VTEX Reports Second Quarter 2021 Financial Results
VTEX (NYSE: VTEX), the digital commerce platform, announced second-quarter 2021 results with a significant 30.4% increase in Gross Merchandise Value (GMV), reaching US$2.4 billion. Total revenues rose 22.1% to US$30.9 million, driven primarily by subscription revenues, which accounted for 96.1% of total revenues. Despite a US$(10.4) million Non-GAAP loss from operations, VTEX is optimistic about sustainable growth and expects third-quarter revenue between US$31.0 million and US$31.5 million.
- 30.4% year-over-year increase in GMV to US$2.4 billion.
- Total revenues grew 22.1% to US$30.9 million.
- Subscription revenue accounted for 96.1% of total revenues.
- Subscription gross profit margin improved to 68.1%.
- Non-GAAP loss from operations of US$10.4 million.
- Non-GAAP free cash flow was US$(14.7) million.
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 2021 ended June 30, 2021. VTEX results have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.”
Geraldo Thomaz Jr., co-CEO and co-founder of VTEX, commented, “We are humbled to present our first quarterly earnings results as a publicly-traded company. Our robust performance highlights the size of the opportunity of digitalization in the emerging markets, despite the gradual reopening of brick-and-mortar retail.” Mariano Gomide de Faria, co-CEO and co-founder of VTEX, added, “We are focused on transforming the future of ecommerce. We expect to continue to enhance our leadership position in Latin America through strong execution and focus. We are only at the beginning of the digital commerce journey and VTEX is here to accelerate it.”
Second Quarter 2021 Operational and Financial Highlights
-
GMV reached US
$2.4 billion in the second quarter of 2021, representing a year-over-year increase of30.4% in USD and25.4% on an FX neutral basis. -
Total revenues increased to US
$30.9 million in the second quarter of 2021, from US$25.3 million in the second quarter 2020, representing a year-over-year increase of22.1% in USD and18.2% on an FX neutral basis. -
Subscription revenue represented
96.1% of total revenues and increased to US$29.7 million ; in the second quarter of 2021, from US$23.9 respectively in the second quarter of 2020, a year-over-year increase of23.9% in USD and20.0% on an FX neutral basis. -
Subscription gross profit was US
$20.2 million in the second quarter 2021, compared to US$15.9 million in the first quarter of 2021.-
Subscription gross margin improved to
68.1% in the second quarter of 2021 from64.7% in the first quarter of 2021. Subscription gross profit margin quarter-over-quarter improvements reflect operational hosting cost efficiencies.
-
Subscription gross margin improved to
-
Non-GAAP loss from operations was US
$10.4 million during the second quarter of 2021, compared to Non-GAAP income from operations of US$6.7 million in the second quarter of 2020, primarily due to incremental investments in sales and marketing and research and development, as we have been investing to capture the acceleration of ecommerce growth. -
Non-GAAP free cash flow was US
$(14.7) million during the second quarter of 2021, compared to US$5.4 million in the second quarter of 2020. -
Our total headcount increased to 1,486 as of June 30, 2021, representing an
88.1% year-over-year increase.
Second Quarter 2021 Product Innovation Highlights:
- VTEX launched enhancements to the core commerce capabilities to further differentiate its value proposition. VTEX Intelligent Search now can leverage VTEX OMS and inventory intelligence to regionalize search results, increasing conversion. VTEX OMS also launched a new feature allowing customers to manage their capacity for scheduled deliveries, aiming to improve the precision of promised SLAs to shoppers and % of SLAs kept on scheduled deliveries.
- VTEX launched selected features to improve local differentiation in some strategic markets. In Brazil, new payment parameters were added to native integrations for our customers to comply with new marketplace regulation. In Argentina, checkout geolocation precision was enhanced to improve conversion. In the US, OMS reports added local tax business rules.
