GMV and total revenue YoY growth reached 27.6 % and 25.4 %, respectively
Gross profit increases 37.8 % YoY, representing a margin expansion of 600 bps YoY
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 second quarter of 2022 ended June 30, 2022. 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, “This quarter we achieved solid top line growth while also delivering significant gross margin expansion. Once again our customers outperformed the GMV growth of the market, demonstrating the value-add of the VTEX Platform as well as the resiliency of our blue-chip customer base.” Mariano Gomide de Faria, founder and co-CEO of VTEX, added, “We continue seeing VTEX consolidating its leadership position in Latin America, with solid steps in countries such as Mexico, while also continuing to make inroads in our US and Europe expansion.”
Second Quarter 2022 Operational and Financial Highlights
Second Quarter 2022 Commercial Highlights:
Second Quarter 2022 Product Innovation Highlights:
We innovate aligned with our guiding principles. VTEX key innovations deployed this quarter:
Business Outlook
Since 2020 ecommerce meaning changed for enterprise brands and retailers, becoming a centerpiece of their business strategy. Omnichannel evolved from a “nice to have” to become a critical tool to engage with end consumers in a consistent and relevant way.
Nowadays, brands and retailers are evolving on the integration of not only physical channels and desktop and mobile online channels, but also interactive, social and conversational commerce, among other channels. The incremental complexity of building a proper omnichannel strategy enables VTEX to position itself as the backbone of commerce, integrating all these apparently separate pieces together in one powerful ecosystem.
In the third quarter of 2022, although we are entering into cleaner comps, macroeconomic conditions remain uncertain. Therefore, we are currently targeting revenue in the US$37.0 million to US$38.0 million range for the third quarter of 2022, implying a YoY growth of 18% in USD and 20% on an FX neutral basis in the middle of the range.
For the full year 2022, we maintain our FX neutral YoY revenue growth of 24% to 27%, implying a range of US$158 million to US$162 million, based on July average FX rates.
Despite navigating a volatile environment, both in terms of macro conditions and consumer behavior, we continue to focus on helping our customers digitally transform their commerce operations and outperform the market. We are satisfied with and excited about the expanding market opportunity in front of us and the resilience of our customer base. After expanding the platform significantly during the past few years, we are executing on our strategy of profitable growth. As such, we expect to continue expanding gross and operating income margins in the second half of the year.
The business outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond VTEX’s control. See the cautionary note regarding ''Forward-Looking Statements'' below. Fluctuations in VTEX’s operating results may be particularly pronounced in the current economic environment. There can not be assurance that VTEX will achieve these results.
The following table summarizes certain key financial and operating metrics for the three months and six months ended June 30, 2022 and 2021.
Three months ended June 30,
Six months ended June 30,
(in millions of US$, except as otherwise indicated)
2022
2021
GMV
3,111.9
2,439.3
5,826.4
4,475.3
GMV growth YoY FXN (1)
21.0%
25.4%
24.1%
64.8%
Revenue
38.7
30.9
73.4
56.8
Revenue growth YoY FXN (1)
19.5%
18.2%
41.5%
Non-GAAP subscription gross profit (2)(4)
26.6
20.4
49.2
36.5
Non-GAAP subscription gross profit margin (3)(4)
72.5%
68.8%
71.1%
67.1%
Non-GAAP income (loss) from operations (4)
(17.5)
(10.4)
(31.2)
(19.0)
Total number of employees
1,560
1,486
(1)
Calculated by using the average monthly exchange rates for the applicable months during 2021, adjusted by inflation in countries with hyperinflation, and applying them to the corresponding months in 2022, 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)
Corresponds to our subscription gross profit divided by subscription revenues.
(4)
Reconciliation of non-GAAP metrics can be found in tables below.
Conference Call and Webcast
The conference call may be accessed by dialing +1-844-200-6205 (Conference ID – 414708 –) 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
“ARR” means annual recurring revenue, calculated as subscription revenue in the most recent quarter multiplied by four.
“Customers” means companies ranging from small and medium-sized businesses to larger enterprises that pay to use VTEX’s platform.
“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.
“SSS” means same-store-sales calculated on a yearly basis by dividing the GMV of active online stores in the current period by the GMV of the same active online same stores in the prior period.
