VTEX

Hello, everyone, and welcome to the BTEX earnings conference call for the quarter ended March 31st, 2023. I'm Julia Bater Fernandez, investor relations director for BTEX. Our senior executives presenting today are Geraldo Thomas Jr., founder and co-CEO, and Ricardo Camatas-Odre, chief financial officer. Additionally, Mariano Gómez de Zahia, founder and co-CEO, and Andres Polidoro, chief strategy officer, will be available during today's Q&A session. I would like to remind you that management may make forward-looking statements related to facts matters as continued growth prospects for the company, industry trends, and product and technology initiatives. These statements are based on currently available information and our current assumptions, expectations, and projections about future events. While we believe that our assumptions, expectations, and projections are reasonable in view of the current available information, we are cautioned not to place undue reliance on these forward-looking statements. Certain risks and uncertainties are described on the risk factors and the forward-looking statement sections of BTEX Form 20-F for the year ended December 31, 2022, and other BTEX filings within the U.S. Security and Exchange Commission, which are available on our investor relations website. Finally, I would like to remind you that during the course of this conference call, we might discuss some non-GAAP measures. A reconciliation of those measures to the nearest comparable GAAP measures can be found in our first quarter 2023 earnings press release available on our investor relations website. Now, I'll turn the call over to Geraldo. Geraldo, the floor is yours.

