VTEX delivered strong Q3 results, reflecting robust growth and consistent execution
NEW YORK--(BUSINESS WIRE)-- VTEX (NYSE: VTEX), the enterprise digital commerce platform for premier brands and retailers, the leader in accelerating the digital commerce transformation in Latin America and now expanding globally, today announced results for the third quarter of 2021 ended September 30, 2021. VTEX results have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.”
Geraldo Thomaz Jr., founder and co-CEO of VTEX, commented, “We are pleased to announce that VTEX delivered another quarter of robust growth and consistent execution. We are excited to see VTEX’s recent product launches and new partnerships, as well as strong sales momentum and encouraging backlog of new online stores undergoing implementation to join our platform.” Mariano Gomide de Faria, founder and co-CEO of VTEX, added, “Consumer behavior shift towards online purchasing had staying power. This is just the tip of the iceberg, ecommerce in Latin America is still an untapped opportunity. We are living in a new era, a revolution, and we are here to accelerate it.”
Third Quarter 2021 Operational and Financial Highlights
Third Quarter Product Innovation Highlights:
We innovate aligned with our guiding principles. VTEX key innovations deployed this quarter were:
Business Outlook
Online commerce penetration in Latin America continues to increase, demonstrating that the 2020 acceleration in online consumption appears sustainable, even as brick-and-mortar retail stores gradually reopen throughout the region and we lap our toughest comps quarter. Consumer behavior shift towards online purchasing has demonstrated staying power.
Our Q3 2021 FX Neutral year-over-year revenue growth of 12.3% already accelerated to over 20% by the end of the quarter, and it came on top of 140% year-over-year growth in Q3 2020. We expect our revenue growth to continue accelerating during Q4 of 2021, as in Q4 2020 brick-and-mortar stores were already starting to reopen.
Seasonal trends in 2021 are expected to remain similar as in previous years. We expect to continue seeing strong new stores’ growth, as our encouraging backlog undergoes implementation. While supply chain challenges may impact commerce during Q4 2021, we are focused on supporting our customers on a successful Black Friday, Cyber Monday and the holiday shopping season.
In view of the aforementioned trends and VTEX’s performance during the nine months ending September 30, 2021, we currently expect to deliver growth at healthy levels. We are targeting revenue in the US$35.3 million to US$37.3 million range for the fourth quarter of 2021, implying a 27% YoY FXN growth rate in the middle of the range. Although Latam currencies devalued 6.7% during Q3 2021, we are confirming our target of US$124 million to US$126 million range for the fiscal year ended December 31, 2021, assuming current period FX rates.
Importantly, we will continue to invest to grow our business as we work towards enhancing our leadership position in Latin America and explore new opportunities outside the region.
The business outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond VTEX’s control. See the cautionary note regarding ''Forward-Looking Statements'' below. Fluctuations in VTEX’s operating results may be particularly pronounced in the current economic environment. There can not be assurance that VTEX will achieve these results.
The following table summarizes certain key financial and operating metrics for the three and nine months ended September 30, 2021 and 2020.
Three months ended September 30,
Nine months ended September 30,
(in millions of US$, except as otherwise indicated)
2021
2020
GMV
2,284.8
2,131.7
6,760.2
4,954.9
GMV growth YoY FXN (1)
4.2%
190.2%
37.0%
137.4%
Revenue
31.9
27.7
88.7
69.6
Revenue growth YoY FXN (1)
12.3%
139.5%
29.9%
102.8%
Non-GAAP Subscription gross profit (2)
20.2
19.2
56.7
47.8
Non-GAAP Subscription gross profit margin (2)
68.2%
73.1%
67.5%
72.7%
Non-GAAP income (loss) from operations (3)
(13.3)
6.3
(32.2)
10.5
Total number of employees
1,624
847
(1)
Calculated by using the average monthly exchange rates for the applicable months during 2020, adjusted by inflation in countries with hyperinflation, and applying them to the corresponding months in 2021, as applicable, so as to calculate what our results would have been had exchange rates remained stable from one year to the next.
(2)
Corresponds to our subscription revenues minus our subscription costs.
(3)
Reconciliation of non-GAAP income (loss) from operations to income (loss) from operations can be found in tables below.
