Q4 2021 VTEX Earnings Call
Hello, everyone welcome to the vertex earnings conference call for the quarter ended December 31st 2021 .
Jamie Rollo, calling on the Investor Relations director please begin.
Our senior executives attending today, Okay, I can assure you ponder uncle CEO and they cannot come at the folding carton excuse me officer.
Sorry, I'm just looking at him Chief financial Officer will be available during today's Q&A session.
I would like to remind you that management may make forward looking statements relating to such matters as continued growth prospects for the call.
Industry trends and production technology initiatives.
These statements are based on current available information and our current assumptions.
Patients on projections for the future.
We believe that our assumptions.
And projections are reasonable in view of the corn kernel of information your question not to place undue reliance on these forward looking statements.
Second week of August .
I'll describe for me this quarter some cautionary statements regarding forward looking statements section.
As trading statement of course airport eight another peak X filings with the U S. Thank you.
Thank you Felicia, which are available on our Investor relations.
Finally, I would like to remind you that during the course of this conference call we might discuss some non-GAAP measures a reconciliation of those measures to the nearest comparable GAAP measures can be found in our fourth quarter 2021 earnings press release available on <unk>.
Our Investor Relations.
Now, let me turn the call over to get all that I'll go for it.
Thank you Sheila and welcome everyone and thanks for joining us today for our 2024th.
Fourth quarter earnings results.
<unk> 21 was a very special year for us because we were.
Public we added what large enterprise customers than ever before we launch it conversational commerce support social and live Commerce, we bought with outstanding companies, such as AWS Facebook stripe Uber.
And mainly new system integrators.
And contribute constricted executing our geographical ex special plans.
Many other things.
I'm proud to announce that in 2021st we made significant progress across the globe, which increases our confidence to be more than that.
The potential of our global expansion.
Now, let me move to the progress we've made during the last quarter of 2021.
We continue to see strong momentum in the new contract signatures, resulting in a quarter over quarter, increasing our backlog of new online stores. Other implementation. In addition to the strong performance of the stores coming out of implementation and go lives.
And importantly, we increased the amount of large enterprise customer contracts signed at that now.
Mentation.
These demonstrate the power to detect gain that over this year, giving us confidence in the future growth of the company and visibility of future performance.
In the fourth quarter of 2020 flows we had more than 40% additional go lives than last year in the second quarter.
With customers now operating with us.
Thank you.
We continued senior huge opportunity ahead of us.
We still see new customers, joining gtx is graeff skewed ecommerce operations.
Commerce penetration is still has a long road ahead, especially in Latin America.
Some new customers that went live this quarter didn't have online presence in the region before.
Elephant in eastern Europe each of them.
Five countries in Latin America.
We also added customers that migrated from Ehealth solutions order complexity.
Including telcos soothing treat countries in Latin America, and Western Europe , and CAE in the U S.
Speed to market continues to be a key differentiator and one of our competitive advantages again born on premises software.
This is crucial as it enable our customers to initiate the DS two commerce transformation faster remaining relevant to our customers and improving their time too guys.
For example, this quarter each of them in Chile went live in less than four months.
We have a drought.
Customers' journey in 2021st we would trusted by more than.
Duane.
Hi, good customers with more than 3200 stores across 38 countries.
In our history as a company we have built successful long term relationships with our customers expressed by a decreased number of storage for customers and countries, where they operate with us.
In 2021st we're normalizing our top 100 customers, we reached $4 eight stores to customers with operations across 34 countries.
From 2023, seven sports for customers in 26th Scott.
In Q4, some of our existing customers that expanded good operations.
By opening new online stores EU countries.
ABM beds in the U S. Martin.
Motorola.
Our first daughter in Colombia.
In Mexico.
Secret in Uruguay, and Tommy Hilfiger in Guatemala and too.
Our existing customers continue to grow at a healthy pace on top of the impressive growth we experienced in 2012.
In 2021, our same store sales were up 12% on FX neutral basis. After 'twenty planning same store sales growth of 90%.
Both same store sales growth were impacted by currency.
