Zenvia Inc.

Good afternoon, and thank you for standing by. Welcome to Zambia's Q1 2022 earnings conference call. Today's speakers are Mr. Cassio Bobsing, 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 in 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 Zenvia's Q1 2022 earnings call. I'm Cassio Babsin, founder and CEO. Today we'll present the key highlights of our first quarter results, which demonstrate that we're off to a strong start of the year. Let's start with slide 4. Q1 was again a very strong quarter for Zenvue. We continued to deliver solid revenue growth and robust cross-margin expansion on a year-over-year basis. Revenue went up 61% for Q1 2022 compared to Q1 2021, including the effects of acquisitions of D1 and SenseData. Organically, our growth reached 36% for the quarter. Both numbers are ahead of our 2022 guidance. It just had gross profit doubled in Q1, while gross margin expanded 6.5 percentage points to almost 34%. Let's now take a closer look at the development of our acquisitions and respective integration processes. Following our decision to speed up the D1 integration process in mid-February, teams are now fully integrated. Also, we have initiated extracting synergies on the cold side, including suppliers and systems, and began cross-selling. We can now offer highly customized journey orchestrations and a much more comprehensive suite of products and services for the brands that want to raise the bar in their customer journeys. Since data back office activities and structures are also fully integrated, with team integrations still in process, we expect to start integrating the platform and cross-selling in Q3. As to Movidask, we announced the closing of the transaction last Tuesday. We expect to start integration in Q3. Let's talk in more detail about Movidask in the next slide. MoviDesk is a perfect and absolute complementary addition to our ecosystem. Their help desk solution is focused and designed for solving the pains of Brazilian companies. It's a user-friendly, easy-to-use platform, in Portuguese, charged in reais, and most importantly, allows our clients to pay for the features they really need. A huge competitive advantage in terms of cost-benefit versus the global shoots. And this is not just our opinion. Media review sites are also attached to the platform's excellence. In less than six years, MovieDesk grew to attract 2,500 customers, who are currently providing an ARR of 46 million reais. Just to compare, the company ended 21 with revenues of 33 million reais, practically double that of 2020. On top of this accelerated growth, given its SaaS model, it adds a recurring revenue profile with a high gross margin of around 70%, which will positively impact our own margins moving forward. The acquisition of Movidask topped off our M&A strategy to position Zenviap as a SaaS company, aiming to provide brands with a unique platform for unified end-to-end customer experience communications in Latin America. We are very proud to have acquired all the companies that were in our plan A. In other words, we acquired the exact companies with the exact capabilities we have in our strategic plan. And the benefits are already visible in our revenue growth and growth margin expansion, even though we have only just begun to strike surges without even starting to consolidate Movidask. We are also very proud of our organic growth and how we were able to use the proceeds from the IPO to substantially increase our investments in R&D. In 2021, R&D spending reached 12% of our revenues, up from 2% in 2020. We expect this level to continue in the next couple of years, allowing us to launch new products that will significantly leverage our growth and marketing position. And the launch of Xavier Campaign in April attests to the efficiency of our strategy. Xavier Campaign is an intuitive, effortless, and prompt campaign creator that was launched to meet a highly demanded need, a tool through which our clients can manage marketing campaigns across various channels. With our solution, companies can now interact with their current and potential customers using a combination of direct and indirect channels, allowing users to react to their actions in the channel they are most active in, contributing to better experiences and ultimately better results. The tool has a time engagement ruler that allows companies to initiate the first contact through WhatsApp and present another message at the scheduled period to be sent through a different available channel. It's also possible to program the journey so that messages will always arrive at the most suitable moments. This is what we call orchestration. The solution also created an environment for the centralized management of the customer base, regardless of the channel in which the conversation happened. But one of its most essential features is applying data analytics to convert the reactions from consumers into effective success metrics. which can be used to improve the strategic decision-making process and achieve higher customer loyalty and profitability. As I like to say, we analyze every step of the customer journeys, transform them into superior experiences to benefit them, the brands, and ultimately us. As you can see, the proceeds from our IPO were quickly allocated to M&A and R&D, which put us exactly where we planned to be at this moment, contributing to our accelerated transformation into a SaaS company. I will now pass to Shai, who will discuss our key financial metrics in more detail, and I will be available for the Q&A.

Thanks, Cassio. And hello, everyone. Let's take a deeper dive into our results. Our revenue in the quarter was greatly boosted by the combination of organic growth, solid client retention and acquisitions. Our client base went up 21.7% to 12.4 thousand clients, while our net revenue expansion rate ended the quarter at 122%, up by 13 percentage points year over year and leading to an organic growth of 36%, as you can see in the chart on the right. The combination of this organic growth with the 30.7 million reais from D1 and Sense data brought our total revenues up 61%. And as Cassio mentioned, both our organic and total revenue grew above our provided guidance for 2022. Another important highlight is the quality of our revenues. Out of the total, revenues from beyond SMS termination were 41% for the quarter, In line with what we guided in our last earnings call for Q421. With the consolidation of MovieDesk as of May, we expect this mix to be closer to 45%. And the best indicator that our revenue mix is moving in the right direction is the improved profitability, as you can see in the next slide. As we promised during our IPO, we continue to expand our profitability. Adjusted gross profit doubled when we compared Q122 to Q121, with the adjusted gross margin expanding 6.5 percentage points to almost 34%. As you can see in the chart to the right, almost 80% of our adjusted gross profit in the quarter already comes from beyond a semester termination, which is a direct result of our diversification strategy and recent acquisitions to become a SaaS company. In the first quarter alone, we have already achieved one-third of our adjusted gross profit earned in the entire 21 years in absolute terms. And this without even starting to consolidate movie desk, cross-selling sense data, or recording games from new products such as Zenvia Campaign. In terms of EBITDA, our non-gap adjusted number was negative R$ 9.5 million in Q1 and includes earn-out expenses related to the acquisitions of Total Voice and Sirena. When we exclude these non-cash expenses, adjusted EBITDA in Q1 2022 was negative 7.6 million reais. As Cassio highlighted, we are off to a really strong start of the year, which makes us confident to reiterate our 2022 guidance and excited about the opportunities ahead. With this, we conclude our prepared remarks and we can now take your questions.