Subscription revenue growth reached 22% in FXN
Gross profit increased by 28% in FXN, reaching a margin of 74%
Non-GAAP operating income margin reached 14%, representing a 10p.p. YoY expansion
Free cash flow margin reached 14%, representing an 8p.p. YoY expansion
NEW YORK--(BUSINESS WIRE)-- VTEX (NYSE: VTEX), the composable and complete commerce platform for premier brands and retailers, today announced results for the third quarter of 2024 ended September 30, 2024. VTEX results have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) IAS 34 Interim Financial Reporting.
Geraldo Thomaz Jr., founder and co-CEO of VTEX, commented, “Our product innovation and expanded platform capabilities continue to drive growth, evidenced by our customers’ consistent above-market performance and our strong new contract signature momentum. This fuels consistent financial improvements that bring us closer to our Rule of 40 target. We’ll remain focused on product excellence and relentlessly dedicate ourselves to meeting the evolving needs of our customers as we continue to execute our profitable growth strategy.” Mariano Gomide de Faria, founder and co-CEO of VTEX, added, “Our strong sales momentum, marked by key go-lives like Fast Shop in Brazil and US Electrical Services in the US, along with the expansion of existing customers across Europe and the US, strengthens our confidence in VTEX’s growth trajectory. We are solidifying our position as a trusted partner for global brands and seizing the opportunity to become the backbone for connected commerce.”
Third Quarter 2024 Financial Highlights
Third Quarter 2024 Commercial Highlights:
New customers who initiated their operations with us, among others:
Existing customers expanding their operations with us by opening new online stores, among others:
Third Quarter 2024 Operational Highlights:
We innovate aligned with our guiding principles. We express our brand through the success of our customers. VTEX key operational highlights this quarter are:
Business Outlook
VTEX is well-positioned to capture an attractive market opportunity, and we remain encouraged by our sales momentum and operational leverage. We will face tougher GMV comparisons in the fourth quarter of 2024, which will ease by year-end.
In this context, we are targeting FX neutral YoY revenue growth of 14% to 17% for the fourth quarter of 2024, implying a US$64.8 million to US$66.8 million range.
For the full year 2024, as we continue executing our profitable growth strategy, we are targeting FX neutral YoY revenue growth to 18.5% to 19.5%, implying a range of US$230 million to US$232 million based on Q3’s average FX rate. We are raising our non-GAAP operating income and free cash flow margins target to low teens.
We are confident in VTEX's ability to capitalize on current market opportunities. We are empowering our customers to digitally transform their commerce operations while helping them to outperform the market.
The business outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond VTEX’s control. See the cautionary note regarding “Forward-Looking Statements” below. Fluctuations in VTEX’s operating results may be particularly pronounced in the current economic environment. There can not be an assurance that VTEX will achieve these results.
The following table summarizes certain key financial and operating metrics for the three and nine months ended September 30, 2024 and 2023.
Three months ended September 30,
Nine months ended September 30,
(in millions of US$, except as otherwise indicated)
2024
2023
GMV
4,380.2
3,999.3
12,854.7
11,141.5
GMV growth YoY FXN (1)
17.1
%
27.8
18.8
23.2
Revenue
56.0
50.6
165.2
140.8
Revenue growth YoY FXN (1)
18.7
24.5
20.6
Non-GAAP subscription gross profit (2)(4)
42.3
36.2
123.4
99.3
Non-GAAP subscription gross profit margin (3)(4)
78.5
76.2
78.0
75.2
Non-GAAP income (loss) from operations (4)
7.7
1.7
(3.9
)
Total number of employees
1,409
1,276
(1)
Calculated by using the average monthly exchange rates for the applicable months during 2023, adjusted by inflation in countries with hyperinflation, and applying them to the corresponding months in 2024, 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 +1-646-307-1951 (Conference ID – 18526 –) 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.
“ 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 Accounting Standards, specifically Non-GAAP subscription gross profit, Non-GAAP income (loss) from operations, free cash flow and FX Neutral measures.