2020 numbers was positively impacted as customers could only sell dirt products' alive during a significant portion of the year.
While 2021st numbers were impacted by the reopening of physical channels, which enable omni channel strategy in many cases supported by Gtx.
Partly offloaded some of the online sales of the prior year.
With that said it is important to note that the 2019, our same store sales.
25% in that aspect neutral.
Before moving to our product development and enhancement.
Wanted to do a quick comment over a relevant special day, we had this quarter black side.
It takes enable $1 4 million consumers or the globally, which represents a 25 year over year, increasing the number of orders compared to November 2012, demonstrating the long term trend of consumers shopping online more frequently and the increasing penetration of digital.
Congress.
And the two things.
Most proud of this holiday season with the reliability of our network.
<unk> allowed us to reach 100% availability during the black Friday week and decreasing in volumes in countries, such as Mexico and need to each joined the top five countries with the most gmg dollar increases evolved gitex countries, demonstrating how our app.
Switch to grow those regions are tangible lead volume and top line acceleration.
Now moving to our project I'm excited to update you with mainly inroads we've made this quarter.
I would like to introduce a new principles that will guide our development.
Numbers on out of pilot the co pilot.
Which basically means that we will develop drug features to help our blocker firm to execute our customer strategy autonomously and to recommend the best actions for them to grow with no or limited human interaction.
Beauty is always.
Evolving process.
We are encouraged to disrupt together with our customers. The main streams conflicts at retail with a new company. We are always seeking to provide a future proof solution that we are ahead of two days.
So now going into our four product development pillows.
Zero friction onboarding collaborations we continued making progress with our new front end framework called first store, which is already adopted like large enterprise customers such as <unk> in Brazil, and we have more in the pipeline such as the cash flow April .
Group.
Sure.
We have already successfully mentored Sci that are now implemented this new module for the textile that was built from scratch with storefront performance in mind without compromising flexibility our development productivity.
We continue to add the sellers to tailor onboarding solution.
Actively using our new salad forward.
We have companies such as total multi embark elephant GM heritage and Samsung that already adopted the solution.
As we are building the infrastructure to enable brands to be relevant in search of convenience driven environment, we're always seeking to enhance the consumers' journey and offer omni channel solution that integrates all sales and fulfillment Chinese shoppers can now navigate.
In our customers' website and check for the local availability of each product.
Rely on faster delivery SMA, if the product is available and the year by physical store or franchise.
We already have full imported that their visa and CNA among others benefiting from this new capability.
We also continued making strides related to our in store style approach.
Our physical store sales associate can use filters, such as supplies rent Bachmann and brand among other coffee configurable futures when searching for products from each store vitek intelligent search.
This results in a more dynamic and precise broadband speed the sales, allowing them to quickly find the designs abroad.
Regarding becoming the single cultural band for every order.
Made three major launches lives sharpie Cobra official comments of social Congress.
In search of highly connected world customers are becoming increasingly impatient.
And demanding when it comes to the shipping and support experience that.
E Commerce resolution in retail might have be just the beginning of a complete change in the way, we shop, which is crucial to be prepared for this next week.
The tax slide shopping App is now available to our customers.
Our native live stream App helps brands the retailers using <unk> e-commerce platform to create one too many and once you want immersive live shopping experiences that increase engagement and conversion rate.
Unlocking new growth opportunities by simplifying how do you start plan manage and track performance of live shopping events.
With lives sharpening our customers have the possibility to broadcast live and sell at the same time, either from store warehouse or the place of your pressure.
Rather detailed are explained to a deeper level and the shopping experience amplified helping consumers in their decision making process.
Early adopters of feedstocks like Sharpie indicated an increase of about five times. The average online session time, and most importantly, an increase of more than 30% and purchase conversion during live events.
We are consistently increasing the support of our customers, who once you introduce sales capability to the conversation that touch point.
Several customers via text.
As you combine the awards of Commerce and conversational platform.
We are onboarding customers from different segment, such as grocery drug stores to enable them to sell through whatsapp and other conversational interfaces.