Conference Call and Webcast
The conference call may be accessed by dialing +1-844-200-6205 (Conference ID – 614545) and requesting inclusion in the call for VTEX.
The live conference call can be accessed via audio webcast at the investor relations section of the Company's website, at https://www.investors.vtex.com/.
An archive of the webcast will be available for one week following the conclusion of the conference call.
Definition of Selected Operational Metrics
“GMV” means the total value of customer orders processed through our platform, including value-added taxes and shipping. Our GMV does not include the value of orders processed by our SMB customers or B2B transactions.
“FX Neutral” or “FXN” means a way of using the average monthly exchange rates for each month during the previous year, adjusted by inflation in countries with hyper-inflation, and applying them to the corresponding months of the current year, so as to calculate what results would have been had exchange rates remained stable from one year to the next.
“Customers” means companies ranging from small and medium-sized businesses to larger enterprises that pay to use VTEX’s platform.
“Stores” or “Active Stores” means the number of unique domains generating gross merchandise value. Each customer might have multiple stores.
Special Note Regarding Non-GAAP financial metrics
For convenience of investors, this document presents certain Non-GAAP financial measures, which are not recognized under IFRS, specifically Non-GAAP subscription gross profit, Non-GAAP Income (Loss) from Operations, Non-GAAP Free Cash Flow and FX Neutral measures.
We understand that Non-GAAP subscription gross profit, Non-GAAP Income (Loss) from Operations, Non-GAAP Free Cash Flow and FX Neutral measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations presented in accordance with IFRS. Additionally, our calculations of Non-GAAP subscription gross profit, Non-GAAP Income (Loss) from Operations, Free Cash Flow and FX Neutral measures may be different from the calculation used by other companies, including our competitors, and therefore, our measures may not be comparable to those of other companies.
Reconciliation of Non-GAAP measures
The following table presents a reconciliation of our Non-GAAP subscription gross profit to subscription revenue for the following periods:
Subscription revenue
29.6
26.3
83.9
65.7
Subscription cost
(9.7)
(7.1)
(27.9)
(18.0)
Subscription gross profit
19.9
56.0
47.7
Share-based compensation
0.3
0.0
0.6
0.1
Non-GAAP subscription gross profit
Non-GAAP subscription gross margin
The following table presents a reconciliation of our Non-GAAP expenses to expenses for the following periods:
Sales & Marketing
Sales & Marketing expense
(19.3)
(5.3)
(46.1)
(16.4)
Share-based compensation expense
2.6
4.9
0.2
Amortization of intangible related to acquisitions
0.8
0.4
Offering expenses ("IPO") (1)
-
Non-GAAP Sales & Marketing expense
(16.2)
(5.1)
(40.1)
(15.8)
Research & Development
Research & Development expense
(14.2)
(4.5)
(33.3)
(12.2)
3.3
6.1
0.5
Non-GAAP Research & Development expense
(10.6)
(4.4)
(26.6)
(11.6)
General & Administrative
General & Administrative expense
(9.9)
(3.3)
(25.0)
(8.8)
3.0
0.7
Offering expenses ("IPO")
0.9
Non-GAAP General & Administrative expense
(6.0)
(2.9)
(8.2)
Offering expenses ("IPO") for Sales and Marketing and Research and Development are travel-related expenses exclusively for the Event Day.
The following table presents a reconciliation of our Non-GAAP income (loss) from operations to income (loss) from operations for the following periods:
Income (loss) from operations
(24.4)
5.5
(52.8)
8.6
9.3
18.0
1.3
Amortization of intangibles related to acquisitions
Non-GAAP income (loss) from operations
The following table presents a reconciliation of our Non-GAAP free cash flow to net cash provided (used) by operating activities for the following periods:
Net cash provided (used) by operating activities
(10.2)
12.0
(31.8)
8.3
Acquisitions of property and equipment
(0.2)
(0.4)
(1.2)
Non-GAAP free cash flow
(10.4)
11.6
(33.1)
7.1
The following table sets forth the FX neutral measures related to our reported results of the operations for the three months period ended September 30, 2021:
As Reported
FXN
Percentage change
12.6%
28.9
9.7%
Services revenue
2.2
67.4%
62.2%
Total revenue
15.2%
31.0
37.5%
(9.6)
36.0%
Services cost
(3.1)
(1.7)
80.1%
(3.0)
74.2%
Total cost
(12.8)
45.8%
(12.6)
43.4%
Gross profit
19.1
18.9
1.0%
18.5
(2.2)%
Operating expenses
(43.4)
(13.4)
224.9%
(41.6)
211.3%
Income (loss) from operation
n/a
(23.2)
This announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting" nor a financial statement as defined by International Accounting Standards 1 "Presentation of Financial Statements". The financial information in this press release has not been audited.
