Zenvia Inc.

Good morning and thank you for standing by. Welcome to Zambia's Fourth Quarter 2021 Earnings Conference Call. Today's speakers are Mr. Cassio Babsing, Zambia's Founder and CEO, and Shai Cho, Investor Relations Officer. Please be advised that today's conference is being recorded and the replay will be available at the company's IR website, where you can also access today's presentation. At this time, all participants are in listen-only mode. After the prepared remarks, there will be a question and answer session. For the Q&A session, we ask you to write down your question via the Q&A icon at the bottom of your screen. Your name will then be announced, and you will be able to ask your question live. At this point, a request to activate your microphone will appear on your screen. If you do not want to open your microphone live, please write down no microphone at the end of your question. In this case, our operator will read your question aloud. Now, I would like to welcome one of your speakers for today, Mr. Cassio Bobson, founder and CEO. Sir, the floor is yours.

Hello everyone and welcome to Zenvius Q4 and full year 2021 earnings call. I'm Casio Babsin, founder and CEO. Today we're going to present the key highlights of the period and provide you with an update on our business. Let's start at slide 4. Q4 was a very strong quarter that closed an excellent 2021 for Sanfier. We delivered again on what we promised investors during our IPO process, solid revenue growth and strong gross margin expansion year-over-year. Revenue went up 46% in Q4 2021 compared to Q4 2020 and 42.5% in the full year. While G1 and Sense Data acquisitions contributed to this total, we highlight our solid organic growth of 32.8% in 2021. This is a direct result of our client base going up 25% to almost 12,000 customers and our rent revenue expansion reaching 122%, up by almost 8 percentage points from last year. Adjusted gross profit went up 147% in Q4 and 78% in 2021 to 198 million RL. Adjusted gross margin was 32.6% in Q4, adding 13.3 percentage points, and 32.3% in the year, adding 6.4 percentage points. we've been building a long-term vision from the ground up. We spent the first years mainly focused on evolving one-way communication and becoming the leader in mobile services and SMS push in Brazil. It was only in the last couple of years that we started our transformation to become a SaaS company focused on customer experiences, aiming to provide brands with a unique platform for unified end-to-end CX communication in Latin America. We are currently in the phase of enabling journeys that happen when the end customers of our clients are engaged in a variety of ways across their lifecycle through multiple channels that are enabled by our communications platform. But we already foresee and prepare for our next phase, which will be focused on enabling experiences, allowing end customers to experience some streamlined relationship with the brand no matter the channel or moment in time. Latin America has enormous growth potential as it is in the early stages of digital transformation and adoption of technology, especially in the small media companies. And this evolution will be data-driven. By using multi-channel engagement solutions and data analytics, we can provide our clients with actionable insights, enabling them to generate automated, customized actions and different touchpoints of the customer journey, creating more and more personalized and seamless experiences to end customers. So let's take a closer look at how we have been evolving our value offering to clients and customers, what we already delivered in 2021 and where we are headed moving forward. 2021 was a year of important milestones for us, from brand positioning to new products to M&A, and obviously the year of our IPO. During the year, we reposition our brand and evolve our culture to align the company's ambitions and long-term vision with our beliefs and behaviors, making sure we recognize the value of our humans and maximize value to our stakeholders. The combination of these two elements is key to pave the way for us to achieve our goal of becoming a global platform that empowers companies to create a new world of experiences. Our internationalization plans were implemented with the acquisition of Serena in the second half of 2020 and the launch of our operations in Mexico. In 2021, international revenues already represented roughly 6% of total. To improve our CPaaS offering, we have launched new products such as Trusted SMS and also added new channels such as RCS and Instagram API. We were very active in the last three years in M&A as we have completed five acquisitions that are effectively transforming our company. Our M&A strategy involved acquiring companies that complemented our technological existence, added solutions, new geographies, and a pool of talent. Integration of these companies will radically transform our value offering to clients in the short and medium terms, allowing us to increase our client base and net revenue expansion. In 2021, we implemented the integration of Serenum with full integration achieved now in Q1 2022. We also worked together with D1 team to map and understand the synergies, which led us to decide accelerating the integration. Since the integration is on track with back office activities and structures already fully integrated, SenseData plays an important role as it changes the core of our platform by adding data analytics and AI. As to Movidask, we expect to close this transaction now in the second quarter. The best way for us to understand the fact of these integrations is by putting ourselves in the client's shoes. We have been doing this by incorporating SenseData and Movidask solutions into our own customer service and implementing changes to ultimately improve our very own customer experience. This already had tangible impacts in the onboarding of new clients, for example. In this sense, we are happy to report that we received an important recognition with the RA1000 seal from ReclameaKey in January. This recognition was granted to 25 companies in Brazil, and it means that our clients recognized that we provided them the best customer experience. I would like to quickly share with you three different cases that attached how we can help brands. One of the largest fashion retailers in Brazil started its relationship with us when they needed an SMS broker. The relationship then evolved and they started using our conversational platform, turning Zenvia into their trusted advisor and provider for end-to-end sales solutions. Through strategically designed journeys, they were able to use WhatsApp, which enabled their salespeople to reach out to customers as soon as the epidemic lockdowns started to offer products. After 90 days of lockdown, they had already reached 75% of revenues through online and WhatsApp sales. One of Brazil's unicorns, a well-known real estate platform, ESSense has automated journeys through WhatsApp to revolutionize the local real estate market, facilitating deals among sellers, buyers, and renters. They will work closely with them to understand their business needs and evolve the product according to the market requirements. Through our Revised Customer Program, we brought their team closer to our R&D and product teams and were able to jointly build a product roadmap. Zenvia Solutions helped them record improved performance. Anima Educação, one of the largest education conglomerates in Brazil, uses Zenvia products to provide self-service solutions to their students, who no longer need to interact with human agents to address most of their needs. This allowed Anima to gain 40% in productivity in their customer care, releasing their agents to support a broader number of students who indeed require human interaction. And what's even better, the level of satisfaction from students with the admitted journey is totally aligned with the ones held by human agents. Finally, our IPO in July of 2021 was a special occasion when we saw the market welcome our investment thesis and that's what we have been doing since then, expanding Zynga and preparing it for the next level our customer experiences in Latin America and globally. Looking ahead, we are now at an inflection point in our expansion route. 2022 will be the year when we lay out the foundations for the profitable growth ahead, accelerating the integration of all businesses into one powerful platform and deploying a new go-to-market strategy to provide the best SaaS experiences for brands, allowing them to offer an unparalleled end-customer journey. In this sense, we released in mid-February our decision to accelerate D1 integration, as we have been seeing strong demand for highly customized end-to-end customer journey solutions. We are ready to speed up both platforms and team integrations to better serve our enterprise clients. Our goal is to move these customers from base communication processes into a journey-wide implementation integrated and leveraged by Data NNI, all in one single platform. We expect to extract several signatures from those integrations that will allow us to offer a much more comprehensive suite of products and services for the brands that want to improve their customer journeys. As you can see, all we do aims at evolving our value offering, always focusing on generating value into the end customer. This has always been our priority, and I dare to say that this is the main differential between us and our peers in the region. Everything we do at Sandvip has the end customer first. This may seem pretty obvious, but it's not. We analyze every step of the customer journeys, which will allow us to transform journeys into experts, benefiting them, the brands, and ultimately We combine BigQuery with usage-based revenue models that allow us to grow with our customers. We initially adopt a land and expense strategy in which we introduce our platform based on one simple use case and then develop the customer relationship over time by upselling and cross-selling. That's the main reason why our focus for 2022 will be connecting our SaaS products with our platform core in order to create a unified end-to-end experience. This will allow our clients to further engage with our platform, leveraging adoption of multiple use cases that covers different parts of their customer journeys. We believe we are now very well positioned to do what we do best, enabling amazing customer experiences for our current and new clients. We are very proud of the results we achieved in 2021 and excited about the prospects for 2022. We expect to keep the strong pace of growth in 2022, as we see increasing demand for our services and a lot of opportunity for growth. We're focused on integrating and launching new products and services that will help us pursue even more substantial organic growth in 2022. I will now pass on to Shai, who will discuss our key financial metrics in more detail and will be available for the Q&A.

