UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2023
Commission File Number 001-40626
VTEX
(Exact name of registrant as specified in its charter)
N/A
(Translation of registrant’s name into English)
125 Kingsway, WC2B 6NH
London, United Kingdom
(Address of principal executive
office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Table of Contents
PART I - FINANCIAL INFORMATION |
3
|
|
Item 1 - Financial Statements |
3
|
|
Condensed consolidated interim balance sheets |
4
|
|
Condensed consolidated interim statements of profit or loss |
6
|
|
Condensed consolidated interim statements of changes in shareholder’s equity |
7
|
|
Condensed consolidated interim statements of cash flows |
8
|
|
Notes to condensed consolidated interim financial statements |
9
|
|
Item 2 - Management’s discussion and analysis of financial condition and results of operations |
29
|
|
PART II - OTHER INFORMATION |
42
|
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Index to Financial Statements
VTEX
Condensed consolidated interim financial statements
Condensed consolidated interim balance sheets
Condensed consolidated interim statements of profit or loss
Condensed consolidated interim statements of changes in shareholder’s equity
Condensed consolidated interim statements of cash flows
Notes to the condensed consolidated interim financial statements
VTEX
Condensed consolidated interim balance sheet
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
100,504
|
|
|
|
24,394
|
|
Restricted cash
|
|
|
-
|
|
|
|
1,608
|
|
Short-term investments
|
|
|
122,002
|
|
|
|
214,164
|
|
Trade receivables
|
|
|
43,432
|
|
|
|
36,844
|
|
Recoverable taxes
|
|
|
4,525
|
|
|
|
5,122
|
|
Deferred commissions
|
|
|
831
|
|
|
|
663
|
|
Prepaid expenses
|
|
|
4,166
|
|
|
|
4,152
|
|
Derivative financial instruments
|
|
|
-
|
|
|
|
117
|
|
Other current assets
|
|
|
45
|
|
|
|
93
|
|
Total current assets
|
|
|
275,505
|
|
|
|
287,157
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
6,437
|
|
|
|
5,432
|
|
Deferred tax assets
|
|
|
21,836
|
|
|
|
17,710
|
|
Prepaid expenses
|
|
|
145
|
|
|
|
204
|
|
Recoverable taxes
|
|
|
4,151
|
|
|
|
3,334
|
|
Deferred commissions
|
|
|
2,495
|
|
|
|
1,790
|
|
Other non-current assets
|
|
|
987
|
|
|
|
957
|
|
Right-of-use assets
|
|
|
4,169
|
|
|
|
4,818
|
|
Property and equipment, net
|
|
|
3,474
|
|
|
|
3,909
|
|
Intangible assets, net
|
|
|
31,397
|
|
|
|
31,210
|
|
Investments in joint venture
|
|
|
825
|
|
|
|
1,152
|
|
Total non-current assets
|
|
|
75,916
|
|
|
|
70,516
|
|
Total assets
|
|
|
351,421
|
|
|
|
357,673
|
|
The above condensed consolidated interim balance sheet should be read in conjunction with the accompanying notes.
VTEX
Condensed consolidated interim balance sheet
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
LIABILITIES
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
35,372
|
|
|
|
34,136
|
|
Loans and financing
|
|
|
-
|
|
|
|
1,153
|
|
Taxes payable
|
|
|
4,989
|
|
|
|
4,128
|
|
Lease liabilities
|
|
|
2,002
|
|
|
|
1,898
|
|
Deferred revenue
|
|
|
24,516
|
|
|
|
20,332
|
|
Derivative financial instruments
|
|
|
35
|
|
|
|
-
|
|
Accounts payable from acquisition of subsidiaries
|
|
|
-
|
|
|
|
299
|
|
Other current liabilities
|
|
|
17
|
|
|
|
70
|
|
Total current liabilities
|
|
|
66,931
|
|
|
|
62,016
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
1,013
|
|
|
|
511
|
|
Taxes payable
|
|
|
160
|
|
|
|
160
|
|
Lease liabilities
|
|
|
3,301
|
|
|
|
3,737
|
|
Deferred revenue
|
|
|
18,473
|
|
|
|
13,923
|
|
Deferred tax liabilities
|
|
|
2,745
|
|
|
|
2,464
|
|
Other non-current liabilities
|
|
|
224
|
|
|
|
185
|
|
Total non-current liabilities
|
|
|
25,916
|
|
|
|
20,980
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Issued Capital
|
|
|
19
|
|
|
|
19
|
|
Capital reserve
|
|
|
385,015
|
|
|
|
390,885
|
|
Other reserves
|
|
|
4,389
|
|
|
|
127
|
|
Accumulated losses
|
|
|
(130,912
|
)
|
|
|
(116,373
|
)
|
Equity attributable to VTEX’s shareholders
|
|
|
258,511
|
|
|
|
274,658
|
|
Non-controlling interests
|
|
|
63
|
|
|
|
19
|
|
Total shareholders’ equity
|
|
|
258,574
|
|
|
|
274,677
|
|
Total liabilities and equity
|
|
|
351,421
|
|
|
|
357,673
|
|
The above condensed consolidated interim balance sheet should be read in conjunction with the accompanying notes.
VTEX
Condensed consolidated interim statements of profit or loss
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30, 2023
|
|
|
June 30, 2022
|
|
|
June 30, 2023
|
|
|
June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription revenue
|
|
|
44,772
|
|
|
|
36,649
|
|
|
|
84,534
|
|
|
|
69,230
|
|
Services revenue
|
|
|
3,114
|
|
|
|
2,065
|
|
|
|
5,634
|
|
|
|
4,151
|
|
Total revenue
|
|
|
47,886
|
|
|
|
38,714
|
|
|
|
90,168
|
|
|
|
73,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription cost
|
|
|
(11,153
|
)
|
|
|
(10,166
|
)
|
|
|
(21,553
|
)
|
|
|
(20,162
|
)
|
Services cost
|
|
|
(4,353
|
)
|
|
|
(2,842
|
)
|
|
|
(8,519
|
)
|
|
|
(5,449
|
)
|
Total cost
|
|
|
(15,506
|
)
|
|
|
(13,008
|
)
|
|
|
(30,072
|
)
|
|
|
(25,611
|
)
|
Gross profit
|
|
|
32,380
|
|
|
|
25,706
|
|
|
|
60,096
|
|
|
|
47,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
(8,242
|
)
|
|
|
(7,431
|
)
|
|
|
(16,167
|
)
|
|
|
(14,352
|
)
|
Sales and marketing
|
|
|
(14,449
|
)
|
|
|
(21,318
|
)
|
|
|
(29,231
|
)
|
|
|
(39,218
|
)
|
Research and development
|
|
|
(16,305
|
)
|
|
|
(15,409
|
)
|
|
|
(30,264
|
)
|
|
|
(29,334
|
)
|
Other losses
|
|
|
(511
|
)
|
|
|
(474
|
)
|
|
|
(1,265
|
)
|
|
|
(465
|
)
|
Loss from operations
|
|
|
(7,127
|
)
|
|
|
(18,926
|
)
|
|
|
(16,831
|
)
|
|
|
(35,599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
|
|
|
9,240
|
|
|
|
4,696
|
|
|
|
16,599
|
|
|
|
8,988
|
|
Financial expense
|
|
|
(9,126
|
)
|
|
|
(10,122
|
)
|
|
|
(15,029
|
)
|
|
|
(19,135
|
)
|
Financial result, net
|
|
|
114
|
|
|
|
(5,426
|
)
|
|
|
1,570
|
|
|
|
(10,147
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity results
|
|
|
367
|
|
|
|
268
|
|
|
|
708
|
|
|
|
487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax
|
|
|
(6,646
|
)
|
|
|
(24,084
|
)
|
|
|
(14,553
|
)
|
|
|
(45,259
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
(1,697
|
)
|
|
|
(574
|
)
|
|
|
(2,267
|
)
|
|
|
(1,001
|
)
|
Deferred
|
|
|
1,733
|
|
|
|
3,193
|
|
|
|
2,282
|
|
|
|
5,705
|
|
Total income tax
|
|
|
36
|
|
|
|
2,619
|
|
|
|
15
|
|
|
|
4,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
|
(6,610
|
)
|
|
|
(21,465
|
)
|
|
|
(14,538
|
)
|
|
|
(40,555
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to controlling shareholders
|
|
|
(6,611
|
)
|
|
|
(21,464
|
)
|
|
|
(14,539
|
)
|
|
|
(40,553
|
)
|
Non-controlling interest
|
|
|
1
|
|
|
|
(100
|
)
|
|
|
1
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share
|
|
|
(0.035
|
)
|
|
|
(0.112
|
)
|
|
|
(0.077
|
)
|
|
|
(0.212
|
)
|
Diluted loss per share
|
|
|
(0.035
|
)
|
|
|
(0.112
|
)
|
|
|
(0.077
|
)
|
|
|
(0.212
|
)
|
The above condensed consolidated interim statements of profit or loss should be read in conjunction with the accompanying notes
VTEX
Condensed consolidated interim statements of changes in shareholders’ equity
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
|
Issued capital
|
|
|
Capital reserve
|
|
|
Other
reserves
|
|
|
Accumulated
losses
|
|
|
Equity
attributable to
VTEX’s
shareholders
|
|
|
Non-controlling
interests
|
|
|
Total
shareholders’
equity
|
|
At January 1, 2022
|
|
|
19
|
|
|
|
390,466
|
|
|
|
652
|
|
|
|
(63,955
|
)
|
|
|
327,182
|
|
|
|
7
|
|
|
|
327,189
|
|
Net loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(40,553
|
)
|
|
|
(40,553
|
)
|
|
|
(2
|
)
|
|
|
(40,555
|
)
|
Other comprehensive income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
(48
|
)
|
|
|
-
|
|
|
|
(48
|
)
|
|
|
-
|
|
|
|
(48
|
)
|
Total comprehensive loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
(48
|
)
|
|
|
(40,553
|
)
|
|
|
(40,601
|
)
|
|
|
(2
|
)
|
|
|
(40,603
|
) |
Transactions with owners of the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
-
|
|
|
|
28
|
|
|
|
-
|
|
|
|
-
|
|
|
|
28
|
|
|
|
-
|
|
|
|
28
|
|
Issue of ordinary shares as consideration for a business combination
|
|
|
-
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
-
|
|
|
|
3
|
|
Share-based compensation
|
|
|
-
|
|
|
|
4,537
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,537
|
|
|
|
-
|
|
|
|
4,537
|
|
Transactions with non-controlling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
|
5
|
|
Total transactions with owners of the Company
|
|
|
-
|
|
|
|
4,568
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,568
|
|
|
|
5
|
|
|
|
4,573
|
|
At June 30, 2022
|
|
|
19
|
|
|
|
395,034
|
|
|
|
604
|
|
|
|
(104,508
|
)
|
|
|
291,149
|
|
|
|
10
|
|
|
|
291,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1, 2023
|
|
|
19
|
|
|
|
390,885
|
|
|
|
127
|
|
|
|
(116,373
|
)
|
|
|
274,658
|
|
|
|
19
|
|
|
|
274,677
|
|
Net loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(14,539
|
)
|
|
|
(14,539
|
)
|
|
|
1
|
|
|
|
(14,538
|
) |
Other comprehensive income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
4,262
|
|
|
|
-
|
|
|
|
4,262
|
|
|
|
-
|
|
|
|
4,262
|
|
Total comprehensive loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
4,262
|
|
|
|
(14,539
|
)
|
|
|
(10,277
|
)
|
|
|
1
|
|
|
|
(10,276
|
) |
Transactions with owners of the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
-
|
|
|
|
88
|
|
|
|
-
|
|
|
|
-
|
|
|
|
88
|
|
|
|
-
|
|
|
|
88
|
|
Share repurchase program
|
|
|
-
|
|
|
|
(13,841
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(13,841
|
)
|
|
|
-
|
|
|
|
(13,841
|
) |
Share-based compensation
|
|
|
-
|
|
|
|
7,883
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,883
|
|
|
|
-
|
|
|
|
7,883
|
|
Transactions with non-controlling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
43
|
|
|
|
43
|
|
Total transactions with owners of the Company
|
|
|
-
|
|
|
|
(5,870
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,870
|
)
|
|
|
43
|
|
|
|
(5,827
|
) |
At June 30, 2023
|
|
|
19
|
|
|
|
385,015
|
|
|
|
4,389
|
|
|
|
(130,912
|
)
|
|
|
258,511
|
|
|
|
63
|
|
|
|
258,574
|
|
The above condensed consolidated interim statements of changes in shareholders’ equity should be read in conjunction with the accompanying notes
VTEX
Condensed consolidated interim statements of cash flows
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
|
June 30, 2023
|
|
|
June 30, 2022
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
|
(14,538
|
)
|
|
|
(40,555
|
)
|
Adjustments for:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
2,494
|
|
|
|
2,205
|
|
Deferred income tax
|
|
|
(2,282
|
)
|
|
|
(5,705
|
)
|
Loss on disposal of rights of use, property, equipment, and intangible assets
|
|
|
612
|
|
|
|
(126
|
)
|
Expected credit losses from trade receivables
|
|
|
737
|
|
|
|
509
|
|
Share-based compensation
|
|
|
7,621
|
|
|
|
4,537
|
|
Provision for payroll taxes (share-based compensation)
|
|
|
1,320
|
|
|
|
(2,147
|
)
|
Adjustment of hyperinflation
|
|
|
4,860
|
|
|
|
2,079
|
|
Equity results
|
|
|
(708
|
)
|
|
|
(487
|
)
|
Fair value (gains) losses
|
|
|
(5,450
|
)
|
|
|
7,970
|
|
Others and foreign exchange, net
|
|
|
(2,616
|
)
|
|
|
(487
|
)
|
Change in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
(6,609
|
)
|
|
|
2,042
|
|
Recoverable taxes
|
|
|
(119
|
)
|
|
|
(162
|
) |
Prepaid expenses
|
|
|
488
|
|
|
|
3,204
|
|
Other assets
|
|
|
(64
|
)
|
|
|
(164
|
)
|
