Zenvia (ZENV) Q4 2024 Earnings Call May 20, 2025 10:00 AM ET Company Participants Cassio Bobsin Machado - Founder, CEO, Chairman & Interim Chief Sales OfficerShay Chor - CFO Operator REPRESENTATIVE:] 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. And for the Q and A session, we ask yo ...

Financial Data and Key Metrics Changes - In Q4 2024, revenues reached BRL 231 million, up 7% year over year, primarily driven by strong volume growth in CPaaS, offsetting declines in SaaS revenues [16][20] - Adjusted gross profit declined 60% to BRL 49 million, with gross margin decreasing to 21% due to a higher mix of lower-margin CPaaS growth and a one-time SMS cost adjustment of BRL 27.8 million recognized in Q4 [16][17] - EBITDA, excluding certain expenses, closed the quarter at BRL 35 million, a 6% decline from BRL 37 million in Q4 2023 [19] Business Line Data and Key Metrics Changes - The Customer Cloud segment generated revenues of approximately BRL 180 million in 2024, with an expected growth of 25% to 30% in 2025 [14][15] - CPaaS market grew 25% year over year between 2023 and 2024, while SaaS grew at high single digits, indicating a more dynamic CPaaS market [20] - SaaS margins declined due to tighter profitability from enterprise clients and higher costs related to the launch of the Customer Cloud [19] Market Data and Key Metrics Changes - The market for Customer Cloud solutions is expected to continue growing at a strong double-digit pace in the coming years, supported by advanced automation and AI [15] - International expansion, particularly in Argentina and Mexico, is performing well and contributing positively to the Customer Cloud segment [11][12] Company Strategy and Development Direction - The company has entered its fourth strategic cycle focused on accelerating growth in its newly defined core business, the Zenvia Customer Cloud [7][12] - A shift to a volume-based pricing model is being implemented, allowing clients to pay based on interactions rather than a per-seat model, enhancing operational efficiency [11][12] - The company is committed to streamlining operations further with AI and automation, while also evaluating opportunities for divestments to optimize capital structure [28][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early improvements seen in Q1 2025, with expectations of revenue growth picking up and SaaS margin recovery [30][60] - The company is focused on leveraging its unified platform and market opportunities to drive organic growth and profitability while reducing leverage [12][28] Other Important Information - The company ended 2024 with a cash balance of BRL 117 million and expects EBITDA to continue growing at a faster pace than CapEx [26] - G&A expenses were reduced by 11% year over year, contributing to improved operational efficiency [24][23] Q&A Session Summary Question: Can you provide clarity on Zenvia's full year 2025 revenue outlook? - The Customer Cloud segment is projected to grow 25% to 30%, while traditional SaaS and CPaaS business lines are expected to see flat to modest growth [34][35] Question: What is the current status of your divestment plans? - Specific details on divestments cannot be shared, but the focus is on improving capital structure and deleveraging the balance sheet [37][38] Question: What new trends are emerging with AI integration? - The company is seeing a shift towards more interconnected use cases that leverage customer data for personalized experiences [40] Question: How is the pricing model evolving? - The company is moving towards a usage-based pricing model, charging per interaction rather than per seat, which is expected to enhance efficiency and revenue [41][43] Question: What are the main goals for 2025? - The primary goals include improving EBITDA and aligning it better with the capital structure, while also focusing on organic growth and customer engagement [53][55]

ZENVIA New Strategic Cycle 4Q & FY 2024 Earnings Presentation Opening Remarks Cassio Bobsin Founder & CEO AI is no longer a promise. It has become a fundamental pillar in how companies engage with their customers. 3 2003 | Startup 2011 | SMS Consolidation 2018 | Portfolio expansion with a focus on CX SaaS 2025 | Zenvia Customer Cloud BUSINESS CYCLES STRATEGIC CYCLES | STARTING THE 4TH CYCLE 4 Innovative Model Flexibility of adoption Use of AI Scalable Revenue 5 Key Financial Highlights Shay Chor CFO Used by ...

