VTEX 2026 Q2 Earnings Call

Hello everyone, welcome to the VTEX Earnings Conference Call for the quarter ended June 30, 2026. I'm Julia Vater Fernández, VP of Investor Relations for VTEX. Our senior executives presenting today are Geraldo Thomaz Jr., Founder and co-CEO, and Ricardo Camatta Sodré, Chief Financial Officer. Additionally, Mariano Gomide de Faria, Founder and co-CEO, and Andre Spolidoro, 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 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 currently available information, you are cautioned not to place undue reliance on those forward-looking statements.

Certain risks and uncertainties are described in the Risk Factors and Forward-Looking Statement sections of VTEX Form 20-F and other VTEX filings with 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 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 second quarter 2026 earnings press release available on our investor relations website. Let's start the call. Geraldo, the floor is yours.

Thank you, Julia. Good afternoon, everyone, thanks for joining us on today's call. I want to open different today. We're far enough into our AI-native transformation to see with real clarity how large the opportunity ahead of us is. The results are not yet translating to revenue growth trajectory we're building towards. We know that. The direction is right. Product delivery is advancing well, early customer signals are encouraging, and our financial strength gives us the runway to execute. We look forward to demonstrating our progress quarter by quarter. The macro environment remained challenging in the second quarter. High interest rates and a promotional marketplace environment in Brazil, softer consumer demand in Argentina, and longer enterprise decision cycles all weighted on near-term growth. Ricardo will cover this in detail.

I want to focus on what matters most for the medium and long-term trajectory of VTEX, the execution of our four growth drivers, global expansion, B2B, ads, and AI. Collective, these initiatives grew 20% on an FX neutral basis in Q2, meaningfully faster than the company overall. While this still represents a relatively small portion of our business today, they are becoming an increasingly important part of our growth profile. The other side of this number is worth stating directly. The remainder of our subscription revenue, concentrated in our established B2C commerce business, is in Brazil and in the rest of Latin America, declined modestly in FX neutral this quarter. We want to be precise about what is happening and what is not happening there. Churn remained stable and in line with historical levels, win rates in competitive processes held steady.

This is primarily a volume and customer mix story, not a competitiveness story. We're not seeing deterioration in retention. Our installed base is transacting less in a weak consumer environment. That distinction matters because volume pressure can ease as the volume cycle improves. Going back to our growth drivers, let me take each in turn in order of their revenue contribution today. Starting with global expansion, this remains one of the most encouraging parts of our business. In the U.S., we're seeing a clear improvement in the quality of the pipeline. Activity has expanded across a broader set of industry, while large B2B opportunities represent an increasing share of expected contract value. We have also evolved our go-to-market strategy to make it more scalable. Rather than relying primarily on direct prospecting, we are increasingly working alongside leading global system integrators such as EY and Accenture.

During the quarter, we hosted our first North America SI bootcamp, bringing together implementation partners to deepen their expertise in our B2B platform, which has already generated new qualified opportunities, reinforcing our confidence that this channel can become an increasingly important source of enterprise demand. Another important shift is how AI is influencing enterprise buying decisions. Today, AI is no longer viewed as an incremental feature. It has become a prerequisite in virtually every RFP as customers increasingly evaluate platforms based on their ability to support future AI-driven commerce. This is also shaping how we position the broader VTEX product suite. While customers typically prioritize modernizing the core commerce foundation first, the response to our CX Platform during enterprise evaluations has been positive. We are increasingly bundling into strategic enterprise proposals, creating a natural path to expand customer adoption over time while further differentiating VTEX from traditional commerce vendors.

Europe is following a similar trajectory. We have become increasingly disciplined in how we deploy commercial resources. Rather than pursuing smaller opportunities across every market, we're concentrating our investments where we see stronger enterprise demand and greater long-term expansion opportunities. The early results are encouraging. We're increasingly winning large, recognizable enterprise brands that choose to begin with a single country or region before expanding their operations across additional markets. We believe this land and expand motion plays directly to the strengths of our platform and creates long-term value. We are also pleased to announce the renewal of our long-term partnership with OBI, our first customers in Germany. Beyond expanding into additional countries over the years, OBI has become an important reference customer in the region, helping establish our credibility with other large enterprises and opening new commercial opportunities.

