Vtex Q2 FY2025 earnings call

• VTEX delivered resilient performance driven by disciplined execution and global expansion. AI initiatives supported cost efficiency.
• Subscription revenue was $57.2 million, 11% Y/Y FX neutral increase, impacted by Argentina's reversed recovery and Brazil's mix shift.
• Gross profit $45.3 million, up 15.2% FX neutral, margin up 3.5 points Y/Y. Non-GAAP income from operations $8.5 million, up 46% FX neutral, margin up 3.3 points Y/Y.
• New customers launched: Alo Yoga, Amigão Supermercados, etc. Strengthened relationships with existing customers like Hinode Group, Keune, LG.
• Product updates: B2B commerce with re-architected buyer portal, retail media with VTEX Ads, omnichannel with AI-powered search and in-store innovations, agentic commerce with AI agents.

Subscription revenue was $57.2 million, representing an 11% year-over-year increase in FX neutral. Gross profit reached $45.3 million, up 15.2% in FX neutral, with a 3.5 percentage points margin increase year-over-year. Non-GAAP income from operations increased by 46% in FX neutral to $8.5 million, representing a 14.4% margin and a 3.3% point margin increase versus the same quarter of last year. Subscription revenue contributes a significant portion, with $57.2 million recorded, showing an 11% Y/Y increase in FX neutral.

• Q3 2025: Target FX-neutral Y/Y subscription revenue growth 6%-9%, implying $57.5M-$59.0M.
• Full-year 2025: Target FX-neutral Y/Y subscription revenue growth 9%-12%, implying $233M-$239M.
• Raised full-year 2025 non-GAAP income from operations and free cash flow margins to the high teens, despite 2% U.S. dollar subscription revenue revision.

• Challenging market in Brazil and Argentina.
• Reversal of recovery in Argentina in Q2.
• Mix shift in Brazil with lower implied take rate customers.
• Softer overall market demand and isolated contract cancellations.

Q: Discuss decline in guidance in terms of GMV and new subscriptions sold, and margin expectations.

A: Argentina and Brazil GMV effects, softer overall market demand, isolated cancellations drove FX-neutral subscription growth revision. Margin improvement from AI support automation, autonomous implementations, ecosystem maturity.

Q: Changes in timing of U.S. and Europe client implementations, competition in LatAm.

A: No significant change in implementation cycle. U.S. and Europe show growing momentum, KitchenAid launch validates platform. Competition traction in international markets.

Q: Color on Argentina's operating momentum deterioration and Brazil consumption deceleration.

A: Argentina reversed recovery in Q2. Brazil saw mix shift to larger customers with lower take rates, expecting deceleration in second half.

Q: Impact of market volatility on B2B and retail media strategy pace.

A: No big structural change, retail media and B2B remain key secular trends, strategy unchanged.