Accounts payable and accrued expenses
|
|
|
(1,388
|
)
|
|
|
1,086
|
|
Taxes payable
|
|
|
1,108
|
|
|
|
(645
|
)
|
Deferred revenue
|
|
|
6,170
|
|
|
|
(1,541
|
) |
Other liabilities
|
|
|
227
|
|
|
|
368
|
|
Cash used in operating activities
|
|
|
(8,137
|
)
|
|
|
(28,019
|
)
|
Income tax paid
|
|
|
(37
|
)
|
|
|
(603
|
)
|
Net cash used in operating activities
|
|
|
(8,174
|
)
|
|
|
(28,622
|
) |
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Dividends received from joint venture
|
|
|
1,138
|
|
|
|
146
|
|
Purchase of short-term investment
|
|
|
(21,273
|
)
|
|
|
(110,991
|
) |
Redemption of short-term investment
|
|
|
118,311
|
|
|
|
53,057
|
|
Interest and dividend received from short-term investments
|
|
|
1,233
|
|
|
|
297
|
|
Payment of business acquired
|
|
|
-
|
|
|
|
(1,512
|
) |
Acquisitions of property and equipment
|
|
|
(178
|
)
|
|
|
(166
|
) |
Derivative financial instruments
|
|
|
(45
|
)
|
|
|
-
|
|
Net cash provided by (used in) investing activities
|
|
|
99,186
|
|
|
|
(59,169
|
) |
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
|
-
|
|
|
|
(718
|
) |
Changes in restricted cash
|
|
|
1,660
|
|
|
|
575
|
|
Proceeds from the exercise of stock options
|
|
|
88
|
|
|
|
28
|
|
Net-settlement of share-based payment
|
|
|
(932
|
)
|
|
|
(783
|
) |
Buyback of shares
|
|
|
(13,841
|
)
|
|
|
-
|
|
Payment of loans and financing
|
|
|
(1,238
|
)
|
|
|
(1,327
|
) |
Interest paid
|
|
|
(5
|
)
|
|
|
(36
|
) |
Principal elements of lease payments
|
|
|
(751
|
)
|
|
|
(574
|
) |
Lease interest paid
|
|
|
(302
|
)
|
|
|
(351
|
) |
Net cash used in financing activities
|
|
|
(15,321
|
)
|
|
|
(3,186
|
) |
Net increase (decrease) in cash and cash equivalents
|
|
|
75,691
|
|
|
|
(90,977
|
) |
Cash and cash equivalents, beginning of the period
|
|
|
24,394
|
|
|
|
121,006
|
|
Effect of exchange rate changes
|
|
|
419
|
|
|
|
(362
|
)
|
Cash and cash equivalents, end of the period
|
|
|
100,504
|
|
|
|
29,667
|
|
|
|
|
|
|
|
|
|
|
Non-cash transactions:
|
|
|
|
|
|
|
|
|
Lease liabilities arising from obtaining right-of-use assets
|
|
|
85
|
|
|
|
1,020
|
|
Issue of ordinary shares as consideration for a business combination
|
|
|
-
|
|
|
|
3
|
|
Dividends from joint venture used to pay accounts from acquisition of subsidiaries
|
|
|
-
|
|
|
|
448
|
|
Transactions with non-controlling interests
|
|
|
43
|
|
|
|
5
|
|
The above condensed consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
1 |
General information
VTEX (“VTEX” or the “Company”) and its subsidiaries, or collectively referred to as the “Group”, provide a software-as-a-service digital
commerce platform for enterprise brands and retailers. VTEX’s services enable its customers to execute their commerce strategy, including building online stores, integrating and managing orders across channels, and creating marketplaces
to sell products from third-party vendors. The platform is also designed to be the operating system for the commerce ecosystem, enabling enterprise brands and retailers to orchestrate their network of consumers, business partners,
suppliers, and fulfillment providers in one place with a complete Commerce, Marketplace, and OMS solution. VTEX assists global companies build, manage, and deliver native and advanced business-to-business (B2B), business-to-consumer
(B2C), and Marketplace commerce experiences with competitive time-to-market. The Company's shares, under the symbol “VTEX”, are listed on the New York Stock Exchange (“NYSE”).
The following entities are part of the Group and are being consolidated in these unaudited condensed interim financial statements:
|
|
|
|
|
|
Interest held by the Group (%)
|
|
Company
|
Place of business /
country of
incorporation
|
Relationship
|
Principal
business
activity
|
June
30,
2023
|
December
31, 2022
|
June 30,
2022
|
|
VTEX (“VTEX”)
|
Cayman
|
Holding
|
Technology Services
|
|
|
|
|
VTEX Argentina S.A. (“VTEX ARG”)
|
Argentina
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Brasil Tecnologia para E-commerce LTDA. (“VTEX Brazil”)
|
Brazil
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Day Eventos LTDA (“VTEX DAY”)
|
Brazil
|
Subsidiary
|
Production of events
|
100
|
100
|
100
|
|
Loja Integrada Tecnologia Para Softwares S.A. (“Loja Integrada”)
|
Brazil
|
Subsidiary
|
Technology Services
|
98.87
|
99.58
|
99.76
|
|
VTEX Chile SPA (“VTEX CHI”)
|
Chile
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Colombia Tecnologia para Ecommerce S.A.S. (“VTEX COL”)
|
Colombia
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Commerce Cloud Solutions LLC (“VTEX USA”)
|
USA
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Ecommerce Platform Limited (“VTEX UK”)
|
UK
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Mexico Soluciones en Ecommerce S.R.L. de C.V. (“VTEX MEX”)
|
Mexico
|
Subsidiary
|
Technology Services
|
100
|
100
|
99.99
|
|
EICOM Business School S.A.P.I De C.V. (“Escuela”)
|
Mexico
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
Peru Tecnologia para ECOMMERCE S.A.C. (“VTEX PERU”)
|
Peru
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Platform España, S.L. ("VTEX ESP")
|
Spain
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
Vtex Ecommerce Platform Limited - Sede Secondaria (“VTEX ITA”)
|
Italy
|
Branch
|
Technology Services
|
100
|
100
|
100
|
|
Vtex Ecommerce Platform Limited London - Sucursala Bucuresti (“VTEX ROM”)
|
Romania
|
Branch
|
Technology Services
|
100
|
100
|
100
|
|
Vtex Ecommerce Platform Limited – Sucursal em Portugal (“VTEX PORT”)
|
Portugal
|
Branch
|
Technology Services
|
100
|
100
|
100
|
|
The Group also holds VT Comercio, a joint venture (“JV”) established in July 2019 with a participation of 50%. |
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
2
|
Basis of presentation and consolidation
The accounting policies described in detail below have been consistently applied to all periods presented in these unaudited
condensed consolidated interim financial statements, unless otherwise stated. The financial statements are applicable for the group consisting of VTEX and its subsidiaries. The accounting policies have been consistently applied by the
Group.
|
|
a. Basis for preparation of the unaudited condensed consolidated interim financial statements
The unaudited condensed consolidated interim financial statements of VTEX Group for the six-month period ended June 30, 2023,
have been prepared in accordance with IAS 34 – Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”).
The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in
an annual consolidated financial statement. Accordingly, this report is to be read in conjunction with the Group’s annual consolidated financial statements for the year ended December 31, 2022, and any public announcements made by the Group
during the interim reporting period.
The accounting policies adopted are consistent with those of the previous financial year, except for the income tax estimation
(see note 6) and the adoption of new and amended standards as set out below.
The unaudited condensed consolidated interim financial statements are presented in U.S. dollars (“USD” or “US$”), which is the
Company’s functional and presentation currency. All amounts are rounded to the nearest thousands, except when otherwise indicated.
b. New standards, interpretations, and amendments adopted by the Group
A number of amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result
of adopting these amended standards.
|
|
c. Critical estimates and accounting judgments
Management has made judgments and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may
differ from these estimates. Accounting estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. Revisions to estimates are recognized prospectively.
In preparing these unaudited condensed consolidated interim financial statements, the significant
judgments and estimates made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those set at the consolidated financial statements for the year ended December 31, 2022.
No retrospective adjustments were made.
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
3.
|
Cash and cash equivalents
The breakdown of cash and cash equivalents is as follows:
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
Cash and cash bank deposits
|
|
|
20,133
|
|
|
|
18,930
|
|
US treasuries
|
|
|
72,965
|
|
|
|
-
|
|
Time deposits, investment funds and others
|
|
|
7,406
|
|
|
|
5,464
|
|
Total
|
|
|
100,504
|
|
|
|
24,394
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
Investments funds
|
|
|
105,629
|
|
|
|
204,045
|
|
Time deposits and others
|
|
|
16,373
|
|
|
|
10,119
|
|
Short-term investments
|
|
|
122,002
|
|
|
|
214,164
|
|
4.1 Investment funds
The following table shows the changes in the balances:
|
|
|
|
2023
|
|
|
|
Opening balance on January 1
|
|
|
204,045
|
|
|
|
Additions
|
|
|
4,111
|
|
|
|
Redemption
|
|
|
(107,235
|
) |
|
|
Fair value gains, net
|
|
|
5,374
|
|
|
|
Exchange differences
|
|
|
(666
|
) |
|
|
Closing balance on June 30
|
|
|
105,629
|
|
|
|
4.2 Time deposits and others
The following table shows the changes in the balances:
|
|
|
|
2023
|
|
|
|
Opening balance on January 1
|
|
|
10,119
|
|
|
|
Additions
|
|
|
17,162
|
|
|
|
Redemption
|
|
|
(11,076
|
)
|
|
|
Accrued interest
|
|
|
3,822
|
|
|
|
Exchange differences
|
|
|
(3,654
|
) |
|
|
Closing balance on June 30
|
|
|
16,373
|
|
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
5
|
Trade receivables
Trade receivables are as follows:
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
Trade receivables
|
|
|
50,826
|
|
|
|
43,084
|
|
Expected credit losses
|
|
|
(957
|
)
|
|
|
(808)
|
|
Total trade receivables
|
|
|
49,869
|
|
|
|
42,276
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
43,432
|
|
|
|
36,844
|
|
Non-current
|
|
|
6,437
|
|
|
|
5,432
|
|
The changes in expected credit losses for trade receivables are as follows: |
|
|
|
|
2023
|
|
|
|
|
|
Opening balance on January 1
|
|
|
(808
|
)
|
|
|
|
|
Addition, net
|
|
|
(737
|
) |
|
|
|
|
Write-off
|
|
|
634
|
|
|
|
|
|
Exchange differences
|
|
|
(46
|
) |
|
|
|
|
Closing balance on June 30
|
|
|
(957
|
) |
|
|
|
|
The trade receivables by maturity are distributed as follows:
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
Current
|
|
|
47,107
|
|
|
|
39,188
|
|
Overdue:
|
|
|
|
|
|
|
|
|
From 1 to 30 days
|
|
|
1,920
|
|
|
|
2,087
|
|
From 31 to 60 days
|
|
|
589
|
|
|
|
454
|
|
From 61 to 90 days
|
|
|
196
|
|
|
|
359
|
|
From 91 to 120 days
|
|
|
240
|
|
|
|
295
|
|
From 121 to 300 days
|
|
|
774
|
|
|
|
701
|
|
Total
|
|
|
50,826
|
|
|
|
43,084
|
6
|
Current and deferred tax
6.1 Deferred tax assets
The balance comprises temporary differences attributable to:
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
Loss allowances for financial assets
|
|
|
314
|
|
|
|
270
|
|
Bonus provision
|
|
|
1,089
|
|
|
|
1,712
|
|
Lease
|
|
|
423
|
|
|
|
392
|
|
Share-based compensation
|
|
|
3,913
|
|
|
|
3,130
|
|
Hyperinflationary adjustments
|
|
|
21
|
|
|
|
37
|
|
Tax loss (i)
|
|
|
13,864
|
|
|
|
10,513
|
|
Others (ii)
|
|
|
2,212
|
|
|
|
1,656
|
|
Total deferred tax assets
|
|
|
21,836
|
|
|
|
17,710
|
|
(i) Tax losses increase is driven mainly by the current investment position of the Brazilian operations. These amounts are expected to be offset in the
foreseeable future.
(ii) This amount refers mainly to temporary differences over accrued expenses.
