Q3 2023 VTEX Earnings Call
Hello, everyone and welcome to the <unk> earnings Conference call for the quarter ended September 32 months at some degree I'm Giulia router Fernandez Investor Relations director Furby checks I wish he and his executive presenting today are Geraldo Thomas showing your father in coffee you only got to look at my personal Gray Chief Financial Officer.
Suddenly Mariano them, you know the funny, yeah, founder and co CEO Arnon. Thanks, Paul you go to a chief strategy 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 company industry trends and product and although she initiatives. These statements are based.
Currently available information and our current assumptions expectations and projections about future events, while we believe that our assumptions expectations and projections are reasonable in view of the current available information you're cautioned not to place undue reliance on these forward looking statements certain risks and uncertainties are described on the risk factors and forward looking statements sections a bit.
X form 20-F for the year ended December 31st 2022, and other filings with the U S Securities and Exchange Commission, which are available on our investor relation website. Finally, I would like to remind you that during the course of this call first call we might discuss some non-GAAP measures a reconciliation of those measures to the nearest comparable GAAP.
Measures can be found in our third quarter turned it into three earnings press release available or not worried about the relation website now.
Now, let me turn the call over to get all that although the floor is yours. Thank you Julia.
Welcome everyone and thank you for joining our third quarter 2023 earnings conference call.
I'm pleased to announce that he touched.
Another quarter of strong results, which is 35% year over year growth in G. M D.
Baidu resilience.
Same store sales.
Existing customers and the successful go lives up to new stores.
The ladder.
Part of the ongoing sort of thing.
The macroeconomic environment, we're pleased to continue to see a stabilization of the ramp up periods and the implementation times, which as mentioned before also contributes to our robust performance turning briefly to our financial results as Ricardo will go.
Do we need it I'd like to highlight two points.
First we've surpassed the dog revenue projects, reaching $56 million this quarter.
The 31% growth year over year.
We achieved our breakeven target from our non-GAAP operating income and free cash flow basis, one quarter before our expectation.
This is a clear testament of our focus on growth.
Power and scalability of our key.
Efficiency is ingrained in the DNA of do fine results, and bringing us closer to becoming the backbone for Cogs.
Additionally, we delivered the 10, 6% year over year gross profit growth and help expenses.
While accelerating our growth under a symptom macros, demonstrating our business model the diversity.
And the operational leverage no let's go into some operational updates.
In Q3, we added.
Sell through new customers that migrated from other process.
Including now due in June the <unk>.
Bristol lunch.
They beat you beat in Brazil, <unk> in Canada, I see before the cheesy.
Good job guys got BRCA, <unk> Super and my Delta in Colombia.
And pharma PL in Mexico, and beauty Cocker in manufacturing.
In addition to attracting new customers. We also focused on strengthening our relationships with existing customers activities supporting their growth initiatives.
During the third quarter.
Premier brand there'll be tasers chose to expand their operations with us by opening new full line stores and further integrating with us.
This includes Calvin Klein, who added our new store, Ecuador, now operate nine countries in Latin America.
I'm, a CP, who added simplicity granting massive tumor now operating with three stores in nothing Cumulus and what even though the way.
He Bock, who entered the study Panama now operating in six countries.
In Latin America, and Workbook, where did the kitchenaid grads in Austria, Denmark, England, France, the UK and Italy, now operating in Latin America, EMEA and APAC.
We're excited to provide an update on one of the new customers wins.
We shared during our Investor day.
Beauty counter.
<unk> portfolio company successfully migrated.
Legacy blocks of functional <unk>.
Migration enabled their consolidation of all the channels.
Five commerce experience.
Two deaths globally recognized as the number one unified commerce startup provided by Gartner.
Has demonstrated its ability to launch large and complex projects in the U S.
These accomplishments represent significant milestones in our global expense structure.
Furthermore, in addition to the new customer acquisition and the existing customers expanding their operations with us.
We can discuss events this quarter underscore our progress and solidify our position as a global enterprise digital starter for we're forward thinking Ceos and C. I O system locking up their investments.
Success of our.
