Zenvia Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Top Line Growth: Q2 saw strong top-line growth of 24%, driven by CPaaS and the rollout of Zenvia Customer Cloud.
• Zenvia Customer Cloud: Revenues increased 23% in the first half of 2025, and the company is confident in 25%-30% growth in 2025.
• G&A Streamlining: G&A was reduced by 27% year-over-year, helping offset the drop in gross profit, with the G&A to revenues ratio at 9% in Q2.
• Profitability Outlook: Normalized EBITDA was BRL 11 million in Q2, with expectations of progressive recovery. CPaaS margins are expected to normalize by year-end.
• Zenvia Consumer Cloud: Revenues are growing, with a 80% increase in usage in Q2. The franchisee model launched in Q1 accounts for 15% of new MRR in Brazil, with 30+ franchisees in Brazil.

Segment Performance

• SaaS Revenues: Grew 3% year-over-year in Q2, primarily from SMB customers. Zenvia Customer Cloud revenues rose 23% in the first half of 2025 compared to the same period in 2024, accelerating from Q1's 15% increase. The company expects 25%-30% growth for Zenvia Customer Cloud in 2025. The rest of the SaaS business faces a tough competitive environment, with the enterprise segment in Brazil for legacy solutions partially offset by growth from Zenvia Consumer Cloud.
• CPaaS Revenues: Increased 33% in Q2, mainly from higher margin customers. CPaaS accounted for 72% of total revenues. It was impacted by low margin clients and carrier cost increases, with margins expected to normalize closer to 20% by Q4 2025.
• Gross Profit Breakdown: SaaS adjusted gross profit rose 5% year-over-year to BRL 45 million in Q2, with the margin up 1% to 55%. CPaaS was affected by low margin clients and carrier cost passes. Consolidated adjusted gross profit was BRL 69 million, with a gross margin of 24%.
• G&A: Decreased 27% year-over-year to BRL 9 million in Q2, with the G&A to revenues ratio at 9%. In the first half of 2025, G&A expenses dropped 25% to BRL 48 million, and excluding a BRL 8 million severance expense from Q1, the ratio was 7%.

Guidance

• Zenvia Customer Cloud: Expect 25%-30% growth in 2025, with revenues around BRL 200 million and gross margin close to 70%.
• CPaaS: Margins are expected to stabilize at a higher level by year-end as carrier cost passes are completed.
• Divestments: The company is evaluating options to divest noncore assets to optimize the balance sheet and deleveraging.

Risks

• Market Volatility: The CPaaS market is highly volatile and competitive, putting short-term pressure on profitability.
• Carrier Cost Increases: CPaaS margins are impacted by carrier cost increases passed through over the year.
• Competitive Environment: The SaaS business, especially the enterprise segment in Brazil for legacy solutions, faces a tough competitive environment.

Question and Answer

• Q: Color on forward guidance for Zenvia Consumer Cloud, Q3/Q4 bookings, franchise channel, BRL 200 million target with 65%-70% margin? A: Zenvia Consumer Cloud is expected to be ~BRL 200 million in revenues with over 25% growth, and gross margin close to 70%. Q2 usage was up 80% vs Q1. The franchisee model launched in Q1 accounts for ~15% of new MRR in Brazil, with 30+ franchisees in Brazil.
• Q: CPaaS margins: Tight now or recovery expected? A: CPaaS margins are under short-term pressure due to competition and carrier cost passes, but expect margins to stabilize higher by year-end as cost passes are completed.
• Q: Enterprise side dynamics for Zenvia Consumer Cloud and rest of SaaS? A: Zenvia Consumer Cloud initially targeted SMBs but is now adopted by enterprise customers. CPaaS is mature with high volume but low margin, while SaaS is more stable with recurrent revenue.
• Q: Cash flow and divestitures? A: The company is evaluating divestment of noncore assets to delever the balance sheet, which is an opportunistic move to accelerate deleveraging and strengthen the capital structure for Zenvia Consumer Cloud.
• Q: Business outlook in 2-3 years? A: The core will be around Zenvia Consumer Cloud, providing unified CX software with AI/automation, moving to a recurrent stable high-margin business from volatile low-margin.