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
6.2 Deferred tax liabilities
The balance comprises temporary differences attributable to:
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
Acquisition of subsidiaries
|
|
|
1,281
|
|
|
|
1,409
|
|
Temporary differences
|
|
|
1,210
|
|
|
|
827
|
|
Others
|
|
|
254
|
|
|
|
228
|
|
Total deferred tax liabilities
|
|
|
2,745
|
|
|
|
2,464
|
|
6.3 Income Tax expense
Income tax expense is recognized based on Management’s estimate of the weighted average effective annual income tax rate expected for the full financial year.
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
Current tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax on profits for the period
|
|
|
(1,697
|
)
|
|
|
(574
|
)
|
|
|
(2,267
|
)
|
|
|
(1,001)
|
|
|
|
|
(1,697
|
)
|
|
|
(574
|
)
|
|
|
(2,267
|
)
|
|
|
(1,001)
|
|
Deferred income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in deferred tax
|
|
|
1,733
|
|
|
|
3,193
|
|
|
|
2,282
|
|
|
|
5,705
|
|
|
|
|
1,733
|
|
|
|
3,193
|
|
|
|
2,282
|
|
|
|
5,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
36
|
|
|
|
2,619
|
|
|
|
15
|
|
|
|
4,704
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
7
|
Leases
|
|
|
|
7.1 Amounts recognized in the balance sheet
|
|
|
|
The balance sheet shows the following amounts related to leases:
|
|
|
|
|
June 30, 2023 |
|
|
|
December 31, 2022 |
|
|
Right-of-use assets
|
|
|
|
|
|
|
|
|
|
Office buildings
|
|
|
4,169
|
|
|
|
4,818
|
|
|
Total
|
|
|
4,169
|
|
|
|
4,818
|
|
|
|
|
|
June 30, 2023 |
|
|
|
December 31, 2022 |
|
|
Lease liabilities
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
2,002
|
|
|
|
1,898
|
|
|
Non-current
|
|
|
3,301
|
|
|
|
3,737
|
|
|
Total
|
|
|
5,303
|
|
|
|
5,635
|
|
|
The following table shows the changes in the right-of-use asset and lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
Right-of-use assets
|
|
|
|
|
|
Opening balance on January 1
|
|
|
4,818
|
|
|
|
New lease agreements
|
|
|
85
|
|
|
|
Depreciation
|
|
|
(746
|
)
|
|
|
Write-off
|
|
|
(324
|
)
|
|
|
Hyperinflation adjustment
|
|
|
5
|
|
|
|
Exchange differences
|
|
|
331
|
|
|
|
Closing balance on June 30
|
|
|
4,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
Lease liabilities
|
|
|
|
|
|
|
Opening balance on January 1
|
|
|
5,635
|
|
|
|
New lease agreements
|
|
|
85
|
|
|
|
Interest added
|
|
|
302
|
|
|
|
Principal elements of lease payments
|
|
|
(751
|
)
|
|
|
Interest payment
|
|
|
(302
|
)
|
|
|
Write-off
|
|
|
(94
|
)
|
|
|
Exchange differences
|
|
|
428
|
|
|
|
Closing balance on June 30
|
|
|
5,303
|
|
|
|
7.2 Amounts recognized in the Statement of profit or loss
|
|
|
|
The Statement of profit or loss presents the following amounts related to leases:
|
|
|
Three months ended
|
|
Six months ended
|
|
|
|
June 30,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
|
|
Depreciation charge of office buildings
|
|
|
375
|
|
|
|
317
|
|
|
|
746
|
|
|
|
620
|
|
|
Interest expense (included in financial expense)
|
|
|
153
|
|
|
|
175
|
|
|
|
302
|
|
|
|
351
|
|
|
Total
|
|
|
528
|
|
|
|
492
|
|
|
|
1,048
|
|
|
|
971
|
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
8 |
Property and equipment, net |
|
|
|
Details of the Group’s property and equipment balance are presented below: |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Leasehold improvements
|
|
|
2,757
|
|
|
|
2,811
|
|
|
Machinery and equipment
|
|
|
248
|
|
|
|
307
|
|
|
Furniture and fixture
|
|
|
656
|
|
|
|
836
|
|
|
Computer and peripherals
|
|
|
4,387
|
|
|
|
4,346
|
|
|
Accumulated depreciation
|
|
|
(4,574
|
)
|
|
|
(4,391)
|
|
|
Property and equipment, net
|
|
|
3,474
|
|
|
|
3,909
|
|
9 |
Intangible assets, net |
|
|
|
Details of the Group’s intangible assets balance are presented below: |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Software
|
|
|
4,685
|
|
|
|
4,291
|
|
|
Trademark
|
|
|
240
|
|
|
|
218
|
|
|
Intellectual property
|
|
|
2,968
|
|
|
|
2,675
|
|
|
Customer contracts
|
|
|
9,499
|
|
|
|
9,394
|
|
|
Goodwill
|
|
|
21,919
|
|
|
|
20,965
|
|
|
Others
|
|
|
570
|
|
|
|
519
|
|
|
Accumulated amortization
|
|
|
(8,484
|
)
|
|
|
(6,852)
|
|
|
Intangible assets, net
|
|
|
31,397
|
|
|
|
31,210
|
|
10 |
Accounts payable and accrued expenses |
|
|
|
The breakdown of accounts payable and accrued expenses is as follows: |
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Trade payables
|
|
|
15,671
|
|
|
|
14,064
|
|
|
Social charges
|
|
|
6,217
|
|
|
|
5,537
|
|
|
Profit-sharing
|
|
|
6,824
|
|
|
|
9,484
|
|
|
Provision for vacation and benefits
|
|
|
7,633
|
|
|
|
5,506
|
|
|
Others
|
|
|
40
|
|
|
|
56
|
|
|
Total
|
|
|
36,385
|
|
|
|
34,647
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
35,372
|
|
|
|
34,136
|
|
|
Non-current
|
|
|
1,013
|
|
|
|
511
|
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
11 |
Loans and financing |
|
|
|
11.1 Breakdown of loans and financing |
|
|
|
As of June 30, 2023, the Group no longer has loans to be paid as both Itaú and BNDES
contracts were fully paid during the first semester of 2023. More details on each loan are described in the table and footnotes below:
|
|
|
|
Interest rate
|
|
Country
|
|
Maturity
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
BNDES (i)
|
|
6.5% p.a
(Brazilian Reais)
|
|
Brazil
|
|
Mar/23
|
|
-
|
|
|
189
|
|
|
Itaú (ii)
|
|
100% CDI + 2.5% p.a
(Brazilian Reais)
|
|
Brazil
|
|
May/23
|
|
-
|
|
|
964
|
|
|
Total
|
|
|
|
|
|
|
|
-
|
|
|
1,153
|
|
|
(i) In March 2017, the Group raised R$15,577 corresponding to US$5,014 from Brazilian National Bank for Economic and Social
Development (BNDES) to finance the development of new ecommerce technologies. The last installment matured in March 2023. |
|
(ii) In June 2019, the Group raised €6,909, corresponding to US$7,782 for working capital purposes. On the same date, a
swap was contracted to hedge the amount against foreign exchange rate, designating the financial instrument as a fair value hedge. The last installment matured in May 2023.
|
|
11.2 Changes in loans and financing |
|
|
|
2023
|
|
|
|
Opening balance on January 1
|
|
|
1,153
|
|
|
|
Payment of loans
|
|
|
(1,238
|
)
|
|
|
Interest charged
|
|
|
4
|
|
|
|
Interest paid
|
|
|
(5
|
)
|
|
|
Basis adjustment on the fair value hedge (i)
|
|
|
42
|
|
|
|
Exchange differences
|
|
|
44
|
|
|
|
Closing balance on June 30
|
|
|
-
|
|
|
|
(i) Losses on the financial instrument designated as a fair value hedge referring to the loan in Euros with Itaú described above
have been recognized as a financial expense. Refer to note 19.1(ii) for additional detail. |
|
|
12
|
Taxes payable
|
|
|
|
The breakdown of taxes payable is as follows:
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Income tax payable
|
|
|
2,249
|
|
|
|
673
|
|
|
Other taxes payable
|
|
|
2,900
|
|
|
|
3,615
|
|
|
Total
|
|
|
5,149
|
|
|
|
4,288
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
4,989
|
|
|
|
4,128
|
|
|
Non-current (i)
|
|
|
160
|
|
|
|
160
|
|
|
(i) The balance refers to sales taxes related to the WorkArea acquisition. |
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
13 |
Contingencies |
|
|
|
The Group is party to civil and labor lawsuits involving loss risks. Provisions for losses resulting from lawsuits are
estimated and updated by the Group, based on analysis from the Group’s legal advisors.
|
|
|
|
The breakdown of existing contingencies classified as probable losses by the Group, based on the evaluation of its legal
advisors, which are recognized as a liability, is as follows: |
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Civil
|
|
|
14
|
|
|
|
6
|
|
|
Labor
|
|
|
47
|
|
|
|
95
|
|
|
Tax
|
|
|
163
|
|
|
|
84
|
|
|
Total
|
|
|
224
|
|
|
|
185
|
|
|
The breakdown of existing contingencies classified as possible losses by the Group, based on the evaluation of its legal
advisors, for which no provision was recognized, is as follows: |
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Civil
|
|
|
126
|
|
|
|
118
|
|
|
Labor
|
|
|
68
|
|
|
|
-
|
|
|
Tax
|
|
|
1,025
|
|
|
|
878
|
|
|
Total
|
|
|
1,219
|
|
|
|
996
|
|
|
On October 9, 2020, Mirakl, Incorporated, filed a complaint for unspecified damages and preliminary and permanent injunctive
relief in the United States District Court for the District of Massachusetts against our subsidiary VTEX Commerce Cloud Solutions LLC, or VTEX USA, and certain of its employees that were formerly employed by the plaintiff. |
|
|
|
On April 14, 2021, the court denied the motion to dismiss. On October 4, 2021, the court granted VTEX's motion to appoint an
independent expert to manage forensic discovery. On December 31, 2021, the court approved a forensic protocol to be employed by the independent expert. As of June 30, 2023, the parties are conducting discovery. Although VTEX plans to defend
itself against such lawsuit, the Company is not able to predict the outcomes of such lawsuit at this current early stage. On June 30, 2023 and December 31, 2022, this contingency was classified as possible, however at the end of the reporting
period it was not possible to estimate the future cash outflows at this stage of the lawsuit, and, therefore, it was not included in the table above.
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
14 |
Shareholders’ equity |
|
|
|
14.1 Issued capital |
|
|
|
The total share capital is as follows: |
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Number of ordinary nominative shares
|
|
|
186,748,157
|
|
|
|
188,992,529
|
|
|
Par value
|
|
|
0.0001
|
|
|
|
0.0001
|
|
|
Total issued capital
|
|
|
19
|
|
|
|
19
|
|
15 |
Revenue from services provided |
|
|
|
The Group revenue derives mainly from the transfer of services rendered and fees charged as services are
provided, therefore, mostly recognized over time. Disaggregation of revenue by major product lines are as follows: |
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Subscriptions
|
|
|
49,323
|
|
|
|
40,025
|
|
|
|
92,853
|
|
|
|
75,700
|
|
|
Taxes on subscriptions
|
|
|
(4,551
|
)
|
|
|
(3,376
|
)
|
|
|
(8,319
|
)
|
|
|
(6,470
|
)
|
|
Subscription revenue
|
|
|
44,772
|
|
|
|
36,649
|
|
|
|
84,534
|
|
|
|
69,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services provided
|
|
|
3,253
|
|
|
|
2,257
|
|
|
|
5,898
|
|
|
|
4,510
|
|
|
Taxes on services
|
|
|
(139
|
)
|
|
|
(192
|
)
|
|
|
(264
|
)
|
|
|
(359
|
)
|
|
Services revenue
|
|
|
3,114
|
|
|
|
2,065
|
|
|
|
5,634
|
|
|
|
4,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
47,886
|
|
|
|
38,714
|
|
|
|
90,168
|
|
|
|
73,381
|
|
16
|
Earnings (loss) per share
|
|
|
|
Basic earnings (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders
by the weighted average number of shares of common stock outstanding during the year.
|
|
|
|
Diluted earnings per share are computed by affecting all potential weighted average dilutive common stock, including options and restricted stock
units.
|
|
|
|
The following table contains the loss per share of the Group for the three and six-month periods ended June 30, 2023 and 2022:
|
|
|
Three months ended |
|
|
Six months
ended |
|
|
Basic loss per share
|
|
|
June 30,
2023
|
|
|
|
June 30,
2022 |
|
|
|
June 30,
2023
|
|
|
|
June 30,
2022
|
|
|
Loss attributable to the stockholders of the Group
|
|
|
(6,611
|
)
|
|
|
(21,464
|
)
|
|
|
(14,539
|
)
|
|
|
(40,553
|
)
|
|
Weighted average number of outstanding common shares (thousands)
|
|
|
187,054
|
|
|
|
191,281
|
|
|
|
187,688
|
|
|
|
191,223
|
|
|
Basic loss per share
|
|
|
(0.035
|
)
|
|
|
(0.112
|
)
|
|
|
(0.077
|
)
|
|
|
(0.212
|
)
|
|
|
Three
months ended
|
|
|
Six
months ended |
|
|
Diluted loss per share
|
|
|
June 30,
2023
|
|
|
|
June 30,
2022
|
|
|
|
June 30,
2023
|
|
|
|
June 30,
2022
|
|
|
Loss attributable to the stockholders of the Group
|
|
|
(6,611
|
)
|
|
|
(21,464
|
)
|
|
|
(14,539
|
)
|
|
|
(40,553
|
) |
|
Weighted average number of outstanding common shares (thousands)
|
|
|
187,054
|
|
|
|
191,281
|
|
|
|
187,688
|
|
|
|
191,223
|
|
|
Diluted loss per share
|
|
|
(0.035
|
)
|
|
|
(0.112
|
)
|
|
|
(0.077
|
)
|
|
|
(0.212
|
) |
|
As of June 30, 2023 and 2022, the number of shares used to calculate diluted net loss per share of common stock attributable to common stockholders is the same as the number of shares used to calculate basic
net loss per share of common stock attributable to common stockholders for the period presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. The number of the potentially dilutive
shares that would have been anti-dilutive is disclosed in note 18.