Thank you, Cássio. Hello, everyone. Thanks for joining us for today's call. Let me share with you some thoughts on our results. The combination of organic growth, solid client retention and acquisitions boosted our revenues in the year. Our client base went up 25% to almost 12,000 clients. Our net revenue retention rate ended the year at 122%, up almost 8 percentage points from last year. In the chart on the top right, you can also see the contribution of organic growth and acquisitions to our revenue. D1 and Sense Data contributed R$41.5 million to the consolidated revenue, while R$141 million were organic, representing a 33% growth. Another important highlight is the quality of our revenues. Out of the total, revenues from beyond SMS termination were 35% in the year, but if you look at Q4 2021 alone, it is already over 40%. We are very proud to see the pace of this transformation, as only two years ago, most of our revenues were from SMS termination. Even within 2021, if we look into Q1, we started the year with only 16% beyond SMS termination. For us, this is an amazing indicator that we are moving in the right direction. The increase in revenues was also a profitable one, and this is important because we promised this during our IPO. Adjusted gross profit increased 147% when we compare Q421 to Q420, with the adjusted gross margin expanding a solid 13.3 percentage points to almost 33%. In the year, adjusted gross profit increased 78% to almost 200 million reais, with the adjusted gross margin expanding 6.4 percentage points to 32.3%. It is important to highlight that this improved revenue mix helps soften the Q4 seasonal impact of higher SMS volumes over profitability, mainly related to Black Friday and Christmas. As you can see in the chart at the right, 77% of our adjusted gross profit in 2021 comes from beyond SMS termination. And these are direct results of our diversification strategy and recent acquisitions, and as we move more and more to become a SaaS company. To finalize, we are introducing our guidance for the fiscal year 2022. As Cassio pointed out in his remarks, 2022 will be the year where we lay the foundations for the profitable growth ahead. We expect our revenues to be within the range of R$ 875 million to R$ 925 million, representing a year-over-year growth of 43% to 51%, with organic growth standing between 32% to 34%. We also expect adjusted gross margin to be within the 35 to 36% range, representing a year-over-year expansion of 2.7 to 3.7 percentage points. This concludes our prepared remarks. We can now move to the Q&A session.