Zenvia Reports Q2 2022 Results
On August 15, 2022, Zenvia Inc. (NASDAQ: ZENV) reported a 50% year-over-year increase in net revenues, totaling BRL 203.9 million in Q2 2022. Adjusted gross margin expanded by 500 basis points to 37.8%. The company's client base grew by 37%, and adjusted gross profit rose by 72.6%. Zenvia is implementing a new revenue breakdown model to improve transparency across its SaaS and CPaaS sectors. Despite challenges in the tech environment, Zenvia reaffirms its full-year guidance, expecting revenues between BRL 875 million and BRL 925 million.
- Net revenues increased by 50% YoY to BRL 203.9 million in Q2 2022.
- Adjusted gross margin expanded by 500bps to 37.8%.
- Client base grew by 37% YoY, enhancing market presence.
- Adjusted gross profit rose by 72.6% to BRL 77 million.
- Strong revenue growth from both organic growth and M&A integration.
- Negative non-GAAP adjusted EBITDA of BRL 22.7 million for H1 2022.
Strong top-line increase from organic growth and M&A integration
Net Revenues up
Numbers are within the full-year guidance range
New reporting breakdown by SaaS and CPaaS to increase transparency and simplify understanding
SÃO PAULO, Aug. 15, 2022 /PRNewswire/ -- Zenvia Inc. (NASDAQ: ZENV), the leading cloud-based CX communications platform in Latin America, empowering companies to transform their existing communications with end customers along their life cycle, today reported its second quarter of 2022 operational and financial metrics.
Cassio Bobsin, Founder & CEO of ZENVIA, said: "A couple of weeks ago, we held an Investor Day on Nasdaq where we shared our long-term strategy and how we envision the future of Customer Experience (CX). We believe that since the rise of civilization and modern society, we've been building organizations based on processes designed for scale and efficiency. This was a great achievement of the industrial revolution. The world is in process of transformation, and value creation has shifted from production efficiency to customer efficiency. Humans are not designed to interact with bureaucratic organizations. We are designed to interact with other human beings. Ultimately, people should be able to talk to companies as if they were also humans. That's why Zenvia is shaping a new world of experiences."
Shay Chor, CFO & IRO of ZENVIA, said: "Starting Q2 2022, and similar to the approach of our Investor Day, we will break down revenues, gross profit and margin by SaaS and CPaaS, our two main business lines. This breakdown will allow for a deeper glimpse into our business and is more aligned with how we understand and manage our company, especially following the organizational restructuring announced last June. It also demonstrates that we are effectively a SaaS company as over half of our gross margin already comes from the software business. As we finished up the first half of 2022, Zenvia is smarter and more robust than ever. Our top-line and gross margin results attest that we are on the right path to creating value. Our client base grew
Key Financial Metrics | Q2 2022 | Q2 2021 | YoY | H1 2022 | H1 2021 | YoY |
Total Customers | 14,740 | 10,773 | 36.8 % | 14,740 | 10,773 | 36.8 % |
Net Revenues (BRL MM) | 203.9 | 135.7 | 50.3 % | 401.5 | 258.3 | 55.4 % |
Adjusted Gross Profit (BRL MM) | 77.0 | 44.6 | 72.6 % | 143.8 | 78.0 | 84.3 % |
Adjusted Gross Margin | 37.8 % | 32.9 % | 5.0p.p. | 35.8 % | 30.2 % | 5.6p.p. |
Key operating highlights
- We unified our portfolio: Zenvia Attraction, Zenvia Conversion, Zenvia Service and Zenvia Success, unified on our Quantum platform to break down all CX barriers and unlock the true potential for end customers
- We closed the Movidesk acquisition on May 2nd, 2022, adding 2,500 customers, with an Annual Recurring Revenue (ARR) of BRL 46 million. We expect to fully integrate Movidesk in a twelve-month period ending May 2023.
- Integration of D1 and SenseData is moving as expected, with cross-selling solutions being already delivered to some of our customers. We expect to fully integrate these businesses by the end of 2022.
- Last June, we announced a tactical reorganization of our business structure, with fully-dedicated teams to focus on strengthening its three existing business lines - SaaS, CPaaS, and Consulting – thus allowing for more autonomy when it comes to revenue generation activities.
Our Business Lines
To better reflect the current stage of our business and align with the recent reorganization of our corporate structure, starting this quarter we will report a revenue breakdown by SaaS and CPaaS, instead of SMS and Beyond SMS. We believe this change will allow all stakeholders to better understand our business and growth levers.
