VTEX Form 6-K Summary
Filing date: November 17, 2021. Reporting period: third and nine months ended September 30, 2021. The unaudited interim financial information was prepared under IAS 34. VTEX operates a software-as-a-service digital commerce platform for enterprise brands and retailers.
Key Financial and Operating Metrics
| Metric | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 |
|---|---|---|---|---|
| GMV | US$2,284.8 million | US$2,131.7 million | US$6,760.2 million | US$4,954.9 million |
| Revenue | US$31.9 million | US$27.7 million | US$88.7 million | US$69.6 million |
| Revenue growth, FX-neutral | 12.3% | 139.5% | 29.9% | 102.8% |
| Subscription revenue | US$29.6 million | US$26.3 million | US$83.9 million | US$65.7 million |
| Non-GAAP subscription gross profit | US$20.2 million | US$19.2 million | US$56.7 million | US$47.8 million |
| Non-GAAP subscription gross margin | 68.2% | 73.1% | 67.5% | 72.7% |
| Net income (loss) | (US$22.0 million) | US$3.0 million | (US$49.9 million) | US$3.4 million |
| Non-GAAP operating income (loss) | (US$13.3 million) | US$6.3 million | (US$32.2 million) | US$10.5 million |
| Net cash from operating activities | Not provided for the quarter | Not provided for the quarter | (US$31.8 million) | US$8.3 million |
| Non-GAAP free cash flow | (US$10.4 million) | US$11.6 million | (US$33.1 million) | US$7.1 million |
| Employees | 1,624 | 847 | 1,624 | 847 |
Q3 reported revenue increased 15.2% year over year, while GMV increased 7.2% in U.S. dollars and 4.2% on an FX-neutral basis. Subscription revenue represented 93.0% of total revenue. Reported gross profit was US$19.1 million, compared with US$18.9 million in Q3 2020; the filing does not provide a consolidated gross margin percentage in the highlighted metrics.
Liquidity, Debt and Balance Sheet
- Cash and cash equivalents were US$321.6 million at September 30, 2021, compared with US$58.6 million at December 31, 2020.
- Total current assets were US$369.5 million and total current liabilities were US$71.6 million. The filing does not provide a formal current ratio.
- Total loans and financing were US$3.9 million, comprising US$2.0 million current and US$1.9 million non-current.
- Lease liabilities totaled US$5.8 million.
- Cash increased primarily from US$296.3 million of net initial public offering proceeds and other financing activities. Nine-month net cash provided by financing activities was US$285.0 million.
- Equity attributable to VTEX shareholders was US$335.1 million at September 30, 2021, compared with US$75.6 million at year-end 2020.
Material Changes Versus Prior Comparable Period
- Operating expenses increased materially, with Q3 sales and marketing expense rising to US$19.3 million from US$5.3 million, and research and development expense rising to US$14.2 million from US$4.5 million.
- Q3 IFRS operating loss was US$24.4 million versus operating income of US$5.5 million in Q3 2020. The nine-month operating loss was US$52.8 million versus income of US$8.6 million.
- Q3 net loss was US$22.0 million versus net income of US$3.0 million; nine-month net loss was US$49.9 million versus net income of US$3.4 million.
- Operating cash flow deteriorated to an outflow of US$31.8 million for the first nine months, compared with an inflow of US$8.3 million in the prior-year period.
- Non-GAAP subscription gross margin declined to 68.2% in Q3 from 73.1%, reflecting investments in cybersecurity, privacy and compliance associated with global expansion and becoming a public company.
- Headcount increased 91.7% year over year to 1,624 employees.
Outlook, Commentary and Risks
- Management expects Q4 2021 revenue of US$35.3 million to US$37.3 million, implying approximately 27% year-over-year FX-neutral growth at the midpoint.
- Fiscal 2021 revenue guidance of US$124 million to US$126 million was reaffirmed, assuming current-period foreign exchange rates.
- Management expects continued growth in new stores and cited an implementation backlog. It also expects online purchasing trends in Latin America to remain durable despite the reopening of physical retail.
- Supply-chain challenges could affect Q4 commerce, including Black Friday, Cyber Monday and the holiday season.
- Management intends to continue investing in sales, marketing, research and development, global expansion and its leadership position in Latin America.
- Product and partnership developments included seller self-service onboarding, marketplace enhancements, Mercado Libre integration in Brazil, AWS and Facebook initiatives, and subsequent-quarter partnerships with Stripe and McFadyen.
- The outlook is forward-looking and subject to risks including foreign-exchange fluctuations, economic conditions, supply-chain disruption, execution of global expansion, customer and store implementations, and factors outside VTEX’s control.
- The filing presents non-GAAP measures that are not IFRS measures and may not be comparable with those of other companies. The financial information is unaudited and the announcement does not constitute a complete IAS 34 interim financial report.
Important Investor Verification Items
- Verify the company’s ability to sustain revenue growth while reducing operating losses and negative free cash flow.
- Monitor subscription gross margin and the ongoing cost of cybersecurity, compliance, infrastructure and international expansion.
- Assess progress against Q4 revenue guidance and the reaffirmed FY2021 revenue target of US$124 million to US$126 million.
- Review cash-burn rates, use of IPO proceeds, working-capital requirements and future financing needs.
- Evaluate exposure to foreign-exchange movements, supply-chain constraints, retail reopening trends and execution risks in the implementation backlog.
- Reconcile non-GAAP results with IFRS results, including share-based compensation, acquisition-related amortization and IPO expenses.