VTEX

I would like to welcome everyone to the VTEC's fourth quarter 2023 financial results conference call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to start your question, press star one again. At this time, I would like to turn the conference over to Julia Vardar-Fernandez, Investor Relations Director. Please go ahead.

Hello, everyone, and welcome to the VTEX Earnings Conference Call for the quarter ended December 31, 2023. I'm Julia Vardar-Fernandez, Investor Relations Director for VTEX. Our senior executives presenting today are Geraldo Thomas, Jr., founder and co-CEO, and Ricardo Camata-Sodre, Chief Financial Officer. Additionally, Mariano Gómez de Faria, founder and co-CEO, and Andrés Polidoro, Chief Services 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 such matters as continuous 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 live available information, you are due not to place undue reliance on these forward-looking statements. Certain risk uncertainties are described on the risk factors and forward-looking statement sections of BTEX Forms 20F for the year-end of December 31, 2023, 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 may discuss some non-GAAP measures. A reconciliation of these measures to the nearest comparable GAAP measures can be found in the fourth quarter 2023 earnings press release available on our investor relations 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 fourth quarter 2023 earnings conference call. In reflecting on our performance throughout the year, it's evident that despite navigating a persistently uncertain macroeconomic landscape, we have consistently surpassed expectations quarter after quarter. The fourth quarter of 2023 was no exception, with GMV and revenues growing 38% and 34% year over year in U.S. dollars, respectively. Our performance is a testament to the resilience of our sticky enterprise customer base, which affects neutral same-store sales and net revenue retention reached 15% and 107% respectively in 2023. And the successful onboarding of new customers onto our platform. Beyond our robust top-line performance, our business model also came to the forefront, as demonstrated by our operational leverage that Ricardo will cover later on. In our history, we've built strong, long-lasting enterprise customer relationships. As evidence, we increased the number of customers with annual recurring revenue above $250,000 to 126, up from 94 last year. And these customers increased their online store count to 692 from 557. Additionally, we increased our global presence to 43 countries from 38 countries last year. Our continuous progress in the top-tier customer base not only highlights our commitment to enterprise customers, but also our product market fit around the globe. This year, we have achieved significant commercial milestones. Some of the net new customers that went live on our platform were Beauty Counter, Corner Up, Hearst, Kaiser Roth and Pierce Manufacturing in the U.S., Rainwheel in Canada, and Auchan, Hunter Douglas, and Prop Beauty in Europe. We also have expanded with existing customers such as Colgate, Motorola, Unilever, and Whirlpool to many countries around the globe. With this segue, let me go to the newly added customers during Q4 of 2023, including Biscoits, John John, Oba Box, Oskling, and Tiffany in Brazil, Mega Tenders and BeSoul in Colombia, Macondo in Italy, 7-Eleven, Shapur, and Voight in Mexico, Hunter Douglas in the Netherlands, Yate Market in Peru, and Hurst and Shop Hero in the U.S. In addition to attracting new customers, We have also focused on strengthening our relationship with existing customers, actively supporting their growth initiatives. During the fourth quarter, several premier brands and retailers chose to expand their operation with us, opening new stores and further integrating with us. This includes Carrefour, who added a new store in Brazil, Atacadão, now operating seven stores in Latin America. Colgate, who added a new store in the U.S., PCA Scheme, now operating in Brazil in the U.S., both with B2C and B2B models. Motorola, who added a new store in Ecuador, now operating in 20 countries across North America, Latin America, and EMEA. Oshkosh Corporation, who added a new store in the U.S., Oshkosh Airport Products, Together with Prius Manufacturing, they are now operating two B2B stores in the West. And Probeauty, who added a new store in Romania, Eternal, now operating both B2C and B2B stores in Romania. In 2023, we achieved remarkable milestones in the digital commerce realm. We started the year being recognized as established in Gartner Peer Insight Voice for After Customers. digital commerce. In the second quarter, IDCs acknowledged us as a major player, and we achieved medals in all 24 categories of the 2023 paradigm B2B combined, being the exclusive vendor to secure a gold medal for marketplace product capability. The third quarter, we were named a visionary in Gardner Magic Quadrant for digital commerce, and became the only vendor ranked in the top five for all use cases in the 2023 Goddard critical capabilities for digital commerce reports. In the fourth quarter, we were recognized as a leader in IDC's market scape. Worldwide mid-market growth B2B digital commerce applications, 2023-2024 vendor assessment. The text was also recognized by the ecosystem. We were honored as the Global Industry Partner of the Year in Retail and Consumer Packaged Goods at the 2023 AWS Partner Awards, and as the Best Interface Developer Portal at the DAS Portal Awards 2023. This underscores our commitment to reshaping commerce through innovation and collaboration. We are happy to share that 2024 started strong. In January, Vitex was an exclusive vendor recognized as a