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Interest and dividend earned on bank deposits and financial investments
|
|
|
3,287
|
|
|
|
168
|
|
|
|
5,055
|
|
|
|
297
|
|
|
Foreign exchange gains
|
|
|
3,241
|
|
|
|
2,095
|
|
|
|
4,174
|
|
|
|
3,812
|
|
|
Gains from fair value of financial instruments (i)
|
|
|
399
|
|
|
|
1,504
|
|
|
|
729
|
|
|
|
3,276
|
|
|
Short-term investments gains
|
|
|
2,241
|
|
|
|
824
|
|
|
|
6,549
|
|
|
|
1,414
|
|
|
Other financial income
|
|
|
72
|
|
|
|
105
|
|
|
|
92
|
|
|
|
189
|
|
|
Financial income
|
|
|
9,240
|
|
|
|
4,696
|
|
|
|
16,599
|
|
|
|
8,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange losses
|
|
|
(4,859
|
)
|
|
|
(2,008
|
)
|
|
|
(7,740
|
)
|
|
|
(3,580
|
)
|
|
Losses from fair value of financial instruments (i)
|
|
|
(392
|
)
|
|
|
(269
|
)
|
|
|
(645
|
)
|
|
|
(2,121
|
)
|
|
Interest on loans
|
|
|
-
|
|
|
|
(15
|
)
|
|
|
(4
|
)
|
|
|
(36
|
)
|
|
Interest on lease liabilities
|
|
|
(153
|
)
|
|
|
(175
|
)
|
|
|
(302
|
)
|
|
|
(351
|
)
|
|
Short-term investments losses
|
|
|
(171
|
)
|
|
|
(6,176
|
)
|
|
|
(1,175
|
)
|
|
|
(10,561
|
)
|
|
Adjustment of hyperinflation
|
|
|
(3,440
|
)
|
|
|
(1,362
|
)
|
|
|
(4,860
|
)
|
|
|
(2,079
|
)
|
|
Other financial expenses
|
|
|
(111
|
)
|
|
|
(117
|
)
|
|
|
(303
|
)
|
|
|
(407
|
)
|
|
Financial expense
|
|
|
(9,126
|
)
|
|
|
(10,122
|
)
|
|
|
(15,029
|
)
|
|
|
(19,135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial result, net
|
|
|
114
|
|
|
|
(5,426
|
)
|
|
|
1,570
|
|
|
|
(10,147
|
)
|
|
(i) Refers to gain and losses on change in the fair value of hedge instruments (Refer to note 19.1)
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
18
|
Share-based compensation
|
|
|
|
18.1 Share-based compensation: VTEX
|
|
|
|
VTEX provides share-based compensation to selected directors and employees as a stock-option plan.
|
|
|
|
Both stock options and Restricted Stock Units instruments (“RSUs”) are exercisable as long as the director or employee fulfills the worked periods after the options are granted.
|
|
|
|
Set out below are summaries of stock options granted under the plan:
|
|
|
|
Number of
options
(thousands)
|
|
|
Weighted
average
exercise price
|
|
|
Remaining
contractual
terms in years
|
|
|
Weighted
average grant
date fair value
|
|
|
At January 1, 2023
|
|
|
9,714
|
|
|
|
4.18
|
|
|
|
4.37
|
|
|
|
1.41
|
|
|
Granted
|
|
|
229
|
|
|
|
3.91
|
|
|
|
-
|
|
|
|
0.60
|
|
|
Forfeit
|
|
|
(441
|
)
|
|
|
6.28
|
|
|
|
-
|
|
|
|
3.76
|
|
|
Exercised (i)
|
|
|
(535
|
)
|
|
|
0.17
|
|
|
|
-
|
|
|
|
0.44
|
|
|
At June 30, 2023
|
|
|
8,967
|
|
|
|
4.32
|
|
|
|
4.04
|
|
|
|
1.22
|
|
|
Stock options exercisable as of June 30, 2023
|
|
|
4,502
|
|
|
|
4.45
|
|
|
|
3.88
|
|
|
|
1.07
|
|
|
(i) The number of stock-options withheld for tax purposes was 0.2 thousand shares.
|
|
|
|
The fair value of the stock options granted is calculated based on the Binomial Options Pricing Model considering the average contract term. The model inputs for options included:
|
●
|
Strike Price - Average price weighted by the quantity granted;
|
●
|
Target Asset Price - The trading price closest to the granting date of the options or the trading price derived from an independent valuation report;
|
●
|
Risk-Free Interest Rate - US Treasury interest rate, according to the contractual term;
|
●
|
Volatility - According to comparable peer entities listed on the stock exchange.
|
|
The weighted average inputs used in the six-month period ended June 30, 2023:
|
●
|
Target Asset Price - US$3.91 per share (December 31, 2022 - US$4.40 per share)
|
●
|
Risk-Free Interest Rate – 3.73% (December 31, 2022: 3.83%)
|
●
|
Volatility – 57.38% (December 31, 2022: 55.68%)
|
●
|
Expected dividend: None
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
The following table summarizes the RSU options granted under the plan:
|
|
|
|
Number of
RSUs
(thousands)
|
|
|
Weighted
average grant
date fair value
|
|
|
At January 1, 2023
|
|
|
3,509
|
|
|
|
6.94
|
|
|
Granted
|
|
|
804
|
|
|
|
3.62
|
|
|
Forfeit
|
|
|
(206
|
)
|
|
|
6.49
|
|
|
Settled (i)
|
|
|
(1,042
|
)
|
|
|
5.89
|
|
|
At June 30, 2023
|
|
|
3,065
|
|
|
|
6.45
|
|
|
(i) The number of RSUs withheld for tax purposes was 301 thousand shares.
|
|
|
|
The fair value of the restricted stock units granted was calculated using the same Target Asset Price used in the Stock Options appraisal model.
|
|
|
|
In June 2023, the Group modified some stock option instruments, changing the exercise price. The total incremental fair value of US$131 will be recognized as an expense over the period from the modification
date to the end of the vesting period. The expense for the original option granted will continue to be recognized as if the terms had not been modified. The fair value of the modified options was determined using the same models and
principles of the original contract.
|
|
|
|
For the six-month period ended June 30, 2023, there was US$ 11,626 of remaining unamortized compensation costs, including social charges, related to unvested stock options and RSUs granted to the Group’s
employees. This cost will be recognized over an estimated weighted average remaining period of 1.67 years. Total unamortized compensation costs will be adjusted for future changes in estimated forfeitures.
|
|
|
|
The total expense, including taxes and social charges related to the share-based compensation plan for the six-month period ended June 30, 2023, was US$7,589 (the six-month period ended June 30, 2022:
US$3,313). For the period ended June 30, 2023, the Group recorded in the capital reserve the amount of US$7,786 (the six-month period ended June 30, 2022: US$4,324).
|
|
|
|
The Company must withhold an amount for an employee's tax obligation associated with a share-based payment and transfer that amount to the tax authority on the employee's behalf. The Company is settling the
share-based compensation on a net basis by withholding the number of shares with a fair value equal to the monetary value of the employee's tax obligation and only issuing the remaining shares on completion of the vesting period. If all of
the shares outstanding as at June 30, 2023 were subsequently vested, the Group would be required to pay taxes of approximately US$5,892 considering the stock price as of June 30, 2023.
|
|
|
|
18.2 Share-based compensation: Loja Integrada
|
|
|
|
On April 29, 2021, VTEX introduced a new share-based compensation plan to selected directors and employees as a stock-option and RSU plan in Loja Integrada, a subsidiary wholly owned. This share-based
compensation plan also has RSU and Stock Options. Under both stock-option plan and RSUs, the options have a term of 7 years as of the grant date. They are exercisable as long as the director or employee fulfills the worked periods after the
options are granted.
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
Set out below are summaries of stock options granted under the plan:
|
|
|
|
Number of
options
(thousands)
|
|
|
Weighted
average
exercise price
|
|
|
Remaining
contractual
terms in years
|
|
|
Weighted
average grant
date fair value
|
|
|
At January 1, 2023
|
|
|
8.42
|
|
|
|
13.48
|
|
|
|
5.35
|
|
|
|
5.66
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Forfeit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
At June 30, 2023
|
|
|
8.42
|
|
|
|
14.81
|
|
|
|
4.86
|
|
|
|
6.22
|
|
|
Stock options exercisable as of June 30, 2023
|
|
|
8.42
|
|
|
|
14.81
|
|
|
|
4.86
|
|
|
|
6.22
|
|
|
The fair value of the stock options granted is calculated based on the Binomial Options Pricing Model considering the average contract term. The model inputs for options included:
|
●
|
Strike Price - Average price weighted by the quantity granted;
|
●
|
Target Asset Price - The trading price closest to the granting date of the options or the trading price derived from an independent valuation report;
|
●
|
Risk-Free Interest Rate - Future CDI, according to the contractual term;
|
●
|
Volatility - According to comparable peer entities listed on the stock exchange.
|
|
The following table summarizes the RSU options granted under the plan:
|
|
|
|
Number of
RSUs
(thousands)
|
|
|
Weighted
average grant
date fair value
|
|
|
At January 1, 2023
|
|
|
285.28
|
|
|
|
6.42
|
|
|
Granted
|
|
|
115.00
|
|
|
|
4.68
|
|
|
Forfeit
|
|
|
(39.67
|
)
|
|
|
5.73
|
|
|
Settled (i)
|
|
|
(63.58
|
)
|
|
|
6.91
|
|
|
At June 30, 2023
|
|
|
297.03
|
|
|
|
6.53
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) The number of RSUs withheld for tax purposes was 0.1 thousand shares.
|
|
|
|
|
|
|
|
|
|
For the six-month period ended June 30, 2023, there was US$1,433 of remaining unamortized compensation cost, including social charges, related to unvested stock options and RSUs granted to the Group’s employees. This cost will be
recognized over an estimated weighted-average remaining period of 1.8 years. Total unamortized compensation costs will be adjusted for future changes in estimated forfeitures.
|
|
|
|
The total expense, including taxes and social charges related to the Loja Integrada share-based compensation plan for the six-month period ended June 30, 2023, was US$2,217 (the six-month period ended June
30, 2022: US$85). For the period ended June 30, 2023, the Group recorded in the capital reserve the amount of US$97 (the six-month period ended June 30, 2022: US$213).
|
|
The Company must withhold an amount for an employee's tax obligation associated with a share-based payment and transfer that amount to the tax authority on the employee's behalf. The Company is settling the share-based compensation on a
net basis by withholding the number of shares with a fair value equal to the monetary value of the employee's tax obligation and only issuing the remaining shares on completion of the vesting period. If all of the shares outstanding as at
June 30, 2023 were subsequently vested, the Group would be required to pay taxes of approximately US$309 considering the stock price as of June 30, 2023.
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
18.3 Amounts recognized in the statement of profit or loss
|
|
|
|
The following table illustrates the classification of stock-based compensation in the consolidated statements of profit and loss which includes both stock-based compensation of VTEX and Loja Integrada:
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Subscription cost
|
|
|
(85
|
)
|
|
|
(80
|
)
|
|
|
(106
|
)
|
|
|
(167
|
)
|
|
Services cost
|
|
|
(99
|
)
|
|
|
6
|
|
|
|
(244
|
)
|
|
|
(20
|
)
|
|
General and administrative
|
|
|
(1,708
|
)
|
|
|
(639
|
)
|
|
|
(3,422
|
)
|
|
|
(1,628
|
)
|
|
Sales and marketing
|
|
|
(1,050
|
)
|
|
|
247
|
|
|
|
(2,369
|
)
|
|
|
(482
|
)
|
|
Research and development
|
|
|
(1,793
|
)
|
|
|
(458
|
)
|
|
|
(3,664
|
)
|
|
|
(1,101
|
)
|
|
Total
|
|
|
(4,735
|
)
|
|
|
(924
|
)
|
|
|
(9,805
|
)
|
|
|
(3,398
|
)
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
19.1 Financial instruments by category
The Company classifies its financial assets and liabilities under the following categories: amortized cost, fair value through other
comprehensive income and fair value through profit or loss. The classification by category and the corresponding accounting policies of each financial instrument in these condensed consolidated interim financial statements are consistent with those
applied and disclosed in the Company’s audited consolidated financial statements for the year ended on December 31, 2022.
