Financial Data and Key Metrics Changes - In Q2 2025, GMV reached $4.8 billion, growing 9% year over year in U.S. Dollars and 14% on an FX neutral basis [26] - Subscription revenue was $57.2 million, a 6% increase in U.S. Dollars and an 11% increase on an FX neutral basis compared to Q2 2024 [26][27] - Non-GAAP income from operations increased by 35% to $8.5 million, resulting in a 14% non-GAAP operating margin, a three percentage points year-over-year margin expansion [30][31] - Free cash flow for the quarter was $7.1 million, up from $3 million in the same quarter last year, resulting in a free cash flow margin of 12% [32] Business Line Data and Key Metrics Changes - Subscription revenue growth was impacted by a mix shift in Brazil towards larger customers with lower implied take rates, affecting revenue growth despite maintaining similar margins [27][28] - Gross profit reached $45.3 million, up 15.2% in FX neutral terms, with a gross margin increase of 3.5 percentage points year over year [8][29] - Non-GAAP subscription gross margin reached 80%, up 180 basis points year over year, driven by gains in customer support efficiency through AI automation [28][29] Market Data and Key Metrics Changes - The U.S. and Europe markets are growing twice as fast as the overall company, indicating strong demand in these regions [5] - Argentina experienced a reversal in GMV growth, falling back to double-digit negative territory in Q2 after initial recovery signs in Q1 [40][59] - Brazil's GMV growth remained stable in the low twenties, but there was a mix shift towards larger enterprise customers, impacting revenue conversion [63] Company Strategy and Development Direction - The company is focusing on B2B commerce and retail media as strategic priorities, introducing new features and partnerships to enhance its platform [9][12][13] - The expansion of partnerships, such as with Whirlpool for the KitchenAid website in the U.S., highlights the company's global competitiveness [5][11] - The company aims to capture significant upside in the years ahead through disciplined growth strategies and investments in under-penetrated areas [9][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market environment, particularly in Argentina and Brazil, but expressed confidence in the company's competitive positioning and global expansion strategy [34][36] - The company is targeting FX neutral year-over-year subscription revenue growth of 6% to 9% for 2025, despite a reduction in revenue guidance due to market conditions [34] - Management emphasized the resilience of the business model and the ability to deliver profitable growth even in complex conditions [43][44] Other Important Information - The company repurchased 800,000 shares at an average price of $4.82 per share as part of its capital allocation strategy [32][33] - The company is set to launch the latest edition of Vitex Vision, showcasing its product roadmap and innovation priorities [11][16] Q&A Session Summary Question: Discussion on the decline in guidance for GMV and new subscriptions sold - Management explained that the decline was primarily due to the GMV performance of existing customers in Argentina and a mix shift in Brazil towards larger customers with lower take rates [39][40] Question: Details on increased margin expectations - Management highlighted that margin improvements are driven by gains in AI support automation and a reduction in sales and marketing expenses, which are flat year over year [43][44] Question: Changes in implementation timelines for larger clients - Management confirmed that there were no significant changes in implementation cycles, and the guidance already accounted for the longer cycles associated with larger enterprise deals [50][51] Question: Competitive landscape in Argentina and Brazil - Management noted that the competitive landscape in Argentina remains stable, and they are embedding expectations for consumption deceleration in Brazil into their guidance [60][63] Question: Impact of market volatility on B2B and retail media strategies - Management stated that the current market conditions reinforce the value proposition of B2B and retail media initiatives, with no major structural changes affecting their strategy [70][71]