According to IDC, the total addressable market (TAM) in Latin America for SaaS will be
SaaS Business
The SaaS business line carries higher gross margins and is the business from where most of our growth will come in the future. During the IPO, we practically only had Zenvia Conversion and communication channels as part of our offering. Twelve months later, Zenvia is talking directly with the marketing and sales departments, acting along the entire customer experience journey. More than half of our margin already comes from our solutions, when nearly three years ago this percentage was zero.
SaaS Key Operational & Financial Metrics | Q2 2022 | H1 2022 |
Total Customers | 6,593 | 6,593 |
Net Revenues (BRL MM) | 64.5 | 116.4 |
Adjusted Gross Margin | 68.5 % | 66.5 % |
Net Revenue Expansion (NRE) | 120 % | 120 % |
According to IDC, Zenvia was already among Latin America's top 10 SaaS players by the end of 2021, with
The Latin American SaaS market is expected to reach US
Our SaaS Portfolio
Since our IPO a year ago, Zenvia has evolved its product portfolio organically and through acquisitions. Our platform now provides four SaaS solutions designed for each phase of customers' journey, starting with the first interaction with the brand and all the way to a continuous relationship with the company.
Solution | Former | Focus |
Zenvia Attraction | Zenvia Campaign | Active end-customer acquisition campaigns |
Zenvia Conversion | Sirena | Converting leads into sales using multiple communication channels |
Zenvia Service | Movidesk | Enabling companies to provide amazing customer service with structured support across multiple channels |
Zenvia Success | Sensedata | Enabling companies to continuously engage customers based on their individual context, promoting healthy and long-lasting relationships, transforming data into insights |
Our SaaS solutions can be used alone or combined, allowing companies to start a program in a really simple way in a matter of minutes, or they can go all the way to a fully integrated, automated, and intelligent customer journey. We also provide CX Tools that can be used to integrate and automate the customer experiences in various ways. Our main tools are APIs, Bots, Natural-language understanding (NLU) and Docs. The Quantum platform connects all our solutions and tools with the client's systems and processes. Companies can access our platform and start choosing from any solution or tool. As they go deeper into adopting multiple parts of the platform, we can break down all CX barriers and unlock the true potential for end customers.
CPaaS Business
CPaaS Key Operational & Financial Metrics | Q2 2022 | H1 2022 |
Total Customers | 8,647 | 8,647 |
Net Revenues (BRL MM) | 139.4 | 285.1 |
Adjusted Gross Margin | 22.9 % | 22.9 % |
The population in Latin America is highly connected and a heavy user of social media and social networks. This leads companies to centralize the communication with end customers through these digital channels, mainly WhatsApp and Instagram, which are the most popular and widely used. Even though SMS is still currently responsible for most of the CPaaS volume in the region, WhatsApp and Instagram are growing at a much faster pace.
To reach the population through multiple channels, companies need to
- Use communications application programming interfaces (APIs), to enhance customer engagement, notifications, service management, marketing automation and business intelligence applications
- Apply real-time communications solutions that are easy to create and scalable.
- Simplify the process of embedding programmable voice and messaging applications, creating cost-effective and agile enterprise cloud applications
According to IDC, Zenvia was the top CPaaS player in Latin America by the end of 2021, with
Financial Results
Consolidated Revenue
Consolidated Revenue in Q2 2022 totaled BRL 203.9 million, up
During H1 2022, consolidated revenues amounted to R
Profitability
Adjusted Gross Profit increased
For H1 2022, Adjusted Gross Profit rose
Non-GAAP Adjusted EBITDA in the first six months of the year was negative BRL 22.7 million, including higher R&D expenses and the earn-out expenses related to the acquisitions of SenseData and Sirena. Excluding these expenses, our Normalized EBITDA in H1 2022 was negative BRL 9.0 million.
Reiterating Guidance
FY 2022 | |||||||
Revenue (millions)(1) | BRL | ||||||
Y/Y Growth | |||||||
Organic Y/Y Growth(2) | |||||||
CPaaS Revenue | BRL | ||||||
SaaS Revenue | BRL | ||||||
Adjusted Gross Margin | |||||||
Y/Y Expansion | 2.7p.p. - 3.7p.p. | ||||||
CPaaS Adj Gross Profit | ~ | ||||||
SaaS Adj Gross Profit | ~ | ||||||
Conference Call
The Company will host a webcast on August 16, 2022, at 10:00 am EDT to discuss its operational and financial metrics. To access the webcast presentation, click here.
Additional information regarding Zenvia can be found at https://investors.zenvia.com.