Our <unk> connect block 10 in Mexico, and now inclusion in the 'twenty to 'twenty, three Gartner magic quadrant for digital Cogs.
We saw remarkable growth at a circa <unk> connect reluctant in Mexico, expanding from over 3000 to over 7000 participants.
The impressive success of detects connecting Mexico demonstrated our opportunity to continue expanding lockdown.
That shouldn't in Mexico. The event featured 60 plus.
Global ecommerce experts and success stories from Victor customers like a core to your revised Bach and Samsung. We also introduced an E. N E R driven improvements focus on customer experience and operational efficiency.
A I N life shopping, which also made progress with cognition during livestreams, eliminating the need for our production team.
For the Tasiast search to personalized customer experience and boost conversion rates.
And he became back which enhances fulfillment efficiency adapting should demand fluctuations for precise resource allocation.
On the industry experts with Coke initial salt with text was named a visionary in the 'twenty to 'twenty three Gartner magic quadrant for digital Congress or its ability to execute and completeness of vision.
The tax was also ranked second.
Following use cases beat you see digital commerce B to C. M Beach Youll be digital commerce on the same platform.
Complex business models.
Additionally, the tax was the top rated digital commerce startup by Gartner peer insights over the last 12 months.
Both humbled and excited about the recognition of this quality our commitment to help enterprises achieve agility and cost effectiveness by choosing the best components for their business.
Continuing our commitment to fostering our ecosystem and offering our customers. The most comprehensive solutions where to $12 two partnerships that have monster line this quarter.
First we're partnering with yellow a leading name in payment solutions in Brazil.
The expertise that <unk> established meant for card payments in pigs will expand our payment offering.
Ensuring our customers access robust solutions in the Brazilian market.
Additionally, we've joined forces with <unk>.
Extending our reach across Latin America.
Partnerships Colbert, Brazil in all Latin countries offering a comprehensive payment ecosystem with diverse options, including credit card and alternative methods like PSC in Colombia.
Our mission is to create a seamless payment experience.
Is truck customers in the region.
Partnerships showcase our dedication to delivering top tier solutions and enhancing the customer experience.
Now before leaving the stage two Chicago I would like to share a couple of success cases for my customers that demonstrates the tangible impact and potential of our platform.
At the core of our organization our customers are in the spotlight and their success will always remain a focus.
Skinny group, a leading south African retailer with a diverse pool to follow 26 beds.
Partnering with GTECH.
Launching the Norfolk batch marketplace consolidated 18 grams in Q1, while retaining the flexibility for each branch customize its marketplace.
Since the platform logs.
It's been a remarkable 72% increase in multi brand orders showcasing the effectiveness of the marketplace and the search App sales accounting for over 35% of total online sales within just two months.
Its conversion rate surpass it both mobile web and desktop by over 200% and 80% respectively.
Furthermore, <unk> achieved a remarkable 33% improvement in page load speeds contributing to a handset user experience.
Structural why a leading Brazilian luxury intermediation of blocker for those the vitek headless solution to meet their unique business needs.
Decision and chewing has to go to market strategy focused on flexibility experimentation and improved availability.
After migrating to detect socialized saw significant cold social rate improvements across multiple channels, thanks to reduce latency and detection scalability, enabling seamless management of high traffic without downtime.
Our U S aftermarket vendor partner with vitek swing, hence the beecher beer wine and spirits improve customers' interactions and optimized product Jackie.
By seamlessly integrating <unk> with the ERP system.
She efficient data exchanges and utilize it the unified commerce.
Ecommerce startups for enhancing both sales operation and buying experiences.
Data redundancy and extensive product catalog are logged customize it.
Yes without extensive development.
These adaptability combined with pretax profit.
Carter from flexibility underscore the transformative power of modern digital Congress in delivering seamless and enhanced customer experiences.
Now imagine tie in with Kao brands specializing in appliances electronics and beauty products with the presence in 14 states and over 76 stores chose the <unk> platform to manage its extensive range of skus in the market.
<unk> placed efficiently now, though has been implemented payment and promotion features and logistics integrations with third party enhancing their ability to see sales opportunity and improve the customer experience.
