Normalized EBITDA of BRL 33.7 million in Q2 2024 and BRL 56.8 million in H1 2024
Strict cost control led G&A as % of revenues to 14.5% in H1 2024 from 18.5% in H1 2023
Promising early results of Zenvia Customer Cloud soft launch, with healthy levels of recurring revenue, churn and crossed adoption
SÃO PAULO, Sept. 5, 2024 /PRNewswire/ -- Zenvia Inc. (NASDAQ:ZENV), the leading cloud-based CX solution in Latin America empowering companies to craft personal, engaging and fluid experiences throughout the customer journey, today reported its operational and financial metrics for the second quarter of 2024.
Cassio Bobsin, Founder & CEO of ZENVIA, said: "During the quarter, we kept our focus on rolling out Zenvia Customer Cloud, and we are pleased to report that the launch has been met with enthusiasm from our clients. We also released in June our cutting-edge Generative AI Chatbot solution, which delivers value in just under six minutes and, within two months of its launch, has already resulted in 99 chatbots developed by companies across eight sectors in Latin America. We are excited about the opportunities these innovations present and remain committed to driving continued growth and strengthening our leadership position in the market. Our team's dedication and the positive response from our clients underscore our confidence in the transformative potential of these solutions and our ability to exceed expectations as we move forward."
Shay Chor, CFO & IRO of ZENVIA, said: "We achieved another quarter of solid revenue growth in Q2 2024, with margins remaining within our guidance range, despite the fact that the revenue increase was mainly driven by large enterprises in both segments, which typically have lower margins. A key highlight of the quarter is the significant reduction in G&A expenses, which was down more than 10% YoY in Q2, attesting our continued commitment to rigorous cost control, and positively impacting our EBITDA. Looking ahead, we are focused on maintaining this momentum, rolling out Zenvia Customer Cloud and unlocking profitable value from our operations to keep deleveraging the business."
Key Financial Metrics (BRL MM and %)
Q2 2024
Q2 2023
YoY
H1 2024
H1 2023
YTD
Revenues
231.2
192.9
19.8 %
443.8
372.0
19.3 %
Gross Profit
87.5
70.4
24.4 %
168.4
149.3
12.8 %
Gross Margin
37.9 %
36.5 %
1.4p.p.
37.9 %
40.1 %
-2.2p.p.
Non-GAAP Adjusted Gross Profit(1)
100.2
83.2
20.4 %
193.8
175.7
10.3 %
Non-GAAP Adjusted Gross Margin(2)
43.3 %
43.1 %
0.2p.p.
43.7 %
47.2 %
-3.6p.p.
Operating Loss (EBIT)
10.0
-7.0
n.m
0.3
-19.3
n.m
Adjusted EBITDA(3)(5)
33.6
14.9
125.5 %
46.7
22.7
105.3 %
Normalized EBITDA(4)(5)
33.7
14.9
126.1 %
56.8
22.7
150.0 %
Loss of the Period
(15.9)
(15.2)
5.1 %
(72.2)
(31.9)
126.0 %
Cash Balance
89.4
142.6
-37.3 %
89.4
142.6
-37.3 %
Net cash flow from (used in) operating activities
18.1
32.8
-44.6 %
5.3
132.3
-96.0 %
Total Active Customers(6)
11,849
14,740
-19.6 %
11,849
14,740
-19.6 %
(1) For a reconciliation of our Non-GAAP Gross Profit to Gross Profit, see Selected Financial Data section below.(2) We calculate Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by revenue.(3) For a reconciliation of our Adjusted EBITDA to Loss for the Period, see Selected Financial Data section below.(4) For a reconciliation of our Normalized EBITDA to Loss for the Period, see Selected Financial Data section below.(5) In December 2023, the Company identified that the allowance for expected credit losses and cost with amortization of intangibles was understated. The calculation was reassessed in the annual financial statements and Management has retrospectively revised the first six months of 2023 for comparison purposes.(6) We define an Active Customer as an account (based on a corporate taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an Inactive Customer.
Highlights Q2 2024
Revenues totaled BRL 231.2 million, up 19.8% when compared to BRL 192.9 million in Q2 2023 as a result of both SaaS (+15.6% YoY) and CPaaS (+22.1%) expansion. CPaaS and SaaS saw growth mainly from large enterprise customers.
Non-GAAP Adjusted Gross Profit of BRL 100.2 million was up 20.4% YoY while Non-GAAP Adjusted Gross Margin was mainly stable, up by 0.2 percentage points to the expected level of 43.3% YoY as highlighted in our guidance for 2024. This decrease is due to:
(i) Higher mix of CPaaS in the period, principally from large enterprises with lower margins; and(ii) Lower SaaS margins, which also grew more in large enterprises with lower margins.
Total number of active customers decreased to 11.8k, being 6.8k from SaaS and 5.5k from CPaaS. This decrease reflects a client-base cleanup, combining the rollout of Zenvia Customer Cloud - that unifies SaaS clients' contracts - with a drop in smaller CPaaS clients which used lower volumes of SMS and were less profitable.