customer choice in 2024, got the voice of the customers for digital commerce. According to the report, 98% of VTech's customers expressed the willingness to recommend the e-commerce platform to their peers. This month, we were recognized as the top leader in IDC market space worldwide B2C digital commerce platform for mid-market growth vendor assessment studies. Rated the highest out of 25 vendors, we stood out for our comprehensive solutions and strategic focus on B2C excellence. We are proud about all the recognitions we got through 2023, and it fuels our dedication to pioneering solutions that empower business for lasting success. Continue our commitment to foresting our ecosystem, and offering our customers the most comprehensive solutions. We're thrilled to announce that in the fourth quarter, we've launched a strategic partnership with Dynamic Yield, a MasterCard company, and a leading pioneer in personalizing customer experiences. We're jointly developing a VTech native innovative app that seems to be integrated with dynamic youth cutting-edge customer experience optimization platform. In an ever-evolving landscape, we seek to empower our customers to leverage dynamic youth AI-driven tool in order to optimize engagement, lifetime value, and revenue generation. Together, we aim to empower brands to easily build tailored experience that resonates with each individual consumer, ultimately revolutionizing the standards of customer engagement and commerce success. Before leaving the stage to Ricardo, I would like to share some customer success cases demonstrating our platform's tangible impact and potential. Our customers are in the spotlight at the core of our organization. and their success will always remain our focus. Electrolux, the leading brand in innovative chrome appliances, addresses the challenge of absence of physical stores by developing a normal store with a digital experience at the 2023 Home Fair, a crucial event in the Colombian consumer calendar. These adaptable stores set up at a specific event like the home fair, featured kiosks, and a sales team equipped with a VTech subaccount, offering customized catalog and inventory for each occasion. Using the sales app, representatives seamlessly presented products, facilitated sales during their walk through the fair, while attendees also had the option to purchase through the self-service kiosk screens. The innovative approach resulted in a 73% sales increase compared to 2022, with the pickup point contributing 30% of total sales and a remarkable 84% growth in units. This success demonstrates Electrolux's ability to sell without physical stores, emphasizing the effectiveness of the digital strategy and the integration of sales apps for an enhanced customer experience. Motorola, the global telecommunication leader, faces a significant challenge with its multiple commerce platform, leading to high maintenance costs and impediments to launching new stores. By migrating to Vitex, Motorola benefited from the platform's adaptability, which was instrumental in streamlining operations and accelerating the establishment of new stores globally. Motorola was able to test third-party applications, optimize the architectures by country, and reduce the total cost of ownership. As a consequence, Motorola experienced a remarkable 20% annual growth in the company e-commerce businesses. Jeffress Pet, the leading U.S. animal health and supply company, expanded its operation through Vitex, now managing one physical store and two websites. They launched their second website, Lumber Vet Supply, boasting over 4,000 SKUs. Leveraging VTEX adaptability, they tailored the site for detailed path registration seamlessly integrated with master data for streamlined checkout processes. Moreover, VTEX allowed customizations to support Lambert's subscription strategy. offering varying time spans from two weeks to six months alongside a tailored vaccine delivery approach, enhancing the consumer experience. The unified web platform across multiple sites proved beneficial, reflected in Lambert's VET's exceptional results, a staggering 208% sales surge within three weeks of its launch. Flamingo, a retailer with over 40 stores across Colombia, partnered with ZTEX to expand their online payment options. By integrating their widely used private label credit card, MIFIA, Flamingo was able to reach a wider audience. Through the VTEX platform, Mephia was seamlessly integrated as a native payment option, ensuring scalability and adaptability for Flamingo and all willing VTEX customers who want to use these payment methods. For Flamingo, with these native payment methods, now represents more than 60% of digital sales. significantly improving its user experience, accelerating its sales, and solidifying its position in the digital market. The largest tool company in the world recognized the immense potential of implementing a self-service platform on its B2B operation through VTech. The implementation allowed them to expedite its user ordering experience across three major business units by eliminating cumbersome offline processes. The project generated time and effort saving in the ordering process, while at the same time reducing costs and increasing efficiency. By migrating to VTEX, they merged their traditional e-commerce site with the B2B site, creating a unified and connected commerce experience and providing a user-friendly B2C or D2C buying journey across both operations. To conclude this session, I would like to express my gratitude to our 1,277 VTEX employees dedicated to making VTEX the backbone for connected commerce and to our customers, partners, and investors. I will now hand the call over to Ricardo to discuss our financial performance for the quarter.