VTEX (VTEX) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.Analysts' growing optimism on the earnings prospects of this company that helps retailers build e-commerce businesses is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings esti ...

It wouldn’t be an overstatement to say that investors are on edge. The stock market continues to deal with a flurry of risky headlines, ranging from higher-than-expected inflation to the possibility of a protracted war in the Middle East. Investors are indicating aWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. ...

Financial Performance - Vtex reported a record gross margin of 79.6% and a non-GAAP operating margin of 23.8% for Q4 2025 [1][4] - The company achieved $66.7 million in subscription revenue for the quarter [1][4] Strategic Initiatives - Vtex implemented a reorganization of its sales and marketing teams, resulting in a headcount reduction of approximately 100 positions to streamline operations and enhance AI utilization [2] - The company is focusing on four strategic growth levers: global expansion, B2B commerce, retail media, and AI-first product development [2] Market Expansion and Partnerships - In 2025, global markets outside of Latin America grew by 22%, and Vtex successfully scaled high-profile partnerships, including a stadium tour store project with Manchester City [3] - The 'Vtex Ads' retail media engine has transitioned from a pilot phase to a core growth driver, allowing enterprise retailers to monetize traffic and provide brands with performance-based, first-party data attribution [3] - Vtex is concentrating on high-value clients, with 158 customers generating over $250,000 in annual recurring revenue [3]

Market Overview - The Dow Jones Industrial Average experienced a significant drop of over 800 points due to rising oil prices and geopolitical tensions, particularly involving Iran [1] - Oil prices have reached a critical psychological barrier of $80 per barrel, which could reignite inflation fears and hinder interest rate reductions [1] - The VIX index has risen nearly 54% year-to-date, indicating high uncertainty and a risk-off sentiment among investors [2] Sector Analysis - The technology and AI sectors are experiencing volatility, with investors returning to large software companies as they reassess the impact of generative AI [3] - Concerns have been raised regarding the return on investment for major companies like Microsoft, which is investing $200 billion in data centers this year [3] Company Highlights Vtex (NYSE:VTEX) - Vtex reported a record gross margin of 79.6% and a non-GAAP operating margin of 23.8% for Q4 2025, with subscription revenue of $66.7 million [9] - The company is focusing on global expansion, B2B commerce, retail media, and AI-first product development, following a reorganization that included a headcount reduction of approximately 100 positions [10] - Vtex's retail media engine, 'Vtex Ads', has transitioned to a core growth driver, enhancing monetization for enterprise retailers [11] ECARX Holdings Inc. (NASDAQ:ECX) - ECARX reported a GAAP EPS of $0.01 and record revenue of approximately $305 million for Q4 2025, marking its second consecutive quarter of profitability [13] - The company aims to generate 50% of its revenue from international markets by 2030 and has secured around $200 million in funding to support its globalization strategy [14] - For 2026, ECARX projects full-year revenue between $1 billion and $1.1 billion, representing a growth of 20% to 30% [15]

Core Viewpoint - Investors in the Internet - Software sector should consider VTEX and Spotify, with VTEX currently presenting a better value opportunity based on various financial metrics [1]. Group 1: Zacks Rank and Earnings Outlook - VTEX has a Zacks Rank of 2 (Buy), while Spotify has a Zacks Rank of 3 (Hold), indicating a more favorable earnings outlook for VTEX [3]. - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that VTEX is likely experiencing an improvement in its earnings outlook [3]. Group 2: Valuation Metrics - VTEX has a forward P/E ratio of 23.22, significantly lower than Spotify's forward P/E of 32.37, indicating that VTEX may be undervalued relative to its earnings potential [5]. - The PEG ratio for VTEX is 0.62, compared to Spotify's PEG ratio of 1.11, suggesting that VTEX offers better value when considering expected earnings growth [5]. - VTEX's P/B ratio is 2.69, while Spotify's P/B ratio is 11.08, further highlighting VTEX's relative undervaluation [6]. Group 3: Value Grades - Based on various valuation metrics, VTEX holds a Value grade of B, whereas Spotify has a Value grade of D, indicating that VTEX is viewed more favorably by value investors [6].