Full year top line fueled by strong CPaaS revenue increaseStrict expense control with G&A as % of revenues improving 4p.p. to 11.9% in FY 2024New Strategic Cycle Announced for 2025SÃO PAULO, May 16, 2025 /PRNewswire/ -- Zenvia Inc. (NASDAQ: ZENV), the leading cloud-based CX solution in Latin America empowering companies to craft personal, engaging and fluid experiences throughout the customer journey, today reported its operational and financial metrics for the fourth quarter and full year of 2024.Cassio Bo ...

Financial Performance - The company incurred losses of R$154,658 thousand for the year ended December 31, 2024, R$60,771 thousand for 2023, and R$243,025 thousand for 2022, indicating a history of financial losses [43]. - The company has a negative consolidated working capital of R$355,769 thousand as of December 31, 2024, raising concerns about its ability to continue as a going concern [41]. - The company recorded provisions for disputes amounting to R$1,797 thousand and R$42,207 thousand as of December 31, 2024 and 2023, respectively, indicating a significant increase in potential liabilities [182]. Revenue Sources - 66.8% of the company's revenue for the year ended December 31, 2024, was derived from the CPaaS segment, primarily from SMS text messaging services [45]. - A significant portion of revenue, 38.2% for 2024, 33.4% for 2023, and 37.0% for 2022, was concentrated among the top 10 customers, with the largest customer accounting for over 7% of total revenue in 2024 [46]. - The Net Revenue Expansion (NRE) rate for the year ended December 31, 2024, was 106.5%, showing growth in revenue from existing customers [71]. Customer Dynamics - The number of active customers decreased from 13,336 in 2022 to 10,622 in 2024, indicating a decline in customer retention [71]. - The company is increasingly dependent on WhatsApp as a communication channel, which may be affected by changes in WhatsApp's policies [52]. Financing and Capital Structure - The company may require additional financing to support future capital requirements, which could be difficult to secure on favorable terms due to existing indebtedness [56]. - As of December 31, 2024, the total loans, borrowings, and debentures outstanding amounted to R$126,855 thousand, consisting of R$81,137 thousand in current liabilities and R$45,718 thousand in non-current liabilities [58]. - The company may need to raise additional capital in the future, which could dilute investors' interests in its share capital [233]. Market and Competitive Landscape - The market for the company's products is relatively new and unproven, with potential risks including changes in consumer behavior and competition from alternative products [44]. - The market for cloud communications is highly competitive, with low barriers to entry, and the company faces significant competition from larger competitors [85]. - The company faces challenges in adapting to rapidly changing technology and evolving industry standards, which could adversely affect sales [59]. Strategic Initiatives - The company has initiated a new strategic cycle focusing on its SaaS business, particularly the recently launched Zenvia Customer Cloud [77]. - The company completed acquisitions of SenseData, D1, and Movidesk to expand its SaaS offerings and enhance multichannel communications capabilities [89]. - The launch of the Zenvia Customer Cloud solution on October 16, 2024, aims to revolutionize customer experience through AI integration [80]. Compliance and Regulatory Risks - Compliance with the LGPD (General Data Protection Law) requires the company to adapt its data processing activities, with penalties for violations including fines up to R$50 million per violation [129]. - The company is subject to evolving privacy and data protection laws, which may increase compliance costs and impact its ability to operate effectively in various jurisdictions [134]. - The company is implementing an anti-corruption compliance program to manage risks associated with anti-corruption laws, which could result in significant fines and reputational harm if violated [139]. Economic and Political Environment - The Brazilian government enacted Constitutional Amendment No. 132 on December 20, 2023, introducing a new taxation model that replaces IPI, PIS, and COFINS with a Contribution on Goods and Services (CBS) and a Tax on Goods and Services (IBS) starting in 2026 [144]. - The ongoing economic and political instability in Brazil may lead to increased volatility in the securities market, adversely affecting the company's financial condition [186]. - High levels of inflation in Brazil historically harm the economy and capital markets, which could negatively impact the company's business and share price [191]. Shareholder Dynamics - Controlling shareholders own 100% of Class B common shares and 35.3% of Class A common shares, representing approximately 92.99% of the voting power and 64.50% of total equity ownership [215]. - The disparity in voting rights between Class A and Class B common shares may adversely affect the price of Class A common shares and limit investors' ability to influence corporate matters [216]. - The company has not adopted a dividend policy, and any future distributions will depend on various factors, including operational results and financial condition [224]. Operational Challenges - The company faces challenges in expanding operations into new market segments and geographic regions, which may require substantial expenditures and time [112]. - The company may incur unforeseen expenses to remediate the identified material weaknesses in internal control over financial reporting [165]. - Cybersecurity threats continue to increase, and any data security incidents could result in loss of confidential information and damage to the company's reputation [158].