About VTEX
VTEX provides a software-as-a-service digital commerce platform for enterprise brands and retailers. Our platform enables our customers to execute their commerce strategy, including building online stores, integrating and managing orders across channels, and creating marketplaces to sell products from third-party vendors. Founded in Brazil, we have been a leader in accelerating the digital commerce transformation in Latin America and are expanding globally. Our platform is engineered to enterprise-level standards and functionality. As of December 31, 2020, we were trusted by more than 2,000 customers with over 2,500 active online stores across 32 countries to connect with their consumers in a meaningful way.
Forward-looking Statements
This announcement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange of 1934, as amended. Statements contained herein that are not clearly historical in nature, including statements about the VTEX strategies and business plans, are forward-looking, and the words “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” ”strategy,” “project,” “target” and similar expressions and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may,” or similar expressions are generally intended to identify forward-looking statements.
VTEX may also make forward-looking statements in its periodic reports filed with the U.S. Securities and Exchange Commission, or the SEC, in press releases and other written materials and in oral statements made by its officers and directors. These forward-looking statements speak only as of the date they are made and are based on the VTEX’s current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond VTEX’s control. A number of factors and risks could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these and other risks is included in VTEX filings with the SEC.
As a consequence, current plans, anticipated actions and future financial position and results of operations may differ significantly from those expressed in any forward-looking statements in this announcement. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented as there is no guarantee that expected events, trends or results will actually occur. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.
This announcement may also contain estimates and other information concerning our industry that are based on industry publications, surveys and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information.
VTEX
Condensed Consolidated Statements of Operations
(In thousands of U.S. dollars, unaudited)
Three months ended
Nine months ended
September 30, 2021
September 30, 2020
29,627
26,315
83,937
65,694
2,237
1,337
4,720
3,875
31,864
27,652
88,657
69,569
(9,735)
(7,079)
(27,911)
(17,960)
(3,056)
(1,696)
(7,921)
(5,033)
(12,791)
(8,775)
(35,832)
(22,993)
19,073
18,877
52,825
46,576
General and administrative
(9,947)
(3,336)
(24,976)
(8,841)
Sales and marketing
(19,330)
(5,250)
(46,062)
(16,356)
Research and development
(14,179)
(4,512)
(33,271)
(12,212)
Other income (losses)
14
(275)
(1,303)
(585)
(24,369)
5,504
(52,787)
8,582
Financial income
2,575
1,298
5,119
2,918
Financial expense
(3,141)
(1,879)
(8,394)
(4,727)
Financial result, net
(566)
(581)
(3,275)
(1,809)
Equity results
162
36
397
27
Income (loss) before income tax
(24,773)
4,959
(55,665)
6,800
Income tax
Current
(1,107)
(2,052)
(1,611)
(3,808)
Deferred
3,921
71
7,387
450
Net income (loss) for the period
(21,959)
2,978
(49,889)
3,442
Attributable to controlling shareholders
2,939
(49,886)
3,356
Non-controlling interest
39
86
Earnings (loss) per share
Basic earnings (loss) per share
(0.119)
0,017
(0.280)
0,020
Diluted earnings (loss) per share
0,016
0,019
Comprehensive Income (Loss)
Items that are or may be reclassified subsequently to profit or loss:
Foreign cumulative conversion adjustment
21
408
325
(987)
Total comprehensive income (loss) for the period
