VTEX (NYSE: VTEX), the composable and complete commerce platform for premier brands and retailers, today announced results for the first quarter of 2024 ended March 31, 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 launches are revolutionizing commerce for IT and business teams to deliver sustainable growth with attractive ROI. By creating new revenue streams, we are extending the runway for long-term growth while continuing to deliver meaningful operational leverage and margin improvements. We are excited for VTEX's future, focused on growth, margin expansion, and customer success." Mariano Gomide de Faria, founder and co-CEO of VTEX, added, "We started the year backed by recognitions from Gartner and IDC, and we are translating this momentum into meaningful sales. Our expansion into Germany, with customers like OBI, encourages us on our global expansion while sustained sales momentum in Brazil highlights our long-term growth potential. Customer feedback on our value proposition for B2B and B2C reinforces our vision as the global backbone for connected commerce."
First Quarter 2024 Financial Highlights
First Quarter 2024 Commercial Highlights:
First 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
Although the macroeconomic scenario remains uncertain, we see VTEX well positioned to capture an attractive market opportunity. We are closely monitoring the performance of our customers and sales funnel and taking necessary actions to ensure our business' sustainable growth and success. We remain encouraged by our sales momentum and operational leverage, despite weakness in Argentina.
In this context, we are currently targeting revenue for the second quarter of 2024 in the US$54.5 million to US$56.0 million range, implying a YoY growth of 18% on an FX neutral basis in the middle of the range.
For the full year 2024, we continue executing our strategy for profitable growth. Recognizing heightened volatility in Argentina's macro situation, we are targeting FX neutral YoY revenue growth of 16% to 20%, implying a range of US$234 million to US$243 million based on April's average FX rate. Further demonstrating our operational leverage, we are targeting free cash flow and non-GAAP operating income margins of high single digits.
We are confident in VTEX's ability to navigate the uncertainties posed by the current macroeconomic scenario. We are empowering our customers to digitally transform their commerce operations while helping them to outperform the market.
The business outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond VTEX's control. See the cautionary note regarding ''Forward-Looking Statements'' below. Fluctuations in VTEX's operating results may be particularly pronounced in the current economic environment. There can not be an assurance that VTEX will achieve these results.
The following table summarizes certain key financial and operating metrics for the three months ended March 31, 2024 and 2023.
|
Three months ended March 31, |
|
(in millions of US$, except as otherwise indicated) |
2024 |
2023 |
GMV |
4,036.9 |
3,303.7 |
GMV growth YoY FXN (1) |
20.1% |
20.6% |
Revenue |
52.6 |
42.3 |
Revenue growth YoY FXN (1) |
21.3% |
22.2% |
Non-GAAP subscription gross profit (2)(4) |
38.9 |
29.4 |
Non-GAAP subscription gross profit margin (3)(4) |
77.2% |
73.9% |
Non-GAAP income (loss) from operations (4) |
3.0 |
(4.1) |
Total number of employees |
1,334 |
1,339 |
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 +1-646-968-2525 (Conference ID ?1918046?) 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:
|
Three months ended March 31, |
|
(in millions of US$, except as otherwise indicated) |
2024 |
2023 |
Subscription revenue |
50.4 |
39.8 |
Subscription cost |
(11.5) |
(10.4) |
Subscription gross profit |
38.8 |
29.4 |
Share-based compensation |
0.0 |
0.0 |
Non-GAAP subscription gross profit |
38.9 |
29.4 |
Non-GAAP subscription gross margin |
77.2% |
73.9% |
The following table presents a reconciliation of our Non-GAAP expenses to expenses for the following periods:
Sales & Marketing |
Three months ended March 31, |
|
(in millions of US$, except as otherwise indicated) |
2024 |
2023 |
Sales & Marketing expense |
(17.2) |
(14.8) |
