Zenvia Inc.

Please be advised that today's conference is being recorded, and a 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 we'll 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 a question. In this case, our operator will read your question aloud. Now, I would like to welcome Shai Shor. Sir, the floor is yours.

Good morning, everyone. Thank you for being with us here today to discuss Sandia's first quarter 2025 results. I am Shai Chor, CFO and IRO. Let's start with a snapshot of the Q1 2025 performance, where you can see all the main financial KPIs of the period. As you can see, in the first quarter we recorded strong top line growth of 39%, reaching almost R$300 million, mainly driven by CPaaS. On the profitability side, we continue to experience margin pressure in the CPS business and some temporary impacts on the SaaS business as we ramp up our Xavier Customer Cloud solution. Therefore, our consolidated adjusted gross profit declined 21% to R$74 million from R$94 million a year ago, with gross margin decreasing to 25%. There were two main drivers behind this. First, on the CPS side. We saw another quarter with higher CPS mix due to strong volume growth with lower margins, combined with an increase in SMS costs applied by the carriers in January, which is expected to be passed through prices throughout the year. Second, on the SaaS side, while adjusted gross profit remains stable year over year, the margins were impacted by the transition to Zendure Customer Cloud as we're still ramping up the business. I'll talk more about this later on. This drop in adjusted gross profit was partially offset by a R$7.5 million decrease in G&A, which represented 8% of our revenues in the quarter, practically half of what it represented a year ago. As a result, normalized EBITDA totaled R$20 million in the quarter, in line with our expectation, and is expected to increase progressively over the course of the year. It is important to highlight that we incurred approximately R$8 million in 1x7 costs during Q1, related to the workforce reduction as announced on January 13. Let's take a deeper look at these results. In this slide, you can see the breakdown of our revenues between SaaS and CPaaS. The revenue increase in this quarter came mainly from CPaaS, which remains very dynamic and volatile, and went up 58%, making up 73% of our total revenues. The CPaaS revenue growth came mostly from certain customers that currently have tight margins. We are confident that the strategy of acquiring clients at tighter margins will pay off in the middle and long term, as we do not need additional G&A expenses to manage them. In the SaaS business, revenue went up 5% year over year, mainly driven by higher revenues from SMB customers, an encouraging sign given that it is the target audience of Xavier Customer Cloud. The SaaS business represented 25% of our revenues in the quarter. This higher mix of CPaaS with low margins still impacts our gross margins. Let's move to the next slide to discuss our profitability. This slide gives us a comprehensive view on how gross profit and margin performed in the quarter. The first chart on the left shows the SaaS business. Adjusted gross profit was flat year-over-year at R$43 million in Q1-25, while adjusted gross margin from SaaS went down 2.7 percentage points to 54%. Even though SMB customers have higher margins than the average mix, we saw a decrease in the SaaS adjusted gross margins primarily due to the transition to Zenvia Customer Cloud as the business is still in its ramp up phase. We expect to keep scaling over the next quarter and improve profitability. It is worth noting here that revenues from Zenvia Customer Cloud solutions increased 15% year over year and are expected to increase even more as we ramp up the business. In the middle of the slide, we can see the CPaaS performance that was again impacted by the newly acquired CPaaS clients with lower margins and increased from the carriers that I already mentioned. As a result, our consolidated adjusted gross profit totaled R$74 million in Q1 2025 with an adjusted gross margin of 25%. Moving on, let's now discuss our G&A. Our G&A expenses this quarter went down 24% year-over-year, reaching R$24 million, already including around R$8 million in severance costs incurred in Q125, as I mentioned earlier in this presentation. This brings G&A as a percentage of revenues to 8%, down 6.7 percentage points from the 14.7% reported in the same period of 24%. This is due to the workforce reduction of approximately 15% announced in January that is expected to result in cost savings between 30 and 35 million reais in 2025, already factoring in the severance expenses. Moving on to the next slide, another key index that we have been highlighting in our presentation for a couple of quarters now, EBITDA minus CAPEX, recorded a positive 10 million reais inflow in the quarter. When we look year over year, This metric remained mostly stable, and we also ended the quarter with a cash balance of 86 million reais. We expect EBITDA to continue growing at a faster pace than our CAPEX, as it has been the case for the last few quarters. CAPEX for 2025 should remain in the same level of 2024. Moving on to the next slide to talk about our next steps. although they've been very consistent for the last couple of quarters it's always important to remind you what we've been doing at one of the next steps as we embark on our new strategic cycle we are focused on expanding the customer cloud in brazil and latin america we are focused on accelerating organic growth leveraging our scalable new platform and partner ecosystem while maintaining our commitment to the leveraging the company The rollout of the new strategic cycle announced in January is taking a toll on short-term profitability, but we are steadily advancing efforts to boost our medium and long-term performance. At the same time, we are streamlining operations even further, with AI playing a key role, not just in how we serve clients, but in how we operate internally, with greater efficiency and intelligence. As we disclose in January, we will carefully evaluate opportunities to invest on core assets. We believe we own assets that hold significant value in their segments and an opportunistic divestment could play a role in optimizing our capital structure. We are working hard for these actions to result in a more efficient company with exceptionally solid business metrics, enabling us to unlock value to our shareholders. With this, we conclude our prepared remarks and we are ready to take your questions.

We will now begin the question and answer session. Once again, for this 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'll be able to ask your question live. At this point, a request to activate your microphone will appear on your screen. If you prefer not to open your microphone live, please write down no microphone at the end of your question and an operator will read your question aloud.