VTEX

executives presenting today are Geraldo Thomas Jr., Founder and Co-CEO, and Ricardo Camatas-Odre, Chief Financial Officer. Additionally, Mariano Gomide de Faria, 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 relating to such 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, you are cautioned not to place a new reliance on these forward-looking statements. Certain risks and uncertainties are described on the risk factors and forward-looking statement sections of PTEX Form 20F for the year ended December 31, 2022, and other BTEX filings within the U.S. Securities and Exchange Commission, which are available on our investor relation website. Finally, I would like to remind you that during the course of this call, first call, we might discuss some non-GAAP measures. A reconciliation of those measures to the nearest comparable GAAP measures can be found in our third quarter 2023 earnings press release available on our investor relation website. Now, let me turn the call over to Geraldo. Geraldo, the floor is yours.

Thank you, Julia. Welcome, everyone, and thanks for joining our third quarter 2023 earnings conference call. I'm pleased to announce that ZTEX delivered another quarter of strong results. We achieved a 35% year-over-year growth in GMV, driven by the resilience of the same-store sales of our existing customers and the successful go-lives of new stores. On the latter Despite the ongoing uncertainty in the macroeconomic environment, we're pleased to continue to see a stabilization of the ramp-up period and the implementation times, which, as mentioned before, also contributes to our robust performance. Turning briefly to our financial results, as Ricardo will delve into it later, I'd like to highlight two points. First, We've surpassed our revenue projections, reaching $50.6 million this quarter and a 31% growth year-over-year. Second, we achieved our break-even targets from a non-GAAP operating income and free cash flow basis one quarter before our expectations. This is a clear testament of our focus on growth and the power and scalability of our team. Efficiency is ingrained in our DNA, amplifying our results and bringing us closer to becoming the backbone for commerce. Additionally, we delivered a 36% year-over-year gross profit growth and held expenses steady while accelerating our growth under uncertain macros. demonstrating our business model's resiliency and operational leverage. Now, let's go into some operational updates. In Key3, we added several new customers that migrated from other platforms, including Naudo in Argentina, Aiva, Pressolandia, and PicPay B2B in Brazil, Handwheel in Canada, ICB Food in Chile, Coupedrogas, Gabrica, Eurosuper and Matelta in Colombia, V&A and Pharmaciel in Mexico, and Beauty Counter and Pierce Manufacturing B2B in the U.S. In addition to attracting new customers, we also focus on strengthening our relationship with existing customers, actively supporting their growth initiatives. During the third quarter, several premier brands and retailers chose to expand their operations with us by opening new online stores and further integrating with us. This includes Calvin Klein, who added a new store in Ecuador, now operating in nine countries in Latin America. Pharmacity, who added its Simplicity brand in Argentina, now operating with three stores in Argentina and one in Uruguay. Kibok, who added a store in Panama, now operating in six countries in Latin America. And Whirlpool, who added its KitchenAid brand in Austria, Denmark, Finland, France, the UK, and Italy, now operating in Latin America, EMEA, and APAC. We're excited to provide an update on one of the new customers' wins, We shared during our investor day. Beauty Counter, a Callao portfolio company, successfully migrated from its legacy platform to VTech. This migration enabled the consolidation of all their channels into a unified commerce experience. VTech, globally recognized as the number one unified commerce platform provided by Gartner, has demonstrated its ability to launch, large and complex projects in the U.S. These accomplishments represent significant milestones in our global expansion journey, and we are committed to our partnership with Beauty Counter. Furthermore, in addition to the new customer acquisition and the existing customers expanding their operation with us, Two significant events this quarter underscore our progress in solidifying our position as the global enterprise digital commerce platform, where forward-thinking CEOs and CIOs smarten up their investments. The success of VTEX Connect Latin in