Q1 2025 VTEX Earnings Call
Speaker Change: Hello everyone and welcome to VTEC's Ernie's conference call for the first quarter of 25th. I'm Julia Butter Fernandez, BP of Investor Relations.
Speaker Change: Joining me today are Geraldo Calasunier, our co-founder and co- CEO , and Ricardo Camata Sodre, our tape financial officer. Also, joining us for the Q&A session are Mariano Guimira de Faria, co-founder and co- CEO and Andrés Polidoro, tape strategy officer.
Speaker Change: Before we begin, please note that today's remarks may include forward-looking statements.
Speaker Change: These statements are based on our current assumptions and projections and actual results my deeper.
Speaker Change: Additional information regarding risks and emergencies is detailed in our form 20F for the year end of December 31, 2024 and other filings with the SEC.
All of which are available on our Investor Relations website.
Speaker Change: During this call, we may also reference certain non-GAAP financial measures. Preconciliation to the most comparable GAAP figures can be found in our Q1 2025 earnings press release, also available on our Investor Relations website.
Geraldo: With that, let me turn the call over to Geraldo, Geraldo, the Floriz yours.
Thank you Julia.
Geraldo: Welcome everyone, and thanks for joining our first quarter of 2025 on a new conference call.
Geraldo: with delivered a solid stars to the year, despite the ongoing macroeconomic volatility.
Geraldo: So the scriptural revenue grew 15% in FX Neutral in the first quarter.
As we look ahead,
Geraldo: The recent glow lives of key enterprise customers combined with the COJU progress in our product innovation and platforming special initiatives reinforce our confidence in the sustainability of our profitable growth strategy.
Geraldo: In a seasonally softer quarter, we also delivered profitable growth and significant market expansion.
Geraldo: Agro's profit-reaching $41 million, a 22% growth in FX neutral, and 3.7% percentage points margin
Geraldo: Additionally, our non-GAAP operating income increased to $5.2 million, and 85% growth and 4.2% percentage points margin increased year-over-year.
Geraldo: The strong operating linker was supported by even stronger free cash flow generation of $6.6 million.
Geraldo: Finally, a known gap, Natinco, reached $5.3 million in the first quarter and $34.5 million over the last 12 months
I'll let Ricardo further expand on this financial shortening.
Geraldo: VTex called Gilles to solidify its position as the platform of choice for global CIOs and CIOs, seeking operational efficiency and commercial agility, enterprises choose VTex for more than softer but for outcomes.
Accelerate the time to market, increase its revenue, improve its margins and reduce its complexity.
Geraldo: Lucky ahead will build a future for the text that goes even beyond that.
Geraldo: A future where detecting target agents evolve into digital workers, autonomously managing core workflows on core across service, de-med generation and merchandising for our customers.
Geraldo: We're not just adapting to the future of Congress, we're building it.
Geraldo: Now, let me highlight a few commercial achievements of the quarter.
Geraldo: In the first quarter, which successfully brought several new customers' lives, including Magasino and LG in Argentina, Americanes, apoie entrega, moda coméia, os castalçados em urban
Geraldo: Elas Ten in Colombia, Oro-Kershineu-Qadur, Lacedela in Spain, Perel, in Procarga, in Mexico, in D.S. One U.S., and D.W. Bepler in the U.S.
We also strengthen our relationship with existing customers.
Geraldo: Bermol launched a new vertical, Bermol Farlon, now operating two stores in Brazil.
Geraldo: Colgate launched a new store in Germany, expanding its Vitex presence across the Americas and Europe .
Geraldo: Crocs, launch of the new-storing chili, now presenting five Latin American markets with G-Tex.
Geraldo: Hurst, launched all-per-daily shop in the U.S. expanding its Vitex presence to six stores.
Levi's Edit Colombia, now present in six Latin America markets.
Geraldo: and Moldelae's larger than new B2B store in Spain and in Ecuador, expanding its Vitex footprinting to Europe .