(i) Financial
instruments valued at amortized cost
The Group has the following financial instruments valued at amortized cost:
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
100,504
|
|
|
|
24,394
|
|
|
Restricted cash
|
|
|
-
|
|
|
|
1,608
|
|
|
Short-term investments
|
|
|
16,373
|
|
|
|
10,119
|
|
|
Trade receivables
|
|
|
49,869
|
|
|
|
42,276
|
|
|
Total
|
|
|
166,746
|
|
|
|
78,397
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
15,671
|
|
|
|
14,064
|
|
|
Lease liabilities
|
|
|
5,303
|
|
|
|
5,635
|
|
|
Loans and financing
|
|
|
-
|
|
|
|
1,153
|
|
|
Total
|
|
|
20,974
|
|
|
|
20,852
|
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
(ii) Financial instruments valued at fair value through profit or loss
The Group has the following financial instruments valued at fair value through profit or loss:
|
|
|
Carrying amount
|
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
Short-term investments
|
|
|
105,629
|
|
|
|
204,045
|
|
|
Derivative financial instruments (i)
|
|
|
-
|
|
|
|
117
|
|
|
Total
|
|
|
105,629
|
|
|
|
204,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
June 30, 2023
|
|
|
December 31, 2022
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments (i)
|
|
|
35
|
|
|
|
-
|
|
|
Accounts payable from acquisition of subsidiary ("earn out")
|
|
|
-
|
|
|
|
299
|
|
|
Total
|
|
|
35
|
|
|
|
299
|
|
(i) In 2022, VTEX ARG had positions in future derivative financial instruments raised through Matba Rofex designated as a protection from
hyperinflation and exchange rate devaluation in Argentina. The notional value is US$5,000 and the last maturity date is in July 2023.
For the six-month period ended on June 30, 2023, the Group had positions in future derivative financial instruments designed as a hedge
of foreign currency risk in Argentina. The hedge contracts had maturity dates equal to those of the principal, which was raised through Matba Rofex. The last hedge contract is due July 2023. Additionally, the Group no longer had positions in Swap
derivative financial instruments designated as hedge of foreign currency debt raised through Itaú Bank, as these hedge contracts had maturity dates equal to those of the loans raised in foreign currency (note 11), also raised through Itaú Bank, and
both instruments last matured in May 2023.
The following amounts were recognized in profit or loss in relation to financial instruments:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Net gain on financial instruments
|
|
|
7
|
|
|
|
1,234
|
|
|
|
84
|
|
|
|
1,155
|
|
The following amounts were recognized in profit or loss in relation to short-term investments:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Net gain (loss) on short-term investments
|
|
|
2,070
|
|
|
|
(5,352
|
)
|
|
|
5,374
|
|
|
|
(9,147
|
)
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
a. Fair value hierarchy
This section provides details about the judgments and estimates made for determining the fair values of the financial instruments
recognized and measured at fair value in the financial statements. The Group has classified its financial instruments into the three levels prescribed under the accounting standards to indicate the reliability of the inputs used in determining fair
value.
|
|
|
June 30, 2023
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
|
105,629
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
|
-
|
|
|
|
35
|
|
|
|
-
|
|
|
|
|
December 31, 2022
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
|
204,045
|
|
|
|
-
|
|
|
|
-
|
|
|
Derivative financial instruments
|
|
|
-
|
|
|
|
117
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable from acquisition of subsidiary ("earn-out")
|
|
|
-
|
|
|
|
-
|
|
|
|
299
|
|
There were no transfers between levels 1, 2, and 3 for recurring fair value measurements during the first semester of 2023.
Fair value measurements using significant unobservable inputs (level 3)
The fair value of the earn-out classified as level 3 is calculated based on the judgment of the Group and the probability of meeting the
goals of each acquisition made during the year. The Sale and Purchase agreement of each acquisition is established if the clients of the acquired entities migrate to the Groups platform and reach an agreed amount, the seller will be entitled to an
earn-out. As at June 30, 2023, the fair value of the earn-out was nil (December 31, 2022 - US$299 ).
The following table presents changes in level 3 items for the six-months period ended on June 30, 2023:
|
|
|
2023
|
|
|
Opening balance on January 1
|
|
|
299
|
|
|
Earn-out adjustment
|
|
|
(299
|
)
|
|
Exchange differences
|
|
|
-
|
|
|
Closing balance on June 30
|
|
|
-
|
|
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
b. Fair values of other financial instruments (unrecognized)
The Group also has several financial instruments which are not measured at fair value in the balance sheet. As at June 30, 2023, these
instruments’ fair values are not different from their carrying amounts since the interest receivable/payable is either close to current market rates or the instruments are short-term in nature. Differences were identified for the following
instruments at June 30, 2023:
|
|
|
Carrying amount
|
|
|
Fair value
|
|
|
Financial assets:
|
|
|
|
|
|
|
|
Short-term investments
|
|
|
8,725
|
|
|
|
9,038
|
|
|
Total
|
|
|
8,725
|
|
|
|
9,038
|
|
19.2 Financial risk management
The risk management of the Group is predominantly controlled by a central treasury department (Group treasury) under policies approved by
the board of directors. Group treasury identifies, evaluates, and hedges financial risks in close co-operation with the Group’s operating units. The board provides written principles for overall risk management and policies covering specific areas,
such as foreign exchange risk, interest rate risk, credit risk, the use of derivatives and non-derivative financial instruments, and investment of excess liquidity.
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
Subsequent share
repurchase and canceling
During July and August of 2023, the Company canceled 252,472 Class A common shares, of which 19,459 shares were held in treasury as of June 30, 2023, and 233,013 were repurchased after June 30, 2023 under the repurchase share program. Refer to note
20.2 (c) for additional details.
Renewal of share repurchase program
On August 3, 2023, the Board of Directors of VTEX authorized the Company to repurchase Class A common shares of the Company, par value US$0.0001 per share, for an aggregate consideration of up to US$20.0 million. This authorization is scheduled to
begin on August 11, 2023, and to expire on August 10, 2024.
Repurchases under the Company's program may be made from time to time in open market or privately negotiated transactions in accordance with applicable laws, including the Securities and Exchange Commission Rule 10b-18. The timing of repurchases
will depend on factors including market conditions and prices, the Company’s liquidity requirements and alternative uses of capital.
The share repurchase program could be suspended from time to time or discontinued, and there is no assurance as to the number of shares that will be repurchased under the program or that there will be any repurchases.
The timing and amount of shares repurchased (if any) will be determined by the Company’s management based on its evaluation of market conditions, applicable legal requirements and other factors. Repurchases may also be made under a Rule 10b5-1
plan. Any repurchased shares may be canceled or remain available for use in connection with its equity incentive plans and for other corporate purposes.
Item 2 – Management’s discussion and analysis of financial condition and results of operations
This Management's Discussion and Analysis of Financial Condition and Results of Operations section may contain certain forward-looking
statements that involve risks and uncertainties. Our actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements for several reasons, including those described in our prior
filings with the U.S. Securities and Exchange Commission.
The following analysis and discussion of our financial condition and results of operations should be read in conjunction with our
unaudited condensed consolidated interim financial statements as of June 30, 2023 and 2022 included elsewhere in this document.
Overview
VTEX is the global enterprise digital commerce platform where brands and retailers run their world of commerce. Our platform is designed to be the
operating system for the commerce ecosystem, enabling enterprise brands and retailers to orchestrate their complex network of consumers, business partners, suppliers, and fulfillment providers in one place. VTEX puts its customers’ business on a fast
path to growth with a complete Commerce, Marketplace, and OMS solution. We help global companies build, manage and deliver native and advanced B2B, B2C, and marketplace commerce experiences with unprecedented time to market and without complexity.
We are redefining the boundaries between digital and physical commerce, empowering personal shoppers, and fostering seamless interactions across both
realms. Our aim is to boost our customers' conversion and efficiency rates in their commerce operations. Through VTEX, enterprises can easily build online stores, integrate and manage orders across multiple channels, create marketplaces to sell
third-party vendors' products, and optimize their product delivery process, among many other capabilities.
With over 20 years of experience in digital commerce, VTEX has been a leader in accelerating the digital commerce transformation in Latin America and is
expanding globally. Our platform is engineered to enterprise-level standards and functionality with approximately 85% of our GMV coming from large, blue-chip companies (i.e. customers with more than US$10 million of GMV per year). We are trusted by
more than 2,600 customers with over 3,400 active online stores across 38 countries to connect with their consumers in a meaningful way.
We benefit from the acceleration of digitalization globally, and in particular in Latin America, where ecommerce is still underpenetrated. Accelerating
ecommerce growth, evolving consumer expectations and the proliferation of digital shopping alternatives are raising the bar for brands and retailers to stay relevant. Legacy structures developed over years force enterprises to choose between deep
customization and speed to market. Our technology combined with our ecosystem of partners solves this problem. We deliver flexibility and simplicity to complex, mission critical commerce operations. We were named a leader in the IDC MarketScape:
Worldwide B2C Digital Commerce Platforms 2020 Vendor Assessment, and a “Strong Performer” in the Gartner Peer Insights ‘Voice of the Customer’: Digital Commerce, January 2022 report. We were also recognized as Visionary in the Gartner® Magic
Quadrant™ for Digital Commerce, August 2022 report. Additionally, we were named a “Contender” in The Forrester Wave™: B2C Commerce Solutions and VTEX was awarded medals in each one of the 12 categories evaluated in the “Paradigm B2B Combine 2022
Digital Commerce Solutions for B2B, Midmarket edition”.
We offer access to our platform on a subscription basis, which accounted for 93.5% of our revenue for the three-month period ended June 30, 2023, compared
to 94.7% of our revenue in the same period of 2022. Our subscription revenue is based on a fixed subscription fee and a transaction-based fee. The transaction-based fee accounts for most of our subscription revenues and is primarily structured as a
take rate or percentage of the total value of the orders processed through our platform, including value added taxes and shipping, which we refer to as our GMV. Our transaction-based fee model aligns our success with our customers’ success and our
revenue grows as our customers’ GMV grows. In the three-month period ended June 30, 2023, our GMV increased to US$3.8 billion from US$3.1 billion in the same period of 2022, representing an increase of 23.4% in USD and 21.2% on an FX neutral basis.
In the same period, our revenue increased to US$47.9 million from US$38.7 million, representing an increase of 23.7% in USD and 22.9% on an FX neutral basis.
Key metric— Gross merchandise value
The key metric we use to measure our performance, identify trends affecting our business, formulate our business plan projections and support our strategic
decisions is GMV. Due to the seasonality of ecommerce and the foreign exchange effects resulting from the volatility of the currencies of the jurisdictions where we operate (particularly Latin America countries) vis-à-vis the U.S. Dollar (which is
our functional currency), our management compares GMV on a year-over-year and foreign exchange neutral basis. The foreign exchange neutral measures are calculated by using the average monthly exchange rates for each month during the previous year,
adjusted by inflation in countries with hyper-inflation, and applying them to the corresponding months of the current year, so as to calculate what our results would have been had exchange rates remained stable from one year to the next.
GMV is the total value of customer orders processed through our platform, including value added taxes and shipping. Our GMV does not include the value of
orders processed by our SMB customers or B2B transactions. Due to our transaction-based subscription model, we believe that GMV growth is linked with our revenue growth and we track GMV as an indicator of the success of our customers, the performance
of the platform and our market share.
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
(in millions of U.S. Dollars, unless otherwise indicated)
|
|
GMV
|
|
|
3,838.5
|
|
|
|
3,111.9
|
|
|
|
7,142.2
|
|
|
|
5,826.4
|
|
GMV growth FX neutral (%)
|
|
|
21.2
|
%
|
|
|
21.0
|
%
|
|
|
20.9
|
%
|
|
|
24.1
|
%
|
Seasonality and quarterly operations results
Our transaction-based subscription model, similar to most retail businesses, experiences seasonal fluctuations. Historically, we have generated higher net
sales in the fourth quarter, as a consequence of the concentration of special dates during that quarter.
