VTEX (NYSE:VTEX) Q4 2022 Earnings Call Transcript March 2, 2023
Operator: Good afternoon. Thank you for attending today’s VTEX 2022 Financial Results Conference Call. My name is Megan, and I’ll be your moderator for today’s call. I would now like to pass the conference over to Julia Fernanderz with VTEX.
Julia Fernandez: Lipase, everyone, and welcome to the VTEX Earnings Conference Call for the quarter ended December 31, 2022; I’m Julia Fernandez, Investor Relations Director for Vtex. Our senior executives presenting today are Geraldo do Carmo Thomaz, Founder and Co-CEO; and Ricardo Sodre, Chief Financial Officer. Additionally, Mariano Gomide de Faria, Founder and Co-CEO; and Andres Polit, 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 such matters as continued growth prospects of 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 undue reliance on these forward-looking statements. Certain risks and uncertainties are described in the risk factors and forward-looking statement sections of the Bite Form 20-F of the year ended December 31, 2022, and other Vtex filings within the U.S. Securities 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 those measures to the nearest comparable GAAP measures can be found in our fourth quarter 2020 earnings press release available on our Investor Relations website.
Now let me turn the call over to Geraldo. Geraldo, the floor is yours.
Geraldo do Carmo Thomaz: Thank you, Julia. Welcome, everyone, and thanks for joining our fourth quarter 2022 earnings conference call. 2022 was a near full with uncertainty and volatility for the industry. So despite the challenges our customers’ performance and business model demonstrated resiliency and the ability to navigate the ever-changing environment smoothly. In 2022, e-commerce in Latin America grew single digits while our GMV growth reached 31%, exceeding the market performance by more than 20%. VTEX same-store sales increased to 17% on an FX-neutral basis indicating that in addition to new customer adds, existing customers performed above the curve and contributed significantly to our outperformance versus the overall market.
As we move forward, our focus for 2023 is clear. We aim to consistently drive growth above market performance improve our gross margin and optimize expenses to gain operational efficiencies as we scale. Our goal is to provide a reliable solution to our customers so they can solely focus on expanding their business while at the same time, we continue to strengthen our comprehensive range of a site sales products to enable our customers to grow their GMV. Our global expansion journey is evolving with solid steps made in the U.S. and Europe. We also announced that customers going to other countries such as India and South Africa this year. We expect to continue to deliver consistent and tangible results aiming to become the global backbone for common.
Reflecting on the performance of the last quarter of 2022, we’re delighted to report that our business has seen resilient growth, although GMV and revenue were below our expectations, we have solidified our position as a regional leader and expanded our reach beyond Latin America. Specifically, in Q4, our GMV increased by 34 percentage year-over-year in U.S. dollars and 29% on an FX-neutral basis, reaching almost the $4 billion mark in the quarter. That’s more than our GMV for the entire year of 2019. It’s worth noting that the retail industry faced challenges during the Q4 of 2022 due to lower-than-expected sales volumes around Black Friday and the holiday season. Despite being impacted by this trend, our business maintained strong performance with Q4 same-store sales improving quarter-over-quarter.
This demonstrates our business strength, resiliency and ability to navigate challenging macroeconomic environments. Throughout our company’s history, we have established solid and long-term relationship with our customers, as evidenced by the growing number of stores and countries per customer. In 2022, we were honored to have the trust of over 2,600 customers with a total of 3,400 stores across 38 countries. Our top 100 customers in 2022 averaged 5.9 stores per customer with operations in 34 countries, an improvement from 4.8 stores per customer in 2021. In the fourth quarter, we kept making significant commercial progress. We are proud to have attracted and on boarded several premier brands and retailers. In first quarter of 2022, we added several new customers who previously did not have an online presence in the countries they started operating with us.
This includes Rebook in Argentina, Brazil, Chile, Colombia and Peru, Super in Brazil, in in Poland and day Mexico. We’ve also added customers that migrated from other platforms. This includes companies that went live in Q4, such as These brands are well established in their respective markets, and we are excited to have them on board as they will help us expand our reach and strengthen our position in these regions. In addition to attracting new customers, we also focused on strengthening our relationship with existing customers by supporting their expansion efforts. During the fourth quarter, Tavera premier brands and retailers chose to expand their operation with us by opening new stores and further integrating with us. This includes Belcorp, who added stores in Mexico and Peru currently operating in 4 countries in Latin America.
Electrolux, who added a store in Brazil currently operating in 6 countries in Latin America. Samsung, who added B2B in Brazil currently operating both B2C and B2B with us; and Carrefour, who integrated more than 150 physical stores into the omnichannel operations in Brazil. This brand’s decision to expand their operations with us is a testament of our platform strength, relevant value proposition and the trust we provide to our customers. We are excited to continue supporting them and reaching consumers in new geographies and leveraging the physical store asset base. I would like to briefly mention a significant event this quarter, the Black Friday November. Vtex achieved a GMV of $1.75 billion, an increase of 32% in USD compared to November 2021 and 27% on an FX-neutral basis.
We were particularly proud of the accomplishments during the hard season. The dependability of our network, which provides scalability, reliability and security while giving our customers piece of mind with 100% of time during Black Friday and Cyber Monday week. And the growth in volumes in countries such as Mexico and the United States, both of which joined the top 5 countries with the highest year-over-year GMV dollar increase among all detected countries demonstrating international expansion tangible results. 2022 was a year where we were excited to announce many outstanding partnerships such as the one with AV, AWS, e-banks, Facebook, Instagram, MercadoLibre, , PayPal, Stripe and TikTok. In Q4, we added deals with