Mexico and our inclusion in the 2023 Gartner Magic Quadrants for digital commerce. We saw remarkable growth at our second VTEX Connect Latin in Mexico, expanding from over 3,000 to over 7,000 participants. The impressive success of VTEX Connect in Mexico demonstrates our opportunity to continue expanding Latin, especially in Mexico. The event features 60-plus global e-commerce experts, and success stories from VTech customers like Accor, Dior, Levi, D-Box, and Samsung. We also introduced AI-driven improvements focused on customer experience and operational efficiency, such as AI in live shopping, which automates product recognition during live streams, eliminating the need for a production team, AI for the intelligent search to personalize customer experience and boost conversion rate. And AI in pick and pack, which enhances fulfillment efficiency, adapting to demand fluctuations for precise resource allocation. On the industry experts recognition side, Vitex was named a visionary in the 2023 Gartner Magic Quadrant for digital commerce. for its ability to execute and completeness of vision. Vitex was also ranked second for the following use cases, B2C digital commerce, B2C and B2B digital commerce on the same platform, and complex business models. Additionally, Vitex was the top-rated digital commerce platform by Gartner Peer Insights. over the last 12 months. We are both humble and excited about the recognition, underscoring our commitment to helping enterprises achieve agility and cost effectiveness by choosing the best components for their business. Continue our commitment to fostering our ecosystem and offering our customers the most comprehensive solutions We're thrilled to announce two partnerships that have materialized this quarter. First, we're partnering with Cielo, a leading name in payment solutions in Brazil. Their expertise in accrediting establishments for card payments and picks will expand our payment offerings, ensuring our customers access robust solutions in the Brazilian market. Additionally, We've joined forces with PayU, extending our reach across Latin America. These partnerships cover Brazil and all Latin countries, offering a comprehensive payment ecosystem with diverse options, including credit cards and alternative methods like PSA in Colombia. Our mission is to create a seamless payment experience to our customers in the region, These partnerships showcase our dedication to delivering top-tier solutions and enhancing the customer experience. Now, before leaving the stage to Ricardo, I would like to share a couple of success cases from our customers that demonstrate the tangible impact and potential of our platform. At the core of our organization, our customers are in the spotlight, their success will always remain our focus therefore skinny group a leading south african retailer with a diverse portfolio of 26 brands successfully transformed its commerce landscape by partnering with vtex they launched the innovative bash marketplace consolidating 18 brands into one while retaining the flexibility for each brand to customize its marketplace. Since the platform launch, there has been a remarkable 73% increase in multi-brand orders, showcasing the effectiveness of the marketplace and a surge in app sales, accounting for over 35% of total online sales within just two months. Its conversion rate surpassed both mobile web and desktop by over 200% and 80%, respectively. Furthermore, TFG achieved a remarkable 33% improvement in page load speed, contributing to a handset user experience. Sochi Online, a leading Brazilian lottery intermediation platform, shows the VTech had the solution to meet their unique business needs. The decision aimed to enhance their go-to-market strategy, focus on flexibility, experimentation, and improved availability. After migrating to VTech, Sochi Online saw significant conversion rate improvements across multiple channels, thanks to reduced latency and VTech scalability. enabling seamless management of high traffic without downtime. A U.S. aftermarket vendor partnered with Vitex to enhance their B2B online experience, improve customers' interactions, and optimize product tracking. By seamlessly integrating Vitex with their ERP system, they achieved efficient data exchanges and utilized a unified B2B commerce platform. enhancing both sales operations and buying experiences. Detect data redundancy and an extensive product catalog allowed customized dealer experience without extensive development. This adaptability combined with detached platform flexibility underscores the transformative