- The new VTEX Admin with a new consistent user interface and a new sales dashboard is being rolled out and was launched to all US customers. Furthermore VTEX continues to evolve its product in a way that removes usability friction for enterprise users and enhanced user experiences to manage inventory, create promotions, and for marketplace operators to evaluate and catalog new offers from sellers.
Business Outlook
We are seeing the economy slowly recover in 2021, rebounding from the contraction of 2020, due to the adverse effects of the COVID-19 pandemic.
Online commerce penetration in Latin America continues at a higher level than it was pre-pandemic, demonstrating that the 2020 quarantine-related acceleration in online consumption appears sustainable, even as brick-and-mortar retail stores gradually reopen throughout the region.
Our customers with brick-and-mortar retail presence can now operate an omni-channel strategy. We expect our business to face similar year-over-year trends in the third quarter and start to normalize towards the end of 2021. We believe that the strong sector tailwinds will continue to drive our growth and overall ecommerce growth rates in the region, despite the near-term year-over-year comps. We expect seasonal patterns to remain the same as in prior years and expect that our revenue will grow sequentially for the remaining quarters in 2021.
In view of the aforementioned trends and VTEX’s performance during the six months ending June 30, 2021, we currently expect to deliver growth at healthy levels. We are targeting revenue in the US
Importantly, we will continue to invest to grow our business as we work towards continuing to enhance 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 six months ended June 30, 2021 and 2020.
|
Three months ended
|
Six months ended
|
||
(in millions of US$, except as otherwise indicated) |
2021 |
2020 |
2021 |
2020 |
GMV |
2,439.3 |
1,870.8 |
4,475.3 |
2,823.2 |
GMV growth YoY FXN (1) |
|
|
|
|
Revenue |
30.9 |
25.3 |
56.8 |
41.9 |
Revenue growth YoY FXN (1) |
|
|
|
|
Subscription gross profit (2) |
20.2 |
18.1 |
36.1 |
28.5 |
Subscription gross profit margin (2) |
|
|
|
|
Non-GAAP income (loss) from operations (3) |
(10.4) |
6.7 |
(18.9) |
4.3 |
Total number of employees |
1,486 |
790 |
1,486 |
790 |
(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) |
For a 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 – 217753 –) 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 the orders processed through our platform, including value-added taxes and shipping.
"Stores" or "Active online stores" means the number of unique domains generating gross merchandise value. Each customer might have multiple stores.
“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.
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 Income (Loss) from Operations, Free Cash Flow and FX Neutral measures.
We understand that 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. Additionally, our calculations of 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 Income (loss) from operations for the following periods:
|
Three months ended
|
Six months ended
|
||
(in millions of US$, except as otherwise indicated) |
2021 |
2020 |
2021 |