Geraldo: Another noteworth development, this quarter, though not yet lies, is that Manchester City Football Club has joined the Vitax Plata.
Geraldo: The club is currently implementing the tax as the foundation of its official digital commerce strategy.
Geraldo: was supporting Manchester City in reimagining and streamlining its digital commerce experiences to deliver a seamless and intuitive journey for fans.
Geraldo: This initiative will enable supporters to access purchase city-related experiences through a unified and efficient checkout process, whether online or via mobile.
Speaker Change: To build our own momentum in contract signatures and reinforce brand trust, we launch it to give you all company.
Speaker Change: The campaign resonated strongly with CEOs and CEOs in the US, where our proclamatory have a affinity for Cust Cricket, helping us connect with beneath racial and professionally relevant
Speaker Change: We also hosted the second edition of Vitex Connect in New York City, a flagship event for senior choruses actors, held immediately following in their <expletive> .
Speaker Change: Desire, we expand the event scope and quality, the welcoming CO, CIOs and senior executives which is from the meeting with Taylor's.
Speaker Change: Timon Biles, deliver the keynote for a side chat, joined by Brazilian tenastics champion Rebecca Andrade.
Speaker Change: The veg showcase our leadership in digital commerce and strengthen our relationship with partners and decision makers.
Speaker Change: In addition to its increasing impact, the event was executed with greater cost efficiency.
Supported by over 14 sponsors, Vitas Connect, New York,
Speaker Change: served as a strategic platform to deepen relationship with our partners and has detects this ability among top industry stakeholders and engaged directly with key decision-makers within the NRF others.
Speaker Change: By gathering the industry most influential voices and integrating global recognized figures, we continue to elevate the text position at the forefront of digital commerce transformation.
Speaker Change: We are also proud to share that the text was once again recognized as a customer choice in the 2025 Garden Voice of Customers for Digital Commerce Report for the second year in the role.
Speaker Change: This recognition is especially meaningful because it is based entirely on our customers' review on the scoring of platforms impact and reliability.
Speaker Change: This recognition based solely on real customer reviews, highlight our ability to deliver exceptional product capability, ease of use, reliable support and measurable business impacts.
Speaker Change: In the landscape, we're choosing the right congress partners, his mission critical, being named the customer's choice for the second year in a row, re-forces Vitex position as the trusted, scalable, and innovation-driven platform of choice for global enterprise.
Thank you.
Speaker Change: Before moving on to our customer success stories, I'd like to revisit the concept introduced earlier. The text is evolving from a single platform into a comprehensive suite of color products designed with series into interoperability at each core.
Speaker Change: Distransformation under fiends are positioning as the color suite of choice for both CIOs and CIOs globally.
Woodbubbling Doll on our two high-packs product bags.
BQB Commerce and Retail Media
Speaker Change: In the first quarter of 2025, we accelerated our retail media strategy with the acquisition of new retail, a little in Brazil retail advertising space.
Speaker Change: This added over 400 advertisers and brands to our network, including Casas Bahia, Pavel Kapul, and Leroy Borlin, and Position Vitax as a leading end-to-end retail media pop.
Speaker Change: We detect that we now offer a unified type performance solution that combines our composable commencing infrastructure with new DAO's immediate innovation.
Speaker Change: Advertises gain access to hybrid targeting inventory, detail-performacing sites, and intelligent placements, enabling smaller targeting and stronger returns across the full-commerce journey.
Speaker Change: We're building the next generation of scalable data-driven retail meter and we're here to lead and co-sertidate this space.
Speaker Change: With that said, let's go into a couple of customer stories to put in a tangible way how we are working side by side with our customers to get meaningful business impacts.
Speaker Change: How many colors? One of Brazil's most iconic and influential retail giants chose Vitax to simplify operations and drive efficiency with innovative solutions replacing some of the e-house developed systems.
Speaker Change: Look through VTAG's out-of-the-box features and collaborations with specialized partners, we deliver the comprehensive customer solution tailored to Americanist needs.
This included robust omnichannel capabilities, marketplace integrations at advertising tools.