power of modern digital commerce in delivering seamless and enhanced customer experiences. Naudu, an Argentine retail brand specializing in appliances, electronics, and beauty products, with a presence in 14 states and over 70 physical stores, chose the Vitex platform to manage its extensive range of SKUs in the marketplace efficiently. Naudu has implemented payment and promotion features and logistics integrations with third parties. enhancing their ability to seize sales opportunity and improve their customer experience. Pharmacondi, a major Brazilian chain with numerous physical stores, partnered with Vitex to implement omnichannel capabilities. They integrated over 160 of their stores with Vitex, harnessing regionalization, intelligent search, and third-party solutions from the Vitex ecosystem. like Mercado Pago and Google Analytics, for enhanced customer experiences and business performance monitoring. Tejo Car, a premium men's fashion brand in Brazil with 11 physical stores and 200 points of sales, shows VTech's composable architecture for the digital commerce platform. They implemented features like the wish list using VTech's I.O. to enhance the customer experience. Tejoka also leverages VTech's shipping network for efficient delivery and integrates with Google Analytics for user-friendly sales data visualization. This integrated solution significantly improved performance, results in a 7x increase in order conversion rate, a 25% boost in average order value, and a 60% reduction in shipping costs. Our global clothing and accessories retailer, operating in 39 countries through 11 online stores and 10 marketplaces, recently adopted an innovative approach. They integrated VTech's headless CMS with an app that directly retrieves contents and seamlessly integrates into the store framework using native components. This implementation empowers them to customize and oversee web page content efforts. As they can easily define structure and reposition sections, they improve their performance by reducing errors and safeguarding against content loss. PagMenos, a leading player in pharmaceutical retail, swiftly integrated extra pharma into the digital ecosystem using VitaxIO store framework. In just 29 days, this strategy integration led to remarkable results, a substantial increase in sales, a 200% boost in conversion rate, significant audience growth, and reduced operational costs, enhancing the financial efficiency of the PagMianos group while uniting both stores seamlessly. This quarter, we achieved significant success with our live shopping solution. Notably, Pat Bo, in collaboration with ZTEX, hosted a live shopping event during New York Session Week, becoming the sole Brazilian brand to do so. The results were outstanding, with Patibo experiencing a remarkable 300% sales increase and a 125% boost in orders and a remarkable 79% rise in average order value. This event underscores the growing preeminence and effectiveness of live shopping as a dynamic sales channel. Additionally, at Vitex Connect LATAM, Live Shopping took center stage, hosting seven 40-minute events from customers such as KitchenAid, which experienced a remarkable 152% sales spike in their events. In Argentina, Style Store did an event at the most relevant night TV show, attracting over 75,000 viewers. and achieving a 700% sales boost compared to the previous month. To conclude this session, I would like to express my gratitude to our 1,276 VTech employees dedicated to making our declared future a reality and to our customers, partners, and investors. 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 Q3 2023 financial results with you. In the nine months of 2023, our performance was consistently strong, surpassing expectations and resulting in positive free cash flow one quarter ahead of schedule. Our Q3 GMV grew by 35% in U.S. dollars and 28% on an FX neutral basis. with Q3 revenue reaching $50.6 million, our 31% year-over-year growth in US dollars, and 25% on an FX neutral basis. Our existing customers remain resilient, and new customers exceeded our expectations with faster-than-expected goal lives. In Q3 2023, our subscription revenue hit $47.5 million, marking a solid 30% year-over-year growth in US dollars. while services revenue climbed from $2.2 million to $3.1 million, largely due to new project implementations. In Q3 2023, our subscription gross margin continued to increase. Non-GAAP subscription gross profit rose to $36.2 million from $26.9 million in Q3 2022. a 35% increase year-over-year, with the margin at 76.2% compared to 75.3% last quarter and 73.8% in