Vtex Q1 FY2026 earnings call

Last quarter, VTEX outlined a strategic framework centered on four key growth factors: global expansion, B2B, retail media, and AI. In Q1, they continued to execute against this strategy. They have recent product launches reinforcing their positioning across these opportunities. They see the industry entering a new phase where AI is a structural driver of growth. Their reinvented VTech commerce platform is moving to an AI-native commerce suite. The VTX AI workspace is the command center with agents that diagnose, plan, and execute. They have new storefront with AI personal shopper, B2B commerce and AI order quotes, integrations with Google Universal Commerce Protocol, and introduced the VHS AI developer toolkit. They have CX and Ads platforms enhanced with AI. They've seen early results from AI use cases like Whirlpool and Decathlon. They welcomed new customers in Q1 2026 and expanded relationships with existing customers.

In Q1 2026, GMV reached $5.1 billion, up 17% in U.S. dollars and 7% FX neutral. Subscription revenue was $60.0 million versus $52.6 million in Q1 2025, an increase of 14% in U.S. dollars and 4% FX neutral. Non-GAAP subscription gross margin reached 81.5%, an expansion of 240 basis points year over year. Total gross margin, including services, reached 80.0%, an expansion of 400 basis points year-over-year. Total non-GAAP operating expenses in the first quarter were $38 million, up 6% year-over-year. Non-GAAP income from operations reached $10.6 million, doubling from $5.3 million in Q1 2025. Non-GAAP net income was $8.1 million in Q1 2026, up 51% year-over-year. Free cash flow for the quarter was $13.3 million, doubling year-over-year and reaching a free cash flow margin of 21.9%.

For Q2 2026, expect subscription revenue to grow at the low to mid single-digit percentage rate on an FX-neutral year-over-year basis. Gross profit to grow at a mid-single-digit percentage rate on an FX-neutral year-over-year basis. Non-GAAP income from operations should be in the high teens to low 20s percentage margin. And free cash flow should be in the high teens to low 20s percentage margin. For the full year 2026, expect subscription revenue to grow at a mid-single-digit percentage rate on an FX-neutral year-over-year basis and gross profit to grow at a high single-digit FX neutral rate, while maintaining non-GAAP income from operations in the low 20s percentage margin and free cash flow also in the low 20s percentage margin. FX neutral growth guidance would translate into higher reported U.S. dollar subscription revenue growth.

Q: Luca Brindam asked about drivers of guidance reduction, if AI products are incorporated in guidance, and update on US/Europe expansion.

A: Ricardo said guidance aligns with current business while confident in long-term. AI products like Vitex AI Workspace have early adopters but biggest value expected is sales pipeline acceleration. Mariano said good momentum in US and Europe with solid pipeline.

Q: Luvea Muzabota asked about B2B strategy advancement, sales cycle.

A: B2B has solid traction, pipeline and market awareness, but sales cycle longer due to macro and AI wait and see, but implementation getting shorter.

Q: Maria Clara Infantozzi asked about AI monetization and competitive environment.

A: AI monetization too early to detail, but charge by outcome. In Brazil and Argentina, competition involves traffic fragmentation and different channel roles, but no significant change in commerce platform competition.

Q: Gustavo Sarias asked about AI investment roadmap.

A: VTEX has AI-native commerce suite available for selected customers, expanding ecosystem with new agents and capabilities.