Business Overview - VTEX is a SaaS commerce platform for enterprises, with 88% of its Annual Recurring Revenue (ARR) coming from enterprise customers, each generating at least $25,000 ARR, with an average of $131,000 in ARR [17] - VTEX's platform facilitated $19.0 billion in B2C Gross Merchandise Value (GMV) in the last twelve months (LTM) of the second quarter of 2025 [21] - VTEX reported $230.4 million in revenue for the LTM period of the second quarter of 2025 [21] - The company has 3,400 customers and 2,400 active online stores across 43 countries as of fiscal year 2024 [21] Financial Performance and Growth - VTEX boasts an attractive unit economics model with a Lifetime Value to Customer Acquisition Cost (LTV/CAC) ratio above 6x [68] - VTEX achieved a Non-GAAP subscription gross margin of 79.1% for the LTM period of the second quarter of 2025 [21] - The number of customers with ARR above US$250,000 experienced YoY growth of 23% in 2024 [69] - VTEX's Top 100 customers have shown a Compound Annual Growth Rate (CAGR) of 24% from 2017 to 2024 [72] - Top 100 customers ARR grew 29% FX Neutral CAGR from 2017 to 2024, reaching $98.7 million in ARR [79] Market and Technology - The Latin American e-commerce market reached $19.0 billion in GMV in fiscal year 2024 [32] - The worldwide e-commerce market is projected to reach $8.1 trillion by fiscal year 2028 [33] - Approximately 45% of VTEX's GMV comes from Collaborative Commerce transactions, with over 85% of GMV from customers using Collaborative Commerce integrations [44]

Group 1 - The company is positioned for high future growth, with a target price of $7.08, indicating a potential return of over 10% from the current price [1] - Future growth will be driven by the sale of enterprise products [1] - The analysis follows a triangulation approach involving valuation by multiples, discounted cash flow (DCF), and dividend yield [1] Group 2 - The focus is on the Consumer Discretionary and Consumer Staples sectors, prioritizing companies with smaller capitalization and low institutional coverage [1] - The investment philosophy combines income and value investing strategies, emphasizing a margin of safety in multiples and projected cash flow [1] - Dividend yield is considered a fundamental component for generating returns and mitigating risks, especially in low coverage stocks [1] Group 3 - The analysis is based on a bottom-up approach, concentrating on operational fundamentals, execution history, and sustainable growth drivers [1] - Suggestions involving options may be included when they align with the main thesis and offer an asymmetric advantage [1] - The goal is to produce in-depth, rational, data-driven analyses to support informed investment decisions [1]

Group 1 - VTEX shares have increased by 5% over the past four weeks, closing at $6.50, with a mean price target of $8.8 indicating a potential upside of 35.4% [1] - The average price targets range from a low of $7.30 to a high of $10.00, with a standard deviation of $1.33, suggesting a variability in estimates [2] - Analysts show a strong consensus that VTEX will report better earnings than previously estimated, which historically correlates with stock price increases [4][11] Group 2 - Recent revisions in earnings estimates have been positive, with two estimates moving higher and the Zacks Consensus Estimate increasing by 5.4% [12] - VTEX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting exact gains, they can indicate the direction of price movement [14]

