year million strategy months number grew This once worth of business. we zero when XX%, mature It compares four the solid XXXX, demonstrating DX, our while is a revenue Movidesk. and two of in only

our Let's cost on year now relevant efforts were full results. to that address our the side

year, of we of started implementing we of cost and accelerated synergies. companies especially as the cutting As initiatives, integration last begun extracting the July acquired have

In others, reducing X% in total the travel, in America. we also G&A consulting expenses Latin of addition to of to such a among corporate announced as equivalent and downsizing November non-personnel our structure workforce

initiatives. to We incurred in onwards, million BRLXX we a capture related being one-time reduced In registered from from was BRLXX million downsizing cutting turn, BRLXX other the costs to this in mainly expense the approximately million of million that and BRLX quarter, expect severance. 'XX cost

efficient in do half second and 'XX improve in operations the constantly EBITDA to slide. We demonstrated will to of next continue have more the been pursuing so a as

environment, very a BRLXX As a a very result fourth quarter executed operation. we the strategy the in in recorded our well of of normalized EBITDA. million in complex profitability Evidencing

look quarterly the our improved how chart led this to during at EBITDA breakeven while year the us first of for putting quarter quarter the nine guidance beat in QX A the shows trend year with months for QX at closer after us XXXX. our

a higher revenue to and SaaS we and million reflecting on related medium During an inches a rate discount the business registered the backdrop impairment back of a in long-term more risk. growth the increased of slower the goodwill the BRLXXX.X macro perceived challenging quarter,

full non-cash our quarter the expenses, BRLXXX in negative the reported million and EBITDA and in BRLXXX was from Including impact out million the negative impairment year. earn goodwill

find in statements. can You EBITDA detailed a reconciliation financial our

see compares numbers the slide. historical XXXX on our full Let how EBITDA next to

can you metrics our in Here of five years. see evolution the EBITDA the last

this direct history. as reverse see We we always the are to into a the back performance profitability Zenvia pivot have to trend our company. the of of the Bringing path result been SaaS negative of part to years the decision happy of XX that a

shows the been strong environment, has but makes minute, especially we'll the couple Both a discuss trend in generation a slide this us operations macro profitable confident complex EBITDA given EBITDA not in with It a previous expansion years. of new the rate 'XX, solid of our in it also saw delivering to but paid in exit as we year and capacity only next a easy, history has off. in deliver a in the record quarterly for slide not

converting been to working strict capital operating slide flow. generated focused maintain combination This million solid cash of generating we us a on cash. into EBITDA, BRLXX EBITDA than our that management positive a a is operations More to with have This in our innovation. these level shows coupled very CapEx focus allowing much healthy keep profitability on investing a

almost this been paying would our have positive in quarter. amortizing cash BRLXX still interest Even million after and debt, flow

allowed slide. us the the of see XXXX gap Before of we you guidance for provide drastically our and our until as against SenseData the reduce I remind extend move to the did to we XXXX agreement like guidance to agreements with DX, which Movidesk can quickly outs, 'XX, earn you and payment of would funding how to this reviewing in end

actual reduce to 'XX. let's able of our BRLXX to discuss review We our versus and XXXX the fourth amount figures. approximately To the in 'XX 'XX to quarter million finalize from our versus for 'XX. payment extending summarizes million BRLXXX were schedule by guidance down performance to guidance expectations be This total the paid slide

guided ranges In revenues, with XX%, within Gross metrics SaaS both revenues above low were also came at guidance. the and of turn, margins remain to in profitability in metrics the all while guidance the all terms CPaaS end, XX% above mid-range. for closer we practically provided SaaS we above In CPaaS were with guidance. margin

X.X of against XX% EBITDA CPaaS above above percentage of The and that range. margin top of BRLXX guidance also guidance. million was was year-over-year the percentage million million. our points, XX% And BRLXX was that evolution against and between was at finally BRLXX.X points the XX.X normalised XX% gross of XX% SaaS well the

numbers XXXX for year With a versus on 'XX. are delivery we guidance full solid our guidance, our introducing

BRLXXX expansion the the boosted XX% XX% a revenues at We SaaS business, mature growth our BRLXXX flat, CPaaS million more middle its stay by million expect between of of stage. top to XX% implying to our should reflecting be line and a range

compared a Our CPaaS. remain margins the to by gross SaaS level as expect in should at higher on 'XX the be mix offset we margin should lower similar revenue

the Day. we be during level to and million Finally, to that implying be to we long-term Investor close EBITDA to XX% presented deliver BRLXX that putting BRLXX million margin mid XX% between XXXX EBITDA should our on our us our track level, expect

our in prepared quarter our With confidence business solid and your take for high and this of to remarks conclude we review are questions. 'XX, ready a