2020 |
Income (loss) from operation |
(16.4) |
6.1 |
(28.4) |
3.1 |
Share-based compensation expense |
5.5 |
0.4 |
8.7 |
0.7 |
Amortization of intangibles related to acquisitions |
0.5 |
0.2 |
0.8 |
0.5 |
Non-GAAP income (loss) from operations |
(10.4) |
6.7 |
(18.9) |
4.3 |
The following table presents a reconciliation of our Non-GAAP free cash flow from operation for the following periods:
|
Three months ended
|
Six months ended
|
||
(in millions of US$, except as otherwise indicated) |
2021 |
2020 |
2021 |
2020 |
Net cash provided (used) by operating activities |
(14.2) |
5.6 |
(21.6) |
(3.8) |
Acquisitions of property and equipment |
(0.5) |
(0.2) |
(1.1) |
(0.7) |
Non-GAAP free cash flow |
(14.7) |
5.4 |
(22.7) |
(4.5) |
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, 2021:
|
Three months ended June 30th |
|||||
As
|
FXN |
As
|
FXN |
|||
(in millions of US$, except as otherwise indicated) |
2021 |
2020 |
Percentage
|
2021 |
2020 |
Percentage
|
Subscription revenue |
29.7 |
23.9 |
|
28.7 |
23.9 |
|
Services revenue |
1.2 |
1.3 |
(9.0)% |
1.2 |
1.3 |
(12.5)% |
Total revenue |
30.9 |
25.3 |
|
29.9 |
25.3 |
|
Subscription cost |
(9.5) |
(5.8) |
|
(9.3) |
(5.8) |
|
Services cost |
(2.8) |
(1.7) |
|
(2.6) |
(1.7) |
|
Total cost |
(12.2) |
(7.5) |
|
(11.9) |
(7.5) |
|
Gross profit |
18.7 |
17.8 |
|
18.0 |
17.8 |
|
Operating expenses |
(35.0) |
(11.7) |
|
(33.6) |
(11.7) |
|
Income (loss) from operation |
(16.4) |
6.1 |
n/a |
(15.7) |
6.1 |
n/a |
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 |
|
Six months ended |
||||
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
June 30, 2020 |
|
|
|
|
|
|
|
|
Subscription revenue |
29,652 |
|
23,937 |
|
54,310 |
|
39,379 |
Services revenue |
1,217 |
|
1,338 |
|
2,483 |
|
2,538 |
Total revenue |
30,869 |
|
25,275 |
|
56,793 |
|
41,917 |
|
|
|
|
|
|
|
|
Subscription cost |
(9,461) |
|
(5,821) |
|
(18,176) |
|
(10,881) |
Services cost |
(2,757) |
|
(1,659) |
|
(4,865) |
|
(3,337) |
|
|
|
|
|
|
|
|
Total cost |
(12,218) |
|
(7,480) |
|
(23,041) |
|
(14,218) |
|
|
|
|
|
|
|
|
Gross profit |
18,651 |
|
17,795 |
|
33,752 |
|
27,699 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
General and administrative |
(7,806) |
|
(2,402) |
|
(15,029) |
|
(5,505) |
Sales and marketing |
(15,697) |
|
(5,360) |
|
(26,732) |
|
(11,106) |
Research and development |
(10,669) |
|
(3,638) |
|
(19,092) |
|
(7,700) |
Other income (losses) |
(868) |
|
(263) |
|
(1,317) |
|
(310) |
Income (loss) from operation |
(16,389) |
|
6,132 |
|
(28,418) |
|
3,078 |
|
|
|
|
|
|
|
|
Finance income |
2,136 |
|
2,714 |
|
2,548 |
|
1,620 |
Finance expense |
(3,490) |
|
(1,145) |
|
(5,257) |
|
(2,848) |
Financial result, net |
(1,354) |
|
1,569 |
|
(2,709) |
|
(1,228) |
|
|
|
|
|
|
|
|
Equity results |
139 |
|
1 |
|
235 |
|
(9) |
|
|
|
|
|
|
|
|
Income (loss) before income tax |
(17,604) |
|
7,702 |
|
(30,892) |
|
1,841 |
|
|
|
|
|
|
|
|
Income tax |
|
|
|
|
|
|
|
Current |
(297) |
|
(1,598) |
|
(504) |
|
(1,756) |
Deferred |
2,432 |
|
(442) |
|
3,466 |
|
379 |
|
|
|
|
|
|
|
|
Net income (loss) for the period |
(15,469) |
|
5,662 |
|
(27,930) |
|
464 |
|
|
|
|
|
|
|
|
Attributable to controlling shareholders |
(15,469) |
|
5,619 |
|
(27,927) |
|
417 |