Q3 2022. The 247 BIPs year-over-year margin increase reflects our commitment towards efficiency and customer success. The margin increase resulted mainly from optimizing our hosting costs and architecture. We are excited about the progress and remain dedicated to delivering further margin improvements in the future. Our overall non-GAAP gross profit rose to $35.8 million from $26.3 million in Q3 2022, a 36% increase year-over-year, with the margin at 70.7% compared to 68.0% in Q3 2022. This achievement was driven by hosting improvements that I just mentioned and an improvement in our services gross margin in the quarter as we started dialing back on the hypercare mode for Qnew customers in US and Europe. In Q3 2023, our non-GAAP total operating expenses stood at $34.1 million, remaining steady compared to our previous quarter. Therefore, our expenses as a percentage of our revenues significantly improved from 83% in Q3 2022 and 71% last quarter to 67% in Q3 2023, demonstrating our commitment towards efficient expense management while also accelerating our business under uncertain macro conditions. In Q3 2023, we achieved positive non-GAAP operating income a quarter earlier than expected. Our Q3 2023 non-GAAP operating margin reached a positive 3.4% compared to a negative 15.5% margin on the same quarter last year. The significant 19 percentage points year-over-year increase was exclusively driven by revenue growth and gross margin improvements as non-GAAP total operating expenses actually slightly increased year-over-year. Furthermore, we saw a solid 6.1 percentage points improvement in our non-GAAP operating income margin on a quarter over quarter basis. These trends underscore our commitment to profitable growth, subscription cost efficiencies, and stable expenses aligned with market demand and sales efficiency, demonstrating our dedication to strengthening financial performance while sustaining high revenue growth. We are delighted to announce that for the three months ending on September 30, 2023, VTEX achieved a positive free cash flow of $2.7 million. This is a significant improvement from the negative free cash flow of $3.3 million reported in the previous quarter and the corresponding quarter of the previous year. Our positive non-GAAP operating income and improvements in our payables and collection efforts primarily drove this free cash flow result. Before I move to the outlook for Q3 and fiscal year 2023, I would like to update you on our share repurchase program. As of September 30, 2023, the remaining balance under the current authorization was nearly $10.1 million. We've purchased 1.9 million shares at an average price of $5.533 per share. Considering the previous plan that concluded on August 8, 2023, The total repurchase shares amounted to 9.0 million shares with an average price of $4.16 per share and a total cost of $37.9 million. As we look to the future, we are thrilled about Vitek's remarkable adaptability and resilience. Regardless of market conditions and their inherent volatility, Vitek has consistently surpassed market expectations while delivering strong long-term performance metrics. For the fourth quarter of 2023, we are currently targeting revenue in the $55.0 to $57.0 million range, implying a year-over-year growth of 22% on a 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 and the top of the range. now targeting the full-year trend between 22% to 23% on FX-neutral year-over-year basis, implying a range of $196 to $198 million based on October average FX rate and assuming a devaluation of the Argentina's currency aligned with the market futures rates. As we continue executing our profitable growth plans, We anticipate year-over-year improvements in the non-GAAP operating income margin quarter 2023. We hold strong confidence in VTAC's distinctive value proposition. centered on empowering our customers to achieve profitability and sustainable growth by reducing their total cost of ownership and simplifying their commerce infrastructure. Our commitment to incorporating physical stores as the centerpiece of the omnichannel experience position us to provide the rapid growth and profitability our customers aspire to. We'll continue to work towards building outstanding success cases with our customers, offering innovative solutions and seizing opportunities to ensure long-lasting success for our dedicated employees, value customers, innovative partners, and long-term investors. The future is filled with exciting prospects that we are eager to pursue. With that, let's open it up for questions now. Thank you.

