Earnings call transcript Q2 2023

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Operator

Good morning and thank you for standing by. Welcome to Zenvia's Q2 2023 Earnings Conference Call. Today's speakers are Mr. Cassio Bobsin, Zenvia's Founder and CEO; and Mr. Shay Chor, CFO and Investor Relations Officer. presentation. today's available being website, at can access that replay and where advised also be will the today's be conference recorded, is a you Please company's IR listen-only At mode. this participants’ time are all in After the will there prepared question-and-answer be a remarks session. Instructions] [Operator

to like of one Cassio would today, the floor our CEO. Founder and I Sir, for is Mr. welcome Now speakers Bobsin, yours.

Cassio Bobsin

being for Cassio with second quarter you call. I'm Bobsin, Hello, and Zenvia's all today. everyone. ‘XX us at for And joining us thank Thank Founder you CEO. earnings

Our gap, showed Zenvia results revenue stability and as we the second for quarter the of consistency resolved while balance profitability. for our correct and funding growth managing

certain progress to that results. of begin systems opportunities And our selling by cross-selling very services, making platforms, allowing potential. we're our already continuing of leverage excited massive is evolution AI as quickly integrating showing the positive which capitalizing good We're the is early on platform us to opportunity industry. ongoing such generative its We're packages changing and and bundled

unveiled quantitative and quarter, leverage and that Understand, enhance Zenvia to to customer In support the customers' the of support. report humanized tools power which deliver including two empowers automated with with an AI easy-to-use journey, delivers customer representatives Zenvia platform chatbots, analysis interactions which efficient second AI we

directly expenses, every clients' We our personalized superior to analysis, predictive results AI-powered fuel Through are day clients. and solutions seeing understanding, how AI transformative can businesses. our bring customer our

aspiration. new And our are and clients We standard, succession loyalty are era, platform, SaaS in with making our is a proactive adding reactive. new we're customer the a

platform, we while been One us capturing moving Zenvia improving to our new on synergies forward, about now. Zenvia platform. creating of and an discussing our internally continue excited I'm and of we which vision our integrated a through you are experiences with value One world a allowing the is focus for proposition to calling have that share

important is engaging factors three based a fluid on in customer uniting and Zenvia a most experience, an the experience: experience, One vision The experience. personal

in our and selling needs by best operating We will our allowing fit products fluid with to experiences pick our volume expanding thereby large ease. suite while a format, position, and push a choose, which their products customers

existing is aligned suite Our the with already strategy format.

evolving been customer platform. experiences processes, only as by build have Not as changing making continue an We continue experience rapidly I journey, efficient. to arena. our the SaaS to AI, We'll explained, integrated but internal leveraging is us will improve engaging also the just customer enhance AI which more

platform of our edge our of deepen our or platform, and from our will internal personalized leverage their lastly, customers of a provide clients relationships us integration allow by behavior This CDP. our understanding expanding the deep will And clients. experiences the we data to of clients customer systems increasingly competitive through construction with to with with

towards cross-selling. that upcoming strategic on we're bundling progress product delivering One and vision projects accelerate key our will structuring concentrated To our quarters, from map, including of Zenvia road in initiatives the

you our in We One coming forward more with the focus sharing look much and are towards to very months. information by Zenvia waited

hand Shay second performance cover I'll Now the our over to in to quarter.

Shay Chor

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

Let's slide start on five.

for growth and of report to revenue focused between while quarter resolving happy in balance the the right ’XX, funding our second the we that on are managing gap profitability. We year,

and lines, row to year-over-year adapt we successfully positive in we're EBITDA X% marking of a to to balance, to economic able which across over growth did stronger and an continue quarters finding In operation business BRLXX four in of challenging an gross profit navigate. and led And the deliver we this EBITDA. million, margins within despite that environment,

in our on CPaaS focus of quarter maintaining business. result year-over-year a X% profitable the dropped a revenues Total as

almost given X%, of XXXX. especially the to expect the lower volumes in CPaaS increasing sequential resume to and easier trend performance QX explained However, volumes the This this able better ‘XX. we large were when continue customers, of net certain is comps to recovery year, second-half HX line from compared with revenue the top we with by growth in