Company Overview - Zenvia Inc. is a leading cloud-based customer experience (CX) platform in Latin America, focusing on transforming customer journeys for companies [1][3] - The company has over 12,000 customers and operates throughout Latin America, providing a unified, multi-channel customer cloud platform [3] Financial Results Announcement - Zenvia will release its fiscal 2024 fourth quarter and full year results after market close on May 15, 2025 [1] - A webcast to discuss the results and business outlook is scheduled for May 20, 2025, at 10:00 am ET [2] Business Focus - Zenvia aims to create personalized, engaging, and fluid experiences across the entire customer journey, enhancing brand presence, sales, and customer support [3]

Core Insights - Zenvia has announced the beginning of a new strategic cycle and is inviting investors to a webcast for further details [1][2] Company Overview - Zenvia is a leading SaaS provider for customer experience in Latin America, focusing on creating personalized and engaging experiences across the customer journey [3] - The company has over 13,000 customers and operates throughout Latin America, aiming to enhance brand presence, increase sales, and improve customer support [3] - Zenvia's platform is designed to generate operational efficiency and productivity for businesses of all segments [3]

Core Insights - Zenvia is entering a new strategic cycle focused on accelerating the growth of its Zenvia Customer Cloud, a unified customer experience solution [2][7] - The company aims to divest non-core assets to optimize its capital structure and concentrate on its new core business [5][7] Company Overview - Zenvia has been a leader in customer experience SaaS in Latin America for 21 years, with a mission to revolutionize customer interactions [2][9] - The Zenvia Customer Cloud integrates all stages of the customer journey, utilizing AI tools to personalize interactions [3][4] Financial Performance - In 2024, Zenvia Customer Cloud generated estimated revenues between R$180 million and R$200 million, with a projected growth of 25% to 30% in 2025 [4] - The gross margin for this operation is expected to be between 68% and 70%, with a positive EBITDA margin [4] Operational Changes - The company is implementing a workforce reduction of approximately 15%, expected to save between R$30 million and R$35 million in 2025 [6] - The new unified operating model will enhance automation and AI utilization, streamlining operations and simplifying the company's structure [6]