The following table sets forth our quarterly condensed consolidated interim statements of profit or loss data for each of the last historical nine
quarters. The condensed consolidated interim statements of profit or loss data below has been prepared on the same basis as the unaudited consolidated financial statements included elsewhere in this document and, in our opinion, reflects all
necessary adjustments, consisting only of ordinary course recurring adjustments, necessary to present this information fairly and accurately. These historical quarterly results of operations are not necessarily indicative of the results of operations
for any future period. The pandemic's macroeconomic impact led to fluctuations in seasonal patterns, resulting in certain levels of volatility. Nevertheless, we foresee these effects gradually normalizing as the macroeconomic conditions ease.
|
|
For the three months ended
(unaudited)
|
|
(in US$ millions)
|
|
June
30, 2021
|
|
|
September
30, 2021
|
|
|
December
31, 2021
|
|
|
March
31, 2022
|
|
|
June
30, 2022
|
|
|
September
30, 2022
|
|
|
December
31, 2022
|
|
|
March
31, 2023
|
|
|
June
30, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription revenue
|
|
|
29.7
|
|
|
|
29.6
|
|
|
|
34.5
|
|
|
|
32.6
|
|
|
|
36.6
|
|
|
|
36.5
|
|
|
|
42.7
|
|
|
|
39.8
|
|
|
|
44.8
|
|
Services revenue
|
|
|
1.2
|
|
|
|
2.2
|
|
|
|
2.6
|
|
|
|
2.1
|
|
|
|
2.1
|
|
|
|
2.2
|
|
|
|
2.8
|
|
|
|
2.5
|
|
|
|
3.1
|
|
Total revenue
|
|
|
30.9
|
|
|
|
31.9
|
|
|
|
37.1
|
|
|
|
34.7
|
|
|
|
38.7
|
|
|
|
38.8
|
|
|
|
45.5
|
|
|
|
42.3
|
|
|
|
47.9
|
|
Subscription cost
|
|
|
(9.5
|
)
|
|
|
(9.7
|
)
|
|
|
(10.5
|
)
|
|
|
(10.0
|
)
|
|
|
(10.2
|
)
|
|
|
(9.8
|
)
|
|
|
(11.5
|
)
|
|
|
(10.4
|
)
|
|
|
(11.2
|
)
|
Services cost
|
|
|
(2.8
|
)
|
|
|
(3.1
|
)
|
|
|
(3.3
|
)
|
|
|
(2.6
|
)
|
|
|
(2.8
|
)
|
|
|
(2.9
|
)
|
|
|
(3.1
|
)
|
|
|
(4.2
|
)
|
|
|
(4.4
|
)
|
Total cost
|
|
|
(12.2
|
)
|
|
|
(12.8
|
)
|
|
|
(13.8
|
)
|
|
|
(12.6
|
)
|
|
|
(13.0
|
)
|
|
|
(12.6
|
)
|
|
|
(14.6
|
)
|
|
|
(14.6
|
)
|
|
|
(15.5
|
)
|
Gross profit
|
|
|
18.7
|
|
|
|
19.1
|
|
|
|
23.4
|
|
|
|
22.1
|
|
|
|
25.7
|
|
|
|
26.1
|
|
|
|
30.9
|
|
|
|
27.7
|
|
|
|
32.4
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
(7.8
|
)
|
|
|
(9.9
|
)
|
|
|
(6.9
|
)
|
|
|
(6.9
|
)
|
|
|
(7.4
|
)
|
|
|
(6.9
|
)
|
|
|
(7.1
|
)
|
|
|
(7.9
|
)
|
|
|
(8.2
|
)
|
Sales and marketing
|
|
|
(15.7
|
)
|
|
|
(19.3
|
)
|
|
|
(17.5
|
)
|
|
|
(17.9
|
)
|
|
|
(21.3
|
)
|
|
|
(16.2
|
)
|
|
|
(12.4
|
)
|
|
|
(14.8
|
)
|
|
|
(14.4
|
)
|
Research and development
|
|
|
(10.7
|
)
|
|
|
(14.2
|
)
|
|
|
(11.9
|
)
|
|
|
(13.9
|
)
|
|
|
(15.4
|
)
|
|
|
(13.8
|
)
|
|
|
(14.1
|
)
|
|
|
(14.0
|
)
|
|
|
(16.3
|
)
|
Other income (losses)
|
|
|
(0.9
|
)
|
|
|
0.0
|
|
|
|
(0.2
|
)
|
|
|
0.0
|
|
|
|
(0.5
|
)
|
|
|
(0.5
|
)
|
|
|
(0.4
|
)
|
|
|
(0.8
|
)
|
|
|
(0.5
|
)
|
Loss from operation
|
|
|
(16.4
|
)
|
|
|
(24.4
|
)
|
|
|
(13.1
|
)
|
|
|
(16.7
|
)
|
|
|
(18.9
|
)
|
|
|
(11.3
|
)
|
|
|
(3.0
|
)
|
|
|
(9.7
|
)
|
|
|
(7.1
|
)
|
Financial result, net
|
|
|
(1.4
|
)
|
|
|
(0.6
|
)
|
|
|
(1.4
|
)
|
|
|
(4.7
|
)
|
|
|
(5.4
|
)
|
|
|
(0.2
|
)
|
|
|
2.7
|
|
|
|
1.5
|
|
|
|
0.1
|
|
Equity results
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.4
|
|
Income (loss) before income tax
|
|
|
(17.6
|
)
|
|
|
(24.8
|
)
|
|
|
(14.3
|
)
|
|
|
(21.2
|
)
|
|
|
(24.1
|
)
|
|
|
(11.2
|
)
|
|
|
0.0
|
|
|
|
(7.9
|
)
|
|
|
(6.6
|
)
|
Income tax
|
|
|
2.1
|
|
|
|
2.8
|
|
|
|
3.7
|
|
|
|
2.1
|
|
|
|
2.6
|
|
|
|
(0.3
|
)
|
|
|
(0.3
|
)
|
|
|
(0.0
|
)
|
|
|
0.0
|
|
Net loss for the period
|
|
|
(15.5
|
)
|
|
|
(22.0
|
)
|
|
|
(10.6
|
)
|
|
|
(19.1
|
)
|
|
|
(21.5
|
)
|
|
|
(11.5
|
)
|
|
|
(0.3
|
)
|
|
|
(7.9
|
)
|
|
|
(6.6
|
)
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings
(loss) per share (US$)
|
|
|
(0.09
|
)
|
|
|
(0.12
|
)
|
|
|
(0.06
|
)
|
|
|
(0.10
|
)
|
|
|
(0.11
|
)
|
|
|
(0.06
|
)
|
|
|
(0.00
|
)
|
|
|
(0.04
|
)
|
|
|
(0.04
|
)
|
The following table sets forth selected condensed consolidated interim profit (loss) statements data for each of the periods indicated as a percentage of total revenue.
|
|
For the three months ended
(unaudited)
|
|
|
|
June
30, 2021
|
|
|
September
30, 2021
|
|
|
December
31, 2021
|
|
|
March
31, 2022
|
|
|
June
30, 2022
|
|
|
September
30, 2022
|
|
|
December
31, 2022
|
|
|
March
31, 2023
|
|
|
June
30, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Subscription cost
|
|
|
(30.6
|
)%
|
|
|
(30.6
|
)%
|
|
|
(28.2
|
)%
|
|
|
(28.8
|
)%
|
|
|
(26.3
|
)%
|
|
|
(25.2
|
)%
|
|
|
(25.3
|
)%
|
|
|
(24.6
|
)%
|
|
|
(23.3
|
)%
|
Services cost
|
|
|
(8.9
|
)%
|
|
|
(9.6
|
)%
|
|
|
(8.9
|
)%
|
|
|
(7.5
|
)%
|
|
|
(7.3
|
)%
|
|
|
(7.4
|
)%
|
|
|
(6.8
|
)%
|
|
|
(9.9
|
)%
|
|
|
(9.1
|
)%
|
Total cost
|
|
|
(39.6
|
)%
|
|
|
(40.1
|
)%
|
|
|
(37.1
|
)%
|
|
|
(36.3
|
)%
|
|
|
(33.6
|
)%
|
|
|
(32.6
|
)%
|
|
|
(32.1
|
)%
|
|
|
(34.4
|
)%
|
|
|
(32.4
|
)%
|
Gross profit
|
|
|
60.4
|
%
|
|
|
59.9
|
%
|
|
|
62.9
|
%
|
|
|
63.7
|
%
|
|
|
66.4
|
%
|
|
|
67.4
|
%
|
|
|
67.9
|
%
|
|
|
65.6
|
%
|
|
|
67.6
|
%
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
(25.3
|
)%
|
|
|
(31.2
|
)%
|
|
|
(18.6
|
)%
|
|
|
(19.9
|
)%
|
|
|
(19.2
|
)%
|
|
|
(17.9
|
)%
|
|
|
(15.5
|
)%
|
|
|
(18.7
|
)%
|
|
|
(17.2
|
)%
|
Sales and marketing
|
|
|
(50.9
|
)%
|
|
|
(60.7
|
)%
|
|
|
(47.0
|
)%
|
|
|
(51.6
|
)%
|
|
|
(55.1
|
)%
|
|
|
(41.7
|
)%
|
|
|
(27.3
|
)%
|
|
|
(35.0
|
)%
|
|
|
(30.2
|
)%
|
Research and development
|
|
|
(34.6
|
)%
|
|
|
(44.5
|
)%
|
|
|
(32.1
|
)%
|
|
|
(40.1
|
)%
|
|
|
(39.8
|
)%
|
|
|
(35.6
|
)%
|
|
|
(30.9
|
)%
|
|
|
(33.0
|
)%
|
|
|
(34.0
|
)%
|
Other income (losses)
|
|
|
(2.8
|
)%
|
|
|
0.0
|
%
|
|
|
(0.6
|
)%
|
|
|
0.0
|
%
|
|
|
(1.2
|
)%
|
|
|
(1.3
|
)%
|
|
|
(0.9
|
)%
|
|
|
(1.8
|
)%
|
|
|
(1.1
|
)%
|
Loss from operation
|
|
|
(53.1
|
)%
|
|
|
(76.5
|
)%
|
|
|
(35.4
|
)%
|
|
|
(48.1
|
)%
|
|
|
(48.9
|
)%
|
|
|
(29.1
|
)%
|
|
|
(6.7
|
)%
|
|
|
(23.0
|
)%
|
|
|
(14.9
|
)%
|
Financial result, net
|
|
|
(4.4
|
)%
|
|
|
(1.8
|
)%
|
|
|
(3.7
|
)%
|
|
|
(13.5
|
)%
|
|
|
(14.0
|
)%
|
|
|
(0.5
|
)%
|
|
|
5.9
|
%
|
|
|
3.4
|
%
|
|
|
0.2
|
%
|
Equity results
|
|
|
0.5
|
%
|
|
|
0.5
|
%
|
|
|
0.5
|
%
|
|
|
0.6
|
%
|
|
|
0.7
|
%
|
|
|
0.7
|
%
|
|
|
0.8
|
%
|
|
|
0.8
|
%
|
|
|
0.8
|
%
|
Income (loss) before income tax
|
|
|
(57.0
|
)%
|
|
|
(77.7
|
)%
|
|
|
(38.6
|
)%
|
|
|
(61.1
|
)%
|
|
|
(62.2
|
)%
|
|
|
(28.9
|
)%
|
|
|
0.1
|
%
|
|
|
(18.7
|
)%
|
|
|
(13.9
|
)%
|
Income tax
|
|
|
6.9
|
%
|
|
|
8.8
|
%
|
|
|
10.0
|
%
|
|
|
6.1
|
%
|
|
|
6.8
|
%
|
|
|
(0.9
|
)%
|
|
|
(0.8
|
)%
|
|
|
(0
|
)%
|
|
|
0.1
|
%
|
Net loss for the period
|
|
|
(50.1
|
)%
|
|
|
(68.9
|
)%
|
|
|
(28.6
|
)%
|
|
|
(55.0
|
)%
|
|
|
(55.4
|
)%
|
|
|
(29.8
|
)%
|
|
|
(0.7
|
)%
|
|
|
(18.8
|
)%
|
|
|
(13.8
|
)%
|
The following table sets forth our Non-GAAP income (loss) from operations for each of the periods indicated:
|
|
For the three months ended
(unaudited)
|
|
|
|
June
30, 2021
|
|
|
September
30, 2021
|
|
|
December
31, 2021
|
|
|
March
31, 2022
|
|
|
June
30, 2022
|
|
|
September
30, 2022
|
|
|
December
31, 2022
|
|
|
March
31, 2023
|
|
|
June
30, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operation
|
|
|
(16.4
|
)
|
|
|
(24.4
|
)
|
|
|
(13.1
|
)
|
|
|
(16.7
|
)
|
|
|
(18.9
|
)
|
|
|
(11.3
|
)
|
|
|
(3.0
|
)
|
|
|
(9.7
|
)
|
|
|
(7.1
|
)
|
Share-based compensation expense
|
|
|
5.5
|
|
|
|
9.3
|
|
|
|
1.6
|
|
|
|
2.5
|
|
|
|
0.9
|
|
|
|
4.8
|
|
|
|
4.6
|
|
|
|
5.1
|
|
|
|
4.7
|
|
Amortization and adjustment
related to acquisitions
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.8
|
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.8
|
|
Offering expenses ("IPO") (i)
|
|
|
-
|
|
|
|
1.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-GAAP Income (loss)
from operation
|
|
|
(10.4
|
)
|
|
|
(13.3
|
)
|
|
|
(10.9
|
)
|
|
|
(13.7
|
)
|
|
|
(17.5
|
)
|
|
|
(6.0
|
)
|
|
|
2.1
|
|
|
|
(4.1
|
)
|
|
|
(1.5
|
)
|
(i) Offering expenses ("IPO") are related to shares offered by the selling shareholders and other one-off IPO expenses.