Earnings Performance - VTEX reported quarterly earnings of $0.05 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.03 per share a year ago, resulting in an earnings surprise of +7.07% [1] - The company posted revenues of $67.95 million for the quarter ended December 2025, which was a miss against the Zacks Consensus Estimate by 0.54%, compared to $61.52 million in the same quarter last year [2] Stock Performance - VTEX shares have declined approximately 21.3% since the beginning of the year, contrasting with the S&P 500's gain of 1.5% [3] - The current Zacks Rank for VTEX is 3 (Hold), indicating that the stock is expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $60.16 million, while for the current fiscal year, the estimate is $0.15 on revenues of $267.35 million [7] - The Internet - Software industry, to which VTEX belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - In Q4 2025, GMV reached $6.3 billion, representing a year-over-year growth of 17.2% in U.S. dollars and 10.0% in FX-neutral terms [14] - For the full year, GMV reached $20.5 billion, up 12.1% in U.S. dollars and 12.9% in FX-neutral [15] - Subscription revenue in Q4 was $66.7 million, growing 12.2% year-over-year in U.S. dollars and 5.4% in FX-neutral [15] - Annual dollar churn remained broadly stable year-over-year, with net revenue retention at 99.5% in FX-neutral [15][16] - Existing stores' gross margin increased from 80% in 2024 to 82% in 2025, while operating margin reached 44%, a 1 percentage point increase year-over-year [16] Business Line Data and Key Metrics Changes - Customers generating over $250,000 in ARR reached 158, with revenue from this cohort up 13% year-over-year [6] - Subscription revenue from global markets grew 19.2% in FX-neutral, contributing 11.1% to total revenue [19] - Subscription gross profit in Q4 was $54.6 million, resulting in a gross margin of 81.8%, up from 78.8% in the same period of the prior year [19][20] Market Data and Key Metrics Changes - Global markets delivered 22% subscription revenue growth in 2025, with significant contributions from Europe [7] - Brazil's subscription revenue grew 12.2% in FX-neutral, while Latin America, excluding Brazil, grew 2.1% in FX-neutral [18] Company Strategy and Development Direction - The company is focusing on four growth levers: global expansion, B2B, retail media, and AI [5][11] - The strategy includes modernizing large enterprises with AI-ready capabilities and enhancing customer experiences through retail media [8][9] - The company aims to evolve from a platform that powers commerce to a multi-product AI-first platform [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that recent growth has been below long-term ambitions due to external factors, including a challenging macro environment and elongated sales cycles [3][4] - The company remains focused on disciplined execution and believes it is well-positioned competitively despite current market challenges [6][11] - For Q1 2026, the company expects subscription revenue to grow at a mid-single-digit percentage rate on a FX-neutral basis [23] Other Important Information - The company announced a new $50 million share repurchase program for Class A shares [22] - Free cash flow reached $11.1 million in Q4, representing a 16.3% margin [22] Q&A Session Questions and Answers Question: Can you provide insights on the elongated sales cycle and any market intelligence regarding normalization? - Management noted that the elongation of sales cycles is a market-wide issue driven by macro scenarios and uncertainty around AI, with stable win rates and churn [30][31] Question: What are the main risks and opportunities of AI for the company? - AI is seen as a structural shift that enhances the company's ability to deliver value, with risks associated with not embracing the technological revolution [36][39] Question: How is the B2B pipeline evolving? - The B2B segment is gaining traction, with roughly half of new deals in the U.S. and EMEA being B2B related, effectively doubling the addressable market [51][52] Question: How does the company view capital allocation moving forward? - The company prioritizes long-term value creation while maintaining flexibility, with plans to invest in R&D and pursue strategic acquisitions [40][42] Question: What factors are critical for gaining traction in global expansion? - The company emphasizes the importance of brand recognition, partnerships, and product localization in its global strategy [62][66]

Financial Data and Key Metrics Changes - In Q4 2025, GMV reached $6.3 billion, representing a year-over-year growth of 17.2% in US dollars and 10.0% in FX-neutral [14] - For the full year, GMV reached $20.5 billion, up 12.1% in US dollars and 12.9% in FX-neutral [15] - Subscription revenue in Q4 was $66.7 million, growing 12.2% year-over-year in US dollars and 5.4% in FX-neutral [15] - For the full year, subscription revenue reached $234.9 million, growing 7.9% in US dollars and 9.5% in FX-neutral [15] - Net revenue retention was 99.5% in FX-neutral, with annual dollar churn remaining broadly stable year-over-year [15][16] - Existing stores' gross margin increased from 80% in 2024 to 82% in 2025, while operating margin reached 44% [16] Business Line Data and Key Metrics Changes - Customers generating over $250,000 in ARR reached 158, with revenue from this cohort up 13% year-over-year [6] - Subscription revenue from global markets grew 19.2% in FX-neutral, contributing 11.1% to total revenue [19] - Subscription revenue from Brazil grew 12.2% in FX-neutral, while Latin America excluding Brazil grew 2.1% [18] Market Data and Key Metrics Changes - Global markets delivered 22% subscription revenue growth in 2025, with significant contributions from partnerships in Europe [7] - B2B demand in the US and Europe is showing durable growth, with Mondelz launching B2B in Brazil [7][12] Company Strategy and Development Direction - The company is focusing on four growth levers: global expansion, B2B, retail media, and AI [5][22] - The strategy includes transitioning to an AI-first platform, enhancing product offerings, and maintaining a disciplined execution approach [10][11] - The company aims to evolve from a commerce platform to a multi-product AI-driven company [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that recent growth has been below long-term ambitions due to external factors, including a challenging macro environment in Brazil and Argentina [3] - The company remains optimistic about its competitive positioning and the potential for growth through its strategic initiatives [7][23] - For Q1 2026, the company expects subscription revenue to grow at a mid-single-digit percentage rate on a FX-neutral basis [23] Other Important Information - Free cash flow reached $11.1 million in Q4, representing a 16.3% margin [22] - A new $50 million share repurchase program for Class A shares was announced [22] - The company executed a reorganization in sales and marketing to enhance efficiency and align investments with expected demand [21] Q&A Session Summary Question: Insights on the elongated sales cycle - Management noted that the elongation of sales cycles is due to macro scenarios and uncertainty around AI, with stable win rates and churn [30][31] Question: Drivers of gross margin gains - Gross margin gains in Q4 were primarily driven by AI automation in customer support, contributing to a 3 percentage point increase in subscription gross margin [32] Question: Risks and opportunities of AI - AI is seen as a structural shift, with opportunities in enhancing security and reliability, while risks involve not embracing the technological revolution [36][39] Question: Capital allocation strategy - The company prioritizes long-term value creation, with a focus on R&D investments and a disciplined approach to share buybacks [40][42] Question: Drivers for revenue growth back to double digits - The company identifies global expansion, B2B commerce, retail media, and AI as key growth drivers, with expectations for gradual acceleration in 2026 [48][50] Question: Evolution of the B2B pipeline - B2B is gaining traction, with roughly half of new deals in the US and EMEA being B2B related, effectively doubling the addressable market [51][52] Question: Competitive pressure from AI tools - Management believes that AI tools from large tech companies will enhance their software capabilities, positioning them favorably in the market [56][57] Question: Geographic investment prioritization - The company is shifting to a functional-oriented organizational structure to leverage AI capabilities globally, reducing the emphasis on regional approaches [63][66]