The X% X XX%, gross gross to increase nearly profitability. to reached in full percentage profit in attesting points which path toward margin, added adjusted our our commitment

Let's take ‘XX. a the first-half look at our of financials for

trends growth XX% margins nearly largely XX the and reflects performance first-half percentage across gross year-over-year with to second margin solid to business Our we profit saw in lines, of that quarter of ‘XX nearly the the for leading expanding points XX.X%. same gross

of from HX negative BRLXX of months Movidesk. is only in had BRLXX EBITDA ‘XX that first-half consolidated to of It XXX BRLXX ‘XX, the the delta million. million a highlight in two of was important here up million, first-half

Our capital BRLXXX led management solid for of stronger working operating the better cash EBITDA year. in to both are and funding million, key and this flow solving gap

the second ‘XX of of our in year. compare first Now the the first-half let's the shows of quarter to progress the which year, quarter

that enterprise can driven in Here volumes by we see grew recovery clients. sequentially, you large X.X%, on our SMS by of this revenues mainly some profitable from slide,

our when to enterprises, exactly CPaaS that to it business. grew have quarter-over-quarter. large strategy X% business quarter. funding you It This excluding happened is mature a is is SaaS remind to Our important the what expansion this business, and SaaS consulting is always of our

can second gross contributing look to compared business for same is to and the quarter slide, On how ’XX, margin breakdown the and examine CPaaS the and Let's SaaS of profit by last take period you year. of mix this of deeper our of see a profitability. which our

our clients related to quarter one enterprise business, that a challenging Second was SaaS in our use consulting services. especially large

longer are months uncertainties scenario the in Brazil in lived these in still cycle we clients, of As the the the of we year. first impacts macro for seeing sales the is

we signs for large the As the quarters. expect are coming better report improve, enterprise improvement figures to starts economy to our in pipeline clients of early and seeing in

margin from BRLXX to million, profit to gross SaaS up terms of In translating profitability million gross BRLXX metrics, a went the XX.X%. quarter year-over-year for X.X% of

up our went revenue and profit figures, from consolidation growth the When XX.X%, gross Movidesk. SaaS the of six mostly looking at month

products Our a to delivered us percentage invest gross demonstrate in increase with solid generate grow in compared cash, the of margin continues a business XX% its to profit, quarter allowing second business. of ‘XX, CPaaS potential to up to reaching CPaaS X innovative increased when SaaS business escalate The and gross points. the to margin almost XX%,

is the of compare see look When but 'XX, trends. with 'XX now at our margins, Let's of solid half first-half see both similar of the profitability off. first-half of focus the We same comparing increased businesses first-half meaning the ‘XX. data, to can ‘XX to in we we performances the paying first on

business implies in of first-half to the year, 'XX the in X a point profit margin million a XX% increase, Our gross reaching of of reached compared percentage which a and BRLXX gross XX%, gross SaaS compared the of to CPaaS 'XX. a to ‘XX, first-half reaching up delivered the percentage the of gross in roughly a turn when compared expansion, increase points. XX first-half solid XX%, of XX% profit margin in first-half

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

business momentum almost in continues revenue, BRLXXX totaling gain to Our annual million. recurring SaaS

totaled As I in net mentioned ‘XX. our previously, compared which the challenging QX environment XXX%, negatively revenue XXX% to impacted expansion,

we the services revenues. XX% SaaS of in boost CPaaS Our total had revenue as a represented

this quarter. terms profit, a XX-XX gross of In had split we

now to on Let's move EBITDA next the evolution. slide our

EBITDA sequentially, to in see BRLXX BRLXX this in QX. from million declined million our slide, can you As

the to in of related mix million related While costs of renewed suppliers' in contracts, in in slightly combined EBITDA the the a to revenues costs Despite higher we expected EBITDA CPaaS BRLXX to quarter. first-half nonrecurring led some provisions, increase and costs severance that, year. we some with infrastructure delivered pressure this higher solid

paying EBITDA Moreover, as has you focus next profitability. a been decision now can our is the positive of It quarters This off. direct strategy macro see slide, particularly with the we not given have easy, a in to in pivot Zenvia consecutive see, on can complex as four environment. result you territory. But company and improving delivered SaaS the is

million, Our in which trailing totaling BRLXX range for us EBITDA confident XX-months EBITDA guidance makes this our year. reiterating is

we important is of cash milestone that stricter with EBITDA extended policies. an attests treasury able the and it the of funding most gap, been to that close to have all important and our to to profitability us gap as humans initiatives Now undertook for a for work payments this earnout to get quarter we coupled slide shows This convert XXXX. of solve and into other our [Indiscernible] lot hard the grow we