Components of our results of operations
The following is a summary of the principal line items comprising condensed consolidated interim income of profit and loss.
Total revenue
Our total revenue consists of (1) subscription and support revenue, arising from a multichannel cloud and SaaS-based platform focused on ecommerce; and (2)
revenue from professional services and other, arising substantially from consulting services.
Subscription revenue
Subscription revenue consists of revenue derived from (1) a mix of transaction-based fees and fixed subscription fees, in each case derived from customers
using our platform; (2) our SMB business; and (3) other business units that generate recurring revenue to us.
Transaction-based fees comprise (a) commission fees charged to customers based on a percentage of the GMV or a fee per order processed on our platform; and
(b) commission fees charged to marketplace partners, payment providers, and any other services provided through our app store.
Fixed subscription fees comprise (a) yearly or multi-year upfront fees paid by merchants to reduce future variable fees; and (b) fixed monthly fee for
using our platform in any given month. Fixed fees are paid to us at the beginning of the applicable subscription period, regardless of the length of the subscription period. As subscription fees are received in advance of providing the related
services, we record deferred revenue on our consolidated balance sheet for the unearned revenue and recognize revenue ratably over the related subscription period.
Services revenue
Services revenue consists primarily of revenue derived from consulting services which are recognized over time during the period that services are
performed. Services revenue accounted for 6.5% of our revenue for the three-month period ended June 30, 2023, compared to 5.3% in the same period of 2022. For the six-month period ended on June 30, 2023, the consulting services revenue accounted for
6.2% of our revenue, compared to 5.7% in the same period of 2022.
Cost of revenue
Our total cost consists of (1) subscription cost; and (2) services cost.
Subscription cost of revenue
Subscription cost consists mainly of costs related to hosting and customer support costs. The hosting related costs include third-party providers, software
related platform operating costs, and compensation for our infrastructure team. Support costs are mostly driven by personnel cost, and represent expenses related to the support we provide to our customers.
Services cost of revenue
Services cost consist mainly of personnel costs and/or third-party expenses to provide the professional services advisory for a specific project of a
customer project.
Operating expenses
Our operating expenses consist of general and administrative expenses, sales and marketing expenses, and research and development expenses.
General and administrative expenses consist primarily of (1) personnel-related expenses (including stock-based compensation) for our finance, support
operation departments, legal and compliance teams; (2) corporate expenses; and (3) corporate overhead allocation. General and administrative expenses also include costs related to business acquisitions, legal and other professional services fees and
depreciation and amortization.
Sales and marketing expenses consist primarily of (1) personnel-related expenses (including stock-based compensation) and commissions paid to the direct
sales team, the success team, partnership sales team and sales enablement team; (2) travel-related expenses; (3) marketing and events expenses; (4) finder fee commissions; and (5) the allocation of corporate overhead. We plan to continue to incur
sales and marketing expenses in the regions that we currently have a presence as well as in new regions over time in order to continue to enhance our brand awareness and our capabilities to attract new customers.
Research and development expenses consist primarily of (1) personnel-related expenses (including stock-based compensation) for product development, product
management and product design; (2) software subscription costs related to the product; and (3) the allocation of corporate overhead. We expect to increase the research and development expenses to continue investing in product innovation, and in the
development of new products.
Financial results
Financial results consist of financial income and financial expenses. Financial income consists of interest earned on bank deposits, foreign exchange
gains, short-term investment gains and other financial income. Financial expense consists mostly of foreign exchange losses, short-term investment losses, losses from fair value of financial instruments, interest on lease liabilities and adjustment
of hyperinflation in Argentina.
Income tax
Provision for income taxes consists primarily of income taxes, current and deferred, in certain foreign jurisdictions in which we conduct business. The
current and deferred income taxes are calculated based on the tax laws enacted or substantively enacted at the end of the reporting period in the countries in which we operate and generate taxable income.
Currently we are running losses in most of our subsidiaries, and to that extent and considering the profitability expected in the foreseeable future our
most relevant operation has been booking the related tax losses as part of our deferred tax assets.
Historical operations results
Comparison of results of operations for the three and six-month periods ended June 30, 2023 and 2022
The following table sets forth our condensed consolidated interim income statements for the three and six-month periods ended June 30, 2023 and 2022. The
period-to-period comparison of financial results is not necessarily indicative of future results.
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands)
|
|
June
30, 2023
|
|
|
June
30, 2022
|
|
|
June
30, 2023
|
|
|
June
30, 2022
|
|
Subscription revenue
|
|
|
44,772
|
|
|
|
36,649
|
|
|
|
84,534
|
|
|
|
69,230
|
|
Services revenue
|
|
|
3,114
|
|
|
|
2,065
|
|
|
|
5,634
|
|
|
|
4,151
|
|
Total revenue
|
|
|
47,886
|
|
|
|
38,714
|
|
|
|
90,168
|
|
|
|
73,381
|
|
Subscription cost (1)
|
|
|
(11,153
|
)
|
|
|
(10,166
|
)
|
|
|
(21,553
|
)
|
|
|
(20,162
|
)
|
Services cost (1)
|
|
|
(4,353
|
)
|
|
|
(2,842
|
)
|
|
|
(8,519
|
)
|
|
|
(5,449
|
)
|
Total cost
|
|
|
(15,506
|
)
|
|
|
(13,008
|
)
|
|
|
(30,072
|
)
|
|
|
(25,611
|
)
|
Gross profit
|
|
|
32,380
|
|
|
|
25,706
|
|
|
|
60,096
|
|
|
|
47,770
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative (1)
|
|
|
(8,242
|
)
|
|
|
(7,431
|
)
|
|
|
(16,167
|
)
|
|
|
(14,352
|
)
|
Sales and marketing (1)
|
|
|
(14,449
|
)
|
|
|
(21,318
|
)
|
|
|
(29,231
|
)
|
|
|
(39,218
|
)
|
Research and development (1)
|
|
|
(16,305
|
)
|
|
|
(15,409
|
)
|
|
|
(30,264
|
)
|
|
|
(29,334
|
)
|
Other losses
|
|
|
(511
|
)
|
|
|
(474
|
)
|
|
|
(1,265
|
)
|
|
|
(465
|
)
|
Loss from operations
|
|
|
(7,127
|
)
|
|
|
(18,926
|
)
|
|
|
(16,831
|
)
|
|
|
(35,599
|
)
|
Financial result, net
|
|
|
114
|
|
|
|
(5,426
|
)
|
|
|
1,570
|
|
|
|
(10,147
|
)
|
Equity results
|
|
|
367
|
|
|
|
268
|
|
|
|
708
|
|
|
|
487
|
|
Loss before income tax
|
|
|
(6,646
|
)
|
|
|
(24,084
|
)
|
|
|
(14,553
|
)
|
|
|
(45,259
|
)
|
Total income tax
|
|
|
36
|
|
|
|
2,619
|
|
|
|
15
|
|
|
|
4,704
|
|
Net loss for the period
|
|
|
(6,610
|
)
|
|
|
(21,465
|
)
|
|
|
(14,538
|
)
|
|
|
(40,555
|
)
|
(1) Includes stock-based compensation expenses as follows:
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands)
|
|
June
30, 2023
|
|
|
June
30, 2022
|
|
|
June
30, 2023
|
|
|
June
30, 2022
|
|
Subscription cost
|
|
|
(85
|
)
|
|
|
(80
|
)
|
|
|
(106
|
)
|
|
|
(167
|
)
|
Services cost
|
|
|
(99
|
)
|
|
|
6
|
|
|
|
(244
|
)
|
|
|
(20
|
)
|
General and administrative
|
|
|
(1,708
|
)
|
|
|
(639
|
)
|
|
|
(3,422
|
)
|
|
|
(1,628
|
)
|
Sales and marketing
|
|
|
(1,050
|
)
|
|
|
247
|
|
|
|
(2,369
|
)
|
|
|
(482
|
)
|
Research and development
|
|
|
(1,793
|
)
|
|
|
(458
|
)
|
|
|
(3,664
|
)
|
|
|
(1,101
|
)
|
Total
|
|
|
(4,735
|
)
|
|
|
(924
|
)
|
|
|
(9,805
|
)
|
|
|
(3,398
|
)
|
Total revenue
The components of our total revenue during the three and six-month periods ended on June 30, 2023 and 2022 were as follows:
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands, except percentages)
|
|
June
30, 2023
|
|
|
June
30, 2022
|
|
|
Variation
|
|
|
June
30, 2023
|
|
|
June
30, 2022
|
|
|
Variation
|
|
Subscription revenue
|
|
|
44,772
|
|
|
|
36,649
|
|
|
|
22.2
|
%
|
|
|
84,534
|
|
|
|
69,230
|
|
|
|
22.1
|
%
|
Services revenue
|
|
|
3,114
|
|
|
|
2,065
|
|
|
|
50.8
|
%
|
|
|
5,634
|
|
|
|
4,151
|
|
|
|
35.7
|
%
|
Total revenue
|
|
|
47,886
|
|
|
|
38,714
|
|
|
|
23.7
|
%
|
|
|
90,168
|
|
|
|
73,381
|
|
|
|
22.9
|
%
|
Total revenue for the three-month period ended June 30, 2023 was US$47.9 million, an increase of US$9.2 million, or 23.7% in US$ or 22.9% on an FX neutral
basis, from US$38.7 million in the same period of 2022. The increase in total revenue was primarily driven by: an increase in GMV of 23.4% in US$ or 21.2% on an FX neutral basis to US$3.8 billion for the three-month period ended June 30, 2023, from
US$3.1 billion in the same period of 2022, which also led to higher revenues from transaction-based fees as percentage of total subscription revenues and the expansion of our operations outside of Brazil.
Total revenue for the six-month period ended June 30, 2023 was US$90.2 million, an increase of US$16.8 million, or 22.9% in US$ or 22.5% on an FX neutral
basis, from US$73.4 million in the same period of 2022. The increase in total revenue was primarily driven by: an increase in GMV of 22.6% in US$ or 20.9% on an FX neutral basis to US$7.1 billion for the six-month period ended June 30, 2023, from
US$5.8 billion in the same period of 2022, which also led to higher revenues from transaction-based fees as percentage of total subscription revenues and the expansion of our operations outside of Brazil.
Total cost
The components of our total cost during the three and six-month periods ended on June 30, 2023 and 2022 were as follows:
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands, except percentages)
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
Subscription cost
|
|
|
(11,153
|
)
|
|
|
(10,166
|
)
|
|
|
9.7
|
%
|
|
|
(21,553
|
)
|
|
|
(20,162
|
)
|
|
|
6.9
|
%
|
Services cost
|
|
|
(4,353
|
)
|
|
|
(2,842
|
)
|
|
|
53.2
|
%
|
|
|
(8,519
|
)
|
|
|
(5,449
|
)
|
|
|
56.3
|
%
|
Total cost
|
|
|
(15,506
|
)
|
|
|
(13,008
|
)
|
|
|
19.2
|
%
|
|
|
(30,072
|
)
|
|
|
(25,611
|
)
|
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost for the three-month period ended June 30, 2023 increased by US$2.5 million, or 19.2%, to US$15.5 million from US$13.0 million in the same period
of 2022, principally due to an increase in total cost of services by US$1.5 million.
Total cost for the six-month period ended June 30, 2023 increased by US$4.5 million, or 17.4%, to US$30.1 million from US$25.6 million in the same period
of 2022, principally due to an increase in total cost of services by US$ 3.0 million.
Gross profit
As a result of the above, our gross profit increased by US$6.7 million, or 26.0% to US$32.4 million for the three-month period ended June 30, 2023 from
US$25.7 million in the same period of 2022. As a percentage of our total revenue, our gross profit increased to 67.6% in the three-month period ended June 30, 2023 from 66.4% in the same period of 2022, mainly due to operational hosting cost
efficiencies.
Our gross profit increased by US$12.3 million, or 25.8% to US$60.1 million for the six-month period ended June 30, 2023 from US$47.8 million in the same
period of 2022. As a percentage of our total revenue, our gross profit increased to 66.6% in the six-month period ended June 30, 2023 from 65.1% in the same period of 2022, mainly due to operational hosting cost efficiencies.
Operating expenses
General and administrative
General and administrative expenses during the three and six-month periods ended on June 30, 2023 and 2022 were as follows:
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands, except percentages)
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
General and administrative
|
|
|
(8,242
|
)
|
|
|
(7,431
|
)
|
|
|
10.9
|
%
|
|
|
(16,167
|
)
|
|
|
(14,352
|
)
|
|
|
12.6
|
%
|
Percentage of total revenue
|
|
|
(17.2
|
)%
|
|
|
(19.2
|
)%
|
|
|
-
|
|
|
|
(17.9
|
)%
|
|
|
(19.6
|
)%
|
|
|
-
|
|
Our general and administrative expenses increased by US$0.8 million, or 10.9%, to US$8.2 million for the three-month period ended June 30, 2023 from US$7.4
million in the same period of 2022, primarily due to the increase in expenses related to share-based compensation.
For the six-month period ended June 30, 2023, our general and administrative expenses increased by US$1.8 million, or 12.6%, to US$16.2 million from
US$14.3 million in the same period of 2022, primarily due to the increase in expenses related to share-based compensation.