We understand that Non-GAAP subscription gross profit, Non-GAAP income (loss) from operations, 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 Accounting Standards. 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
53.9
47.5
158.2
132.1
Subscription cost
(11.6
(11.4
(35.0
(32.9
Subscription gross profit
36.1
123.2
99.1
Share-based compensation
0.1
0.2
Non-GAAP subscription gross profit
Non-GAAP subscription gross margin
The following table presents a reconciliation of our Non-GAAP S&M expenses to S&M expenses for the following periods:
Sales & Marketing expense
(16.4
(15.1
(50.9
(44.3
Share-based compensation expense
1.1
1.0
3.1
3.3
Amortization related to acquisitions
0.3
0.9
Earn out expenses related to acquisitions
-
Non-GAAP Sales & Marketing expense
(14.9
(13.8
(46.8
(40.1
The following table presents a reconciliation of our Non-GAAP R&D expenses to R&D expenses for the following periods:
Research & Development expense
(13.4
(15.5
(40.3
(45.8
1.2
1.9
2.7
5.6
0.4
Non-GAAP Research & Development expense
(11.9
(13.3
(37.2
(39.3
The following table presents a reconciliation of our Non-GAAP G&A expenses to G&A expenses for the following periods:
General & Administrative expense
(8.4
(26.3
(24.5
1.5
6.3
4.9
0.0
Non-GAAP General & Administrative expense
(6.7
(6.9
(20.0
(19.6
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
2.9
(3.5
3.0
(20.3
4.2
4.6
12.6
14.4
0.6
1.3
2.0
Non-GAAP income (loss) from operations
The following table presents a reconciliation of our free cash flow to net cash provided by (used in) operating activities for the following periods:
Net cash provided by (used in) operating activities
8.1
2.8
14.5
(5.4
Acquisitions of property and equipment
(0.4
(0.1
(1.7
(0.3
Free Cash Flow
12.8
(5.7
The following table sets forth the FX neutral measures related to our reported results of the operations for the three months ended September 30, 2024:
As Reported
FXN
3Q24
3Q23
% Change
13.4
57.9
21.9
Services revenue
2.1
(31.9
%)
2.2
(29.6
Total revenue
10.6
60.1
Gross profit
41.7
35.6
17.2
45.4
27.6
N/A
3.7
This announcement does not contain sufficient information to constitute an interim financial report as defined in International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) IAS 34 Interim Financial Reporting, "Interim Financial Reporting" nor a financial statement as defined by IFRS Accounting Standards 1 "Presentation of Financial Statements". The financial information in this press release has not been audited. Numbers have been calculated using whole amounts rather than rounded amounts. This might cause some figures not to total due to rounding.
About VTEX
VTEX (NYSE: VTEX) is the composable and complete commerce platform that delivers more efficiency and less maintenance to organizations seeking to make smarter IT investments and modernize their tech stack. Through our pragmatic composability approach, we empower brands, distributors, and retailers with unparalleled flexibility and comprehensive solutions, enabling them to invest solely in what provides a clear business advantage and boosts profitability.
VTEX is trusted by 2,600 global B2C and B2B customers, including Carrefour, Colgate, Motorola, Sony, Stanley Black & Decker, and Whirlpool, having 3,500 active online stores across 43 countries (as of FY ended on December 31, 2023). 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 statements of profit or loss (Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
Three months ended
Nine months ended
September 30, 2024
September 30, 2023
53,897
47,544
158,244
132,078
2,099
3,084
6,941
8,718
55,996
50,628
165,185
140,796
(11,642
(11,395
(35,023
(32,948
Services cost
(2,636
(3,625
(8,937
(12,144
Total cost
(14,278
(15,020
(43,960
(45,092
41,718
35,608
121,225
95,704
Operating expenses
General and administrative
(8,402
(8,374
(26,341
(24,541
Sales and marketing
(16,410
(15,101
(50,854
(44,332
Research and development
(13,366
(15,508
(40,330
(45,772
Other losses
(668
(99
(723
(1,364
2,872
(3,474
2,977
(20,305
Financial income
7,359
8,974
26,803
25,573
Financial expense
(7,959
(7,896
(28,006
(22,925
Financial result, net
(600
1,078
(1,203
2,648