Financial Data and Key Metrics Changes - Subscription revenue grew 15% in FX neutral terms in Q1 2025, reaching $52.6 million compared to $50.4 million in Q1 2024, a 4% increase in U.S. dollars [25][30] - Gross profit reached $41 million, a 22% growth in FX neutral terms, with a 3.7 percentage points margin increase year over year [5][30] - Non-GAAP operating income increased to $5.3 million, an 85% growth year over year, with a 4.2 percentage points margin increase [5][30] - Non-GAAP net income for Q1 2025 was $5.3 million, more than doubling year over year, with a 10% margin [29][30] - Free cash flow reached $6.6 million, compared to $1.6 million in the same quarter of the prior year, achieving a free cash flow margin of 12% [29][30] Business Line Data and Key Metrics Changes - Non-GAAP subscription gross margin reached 79%, up 191 basis points year over year, reflecting operational efficiency improvements [26][30] - Total gross margin rose to 76%, up 371 basis points year over year, driven by a lower mix of services revenue [26][30] Market Data and Key Metrics Changes - GMV for the quarter reached $4.3 billion, growing 8% year over year in U.S. dollars and 17% on an FX neutral basis [25][30] - The company continues to expand its presence in various markets, including new customer launches in Argentina, Brazil, Colombia, Ecuador, Spain, Mexico, and the U.S. [7][8] Company Strategy and Development Direction - The company is focusing on expanding its product suite and enhancing operational efficiency through AI and automation [6][43] - A strategic emphasis is placed on B2B commerce and retail media, with the acquisition of Newpeo to enhance retail advertising capabilities [13][30] - The company aims to evolve from a single platform to a comprehensive suite of commerce products, reinforcing its position as a trusted partner for global enterprises [12][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's profitable growth trajectory despite macroeconomic volatility [30][54] - The company is targeting FX neutral year-over-year subscription revenue growth of 12.5% to 15.5% for Q2 2025 and 14% to 17% for the full year [30][54] - Management highlighted the importance of maintaining a disciplined approach to cost and expenses while focusing on customer value [57][30] Other Important Information - The company repurchased 2.7 million Class A common shares at an average price of $5.56 per share, totaling $15 million [29][30] - The company was recognized as a customer choice in the 2025 Gartner Voice of Customers for Digital Commerce report for the second consecutive year [11][12] Q&A Session Summary Question: Comment on subscription gross profit and sustainability of gains - Management noted a 190 basis point improvement in subscription gross margin, attributing gains to customer support optimization and the maturity of the partner ecosystem [35][36] Question: Areas seeing headcount reduction - Management indicated stability in headcount with minor changes primarily in the support area, not reflecting a trend [38] Question: Increase in R&D expenses - Management explained the increase in R&D expenses as a strategic investment in product development and innovation, particularly in B2B and retail media [42][43] Question: Update on U.S. expansion - Management confirmed ongoing momentum in U.S. sales, focusing on high-value enterprise customers and building durable relationships [46][47] Question: Macro situation in the U.S. and IT budgets - Management highlighted the company's resilience amid macroeconomic volatility, noting that enterprises are reassessing their technology infrastructure for cost efficiency [52][54] Question: Subscription revenue build-up by geography and category - Management provided qualitative insights, indicating Brazil's contribution to growth through new customer implementations [65] Question: Economics of retail media business - Management expressed confidence in the retail media business, emphasizing the connection between publishers and advertisers, and the rapid growth of the advertiser network post-acquisition [68][69]

Business Overview - VTEX is a SaaS digital commerce platform for enterprise brands and retailers [8, 12] - 88% of VTEX's ARR comes from enterprise customers, each generating at least $25K ARR, with an average of $131K in ARR as of FY 2024 [12] - VTEX's platform processed $18.2 billion in GMV B2C in FY 2024 [14] - VTEX has 3400 customers and 2400 active online stores across 43 countries as of FY 2024 [15] Financial Performance - VTEX achieved $226.7 million in revenue in FY 2024 [15] - The company's non-GAAP subscription gross margin was 78.2% in FY 2024 [15] - Non-GAAP income from operations margin increased from 19.1% in 4Q23 to 20.1% in 4Q24 [78] - VTEX's subscription revenue grew by 20.2% FX Neutral in 2024, reaching $228.8 million [94] Growth and Strategy - VTEX has a LTV/CAC ratio above 6x [48] - VTEX's Top 100 Customers are growing, with ARR increasing from $23.9 million in 2017 to $98.7 million in 2024, a 29% FXN CAGR [55, 57]