Thank you, Julia. Welcome, everyone, and thanks for joining our first quarter 2023 earnings conference call. The year's first quarter has been promising, as we have experienced robust growth and successful implementation of strategy in all regions. This has further reinforced our leading position in the digital landscape of Latin America and enhanced our presence globally. It gives me great pleasure to share with you the strides we have made in establishing VTech as one of the leading worldwide digital commerce platforms. Despite the persistent challenges presented by the macroeconomic environment, we achieved a strong performance in the first quarter, with GMV growing by 22% year over year, a reflection of the resilient performance of our customers. The performance of our customers during this period allowed us to surpass our revenue projections, while at the same time, we delivered quarter-over-quarter subscription gross margin improvements. In the first quarter of 2023, we added several new customers who previously did not have an online store presence in the countries they started operating with us. These include Prezuniki, Todo Dia and Rede D'Or in Brazil, Intime in Chile, and Only Muebles in Colombia. We've also added customers that migrated from other platforms. These include companies that went live in Q1, such as Banco Provincia in Argentina, White Bird in Canada, Easy in Colombia, Farma & Lance in Ecuador, Canali in Italy, Sonepal in Peru, Floria in Romania, and cornered up in the US. Going back to the first quarter 2023, in addition to attracting new customers, we also focus on strengthening our relationships with existing customers by supporting their expansion efforts. During the first quarter, several premier brands and retailers chose to expand their operations with us by opening new stores and further integrating with us. This includes Delcourt, who added the store in Ecuador, currently operating in six countries in Latin America. EAE, who added two of its brand B2C stores in Canada, operating with us both B2B and B2C in North America. Mazda, who added Netherlands, currently operating in six countries in Europe. H&M, who added the store in Ecuador, currently operating in five countries in Latin America. Motorola, who added a store in Singapore, currently operates in 20 countries across the globe, and Samsung is now present in four countries, both B2B and B2C across the globe. The decision of these brands to expand their operations with us is a testament of the strength of our platform, its relevant value proposition, and the trust we have built with our customers. We are excited to continue supporting them as they expand the reach into new geographies and leverage the assets of the physical stores. I would like to draw attention to a significant event in the first quarter of 2023, the NRF Retail Big Show, which brings together the most influential players in the retail industry to set trends and discuss the future of retail. The event was held in New York City and attracted over 6,000 retailers and 2,500 unique brands from over 90 countries. During the event, we positioned VTech as a challenger brand focusing on profitable growth for our customers, highlighting our out-of-the-box capabilities and raising awareness among participants. Also, during the event, we announced the release of our proprietary white paper, Three Investments to Drive E-commerce Growth, by VTech analyst in residence, Jordan Jewel, which I would like to invite you all to take a look at it, available at VTech's homepage. In the first quarter of 2023, we are excited to announce our partnership with Compt, an Equifax company, one of the most well-known credit bureaus globally. This partnership will allow us to offer our customers a world-class anti-fraud solution, further enhancing the security and reliability of our platform. This partnership will also be monetized through a profit-sharing approach with minimum monthly fees. Finally, we are pleased to formally announce that we have initiated the monetization process of our RACD partner ecosystem. To this end, we have successfully concluded agreements with key players such as InSwitch, an omnichannel 360 fintech data service that will help our customers to implement digital financial services quickly and efficiently. Although we do not foresee a significant contribution to revenue in the immediate future, these partnerships and other initiatives establish a strong groundwork for monetizing our ecosystem and the long-term revenue growth for Vitex. Let me now share with you some success stories of our customers that demonstrate the capabilities of our platform and the remarkable outcomes they have achieved. I'm thrilled to share Samsung's recent success in creating data observability operations using VTechIO. This project has allowed Samsung to improve its operational efficiency by more intelligently centralizing and integrating information from multiple channels. The project was initiated just two weeks before Black Friday 2022 and has Teams produced remarkable results for its digital commerce operation in Brazil. Relying on Vitex I.O. back-end services and APIs, Samsung implemented various solutions, including pixel web templates, order feed, order hook, and custom control dashboards, also an alert mechanism via Telegram. The result was a more proactive operation, informed decision-making, and an enhanced customer experience with better delivery quality and faster response times. Six months after implementation, Samsung saw a decrease in response time from four hours to 40 minutes. With this success, Samsung continues developing innovative launch strategy and automation to improve inventory tracking and predict purchase flow, ensuring peace of mind for themselves, their partners, and end customers. Overall, this project has been a game changer for Samsung and set a new operational excellence standard. Claro, a leading telecommunication company in Latin America, chose Vitex Composable Architecture as the digital commerce platform in Peru to simplify their current architecture and achieve a fast time to market. With our out-of-the-box features, Claro solved their business requirements, including marketplaces. Divino, one of Brazil's largest online wine platforms, selected Vitex to improve its front-end capabilities and ensure a frictionless migration for its subscribers. As a result, Divino now has an internal marketplace and has increased its revenue channels by selling new products, such as wine accessories. A high aesthetic wear brand operating in Saudi Arabia and the United Arab Emirates chose Vitex for our headless implementation capabilities and flexibility to culture-specific product requirements. With our platform, they now have a catalog that enable multi-language product translations and the checkout.com payment tool, which provide a better customer experience for the users. Vital Mayorista a large wholesale supermarket brand in Argentina, customized their checkout with different payment options with Vitex. Furthermore, the customer incorporated a shopping cart rule feature during the checkout process, enabling the implementation of purchasing rules for approving, canceling, or modifying online orders. This has assisted their consumers in adhering to the requirements necessary for completing the purchase, leading to an increase in conversion rates. With these key improvements, Vital has increased their orders by more than 140%. Banco Provincia, a publicly listed bank in Argentina, selected Vitex as their technology partner due to our ability to handle complex architecture requirements, including adding sellers and implementing multiple internal and external integrations. Vitek's previous experience with similar customers, such as Banco Inter, made this a suitable choice for Banco Provincia. With Vitek's help, Banco Provincia successfully launched its platform, becoming a highly successful marketplace in Argentina, with a daily record of more than 10,000 orders. Although their journey is ongoing, Banco Provincia plans to double the number of sellers in their portal and expand their product catalog in various industries with Vitex assistance. Their continued drive to enhance the platform will enable their growth and success. Oba Hortifrut, a grocery chain with more than 70 stores and two distribution centers in Brazil, chose Vitex's omnichannel strategy to leverage sales opportunities. With our features, such as shipping from stores and pickup in stores, Oba improved the logistics and customized the web user experience. Jeffers Pet, an online pet retailer in the USA that operates in B2C and B2B models, chose VTech to strengthen its customer experience and increase sales using our live shopping feature. Our customers have experienced a significant increase in their conversion rates during live events, doubling their average sales volume during the sessions. I also want to share an update on the Cia Ering case, a major Brazilian fashion group with over 800 physical stores. Recapping, they replataform to Vitex in only three months, focusing the process on growth and website performance. The re-platforming process provided our customers with a fully customizable storefront, faster user experience, improved checkout experience, and first-party apps and multiple channels integration. As a result, the company saw already a 30% increase in their average order value and a 40% decrease in their abandoned cards. To include the operational update, I would like to inform you that our ESG framework has been made available in our investor relations website, highlighting all the initiatives Vitex has implemented and supported in these regards. At Vitex, we believe in leading by example and driving positive change in the world through ethical and responsible action. We see ourselves as agents of transformation in the e-commerce field, working towards a more sustainable society. In our desired future, we declare and are committed to become the leaders in diversity within the technology sector, value the importance of fostering a culture that embraces multiple perspectives and creating a safe and respectable environment for all members of our ecosystems. I would like to express my gratitude to our 1,339 VTEX employees who are dedicated to making our declared future a reality, as well as to our customers, partners, and investors. Before I turn the call to Ricardo, I'm happy to inform you that we will be hosting the VTEX Day, the largest e-commerce event in Latin America, and third globally on June 5th and 6th in Sao Paulo. I'm excited to invite you to come and experience the VTEX culture and witness the strength of our ecosystem at this magnificent event. Additionally, on June 6th, we'll be holding a Q&A session for investors, where Mariana and I will answer audience questions and exchange ideas. If you are interested in participating in this session, contact Julia and she will provide all the details. We will be delighted to have you to join us. I will now hand the call over to Ricardo to discuss our financial performance for the quarter.