Operator

BBA. first comes from begin Moraes, side Instructions] We will session. the question-and-answer question Itau [Operator sell analysts now Our from Gabriela

We that are now opening Please live. can you audio, ahead. question go the so ask your

Gabriela Moraes

you for taking morning. Hello, our questions. Good guys. Thank

side. have two We here points on our

in XXXX? margin question and in cut-off much. or workforce, profitability the segment? other that The what it We important we to And one dynamic some besides the guys. boost the communication-as-a-service would initiatives profitability. you guys like improvement when you EBITDA Thank other this quarter in basically an saw are the is drivers first very expansion on division, in to know That's main the top-line to is the in do of the expect revenues regarding see is this start growth regarding

Shay Chor

as Caio details brief give here. Thanks, the take Gabriela. let with I me can just guess us a reminder

So some approximately personnel BRLXX million savings did details effort 'XX we Caio in approximately saying where and we BRLXX about BRLXX all mid-year been lines BRLXX are in this can as comes in are other from. from provide from we've the 'XX that million of as coming and expecting on there's million coming million of

Caio Figueiredo

already to of can map. course, starting can of business of we and the ourselves. performance impact the from We third-party coming expenses do all reprioritisation and do that mainly the we not cut with million the the our our it we or Yeah, are map BRLXX did initiatives

coming consulting, from travel and expenses from also coming so So on.

the the really here all a mapping without the job cut impact detailed did of we we business. expenses on could So that performance

Shay Chor

sorry. I'm Gabriela. And

got you me. your a repeat You question? just for little Can second

Gabriela Moraes

division. expect regarding When the of in guys see improvement in to the Yeah, revenues growth sure. some It's communication-as-a-service division? the revenues growth you the do

Shay Chor

Okay.

for lead to So business, from players saying as see -- increased 'XX, our end started the some CPaaS competition would a go to been with of negative that into as profitability. our we we've our price even QX perspective of

decided we growth right profitability. and between try So find balance to and the

has in this market. the from been it we So very perspective from volatile what see

second last competition. half The year with of continued this strong

less will behaves Gabriela market CPaaS. terms market months first the the In 'XX. how guidance, It in on We the we of pricing. embedded terms flat seeing of in our about essentially in of are depend competitive

investing profitability. and of is profitability into a This the where reais We because terms business look in not is in we cash business. in generated continue of absolute SaaS our into this business we cash to look expanding margins that generates this use terms cash

into reais top profit we terms, with how with line looking behaves how concerned less stopped we we way are much margin in are in absolute because percentage generating. So looking more and start terms concerned and are we gross

long as a aiming of market Cassio in again, pricing from don't add at. seeing we the level of in terms be Caio are profit is anything behaving more here. I much perspective as what So will know the growing, first if than said, high has to 'XX. that's 'XX gross better was it in months or That we

Cassio Bobsin

you. Thank

from and doing to are and nice move profitability, nailed You times, we focusing the mark able looking in it the of should CPaaS. to year strong in achieve profitability be We what way demand pretty We're although CPaaS, to at seeing competitive. into it, that terms getting that's whole all well forward Shay. a on, of see is becomes some which is terms base more for

Gabriela Moraes

clear super very much. you guys. Thank That's

Operator

from UBS. analyst sell next the question Well, from comes side Leonardo Olmos,

now live that so you read revenue Hi. do expect day. end. from can read When grow you and have question we the can from here. One mix. new question morning. normalized discuss Please UBS for growth or what back is your I Good shift the it. Olmos opening my good rate are from a here. will the to And the revenue I expect you it ask audio, We again? expected evolution should Thank Zenvia? Leonardo in the

Cassio Bobsin

complement from this like the what expect numbers. revenue the take and you mix then I'll expected -- can Shay, we and in shift the on

keep a picture that doing strategy we're for of -- onto couple seeing growth business the this the quarters the XXXX the and we strategy, SaaS here. to We're going to over which same big but pace rates over sustainable, achieve, the of on looking sustained of healthy profit big couple growth not healthy a that focusing the that's So time can that be and that means with costly to growth, then gross flows growth very EBITDA. to would healthy flows be expect

we're to As is we for. growth tech market some considering How are achieve one the and how CPaaS generate us to to much we into gross whole get and we going with as the is at of in mentioned. whole understand Shay from expecting that the able that while direction balance but we're industry that profit CPaaS look point, terms already

high demand. pretty doing and we're So we're seeing well seeing both businesses very

look We're especially growth back to gross seeing at them and getting we when profit growth.

driving the we're of numbers numbers businesses, way into of the Caio forward pick to the in and we would or so business XXXX both what that's parts So what the on that drive both Shay the complement normalized terms we expect looking growth.