If you would like to ask a question, simply press star 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question will come from the line of Marcelo Santos with JP Morgan. Please go ahead.

Hi, good evening. Thanks for the opportunity to make questions. I have two. The first is, if you could comment, what were the main countries that posted the positive surprise and allowed the text to beat the original guidance? So just wanted to see where the surprise came more from. And the second question is more about the service margin. It was negative, but it was one of the, let's say, lowest negative margin that you ever print, at least that we have history as a reported company, as a listed company. What's the dynamics in there? Why is it so low now? And is there some change in the way you do the services? So if you could comment on that, I would be glad. Thank you.

Hi, Marcelo. Thanks for the question. Great questions. So I'll take this one. Ricardo Sodré here. So on the overperformance versus the guidance, in Q3 2023, our robust performance can be attributed to multiple factors, with new customers' additions playing a significant role, both coming from new ACV signings and the go-live of ACVs that were signed in previous quarters. On the latter, we continue to observe a promising trend in regards to the stabilization of our sale and implementation cycle, which had a positive impact in our results. Also, on existing customer-based same-store sales, we continue to see growth in the teams level, outperforming the market and slightly above our internal expectations for Q3. And on the country specific, as you ask, we continue to see a robust performance across the board. Brazil performed pretty well in Q3. And we also saw the global U.S. and Europe outperforming the overall company. As you know, we provide more detailed numbers on the geographic breakdown on an annual basis. So when we publish Q4 in next quarter, we can give more details on the geographic breakdown. uh and and looking forward you know we we acknowledge the potential impact of an uncertain macro scenario on the same source sales of existing customers and the sales cycle for new customers nevertheless our competitive position remains strong and we are focused on delivering value and enabling growth for our customers and with a pipeline of promising projects implementation and favorable trends in sales cycle stabilization, we are pretty confident in the sustainable growth trajectory that we have. On the second question on the services cross-margin, as mentioned in the prepared remarks, we are gradually evolving the hyper-care mode for project implementation for QNU customers in U.S. and Europe for more ongoing regular modes. So just to recap, the hypercare mode is how we call our deliberate commercial decision to closely support implementation of relevant new customers in US and Europe to ensure their successful go-lives. And as a result of this strategic move, we were able to create strong relationships with flagship signed customers. ensuring a high-quality integration and onboarding experience, and advancing our expansion into these new geos with reputational cases. And also with the hypercare, we can more actively guide our customers into the vision of commerce that we believe in. At that time, we committed that this decision was going to impact our services gross margin in the short term, but that this was going to position us better in these new regions in the medium to long term. And in Q3, as a demonstration of that, we had the go-live of the B2C of Beauty Counter, as you can see in beautycounter.com, and also the B2B of Fierce Manufacturing and Oshkosh Company. And we have a relevant pipeline of go-lives to come over the next two quarters as well. And we encourage you to see the improvement in services cross-margin after the go-live of these new customers. Now, we still have all the relevant global customers under implementation, and some services cross-margin volatility is natural in our business. But looking further out, we expect cross-margin to continue improving.

Perfect. Very clear. Thank you very much.

Our next question will come from the line of Maddie Scratch with KeyBank Capital Markets. Please go ahead.

Hey, guys, and thanks for taking my question today. I was wondering if you guys could talk a bit about if you're seeing any price sensitivity when it comes to merchants or even the customer base, and if you could comment on what you're seeing top of funnel. And secondly, I'm wondering if you guys could comment on what you're seeing in terms of seasonal spend that we've seen so far in 4Q between October and now November. Thanks.

Hi, Mariano here. On the price, I can tell you that the high interest rate is bringing a tough environment for all the retailers all over the world. And of course, the retailers are now looking for more efficient solutions. So we see this as an opportunity. Vitek's positioning as a complete and composable platform, allowing customers to be very lean and fast when they need it, but also compose and be custom when they want it. So in terms of price, we see a mood bringing the discussion of the TCO of a commerce platform as something that was not in the table, and now it is, but we see this as a huge opportunity for us as well. On the second, I will invite Sodre to answer. Yep.

Yep, happy to, Mariano. So, Maddy, regarding the holiday season, how we are seeing it, so we continue to see uncertainty in the macro environment, which makes it challenging to have clear visibility into the holiday season. Last year, we observed a shift in the seasonality a bit, with sales spreading out all over November instead of concentrating around the typical Black Friday event or week. There is currently conflicting information regarding holiday season expectations. We are approaching predictions for sales cautiously. Consumers appear to be eager to make holiday purchases, but they seem to be seeking significant discounts before committing to buying. And on the retailer side, it remains uncertain to which extent they can afford to sacrifice margins to offer substantial discounts and boost sales. So as a result, we are closely monitoring both the end consumer and our customers' activity to assist the latter in performing well during the holiday season. And most importantly, we're taking steps to ensure our customers can entirely rely on our platform during this critical time of the year.

