Earnings call transcript Q1 2023

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Operator

[Call Starts Abruptly] 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. At this time, all participants are in listen-only mode. After the prepared remarks, there will be a question-and-answer session. [Operator Instructions]

welcome your to Mr. for like I'd one speakers of today, Now, Bobsin, and Cassio CEO. Founder the floors the is Sir, floor yours.

Cassio Bobsin

Hello, everyone, Founder ‘XX today. Earnings you and Zenvia’s for Call. at thank all I'm you for Cassio with Bobsin, being and Thank joining CEO. us us QX

advancing results four showed momentum companies of in fully organizational on last as and one an first integrated we and structure its allow for profitability. we are Three years quarter benefit focus integration couple continue acquired perspective, systems to on the the are from platforms, out our and of for SaaS capture Zenvia, from will which Our growing platform. we of fully business the the single to synergies

of transform platform CX Customers are our beginning unified their journeys to to into digital. advantages SaaS realize customer competitive the

as are that massive We its AI from and evolution excited leverage continuous customer benefit the experiences to such the that very Quantum mostly generative overall. of platform our companies' productivity with ChatGPT, are opportunity, would and starting clearly now solutions, LLMs

the its which fund a expansion this volumes business clients of demonstrating SaaS from large execute generate to attesting recovery sustained to ability mature business, saw margins, On mailing with on to business. and of is our we instrumental cash, potential CPaaS to our the

Our on will opportunities. profitability remain focus forward moving and capturing cross-selling

for Q&A. into on our detail the to performance. more I'll back the go to be after over hand that Shay call I'll

Shay Chor

and everyone Hello, Cassio. being us you, for Thank with today. thanks

the third environment. plan of first profitability, the economic quarter executing focused our improve on In since start while all last challenging Let's year, a remained on savings our strategy X. quarter in of of we this face ‘XX, Slide on to implemented

to BRLXX positive which a ‘XX, with with cost to led did we three QX profitability, between of balance efficiencies quarters million, EBITDA. operate we row ‘XX As an coupled of revenue growth making and in QX in in correct EBITDA the continued

generation X% to more SaaS growth challenging XX%, cash though successfully a a to very management to we of excluding we forma the to that of it's our our working capital environment result important again, the QX as and revenues and strict expansion in of ‘XX engine, business, continues top competitive business a Even total despite Also, a dropped year-over-year, strong highlight the a our navigate. continue consulting the be line result this CPaaS QX with profitable when as pro focus ‘XX. when comparing did business

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

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

We Here performances and year. means paying-off. on that margin the our see see is first last SaaS quarter the Slide and of same X, with to on margins, in for period profit focus gross of of breakdown both business, CPaaS our the by compared mix profitability can ‘XX good increased you can which

up delivered reaching ‘XX, CPaaS XX quarter first XX%, points. up a X gross compared XX%, compared Our business a of a reached percentage quarter gross first to of compared a million BRLXX.X in increase almost of ‘XX. quarter, when of points first increase nearly XX% ‘XX, the gross margin the reaching quarter turn profit The in to profit gross SaaS of this XX% the margin the mark of to in solid percentage

to on gain front. look our financial our now momentum data on We're weight we a continue company, full of well Zenvia towards transforming in in terms this SaaS and this metrics. Let's at way into

SaaS BRLXXX Our business expansion XXX% an annualized above SaaS level. revenue in BRLXX at which of recurring first healthy almost revenue million. the business million remained annual the reached this quarter, in Net totals

quarter. this and profit, total represented terms of XX/XX services we XX% revenue in gross result of SaaS had the Our a

the In the Hack-a-Bot during potential to and suite of We develop ChatGPT our humans we solutions conversation, tested including sentiment end hosted ChatGPT internal The hackathon based with on evaluation of solutions in for explore X.X analysis the solutions AI CX Attraction, Zenvia with Hack-a-Bot, customer portfolio, integration for February. solutions, an tool. first for the continue of we which being enhance context are of improved announced developed the with grammar generative already customer developments building to possibilities integration March, off SaaS our analysis. our the to ever

already enabling month, and which of now future company, to doors opening integration the of we is the to a of integrated more variety Zenvia's and questions company. into tool. by be announced can already This in have use created documents ChatGPT And this major many chatbot a for Brazilian chatbot, the wider earlier within answers through reuse the trained insurance search automated

until move now On evolution of gross the today. the delivering the our keep see can gross next of from during promises Let’s slide, we to slide and first quarter on the We margins. IPO. made this on margin ‘XX our

to through quarter, the of points expansion first XX expand compared in quarter last same margins year. have a and the ‘XX the shown QX and continue a percentage We IPO to from XX our points expansion percentage

the We on to our profitability. reached XX% a with in gross are of consistent our results margin that walking proving talk we QX, path

