Zenvia Reports Q2 2022 Results
Strong top-line increase from organic growth and M&A integration
Net Revenues up 50% YoY with Adjusted Gross Margin expanding 500bps to 38% in Q2
Numbers are within the full-year guidance range
New reporting breakdown by SaaS and CPaaS to increase transparency and simplify understanding
SÃO PAULO, Aug. 15, 2022 /PRNewswire/ -- Zenvia Inc. (NASDAQ: ZENV), the leading cloud-based CX communications platform in Latin America, empowering companies to transform their existing communications with end customers along their life cycle, today reported its second quarter of 2022 operational and financial metrics.
Cassio Bobsin, Founder & CEO of ZENVIA, said: "A couple of weeks ago, we held an Investor Day on Nasdaq where we shared our long-term strategy and how we envision the future of Customer Experience (CX). We believe that since the rise of civilization and modern society, we've been building organizations based on processes designed for scale and efficiency. This was a great achievement of the industrial revolution. The world is in process of transformation, and value creation has shifted from production efficiency to customer efficiency. Humans are not designed to interact with bureaucratic organizations. We are designed to interact with other human beings. Ultimately, people should be able to talk to companies as if they were also humans. That's why Zenvia is shaping a new world of experiences."
Shay Chor, CFO & IRO of ZENVIA, said: "Starting Q2 2022, and similar to the approach of our Investor Day, we will break down revenues, gross profit and margin by SaaS and CPaaS, our two main business lines. This breakdown will allow for a deeper glimpse into our business and is more aligned with how we understand and manage our company, especially following the organizational restructuring announced last June. It also demonstrates that we are effectively a SaaS company as over half of our gross margin already comes from the software business. As we finished up the first half of 2022, Zenvia is smarter and more robust than ever. Our top-line and gross margin results attest that we are on the right path to creating value. Our client base grew 37%, bringing revenues up 50%, while our adjusted gross profit rose 73% and the gross margin jumped 500bps. We just started cross-selling our solutions and tools to a growing client base. R&D expenses also grew to represent about 12% of revenues. We expect these expenses to remain at this level for the next couple of years, following the launch of new products that will significantly leverage our growth and market positioning. And, despite the current uncertain environment and the challenges involving tech companies, we are reaffirming our guidance for the year."
Key operating highlights
Our Business Lines
According to IDC, the total addressable market (TAM) in Latin America for SaaS will be $5.4 billion in 2026, growing from $3.2 billion in 2021, while the CPaaS will grow from $0.9 billion in 2021 to $3.6 billion in 2026. Both markets will sum up to $9.0 billion in 2026, from $4.0 billion in 2021.
According to IDC, Zenvia was already among Latin America's top 10 SaaS players by the end of 2021, with 2.2% of market share. This means we have already changed the customer experience of over 40 million people in LatAm with our SaaS solutions, compared to a total population of 925 million in the region, which means that we can still change the experience of 95% of them.
The Latin American SaaS market is expected to reach US$5.4 billion in value by 2026, with a market size of $2.2 billion, and a CAGR of 12.0% and 19.3%, respectively. Our SaaS revenues have been growing faster than the market as we gain market share. Our products are designed to solve the pains of LatAm businesses, from price point to suitability, giving us a competitive advantage. Our offering competes with global suites that are not tropicalized for local needs and are usually charged in US dollars. Furthermore, our offering off-the shelf promotes an easy adoption and a short sales cycle.
Our SaaS Portfolio
Our SaaS solutions can be used alone or combined, allowing companies to start a program in a really simple way in a matter of minutes, or they can go all the way to a fully integrated, automated, and intelligent customer journey. We also provide CX Tools that can be used to integrate and automate the customer experiences in various ways. Our main tools are APIs, Bots, Natural-language understanding (NLU) and Docs. The Quantum platform connects all our solutions and tools with the client's systems and processes. Companies can access our platform and start choosing from any solution or tool. As they go deeper into adopting multiple parts of the platform, we can break down all CX barriers and unlock the true potential for end customers.
The population in Latin America is highly connected and a heavy user of social media and social networks. This leads companies to centralize the communication with end customers through these digital channels, mainly WhatsApp and Instagram, which are the most popular and widely used. Even though SMS is still currently responsible for most of the CPaaS volume in the region, WhatsApp and Instagram are growing at a much faster pace.
To reach the population through multiple channels, companies need to
According to IDC, Zenvia was the top CPaaS player in Latin America by the end of 2021, with 13% of market share. The CPaaS Latin American market is expected to multiply by roughly 3x, reaching $3.1 billion in size and $3.5 billion in TAM by 2026. It means that although the addressable market is expected to continue growing at an accelerated pace, white space is limited. We expect to maintain our leadership position.
During H1 2022, consolidated revenues amounted to R$401.5 million, up 55.4% YoY, and an organic growth rate of 28.2%. This reflects a higher number of active customers (+37% YoY) and strong growth of our SaaS business. The H1 2022 results fully consolidate D1 and SenseData acquisitions and consider only two months of Movidesk, which jointly contributed with BRL 70.4 million to our consolidated net revenues.
For H1 2022, Adjusted Gross Profit rose 84.3% to BRL 143.8 million, while Adjusted Gross Margin expanded 570bps to 35.8%.
Non-GAAP Adjusted EBITDA in the first six months of the year was negative BRL 22.7 million, including higher R&D expenses and the earn-out expenses related to the acquisitions of SenseData and Sirena. Excluding these expenses, our Normalized EBITDA in H1 2022 was negative BRL 9.0 million.
Additional information regarding Zenvia can be found at https://investors.zenvia.com.
Click here to see our full Investor Day Video Presentation or go to our investor relations website, in the events section, at the following link: https://investors.zenvia.com/news-events/company-events/
SELECTED FINANCIAL DATA
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