Scott emerging channel that will complement physical stores browsers mobile app marketplace.
And order sales channels. We also launched Gtx tracking notification via Whatsapp. In addition to SMS and email notifications, increasing refused response rates of our customers.
We also launched social commerce capabilities, enabling sales associates in physical store of our of our clients to ship products with customers.
Codes.
<unk> allows physical store customers to assess that.
Two a shopping cart with project. So they can complete the purchase even if size of call. It is not available with the physical store.
On our mission of becoming the developer platform of choice for comment.
Continuing attracting developers to our low code platform, gaining momentum in the community and scaling our capabilities.
Mostly active developers accessing detects developer portal increased to more than 20000 in Q4 from more than 14000 in Q3 <unk>.
Additionally, we are excited to announce that.
This quarter U S developers accessing our portal has have more than doubled quarter over quarter.
Finally, he guarding provide e-commerce on auto pilot and copilot with large at our new ethylene dashboards.
Near real time data with the most relevant commerce information.
Also with our new Gtx log performance value customers can have a graphical presentation and description of each carrier's performance with all growth, suggesting which one is more efficient for each particular delivery.
Our clients can track carrier's performance calculation results and leverage all the detailed information we have on each carrier.
Rose.
Last but not least I would like to thank our more than 1700 detected that had made detects into the top 10 public software companies to work at.
Quadrant two glass door.
In the last 18 months with Triple our investment increasing significantly our head count from around 600.
2019.
So for us being able to maintain our core DNA at scale, while evolving into become a better stronger and high performing company.
Is the non <unk> and the commitment we make every day to all of the taxes.
We have been able to build a robust team in every area.
G&A R&D and estimate.
And now it's time to let this team mature reach efficiency and show the world what we are capable of.
In 2022, we expect to grow our team at a more measured pace.
By reaping the benefits of the investments made in 2021, we will grow at a strong pace in 2022, while at the same time delivering significant operating margin expansion.
Now before I turn the call to Ricardo <unk>.
I'd like to announce that we will be hosting the <unk> date, the biggest ecommerce event in Latin America, and the third globally on April 12, and the 13th in Sao Paulo.
We'd like to invite you to come experience with <unk> culture, and see the power of our ecosystem. It is magnificent.
<unk>.
In 2019, the last year, we could do this in person we had more than 20000 attendees and.
And more than 160 amazing speakers.
We are confident we will have another amazing event this year.
Being mindful of social distancing and health and safety.
The event will be limited in terms of the attendees. So book your place quickly and stay tuned we will be more than happy to heavy wall.
I will leave you to cover our financial progress for the quarter.
Hi, everyone.
Can be here updating along our financial performance for the fourth quarter of 2021.
This quarter, our revenue increased to $37 $1 million.
Year over year increase of 30% on an FX neutral basis, so biopsy the wide, 27% year over year FX neutral growth rate, we guided last quarter and demonstrating that we are indeed entry into the growth rate normalization trend, we were expecting towards 2022.
These allow us to reach a widening of $125 $8 million for the full year 2021.
Representing 30% growth one on FX neutral basis on top of our record revenue growth of 95% on FX neutral basis last year.
Our robust performance in such a tough comps environment give us confidence in our future growth projections going forward.
In the fourth quarter, we have seen some vertical gaming relevant such as medium help grocery and Edinburgh and accessories, which grew 42, 2% 86, 6% and 33, 8%, respectively on a year over year and FX neutral basis.
Some verticals such as electronics and home appliances, loggerhead were impacted by supply chain challenges.
Economic trends.
Presented more modest performance.
That shows that <unk> has a resilient business model, our software works well for many different industries, allowing us to perform well even while some verticals are impacted by macroeconomics.
Our revenue from existing stores increased to $87 3 million volumes in 2021.
Yes.
Net revenue retention of 105, 1%.
Next neutral basis.
Each win net revenue retention of 171, 9%.
Deeply impacted by fiscal stores and for any closing.
In context.
The 2021.
While impacted by physical stores reopening.