(21,938)
3,386
(49,564)
2,455
Condensed Consolidated Balance Sheet
December 31, 2020
ASSETS
Current assets
Cash and cash equivalents
321,629
58,557
Restricted cash
1,190
1,429
Marketable securities
16,969
Trade receivables
34,573
24,491
Recoverable taxes
5,577
4,071
Deferred commissions
150
438
Prepaid expenses
5,981
2,379
Derivative financial instruments
25
174
Other
331
223
Total current assets
369,456
108,731
Non-current assets
Deferred tax assets
9,479
2,174
147
3,134
538
674
Deferred Commission
1,130
389
251
53
Right-of-use assets
5,031
5,076
Property and equipment, net
4,906
4,551
Intangible assets, net
34,685
15,093
Investment in joint venture
442
136
Total non-current assets
56,609
31,280
Total assets
426,065
140,011
LIABILITIES
Current liabilities
Accounts payable and accrued expenses
37,407
20,709
Loans and financing
1,992
1,585
Taxes payables
3,592
6,790
Lease liabilities
1,023
850
Deferred revenue
20,298
14,170
Accounts payable from acquisition of subsidiaries
7,270
2,794
Others
159
Total current liabilities
71,582
47,057
Non-current liabilities
1,914
4,774
4,802
5,303
254
1,206
9,885
5,005
Deferred tax liabilities
2,141
731
392
187
Total non-current liabilities
19,388
17,206
EQUITY
Issued Capital
19
17
Capital reserve
387,977
78,945
Other comprehensive income
429
104
Accumulated losses
(53,330)
(3,444)
Equity attributable to VTEX’s shareholders
335,095
75,622
Non-controlling interests
126
Total shareholders’ equity
75,748
Total liabilities and equity
Condensed Consolidated Statements of Cash Flows
Net income (loss) of the period
Adjustments on income (loss) for the period
Depreciation and amortization
2,840
1,803
Deferred income tax
(7,385)
(450)
Loss on disposal of property, equipment, and intangible assets
50
95
Allowance for doubtful accounts
412
662
6,845
1,317
Provision for payroll taxes (share-based compensation)
9,991
Adjustment of hyperinflation
1,481
335
Profit on investments in joint venture
(397)
(27)
Fair value gain
(366)
(925)
Other gains (losses), net
(433)
(2,618)
Working capital adjustments
(9,876)
(7,100)
(1,370)
(886)
(615)
(2,799)
Other assets
(161)
(60)
10,209
7,127
Taxes payable
4,987
9,697
6,393
Other liabilities
458
(1,470)
Cash provided (used) in operating activities
(27,319)
9,826
Income tax paid
(4,511)
(1,572)
Net cash provided (used) in operating activities
(31,830)
8,254
Cash flows from investing activities
Redemption of marketable securities
16,857
Interest received
981
1,013
Payment of business, net of cash acquired
(5,182)
(3,176)
Acquisitions of intangible
(364)
(1,235)
(1,175)
Net cash provided (used) in investing activities
11,057
(3,338)
Cash flows from financing activities
Changes in restricted cash
239
780
Proceeds from the exercise of stock options
3,220
154
Net-settlement of share-based payment
(1,781)
Capital increase
1,000
126,976
Capital increase - proceeds from initial public offering, net of transaction costs
296,318
Buyback of shares
(2,423)
(103,414)
Payment of loans and financing
(10,349)
(1,932)
Interest paid
(84)
(150)
Principal elements of lease payments
(671)
(199)
Lease interest paid
(513)
(575)
Net cash provided by financing activities
284,956
21,640
Net increase in cash and cash equivalents
264,183
26,556
Cash and cash equivalents, beginning of the period
29,762
Effect of exchange rate changes
(1,111)
3,056
Cash and cash equivalents, end of the period
59,374
Supplemental cash flow information:
Lease liabilities arising from obtaining right-of-use assets
155
34
Issue of ordinary shares as consideration for a business combination
1,469
Unpaid amount related to acquisition of non-controlling interest
Unpaid amount related to business combinations
8,471
View source version on businesswire.com: https://www.businesswire.com/news/home/20211117005413/en/
Julia Vater Fernández Investor Relations Director investors@vtex.com
Source: VTEX Commerce Cloud Solutions LLC