“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 the 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 gross profit for the following periods:
Subscription revenue
36.6
29.7
69.2
54.3
Subscription cost
(10.2)
(9.5)
(20.2)
(18.2)
Subscription gross profit
26.5
20.2
49.1
36.1
Share-based compensation
0.1
0.2
0.3
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
(21.3)
(15.7)
(39.2)
(26.7)
Share-based compensation expense
(0.2)
1.6
0.5
2.3
Amortization of intangible related to acquisitions
0.6
Non-GAAP Sales & Marketing expense
(13.9)
(38.1)
(24.0)
Research & Development expense
(15.4)
(10.7)
(29.3)
(19.1)
1.7
1.1
2.8
0.4
Non-GAAP Research & Development expense
(14.7)
(8.8)
(27.8)
(16.0)
General & Administrative
General & Administrative expense
(7.4)
(7.8)
(14.4)
(15.0)
1.9
3.1
0.0
-
Non-GAAP General & Administrative expense
(6.8)
(5.9)
(12.7)
(12.0)
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
(18.9)
(16.4)
(35.6)
(28.4)
0.9
5.5
3.4
8.7
Amortization of intangibles related to acquisitions
1.0
0.8
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 used in operating activities
(12.6)
(14.2)
(28.6)
(21.6)
Acquisitions of property and equipment
(0.1)
(0.5)
(1.1)
Non-GAAP free cash flow
(28.8)
(22.7)
The following table sets forth the FX neutral measures related to our reported results of the operations for the three months period ended June 30, 2022:
As Reported
FXN
Percentage change
23.6%
34.8
17.4%
Services revenue
2.1
1.2
69.7%
70.2%
Total revenue
36.9
7.5%
7.9%
Services cost
(2.8)
3.1%
(2.9)
3.8%
Total cost
(13.0)
(12.2)
6.5%
(13.1)
7.0%
Gross profit
25.7
18.7
37.8%
23.8
27.7%
Operating expenses
(44.6)
(35.0)
27.4%
(43.1)
23.0%
Income (loss) from operation
15.5%
(19.3)
17.5%
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 (NYSE: VTEX) is the enterprise digital commerce platform where global brands and retailers run their world of commerce. VTEX puts its customers’ business on a fast path to growth with a complete Commerce, Marketplace, and OMS solution. VTEX helps global companies build, manage and deliver native and advanced B2B, B2C, and Marketplace commerce experiences with unprecedented time-to-market and without complexity.
As a leader in digital commerce platforms, VTEX is trusted by more than 2,400 customers, including AbInbev, Carrefour, Colgate, Motorola, and Whirlpool, having over 3,200 active online stores across 38 countries (as of FY ended on December 31st, 2021). For more information, visit www.vtex.com.
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 interim statement of profit or loss
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
Three months ended
Six months ended
June 30, 2022
June 30, 2021
36,649
29,652
69,230
54,310
2,065
1,217
4,151
2,483
38,714
30,869
73,381
56,793
(10,166)
(9,461)
(20,162)
(18,176)
(2,842)
(2,757)
(5,449)
(4,865)
(13,008)
(12,218)
(25,611)
(23,041)
25,706
18,651
47,770
33,752
Operating Expenses
General and administrative
(7,431)
(7,806)
(14,352)
(15,029)
Sales and marketing
(21,318)
(15,697)
(39,218)
(26,732)
Research and development
(15,409)
(10,669)
(29,334)
(19,092)
Other losses
(474)
(868)
(465)
(1,317)
Loss from operation
(18,926)
(16,389)
(35,599)
(28,418)
Financial income
4,696
2,136
8,988
2,548
Financial expense
(10,122)
(3,490)
(19,135)
(5,257)
Financial result, net
(5,426)
(1,354)
(10,147)
(2,709)
Equity results
268
139
487
235
Loss before income tax
(24,084)
(17,604)
(45,259)
(30,892)
Income tax
Current
(574)
(297)
(1,001)
(504)
Deferred
3,193
2,432
5,705
3,466
Total income tax
2,619
2,135
4,704
2,962
Net loss for the period
(21,465)
(15,469)
(40,555)
(27,930)
Attributable to controlling shareholders
(21,464)
(40,553)
(27,927)
Non-controlling interest
Loss per share
Basic loss per share
(0.112)
(0.090)
(0.212)
(0.163)
Diluted loss per share
Condensed consolidated interim balance sheet
In thousands of U.S. dollars
December 31, 2021
ASSETS
Current assets