Sales and marketing
Sales and marketing expenses during the three and six-month periods ended June 30, 2023 and 2022 were as follows:
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands, except percentages)
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
Sales and marketing
|
|
|
(14,449
|
)
|
|
|
(21,318
|
)
|
|
|
(32.2
|
%)
|
|
|
(29,231
|
)
|
|
|
(39,218
|
)
|
|
|
(25.5
|
)%
|
Percentage of total revenue
|
|
|
(30.2
|
)%
|
|
|
(55.1
|
)%
|
|
|
-
|
|
|
|
(32.4
|
)%
|
|
|
(53.4
|
)%
|
|
|
-
|
|
Our sales and marketing expenses decreased by US$6.9 million, or 32.2%, to US$14.4 million for the three-month period ended June 30, 2023 from US$21.3
million in the same period of 2022, primarily due to (1) the decrease in expenses related to compensation due to the reduction in our sales and marketing workforce as a result of the Company’s efforts to optimize its structure, (2) the decrease in
marketing and events expenses and (3) the decrease in outsourcing expenses.
For the six-month period ended June 30, 2023, our sales and marketing expenses decreased by US$10.0 million, or 25.5%, to US$29.2 million from US$39.2
million for the same period of 2022, primarily due to (1) the decrease in expenses related to compensation due to the reduction in our sales and marketing workforce as a result of the Company’s efforts to optimize its structure, (2) the decrease in
marketing and events expenses and (3) the decrease in outsourcing expenses.
Research and development
Research and development expenses during the three and six-month periods ended on June 30, 2023 and 2022 were as follows:
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands, except percentages)
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
Research and development
|
|
|
(16,305
|
)
|
|
|
(15,409
|
)
|
|
|
5.8
|
%
|
|
|
(30,264
|
)
|
|
|
(29,334
|
)
|
|
|
3.2
|
%
|
Percentage of total revenue
|
|
|
(34.0
|
)%
|
|
|
(39.8
|
)%
|
|
|
-
|
|
|
|
(33.6
|
)%
|
|
|
(40.0
|
)%
|
|
|
-
|
|
Our research and development expenses increased by US$0.9 million, or 5.8% to US$16.3 million for the three-month period ended June 30, 2023 from US$15.4
million in the same period of 2022, primarily due to an increase in expenses related to share-based compensation, which was partially offset by the decrease in other expenses related to compensation as a result of the Company’s efforts to optimize
its structure.
For the six-month period ended June 30, 2023, our research and development expenses increased by US$0.9 million, or 3.2%, to US$30.3 million from US$29.3
million in the same period of 2022, primarily due to an increase in expenses related to share-based compensation, which was partially offset by the decrease in other expenses related to compensation as a result of the Company’s efforts to optimize
its structure.
Financial results
The components of our financial results during the three and six-month periods ended June 30, 2023 and 2022 were as follows:
|
|
Three months ended
|
|
|
Six months ended
|
|
(in US$ thousands, except percentages)
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
Variation
|
|
Financial income
|
|
|
9,240
|
|
|
|
4,696
|
|
|
|
96.8
|
%
|
|
|
16,599
|
|
|
|
8,988
|
|
|
|
84.7
|
%
|
Financial expense
|
|
|
(9,126
|
)
|
|
|
(10,122
|
)
|
|
|
(9.8
|
)%
|
|
|
(15,029
|
)
|
|
|
(19,135
|
)
|
|
|
(21.5
|
)%
|
Financial result, net
|
|
|
114
|
|
|
|
(5,426
|
)
|
|
|
(102.1
|
)%
|
|
|
1,570
|
|
|
|
(10,147
|
)
|
|
|
(115.5
|
)%
|
Our financial result amounted to a revenue of US$0.1 million for the three-month period ended June 30, 2023, compared to an expense of US$5.4 million in
the same period of 2022
Our financial result amounted to a revenue of US$1.6 million for the six-month period ended June 30, 2023, compared to an expense of US$10.1 million in the
same period of 2022
Explanations for the variations in the above referred period are set forth below:
Financial income
Financial income increased by US$4.5 million, or 96.8%, to US$9.2 million for the three-month period ended June 30, 2023 from US$4.7 million in the same
period of 2022, mainly due to (1) an increase in interest and dividends earned on bank deposits and financial investments to US$3.3 million in June 30, 2023 from US$0.2 million in June 30, 2022 and; (2) an increase in short term investments gains to
US$2.2 million in June 30, 2023 from US$0.8 million in June 30, 2022.
Financial income increased by US$7.6 million, or 84.7%, to US$16.6 million for the six-month period ended June 30, 2023 from US$9.0 million in the same
period of 2022, mainly due to (1) an increase in interest and dividends earned on bank deposits and financial investments to US$5.1 million in June 30, 2023 from US$0.3 million in June 30, 2022 and, (2) an increase in short term investments gains to
US$6.5 million in June 30, 2023 from US$1.4 million in June 30, 2022, which was partially offset by (3) a decrease in gains from fair value of financial instruments to US$0.7 million in June 30, 2023 from US$3.3 million in June 30, 2022.
Financial expense
Financial expense decreased by US$1.0 million, or 9.8%, to US$9.1 million for the three-month period ended June 30, 2023 from US$10.1 million in the same
period of 2022, mainly due to (1) the decrease in short-term investment losses to US$0.2 million in June 30, 2023 from US$6.2 million in June 30, 2022; partially offset by (2) an increase in foreign exchange losses to US$4.9 million in June 30, 2023
from US$2.0 million in June 30, 2022 and, (3) an increase in adjustment of hyperinflation to US$3.4 million in June 30, 2023 from US$1.4 million in June 30, 2022.
Financial expense decreased by US$4.1 million, or 21.5%, to US$15.0 million for the six-month period ended June 30, 2023 from US$19.1 million in the same
period of 2022, mainly due to (1) the decrease in short-term investment losses to US$1.2 million in June 30, 2023 from US$10.6 million in June 30, 2022; partially offset by (2) an increase in foreign exchange losses to US$7.7 million in June 30, 2023
from US$3.6 million in June 30, 2022, and; (3) an increase in adjustment of hyperinflation to US$4.9 million in June 30, 2023 from US$2.1 million in June 30, 2022.
The following tables show the unrealized gain and loss position recorded in our Balance Sheet as at June 30, 2023 and December 31, 2022:
|
|
As at June 30, 2023
|
|
|
|
Amortized cost
|
|
|
Gross
unrealized gain
|
|
|
Gross
unrealized loss
|
|
|
Fair value
|
|
Short-term investments
|
|
|
100,601
|
|
|
|
5,028
|
|
|
|
-
|
|
|
|
105,629
|
|
|
|
As at December 31, 2022
|
|
|
|
Amortized cost
|
|
|
Gross
unrealized gain
|
|
|
Gross
unrealized loss
|
|
|
Fair value
|
|
Short-term investments
|
|
|
208,177
|
|
|
|
1,013
|
|
|
|
(5,145
|
)
|
|
|
204,045
|
|
Net loss for the period
As a result of the above, our net loss amounted to US$6.6 million for the three-month ended June 30, 2023, compared to US$21.5 million in the same period
of 2022.
As a result of the above, our net loss amounted to US$14.5 million for the six-month period ended June 30, 2023, compared to US$40.6 million in the same
period of 2022.
Condensed consolidated interim statements of cash flows
The following table sets forth certain condensed consolidated interim cash flow information for the periods indicated:
|
|
For the six months ended
|
|
(in US$ thousands)
|
|
June
30, 2023
|
|
|
June
30, 2022
|
|
Net cash used in operating activities
|
|
|
(8,174
|
)
|
|
|
(28,622
|
)
|
Net cash provided by (used in) investing activities
|
|
|
99,186
|
|
|
|
(59,169
|
)
|
Net cash used in financing activities
|
|
|
(15,321
|
)
|
|
|
(3,186
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
75,691
|
|
|
|
(90,977
|
)
|
Net cash used in operating activities
For the six months ended June 30, 2023, net cash used in operating activities decreased by US$20.5 million to US$8.2 million, from US$28.6 in the same
period of 2022, primarily as a result of:
•
|
(1) a decrease in net loss of the period to US$14.5 million for the six-month period ended June 30, 2023, compared to a net loss of US$40.6 in the same period of 2022
|
•
|
(2) working capital adjustments which consisted mainly of an increase in deferred revenue in the amount of US$6.2 million for the six-month period ended June 30, 2023, compared to a decrease of US$1.5 million
in the same period of 2022. This was partially offset by:
|
•
|
(3) working capital adjustments which consisted mainly of an increase in trade receivables in the amount of US$6.6 million for the six-month period ended June 30, 2023, compared to a decrease of US$2.0
million in the same period of 2022.
|
Net cash provided by (used) in investing activities
For the six-month period ended June 30, 2023, net cash provided by (used in) investing activities increased by US$158.4 million to US$99.2 million of net
cash provided by investing activities from US$59.2 million of net cash used in investing activities in the same period of 2022, primarily as a result of (1) an increase in the redemption of short-term investments to US$118.3 million for the six-month
period ended June 30, 2023, from US$53.1 million in the same period of 2022 and (2) a decrease in the purchase of short-term investments to US$21.3 million for the six-month period ended June 30, 2023, from US$111.0 million in the same period of
2022.
Net cash used in financing activities
For the six-month period ended June 30, 2023, net cash used in financial activities increased by US$12.1 to US$15.3 million, from US$3.2 million in the
same period of 2022, primarily as a result of the buyback of shares in the amount of US$13.8 million for the six-month period ended June 30, 2023, from nil in the same period of 2022
Capital expenditures
Our capital expenditures, consisting of purchase of property and equipment and intangible assets, for the six-month periods ended June 30, 2023 and 2022,
amounted to US$0.2 million and US$0.2 million, respectively, representing 0.2% and 0.2% of our total revenue for the six-month periods ended June 30, 2023 and 2022, respectively.
We expect to slightly increase our capital expenditures to support the growth in our business and operations. For 2023, we have budgeted capital
expenditures of US$2.0 million. We expect to meet our capital expenditure needs for at least the next 12 months from our net cash provided by operating activities and our existing cash and cash equivalents.
Off-balance sheet arrangements
As of June 30, 2023, we did not have any off-balance sheet arrangements.
Quantitative and qualitative disclosures about market risk
We are exposed to market risks in the ordinary course of our business, including the effects of foreign currency fluctuations, derivative financial
instruments, credit risk and liquidity risk. Information relating to quantitative and qualitative disclosures about these market risks is described below:
Interest rate risk
The interest risk arises from the possibility of us incurring losses due to fluctuations in interest rates in respect of fair value of future cash flows of
a financial instrument.
Our investments are made for capital preservation purposes and we do not enter into investments for trading or speculative purposes. Our trade receivables,
accounts payable and other liabilities do not bear interest.
Our cash, cash equivalents, restricted cash, and short-term investments consist primarily of interest-bearing accounts held by our parent company in
USD. Such interest-earning instruments carry a degree of interest rate risk. To minimize interest rate risk, we intend to maintain our portfolio of cash equivalents in a variety of investment-grade securities, which may include commercial papers,
money market funds, and government and nongovernment debt securities. Because of the short-term maturities of our cash, cash equivalents, restricted cash, and short-term investments, as of June 30, 2023, we are not materially exposed to the risk of
changes in market interest rates.
Foreign currency exchange risk
We have significant operations internationally that are denominated in foreign currencies. Our exposure to foreign exchange risk is primarily related to
fluctuations between the U.S. Dollar and the currency of Latin American countries in which we operate (primarily the Brazilian real, Argentine peso, Colombian peso and Chilean peso). We transact business in various foreign currencies and have significant international revenues and costs. Our cash flows, results of operations and
some of our intercompany balances are exposed to foreign exchange rate fluctuations that may differ materially from expectations. We may record significant gains or losses due to foreign currency fluctuations and related hedging activities.
Our subsidiaries generate revenues and incur most of their expenses in the respective local currencies of the countries in which they operate. As a result,
our subsidiaries use their local currency as their functional currency. As of the six-month period ended June 30, 2023 and in the year ended December 31, 2022, 20.4% and 15.6% of our revenues were denominated in, or linked to, U.S. dollars,
respectively. As of June 30, 2023 and in the year ended December 31, 2022, our assets were represented by 61.4% and 66.1% in U.S. dollars, 38.6% and 33.9% in other currencies. As of June 30, 2023 and in the year ended December 31, 2022, our
liabilities, excluding our total shareholders’ equity, were represented by 14.2% and 13.2% in U.S. dollars, 85.8% and 86.8% in other currencies.
We are exposed to foreign exchange fluctuations on the revaluation of foreign currency assets and liabilities. We use foreign exchange derivative products
to hedge intercompany loans, and debt for operational purposes. By their nature, derivative financial instruments involve risk, including the credit risk of non-performance by counterparties. We use derivatives for hedging purposes and not as
speculative investments.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: August 8, 2023
|
VTEX
|
|
|
|
|
|
By: /s/ Ricardo Camatta Sodre
|
|
Name: Ricardo Camatta Sodre
|
|
Title: Chief Financial Officer
|
41
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