Pharma quality, a major Brazilian chain with numerals physical stores partnering with detect to implement omni channel capabilities.
They integrated over there hasn't been 16 after stores with vertex.
<unk> visualization intelligent search and third party solutions from Lindsay Teck's ecosystem like Moscow, Bob Gwin, Google analytics enhance customer experiences and business performance monitoring.
Thank you Kal our premiums men's fashion brands in Brazil with 11 since two stores in 200 points of sales those vitek composite bore texture.
Digital commerce start to form the implemented features like wish list using vitek style youll to enhance the customer experience.
<unk> also leverages Vitek shipping network.
Efficient deliveries and integrate with Google analytics for user friendly sales data visualization.
This integrated solution sticking to currently improved performance results in a seven day increase in order conversion rate at.
At 25% boost in average order value and a 60% reduction in 16 shipment costs.
Our global clothing, and accessories retailer operating in 39 countries through 11 online stores in 10 marketplaces recently adopted an innovative approach.
Integrated detect headless CMO within that that dialogue.
Gradually reaching content and seamlessly integrates into the store framework using native component.
This implementation empowers them to customize and oversee webpage content efforts at this.
As they get easily defined structure and will position section.
<unk> improved their performance by reducing errors and safeguard against content law.
<unk>, a leading player in pharmaceutical retail.
Firstly integrated extra pharma into their digital ecosystem using <unk> York store framework in just 29 days. This strategy integration led to remarkable results.
Substantial increase in sales of 200% boosting conversion rates significant all of this growth and reduces operational costs enhancing the financial efficiency of the <unk> group why June 19th bookstores seamlessly.
This quarter, we achieved significant success with our live shopping solution.
Notably that ball or in collaboration with IDEXX hosted the large shopping events during New York fashion week becomes a solid Brazilian brands. So the results were outstanding with parts board experiencing a remarkable 300% sales increase and then.
125% boost in orders and the remarkable 79% rise in average order value.
This event underscores the growing creaminess and effectiveness of lives shopping as a dynamic sales channel.
Additionally, at <unk> connect laughter large shopping took center stage hosting davlin 40 minutes event.
Customers, such as kitchenaid, which experienced a remarkable 152% sales spiking the offense.
<unk> seen them.
Store didn't event at the most relevant diet television show, attracting over 75000 dealers and achieving a 700% sales boost compared to the previous model.
To conclude this session I would like to express my gratitude to our <unk> hundred 70, <unk> detects employees dedicated to making us the clear future a reality and to our customers partners and investors.
I will now hand, the call over to Hidalgo to discuss our financial performance for the quarter. Thank you hi, everyone. I am pleased to share <unk> Q3, 2023 financial results with you.
In the nine months of 2023, our performance was consistently strong surpassing expectations and resulting in positive free cash flow one quarter ahead of schedule.
Our Q3 <unk> grew by 35% in U S dollars and 28% on an FX neutral basis, with Q3 revenue, reaching $56 million or 31% year over year growth U S dollars and 25% on an FX neutral basis.
Our existing customers remain resilient and new customers exceeded our expectations with faster than expected go lives.
In Q3, 2023, our subscription revenue hit $47 5 billion marking.
<unk>, marking a solid 30% year over year growth U S dollars, while services revenue climbed from $2 $2 million to $3 $1 million largely due to new project implementations.
In Q3 2023, our subscription gross margin continued to increase.
non-GAAP subscription gross profit rose to $36 2 million from $26 9 million in Q3, 2022 at 35% increase year over year with the margin at 76, 2% compared to 75, 3% last quarter and 73 eight.
<unk> in Q3 2022.
The 247 bps year over year margin increase reflects our commitment towards efficiency and customer success.
The margin increase resulted mainly from optimizing our hosting costs and architecture.
We are excited about the progress and remain dedicated to delivering further margin improvements in the future.
Now I will.
Overall, non-GAAP gross profit rose to $35 $8 million from $26 3 million in Q3, 2022 at 36% increase year over year with the margin at 77% compared to 68.0% in Q3 2022.