Shay Chor

So thanks, Cassio.

we've with grows generation we is been with specific business, expect are reason how we profit not for as the we there's that concerned and our top this right? for again, and in that, that are line our as concerned cash our it said, evolves. EBITDA in much as as and we gross our is flat. we, So reason saying And detailed guidance to business, So, CPaaS be a

business a be improved, done. expect if you dynamics seen revenue this EBITDA if low again, well than could any, be can we've point, profit looking side improve. gross But to prefer and safe for to competitive see that single-digits should be you flat, it growth, but and on wait assume on basis the goes So we the at CPaaS to and if we are the as on more it

to at And around a as see XX% pro for QX, we it grew basis. growing the SaaS year. XX% forma a business, on continue the SaaS XX%, business

anything businesses. that. know and expansion wants combination with of to net I being normalized should if We you the added Caio to that's don't expect to the see different clients level a add revenue for continue

Caio Figueiredo

second Sorry. and that revenue half see bit the of stronger was Yes, of start view, course, half revenue. first a in competition. of add it's the the at we for strong feel We we we the had although half of we to year XXXX revenue terms in of expect 'XX full our on here a the flat growth, CPaaS because reduction in of year CPaaS important of the to a CPaaS little second Shay, 'XX a from growth half to expect

expect in XXXX. second We come the half to back growth the of

it's important too highlight but year the that's flat, So that. make and important will they to

Operator

[Operator Instructions]

Shay Chor

you breathing raise out Eric, on have this Do to here. more late I'll announced last or give room? to a earn year. of We year renegotiations And in to we take several give equity as the working room. expect us breathing question yourself with debt top to are that different alternatives

of that maturing debt So is, year. We've to the maturity answer have discussing with possibility yes. we been banks short-term this the extend

to instruments back to other on gap. to expect able are that are short-term solve understand funding we market the alternatives a all be and and some months, gap. available the all track come we And And still be will to to announce measures we funding weeks, that that take matter our not us. there's to And of right obviously and the we

for the is There is XXXX. on question same topic, which cash follow-up flow a

if assume middle of of that CapEx to EBITDA, expect to at So provided we million, of the million million. we be BRLXX million BRLXX BRLXX BRLXX BRLXX guidance BRLXX so we million in million, the EBITDA around the range in

to close million BRLXX So be paid. have And in BRLXX interest BRLXX minus we approximately million, to that's EBITDA million, BRLXX CapEx then million.

for still months. solved some be needs XXXX. you So there that funding And XX of flow that an gives we the to that idea gap see that's in cash expectations why next is

Caio over why almost -year? here. let margin strong With the XX%, year-over is gross gross question I'll margin 'XX a profit unchanged reaching this. Another answer for guidance

Caio Figueiredo

Yes, course, Shay. of

have two here. reasons we So

cost because margins of acquired of because is expenses the business, SaaS better we on this little of First the between allocation for a and expect bit companies. reduction

and what really a allocating on better job So is really strong expenses. we did cost

margins have a the some comparing of are in expense, they'll migrating they to and XXXX don't currency reduce are of companies terms allocation. acquired we the when that because they needed bit from the when cost smaller, And

two reason we market environment for one. also that we're CPaaS to Reason that's is the seeing. So do it

We we margins CPaaS saw not expect year. that little for keeping in those the during a

the of little half expect reduction that saw bit the growth flat a you in the expect We guarantee to order we of between in second and the number revenue year.

main So reasons. the two that's

Shay Chor

more can Caio. see we Thanks, Eric, to report have if you questions?

Operator

Instructions] [Operator

Shay Chor

for There's of the Cassio. that our another all Zenvia? it's that think to but look to the discuss reports I only one you you and XX, of I'll not guys SaaS decisions. into pass day XX Cassio, add Rule interesting the in here, Would interesting for at we Rule day to metrics

Cassio Bobsin

sure. business. Yeah, the to and rate and metrics SaaS the these We love that internally combining And specifically margin. the this check are we looking at ones profit of of concept healthiness growth apply

around walking we're As profitability, quarters have we are a interesting path XX% interesting forecasting these to next number towards the exact couple of is going of the balance of very a in margin. as

XXXX us for growth CPaaS to with the manage year how EBITDA margin. SaaS, a rate we we're for two comparing the a from bit And rising of able of We're business. the to difficult a seeing interesting expect the makes end this to the means very margins. this beginning mean and We of year, be tricky logic portion businesses, from which of to seeing and disclose are balance have more to I just different the we of different it has which do

because prefer would sense. and it report declare a we doing pretty that's CPaaS I use we the explicitly in mean to and become and that it's not why more of but SaaS that do bit tricky combined team to well So kind auditing both for SaaS, metric these