Click here to see our full Investor Day Video Presentation or go to our investor relations website, in the events section, at the following link: https://investors.zenvia.com/news-events/company-events/
Contacts
Investor Relations Caio Figueiredo Fernando Schneider | Media Relations – Grayling Lucia Domville – (646) 824-2856 – lucia.domville@grayling.com Fabiane Goldstein – (954) 625-4793 – fabiane.goldstein@grayling.com
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About ZENVIA
ZENVIA is driven by the purpose of empowering companies to create unique experiences for customer communications through its unified end-to-end platform. ZENVIA empowers companies to transform their existing customer communications from non-scalable, physical and impersonal interactions into highly scalable, digital-first and hyper-contextualized experiences across the customer journey. ZENVIA's unified end-to-end CX communications platform provides a combination of (i) SaaS focused on campaigns, sales teams, customer service and engagement, (ii) tools, such as software application programming interfaces, or APIs, chatbots, single customer views, journey designers, documents composer and authentication and (iii) channels, such as SMS, Voice, WhatsApp, Instagram and Webchat. Its comprehensive platform assists customers across multiple use cases, including marketing campaigns, customer acquisition, customer onboarding, warnings, customer services, fraud control, cross-selling and customer retention, among others. ZENVIA's shares are traded on Nasdaq under the ticker ZENV.
Forward-Looking Statements
The preliminary second quarter operating results set forth above are based solely on currently available information, which is subject to change. These preliminary operating results constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections, as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Zenvia's control. Zenvia's actual results could differ materially from those stated or implied in forward-looking statements due to several factors, including but not limited to: our ability to innovate and respond to technological advances, changing market needs and customer demands, our ability to successfully acquire new businesses as customers, acquire customers in new industry verticals and appropriately manage international expansion, substantial and increasing competition in our market, compliance with applicable regulatory and legislative developments and regulations, the dependence of our business on our relationship with certain service providers, among other factors.
SELECTED FINANCIAL DATA
Q2 2022 | H1 2022 | |||||
2022 | 2021 | Variation | 2022 | 2021 | Variation | |
(non-audited) | (non-audited) | (non-audited) | (non-audited) | |||
(in thousands of R$) | ( %) | (in thousands of R$) | ( %) | |||
Revenue | 203,897 | 135,652 | 50.3 % | 401,478 | 258,345 | 55.4 % |
Cost of services | -137,849 | -94,186 | 46.4 % | -276,006 | -186,586 | 47.9 % |
Gross profit | 66,048 | 41,466 | 59.3 % | 125,472 | 71,759 | 74.9 % |
Selling and marketing expenses | -30,771 | -22,822 | 34.8 % | -56,190 | -38,200 | 47.1 % |
Administrative expenses | -39,607 | -14,467 | 173.8 % | -74,340 | -47,189 | 57.5 % |
Research and development expenses | -15,883 | -6,000 | 164.7 % | -29,193 | -11,009 | 165.2 % |
Allowance for credit losses | -1,957 | -1,656 | 18.2 % | -3,997 | -3,246 | 23.1 % |
Other income and expenses, net | -11,826 | -289 | n.m. | -19,984 | -181 | n.m. |
Operating profit | -33,996 | -3,768 | 802.2 % | -58,232 | -28,066 | 107.5 % |
Finance costs | -17,860 | -9,310 | 91.8 % | -31,478 | -26,969 | 16.7 % |
Finance income | 9,650 | 15,739 | -38.7 % | 21,550 | 18,665 | 15.5 % |
Net finance costs | -8,210 | 6,429 | -227.7 % | -9,928 | -8,304 | 19.6 % |
Loss before income tax and social contribution | -42,206 | 2,661 | n.m. | -68,160 | -36,370 | 87.4 % |
Deferred income tax and social contribution | 10,936 | -969 | -1228.6 % | 15,885 | 9,657 | 64.5 % |
Current income tax and social contribution | -703 | -562 | 25.1 % | -723 | -632 | 14.4 % |