Cash and cash equivalents
29,667
121,006
Restricted cash
694
1,183
Marketable securities and short-term investments
225,113
177,191
Trade receivables
32,669
34,682
Recoverable taxes
5,053
6,881
Deferred commissions
396
263
Prepaid expenses
4,806
7,911
Other current assets
399
Total current assets
298,398
349,516
Non-current assets
5,530
6,143
Deferred tax assets
18,771
12,572
345
343
2,223
556
1,705
1,246
Other non-current assets
902
435
Right-of-use assets
5,623
5,183
Property and equipment, net
4,570
4,711
Intangible assets, net
32,393
33,644
Investment in joint venture
544
621
Total non-current assets
72,606
65,454
Total assets
371,004
414,970
LIABILITIES
Current liabilities
Accounts payable and accrued expenses
30,168
29,537
Loans and financing
2,396
2,087
Taxes payable
3,733
5,035
Lease liabilities
1,493
1,105
Deferred revenue
16,531
16,598
Derivative financial instruments
133
Accounts payable from acquisition of subsidiaries
1,552
4,260
Other current liabilities
158
Total current liabilities
56,031
58,888
Non-current liabilities
482
1,977
1,192
160
4,931
4,886
2,163
15,581
16,204
Deferred tax liabilities
2,240
2,045
Other non-current liabilities
420
266
Total non-current liabilities
23,814
28,893
EQUITY
Issued capital
19
Capital reserve
395,034
390,466
Other reserves
604
652
Accumulated losses
(104,508)
(63,955)
Equity attributable to VTEX’s shareholders
291,149
327,182
Non-controlling interests
10
7
Total shareholders’ equity
291,159
327,189
Total liabilities and equity
Condensed consolidated interim statements of cash flows
Loss for the period
Adjustments on loss for the period
Depreciation and amortization
2,205
1,814
Deferred income tax
(5,705)
(3,466)
Loss on disposal of rights of use, property, equipment, and intangible assets
(126)
1
Allowance for doubtful accounts
509
294
4,537
3,995
Provision for payroll taxes (share-based compensation)
(2,147)
Adjustment of hyperinflation
2,079
876
Profit on investments in joint venture
(487)
(235)
Fair value losses
7,970
(88)
Other costs and foreign exchange, net
27
Working capital adjustments
2,042
(6,553)
(162)
(47)
3,204
(2,450)
Other assets
(164)
28
1,086
9,422
(645)
206
(1,541)
6,894
Other liabilities
368
(525)
Cash used in operating activities
(28,019)
(17,737)
Income tax paid
(603)
(3,879)
(28,622)
(21,616)
Cash flows from investing activities
Dividends received
146
Purchase of short-term investment
(110,991)
Redemption of short-term investment
53,057
Redemption of marketable securities
3,316
Interest received
267
384
Dividend income from financial instruments
30
Payment of business acquired
(1,512)
(4,449)
(166)
(1,065)
Net cash used in investing activities
(59,169)
(1,814)
Cash flows from financing activities
(718)
Changes in restricted cash
575
69
Proceeds from the exercise of stock options
927
Net-settlement of share-based payment
(783)
Capital increase
1,000
Buyback of shares
(2,423)
Payment of loans and financing
(1,327)
(9,653)
Interest paid
(36)
(59)
Principal elements of lease payments
(460)
Lease interest paid
(351)
Net cash used in financing activities
(3,186)
(10,950)
Net decrease in cash and cash equivalents
(90,977)
(34,380)
Cash and cash equivalents, beginning of the period
58,557
Effect of exchange rate changes
(362)
(579)
Cash and cash equivalents, end of the period
23,598
Supplemental cash flow information:
Lease liabilities arising from obtaining right-of-use assets
1,020
156
Issue of ordinary shares as consideration for a business combination
3
1,469
Unpaid amount related to acquisition of non-controlling interest
Unpaid amount related to business combinations
9,810
Dividends receivable used to pay accounts from acquisition of subsidiaries
448
Transactions with non-controlling interests
5
View source version on businesswire.com: https://www.businesswire.com/news/home/20220809006063/en/
Julia Vater Fernández Investor Relations Director investors@vtex.com
Source: VTEX Commerce Cloud Solutions LLC