Shay Chor

Thanks, Cassio.

on you to payable And questions contributes trade that? increase what year-over-year? can million sheet. one, the two BRLXXX take Caio, here, Next balance first on

Caio Figueiredo

course. of Yes,

they the have CPaaS carriers we Twilio, that CPaaS have And in we our the it's payable, also we trade we that for that the have. we the in of use use the in because increasing. So carriers, Brazil, CPaaS Twilio all in for agreement that volume the use increase the -- They our the mainly comes metrics infrastructure use from mainly business.

to the makes And total our carriers us that payable higher. so

higher that's the year. last why this main to compared is from reason when tradable So the payment

Shay Chor

add for Twilio our right. just here And anticipation, to with agreement for clarification, is revenue

pays Twilio So us months three in advance.

is because capital revenue our Twilio there ahead get from working to this perspective a payment we carriers. from positive the So of

the it we've has tools using one our metrics. working of So improve been to capital been

can how XXX reduce to The million of from the on payment Back sequentially? it? SenseData liabilities and acquisition XXX increases instead you the negotiation explain second with Movidesk question is, balance you, sheet million Shouldn't DX, to liabilities increasing Caio. from their

Caio Figueiredo

balance we in amount XXXX, method payment not kept Yes. the the same. total in past recognize year. because renegotiated, Actually, No, recognized but several when overall There Movidesk, amount no instalments so amount until payment one should we instalment, sheet. of in was that the the especially payment is of reduce the needed renegotiated we not payment, not on to the our

that pay So not did that's But amount should the why increase. the we overall change.

So as expected.

So was The increased. on that's that had those earn only pay we we how here outs. why they change

Shay Chor

demand Can you a at there integration? color recent AI you, strong Is That's integration on provide your excited ChatGPT most you're for in general? What about clients Cassio. from Zenvia. some

Cassio Bobsin

Yes.

all of integrate been have of products. you all working to have generative As technology AI, and on the OpenAI Microsoft we our checking into with this evolution been

the integration a first of weeks ago content. launched of campaign generation for of creation we So couple

agents different of our reps into interesting best And productive to customer tool experiences. seeing of fronts using answer. ChatGPT we've use opportunities I more the we're to been to very evolving or generative how the customer say into of suggestions both service other be content would sales processes with help next

customer. the And also customers of product ongoing help these to review can different usage. best different into to of fronts and working then better We've the get the company parts of of into you so also analysis interactions customer interest also act on been a interactions our of

whole adopt opportunities different UI So being our and of platform. ChatGPT to UX the into testing

on are at there worked time being many at fronts So this this moment.

weeks of more to to our release we next customers. expect the couple a So coupled

beta in Some a few customers. of are them with

is because can excited that actually our useful practical customers as are arm and very using different we're be we're right technology really seeing our very solutions. really this So

their automation journeys. we see from And integrate or into to also ChatGPT demand companies bots

of understand can your Now, say a, at brand times be ChatGPT early bit excitement, can get some we control. to that it's consideration I'd by bot of be a have lot out served some these although that's to a take let a into of because fully of automated bit a

I mean, you customer kind to why either control overall. for most XXX%. don't or the sales service the output of that be a would in customer controlled or That's agents reps applications experiences and we're accelerate very of environment operations content-oriented within seeing other course all process

about being everybody. big at So for and having said sort of this of CX in we're and whole able very industry a it's of these accessible to whole manner it's a easy add very some looking examples, becoming the evolution tool picture industry, the important

customers lots and with we're making well it that of pretty excitement and it's in there's our So now doing work sense.

Operator

his So closing Mr. session. this the Bobsin for concludes turn our I'd back over remarks. Cassio to question-and-answer conference to like

Cassio Bobsin

achieve XXXX to years now synergies. XXXX and year all fully much we're last acquisitions being to that where the the couple a very exceed great that benefit this guidance. all guidance for made points looking from from year, our and able a during very are all to even we starting to to then in forward we to integrated, the year of benefit to you have our Thank happy be We're some

especially integration unified will the into drive to the solutions and that platform Our customers are not side, and on transformation are the them, lead SaaS CX but our of AI unification a only about the to whole becoming evolution very able very excited on being clearly we of this journey. all customer opportunities

you you a for and attention much the thank on be time. and next will one. the I the hope year great it for So very see

Operator

has now to answer for your disposal conference presentation. Zenvia's been concluded. additional attending IR today's questions. area Thank at is The you any

day. may nice and have disconnect You now a

Zenvia (ZENV) 5 Apr 232022 Q4 Earnings call transcript