The Solution Streamline Processes
Speaker Change: Accinerated time to market and significantly lower the total cost of ownership.
Speaker Change: In addition to VTAC's native capabilities, Americanes is also leveraging the strength of the VTAC's ecosystem by integrating partner solutions, replacing certain legacy systems with more scalable alternatives.
Speaker Change: Following a detailed system analysis and close collaboration, we co-designed a streamlined future red architecture that enhances operation efficiency, support rapid scalability, and streamlined seamlessly with Americano's low-term strategic objectives.
Speaker Change: The Americanes win on the squad the continued death of opportunity within Brazil, a market where the text already had a strong presence, yet still holds significant runaway for pro.
Speaker Change: It demonstrates that even in more developed geographies there are remaining sizable, high-impact digital transformation opportunities for us to capture over the coming years.
Speaker Change: A leading frozen food retainer in Spain, part and refit tax should modernize its digital commerce and bridge the gap between its physical stores and online presence.
Speaker Change: seeking greater flexibility and the brand shows the text for its ability to manage complex catalogues and store level logistics with easy.
Speaker Change: Detects also enable, smooth integration with the customer's new loyalty program, creating a more intuitive and personalized customer journey.
Speaker Change: which marketplace capabilities and omnichannel features, now fully implemented, they are delivering a seamless connected shopping experience across every touchpoint.
Sickle Seed, one of Latin America's
Largest Viteo Vru
Speaker Change: Transforming its post-purchase experience in Brazil by implementing WANI by VTX to automate out-of-stock products to be situations via WhatsApp.
Speaker Change: Initially, launched with Presumnik and quickly scaled to Brutus, Jeba Habaza, and Mercuncu, the solution enables real-time customers approval and believe that 9% increase in the average or the value of impacted orders.
Speaker Change: By streamline in communication and driving operational efficiency, Tengel's suit is delivering a smarter, more scalable digital experience across its fence.
Speaker Change: I'm also pleased to highlight a significant customer success that demonstrates the versatility
Speaker Change: T. W. Pepper, one of the leading <expletive> music retailers in the US, has successfully transformed the digital commerce operation with Vitax.
facing industry-specific challenges.
Speaker Change: Such a complex product discovery and event using shopping, the company lavaged V-Tex composable architecture and native had the CMS to build tailored experiences for educators and worship leaders.
Speaker Change: This empowered your business teams to accelerate content of the dates and reduce reliance on development resources.
Personalization and complex check-out flows.
Speaker Change: Today, J.W. Pepper operates on a flexible, scalable platform that supports a diverse customer base and adapts easily to seasonal demand patterns.
Speaker Change: This case under scored our ability to deliver impactful digital transformation and specialize at high complexity industry while preserving business continuity and maximizing ROI.
Speaker Change: Nestle, one of the world's largest food and beverage property, drove strong results with the detects ads to power retail media campaigns across Keep Barters Channel.
Speaker Change: Confronted with limited visibility into retail sales performance, Nestlé turned to Vitech's ads for real-time insights directly from retailer products.
Speaker Change: These data-driven approach enable rapid campaign optimization and stronger performance across
Speaker Change: In its latest major campaign, Nestle achieved a 16.2% return on ad-span in the chocolate category.
Speaker Change: Beyond immediate impact, the initiative unlocked valuable strategic insights for future activations.
Speaker Change: Ricardo, a leading distributor and manufacturer of lifting solutions in Mexico, selected heat
Speaker Change: Aiming to enhance the buying experience for B2B distributors and expanding to B2C, the company is adopting a dual-channel strategy powered by the tax.
Speaker Change: The new solution built on the tax-composable architecture delivers a modern self-service callous experience focused on efficiency and scalability.
Speaker Change: It features custom UXY, ERB's integrations and mobile ready access ensuring a seamless journey across all channels.
Speaker Change: These initiatives mark a strategic move for Procarga, strengthening customer engagement and driving growth across Mexico industrial retail markets.