Financial Data and Key Metrics Changes - In Q4 2025, GMV reached $6.3 billion, representing a year-over-year growth of 17.2% in US dollars and 10.0% in FX-neutral terms [14] - For the full year, GMV reached $20.5 billion, up 12.1% in US dollars and 12.9% in FX-neutral [15] - Subscription revenue in Q4 was $66.7 million, growing 12.2% year-over-year in US dollars and 5.4% in FX-neutral [15] - For the full year, subscription revenue was $234.9 million, growing 7.9% in US dollars and 9.5% in FX-neutral [15] - Annual dollar churn remained broadly stable year-over-year, with net revenue retention at 99.5% in FX-neutral [15][16] - Existing stores' gross margin increased from 80% in 2024 to 82% in 2025, while operating margin reached 44% [16] Business Line Data and Key Metrics Changes - Customers generating over $250,000 in ARR reached 158, with revenue from this cohort up 13% year-over-year [5] - Subscription revenue from global markets grew 19.2% in FX-neutral, contributing 11.1% to total revenue [19] - Subscription revenue in Brazil grew 12.2% in FX-neutral, while Latin America excluding Brazil grew 2.1% [18] Market Data and Key Metrics Changes - Global markets delivered 22% subscription revenue growth in 2025, with significant contributions from Europe [6] - B2B demand in the US and Europe is showing durable growth, with half of new deals in these regions being B2B related [46] Company Strategy and Development Direction - The company is focusing on four growth levers: global expansion, B2B, retail media, and AI [5][22] - The strategy includes a disciplined execution plan to improve growth and profitability while investing in R&D for AI transformation [10][22] - The company aims to evolve from a commerce platform to a multi-product AI-first platform [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that recent growth has been below long-term ambitions due to external factors like macroeconomic challenges in Brazil and Argentina [3] - The company remains optimistic about its competitive position and the quality of new customer additions despite macro headwinds [23] - For Q1 2026, the company expects subscription revenue to grow at a mid-single-digit percentage rate on a FX-neutral basis [23] Other Important Information - Free cash flow reached $11.1 million in Q4, representing a 16.3% margin [21] - A new $50 million share repurchase program for Class A shares was announced [21] Q&A Session Summary Question: Can you provide insights on the elongated sales cycle and any market intelligence regarding normalization? - Management noted that the elongation of sales cycles is due to macro scenarios and uncertainty around AI, with stable win rates and churn [31] Question: What are the main risks and opportunities of AI for the company? - AI is seen as a structural shift that enhances the company's position as a mission-critical orchestration layer for commerce [36] Question: How is the B2B pipeline evolving? - B2B is gaining traction, with roughly half of new deals in the US and EMEA being B2B related, effectively doubling the addressable market [49] Question: How does the company plan to allocate capital moving forward? - The company prioritizes long-term value creation, with a focus on R&D investments and a disciplined approach to share buybacks [40] Question: What are the main drivers for revenue growth back to double digits? - The company anticipates growth from global expansion, B2B commerce, retail media, and an AI-first approach, with expectations of gradual acceleration in 2026 [46][48]

Business Overview Fourth Quarter 2025 February 2026 The Backbone for Connected Commerce Safe Harbor This presentation has been prepared by VTEX ("we," "us," "our," "VTEX" or the "Company"). This presentation may contain 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 even ...