This achievement was driven by hosting improvements that I, just mentioned and an improvement in our services gross margin in the quarter as we started dialing back on the hyper care mode for a few new customers in the U S and Europe.
In Q3 2023, our non-GAAP total operating expenses stood at $34 $1 million remaining steady compared to our previous quarter. Therefore.
Therefore, our expenses as a percentage of our revenues significantly improved from 83% in Q3, 2022, and 71% last quarter to 67% in Q3 2023, demonstrating our commitment towards efficient expense management, while also accelerating our business.
And they're uncertain macro conditions.
In Q3, 2023, we achieved positive non-GAAP operating income a quarter earlier than expected. Our Q3 2023, non-GAAP operating margin reached a positive three 4% compared to a negative 15, 5% margin on the same quarter last year.
This significant 19 percentage points year over year increase was exclusively driven by revenue growth and gross margin improvements as non-GAAP total operating expenses actually is slightly increased year over a year.
Furthermore, we saw a solid six one percentage points improvement in our non-GAAP operating income margin on a quarter over quarter basis.
These trends underscore our commitment to profitable growth <unk> subscription cost efficiencies and stable expenses aligned with market demand and sales efficiency, demonstrating our dedication to strengthening financial performance, while sustaining high revenue growth.
We are delighted to announce that for the three months ending September 32023, <unk> achieved a positive free cash flow of $2 $7 million. This is a significant improvement from the negative free cash flow of $3 $3 million reported in the previous quarter and the corresponding quarter of.
The previous year.
Our positive non-GAAP operating income and improvements in our payables and collection efforts primarily drove this free cash flow result.
Before I move to the outlook for Q3 and fiscal year 2023.
Like to update you on our share repurchase program.
As of September 32023, the remaining balance under the current authorization was nearly $10 $1 million.
We've purchased one 9 million shares at an average price of $5 three $3 per share.
Considering the previous plan that concluded on August eight 2023, the total repurchase shares amounted to 9.0 million shares with an average price of $416 per share and a total cost of $37 $9 million.
Yes.
As we look to the future we are thrilled about <unk> remarkable adaptability and resilience regardless of market conditions and their inherent volatility the tax has consistently surpass market expectations, while delivering a strong long term performance metrics.
The fourth quarter of 2023, we are currently targeting revenue in the 55.0 to 57.0 million dollar range, implying a year over year growth of 22% on an FX neutral basis in the middle of the range.
For the full year 2023, considering the current performance of the company, we are increasing the bottom and the top of the range now targeting the full year, two and between 22% to 23% on an FX neutral year over year basis, implying a range of 196 to 198 million.
Based on October average FX rate and assuming a devaluation of the Argentina currency aligned with the market future rates.
As we continue executing our profitable growth plans, we anticipate year over year improvements in the non-GAAP operating income margin quarter 2023.
We hold strong confidence in the tax distinctive value proposition centered on empowering our customers to achieve profitability and sustainable growth by reducing their total cost of ownership and simplifying their commerce infrastructure.
Our commitment to incorporating physical stores as the centerpiece of the omni channel experience position us to provide the rapid growth and profitability our customers aspire too.
We will continue to work towards building outstanding success cases, with our customers offering innovative solutions and seizing opportunities to ensure long lasting success for our dedicated employees value customers innovative partners and long term investors.
The future is filled with exciting prospects that we are eager to pursue.
With that let's open it up for questions now thank you.
If you would like to ask a question simply press star one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
Our first question will come from the line of Marcelo Santos with Jpmorgan. Please go ahead.
Hi, good evening, thanks for the opportunity to make questions I had two.
The first is if you could comment what were the main countries. That's boosted the positive surprise in the lab.
To beat the original guidance. So just wanted to see where this where the surprise came work for them and the second question is more about the service margin it.
It was negative but it was one of the let's see.
Lowest negative margin that you ever printed at least that we have phase III.
As I reported company is industrial company.
What's the dynamics in there why is it so low now.
There is some change in the way you do the services if you could comment on that that would be Glenn. Thank you.