Thank you, Geraldo. Hi, everyone. I'm pleased to share VTAC's Q1 2023 financial results with you. Despite the challenging macroeconomic environment, our company's top-line performance remains robust. As highlighted by Geraldo, our Q1 GMV achieved 22% year-over-year growth in U.S. dollars and 21% on an FX neutral basis. Our Q1 revenue exceeded our expectations and surpassed the upper end of our guidance, reaching $42.3 million and reflecting a year-over-year growth of 22% in U.S. dollars and 22% on an FX neutral basis. This outcome clearly demonstrates the resiliency of our blue-chip customer base, and we are reassured to observe that we are continuing to assist our customers in outperforming the market. Double-clicking on our top line, our subscription revenue reached $39.8 million the first quarter of 2023, from $32.6 million in the same quarter last year, a year-over-year increase of 22% in U.S. dollars and 22% on an FX-neutral basis. Our services revenue reached $2.5 million in the first quarter of 2023 from $2.1 million in the same quarter last year, a year-over-year increase of 21% in U.S. dollars and 28% on FX neutral. Even with seasonality being a headwind this quarter, our subscription gross margin was slightly better than last quarter's. Our non-GAAP subscription gross profit was $29.4 million compared to $22.7 million in the first quarter of 2022. Non-GAAP subscription gross margin was 73.9% in the first quarter of 2023 compared to 73.5% in the last quarter and 69.6% in the same quarter of 2022. The 430 basis points year-over-year margin expansion shows the commitment of our team to keep improving our margins. This margin improvement was driven mainly by the migration of non-core services to more efficient hosting providers and the optimization and operational leverage of our support cost. We are more than proud of what we have achieved in this front and we are excited about what is to come. We deliver a year-over-year improvement of 190 basis points on our overall gross margin in Q1. We are working on a few implementations in the U.S. and Europe where we have proactively invested on our services offering to ensure successful go-lives. By design, these impacted our services gross margin and, therefore, our overall gross margin experienced a slightly decline quarter-over-quarter. While this commercial decision may have a small impact on our gross margin in the short term, It will position us better in newer regions in the medium to long term, enabling us to implement new customers smoothly and successfully. Our non-GAAP total operating expenses reached $31.9 million in the first quarter of 2023 from $29.1 million in the prior quarter and $35.9 million in the same period last year. The year-over-year improvement reflects the organizational restructuring we made over the past couple of quarters. As a result of the better-than-expected margin improvements, with the top line coming at a robust pace, our non-GAAP operating income improved from a negative 39.5% margin in the same quarter last year to a negative 9.7% margin in first quarter 2023. This represents 30 percentage points improvement year over year. As of the three months ended March 31st, 2023, VTEX had a negative $5.0 million free cash flow compared to a positive $2.5 million in the prior quarter and a negative $16.1 million free cash flow in the first quarter of 2022. Before I move to the outlook for the second quarter and fiscal year 2023, I would like to update you on the share repurchase program approved in August of last year. As of March 31st, 2023, the remaining balance under this authorization was nearly $12 million. We repurchased 4.6 million shares at an average price of $3.91 per share. We expect to continue executing our plan based on the evaluation of market conditions and applicable legal requirements. Looking ahead, while macroeconomic conditions remain uncertain, we are pleased with the resiliency of our results. We are confident in our ability to navigate these uncertainties and remain committed to supporting our customers through every step of their journey. We are currently targeting revenue in the $45.0 million to $45.8 million range for the second quarter of 2023, implying a year-over-year growth of 19% on FX neutral basis in the middle of the range. For the full year 2023, considering the current performance of the company, we are increasing the bottom of the range, now targeting the full year to end between 16% and 19% on FX-neutral year-over-year base, implying a range of $185 million to $190 million based on year-to-date average FX rates. In conclusion, We remain committed to our customers' digital transformation journey and supporting them with the appropriate set of tools and products. Despite the uncertain times we are currently facing, our customer base continues to show its resiliency. We are grateful for our customers' unwavering trust in Vitek's platform, which is evident through our consistently low annual revenue churn. This has resulted in a robust business model for Vitek that will continue to generate growth in a sustainable and ambitious manner. As we continue executing on our strategy for profitable growth, we anticipate a substantial year-over-year expansion in our non-GAAP operating income margins in the second quarter of 2023, followed by incremental improvements in the second half of the year. Our commitment to delivering value for our customers, partners, and shareholders has never been stronger, and we are excited about the opportunities ahead. With that, let's open it up for questions now. Thank you.

