Zenvia Inc. Q4 FY2024 earnings call

• AI is a strategic priority, with Zenvia focusing on unifying customer interactions across channels using AI and data analytics. - Launched Zenvia Customer Cloud in October 2024, leveraging product-led growth (PLG) strategies and international expansion. - Implemented a volume-based pricing model instead of traditional SaaS. - Streamlined operations, reducing G&A to revenue ratio from 19.5% in 2022 to 12% in 2024. - Plan to divest noncore assets to optimize capital structure and deleverage.

Zenvia's segments showed distinct financial performances. The CPaaS segment saw revenues grow 25% year-over-year between 2023 and 2024, but was impacted by lower margins in growth and an SMS cost adjustment, with adjusted gross profit at BRL6 million. The SaaS segment grew in high single digits, but margin declined due to a competitive environment and launch costs, with adjusted gross profit at BRL43 million. Zenvia Customer Cloud, launched in October 2024, generated ~BRL180 million in full-year 2024 revenues, with 20% from international clients (Mexico and Argentina), and is expected to grow 25%-30% in 2025 with a gross margin of 68%-70% and positive EBITDA margin.

• Zenvia Customer Cloud is expected to grow 25%-30% in 2025 with a gross margin of 68%-70% and positive EBITDA margin. - EBITDA minus CapEx is expected to continue growing faster than CapEx. - Goal to deleverage the balance sheet and align EBITDA with the company's capital structure. - SaaS under Zenvia Customer Cloud is expected to start leveraging growth, transitioning to a full SaaS model.

• Volatility in the CPaaS market. - Competitive pressure affecting SaaS margins. - Integration challenges with new acquisitions. - Uncertainty around the timing and outcomes of divestment efforts.

Q: Could you provide clarity on Zenvia's full year 2025 revenue outlook? Specifically, how should investors model the Customer Cloud segment 25% to 30% projected growth in relation to your traditional SaaS CPaaS business line? To what extent do you anticipate customer cloud revenues to cannibalize existing revenue streams versus creating net new growth?

A: SaaS legacy business is flat to 5% growth, CPaaS expected to grow 5%-8% in 2025. Customer Cloud revenues are seen as creating net new growth with minimal cannibalization.

Q: Could you provide an update on the current status of your planned divestments? Has the company established any specific milestones or timeline for completing this process that you're able to share with investors?

A: We are opportunistic on evaluating divestment alternatives, focusing on improving capital structure. Recent debt renegotiations granted 6-month grace periods on principal amortization.

Q: Now that AI is a reality, what are you seeing as a new hot topic or things that change is a thing that could happen differently in '25?

A: Adoption of more interconnected AI use cases combining customer data and past interactions to create sophisticated customer journeys and experiences.

Q: I remember at some point, you talked about charging per interaction. The SaaS industry mostly on a per seat basis, can you elaborate more on this?

A: Moved from per seat to per interaction pricing to align with AI and automation, stimulating deeper usage and reducing customer reliance on human agents.

Q: I have noticed that in the past few months, there has been a bigger focus from the team on the franchise model, as well as new partnerships. Could you talk us through what the ultimate vision is here? Are there customer acquisition tools, retention or pure-play monetization opportunities?

A: Evolving partners into franchises to help customers achieve operating results, aiming to scale this model as a major sales channel for Zenvia.

Q: Will 2025 gross margin for both SaaS and CPaaS get back above '23 levels or will we stay below that?

A: SaaS margin expected back to 2023 levels (45%-50%), CPaaS margin to normalize around 2024 levels (~25%).

Q: So could you tell us what are your main goals or challenges for this year?

A: Main goals include deleverage balance sheet, align EBITDA with capital structure, and improve profitability; challenges include market volatility and competitive pressures.