It is a strong example on how our relationship continue to deepen over time as customers expand their business on the VTEX Commerce Platform. Taken together, our international strategy is advancing. We continue to improve the quality of our pipeline, compete successfully against global incumbents, and build a growing base of enterprise customers that can expand with us for many years to come. B2B remains one of our most durable sources of growth. The foundation of our B2B strategy is a philosophy we have come to describe as channel-agnostic digitalization. B2B buyers are not an homogeneous group. A carpenter ordering building materials wants to send a WhatsApp audio message. A procurement manager at a large distributor wants a self-service portal. A field sales rep wants to generate a quote on a mobile device while standing in front of a client.

Our platform processes all of this input natively without forcing buyers or sellers into a workflow that does not fit how they actually operate. This is the core reason we win in complex B2B environments, and it is increasingly the first thing prospects mention when they choose VTEX over alternatives. Looking ahead, we want to be direct with investors about where we are investing and why. We have built what we believe is the strongest B2B self-service commerce platform in our market. The gap we are actively closing is on the tools that give field sales reps, managers, and account teams the real-time visibility and AI assistant intelligence they need to work more effectively. Our objective is to offer the best solution in the market for those agents.

One where a rep can see which clients are active, which have lapsed, which logged into the portal without converting, and which accounts represent the highest probability opportunity on any given day. Combined with our CX Platform and our self-service capabilities, this will give VTEX a unified AI-native stack that covers the full B2B commercial workflow from the first buyer interaction to the closed order. On top of a strong demand for B2B digitalization across global markets, recent customer activity in Brazil and Latin America reflects the breadth of this opportunity. Whirlpool's B2B expansion in Brazil and Electrolux's launch in Chile demonstrate how our existing enterprise relationships convert into B2B growth across geographies. Moving to the VTEX Ads Platform. We continue building strong momentum during the second quarter.

On the product side, we continue expanding our Ads Platform with AI-driven campaign creation, automated budget management, improved attribution, and AI-generated creative assets, bringing VTEX Ads Platform closer to the capability expected from the world's leading retail media platforms. Commercially, we expanded our international sales presence, established active relationships with leading global agency groups such as WPP, Publicis, and Omnicom, and strengthened our ecosystem through partnerships, including Magnite, among others. Together, these initiatives expand both advertiser demand and available inventory as we continue building a differentiated omnichannel retail media network. We're also seeing encouraging demand for new verticals. Prescription portals and health platforms in particular are generating strong interest from pharmaceutical advertisers. This vertical creates a differentiated inventory opportunity that does not exist on generalist retail media networks. Our fourth growth driver is AI, which today runs on two fronts.

The VTEX CX Platform, already a revenue contributor, and the AI Workspace, which points to where the entire platform is going. Starting with our CX Platform, the second quarter demonstrated not only strong product momentum, but also a business model that is scaling efficiently. Since VTEX DAY, the VTEX CX Platform has recorded more than 200 trial activations through our trial-led go-to-market strategy. The results have been compelling. Average sales cycles from the solution have declined by more than 50% from approximately 9 days to roughly 40, while implementation time has been reduced from 30 days to 1 week. These are structural improvements that directly reflect the advantage of native integration with the core commerce platform. On top of this, the VTEX CX Platform operational performance continues to improve.

Our AI agents are sustaining conversations containment rate above 92% and problem resolution rates above 80%, while directly influencing GMV through payment recovery, abandoned cart rescue, and cross-selling. While it's still early, these results provide encouraging evidence of the platform value generation for our customers. The VTEX CX Platform also continues to expand beyond its initial use cases and our installed base. During the quarter, we introduced our first integrated B2B agents, increased adoption through the web channel, expanded across Mexico and the broader region, signed our first European customers, and continue winning standalone deployments. Turning to the second front, the AI Workspace. Since introduction, AI Workspace and our first pioneer agents at VTEX DAY, we have expanded the platform with new capabilities across merchandising, content, fulfillment, and commercial analytics.

These include My Assistant, our orchestration layer that coordinates multiple AI agents through a single interface, allowing teams to execute business objectives through natural language instead of manual configuration. Our vision remains clear. We're not building isolated AI features. We are building the AI native commerce suite. We now have more than 100 enterprise customers in the AI Workspace wait list, but we intentionally began with a small group through our pioneer program. Our product and engineering teams are working alongside these customers to maximize operational value and help shape the next generation of the platform. We are not yet reporting operational or financial contribution from AI Workspace, but the foundation we're building today gives us confidence that adoption will be durable and scalable over time. Our ecosystem is also embracing the AI journey.