On a two year compounded average our 'twenty 'twenty 2021, net retention was 100 embedded.
You're above our historical average.
Right speaking 100 day 100.
50%.
On top of our existing stores growth, we continue attracting new stores added $19 4 million as well as the revenue to our base each represented 23% of our <unk> <unk> platform revenue yes.
Demonstrating the strong momentum we are heavy Newport facilities.
Number of customers with revenue above $280000 per year, Egypt, 76 from 58, 2020, representing a year over year increase of 31%.
Our geographical expansion continues to broaden.
Revenues outside of Brazil.
The 47% of our total revenues.
And that can be a gagan Latin America, excluding Brazil grew 84%.
While the ramp up the road.
Almost triple digits, 96%.
When analyzing our FX neutral year over year growth in 2020.
One bright you grew 24% Latin America, excluding Brazil, our we can most impacted by east coast stores, we opened even our customer base increased.
<unk> increased by 28%.
Rest of the world.
8% positively impacted by the work Gary acquisition, but also driven by solid organic growth.
Now moving down our P&L.
non-GAAP subscription gross profit was $24 $1 million in the fourth quarter of 2021.
Compared to $17 9 million in the fourth quarter of 2020.
Representing a year over year increase of 35% in U S dollars and 38, 2% FX neutral basis non-GAAP subscription gross margin was 69, 9%.
Fourth quarter of 2021.
64, 6% in the third.
Quarter of 2020.
non-GAAP subscription gross margin year over year at 530 basis point improvement reflects operational hosting cost efficiencies.
We believe we will continue improving subscription gross margin in 2022 and onwards, even EP specific quarters could potentially show some volatility while we introduce new product features and migrate noncore software providers potentially incurring additional short term cost.
Alex we enjoy long term higher efficiency.
We decided to significantly increase our investments 18 months ago to capture the strong e-commerce acceleration market opportunity as a result, our non-GAAP loss from operations was $10 $9 million during the fourth quarter. Our fleet, one one compared to non-GAAP income from operations of <unk>.
<unk> $1 million in the fourth.
Quarter of 2020.
Primarily due to incremental personnel related investments.
The non-GAAP loss from operations margin this quarter already.
Since Q3.
A result of Q4 seasonality as well as operational leverage.
Moderate quarter over quarter expense.
Also along these lines we are encouraged.
We continue having attractive unit economics before.
Despite the higher investments, we conducted new geographies.
Our LTV to CAC is still above six times cash on cash.
In 2021, we planted the seeds across the geography and product features.
Notwithstanding to see which ones will be most likely to detect and focus our efforts on those to leverage our future growth.
As of the three months ended December 31st 2021.
<unk> had a negative $21 $3 billion free cash flow.
Driven by our non-GAAP loss from operations and <unk>.
One off looking carefully.
It's important to know that until the end of 2020 deep X. We vote, let alone kept injection self funded by its powerful business model.
Although in the last three years, we had sullivan privately that nuance.
Of those loans were secondary.
All of them, we only received $66 $3 billion of primary funding.
We consider it important to know that by the end of 2020, we had $75 5 million in cash and marketable securities on the balance sheet.
We ended the year with almost $300 million in cash. So we are more than well positioned to deliver strong results with no additional foreseeable funding our organic growth.
Before moving to our 2022 outlook.
Likely that from a business perspective, we think about our P&L as a combination of GP and helps our existing stores P&L, our new sports P&L.
Youll find these reference slide 28.
Fourth quarter earnings presentation.
Deep ex existing stores revenue, excluding our F&B platform represented approximately 80% of total revenues.
These P&L.
<unk> operating margin and growth in our net revenue retention rate.
We don't have any significant sales and marketing expenses to serve our existing sports.
We only had supply costs, which we already included in our subscription cost.
These existing stores P&L gross or net revenue mutation, which is mainly driven by the same store sales growth of our existing sports.
Our variable revenue as a percentage of our total revenue and our annual revenue.
Our new stores revenue also excluding our F&B platform represented approximately 20% of total revenues.