Share-based compensation expense |
1.1 |
1.3 |
Amortization of intangible related to acquisitions |
0.3 |
0.3 |
Non-GAAP Sales & Marketing expense |
(15.8) |
(13.2) |
Research & Development |
Three months ended March 31, |
|
(in millions of US$, except as otherwise indicated) |
2024 |
2023 |
Research & Development expense |
(12.7) |
(14.0) |
Share-based compensation expense |
0.2 |
1.9 |
Amortization of intangible related to acquisitions |
0.2 |
0.2 |
Non-GAAP Research & Development expense |
(12.3) |
(11.8) |
General & Administrative |
Three months ended March 31, |
|
(in millions of US$, except as otherwise indicated) |
2024 |
2023 |
General & Administrative expense |
(9.2) |
(7.9) |
Share-based compensation expense |
2.6 |
1.7 |
Amortization of intangible related to acquisitions |
0.0 |
0.0 |
Non-GAAP General & Administrative expense |
(6.6) |
(6.2) |
The following table presents a reconciliation of our Non-GAAP income (loss) from operations to loss from operations for the following periods:
|
Three months ended March 31, |
|
(in millions of US$, except as otherwise indicated) |
2024 |
2023 |
Loss from operations |
(1.6) |
(9.7) |
Share-based compensation expense |
4.1 |
5.1 |
Amortization of intangibles related to acquisitions |
0.5 |
0.5 |
Non-GAAP income (loss) from operations |
3.0 |
(4.1) |
The following table presents a reconciliation of our free cash flow to net cash used by operating activities for the following periods:
|
Three months ended March 31, |
|
(in millions of US$, except as otherwise indicated) |
2024 |
2023 |
Net cash used in operating activities |
2.6 |
(4.9) |
Acquisitions of intangibles |
- |
- |
Acquisitions of property and equipment |
(0.7) |
(0.1) |
Free cash flow |
1.9 |
(5.0) |
The following table sets forth the FX neutral measures related to our reported results of the operations for the three months ended March 31, 2024:
|
As Reported |
FXN |
As Reported |
FXN |
||
(in millions of US$, except as otherwise indicated) |
1Q24 |
1Q23 |
Percentage Change |
1Q24 |
1Q23 |
Percentage Change |
Subscription revenue |
50.4 |
39.8 |
26.7% |
49.1 |
39.8 |
23.4% |
Services revenue |
2.3 |
2.5 |
(9.3)% |
2.2 |
2.5 |
(10.8)% |
Total revenue |
52.6 |
42.3 |
24.5% |
51.3 |
42.3 |
21.3% |
Gross profit |
37.9 |
27.7 |
36.7% |
36.6 |
27.7 |
32.1% |
Loss from operations |
(1.6) |
(9.7) |
(83.6)% |
(1.5) |
(9.7) |
(84.7)% |
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.
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 |
|
|
March 31, 2024 |
March 31, 2023 |
|
|
|
Subscription revenue |
50,362 |
39,762 |
Services revenue |
2,286 |
2,520 |
Total revenue |
52,648 |
42,282 |
|
|
|
Subscription cost |
(11,539) |
(10,400) |
Services cost |
(3,221) |
(4,166) |
Total cost |
(14,760) |
(14,566) |
Gross profit |
37,888 |
27,716 |
|
|
|
Operating expenses |
|
|
General and administrative |
(9,172) |
(7,925) |
Sales and marketing |
(17,192) |
(14,782) |
Research and development |
(12,728) |
(13,959) |
Other losses |
(386) |
(754) |
Loss from operations |
(1,590) |
(9,704) |
|
|
|
Financial income |
9,102 |
7,359 |
Financial expense |
(12,496) |
(5,903) |
Financial result, net |
(3,394) |
1,456 |
|
|
|
Equity results |
18 |
341 |
|
|
|
Loss before income tax |
(4,966) |
(7,907) |
|
|
|
Income tax |
|
|
Current |
(254) |
(570) |
Deferred |
2,766 |
549 |
Total income tax |
2,512 |
(21) |
|
|
|
Net loss for the period |
(2,454) |
(7,928) |
|
|
|
Attributable to controlling shareholders |
(2,446) |
(7,928) |
Non-controlling interest |
(8) |
- |
|
|
|
Loss per share |
|
|
Basic loss per share |
(0.013) |
(0.042) |
Diluted loss per share |
(0.013) |
(0.042) |
VTEX |
||
Condensed consolidated interim balance sheets (Unaudited) |
||
In thousands of U.S. dollars, unless otherwise indicated |
||
|
March 31, 2024 |
December 31, 2023 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
17,468 |
28,035 |
Short-term investments |
191,885 |
181,374 |
Trade receivables |
45,189 |
44,122 |
Recoverable taxes |
5,958 |
6,499 |
Deferred commissions |
1,328 |
1,005 |
Prepaid expenses |
6,238 |
5,143 |
Derivative financial instruments |
- |
53 |
Other current assets |
122 |
22 |
Total current assets |
268,188 |
266,253 |
|
|
|
Non-current assets |
|
|