Financial Data and Key Metrics Changes - Subscription revenue grew 15% in FX neutral terms in Q1 2025, reaching $52.6 million compared to $50.4 million in Q1 2024, a 4% increase in U.S. dollars [26] - Gross profit reached $41 million, a 22% growth in FX neutral terms, with a 3.7 percentage points margin increase year over year [5] - Non-GAAP operating income increased to $5.3 million, an 85% growth year over year, with a 4.2 percentage points margin increase [5][29] - Non-GAAP net income reached $5.3 million in Q1 2025, more than doubling year over year, with a 5.2 percentage points improvement in margin [30] - Free cash flow was $6.6 million, compared to $1.6 million in the same quarter of the prior year, achieving a free cash flow margin of 12% [29] Business Line Data and Key Metrics Changes - Non-GAAP subscription gross margin reached 79%, up 191 basis points year over year, reflecting operational efficiency improvements [27] - Total gross margin rose to 76%, up 371 basis points year over year, driven by a lower mix of services revenue and subscription gross margin gains [27] Market Data and Key Metrics Changes - GMV for the quarter reached $4.3 billion, growing 8% year over year in U.S. dollars and 17% on an FX neutral basis [26] - The company successfully brought several new customers live across various regions, including Argentina, Brazil, Colombia, Ecuador, Spain, Mexico, and the U.S. [7][8] Company Strategy and Development Direction - The company is focusing on building a future where intelligent agents evolve into digital workers, managing core workflows autonomously [6] - The strategy includes doubling down on high-impact product bets, particularly in B2B commerce and retail media, with the acquisition of Newpeo to enhance retail advertising capabilities [14] - The company aims to solidify its position as a trusted, scalable, and innovation-driven platform for global enterprises [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of the profitable growth strategy despite ongoing macroeconomic volatility [4] - The company is targeting FX neutral year-over-year subscription revenue growth of 12.5% to 15.5% for Q2 2025 and 14% to 17% for the full year 2025 [31] - Management acknowledged the challenges posed by macroeconomic conditions but emphasized the company's resilience and adaptability [56] Other Important Information - The company repurchased 2.7 million Class A common shares at an average price of $5.56 per share, totaling $15 million [29] - The company was recognized as a customer choice in the 2025 Gartner Voice of Customers for Digital Commerce report for the second consecutive year [12] Q&A Session Summary Question: Comment on subscription gross profit and sustainability of gains - Management noted a 190 basis point improvement in subscription gross margin, attributing gains to customer support optimization and the maturity of the partner ecosystem [38] Question: Areas seeing headcount reduction - Management indicated stability in headcount with minor changes, primarily in the support area, but not indicative of a trend [40] Question: Increase in R&D expenses - Management explained the increase in R&D expenses as a strategic investment in product development and innovation, particularly in B2B and retail media [46] Question: Update on U.S. expansion - Management confirmed ongoing momentum in the U.S. market, focusing on high-value enterprise customers and building durable relationships [50] Question: Macro situation in the U.S. and IT budgets - Management highlighted the company's resilience amid macroeconomic volatility, noting that enterprises are reassessing their technology infrastructure for cost efficiency [56] Question: Subscription revenue build-up by geography and category - Management provided qualitative insights, indicating that Brazil is contributing to growth through new customer implementations [68] Question: Economics of the retail ads media business - Management expressed confidence in the retail media business, emphasizing the connection between publishers and advertisers and the rapid growth of the advertiser network [72]