This P&L has a negative operating margin, but bring new stores to our base with attractive unit economics.
So we're getting new stores, the focus of our sales and marketing.
So these P&L.
Most all of those expenses.
Now comparing our P&L breakdown for 2000 22021, there are a couple of comments I would like to make.
We are exiting the year at a subscription gross margin of 70%.
Higher than the overall gross margin for 2020.
On the other hand, new stores P&L.
35% gross margin in 2021.
A result of a higher mix of used.
The overall base.
And the additional services these new stores, we acquired two go lives.
When analyzing the expenses. It is important to note that we estimate that in 2021, 25% of our expenses were related to our global exploration outside of Latin America.
More precisely 35% of our SNF, 15% of our R&D and 10% of our DNA.
Therefore, the increase you feel the marketing new stores being mostly explained by our global education.
The increase.
As explained by our global expansion and our investments in new products and capabilities that may drive additional future growth.
And the increase.
Mostly explained by our investments to become a public company, which is already busy as a percentage of revenue over the last four quarters.
Now moving to our outlook, we expect to continue to see strong new stores growth as our encouraging backlog undergoes implementation.
In Q1, our existing stores will face tougher comps and the ones in Q4 as many countries, we're experiencing a second labeled full gig.
During the first quarter of 2021.
Nevertheless, we expect our revenue growth to continue at a strong pace.
That said, we are targeting revenue of $33 30.
$33 $5 million range for the first quarter of 2022.
30% year over year FX neutral growth rate in the mid of the range.
For the full year 2022.
We expect FX neutral revenue growth of 29%, 31%, implying a range of $168 million to $162 million.
As of fourth quarter end of period FX rates.
Wrapping up todays call, we want to reinforce that Deepak as the leading destock almost blackhawk.
Erika the fastest.
Fastest growing regional for e-commerce in the World.
Yes, overwhelmingly underpenetrated is better positioned than ever to continue delivering strong results.
And part of that.
Also only scratching the surface of our global opportunity.
We have an exciting road ahead of us and we encourage you conquer new journey with our employees customers partners and investors by our side.
Thanks, everyone for joining this conference call. We look forward to keep you updated on our progress next quarter.
With that let's open it up for questions now.
Thank you if you would like to ask a question today. Please press star followed by the number one on your telephone.
Thank you Pat I will just allow the lineup for any questions can be registered.
Our first question today comes from Clarke Jeffries from Piper Sandler.
Please go ahead.
Line is now.
Hello, Thank you for taking the question.
First question is.
How we should view your hiring plan for 2022, obviously.
Investment here head count has grown from roughly 855 quarters ago to now more than 70 to 100.
How is the hiring.
Making up for 'twenty, two and and maybe I think specifically, how we think we should think about the margin profile based off of the rest of the world indefinitely.
One follow up.
I can get this.
Thank you for your question.
So even though we for the last I would say.
Since the beginning of the pandemic.
In 2020, we accelerated the hiring of luck.
All all sorts of areas the company R&D sales and marketing G&A.
And this was this was a very important moment.
We are attracting very good people and we've grown the team a lot.
After the IPO, we continue hiring a lot more people and.
The brand that the employer brand that the IPO brought towards Australia important price you're fine.
People that we were missing the organization.
Before the IPO and we hire them.
I'd say that now.
Maybe I think Australia or in their correct me, if I'm wrong, but I guess, what I'd say as I said with triple our our our work for 2019.
For this year it started to move not highly antibody, but we expect that our revenue will grow more than that.
Center of the company and you will start to see positive margins less next year.
Our our backs right now so it looks like.
We expanded the team a lot Joe.
Powerful team now.
<unk> time to nurture this team to find the only the key element that is missing from the team and use this investment is not in our favor for increased revenue in the next two years.
That's great.
Bob.
Oh go ahead.
Yes, and on your second question I think I had a question about the margins.
And globally.
So as you probably heard in the prepared remarks, we estimated that 25% of our expenses comes from our global expansion.
And we have roughly 90% of our revenue coming from.
The rest of the world right. So from that you can have a sense of how much we are investing.
