VTEX Form 6-K Summary
Filing date: February 24, 2022. The filing reports VTEX’s IFRS consolidated results for the year ended December 31, 2021, compared with 2020. Annual financial statements are presented in thousands of U.S. dollars; fourth-quarter results are unaudited.
Business context and reporting period
VTEX provides a software-as-a-service digital commerce platform for enterprise brands and retailers, including online stores, order management, marketplaces and related ecosystem integrations. As of December 31, 2021, VTEX served more than 2,400 customers and supported over 3,200 active online stores across 38 countries. Approximately 81% of GMV came from large, blue-chip customers.
Subscription revenue represented approximately 93.0% of fourth-quarter revenue. VTEX completed its initial public offering in July 2021, receiving net proceeds of approximately $296.3 million.
Key financial metrics
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Total revenue | $125.8 million | $98.7 million | +27.5% |
| Subscription revenue | $118.5 million | $93.4 million | +26.9% |
| Services revenue | $7.3 million | $5.3 million | +37.6% |
| Gross profit | $76.2 million | $63.8 million | +19.4% |
| Gross margin | 60.6% | 64.7% | Down 4.1 percentage points |
| Operating income (loss) | $(65.9) million | $6.5 million | Declined materially |
| Net income (loss) | $(60.5) million | $(0.8) million | Loss widened |
| Basic and diluted loss per share | $(0.333) | $(0.005) | Loss widened |
| Net cash used in operating activities | $(53.0) million | $11.2 million provided | Turned negative |
| Capital expenditures | $1.8 million | $1.6 million | + approximately 12% |
Fourth-quarter revenue was $37.1 million, up 27.5% year over year, while gross profit was $23.4 million and gross margin was 62.9%, compared with 59.3% in the fourth quarter of 2020. Fourth-quarter operating loss was $13.1 million and net loss was $10.6 million.
GMV increased to $9.7 billion in 2021 from $7.5 billion in 2020, representing growth of 29.1% in reported U.S. dollars and 31.1% on an FX-neutral basis. Fourth-quarter GMV was $2.9 billion, up 14.7% in U.S. dollars and 16.1% on an FX-neutral basis.
Liquidity, debt and cash flow
- Cash and cash equivalents were $121.0 million at December 31, 2021, compared with $58.6 million at December 31, 2020.
- Marketable securities and short-term investments were $177.2 million, compared with $17.0 million of marketable securities in 2020. Cash, short-term investments and restricted cash totaled approximately $299.4 million.
- Loans and financing totaled $3.3 million, including $2.1 million current and $1.2 million non-current, compared with $6.4 million at year-end 2020.
- Lease liabilities totaled $6.0 million. Accounts payable related to acquisition earn-outs totaled $5.0 million.
- Operating cash flow was negatively affected by the $60.5 million net loss and working-capital investment, including a $16.7 million increase in trade receivables. Investing cash outflow of $166.8 million primarily reflected purchases of short-term investments of $177.8 million and $5.7 million for acquisitions.
- Financing cash inflow of $283.7 million primarily reflected net IPO proceeds of $296.3 million. Year-end shareholders’ equity was $327.2 million attributable to VTEX shareholders.
Material changes versus the prior comparable period
- Revenue and GMV continued to grow, but revenue growth slowed from the exceptional 2020 e-commerce acceleration.
- Gross margin declined annually because hosting and related infrastructure costs increased faster than revenue; management reported $27.7 million of IT and hosting costs in 2021, up 41.8%.
- Operating expenses expanded substantially to support international growth: general and administrative expense increased 128.4%, sales and marketing increased 166.4%, and research and development increased 137.3%.
- Sales and marketing and research and development represented 50.5% and 35.9% of annual revenue, respectively, compared with 24.2% and 19.3% in 2020.
- Share-based compensation expense, including taxes and social charges, increased to approximately $19.6 million from $3.3 million. Remaining unamortized compensation cost was approximately $27.0 million, plus $0.9 million related to the Loja Integrada plan.
- Intangible assets increased to $33.6 million from $15.1 million, primarily reflecting acquisitions including Workarea and Suiteshare; goodwill increased to $22.4 million from $10.6 million.
Guidance, outlook, management commentary and risks
- Management expects e-commerce adoption to continue structurally but does not expect the same growth rates seen during the pandemic-related acceleration. Revenue may experience increased near-term fluctuations as e-commerce growth normalizes and physical retail reopens.
- Management expects to continue investing in sales, marketing, research and development, new products and international expansion.
- Capital expenditures are budgeted at approximately $2.0 million for 2022. Management expects to fund capital expenditure needs for at least the next 12 months with operating resources and existing cash and cash equivalents. The filing does not provide formal revenue, profitability or EBITDA guidance.
- Key risks include foreign-exchange volatility across Latin American markets, customer and market adoption, post-pandemic normalization, execution of international expansion, rising hosting and personnel costs, continued operating losses and negative operating cash flow.
- VTEX uses foreign-exchange derivatives for hedging rather than speculation. It is exposed to currency, interest-rate, credit and liquidity risks. The filing reports no off-balance-sheet arrangements.
- Probable litigation contingencies totaled $86,000 at year-end 2021; possible contingencies not accrued totaled $322,000.
Most important facts for investors to verify
- Whether revenue and GMV growth can be sustained as pandemic-related e-commerce acceleration normalizes.
- The pace at which sales and marketing, research and development and general and administrative investments translate into customer growth and operating leverage.
- Cash burn, working-capital requirements and the timing of a return to positive operating cash flow.
- The impact of hosting-cost inflation and foreign-exchange movements on gross margin and reported revenue.
- The future effect of share-based compensation, including approximately $27.9 million of disclosed unamortized costs across VTEX and Loja Integrada.
- Acquisition performance, including earn-out obligations and the carrying value of goodwill and other acquired intangible assets.