SMS us sheet positive working terms. While enough in This pay down debt working flow XXXX, strong solve flexible invest for gap position capital a to to and in EBITDA BRLXXX payment with funding BRLXX.X providers continue operating operating allow minus more to clients new total projects. a better renegotiation and to cash cash balance and management, from anticipation to our us putting deleveraging capital million generate better flow improvement reached million, due of higher was CapEx ready a and result especially as

would just to like I we previously reiterate guidance set finish, XXXX. the To for

we the top of at are low to On guidance, of to the the aiming the revenue end are for we close range. while EBITDA, end deliver confident side, the

during ability XX% we we on trend Investor track solid EBITDA us to XXXX in deliver confident our Given which presented Day. to the positive the XXXX, are level we puts our deliver the seeing, mid- in long-term are EBITDA to margin,

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

Operator

will question [Operator sell-side Our analyst We Chaves, of now first Luca question-and-answer Lucas session. from comes the begin Instructions] Web.

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

Lucas Chaves

So UBS from here. just -- Lucas BB

And from our questions How how on clients we large considering focus at clients impact side. year? the time, especially see that read two on of these And the enterprises? second-half -- should So you two you second-half? on large the going margins of see things the the into part do how do

Cassio Bobsin

very -- Thank like large to we're is question. margins we are market environment we customers. growth We expect margins of more to on we the new are as pushing trend, you, and on customers the large to a as Lucas, have customers, keep like high bring from that the seeing not a though small as And the grow even that able environment not projects profile always hence, customers, these customers. large for a strong

a That's revenue balance getting better brings of growth are the lots of this much margin a small us base, best profile, and why because a margins, kind of large customers continuous they profile. not of customers we long-tail which can which but with counterbalance get of margins so growth on so revenue, large customers we counterbalance the bring both

we we R&D. through And more and large these that getting of couple customers launched adoption the whole last of in seeing the are acquisitions quarters portfolio

are coming expect our presence large CPaaS quarters from now these on and we increase margins higher customers we presence of the of which customers, in of more couple next large overall. large getting to So solutions for customers, a SaaS

from coming why course, of can software-based SaaS-like on usage, -- which, is so margins migrate us we've whole our investing course, CPaaS -- into the for which, from that usage the more core the of that's solutions the to we we the platform, kind good SaaS of platform, whole been pure have, of So brings customers into integrating picture. the channel SaaS

And creating get only of revenues, large also locking especially by these able we're over go customers as into not we margins more our time. platform, those deep adoption to but sustained more for

Lucas Chaves

is thanks. very clear. Many That

Shay Chor

some improvement comment the if Let the moving me more the on And get you CPaaS questions Can system. forward? from is sustainable here competitive environment?

Cassio Bobsin

companies We CPaaS competitive better market, bringing is on industry our a But opportunity. the players lots in this position to strength try end same global market, more Sure. that -- the SaaS. see than have than in CPaaS is address market and especially other the compete very to regional as of us strong that a we market

As leaders sustainable this we're on carriers, negotiations of able able to position cost year pace market which us advantage. that over a long-term space, that we to the time, better track be achieve as that over with growth of now are over course the brings making the to mid leveraging that to became, we and we're

especially to achieve in with the able framework are to big better purchases -- a of the customers, demand. position we this with capture able pricing company a ourselves as large on the Hence, of with better to able position majority messaging, to market, we're order is ourselves that

going continue to So we this forward. expect

Shay Chor

for stock you, you Cassio. in like looking Cassio. -- easy One What years? Thanks, company's see the one do five