Financial Data and Key Metrics Changes - In Q4 2024, GMV reached $5.4 billion, showing flat year-over-year growth in US dollars and an 11% increase in FX-neutral terms [39] - Revenue totaled $61.5 million, growing 1% year-over-year in US dollars and 12% in FX-neutral for Q4 2024, while full-year revenue reached $226.7 million, representing 13% and 18% growth in US dollars and FX-neutral respectively [40][94] - Subscription revenue for Q4 2024 was $59.5 million, a 2% increase in US dollars and 13% in FX-neutral, with full-year subscription revenue at $217.7 million, up from $190.3 million in 2023, indicating 14% and 20% growth in US dollars and FX-neutral [43][97] Business Line Data and Key Metrics Changes - The number of customers generating over $250,000 in annual recurring revenue increased by 23%, while annual revenue churn remained stable in the mid-single digits [58] - Existing stores' revenue increased to $169 million, with a net revenue retention rate of 104% in FX-neutral [98][100] - Subscription gross margin improved to 78.9% in Q4 2024, up from 78.6% in the same period last year [104] Market Data and Key Metrics Changes - Revenue generated outside Brazil accounted for 43.4% of total revenues in 2024, with Brazil's subscription revenue growing 28% in FX-neutral [101][102] - Latin America excluding Brazil saw a 6% increase in subscription revenue in FX-neutral, while the Rest of the World subscription revenue grew 34% in FX-neutral [102] Company Strategy and Development Direction - VTEX aims to transition from a single product platform to an integrated suite of solutions, expanding its offerings to include B2C, B2B, Sales App, and more [72] - Strategic investments in AI and conversational commerce capabilities, including a stake in Synerise and the acquisition of Weni, are intended to enhance VTEX's product suite and market position [18][73] - The company is focused on building trust with customers and delivering on promises, positioning itself as a comprehensive commerce suite for enterprises [19][73] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Brazil due to softer consumer spending and currency devaluation but expressed confidence in sustaining profitable growth through new customer acquisitions and product innovations [41][96] - The company targets FX-neutral year-over-year subscription revenue growth of 13% to 15% for Q1 2025 and 14% to 17% for the full year 2025 [56][57] - Management remains optimistic about future opportunities despite short-term growth rate challenges, emphasizing strong operational indicators [57][58] Other Important Information - A new share-repurchase program was approved, allowing the repurchase of up to $30 million in Class A common shares [108] - The company repurchased 1.8 million Class A common shares at an average price of $6.08 per share, totaling $11.2 million in Q4 2024 [108] Q&A Session Summary Question: What are the expectations for subscription revenue growth in 2025? - The company is targeting FX-neutral year-over-year subscription revenue growth of 13% to 15% for Q1 2025 and 14% to 17% for the full year 2025 [56][57] Question: How is the company addressing the challenges in Brazil? - Management highlighted the importance of new customer acquisitions and product innovations to sustain growth despite the challenging consumption environment in Brazil [41][96] Question: What strategic investments has the company made recently? - VTEX made strategic investments in AI and conversational commerce capabilities, including a stake in Synerise and the acquisition of Weni, to enhance its product offerings [18][73]

Core Insights - VTEX reported revenue of $61.52 million for the quarter ended December 2024, reflecting a 1.3% increase year-over-year, but a -3.00% surprise compared to the Zacks Consensus Estimate of $63.43 million [1] - The company's EPS was $0.03, up from $0.02 in the same quarter last year, but fell short of the consensus estimate of $0.05, resulting in a -40.00% EPS surprise [1] - The stock has returned -0.8% over the past month, compared to a -1.8% change in the Zacks S&P 500 composite, and currently holds a Zacks Rank 3 (Hold) [3] Revenue Breakdown - Gross Merchandise Volume (GMV) was reported at $5.39 billion, lower than the estimated $5.65 billion [4] - Services revenue was $2.06 million, slightly above the $2 million average estimate, but represented a -17.4% year-over-year decline [4] - Subscription revenue reached $59.46 million, which was below the $61.43 million average estimate, but showed a +2.1% increase year-over-year [4]

Company Performance - VTEX reported quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.05 per share, and showing an increase from $0.02 per share a year ago, representing an earnings surprise of -40% [1] - The company posted revenues of $61.52 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3%, and compared to year-ago revenues of $60.72 million [2] - Over the last four quarters, VTEX has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Outlook - VTEX shares have increased approximately 4.8% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is $0.02 on revenues of $57.03 million, and for the current fiscal year, it is $0.14 on revenues of $256.4 million [7] Industry Context - The Internet - Software industry, to which VTEX belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact VTEX's performance [5] - Another company in the same industry, Soho House & Co, is expected to report a quarterly loss of $0.07 per share, with revenues projected at $313.14 million, reflecting a year-over-year increase of 7.7% [9]