Hi, Michelle Thanks for the question great questions. So I'll I'll take this once he cardoso did I here.
So on the over performance versus the guidance.
In Q3 2023, our robust performance can be attributed to.
Multiple factors.
New customers additions playing a significant role.
Both coming from new ACB sinus and they go live of Atvs that were signing in previous quarters.
On the letter we continue to observe a promising trend in regards to the stabilization of our sales and implementation cycle.
Which had a positive impact in our results.
Also on our existing customer base same store sales.
We continue to see growth in the in the teens level.
Outperforming the market and slightly above our internal expectations for Q3.
And in one country specific as you ask we continue to see a robust performance across the board.
Brazil performed pretty well in Q3.
And we also saw the global U S and Europe outperforming the overall.
Company.
As you know we provide more detail numbers on the.
Geographic breakdown on annual basis, so when we publish.
Q4, and next quarter, we can give more details on the geographic breakdown.
And.
And looking forward, we acknowledge the potential impact of an uncertain macro scenario on the same store sales of our existing customers and the sales cycle for new customers.
We have.
On the second question on the services gross margin.
As mentioned in the prepared remarks, we.
We are gradually evolving the hyper care mode for project implementation for key new customers in U S and Europe for a more ongoing regular modes.
So just to recap.
The hyper care Moody's, how we call our deliberate commercial decision to close a new support the implementation of relevant new customers in U S and Europe to ensure they're successful go lives and as a result of this strategic move we were able to create strong relationships with flagship signed customers ensuring a high.
Quality integration and Onboarding experience and advancing our expansion into these new Geos. We've reputation of cases and also with the hyper care. We can more actively guide our customers each division of E Commerce that we believe in.
And at times, we commented that this decision was going to impact our services gross margin in the short term.
That diesel is going to position us better in these new regions in the medium to long term and in Q3 as a demonstration of that we had to go live off the beach you see of beauty counter as you can see in beauty counter dotcom and also the beach will be of viewers manufacturing in Oshkosh company, and we have a relevant pipe.
Line of go lives should come over the next two quarters as well.
And we are encouraged to see the improvement in services gross margin. After they go live off these new customers.
Now, we still have all the relevant global customers under implementation and some services gross margin volatility is natural in our business, but looking further out we expect gross margin to continue improving.
Perfect very clear thank you very much.
Our next question will come from the line of Matt <unk> with Keybanc capital markets. Please go ahead.
Hey, guys and thanks for taking my question today I was wondering if you guys could talk a bit about if you're seeing any price sensitivity when it comes to merchants or even the customer base and if you could comment on what youre seeing top of funnel and secondly, I'm wondering if you guys could comment on what youre seeing in terms of seasonal spend that.
We've seen so far in <unk> between October and now November thanks.
Hi, Mariano here.
On the price.
I can I can tell you.
The high interest rate is bringing a tough environment for all of the retailers all over the world and now of course, the retailers are announced looking for a more efficient solutions.
We see these as an opportunity the tax positioning as a complete and compose will platform, allowing customers to be very lean and fast when they need it but also composed and be custom when they wanted.
So in terms of price, we see a mood, bringing a the discussion of the TCE of E Commerce platform as something that was not in the table and nowadays, but we see this as a huge opportunity for us as well on.
On the second.
I will invite.
So to answer yes.
Yep.
Yes, I'd be happy too so.
So Betty regarding the holiday season.
We are seeing it.
So we continue to see uncertainty in the macro environment, which makes it challenging to have clear visibility into the holiday season.
Last year, we observed a shifting the seasonality a bit with sales is spreading out all over November Easter of concentrating all around the typical black Friday event a week.
And there is no.
Currently conflicting information regarding holiday season expectations. So we are approaching predictions for sales cautiously.
Sumer appear to be eager to make holiday purchases Budd.
But they seem to be seeking significant discounts before committing huge buying.
And on the retailer side, it remains uncertain to which extent they can afford to sacrifice margins to offer substantial discounts and boost sales.