And we tend to think more about our P&L by breaking deplete their existing customers and new customers as highlighted in the prepared remarks then.
By geography at this point hopefully thats helpful.
Yes. Thank you, yes that certainly makes sense.
I think a follow up question is encouraging to hear about the number of go lives. The backlog of contracts that are that are moving to implementation.
I wanted to get an update on how you're seeing the conversations conversations change, especially as some of the brands start to weigh incremental investments mainly in the context of physical channel coming back and how the way their e-commerce strategy versus physical channels has omnichannel or hybrid kind of.
Elevated to the top of those conversations and where are you seeing the appetite to invest.
As we enter 2002.
We are very excited being digitalized the physical store.
Spirit, we're breathing.
So you can store too.
Digital work of the retail and we're doing this through several initiatives for that.
We are developing a new store solution that is.
Our software that is for the sales force and add the physical store.
There are plenty of customers that <unk> that are ready to deliver from store orders that were made in the E Commerce website.
In storage solutions allow.
Hello, infinite dial purchases.
Customers can buy projects that are not available with the ship to store.
Not available at the brand as well.
The physical store sales person can also sell third party products as a marketplace.
<unk>.
We have had.
Developing.
This newly developed peaky solution to enable the physical sales force.
To make a big key.
A few orders that were generated somewhere else.
And delivered to the customer that is close to them.
Allows very fast a good destination for the consumers.
And with this conversational commerce initiatives that we're supporting conversational commerce interactions, we will make a huge step towards this direction.
Enable the physical store sales to be much more than a sales person.
The person that is.
<unk> store.
This person.
Physical sales book will serve the customers everywhere all the time.
Great I appreciate the color. Thank you.
Thank you. Our next question today comes from Josh Beck from Keybanc. Please go ahead the line is yours.
Yeah.
Thank you team.
For the call and the question.
I wanted to ask about this why shopping feature it certainly seems like it's.
Improved engagement.
<unk> conversion, obviously is really important.
Tricks for your customers, just curious about where the uptake could maybe go over time.
Is this something that you plan to monetize specifically or is it just part of the platform would love to hear more on that topic.
Yes.
Mike.
We are seeing a big trend.
Of the traffic.
From the browser to the composition of our guidance suite, So social commerce with a personal shopper life shopping.
All of these have streets of social engagement, we foresee as a big trend for all our clients.
This trend started in Asia.
Wrapping up in Latin America strong as it was in Asia, and we reach Europe , and United States Life shopping is one of the elements of the social Commerce, we already have the <unk> commerce in production. It is already in place in more than 50 clients and yes, we will monetize the channel as we do.
And your other channels. So were these life Commerce will stand in Latin America, Europe or U S. We are believing that can reach the same level that <unk> seen in Asia right now that social commerce entirely represents 50 or more percent of the entire GMT in Asia. So it is a big bet for vertex.
We are seeing a good momentum on those clients.
Clients and brands from luxury brands from discount brands are using do you see as a new channel.
The beauty of the new channel is that most organic channel by Congress. So it is a trend and the trend that.
Kind of help the margin I'll, probably retailers our clients.
And Ross just from very high level of remediation.
Go ahead.
Yes, just to complement on the monetization side.
We do charge a.
Our fee for using the <unk> Commerce App. However, as you know we are very aligned with our customers as we have this.
Infection PD stake rate on the <unk>. So if they increase the recession back if they increase their conversion will increase their GMP and that will translate into additional revenue for <unk> as well. So it's a very aligned business model with our customers.
Makes total sense and then maybe another follow up for you Ricardo.
Just curious on I don't know how specific we need to be but just with respect to <unk> and that revenue recapture just if you expect this year to be within more.
Typical ranges if theres other factors that we need to be.
Thinking about as we build out the bottle for this year.
Yes, Thanks, Josh for the question, so all GNP growth and revenue growth I think if you look at the past couple of quarters.
We saw revenue growth higher than GNP growth and there are two mix impact that explain what happened over the past quarters and I can leave that to the expectation for the future I think thats more of your question, but the first mix impact is the increase of new stores as a percentage of our <unk>.