And at this time, if you would like to ask a question, press star then the number one on your telephone keypad. Our first question comes from the line of Marcelo Santos with JP Morgan. Your line is open.

Hi, good evening. Thanks for taking my questions. The first question, I wanted to understand a bit better if you could give some more color on the GMV growth. It was a good growth on the first quarter, but there was a sequential deceleration. So if you could explain the moving parts here, and I think that would be very interesting. And the second question is about the competitive environment. One Brazilian software company launched a new brand called Wake, targeting mid-sized companies. Is that something that somehow crosses your path or that you have seen somehow impacting maybe the low end of your clients, or is this totally a different business?

Thank you. Hello. Hello, Marcelo.

This is Geraldo speaking. Good to talk to you. So about the GMV growth, we think that we are outperforming the general market, although the pace of the GMV growth is lower than last year, mainly because of the same-store sales, right? The same-store sales are decelerating a little bit. We're still growing more than the average market. And we attribute that to the fact that we have more robust customers and also that the platform allows these customers to succeed. I think the greatest and latest example of that is the fact that we have this capability that allow our customers to deliver from physical stores. Deliver from physical stores is very good for most of our customers, especially fashion customers. They have They have more inventory available at the website. It allows also the salesperson at the physical store to sell products that are not available currently at the physical store. So this allows collaboration between the online and offline world in a very seamless way. And this is growing a lot at Vitek. This capability is ramping up very fast. In the last two years, we almost more than doubled the volume of what we call collaborative orders on Omnichannel. It was less than half of two years ago. So this is our explanation for our growth on GMG more than the markets recently. About the competition with Wake, You know, like e-commerce platform, we have several competitors all the time. There's always a new set of competitors. I do believe Wake is positioned to compete with our tier three and tier two customers. You know, like we're going to do our work as we should do, and we're going to serve our customers in the best way possible. So we plan to continue to serve them well.

Perfect. Thank you very much.

And our next question comes from the line of Clark Jeffries with Piper Sandler. Your line is open.

Hello. Thank you for taking the question. I wanted to follow up on this sort of question around GMV growth and specifically, you know, was it in line with your expectations? And what it seems most curious to me is, The deceleration in GMV growth, but the actual acceleration in subscription growth, was there a reason or a dynamic in which a typical economic model was changing such that GMV growth, you know, coming down didn't result in an equal drawdown in subscription?

Yeah. Hi, Clark. Ricardo here. Thank you for the question. Very good question. So on the GMV growth, what we saw was, as Geraldo mentioned, for the existing stores, existing customers, same store sales was slightly below, but we did see new customers coming on board. especially through some upselling initiatives that was above what we expected. So this helps to explain also your second part of the question, that because of this slightly better mix or higher mix of new customers that have a slightly higher implied take rate because they paid a fixed fee, but in the beginning they don't bring a lot of GMV, has improved this performance on the revenue side. So that has matched a little bit more the GMV growth with the revenue growth. Hopefully that answers the question.

Yeah, absolutely. And then I think a follow-up to that is really around some of the commentary around maybe subsidizing or maybe being flexible on price for the services and implementation. So fair to say that there was some economic sensitivity around the implementation, but that the customers were more than willing to pay the fixed fee or the subscription fee once implemented, and this is really around trying to accelerate or reduce the friction to adoption. And then I guess the last follow-up to that is, how long do you expect to maybe have those concessions? Is it still a good ROI to maybe be flexible on services to promote adoption?