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

year, similar for to As for a our our level guidance margin ‘XX. at remain gross compared should the

On progress the next we quarter the we initiatives, reduction slide. slide, Moving which started on to year. third detail cost implementing in towards this last

reaching reducing with consulting fourth travel, reduction in as a recorded the X.X% year. quarter, structure such ‘XX, we corporate and compared to G&A Following BRLXX same expenses compared first just quarter quarter non-personnel of the the downsizing of combined with million the BRLXX million in last our expenses G&A over in almost

good our really and reflect revenue. but impacts in to the also our plan of we made progress it in On thanks the percentage see yet. improvement doesn’t We in to efforts all cost graph can of restructuring, sequential the right, reduction QX, terms net savings

We percentage a of of expect the a the in savings leading an in lower to expenses following revenues. capture as of acceleration quarters, ratio

to next the move Let’s ‘XX, of SaaS we result focus first our macro direct slide quarter the growth path. EBITDA bringing especially as detail our the a Zenvia since performance the not and you to off. decision which paying complex profitability into company slide. has this but It back environment, a is of to our is pivot In the profitability been can easy, see, given on

guidance QX So, deliver on (ph) This quarter. BRLXX BRLXX track was million solid negative QX million and us on to will of capacity the year. confident to in history the to in Zenvia’s ‘XX minute. delivering of solid operations last as we makes a range for a a the positive us ’XX, EBITDA a discuss compared in expansion BRLX million top deliver EBITDA in ’XX profitable in puts our

This to that to us, shows as slide able the have slide. cash. is it move into next very to been we EBITDA convert important Let’s

While funding ’XX with to reduce EBITDA minus for BRLXX working This flexible due cash the extended enabling CapEx working generate to was from is renegotiations this with especially total reached improvement, capital management, positive anticipations to a pay million SMS already BRLXX to quarter. payments, us more This (ph). our and a earn-out is gap million, flow payment result coupled higher terms. debt enough clients providers down operating of better capital and

we time the working we actually negotiate transaction a how better the for year all like in we half better two I and acknowledge funding we stakeholders. options, have given for working gap managing still that equity solution additional cash are gain on of include we and on and is in a last to first but also us been difficulties, among this our to are our would emphasize said that We conference enabling that this are any see solid others, debt, we position are we flow. but working for calls don’t indeed, capital

discussed our million To guidance last earnings have BRLXX between just like million. and BRLXX this finish, call, in I would our EBITDA to but ‘XX of already emphasize for we

we BRLXX EBITDA mid Investor ability on confident in solid deliver BRLXX to the QX ‘XX, presented ‘XX are numbers delivered level the long-term of XX% our in to EBITDA QX in Day. Given EBITDA ‘XX ‘XX we and us putting to is we million, deliver million both which our margin respectively, track in and this

With we to we and ready take conclude our are prepared remarks, your this, questions.

Operator

comes We live. that so will begin Marco Nardini, Instructions] we question analyst the ahead. sell-side audio from question are from question-and-answer Marco, XP. first ask Our session. your Please go the [Operator opening you now can

Marco Nardini

here my I question. morning. have two my for actually Hello. side. Thank on taking Good you

you also this you line more adjusted The in follow-up please? expect this us quick line this color little first positive gross a regarding that dynamics report the quarter trend with together competition on When is one first on the can growth top on you And a margin. have do to top quarter, bit give CPaaS.

gross SaaS in segments in second And one margin the adjusted we the for increasing margin drop drop is in the regarding year? business more the the sell. you. this see down Should Thank and quarter-over-quarter

Cassio Bobsin

overall then I'll I are doing CPaaS, how the of competitive and Shay, the dynamics on understanding things the start complement with and on can numbers.