Long-term investments |
3,056 |
2,000 |
Trade receivables |
8,595 |
7,415 |
Deferred tax assets |
22,469 |
19,926 |
Prepaid expenses |
127 |
155 |
Recoverable taxes |
4,411 |
4,454 |
Deferred commissions |
3,006 |
2,924 |
Other non-current assets |
788 |
902 |
Right-of-use assets |
2,813 |
3,277 |
Property and equipment, net |
2,969 |
2,697 |
Intangible assets, net |
29,121 |
30,024 |
Investments in joint venture |
1,099 |
1,118 |
Total non-current assets |
78,454 |
74,892 |
Total assets |
346,642 |
341,145 |
|
|
March 31, 2024 |
December 31, 2023 |
LIABILITIES |
|
|
Current liabilities |
|
|
Accounts payable and accrued expenses |
39,352 |
39,728 |
Taxes payable |
6,811 |
8,219 |
Lease liabilities |
1,717 |
1,863 |
Deferred revenue |
26,653 |
25,948 |
Other current liabilities |
3,854 |
1,486 |
Total current liabilities |
78,387 |
77,244 |
|
|
|
Non-current liabilities |
|
|
Accounts payable and accrued expenses |
811 |
1,632 |
Lease liabilities |
1,851 |
2,233 |
Deferred revenue |
19,209 |
16,584 |
Deferred tax liabilities |
3,026 |
2,668 |
Other non-current liabilities |
427 |
452 |
Total non-current liabilities |
25,324 |
23,569 |
|
|
|
EQUITY |
|
|
Issued capital |
18 |
18 |
Capital reserve |
373,554 |
370,821 |
Other reserves |
1,824 |
(486) |
Accumulated losses |
(132,506) |
(130,060) |
Equity attributable to VTEX's shareholders |
242,890 |
240,293 |
Non-controlling interests |
41 |
39 |
Total shareholders' equity |
242,931 |
240,332 |
Total liabilities and equity |
346,642 |
341,145 |
VTEX |
||
Condensed consolidated interim statements of cash flows (Unaudited) |
||
In thousands of U.S. dollars, unless otherwise indicated |
||
|
March 31, 2024 |
March 31, 2023 |
|
|
|
Net loss for the period |
(2,454) |
(7,928) |
Adjustments for: |
|
|
Depreciation and amortization |
1,113 |
1,226 |
Deferred income tax |
(2,766) |
(549) |
Loss on disposal of rights of use, property, equipment, and intangible assets |
127 |
14 |
Expected credit losses from trade receivables |
215 |
537 |
Share-based compensation |
3,030 |
4,004 |
Provision for payroll taxes (share-based compensation) |
1,092 |
452 |
Adjustment of hyperinflation |
4,002 |
1,420 |
Equity results |
(18) |
(341) |
Accrued interest |
(5,491) |
(1,768) |
Fair value (gains) losses |
304 |
(3,374) |
Others and foreign exchange, net |
3,877 |
1,836 |
Change in operating assets and liabilities |
|
|
Trade receivables |
(3,684) |
(124) |
Recoverable taxes |
(397) |
(580) |
Prepaid expenses |
(1,167) |
(1,019) |
Other assets |
(446) |
(299) |
Accounts payable and accrued expenses |
(1,346) |
(4,250) |
Taxes payable |
(1,038) |
1,472 |
Deferred revenue |
4,251 |
4,279 |
Other liabilities |
2,888 |
304 |
Cash provided by (used in) operating activities |
2,092 |
(4,688) |
Income tax refund (paid) |
547 |
(170) |
Net cash provided by (used in) operating activities |
2,639 |
(4,858) |
Cash flows from investing activities |
|
|
Purchase of short and long-term investment |
(64,067) |
(4,005) |
Redemption of short-term investment |
54,184 |
11,868 |
Interest and dividend received from short-term investments |
197 |
462 |
Acquisitions of property and equipment |
(738) |
(146) |
Derivative financial instruments |
(1,549) |
(134) |
Net cash provided by (used in) investing activities |
(11,973) |
8,045 |
Cash flows from financing activities |
|
|
Changes in restricted cash |
- |
1,034 |
Proceeds from the exercise of stock options |
448 |
3 |
Net-settlement of share-based payment |
(764) |
(387) |
Buyback of shares |
- |
(5,330) |
Payment of loans and financing |
- |
(696) |
Interest paid |
- |
(4) |
Principal elements of lease payments |
(414) |
(368) |
Lease interest paid |
(106) |
(148) |
Net cash used in financing activities |
(836) |
(5,896) |
Net decrease in cash and cash equivalents |
(10,170) |
(2,709) |
Cash and cash equivalents, beginning of the period |
28,035 |
24,394 |
Effect of exchange rate changes |
(397) |
206 |
Cash and cash equivalents, end of the period |
17,468 |
21,891 |
|
|
|
Non-cash transactions: |
|
|
Lease liabilities arising from obtaining right-of-use assets and remeasurement |
- |
76 |
Transactions with non-controlling interests |
10 |
17 |
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