Non-controlling interest |
- |
|
43 |
|
(3) |
|
47 |
|
|
|
|
|
|
|
|
|
USD |
|
USD |
|
USD |
|
USD |
Earnings (loss) per share |
|
|
|
|
|
|
|
Basic earnings (loss) per share |
(0.090) |
|
0.034 |
|
(0.163) |
|
0.003 |
Diluted earnings (loss) per share |
(0.090) |
|
0.033 |
|
(0.163) |
|
0.003 |
VTEX Comprehensive Income (Loss) (In thousands of U.S. dollars, unaudited) |
|||||||
|
Three months ended |
|
Six months ended |
||||
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
June 30, 2020 |
|
|
|
|
|
|
|
|
Net income (loss) for the period |
(15,469) |
|
5,662 |
|
(27,930) |
|
464 |
|
|
|
|
|
|
|
|
Items that are or may be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
Foreign cumulative conversion adjustment |
847 |
|
(441) |
|
304 |
|
(1,395) |
|
|
|
|
|
|
|
|
Total comprehensive loss for the period |
(14,622) |
|
5,221 |
|
(27,626) |
|
(931) |
VTEX Condensed Consolidated Balance Sheet (In thousands of U.S. dollars, unaudited) |
||||
|
|
June 30, 2021 |
|
December 31, 2020 |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
23,598 |
|
58,557 |
Restricted cash |
|
1,360 |
|
1,429 |
Marketable securities |
|
13,503 |
|
16,969 |
Trade receivables |
|
31,330 |
|
24,491 |
Recoverable taxes |
|
4,257 |
|
4,071 |
Deferred commissions |
|
191 |
|
438 |
Prepaid expenses - Current |
|
6,103 |
|
2,379 |
Derivative financial instruments - Curt assets |
|
- |
|
174 |
Other current assets |
|
278 |
|
223 |
Total current assets |
|
80,620 |
|
108,731 |
|
|
|
|
|
Non-current assets |
|
|
|
|
Deferred tax assets |
|
5,840 |
|
2,174 |
Prepaid expenses |
|
1,860 |
|
3,134 |
Recoverable taxes |
|
535 |
|
674 |
Deferred Commission |
|
1,160 |
|
389 |
Other |
|
221 |
|
53 |
Right-of-use assets |
|
5,611 |
|
5,076 |
Property and equipment, net |
|
5,361 |
|
4,551 |
Intangible assets, net |
|
37,256 |
|
15,093 |
Investment in joint venture |
|
310 |
|
136 |
Total non-current assets |
|
58,154 |
|
31,280 |
|
|
|
|
|
Total assets |
|
138,774 |
|
140,011 |
LIABILITIES |
|
June 30, 2021 |
|
December 31, 2020 |
Current liabilities |
|
|
|
|
Accounts payable and accrued expenses |
|
28,465 |
|
20,709 |
Loans and financing |
|
2,135 |
|
1,585 |
Taxes payables |
|
3,240 |
|
6,790 |
Lease liabilities |
|
969 |
|
850 |
Deferred revenue |
|
16,837 |
|
14,170 |
Derivative financial instruments |
|
304 |
|
- |
Accounts payable from acquisition of subsidiaries |
|
8,686 |
|
2,794 |
Other |
|
80 |
|
159 |
Total current liabilities |
|
60,716 |
|
47,057 |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Loans and financing |
|
2,826 |
|
4,774 |
Lease liabilities |
|
5,492 |
|
5,303 |
Accounts payable from acquisition of subsidiaries |
|
1,687 |
|
1,206 |
Deferred revenue |
|
10,543 |
|
5,005 |
Deferred tax liabilities |
|
2,162 |
|
731 |
Other |
|
269 |
|
187 |
Total non-current liabilities |
|
22,979 |
|
17,206 |
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
Issued capital |
|
17 |
|
17 |
Capital reserve |
|
86,025 |
|
78,945 |
Other comprehensive income |
|
408 |
|
104 |
Accumulated losses |
|
(31,371) |
|
(3,444) |
Equity attributable to VTEX’s shareholders |
|
55,079 |
|
75,622 |
Non-controlling interests |
|
- |
|
126 |
Total shareholders’ equity |
|
55,079 |
|
75,748 |
Total liabilities and equity |