Normalized EBITDA was positive BRL 33.7 million in the quarter, up 126.1% from Q2 2023, benefiting from higher revenues and strict expense control.
On June 19, we announced the launch of our Generative AI Chatbot, a game-changing solution to revolutionize chatbot development, making it as simple and intuitive as a personal interaction and accessible to businesses of all sizes looking to improve and automate customer service. Key highlights include easy customization and efficient integration with multiple communication channels, ensuring a superior solution for all customer needs. Within two months of its launch, 99 chatbots were already developed by companies across eight industry sectors in Latin America.
The migration of the client base to Zenvia Customer Cloud has already started, with a full rollout expected by the H1 2025. To date, we could observe healthy levels of recurring revenue, churn, and cross-adoption.
Highlights H1 2024
Revenues totaled BRL 443.8 million, up 19.3% when compared to BRL 372.0 million in H1 2023 as a result of both SaaS (+13.8% YTD) and CPaaS (+22.5%) expansion.
Non-GAAP Adjusted Gross Profit of BRL 193.8 million was up 10.3% YTD while Non-GAAP Adjusted Gross Margin was down 3.6 percentage points YoY to the expected level of 43.7%.
Normalized EBITDA was positive BRL 56.8 million in the quarter, up 150.0% from H1 2023, which is in line with our expectations and in line to deliver the full year guidance of BRL 120 million to BRL 140 million.
SaaS Business
SaaS Key Operational & Financial Metrics (BRL MM and %)
Q2 2024
Q2 2023
YoY
H1 2024
H1 2023
YTD
Revenues
78.0
67.5
15.6 %
154.8
136.0
13.8 %
Gross Profit
29.9
29.1
2.5 %
60.4
62.1
-2.6 %
Gross Margin
38.3 %
43.2 %
-4.9p.p.
39.0 %
45.6 %
-6.6p.p.
Non-GAAP Gross Profit(1)
42.5
42.0
1.3 %
85.9
88.4
-2.9 %
Non-GAAP Gross Margin(2)
54.5 %
62.2 %
-7.7p.p.
55.5 %
65.0 %
-9.5p.p.
Net Revenue Expansion (NRE)
100 %
116 %
-16p.p.
100 %
116 %
-16p.p.
Total Active Customers(3)
6,770
6,888
-1.7 %
6,770
6,888
-1.7 %
(1) For a reconciliation of the Non-GAAP Adjusted Gross Profit of our SaaS business segment to Gross Profit of our SaaS business segment, see Selected Financial Data section below.(2) We calculate Non-GAAP Adjusted Gross Margin of our SaaS business segment as Non-GAAP Gross Profit of our SaaS business segment divided by revenue of our SaaS business segment.(3) We define an Active Customer as an account (based on a corporate taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an Inactive Customer.
In Q2 2024, our SaaS business Revenue went up 15.6% YoY to BRL 78.0 million, compared to BRL 67.5 million in Q2 2023, primarily from large enterprise customers, especially in the Consulting business that has a low base of comparison in Q2 2023. In H1 2024, our SaaS business revenue increased 13.8%.
As a result, Q2 2024 Non-GAAP Adjusted Gross Profit was mainly stable, up 1.3% YoY to BRL 42.5 million from BRL 42.0 million. It is worth noting that the soft launch of Zenvia Customer Cloud began at the end of Q1 2024, and the team is focused on rolling out all functionalities by Q4 2024, when we expect to launch the full marketing campaign.
The revenue increase came mostly from large enterprises that carry lower margins, leading to lower Non-GAAP Adjusted Gross Margin from SaaS. Despite being down by 7.7 percentage points YoY to 54.5%, this margin level is expected, given that the large enterprise business carries lower margins when compared to the pure software business of circa 50%. For the same reason, in H1 2024, our Non-GAAP Adjusted Gross Profit was down 2.9%, which resulted in an expected decrease of 9.5 percentage points in our Non-GAAP Adjusted Gross Margin.
CPaaS Business
CPaaS Key Operational & Financial Metrics (BRL MM and %)
Q2 2024
Q2 2023
YoY
H1 2024
H1 2023
YTD
Revenues
153.2
125.5
22.1 %
289.0
235.9
22.5 %
Non-GAAP Gross Profit(1)
57.7
41.2
39.8 %
108.0
87.3
23.7 %
Non-GAAP Gross Margin(2)
37.6 %
32.9 %
4.8p.p.
37.4 %
37.0 %
0.4p.p.
Total Active Customers(3)
5,506
8,647
-36.3 %
5,506
8,647
-36.3 %
(1) For a reconciliation of the Non-GAAP Adjusted Gross Profit of our CPaaS business segment to Gross Profit of our CPaaS business segment, see Selected Financial Data section below.(2) We calculate Non-GAAP Adjusted Gross Margin of our CPaaS business segment as Non-GAAP Gross Profit ...