it as gross hence a are we're margins, subsidizing bit amongst last decrease kind into profitability better sense, of working very we since to hard the damage eliminating ones. helping is stocks on revenues means So each competitors the had after reach could big shift looking pricing we margins. predatory at less the been especially the any on We've customer, our us competition, on achieving negotiation to with that which and space, QX in observing which QX, we up that

these Hence, we to same we're higher back be go to a as to get higher into don't volumes serving going volumes, margins our means that imagine terms which being of of revenues. we in revenues. translates And that dynamics the profile keep gross expect to able are we we as growth

with that expect a of lower kind mean, that have but that over that's will to bit balance achieve of why year I space a to. not kind we margins, get less margins customers revenue growing So the and in there's level less that the the kind growth same reach bit project margins this the of trying we to between bring gross

Now can you I think numbers. on me the guys complement

Caio Figueiredo

regarding second can Still as we expect Cassio half XXXX. what some we CPaaS, of of Cassio. said, because Yes, is volume lost

pipeline due the quarter-over-quarter this a the to it's are of the to compare half on on Talking didn't perform the performance cycles large the the fact client because the was about or the especially XXXX. expected, of longer sales expect the related SaaS, growth we when part line of QX environment as consulting macroeconomic client. and business year to in size you We the including to the second in business due

performance. already better performing, on But so we seen pipeline QX, better this

also And of line the line clients. business decline, that with the year, we quarter-over-quarter regarding rest that of are revenue gross specific guidance. not expect margin So the is saw a and this we loss in for our it's the mix. on profitability focused in you There's for some recover fast large

here. I So don't no know, you Shay, words counter. want if to

Shay Chor

it. That's No.

Marco Nardini

Perfect, guys. Thank you.

Operator

Instructions]. [Operator

Shay Chor

of Eric, I couple have questions a here.

you this end debt? to gap here. until year, do the some -- gap the me the payments Let ’XX, with question first gap, end start Still the looking not for is So this So still there plan until that here to this? funding we next on how have wish question probably web only the you more of some them is, are you issue with profitability on for year. funding and… but acknowledge improvement, into of earn-outs Do plan on funding

‘XX of cash As pay half believe there. half that to the out generation have that of that first ‘XX, the earn-outs second be our for enough for will we and we of

short-term funding advantage working mentioned time strong we taking the best the find prepared us are, gap. our we've remarks, we and that we capital very are medium-term solution of solve been buying to the us working doing in for So management as is that to hard and

we've have to is, difficulties We always question working please working How look. access going into and we Second hard funding. enter look working detail could forward? these quarter. in in regarding capital, going that capital very we going you been companies positives at more all So way should saw the good with numbers we been here the tech the change are of looked through to these

both DSO So we've been on DPO. improving processes a lot focusing and our

‘XX we QX obviously kicking we and with in and This the working -- some specifically, the of flexibility. believe been with couple rolling into revenue, the us is advance. down so of we'll We've road. months a provides very us Twilio in this, capital which transaction paying capital in Twilio good And entered in anticipating more the rolling last keep can that in working this this financial and

shouldn't we should you healthy -- should expect any at capital, so you outflows So working this out levels. of continue

SMS other is -- our providers, -- renegotiate a behind. side, managing been negotiating team been successful suppliers very and DPO that is including and with the that with we've we've procurement created we all in we've recently -- at in we providers, on more And negotiate have, been better this

is expect not business business going we intensive working us capital helping in a working magnitude capital. not this usually continue obviously in we should and But in continue positively work are saw in forward, ways, any So this in that we with to the same but quarter. to

questions how you I drive our what see see messaging and I talk GPT features related in margin you in profitability the expect features regarding impacting AI this Do AI, see near me ChatGPT us? guess, for you higher Two Cassio, CPaaS accelerating AI. investments volumes you Let about to the Do stream? revenue have can impacting also AI here. term? the powered in

Cassio Bobsin

applying parts product. are product these customer get to productivity. the usually Sure. agents such software as reps are or the both using sales usability in the service into accelerate even of put will of [indiscernible] that on most We've ChatGPT a managers been that or and And productivity different

different that scale can on beta a as not of really mostly for in a with phase to understand we it's of the measure across to be, working yet on some be next couple We little soon -- facts are quarters. phase, bit kind reel will we some yet these to expect like, the scale with that customers what It's so features. a into

deeper reduce expect for we costs we everybody see, looking that change to using especially Hence, usage, will companies a in set which, in of more more our lots platform, expect We that don't features drive and bring of going our course, over the to margins. adoption, side which their do and time impacting platform. different interest automation into operations. bring is efficiency, And really term near helps this the that like, of of especially the the on

go that's when although, CPaaS distant for hold bring a in And companies CX, yet measure especially something into we're us we automation company on to possible betting we -- [indiscernible] AI the at able improve looking space, more more that leverage customers, will these that they're to as expect That's and adoption, focused mid levers that scale, the all the for customer that why it's efficiency impact, to these to in course, to and of would more reduce evolution is not to in space, costs a long-term. and on bring experiences. when order lots platform of more using our we

Shay Chor

Thanks, Cassio.

quarter? that. What take Another is I SaaS for think Caio, growth one organic this of you can the here.