Cassio Bobsin

being But sure are to of bundling strong as on that layer not I the vision, lots movement solutions different first to don't to to have and the of very are I'm traction SaaS benefits the building now the solutions. from journey a sense. have of are the am a comprised on been long-term this I starting of parts we customer the what working of we of cross-sell that integrated, and get lawyer get my side. starting able we view tell by

next the of quarters, that. the in we're couple see effects And of going to

this the would that results all that years as but over two, awesome the So that beginning year, the that all become of we that would we the these on opportunity years, on, aspect fully QX a long-term capture investors why there long-term and are will good leader look three in this the five strategy we strategy, customer become that which investments QX, for market XXXX expect to is say, Zenvia And for is experiences, I software. of clear last to understand next very -- capture very getting we those a building over time. in that's

Shay Chor

we puts for hard Congrats us banks a here. for We negotiated gap ago. one to moving on solving you better were alternatives. months we've strong situation and this funding in than So been 'XX. deliver EBITDA Another of do it see cash working on the funding with How and a flow, couple 'XX? as

very be not confident continuing for but earnout deliver to we'll the from solve mainly have. entire arising that the structure able that results, are the gap 'XX, the the we of company, only we funding to by strong So gap funding

we with come of we our confident we'll were than don't that we ago. this for stakeholders of better are much situation are on So now, we up -- as good But months front. a couple a that in we news feel

Operator

[Operator Instructions]

Shay Chor

want I'll In relatively do visibility this? you continue order XXXX high is take achieving HX. growth on the revenue in revenue How meet would here. need this? you your Caio, to to guidance,

Caio Figueiredo

course. of course, of Yes,

the on as Shay aiming for are of part guidance the we low revenue. said, So

For Friday CPaaS of to had QX, return Black seasonality on have In revenue we we a business. business, Christmas. due the and

for So year. in us gives that more growth room second-half the the of

enterprise -- to as a the we pipeline going for when have Shay you're seeing the comparing why for we're said, -- growth we already also already stronger. to see getting And large SaaS that's strong So first-half. business,

growth. in you to -- also, had And see strong can SaaS our start number of a results, our clients for

So as we deliver we need that of we expansion, and start order we can reach low we are revenue small in in guidance the revenue. part the a growth terms strong of their confident that have in business, the to

Shay Chor

can highlighted Zenvia in Thanks, the you on opening you color give Caio. One that your more Cassio, remarks?

Cassio Bobsin

companies a investment on that acquisitions been doing that portfolio. also that three -- and SaaS of combination customers complexity SaaS we've But R&D our now movement offerings a those our last are of strategically offer products and past internally. had What part at Sure. the layer. we our operate created doing is looking of stronger years so, how in building the And course, on complementary that the certain did a some was terms company of we to how we

we're are suite. and infrastructure that the integration last products chart of a the quarters in single couple now of -- and organizational integration part with process So been into And we've the corporate started these much basic concluded. combine doing process all beginning which and to pretty

at aiming the -- quarters. of over next couple provide are over we what that's to last So the

it calling Zenvia. -- And that's that working part on to on we've are that's being to It doing of of One that next make the QX that QX it and executed projects year. available been make -- considers happen. that that was So we're all been

model. business corporate unification and the So that's integration billing interface systems, user experience, of systems, user of a of of the products, integration integration combination of

we on will So of that the everything last quarters, couple continue couple we've in months. the next of over been working sell and so

deliver of customers customers the be a movement can offering almost all we in calling for So customers. Zenviaon. provide impact internally, One being makes on -- a a that synchronized value that we're unique for we of region. doing fact We're our much a able unified lot our these a to that that the execution And -- offer pretty for are market in -- a lot way of calling so movement

customers. of So for to executed our these platform combination provide projects it's a all unified of a being

Shay Chor

the Are is on comment that How more demanding solutions large solution this based? your Can AI-driven does impact you AI pricing how corporate on are they strategy? interest evolving?