Equity results
—
281
2
989
Income (loss) before income tax
2,272
(2,115
1,776
(16,668
Income tax
Current
98
(50
(83
(2,317
Deferred
874
(214
4,026
2,068
Total income tax
972
(264
3,943
(249
Net income (loss) for the period
3,244
(2,379
5,719
(16,917
Attributable to controlling shareholders
3,245
(2,374
5,734
(16,913
Non-controlling interest
(1
(5
(15
(4
Earnings (loss) per share
Basic earnings (loss) per share
0.018
(0.013
0.031
(0.090
Diluted earnings (loss) per share
0.017
0.030
Condensed consolidated interim balance sheets (Unaudited)
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
22,525
28,035
Short-term investments
194,514
181,374
Trade receivables
53,820
44,122
Recoverable taxes
5,898
6,499
Deferred commissions
1,449
1,005
Prepaid expenses
4,313
5,143
Derivative financial instruments
53
Other current assets
124
22
Total current assets
282,643
266,253
Non-current assets
Long-term investments
9,649
2,000
12,639
7,415
Deferred tax assets
21,424
19,926
95
155
4,715
4,454
4,169
2,924
Other non-current assets
1,114
902
Right-of-use assets
2,204
3,277
Property and equipment, net
3,198
2,697
Intangible assets, net
31,309
30,024
Investments in joint venture
1,118
Total non-current assets
90,516
74,892
Total assets
373,159
341,145
LIABILITIES
Current liabilities
Accounts payable and accrued expenses
37,726
39,728
Taxes payable
6,305
8,219
Lease liabilities
1,534
1,863
Deferred revenue
31,553
25,948
102
Accounts payable from acquisition of subsidiaries
33
Other current liabilities
1,243
1,486
Total current liabilities
78,496
77,244
Non-current liabilities
2,165
1,632
206
1,284
2,233
893
24,810
16,584
Deferred tax liabilities
2,653
2,668
Other non-current liabilities
439
452
Total non-current liabilities
32,450
23,569
EQUITY
Issued capital
19
18
Capital reserve
383,371
370,821
Other reserves
3,104
(486
Accumulated losses
(124,326
(130,060
Equity attributable to VTEX’s shareholders
262,168
240,293
Non-controlling interests
45
39
Total shareholders’ equity
262,213
240,332
Total liabilities and equity
Condensed consolidated interim statements of cash flows (Unaudited)
Adjustments for:
Depreciation and amortization
3,329
3,799
Deferred income tax
(4,026
(2,068
Loss on disposal of rights of use, property, equipment, and intangible assets
114
614
Expected credit losses from trade receivables
775
1,093
11,111
12,280
Provision for payroll taxes (share-based compensation)
1,520
2,117
Adjustment of hyperinflation
6,428
10,221
(2
(989
Accrued interest
(12,605
(9,875
Fair value gains
(2,166
(7,863
Others and foreign exchange, net
9,508
2,559
Change in operating assets and liabilities
(19,143
(6,781
(1,611
(108
668
Other assets
(462
(25
(2,275
(958
1,056
415
17,931
5,450
Other liabilities
110
1,175
Cash provided by (used in) operating activities
15,979
(5,655
Income tax paid
(1,482
233
14,497
(5,422
Cash flows from investing activities
Dividends received from joint venture
1,138
Proceeds from disposal of Joint Venture
1,026
Purchase of short and long-term investment
(116,802
(112,350
Redemption of short-term investment
105,377
139,458
Interest and dividends received from short-term investments
591
1,941
Acquisition of subsidiaries net of cash acquired
(2,920
(1,691
(252
(3,558
359
Net cash provided by (used in) investing activities
(17,977
30,294
Cash flows from financing activities
Changes in restricted cash
1,660
Proceeds from the exercise of stock options
3,725
632
Net-settlement of share-based payment
(2,806
(1,618
Buyback of shares
(25,053
Payment of loans and financing
(71
(1,238
Interest paid
Principal elements of lease payments
(1,249
(1,152
Lease interest paid
(284
(440
Net cash used in financing activities
(685
(27,214
Net decrease in cash and cash equivalents
(4,165
(2,342
Cash and cash equivalents, beginning of the period
24,394
Effect of exchange rate changes
(1,345
(751
Cash and cash equivalents, end of the period
21,301
Non-cash transactions:
Lease liabilities arising from obtaining right-of-use assets and remeasurement
344
85
Unpaid amount related to business combinations
926
Transactions with non-controlling interests
21
42
Julia Vater Fernández VP of Investor Relations investors@vtex.com