Yeah, so Mariano here. Thank you for the question. I think you are mentioning about the service gross margin. So the overall gross margin in Q1, it was an improvement year over year from 63.6% to 65.6%. But the quarter over quarter was a compression, right? So seasonality can explain part of the quarter over quarter. If you see last year's, But we also made a deliberate commercial decision to closely support the implementation of relevant new customers in the US and in Europe. And this kind of overcare is to ensure the success of their goal lives. So as a result of this strategy move, we are creating strong relationships with recent signed customers ensuring a high-quality integration and onboarding experience, and advancing our expansion into these new geos with reputational cases. This is quite important for our declared future to pursue reputational cases. It is what makes us strong. But while this decision may impact our service in the gross margin in the short term, it will position us better in newer regions as U.S. and Europe in the mid- and long-term. Additionally, it is important to clarify that this commercial decision should not compromise our ability to reach a sustainable break-even by the fourth quarter of this year. And we have mentioned in previous earnings calls, so we are on track. Instead, it will enable us to pursue a much greater market opportunity. We are optimistic by taking this decision and we are looking forward for the results of it.

Thank you very much.

And our next question comes from the line of Franco Beranda from DA Davidson. Your line is open.

Hi. Hi. Good afternoon. Thanks for taking my questions here. I was hoping to follow up on the gross margin question on the other side of the business and the subscription side. You obviously had some nice uptake from your infrastructure improvements, but I was wondering, is there more room for upside there, or how should we think about that as we go through the year?

Thank you. Thank you very much for the question. This is Geraldo here. Thank you. So, you know, at the time of the IPO, our gross margin was getting smaller than historically was. And we were growing a lot. We were bringing customers in. We were investing in new capabilities very fast. Because of the pandemic, we needed to be much faster than efficient. I would say that You will see consistent improvements in our gross margin since, I guess, one year, a little bit more than one year ago. And this is a deliberate effort of R&D and, of course, optimizations in our support processes. This is related mostly to how we architecture our hosting capabilities, how how we make them more efficient, how we move from Windows instances to Linux instances, we move to more modern processors. This is an area where there's a lot of improvements to be done. And while the growth is a little bit lower in our end, there is more bandwidth on the R&D side for us to focus on these improvements. So to answer your question, yes, we continue to invest in the improvement of our gross margin. And you cannot expect that, you know, like we almost improved the subscription gross margin by 400 basis points, right, in the year over year. You won't expect that rhythm. but you expect marginal improvements, yes.

All right. No, thank you. That's some good color. I appreciate it. And then for my second question, I was hoping to get some color on the costs associated with Loja Integrada, your SMB business. On the 6K that you filed, I noticed that the costs nearly doubled year over year.

Can you speak about those increases, Zach?

Hi, Franco. Ricardo here. Happy to take that one. So on the 6K, we don't disclose the breakout of the expenses for Loja Integrada versus the overall V-tax. We do have some disclosure on the stock-based compensation for the management team there, but that's not the full picture of the expenses for Loja Integrada. But, you know, what I could say is that Loja Integrada has been performing in a similar pace to Vitax. I would say both on a revenue growth perspective. as well as on operating margin perspective. So it's not exactly the same, but it's similar. So they are going through the same trends that we are seeing at Vitex on the overall numbers. Underneath the numbers, the details are pretty different because they are in the SMB business. Vitex is more enterprise, but the overall numbers So it's not a boost to our results, but it's not also a detriment to our results.

Thanks for the clarification. Appreciate it.

And our next question comes from the line of Cesar Medina with Morgan Stanley. Your line is open.

Hi. Thanks for taking my question. On the commentary on the release, you mentioned that you haven't seen additional iteration on cell cycles. uh on and on that front can you comment on how this is impacting you know sales time ramp time your backlog and more importantly your expansion outside of brazil in that time and develop markets thank you so yes uh proud to answer here mariano so the sales cycle is not changing um it is uh the maturity of each region can influence

the uh the sales cycles but the sales cycles in each region we are seeing a kind of a kind of uh let's say a commoditization of the sale of the sales cycle so we are not expecting uh not a good surprise or or even a worse surprise based on the sales cycle and the international expansion how are your clients outside of uh

of Brazil, you know, reacting amid demand uncertainty.

