ZENVIA Reports Q1 2022 Results

Strong top line growth and improved revenue mix led to higher profitability
Net Revenues up 61.0% YoY with Adjusted Gross Margin expanding 650bps to 33.8% in Q1

Zenvia Inc. (NASDAQ: ZENV), the leading cloud-based CX communications platform in Latin America, empowering companies to transform their existing communications with end-customers along their life cycle, today reported its fiscal 2022 first quarter operating and financial metrics. Q1 2022 numbers fully consolidate D1 and SenseData.

Cassio Bobsin, Founder & CEO of ZENVIA, said: “We are pleased with the strong start for 2022. The first quarter results attest to the successful execution of our strategic plan. The proceeds from the IPO were critically allocated to M&A and R&D events, which contributed to the acceleration of a more mature ecosystem of products and services.

The recently closed Movidesk transaction is the last of the three acquisitions we funded with the proceeds. More importantly, it concludes our plan A for the first phase of our M&A strategy. Put another way, we bought the exact capabilities and companies that we had targeted. Also, R&D for 2021 drastically increased to represent 12% of our revenue, up from 2% in the prior year. We believe this active management style will continue to benefit our firm and stakeholders, as the healthy increase in our revenues and solid margin expansion from the integration of acquisitions and organic growth confirms so.

One of the main projects where we used our R&D funds is Zenvia Campaign; an intuitive, effortless, and integrated SaaS solution launched in early April, designed to answer the highly demanded needs of our clients, that can now manage multichannel communications throughout their entire user journey. The solution was also constructed to unlock the full potential of data-analytic tools and convert consumers’ reactions into effective success metrics, improving the strategic decision-making process and achieving higher customer loyalty and profitability. We believe this is a game changer in campaigning solutions for the Latin American market.

With the conclusion of the Movidesk transaction, the launch of Zenvia Campaign and the ongoing integration of recently acquired companies, we are well-positioned to offer a full suite of end-to-end solutions and capture all the opportunities in the market.”

Financial Highlights Q1 2022

• Net Revenues increased 61.0% YoY to BRL 197.6 million, with organic growth of 36.0%
• Net Revenue Expansion Rate (NRE) of 122%, +13p.p. vs Q1 2021
• Adjusted Gross Profit totaled BRL 66.8 million, +100% YoY, with Adjusted Gross Margin expanding 650bps to 33.8%

M&A and Integration Activity

• Closing of Movidesk acquisition on May 2^nd, 2022. Movidesk adds a help desk SaaS tool for ZENVIA with +75 performance indicators to further empower companies in customer service and support; in 2021, the firm revenues expanded 96% to BRL 33 million, while gross margin was approximately 70%. Movidesk had 2,500 clients as of March 2022, with Annual Recurring Revenue (ARR) of BRL 46 million
• Integration of D1 moving as planned with teams already fully integrated as of April, and synergies on the cost side (suppliers and systems) being implemented; cross-selling of solutions is positively received by the clients
• Integration of SenseData is also moving as expected, with back-office activities and structures fully integrated, while team integration is still in progress; on track to target selected customers with cross-selling solutions beginning in Q3

Key Metrics and Recent Business Highlights

• Number of active customers grew by 21.7% YoY to 12,400
• ZENVIA Campaign SaaS tool launched in early April. Unlike other tools in the market, this product was developed to offer multichannel communication throughout the entire end-customer journey. Companies can now interact with consumers using a combination of direct and indirect channels, allowing them to react to the brand’s actions in the channel they are most active in, effectively contributing to the campaign’s success. It is possible to orchestrate the journey so that messages always arrive at the most opportune moment. The launch is aligned with ZENVIA’s strategy of leveraging organic growth by introducing new SaaS products to its growing client base.

Consolidated Revenue

Consolidated Revenue in Q1 2022 totaled BRL 197.6 million, an increase of 61.0% YoY, reflecting both solid organic growth and M&A gains.

The organic growth rate of 36.0% reflects a higher number of active customers (+21.7% YoY) and a 13 p.p. increase in the Net Revenue Expansion rate to 122%.

Q1 2022 fully consolidates D1 and SenseData, which jointly contributed BRL 30.7 million to our consolidated net revenues in the period. Movidesk transaction was concluded on May 2^nd, 2022, and therefore will be fully consolidated as of that date, with numbers already incorporated into ZENVIA’s 2022 earnings guidance.

In terms of revenue mix, revenue from Beyond SMS Termination, which carries higher gross margins, represented 40.6% of the total revenue in Q1 2022, compared to 25.2% in Q1 2021, attesting to solid execution and the positive impacts of our M&A strategy.

Our strong revenue growth for the quarter demonstrates our ability to keep delivering results through a combination of organic expansion in both client base and usage and integrating acquired companies, further improving our revenue mix.

Profitability

Adjusted Gross Profit increased a solid 100% in the quarter to BRL 66.8 million, reflecting the strong revenue growth and improved mix, while Adjusted Gross Margin expanded 650bps to 33.8%. Adjusted Gross Margin in Q1 2022 was up 120bps sequentially, due to the impact of seasonal higher SMS volumes over profitability in Q4. On a like-for-like basis (pro-forma excluding D1 and SenseData), the Adjusted Gross Margin expanded by 360bps YoY in the quarter.

Adjusted Gross Profit from Beyond SMS Termination reached 79.6% of the total in Q1 2022, compared to 68.6% in the same period of 2021, as a direct result of our diversification strategy and recent acquisitions to position ZENVIA as a SaaS company.

Non-gaap Adjusted EBITDA was negative BRL 9.5 million and includes earn-out expenses related to the acquisitions of Total Voice and Sirena. Excluding these non-cash expenses , non-gaap Adjusted EBITDA in Q1 2022 was negative BRL 7.6 million.

Guidance

(1)  Includes D1 and SenseData from January 1 to December 31, 2022 and Movidesk from May 1 to December 31, 2022. 
(2)  Organic revenue growth guidance excludes revenue from acquisitions that closed after January 1, 2021 

Conference Call

The Company will host a webcast on Friday, May 06, 2022, at 12:00 pm EDT to discuss its operational and financial metrics. To access the webcast presentation, click here. Additional information can be found on the Zenvia Investor Relations website at https://investors.zenvia.com.

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