Vtex Q4 FY2025 earnings call

• Acknowledged recent growth below long-term ambition, driven by cyclical factors like macro environment, promotional marketplace, and longer decision cycles due to AI. - Emphasized four growth levers: global expansion (global markets had 22% subscription revenue growth in 2025, e.g., partnership with Manchester City), B2B (modernizing large enterprises with AI-ready and composable capabilities, e.g., Mondelez launched B2B in Brazil), retail media (2025 was turning point, e.g., Essity saw 39% increase in average conversion rate), and AI (redesigning products with AI-first approach, e.g., WENI by Vitex automating support journeys, and AI showing results in operations like expanding gross margins by ~3pp). - Adjusted sales and marketing investments, reallocating to R&D for B2B, retail media, and AI-powered after-sales support. - In Q4, added new enterprise customers and saw expansion activity within existing customer base.

In Q4 2025, GMV reached $6.3 billion (17.2% YoY in USD, 10.0% FX-neutral), subscription revenue was $66.7 million (12.2% YoY in USD, 5.4% FX-neutral). For full year 2025, GMV was $20.5 billion (12.1% YoY in USD, 12.9% FX-neutral), subscription revenue was $234.9 million (7.9% YoY in USD, 9.5% FX-neutral). Brazil's subscription revenue grew 12.2% FX-neutral, global markets (formerly rest of the world) grew 19.2% FX-neutral. Existing stores gross margin increased from 80% in 2024 to 82% in 2025, operating margin reached 44% (1pp increase YoY). Global markets represented 11.1% of total revenue and its contribution margin improved significantly and approached break-even.

• Q1 2026: Subscription revenue expected to grow mid-single-digit FX-neutral YoY, gross profit high single-digit FX-neutral YoY, non-GAAP income from operations mid-teens percentage margin, free cash flow high-teens percentage margin. - Full year 2026: Subscription revenue targeted mid- to high-single-digit FX-neutral YoY growth, gross profit high single-digit to low-teens FX-neutral YoY growth, non-GAAP income from operations low-20s percentage margin, free cash flow low-20s percentage margin. FX neutral growth would translate into higher reported USD subscription revenue growth. Adjusted sales and marketing investments and reallocated capital to R&D for key product offerings.

• Elongated sales cycles due to macro scenarios and uncertainty of AI future, which impacted revenue addition from new stores and will carry over some impact in 2026. - Market wide hesitation regarding AI and its impact on software decisions leading to delayed enterprise platform decisions. - Dependence on take rate on customers' GMV, where decline in net revenue retention was driven by lower same-source sales growth in Argentina and muted consumer spending in Brazil.

Q: Explore the point of the elongated sales cycle, including feedback from CTOs/industry players, market intelligence on normalization, and what's needed for change; also about gross margin gains in Q4.

A: Mariano said sales cycles are elongated due to AI wait and see effect as enterprises take more time for platform decisions due to macro and AI uncertainty, win rates stable. Drea said gross margin gains in Q4 were basically all AI-driven, from automating support using AI tools.

Q: Comment on main risks and opportunities of AI for the company in short and long term, and capital allocation.

A: Gerardo said AI is structural shift, not feature upgrade, risk is not embracing AI, opportunity is being mission-critical orchestration layer. Capital allocation is guided by long-term value creation, with share repurchase program and M&A like WENI and Newtail.

Q: Main drivers for revenue growth back to double digits, regional breakdown, and B2B pipeline evolution.

A: Main drivers include global expansion, B2B, retail media, AI. Regional breakdown: Brazil subscription revenue grew, global markets grew. B2B has half of deals in US and EMEA related, showing momentum.

Q: Development of AI tools from large tech providers and agent e-commerce.

A: AI companies enable better software, VTEX better positioned as domain application with credibility, security, etc. Agent e-commerce beneficial for D2C platforms as VTEX delivers outcomes.

Q: Pace and prioritization of geographic investments, and conversations with CIOs on discoverability in agentic commerce.

A: Changed regional approaches to functional oriented, leveraging ecosystem. Conversations with CIOs focus on delivering value aggregation through AI, with Agentech CX platform delivering results like saving 80% in customer service costs.