Caio Figueiredo

Yes.

growth. is that consulting we the basis the impact part what SaaS forma Excluding business said as QX, the earlier, in unit, see of I in lines XX% other pro over

was we pipeline performance the impacted or a as seeing is this consuming in XX% said still but excluding So forma a are to the pipeline cycle due better earlier, already the but that I on in of longer. QX, again basis, growth part sales pro the

the that's So impact.

Shay Chor

of working the Our is anticipation financing? is XX% average revenue capital What financing a the of about cost transaction most year.

considerably is close approximately to loans, X%, cheaper than XX% So which year. bank our a which now is CDI are plus

to really attractive the So is financing in cost terms us. capital of working

with free we'll estimation trying next QX financing your flow get to better interest about continue and to of spend to post is what ‘XX. the sense here annualized cash And cost option? a Look, question

‘XX we BRLXX -- of million. guys to we let's for help guided expectations, navigate start you So BRLXX million and right? with through So EBITDA EBITDA

last top given that, which two million (ph). of ‘XX we to the is quarters, BRLXX close end the Let's the delivered range, in use

to So it's from look end top of the a range. a better from

then of So or BRLXX financing assuming BRLXX in this BRLXX million million and EBITDA we'll million, in to million have cost, have approximately pay cost. for year, take given we'll BRLXX CapEx in

in cash BRLXX finance BRLXX CapEx, costs. EBITDA, BRLXX So flow, in our that free of million sense you million million in BRLXX gives million, a and

almost compared us you this going going QX. you capture to have here. Caio, help here. you SG&A, said can expect had keep you should level I'll to forward we XX% On I what still guess, -- in

Caio Figueiredo

-- the expect the of expect Yes, revenue, revenue, of the because of expenses, don't terms of terms ahead growth revenue but expenses. G&A to the we be in of we to of of growth as growth amount the the in around of XX% amount net

Shay Chor

if low elaborate so QX. or you, million EBITDA. that? to that BRLXX probably I Guidance Can EBITDA BRLXXX or especially BRLXX here. conservative feels to EBITDA to at Caio. Obviously, million year we trailing the XX are closer Thank BRLXX our have to guidance months, QX tracking we close you one a annualize million are when million. on So looking compares both we to compared to QX, of more for in

confident So to the guidance and is delivering we million all be we are will which that aim. and very as the BRLXX should management probably, BRLXX million,

continue more year, what guided. early I so Eric. two are that guidance. in questions if But the this And like again, of to it's our continue one and same additional the the right? that to than level work We'll anyone deliver has reiterate we to see, the at deliver in very Can do if to with here, the Only hard too would we guidance just still emphasize the you those EBITDA past questions? better it's case. trying we than quarter, quarters report But we time,

Operator

[Operator Instructions] Perfect.

Shay Chor

doing What So there's for is increase a here, hindering all from one Eric. guys you investors. question rata more pro

are we've right, alternative with we gap. funding us help not as the excluding saying, any to been So

all their equity, alternatives including We timings. are them, have have working that process and we options own of with including debt, all all

for up with to are options these we all solutions the come best all stakeholders. to And with with working them

cash good and that's strong time quarter evaluate guess alternatives we working capital best that of Eric, flow the at buys the -- management I again, time to it. shorter us possible. And times the generate period this the So,

Operator

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

Cassio Bobsin

everybody very for you Thank our much call. conference joining

see be the time. to very happy of happen, results more lots ahead, so you with news we're with good a looking next our guys excited we year that got We next are and track delivering been have expect to to some we and very still have couple and you. at guidance the the Thank quarters, on on

Operator

Perfect.

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

now day. nice have may You disconnect a and

Zenvia (ZENV) 18 May 232023 Q1 Earnings call transcript