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

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

• GMV reached US$3.1 billion in the second quarter of 2022, representing a YoY increase of 27.6% in USD and 21.0% on an FX neutral basis.
• Total revenue increased to US$38.7 million in the second quarter of 2022, from US$30.9 million in the second quarter of 2021, representing a YoY increase of 25.4% in USD and 19.5% on an FX neutral basis.
• Subscription revenue represented 94.7% of total revenues and increased to US$36.6 million in the second quarter of 2022, from US$29.7 million in the second quarter of 2021, a YoY increase of 23.6% in USD and 17.4% on an FX neutral basis.
• Non-GAAP subscription gross profit was US$26.6 million in the second quarter of 2022, compared to US$20.4 million in the second quarter of 2021, representing a YoY increase of 30.2% in USD and 22.7% on an FX neutral basis.
  • Non-GAAP subscription gross margin was 72.5% in the second quarter of 2022, compared to 68.8% in the same quarter of 2021. Non-GAAP subscription gross profit margin YoY 370 bps expansion reflects operational hosting cost efficiencies.
• Non-GAAP loss from operations was US$17.5 million during the second quarter of 2022, compared to Non-GAAP loss from operations of US$10.4 million in the second quarter of 2021, this quarter included exceptional expenses related to VTEX Day and to a personnel layoff implemented during the quarter.
• Non-GAAP negative free cash flow was US$12.7 million during the second quarter of 2022, compared to US$16.1 million in the first quarter of 2022 and US$14.7 million in the second quarter of 2021.
• Our total headcount decreased to 1,560 as of June 30, 2022, representing an increase of 5.0% YoY and a decrease of 11.6% QoQ.
• VTEX today announced its Board of Directors has authorized a 1-year, US$30.0 million program to repurchase shares of VTEX's Class A Common Shares. The timing and amount of shares repurchased (if any) will be determined by our management based on its evaluation of market conditions and other factors.

Second Quarter 2022 Commercial Highlights:

• New customers that initiated their operations with us, among others: Elo, Hering, Pernambucanas, SumUp and ZeBrands in Brazil, Yamaha and Groupe Seb Andeans in Colombia, and BRF in Chile, Garbarino in Argentina, Grainger and Citric in Mexico, Momentum Textiles in the US and Invitadisima in Spain.
• Existing customers expanding their operations with us by opening new online stores, among others: AB Inbev added the Dominican Republic, expanding from 9 countries in Latin America; and Sugo added Mexico, expanding from 4 countries in Latin America.

Second Quarter 2022 Product Innovation Highlights:

We innovate aligned with our guiding principles. VTEX key innovations deployed this quarter:

• Zero friction onboarding and collaboration:
  • Pernambucanas chose our headless approach to implement continuous customizations on their website and app and to keep a consistency between channels while providing a unified experience. The VTEX team implemented this complex case in only 5 months.
  • Launched a partnership with Adyen, the global payments platform of choice for many of the world’s leading companies.
• Single control panel for every order:
  • Briggs & Stratton chose VTEX in the US for their B2B project with 3 different Business Units supporting multi-language and multi-currency with one single account. With our single ecommerce platform and out-of-the-box features, we helped the customer to run their two different platforms, improving maintainability and providing frictionless solutions.
  • Embargosalobestia needed robust omnichannel capabilities to help unify their multiple sales channels. With VTEX, they improved their checkout statistics, conversion rates and other key ecommerce performance metrics while also building a true omnichannel strategy by integrating their physical stores and other sales channels.
  • Live Shopping continues to penetrate our customer base with increased adoption and satisfaction. This quarter we had 231 Live Shopping events, which represents a QoQ increase of almost 80%.
  • Along with Google, VTEX is launching Web Page Performance, a dashboard that adds Google's PageSpeed Insights and Lighthouse tools to the VTEX Admin. Now, our customers can keep track of the Core Web Vitals performance of all of the store's URLs in one single place.
• The development platform of choice for digital commerce:
  • We continued evolving our VTEX Acceleration Program which seeks for innovative ecommerce-related solutions that can meet the needs of our customers. The project is focused on fostering the global ecommerce ecosystem by integrating third-party apps with VTEX App Store. Some interesting partners to highlight within the program are MailUp, with its dashboard app, and WoowUp, with its CRM app.
  • Continued attracting developers to our low-code platform, gaining momentum in the community and scaling our capabilities. Monthly active developers accessing the VTEX development portal increased to more than 28,000 in the second quarter of 2022 from more than 24,000 in the first quarter of 2022.

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.

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:

The following table presents a reconciliation of our Non-GAAP expenses to expenses for the following periods:

The following table presents a reconciliation of our Non-GAAP income (loss) from operations to income (loss) from operations for the following periods:

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:

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:

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220809006063/en/