Perfect. So I can say some words about our international expansion. Like, for example, we shifted our approach towards a more technical sales strategy early last year, and we have been focused on building a kind of POCs and engaging the clients on a more technical way. This is only possible because of the VTEX platform features and capabilities, the out-of-the-box, Capabilities allow us to prove to our clients by doing it instead of selling it. And this approach of not pitch the selling but pitch the product is making the difference. We are seeing the conversion rate answering to this kind of approach. So of course, it's making it harder for our competitors to replicate our proof of concept approach. Additionally, we have been dedicating more and more to tech teams, solution engineering, to engage on the first calls with our prospects. And I believe VTech is pioneering on this sense. And it is a big bet for the US and Europe, putting more engineering in front of the clients as early in the process as possible. So we anticipate being able to disclose some of the customers we have signed contracts with over the coming quarters as they are having their go-lifes And we can say that B2B demand, it is in high. So VTech has a unique offer for B2B. The digital commerce platform plus the distributed order management plus the marketplace ready platform makes VTech a unique offering for the B2B industry. So we do feel optimistic that we are moving into the right direction and the consistency of our reputational cases going live we'll create more and more the brands that we want in us in europe and uh you can call for example gardner and idc analysis and analysis and they will share with you their perspective about vtex so i believe the increase of those analyst companies on the coverage of vtex it is a good sign of our reputation increasing as well So we are optimistic for the quarters and the years to come in the U.S. and Europe.

Perfect. Thank you so much for the call.

And again, if you would like to ask a question, please press star and the number one on your telephone keypad. Our next question comes from the line of Luca Brendam with Bank of America. Your line is open.

Hi, good evening, everyone. Thank you for taking my question. Two questions here. The first one, if you could just clarify a little bit, on those higher expenses to support the implementation costs, is this related just to clients that are yet to go live, or has this already been implemented before, started to be implemented before with the previous clients? And then the second question, if you could give us some color on how you're seeing the e-commerce market mainly in Brazil, but if you could also give a color for how things are going in the other regions compared to what we saw in the first quarter, if we're seeing some sort of recovery or if the market remains difficult. Thank you.

Hi Luca, Ricardo here. Happy to answer the first one. So on the investment that we are making on the services side, this is connected with the implementation. So new customers coming on board. It's not with the existing customers of Vitex. It's very, very specific on helping cases that we have signed customers in US and Europe.

to undergo a successful implementation and go live and in the second question if you could repeat please well if you could just uh tell us how you're looking how you're seeing the e-commerce market uh so far in the second quarter and the outlook uh going forward comparing it to the first quarter so um they come as market we are seeing a lot of retailers in in the world suffering um these are kind of uh

kind of let's call the God effect, right? COVID plus war plus inflation plus high interest rates. It is one of the kind of worst kind of people of macro conditions we have in the market in the last 30 years. So all the retailers that need to finance themselves in a new environment, they will suffer. So you can see Body Bath & Beyond and others, retailers in the U.S., in Europe, they will suffer and they will go chapter 11. They will go bankrupt. So that's not different in Latin America. Maybe Latin America is a little bit more resilient because the companies there are more used to crisis. But at the end of the day, there's something that is pretty obvious and a fact. The money is much more expensive than it used to be before. That brings the customers to make more pragmatic decisions. So... In terms of the positioning where VTech is, where a kind of a backbone for connected commerce, where you can have your time to market faster than other platforms, we might see a demand coming that we need to be very cautious on being optimistic on this because a crisis is never good, but might have an effect that allows us to serve a wave that clients that want to not use anymore a custom software and use VTechs or any other platform to serve a more lean approach. So we can say like for good and for bad, we can expect the same pace. So we are keeping seeing our two quarter on a 45 to 45.8 million year over year with a 19% FX neutral. And we keep seeing the 2023 growth In between $185 million to $190 million, that's a 16% to 19% FX neutral. So we didn't change roughly the guidance that we have been doing in the last quarter.

Perfect. Very clear. Thank you for the answers.

And there are no further questions at this time. Geraldo Thomas, I'll turn the call back over to you.

To conclude the earnings call, I would like to thank everyone who joined us today for our first quarter 2023 earnings conference call. We're thrilled to share our successes from past quarter, which includes robust growth and successful implementation of strategy in all regions, further reinforcing our leading position in the digital landscape of Latin America and enhancing our presence globally. We have experienced an increase in GMV by 22% year over year, which reflects our customers' resilient performance, even in challenging times. We have also expanded our customer base, adding several new customers and strengthening our relationship with the existing ones. I'm looking forward to keep you updated on new customers' ads across the years. Great things are about to come. We continue to be excited about our path of being the backbone for connected commerce. Thank you again for your continued support, and we look forward to your participation on our future updates. You may now disconnect.

And this concludes today's conference call. You may now disconnect.