Speaker Change: Now, I'd like to take a moment to express my gratitude to our 1,320 Vitax team members.
Speaker Change: Whose extraordinary contributions propel us forward as the backbone for connected commerce.
Speaker Change: I'd also like to thank our vetted customers, partners and investors.
I will now hang the cold to hiccup.
Ricardo: Thank you, Geraldo. Hi, everyone. I'm pleased to share VTAC 2021-25 financial results.
Ricardo: Before diving into the numbers, as a reminder, this is our first quarter reporting under US gap. We publish a reconciliation presentation in a form 6K on April 15 and a comparison of 2023 and 2024 financials under US gap is available on our investor relations website.
Ricardo: <unk> for the quarter, which at $4 $3 billion growing 8% year over year in U S dollars and 17% on an FX neutral basis.
Ricardo: This led to subscription revenue, reaching $52 6 million compared to $54 million in Q1 of last year.
Ricardo: A 4% increase in U S dollars and 15% on an FX neutral basis.
Ricardo: Now moving down the P&L, we are pleased to announce the positive operational leverage achieved even with the inherently softer seasonality observed in our first quarters.
Ricardo: Our non-GAAP subscription gross margin reached 79% this quarter up 191 basis points year over year from 77% in Q1 2024.
These expenditures reflect our continued focus on operational efficiency with the most notable gains coming from customer support optimization effort.
Ricardo: Leveraging AI power automation, we were able to improve service quality, while significantly reducing support related costs.
Our total gross margin, which include services rose to 76% up 371 basis points year over year compared to 72% in Q1 2024.
Our total gross margin improvement was mostly driven by the lower mix of services revenue in our total revenue as we are relying more on our ecosystem to provide implementation services.
Ricardo: And by the subscription gross margin gains I just mentioned.
Ricardo: On the expense side, we maintained strong discipline.
Ricardo: non-GAAP operating expenses came in at $35 $9 million slightly up from $35 2 million in the same quarter last year, an increase of less than 2% year over year.
Ricardo: These risks with lights, and stable sales and marketing and G&A expenses, while the increase in R&D was a strategic supporting our continuing investment in product development and innovation.
This disciplined approach led to a significant improvement in profitability.
Ricardo: With non-GAAP operating income, reaching $5 $3 million in Q1, 2025 up from $2 9 million in Q1 2024, an increase of over 80% year over year in U S dollars.
Ricardo: This translates into a four percentage point margin expansion, bringing our non-GAAP operating income margin to 10% for the quarter.
Ricardo: These results highlight the strength of our operating model and the consistent evolution of our financial profile.
Ricardo: As we have on our profitability growth strategy non-GAAP net income has become an increasingly relevant metric.
Ricardo: In Q1, 2025, non-GAAP net income reached $5 3 million and 10% margin.
Ricardo: From $2 4 million in the same period last year more than doubling year over year, and a 5.2 percentage points improvement in margin.
Ricardo: As mentioned by Gerardo on a trailing 12 month basis, non-GAAP net income totaled $34 $5 million, reflecting the ongoing strengthening of our profitability profile as we continue executing with discipline and scaling efficiently.
Gerardo: Aligned with our non-GAAP operating income as off the three months ended March 31, 2025, we had a positive $6 $6 million free cash flow compared to $1 $6 million free cash flow in the same quarter of the prior year, reaching a free cash flow margin of 12% and a nine percentage point margin improvement year over year.
Gerardo: In the first quarter of 2025 regarding the one year share repurchase program authorized by our board of directors on December 3rd 2024, <unk>, We purchased a total of $2 7 million class a common shares at an average price of $5 $56 per share.
Gerardo: Representing an aggregate amount of $15 million.
Gerardo: Considering the current and previous year's share repurchase programs. The total executed amounted.
Gerardo: $15 2 million shares with an average price of $4 $86 per share and a total cost of $74 $3 million.
Gerardo: As we move forward with our business outlook, we continue to navigate a macroeconomic environment market by volatility in our same store sales and GMB growth increasing the uncertainty of projections.