So as a result, we are closely monitoring both the end consumer and our customers' activity to assist the ladder in performing well during the holiday season, and most importantly, we've taken steps we sure our customers get an entirely rely on our platform. During this critical time of the year.
That's super helpful. Thanks, guys and congrats on the quarter.
Again for any question simply press Star one on your telephone keypad and your next question will come from the line of Leonardo Olmos with UBS. Please go ahead.
Alright.
Hello.
Sorry about that can you hear me.
Yeah, we can hear you loud, yes, yes, yes.
Yes, it wasn't a webcast so I won't be delayed so can you discuss a little bit the.
The product approach. So if you can talk a little bit about <unk> in Brazil, how does that has that been evolving in other product launches that you have in there.
In the Q3, how is that being accepted by <unk>.
By the market in Brazil. Thank you.
Thank you Linda.
So first of all be to be it seems.
<unk>.
Appearing as a very appealing offer.
At <unk>, it's not restrained constraint to Brazil.
You.
Just saw the announcement that we announced that they would be to be as a go live but even though Brazil is accelerating the sales of <unk>, but not only Brazil Latin America U S.
We're selling <unk> scenarios everywhere.
And the beauty of our cloud to Formula as you if you saw it or not.
Gartner reports the critical capability to report.
We are the number two player performing beaches C and b to be in the same cluster form this creates a big advantage for our customers because they can they can deal with one single control panel for both channels.
And this also creates a big advantage for us as a product because we don't read too a lot of the core things that we need to having both scenarios so btu before.
There is some specific position that we develop in some modules that protect so that it works.
B to B.
<unk> also is very customizable. So we have like a customer called <unk> manufacturing in the U S launching a <unk> operation with us in this case.
You can see that we have the inventory of all the sales that boost manufactured did in the past.
Parts of each truck that they sold and all it customize it into our platform. So b to B is exited specification of our ecommerce platform and we are investing a significant amount of energy.
Specializing even more of our modules with futures.
Rick.
Buying organizations capacity to customized master data, there's several things that we're doing to be more competitive, but we were very competitive.
Great.
Thank you and another question can you can you discuss a little bit the market in Argentina, we've been.
Talking so much about political but can you talk about the retail market and how we're seeing things for at year end. Thank you.
I know you've gone through here and happy to take on Argentina.
So on the overall retail market.
I think there was some news the local newspapers in Brazil talking about how consumers are purchasing.
Accelerating their purchases in Argentina, So we see we see some of that happening.
But more broadly regarding the country. We are closely monitoring the situation in Argentina, and the uncertainties surrounding this year's election.
Argentina represents roughly 10% of our revenue and while we are we have successfully navigated changing political and economic conditions in Argentina over the years.
We are aware of the challenges and complexities that come with operating in this market.
As mentioned in the earnings release for our Q4 guidance.
We are assuming that the Argentine Basil will devalue in line with the FX market futures, losing roughly half of its value in December.
So considering that we have part of our revenue in Argentina U S. Dollars. These level of FX devaluation would result in a revenue impact of high single digits roughly.
<unk> million dollars in 2024, and only half of that would flow through to operating income.
Therefore, it's a it's a one off in.
Pretty small impact on our overall business and.
And having said that we are confident that despite these potential headwinds did that should continue to improve its operating margin and maintain an attractive FX neutral growth rate as we are very well positioned in the country. You will have a strong competitive position in Argentina, and the underlying growth of the country over the years could be attractive for us.
Yeah sounds great. Thank you very much and sorry for my background nice have a good evening, everyone Bye bye.
Thanks, a lot.
Your next your next question will come from the line of Franco Granda with D. A Davidson. Please go ahead.
Hi, Yes. Good afternoon. Thank you for taking my questions and congrats on the solid quarter here.
I was hoping you could share some statistics with us to highlight or maybe to better characterize the performance of some of the recent product introductions, namely the ones of you talked about back in June that would be tax day.
If we could do that might.
<unk> can complement me if necessary. So we are we're very excited with.
Developing capabilities to empower.
Workforce.
Our customers.
Live shopping is one of them.
The personal shopper is another winter sales.
I'll.