Cassio Bobsin

Yes, sure.

first, of seeing features on agents we lot couple in customer how processes. agents broad months pre-written from companies more sales these from they based last generative of that have from especially the their their customer coming of search are AI launched inquiry a or history responses What of service boost kind -- like of productivity, company's customers a use to with and kind that demand customers. can to are different on it's demand We for the

So our what this of around other data sources on also customers' these we're behavior saying, but and have the that is around from combining expectations, not only company. also customer products. are accessed available the communications evolving the And already what is this the we customer some understanding

So we combined some based these going we're insights this -- customers and providing are features testing and these now on And use them we all seeing these AI. have history. on customer prediction of that into

In customers how AI are terms we modules we that although of seeing we're for extra that building are instead layers platform. that, of are the charging that, a in AI, some companies of some we for monetize specific putting of core seeing the building

So customers we features have access out -- all for time this our part the to are customers. these all of rolling be as will that over of will

their companies one or core. merging their sales -- SaaS available this, offerings that That's that will something be of of initiatives As we basic the like why to that into our this we make looking accessible will at a all will software to are or we're that or that customers requirement just service. making consider be for these instead customer for the improve improve trying core two

doing that customers. that for into to They're considering already platform mostly most entered all our We and kind whole the making available differentiate to still this competitors not approach. testing. prediction expect of we that So are

Shay Chor

on you here. difference between acquiring clients the the Caio? in in pace? comment Can new didn't and the SaaS same revenue that Another one grow

Caio Figueiredo

Yes, of course.

of income strong service. start use So to said, more we client. we as our cases, what we see solution they traction. strong And to in small growth cases see when also, we or is more number seeds. a grow in in can start in and use special we with result, conversion small clients saw growth the Then And especially

our clients XX-months that's to revenue close the net longer expansion is than for And that XXX%. why are

We help to So start clients revenue. they as revenue, We cases help to why they learn. the learn. quarters. so using we the their our pace grow see the inside use the we of you more them business, see clients the then use start next That's number up for solutions, first keep growing, them then

Shay Chor

from Can minimum due Are it? on you the you revert comment NASDAQ, bid to of to the delisting risk efficiency price? confident

funding be important confident able to any to without solve able we be Yes, in the all. us once it results. solution. to continue our will opinion, needing and the to are It's single price. strong share on on gap for delivering we'll catalyst us be that, And for It's technical revert most

we technical we'll spilt. reverse it able if Hugo, any revert are are Those have the such be questions solutions of report to questions. as there we you can confident see the without further need are So any to here. And

Operator

Can have Gabriel question questions. Instructions] any do here Please, read? Shay, there's [Indiscernible]. [Operator a you further you please by

Shay Chor

adjusted in of gap? million paid EBITDA, do on one to earn-out of million be million only BRLXXX million to how cash solve bank clients, million BRLXX plus with debt plan to advance one be funding you paid and of in year, BRLXX plus BRLXXX year are the BRLXXX of There

have enough only we in in the stages So from That that renegotiations when contract needing clients again, XX-months, will for see a very situation million [Indiscernible]. is for is -- contract good generating put of BRLXXX pay revenue are that. advances cash of contract to you which us final of with we the

be the not and on EBITDA, million agree sure I'm that with to Our adjusted, BRLXX BRLXX this I million because you, million. is BRLXX Gabriel, going year between

BRLXXX year million. million, BRLXXX to probably Next going is be

rolling that. we the structure it XX debt the with enough banks now, with And payments for a term situation for next will that generating to we confident in us XX where EBITDA obviously, the good by are in ease with longer cash longer So months. and puts are and the discussing

able and pay is the So higher to generating we more are those obviously, company EBITDA all cash. liabilities when

Operator

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

Cassio Bobsin

much, for very you earnings Thank everybody, our joining call.

to with and only excited have for our aiming guidance the have all bringing value going customer into a become for experience that, path opportunity to of Not become very happy future, journey. with we the year we suite a providing connecting are especially lots that for that the We strong we very forward, our offering by us that are we SaaS, are the achieve by the the very but and year. along looking customers unique a competitor of customers which in unified very field will the of

for happy our what That's very That's purpose. building be to on track the future, and we're we are of that.

thank and So much, next see time. very you you

Operator

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

Have disconnect. now day. nice may You a

Zenvia (ZENV) 17 Aug 232023 Q2 Earnings call transcript