The revenue right.
New stores come with a higher take rate as customers GMB ramp up overtime and our PCP remains the same.
Also new stores.
Driving the increase in services needed for implementation and go live of the store.
The second impact is the increase in revenue coming from customers that have bought.
Your average dk consumer purchases.
We tend to have slightly higher take rate for customer.
Customers of <unk> with lower average ticket.
Given the acceleration in the last two quarters of dividend, how grocery in apparel and accessories.
Categories with lower average ticket, we experienced a positive contribution to our take rate.
Now, having said that for the full year 2022.
I expect the GMB and revenue growth should be more aligned.
On a quarter per quarter basis.
There could be some mix fluctuations for example, we currently have a strong backlog undergoing implementation.
The next couple of quarters that GDP growth could lag revenue growth, but for the full year JV and revenue growth should be more aligned now hopefully that answers your question.
Super helpful. Thank you team.
Thank you just as a reminder, if you wish to ask a question. Please press star followed.
Number one can you tell us.
Thank you Pat.
Our next question today comes from Fred Mendes from Bank of America. Please go ahead, Sir the line is yours.
Hello, Good afternoon.
Professionals as well as the first one about the developers very interesting information disclosure here and the growth.
Quite relevant trend cadence broader 14, K last quarter. So.
First question how did the fact, you have a need to develop the horizon platform gets accordingly.
Get them information a number to it.
Did any kind of migraine pain.
Our non recurrent event that led to this very strong growth over the last two quarters pretty much this would be.
Yes.
The first one and then the second one also on the same topic.
Most of these developers this growth.
Calling a client.
Who have developers and working our platform <unk> I still number of crew lantus relaunched trying to develop a product.
Although those would be the two questions. Thank you very much.
No great great Riccardo here happy to take this one.
So on the vaccine the developers on our developed important right I mean, we have a point that they have to login.
To that point, though so we can see how many developers are logging in and if they are deploying cold to our platform and that goes it could be.
That could be an update to an app it could be some type of customization that a customer is making on top of the beat tax platform right. So all of those interactions.
We see it because they have to or logging to two hour portal right and we have the control AUC is there in Brazil are there in the U S.
And so on and so forth in different geographies. So we can very quickly and easily.
That type of information and the other interesting information that we track that we have in the earnings presentation, we did not mention their earnings call.
The number of deploys that theyre doing it because it's not just a matter of them login to the portal you have to see if they are actually doing something between the port though right.
So we also track that.
Also be increasing over the quarters, we need these over the past couple of quarters as well. So you can all see that trend.
So that's how we track it and your second question.
Could you repeat please.
I would like to compliment.
Marty just to complement.
As we are expanding in the U S and Europe .
How does what do we need to adapt our product to the local necessities.
In the last two years, we'd be investing a lot in this network effect how to integrate to the text of the local players and today, we have more than 100 Isps natively integrated.
Cyber sourcing from people have a lot of segments ship station Clark. This track canal like all of the suite that we need to be competitive in the U S and Europe is already in place and now obviously this needs a lot of development manpower from the from our clients from our partners and from vertex itself.
So these ecosystem is growing as we expand our our footprint another demand for developers to increase is our integrations with ERP. So we are integrated with our ERP like ERP and Pos as SAP be naturally Microsoft dynamics retail light speed also doing.
Those needs of developers to create the apps to our to our platform. So the third dimension also it is our size in the United States like focus shaken. So wunderman Thompson guerilla group Valtek born group vivo tree and rely they have now undergoing projects with <unk>.
That also needs there.
Resources to be.
<unk> ready on these so those are the three that I've mentioned that demand for more and more developers to be delivering code <unk>.
Perfect.
Correct.
And then I guess going forward the second question.
Yes.
Ben.
Yes.
We'll develop there.
And to your platform you can track it basically developers following our clients.
We are working on their own forward to develop their own products.
Relapses that through the community <unk> platform as a way to develop on that or something.