Loss for the period | -31,973 | 1,130 | n.m. | -52,998 | -27,345 | 93.8 % |
Q2 | H1 | |||
2022 (non-audited) | 2021 (non-audited) | 2022 (non-audited) | 2021 (non-audited) | |
(in thousands of R$) | ||||
Net cash from (used in) operating activities | 29,843 | 18,225 | 13,422 | -25,539 |
Net cash used in investing activities | -311,519 | -22,763 | -319,423 | -27,414 |
Net cash from (used in) financing activities | 959 | -15,742 | -135,207 | 68,031 |
Exchange rate change on cash and cash equivalents | 9,279 | 937 | -20,864 | 1,412 |
Net (decrease) increase in cash and cash equivalents | -271,438 | -19,343 | -462,072 | 16,490 |
(in thousands of R$) | June 30, 2021 (non-audited) | December 31, 2021 (audited) | June 30, 2022 (non-audited) |
Assets | |||
Current assets | 216,850 | 766,059 | 309,142 |
Cash and cash equivalents | 76,469 | 582,231 | 120,159 |
Trade and other receivables | 99,798 | 142,407 | 150,792 |
Tax assets | 8,602 | 15,936 | 25,840 |
Derivative and Financial instruments | - | 74 | - |
Prepayments | 8,774 | 20,918 | 4,645 |
Other assets | 2,207 | 4,493 | 7,706 |
Advances to Acquisitions | 21,000 | - | - |
Non-current assets | 287,172 | 1,077,790 | 1,581,499 |
Tax assets | 138 | 112 | 170 |
Prepayments | 2,224 | 2,271 | 3,097 |
Interest earning bank deposits | - | 7,005 | 7,509 |
Property, plant and equipment | 11,621 | 15,732 | 21,733 |
Intangible assets and goodwill | 273,189 | 1,050,357 | 1,532,490 |
Deferred Tax Assets | - | 2,276 | 16,415 |
Other Assets | - | 37 | 85 |
Total assets | 504,022 | 1,843,849 | 1,890,641 |
(in thousands of R$) | June 30, 2021 (non-audited) | December 31, 2021 (audited) | June 30, 2022 (non-audited) |
Liabilities | |||
Current liabilities | 242,527 | 429,883 | 418,165 |
Loans and borrowings | 43,521 | 64,415 | 68,906 |
Trade and other payables | 102,945 | 144,424 | 182,319 |
Liabilities from acquisitions | 68,281 | 176,069 | 100,791 |
Tax liabilities | 8,972 | 15,736 | 15,307 |
Employee benefits | 16,863 | 21,926 | 34,426 |
Lease liabilities | 1,118 | 2,220 | 2,203 |
Deferred revenue | - | 4,582 | 13,756 |
Taxes to be paid in installments | - | 511 | 457 |
Derivative and Financial Instruments | 827 | - | - |
Non-current liabilities | 171,466 | 210,764 | 325,675 |
Liabilities from acquisitions | 27,917 | 60,220 | 191,199 |
Trade and other payables | 1,990 | 936 | 715 |
Loans and borrowings | 125,706 | 143,723 | 129,132 |
Lease liabilities | 1,125 | 2,038 | 3,662 |
Provisions for tax, labor and civil risks | 1,590 | 1,369 | 419 |
Deferred tax liabilities | 13,138 | 1,756 | - |
Taxes to be paid in installments | - | 722 | 548 |
Equity | 90,029 | 1,203,202 | 1,146,801 |
Capital | 6 | 957,523 | 957,524 |
Reserves | 87,760 | 226,599 | 258,149 |
Translation reserve | 520 | 34,638 | - |
Accumulated losses | 1,743 | (15,558) | (68,540) |
Non-controlling interests | - | - | (331) |
Total equity and liabilities | 504,022 | 1,843,849 | 1,890,641 |
Q2 | H1 | |||
2022 (non-audited) | 2021 (non-audited) | 2022 (non-audited) | 2021 (non-audited) | |
(in thousands of R$) | ||||
Gross profit | 66,048 | 41,466 | 125,472 | 71,759 |
(+) Amortization of intangible assets acquired from business combinations | 10,969 | 3,142 | 18,377 | 6,284 |
Non-GAAP Gross Profit | 77,017 | 44,608 | 143,849 | 78,043 |
Revenue | 203,897 | 135,652 | 401,478 | 258,345 |
Gross margin | 32.4 % | 30.6 % | 31.3 % | 27.8 % |
Non-GAAP Gross Margin | 37.8 % | 32.9 % | 35.8 % | 30.2 % |
Q2 | H1 | |||
2022 (non-audited) | 2021 (non-audited) | 2022 (non-audited) | 2021 (non-audited) | |
(in thousands of R$) | ||||
EBITDA | -22,660 | 4,540 | -24,743 | -11,766 |
(+) Expenses related to IPO grants | 1,394 | -5,044 | 2,035 | 1,951 |
Adjusted EBITDA | -21,266 | -504 | -22,708 | -9,815 |
Interest | June 30, 2022 | December 31, 2021 | June 30, 2021 | |
(in thousands of R$) | ||||
Working capital | From CDI + | 153,038 | 163,138 | 169,227 |
Debentures | 18.16 % | 45,000 | 45,000 | — |
Total | 198,038 | 208,138 | 169,227 |
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SOURCE Zenvia
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