Financial Data and Key Metrics Changes - The company reported a significant year-over-year increase in EBITDA, reaching BRL 41 million in Q3 2024, which is almost threefold compared to the same period last year [9] - Year-to-date EBITDA totaled BRL 98 million, up roughly 150% from the same period last year [9] - The consolidated adjusted gross margin for the nine months reached 40.7%, slightly below the guidance for the year [15] Business Line Data and Key Metrics Changes - CPaaS revenues grew 37% year-over-year, reaching an all-time high of almost BRL 200 million in Q3 2024 [10] - The SaaS segment delivered a 16% increase in revenues compared to the same period last year, with a solid 12% sequential growth from Q2 [10] - The SaaS segment's gross profit margin decreased by 230 basis points year-over-year, primarily due to the impact from enterprise customers [13] Market Data and Key Metrics Changes - The company is experiencing strong growth in the SMB sector, which is expected to drive future growth [7] - The enterprise portion of the SaaS segment is facing a competitive environment, leading to lower-than-expected new sales [8] Company Strategy and Development Direction - The launch of Zenvia Customer Cloud marks a strategic shift from a CPaaS platform to a comprehensive customer experience SaaS in Latin America [3] - The company aims to enhance customer relationships through AI-driven solutions and data analytics, focusing on organic growth and profitability [3][4] - The strategy includes reducing leverage and optimizing capital structure to deliver sustainable value to shareholders [3] Management's Comments on Operating Environment and Future Outlook - Management expects continued growth in the SaaS segment, while CPaaS revenues are anticipated to be slightly below Q3 levels due to nonrecurring volumes [31] - The company is optimistic about the adoption of Zenvia Customer Cloud, particularly among SMBs, and is seeing increased cross-selling opportunities [25][26] - Management reiterated guidance for 2024, emphasizing a focus on organic growth and EBITDA generation [21][32] Other Important Information - The company has successfully reduced G&A expenses as a percentage of revenue from 17% in the first nine months of 2023 to 13% in 2024, reflecting improved productivity [17] - The net debt to EBITDA ratio has improved significantly, decreasing from over 10 times to 2.2 times by the end of September 2024 [20] Q&A Session Summary Question: How is competition in the SaaS segment, especially in large enterprises? - Management noted that while the focus is on SMBs, there is early traction with enterprise customers adopting the platform, and they are excited about the unique value proposition being offered [25] Question: How much of the net additions in active customers is attributed to Zenvia Customer Cloud? - The increase in active customers is primarily due to the focus on Zenvia Customer Cloud, with significant traction in both new and existing customers [25] Question: Can you share more details about the rollout of Zenvia Customer Cloud? - The rollout has been positive, with several features launched, and the company is migrating customers from standalone products to the new unified solution [29] Question: What should be expected for CPaaS and SaaS revenues in Q4? - CPaaS revenues are expected to be slightly below Q3 levels, while SaaS is anticipated to continue its growth trajectory [31] Question: How deep is AI embedded in the products? - The company has integrated several AI features into its products, focusing on enhancing customer experiences and operational efficiency [33] Question: Will expense reductions impact future revenue growth? - Management believes that the optimization of operations will not negatively impact revenue growth, as efficiencies are being realized through integration [34] Question: Can we expect more positive net income in the next quarter or next year? - Management aims to continue delivering value to shareholders, with expectations for net income to improve alongside EBITDA growth [37] Question: What is the guidance for 2025 in terms of free cash flow EBITDA? - Currently, the focus remains on delivering results for 2024, with guidance for 2025 expected to be provided early next year [38]

Core Insights - Zenvia Inc. reported strong financial performance with double-digit growth in both revenue and profitability, achieving a normalized EBITDA of BRL 135.2 million, which is on track to meet the 2024 guidance [1][21] - The official launch of Zenvia Customer Cloud is a significant milestone aimed at enhancing customer relationships through AI-driven solutions [2][5] Financial Performance - Q3 2024 revenues reached BRL 284.4 million, a 30.1% increase from BRL 218.6 million in Q3 2023, driven by SaaS growth of 16% and CPaaS growth of 37% [4][17] - Non-GAAP Adjusted Gross Profit for Q3 2024 was BRL 102.5 million, up 22.3% YoY, while Non-GAAP Adjusted Gross Margin decreased to 36.0% [4][19] - Normalized EBITDA for Q3 2024 was BRL 41.2 million, a 153.1% increase from Q3 2023, marking the highest quarterly EBITDA in three years [5][20] Customer Metrics - Total active customers stood at 12,152, with a year-over-year decrease of 10.8% due to a client-base cleanup [5][16] - The SaaS segment reported revenues of BRL 87.6 million in Q3 2024, a 16.3% increase YoY, primarily from small and medium-sized businesses [9][10] - The CPaaS segment generated revenues of BRL 196.8 million in Q3 2024, reflecting a 37.4% increase YoY, with a notable temporary spike in volumes from large enterprise customers [12][14] Operational Efficiency - The company has streamlined operations, resulting in a year-over-year reduction in G&A expenses as a percentage of revenue, which decreased to 13.1% from 16.7% [20] - Cash balance at the end of Q3 2024 was BRL 102.7 million, reflecting a focus on cash preservation while ensuring sustainable growth [5][20] Future Outlook - Zenvia reiterated its FY 2024 guidance, projecting revenues between BRL 930 million and BRL 970 million, with a year-over-year growth of 15% to 20% [23]