Thank you.
Yeah majority of the developers are from Si's are Isps. So we see very few freelancers, you're starting new companies through the effects of what we are seeing it is a massive adoption of Suvs MSI, so where.
We have our expansion. So those added developers comes from those new expansion markets.
Yes.
Perfect very clear thank you.
Thank you. Our next question today comes from Vitor Tomita from Goldman Sachs. Please go ahead your line is yours.
Hello and.
Thanks for taking our question.
Two questions as well from our side. The first one is thinking so far in 2020 Q, we've seen some wider macro issues that have likely affected the buprenorphine different ways. So they're down the prolonged spike recently further economic reopening some macroeconomic volatility from supply.
Hi chain issue.
Thinking about the 2020 guidance what kind of scenario are you assuming it's already backfill for this type of variable.
That would be our first question or second question. If we may we'll be following up on your discussion of expanding featured R&D Omnichannel could you give us an update on your M&A strategy and whether you are seeing any potential opportunities to complement our platform via acquisition through.
Further accelerates that rollout of new features thank you.
Hi, Thanks for the question.
On the microeconomic scenario right.
We don't control the macro and it's very hard to predict what's going to happen as you mentioned supply chain issues. There is the omicron.
There'll be a lag.
Action in a few countries in Latin America. This year all of these things we don't we don't control what we do control is how we help our customers to sell more to perform well, which will improve their <unk> should do more omni channel type of solutions to integrate.
Their physical stores with e-commerce through our Oems to launch marketplaces and to help them.
Digital transformation journey right and so from our side. We are what we are looking at this.
If you look at 2021 .
A year that we had very tough comps compared to 2020, given the lockdown off 2020.
And we managed to grow 30% on a year over year basis in 2020.
One we feel confident about growing again, 30% in 2022, and we know macro it's not going to be.
<unk> I know.
Normal year.
And by the events today for example, but.
But we feel confident in delivering a 30% growth in 2022, that's been geared off the guidance for the year right that we guided FX neutral growth between 29.
A percent and 31% for 2022, so we feel confident on that.
And second question was on M&A can also take this one so yes, so we have $300 million in the balance sheet.
We're very comfortable with.
Of cash to deploy.
Develop our organic growth plans.
And we could also explore some M&A historically has that emanate.
I think 15 transactions in the history of <unk> solar transactions in the past three years. These are mostly.
Bolt on type of acquisitions, they are not transformational acquisitions.
We are looking at M&A, we have M&A team at apex, we have a pipeline that we are evaluating we look at M&A through three key verticals and one horizontal the first vertical is buying a customer base and migrating those customers too.
<unk>. So we've done that last year with the work area of acquisition in the U S that can help us expand geographically.
The second vertical is Tobias features that will help our customers through to sell more or we will reduce the churn or will increase the NPS of our customers. So we bought a company called <unk>, which is a search engine that helps our customers to sell more.
The third vertical is growing due to additions in markets that we are well placed and we have a right to win so.
That's also something that we are exploring and then the horizontal is actually higher right developers R&D talent is scarce at the moment. So looking at companies that we finally have a very good team could also be an interesting acquisition target for us.
So we have a pipeline we are looking at this opportunity.
And I think.
There is nothing to announce at the moment, but we have the cash.
Cash on balance sheet, and we have a team and we have done M&A in the past so.
I think that is something that could be.
Something to be in the next.
In the future now I would expect more around taking in type of acquisitions than transformational acquisitions.
Very clear thank you very much.
Thank you.
Sure.
Okay, now Geraldo would like say some final remarks.
Please go ahead.
I want to take this opportunity to thank you for being with us.
We closed 2021, showing solid steps toward does desirable future and we're excited for what's to come.
We will continue to focus on executing with excellence.
And making <unk> the platform of choice for enterprise strengthened with tables, not only Latin America, but worldwide.
We invite you to join us in our journey of disrupted commerce looking forward to keeping you updated on our progress next quarter.
Dave Thank you very much.
This concludes today's call. Thank you for joining you may now disconnect your lines.
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