Keep it delivers the fuchs announce of delivering from store also gives more rules to the sales person inside the physical stores. These are the things that we're very excited with.
And it's very aligned with the broad range of customers that we serve.
There's a lot of our customers that can benefit from the neutral from store from integrating the stores the salespeople to search supposed to into the <unk> experience.
This is also very powerful for bto b scenarios as well when when you have sales people.
Surfing and helping the sales off the manufacturer that is doing the digital business. So this is something that we're very excited.
<unk>.
On this topic. There is also the beacon pack capability that it's a tool that enables streamlining the process of delivering from store.
There is no similar to in the market for <unk> streamlined such a process.
Developing some capabilities on top of AI does naturally.
Natural <unk>, which is our search our recommendation.
These are all.
H R.
<unk> features that we are developing even more.
But we're not doing only that our new all these new tools that I just mentioned to you.
All they have also AI capabilities embedded on that because we're very excited with these with these capabilities.
The Texas also.
Very committed in delivering security capability truck customers privacy compliance.
Is that also something that we're very excited to deliver to our customers. So that they can rely on a robust platform that is.
At elastic and so.
Q, so we can process.
So data and keep the data.
Safely as possible.
Great. Thanks, Thanks for the detailed answer there.
I was hoping to also get and are getting an update in regards to some of the new customers that you talked about during your analyst day, you didn't give us a view on those but.
And any update on casino and what Theyre during their how their expansion is going and whether they are planning to expand across entire company in France.
Yeah happy to get this as well in our in our Investor Day, we disclaim firsthand casino.
The implementation with Hearst is advancing well and <unk>.
Schedule. So we expect to provide a further update as soon as you know we disclaim our clients win and when they go live that's the line that we chose.
To communicate our company casino is undergoing a big change, it's a changing control a huge re org. So it's a situation that adds a meaningful challenges and.
And we keep you updated.
There is any relevant developments on that.
It's worth mentioning that implementation timelines can be lengthy and which is why we decided to review new customer names only up under a successful go live.
I know that sometimes you become onshore.
But.
We believe Thats, how are we going to generate more value for the long term of the company. So we want to reinforce that the go lives basis will be our standard breath to see uncommunicative new clients.
Just to manage expectations. Thank you so much for the questions.
Yes of course.
Thank you.
Alright, great ill hop on that.
If you could speak to that sales cycles.
The timing of those quarter over quarter and year over year and possible. Thanks again.
Hypothetical he got here, yeah happy to so as we mentioned this quarter.
We also mentioned last quarter, we are seeing an encouraging stabilization of the sales cycles. They are not back to historical average, but we have not seen them worsening and they have been.
They have shown a slightly improvement.
Quarter over quarter.
Now on a year over year basis, I would say.
It's more stable as we saw sales cycle deteriorating.
Alone last year right. So we started like in April.
Until towards.
At the end of the year. It was when we saw most of the movement.
So it's encouraging to see disease stabilization to slight improvement in the in the sales cycle and when we say sales cycle. We are thinking about not only the time it takes to negotiate the contract and signed the contract with the customer but also the time it takes to implement the softer and the customer to go live.
The initial ramp up of our new customers. So we are thinking about this whole cycle.
I appreciate the color. Thanks.
And there are no further questions at this time with that I will turn the call back over to Geraldo for any closing remarks.
The testing that you really exciting phase rethinking nishu rewards of our global expansion investments.
We've shown consistent execution and financial results, reaching breakeven and generating cash a quarter ahead of schedule.
A solid quarter market by sustainable gross margin improvements and expense discipline demonstrates the success of our business model, even in an uncertain macro conditions.
We serve a multitude of markets and customer touch points from Beecher CB Judy beat you get you see two physical stores in marketplaces, including large shopping and conversational commerce among causes.
The tax is becoming the platform of choice for forward thinking leaders and this is just the beginning.
Thanks to our customers partners investors and our dedicated team who make it all possible. We look forward to keep you updated at our next earnings call.
Have a wonderful week.
That will conclude today's meeting you may now disconnect.
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Yes.
Okay.
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