Financial Data and Key Metrics Changes - In Q1 2025, the company recorded a strong top line growth of 39%, reaching almost 300 million reais, primarily driven by CPaaS [3] - Consolidated adjusted gross profit declined 21% to 74 million reais from 94 million reais a year ago, with gross margin decreasing 25% [4] - Normalized EBITDA totaled 20 million reais in the quarter, in line with expectations, and is expected to increase progressively over the year [5] - The company ended the quarter with a cash balance of 86 million reais [11] Business Line Data and Key Metrics Changes - CPaaS revenue increased by 58%, making up 73% of total revenues, while SaaS revenue grew by 5% year over year, representing 25% of total revenues [6][7] - Adjusted gross profit from SaaS remained stable at 43 million reais, but adjusted gross margin decreased by 2.7 percentage points to 54% [8] - The CPaaS business was impacted by newly acquired clients with lower margins and increased SMS costs from carriers [10] Market Data and Key Metrics Changes - The company observed strong SMS volume growth year over year, although there was a slight deceleration expected in Q2 compared to Q1 [19][26] - The company anticipates around 50 million reais in revenues from LATAM in 2025, representing over 50% growth compared to 2024 [40] Company Strategy and Development Direction - The company is focused on expanding Xenvia Customer Cloud in Brazil and Latin America, aiming for organic growth while maintaining a commitment to deleveraging [12] - The rollout of the new strategic cycle is expected to impact short-term profitability but aims to boost medium and long-term performance [13] - The company is evaluating opportunities to divest non-core assets to optimize capital structure [13] Management's Comments on Operating Environment and Future Outlook - Management noted that while Q1 was strong, there is a softening expected in Q2, but SMS volumes continue to grow year over year [19][26] - The company is confident in the growth of Xenvia Customer Cloud and SaaS, expecting continued trends from Q1 with some acceleration in Xenvia Customer Cloud [27] - Management emphasized the importance of deleveraging the balance sheet to accelerate growth, especially in a high-interest-rate environment [23] Other Important Information - The company incurred approximately 8 million reais in one-time severance costs during Q1 related to workforce reduction [5] - G&A expenses decreased by 24% year over year, reaching 24 million reais, which is 8% of revenues [10] Q&A Session Summary Question: Reasons behind CPaaS growth in SMS volume - Management indicated that the growth is primarily due to marketing campaigns relying on SMS, rather than AI-related factors [16] Question: More details on Zenvia Customer Cloud growth - The 15% year-over-year growth includes both new clients and those migrating to the platform, with expectations for acceleration as awareness increases [19] Question: Current headwinds for Zenvia Customer Cloud adaptation - Management stated that they are being cautious in migrating customers to ensure a positive experience, rather than customers being hesitant [20] Question: Progress on asset sales and leverage - Management noted that they cannot comment specifically on asset sales but are focused on deleveraging the balance sheet and improving capital structure [22][23] Question: Guidance for the year and trends - Management refrained from providing formal guidance but discussed trends indicating strong growth in SMS and Xenvia Customer Cloud, with expectations for a stronger second half of the year [26] Question: Customer churn and retention strategies - Management acknowledged some churn in legacy solutions but reported healthy retention rates in core software, emphasizing efforts to improve customer experience [42]

Financial Data and Key Metrics Changes - In Q1 2025, the company recorded a strong top line growth of 39%, reaching almost 300 million reais, primarily driven by CPaaS [3][4] - Consolidated adjusted gross profit declined 21% to 74 million reais from 94 million reais a year ago, with gross margin decreasing 25% [4][9] - Normalized EBITDA totaled 20 million reais in the quarter, in line with expectations, and is expected to increase progressively over the year [5][10] Business Line Data and Key Metrics Changes - CPaaS revenue increased by 58%, making up 73% of total revenues, while SaaS revenue grew by 5% year over year, representing 25% of total revenues [6][7] - Adjusted gross profit for SaaS remained stable at 43 million reais, but adjusted gross margin decreased by 2.7 percentage points to 54% due to the transition to Zenvia customer cloud [8][9] - G&A expenses decreased by 24% year over year, reaching 24 million reais, which is 8% of revenues, down from 14.7% a year ago [9][10] Market Data and Key Metrics Changes - The company expects SMS volumes to continue growing year over year, although at a slightly decelerated pace compared to Q1 [18][24] - The company estimates around 50 million reais in revenues from LATAM in 2025, representing over 50% growth compared to 2024 [38] Company Strategy and Development Direction - The company is focused on expanding Xenvia Customer Cloud in Brazil and Latin America, aiming for organic growth while maintaining a commitment to deleveraging [11][12] - The rollout of the new strategic cycle is impacting short-term profitability but is expected to boost medium and long-term performance [12] - The company is evaluating opportunities to divest non-core assets to optimize capital structure [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while Q1 was strong, there is a slight softening expected in Q2, but SMS volumes are still expected to grow in high double digits [18][24] - The company is optimistic about the growth of Xenvia Customer Cloud and SaaS, with expectations of 25-30% growth for the full year [19][24] - Management expressed satisfaction with the current churn levels, indicating that early churn is primarily from legacy solutions [41] Other Important Information - The company incurred approximately 8 million reais in one-time severance costs during Q1 related to workforce reduction [5][10] - The company ended the quarter with a cash balance of 86 million reais and expects EBITDA to continue growing faster than CapEx [10] Q&A Session Summary Question: Reasons behind CPaaS growth in SMS volume - Management indicated that the growth is primarily due to marketing campaigns rather than AI-related factors [15][18] Question: Clarification on Zenvia Customer Cloud growth calculation - Management explained that the 15% growth includes both new clients and those migrating to the platform, and they remain confident in achieving 25-30% growth for the year [19] Question: Current headwinds for Zenvia Customer Cloud adoption - Management stated that they are being cautious in migrating customers to ensure a positive experience, rather than customers being hesitant [20] Question: Progress on asset sales and leverage - Management noted that they cannot comment specifically on asset sales but are focused on deleveraging the balance sheet and improving capital structure [21][22] Question: Guidance for the year and trends - Management refrained from providing formal guidance but discussed trends indicating strong growth in CPaaS and Xenvia Customer Cloud [24] Question: Customer churn and retention strategies - Management reported that churn is higher in legacy solutions but healthy in core software, and they are working on improving customer retention [41]