Super helpful. Thanks, guys, and congrats on the quarter.

Again, for any questions, simply press star 1 on your telephone keypad, and your next question will come from the line of Leonardo Olmos with UBS. Please go ahead.

Hello? Sorry about that. Can you hear me?

Yes, we can hear you.

Yes, we can hear you. Yeah, I was on the webcast, so I'll be delayed. So can you discuss a little bit the product approach? So if you can talk a little bit about B2B in Brazil, how has that been evolving in all the product launches that you have in the Q3? How is that being accepted by the market in Brazil? Thank you.

Oh, thank you, Leonardo. So, first of all, B2B, it seems it's appearing as a very appealing offer at ZTEX. It's not constrained to Brazil. You know, you just saw the announcement that we announced a peak pay B2B as a go-live. But, you know, Brazil is accelerating the sales of B2B a lot. but not only Brazil, Latin America, US, we're selling B2B scenarios everywhere. And the beauty of a platform, if you saw the Gartner reports, the critical capability reports, We are the number two platform in B2C and B2B in the same platform. This creates a big advantage for our customers because they can deal with one single control panel for both channels. And this also creates a big advantage for us as a product because we don't redo a lot of the core things that we need to have in both scenarios. So B2B for us is some specialization that we develop in some modules that we test so that it works nicely with B2B. B2B also is very customizable. So we have a customer called Pierce Manufacturing in the U.S. launching a B2B operation with us. And this case is, you know, you can see that we have the inventory of all the sales that this manufacturer did in the past for the parts of each truck that they sold, and all it's customized in our platform. So B2B is actually a specialization of our e-commerce platform, and we are investing a significant amount of energy specializing even more on modules with features just like buying organizations, capacity to customize master data. There's several things that we are doing to be more competitive, but we're very competitive already.

Thank you. And another question. Can you discuss a little bit the market in Argentina?

talking so much about political but can you talk about the retail market and how hard seeing things for year end thank you hello ricardo here happy to take uh on on argentina so on the overall retail market uh i think there was some uh news in the local newspapers in brazil talking about how consumers are purchasing uh accelerating their purchases in Argentina, so we see some of that happening. But more broadly regarding the country, we are closely monitoring the situation in Argentina and the uncertainties surrounding this year's election. Argentina represents roughly 10% of our revenue. And while we have successfully navigated changing political and economic conditions in Argentina over the years, We are aware of the challenges and complexities that come with operating in this market. And as mentioned in the earnings release for our Q4 guidance, we are assuming that the Argentine peso will devalue in line with the FX market futures, losing roughly half of its value in December. So considering that we have part of our revenue in Argentina U.S. dollars, this level of FX devaluation would result in a revenue impact of high single-digit, roughly $1 million in 2024, and only half of that would flow through operating income. Therefore, it's a one-off and pretty small impact on our overall business. And having said that, we are confident that despite this potential headwind, VTech should continue to improve its operating margin and maintain an attractive FX neutral growth rate. As we are very well positioned in the country, we have a strong competitive position in Argentina, and the underlying growth of the country over the years could be attractive for us.

Yeah, sounds great. Thank you very much, and sorry for my background noise. Have a good evening, everyone. Bye-bye.

Thanks a lot.

Your next question will come from the line of Franco Garanda with VA Davidson. Please go ahead.

Hi. Yeah, good afternoon. Thank you for taking our questions, and congrats on the solid quarter here. I was hoping you could share some statistics with us to highlight or maybe to better characterize the performance of some of the recent product introductions, namely the ones that you talked about back in June, VTech's day. Thanks.

