US$2.4 billion GMV, up 25.4% year-over-year on an FX neutral basis
Total revenues of US$30.9 million, up 18.2% year-over-year on an FX neutral basis
VTEX (NYSE: VTEX), the enterprise digital commerce platform for premier brands and retailers, the leader in accelerating the digital commerce transformation in Latin America and now expanding globally, today announced results for the second quarter of 2021 ended June 30, 2021. VTEX results have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting.”
Geraldo Thomaz Jr., co-CEO and co-founder of VTEX, commented, “We are humbled to present our first quarterly earnings results as a publicly-traded company. Our robust performance highlights the size of the opportunity of digitalization in the emerging markets, despite the gradual reopening of brick-and-mortar retail.” Mariano Gomide de Faria, co-CEO and co-founder of VTEX, added, “We are focused on transforming the future of ecommerce. We expect to continue to enhance our leadership position in Latin America through strong execution and focus. We are only at the beginning of the digital commerce journey and VTEX is here to accelerate it.”
Second Quarter 2021 Operational and Financial Highlights
- GMV reached US$2.4 billion in the second quarter of 2021, representing a year-over-year increase of 30.4% in USD and 25.4% on an FX neutral basis.
- Total revenues increased to US$30.9 million in the second quarter of 2021, from US$25.3 million in the second quarter 2020, representing a year-over-year increase of 22.1% in USD and 18.2% on an FX neutral basis.
- Subscription revenue represented 96.1% of total revenues and increased to US$29.7 million; in the second quarter of 2021, from US$23.9 respectively in the second quarter of 2020, a year-over-year increase of 23.9% in USD and 20.0% on an FX neutral basis.
- Subscription gross profit was US$20.2 million in the second quarter 2021, compared to US$15.9 million in the first quarter of 2021.
- Subscription gross margin improved to 68.1% in the second quarter of 2021 from 64.7% in the first quarter of 2021. Subscription gross profit margin quarter-over-quarter improvements reflect operational hosting cost efficiencies.
- Non-GAAP loss from operations was US$10.4 million during the second quarter of 2021, compared to Non-GAAP income from operations of US$6.7 million in the second quarter of 2020, primarily due to incremental investments in sales and marketing and research and development, as we have been investing to capture the acceleration of ecommerce growth.
- Non-GAAP free cash flow was US$(14.7) million during the second quarter of 2021, compared to US$5.4 million in the second quarter of 2020.
- Our total headcount increased to 1,486 as of June 30, 2021, representing an 88.1% year-over-year increase.
Second Quarter 2021 Product Innovation Highlights:
- VTEX launched enhancements to the core commerce capabilities to further differentiate its value proposition. VTEX Intelligent Search now can leverage VTEX OMS and inventory intelligence to regionalize search results, increasing conversion. VTEX OMS also launched a new feature allowing customers to manage their capacity for scheduled deliveries, aiming to improve the precision of promised SLAs to shoppers and % of SLAs kept on scheduled deliveries.
- VTEX launched selected features to improve local differentiation in some strategic markets. In Brazil, new payment parameters were added to native integrations for our customers to comply with new marketplace regulation. In Argentina, checkout geolocation precision was enhanced to improve conversion. In the US, OMS reports added local tax business rules.
- The new VTEX Admin with a new consistent user interface and a new sales dashboard is being rolled out and was launched to all US customers. Furthermore VTEX continues to evolve its product in a way that removes usability friction for enterprise users and enhanced user experiences to manage inventory, create promotions, and for marketplace operators to evaluate and catalog new offers from sellers.
We are seeing the economy slowly recover in 2021, rebounding from the contraction of 2020, due to the adverse effects of the COVID-19 pandemic.
Online commerce penetration in Latin America continues at a higher level than it was pre-pandemic, demonstrating that the 2020 quarantine-related acceleration in online consumption appears sustainable, even as brick-and-mortar retail stores gradually reopen throughout the region.
Our customers with brick-and-mortar retail presence can now operate an omni-channel strategy. We expect our business to face similar year-over-year trends in the third quarter and start to normalize towards the end of 2021. We believe that the strong sector tailwinds will continue to drive our growth and overall ecommerce growth rates in the region, despite the near-term year-over-year comps. We expect seasonal patterns to remain the same as in prior years and expect that our revenue will grow sequentially for the remaining quarters in 2021.
In view of the aforementioned trends and VTEX’s performance during the six months ending June 30, 2021, we currently expect to deliver growth at healthy levels. We are targeting revenue in the US$31.0 million to US$31.5 million range for the third quarter of 2021, and US$124 million to US$126 million range for the fiscal year ended December 31, 2021, assuming current period FX rates.
Importantly, we will continue to invest to grow our business as we work towards continuing to enhance our leadership position in Latin America and explore new opportunities outside the region.
The business outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond VTEX’s control. See the cautionary note regarding ”Forward-Looking Statements” below. Fluctuations in VTEX’s operating results may be particularly pronounced in the current economic environment. There can not be assurance that VTEX will achieve these results.