|
138,774 |
|
140,011 |
VTEX Condensed Consolidated Statements of Cash Flows (In thousands of U.S. dollars, unaudited) |
||||
|
|
Six months ended |
||
|
|
June 30, 2021 |
|
June 30, 2020 |
|
|
|
|
|
Net income (loss) of the period |
|
(27,930) |
|
464 |
|
|
|
|
|
Adjustments on income ( loss) for the period |
|
|
|
|
Depreciation and amortization |
|
1, 814 |
|
1,270 |
Deferred income tax |
|
(3,466) |
|
(379) |
Loss on disposal of property, equipment and intangible assets |
|
1 |
|
34 |
Allowance for doubtful accounts |
|
294 |
|
744 |
Share-based compensation |
|
3,995 |
|
702 |
Adjustment of hyperinflation |
|
876 |
|
126 |
Loss (profit) on investments in joint venture |
|
(235) |
|
9 |
Fair value gain (losses) |
|
(88) |
|
(76) |
Other costs and foreign exchange, net |
|
27 |
|
(2,093) |
Working capital adjustments |
|
|
|
|
Trade receivables |
|
(6,553) |
|
(8,760) |
Recoverable taxes |
|
(47) |
|
(4) |
Prepaid expenses |
|
(2,450) |
|
(2,752) |
Other assets |
|
28 |
|
(546) |
Accounts payable and accrued expenses |
|
9,422 |
|
1,570 |
Taxes payable |
|
206 |
|
2,915 |
Deferred revenue |
|
6,894 |
|
6,102 |
Other liabilities |
|
(525) |
|
(1,889) |
|
|
|
|
|
Cash used in operating activities |
|
(17,737) |
|
(2,563) |
Income tax paid |
|
(3,879) |
|
(1,193) |
|
|
|
|
|
Net cash used in operating activities |
|
(21,616) |
|
(3,756) |
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Redemption of marketable securities |
|
3,316 |
|
- |
Interest received |
|
384 |
|
757 |
Acquisition of subsidiaries net of cash acquired |
|
(4,449) |
|
(2,599) |
Acquisitions of property and equipment |
|
(1,065) |
|
(734) |
Net cash used in investing activities |
|
(1,814) |
|
(2,576) |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Changes in restricted cash |
|
69 |
|
731 |
Proceeds from the exercise of stock options |
|
927 |
|
52 |
Capital increase |
|
1,000 |
|
- |
Buyback of shares |
|
(2,423) |
|
- |
Payment of loans and financing |
|
(9,653) |
|
(1,159) |
Interest paid |
|
(59) |
|
(78) |
Principal elements of lease payments |
|
(460) |
|
(102) |
Lease interest paid |
|
(351) |
|
(395) |
Net cash used in financing activities |
|
(10,950) |
|
(951) |
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(34,380) |
|
(7,283) |
|
|
|
|
|
Cash and cash equivalents, beginning of the period |
|
58,557 |
|
29,762 |
Effect of exchange rate changes |
|
(579) |
|
2,632 |
Cash and cash equivalents, end of the period |
|
23,598 |
|
25,111 |
Supplemental cash flow information: |
|
|
|
|
Lease liabilities arising from obtaining right-of-use assets |
|
156 |
|
37 |
Issue of ordinary shares as consideration for a business combination |
|
1,469 |
|
- |
Unpaid amount related to acquisition of non-controlling interest |
|
27 |
|
- |
Unpaid amount related to business combinations |
|
9,810 |
|
- |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210817005767/en/
FAQ
What were VTEX's earnings for the second quarter of 2021?
What is the forecast for VTEX's revenue in the third quarter of 2021?
How did VTEX's Gross Merchandise Value (GMV) perform in Q2 2021?
What are the main challenges VTEX faced in Q2 2021?
What percentage of VTEX's total revenue came from subscription services in Q2 2021?