Happy to do that. Mariano can compliment me if necessary. So we are very excited with developing capabilities to empower the workforce of our customers. Live shopping is one of them. The personal shopper is another one, the sales app. All these deliver, the functionality of delivering from store also gives more roles to the salesperson inside the physical stores. These are things that we're very excited with, and it's very aligned with the broad range of customers that we serve. uh there's a lot of our customers that can benefit from delivery from store from integrating the store the sales people the search person into the digital experience this is also very powerful for b2b scenarios as well when when you have sales people serving and helping the sales of the manufacturer that is doing the b2b business so this is something that we're very excited uh we uh on this topic there's also the pick and pack capability that it's a tool that enables streamlining of the process of delivering from store uh you know like there's no similar tool in the market for for to streamline such a process We are developing some capabilities on top of AI. There's the natural path for this, which is our search, our recommendation. These are all AI aid features that we are developing even more. But we're not doing only that. All these new tools that I just mentioned to you, they have also AI capabilities embedded on that. because we're very excited with these capabilities. VTech is also very committed in delivering security capabilities to our customers, privacy, compliance. These are also something that we're very excited to deliver to our customers. so that they can rely on a robust platform that is elastic and secure so we can process the data and keep the data as safely as possible.

Great. Thanks for the detailed answer there. And I was hoping to also get an update in regards to some of the new customers that you talked about during your analyst day. You did give us a few on those, but any updates on Casino and what they're doing there, how their expansion is going, and whether they're planning to expand across entire company in France? Thanks.

Yeah, happy to get this as well. In our investor day, we disclaim Hearst and Casino. The implementation with Hearst is advancing well and as is scheduled. So we expect to provide a further update soon. As you know, we disclaim our clients when they go live. That's the line that we chose to communicate to our company. Casino is undergoing a big change. It's a change in control, a huge reorg. So it's a situation that adds meaningful challenges. And we keep you updated if there is any relevant developments on that. And now it's worth mentioning that implementation timelines can be lengthy, which is why we decided to review new customer names only upon their successful go-live. I know that sometimes you become anxious, but we believe that's how we're going to generate more value for the long term of the company. So we want to reinforce that the go-live basis will be our standard practice in communicating new clients. just to manage expectations. Thank you so much for the questions.

Yeah, of course. Thank you. And a very brief follow-up on that. Maybe if you could speak to the sales cycles, the timing of those, quarter over quarter, and then year over year, if possible. Thanks again.

Hi Franco, Ricardo here. Yeah, happy to. So as we mentioned this quarter and we also mentioned last quarter, we are seeing an encouraging stabilization of the sales cycles. They are not back to their historical average, but we are not seeing them worsening and they have shown a slightly improvement quarter over quarter. Now on a year over year basis, I would say it's more stable as we saw sales cycle deteriorating along last year. So we started in April until towards the end of the year. It was when we saw most of the movement. uh so so it's it's encouraging to see this stabilization choose light improvement in the in the sales cycle and when we say sales cycle we are thinking about not only the time it takes to negotiate the contract and sign the contract with the customer but also the time it takes to implement uh the software and the customer to go live and then the the initial ramp up of of a new customer so we're thinking about this whole uh cycle i appreciate the car thanks

And there are no further questions at this time. With that, I'll turn the call back over to Geraldo for any closing remarks.

The text is entering an exciting phase, reaping the initial rewards of our global expansion investments. We've shown consistent execution and financial results, reaching great given and generating cash a quarter ahead of schedule, a solid quarter marked by sustainable gross margin improvements and expense discipline, demonstrates the success of our business model, even in uncertain macro conditions. We serve a multitude of models and customers' touchpoints, from B2C, B2B, B2B2C, to physical stores and marketplaces, including live shopping and conversational commerce, among others. The tech is becoming the platform of choice for forward-thinking leaders, and this is just the beginning. Thanks to our customers, partners, investors, and our dedicated team who make it all possible. We look forward to keep you updated at our next earnings call. Have a wonderful week.

That will conclude today's meeting. You may now disconnect.