All this boosting productivity through AI. We launched FastStore framework where we’re revolutionizing the way we are letting our customers building fast experiences in the website. This is not completely related to AI, but we think it’s very important to our customers right now. But the Ad Network, as you can imagine, is leveraging AI a lot and I think customers will leverage this a lot. Data Pipelines. With Data Pipeline, we will enable our customers and partners to build AI models to leverage AI with to, you know create possibilities of their own, actually turn data into gold. We also launched a product called VTEX Shield security shields I think with these value — data has — with more value, people will capture more value being sure that the data is self-guarded is fundamental to a software like ours so we launched this product as well.
And so we are investing a lot. And as I said, we’re the right company to give business meaning to this AI revolution.
Thiago Kapulskis: Great. Thank you so much for the answers, guys. And I’ll definitely explore the video — the content. Thank you.
Geraldo do Carmo Thomaz Junior: Thank you.
Operator: Your next question comes from the line of Maddie Schrage from KeyBanc. Your line is open.
Maddie Schrage: Hey, guys, and thank you for taking my questions. Besides Argentina just kind of wanted to talk through maybe some of your other geographies, wondering if there are maybe any tailwinds in rest of world or anything like that, that could partially offset it? Thanks.
Ricardo Camatta Sodre: Yep. Happy to start and then others feel free to chime in. Thanks, Maddie. So, as I mentioned on my first answer, we saw this headwind in Argentina, but we saw the other countries performing well. Brazil, Colombia and Mexico, the US, Europe also, I would highlight that Brazil continues to show strong momentum in signing new contracts and new sales, even with the relevant market share that we have in the country. Our strong position and the strong ecosystem that we have is helping on that. And also the way we see our retailers, our customers in Brazil, integrating the fiscal stores, accelerating their same store sales has been a positive. So overall, we see good performance on our other geographies, which is encouraging for our year as well. Not sure if that answers the question or if others want to chime in.
Maddie Schrage: Yes, I think I just have a quick follow-up for you as well. But wondering, if you could maybe talk about the sales motion right now. Kind of what’s maybe the mix of revenue between existing and new customers and maybe if you could kind of size the backlog for us, I think that would be helpful too.
Mariano Gomide de Faria: Hey, Mariano here, just to mention about a little bit on sales momentum if I understand correctly your question, we are seeing a consistent improvement in the pipeline, not one specific country, but globally. This is a consequence of VTEX position in most of analyst companies such as Forrester, IDC and Gartner so we are receiving good reports, we are enhancing our positioning and we are inviting to more and more RFPs globally. We are recognizing the good momentum, we are on track with the sales goals we plan for the year. However, we need to highlight the volatile period for retailers and manufacturers all over the world in this environment of high interest rates. So, this will bring some volatility and we might end up being a good solution for this world that will pursue more efficiency and it’s going to be really tough years ahead for all retailers.
It’s not one year, it’s going to be like three years, four years, five years in a shift. So, we are being very diligent in opening new organic channels and increasing profitability for our active customers and we are really focused on helping them to simplify their operations and deliver efficiency in the bottom line. In this high interest rate and high inflation environment, seamless integration, ecosystem ready software and efficient architecture are essential to minimize maintenance costs and accelerating revenue. So with all the more than 1000 system integrators and more than 6000 VTEX IO extensions by third-parties, VTEX provides a very comprehensive solution we call the complete and composable solution that can help retailers all over.
Mentioning Brazil, we still have a lot of room to grow on the B2C and we have an enormous B2B market to be discovered. Latin America, we have significant groundwork to cover this quarter. Having the go-live of Nike in Colombia is a significant milestone in Europe. Our expansion into Germany with OBI sets solid foundations for us to build up. So that’s the summary. Mainly the recognition of the industry experts Gartner Customer Choice, we were the only company to achieve the Customer Choice award and the IDC acknowledgment VTEX as the main leader on B2C and a major leader for B2B also completes the good momentum on branding and positioning for VTEX.
Ricardo Camatta Sodre: And maybe just to build quickly Mariano, I think there was a question from Maddie as well on the existing versus new customers. So we continue to see in our same-store sales on the mid-teens level. If you look at on a GMV basis and on the overall revenue growth for the company, we continue to see that roughly one-third of our revenue is coming from our existing customer base and roughly two-thirds of the revenue growth coming from adding new customers to the customer base.
Maddie Schrage: Appreciate it guys. Thank you.
Operator: [Operator Instructions] Your next question comes from the line of Luca Brendon from Bank of America. Your line is open.
Luca Brendon: Hi. Good afternoon, everyone. Thank you for taking my questions. I have two here on my side. First of all, on gross margin, it was really strong this quarter and it’s getting close to what you guys said as the target model for the coming years, even in a soft quarter. So we probably should expect gross margins to be higher for the full year. So I just wanted to see, when do you guys think you could be reaching this target model and looking forward, what do you think could be the gross margin for the company? Maturity or how can we think about that going forward? And then second, ties a little bit to the first question, but on service revenues it was down year-over-year and I just wanted to understand how we could think about this line going forward. Should it continue at similar levels in nominal rates or should it also expand from current levels? Thank you.