Core Insights - Zenvia Inc. reported a strong revenue growth of 39.2% year-over-year, reaching BRL 295.9 million in Q1 2025, driven primarily by a 58.5% increase in CPaaS revenues [11][24][13] - The transition to Zenvia Customer Cloud is progressing as planned, with expectations for completion by year-end 2025, which is anticipated to enhance long-term performance [2][6] - General and administrative expenses (G&A) decreased by 24% year-over-year, resulting in G&A as a percentage of revenues improving to 8.0% [17][18] Financial Performance - Normalized EBITDA for Q1 2025 was BRL 20 million, down 15.1% from Q1 2024, attributed to lower gross profit from the CPaaS segment due to increased SMS costs [11][18] - Gross profit decreased by 23.7% year-over-year to BRL 61.7 million, with a gross margin of 20.8%, down 17.2 percentage points from the previous year [11][24] - Non-GAAP Adjusted Gross Profit reached BRL 74.2 million, a decline of 20.8% year-over-year, with a Non-GAAP Adjusted Gross Margin of 25.1% [11][31] Segment Analysis CPaaS Business - CPaaS revenues totaled BRL 215.2 million, reflecting a 58.5% increase year-over-year, although Non-GAAP Adjusted Gross Profit fell by 38.7% to BRL 30.8 million, resulting in a Non-GAAP Adjusted Gross Margin of 14.3% [10][13] - The growth in CPaaS was primarily driven by higher SMS volumes from large clients, which have lower margins [11][15] SaaS Business - SaaS revenues increased by 5.1% year-over-year to BRL 80.7 million, with a slight increase in gross profit to BRL 30.9 million, but the gross margin decreased to 38.2% [7][9] - The transition to Zenvia Customer Cloud is impacting SaaS margins, which are expected to improve as the business scales [9][16] Customer Metrics - Total active customers decreased to 10,462, down 21.1% year-over-year, with a notable decline in both SaaS and CPaaS customer bases [11][24] - Active customers in the SaaS segment were 5,668, down 20.6% year-over-year, while CPaaS active customers were 4,794, down 25.8% [10][11]

Core Insights - Xunzhong Co., Ltd. is the third-largest cloud communication service provider in China, with a market share of 1.8% based on 2024 revenue [4] - The company is one of the earliest providers of cloud communication services in China and among the few offering AI-driven communication services [4] - The core business of the company is Communication Platform as a Service (CPaaS), which accounted for over 80% of its revenue during the historical period [4] Industry Overview - The total revenue of China's cloud communication service market is projected to reach RMB 50.3 billion in 2024, with CPaaS services contributing RMB 44.8 billion and contact center SaaS services RMB 5.5 billion [4] - From 2020 to 2024, the total revenue of the cloud communication service market in China is expected to grow from RMB 35.5 billion to RMB 50.3 billion, representing a compound annual growth rate (CAGR) of 9.1% [4] - The market is anticipated to reach RMB 74.5 billion by 2029, with a CAGR of 8.2% from 2024 to 2029 [4] Financial Performance - Revenue for Xunzhong Co., Ltd. for the years 2022, 2023, and 2024 is approximately RMB 810 million, RMB 916 million, and RMB 918 million respectively [5][8] - Net profit for the same years is reported as RMB 74.66 million, RMB 76.58 million, and RMB 50.64 million respectively [5][8] - The overall gross margin decreased from 24.1% in 2022 to 21.4% in 2023, primarily due to a significant increase in lower-margin messaging service revenue [8] - The gross margin is expected to slightly increase to 22.1% in 2024, driven by a stable revenue structure and higher margins in most business segments [8] Segment Performance - The gross margin for cloud communication services was 25.9% in 2022, 21.7% in 2023, and is projected to be 22.2% in 2024 [9] - The gross margin for CPaaS services was 22.6% in 2022, 18.3% in 2023, and is expected to be 18.9% in 2024 [9] - The gross margin for project-based communication solutions increased from 54.9% in 2022 to 61.3% in 2023, and is projected to reach 64.9% in 2024 [9]