Gerardo: That said, we remain confident in the tax profitable growth trajectory.
Gerardo: <unk> is well positioned to capture an attractive market opportunity and we remain encouraged by our leading market positioning platform expansion and operational leverage.
Gerardo: Considering these were currently targeting FX neutral year over year subscription revenue growth of 12, five to 15, 5% for the second quarter of 2025, implying a 57.0 to $58 $5 million range.
Gerardo: For the full year 2025, as we continue executing our profitable growth strategy, we continue to target FX neutral year over year subscription revenue growth of 14.0% to 17.0%.
Gerardo: Implying a range of $238 million to $244 million based on the average of April FX rate.
Gerardo: We are targeting non-GAAP operating income and free cash flow margins of meeting.
Gerardo: To wrap up in Q1, we deliver solid subscription revenue growth as.
Gerardo: As indicated by our guidance, we remain confident in the strength and sustainability of our profitable growth strategy in Q2 and for the full year 2025 supported by the new enterprise customers go live and our ongoing platform expansion.
Gerardo: We will stay focused on disciplined execution, leveraging our strong fundamentals and resilient business model as we continued to gain global traction as the backbone for connected commerce.
Gerardo: We remain committed to delivering lasting value for our customers partners and shareholders.
Gerardo: With that let's albeit up for questions now thank you.
Thank you we will now begin the question and answer session. If you have dialed in I would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
Marcellus Santos: We'll take our first question from Marcellus Santos at J P. Morgan.
Marcellus Santos: And Mr. Santos. Your line is open and you may have yourself me at all.
Sorry, I was muted.
Speaker Change: Thank you for taking my questions I have actually two the first if you could comment a bit on subscription gross profit you almost touched the.
Speaker Change: <unk> target model of 79% closer to 80% in a seasonally weak quarter. It is a sustainable gain going forward and what are the main sources of the gain and the second question is regarding head count reduction what are the main areas that theyre seeing head count reduction at the company. Thank you.
Speaker Change: Hi, Marcelo he got it right here. Thanks.
Speaker Change: For the question.
Speaker Change: So on gross margin we are pleased with the continued progress in our margin profile this quarter.
Speaker Change: In Q1 2025, as you mentioned, we delivered 190 basis point improvement in subscription gross margin and 370 basis point improvement in the overall gross margin on a year over year basis.
Speaker Change: These gains are particularly meaningful given the seasonality that softer and.
Speaker Change: In nature in the first quarter, making the expansion both sequentially and year over year, a strong validation of the scalability and the resilience of our business model.
Speaker Change: This performance reflects disciplined execution on multiple fronts.
Speaker Change: Key driver has been the optimization of our customer support operations as mentioned in your prepared remarks, where we are seeing tangible benefits from the strategic use of AI.
Speaker Change: These enhancements are allowing us to both elevate service quality and materially reduce support related costs, delivering a meaningful impact on gross margin.
Another important contributor is the continued maturity of our global ecosystem of system integrator partners as our partner network scales and becomes more autonomous we are increasingly shifting implementation services should these third parties.
Speaker Change: This is a strategic priority and we've been advancing over several quarters and it not only supports margin expansion on a total gross margin on our model and our subscription gross margin, but on a total gross margin and it also reinforces our asset light highly scalable operating model.
Speaker Change: On getting closer to the target, we just posted 79% subscription gross margin right. So the target is 80%. So we are going towards and approaching this does target, but not yet there and our margin expansion reflects the successful execution of our long term disciplined strategy and so we remain focus.
Speaker Change: On Florida, strengthening our profitability profile, while delivering value to our customers and.
Speaker Change: And if you could repeat the second question. Please.
Speaker Change: The second was about head count reduction there was a sequential headcount reduction of three 5% of and I'm mistaken just wanted to know what are the main areas that are seeing this head count cut.
Mariano: I can address here Mariano hand.
Speaker Change: Actually we see a stability on the head count there.
Speaker Change: Small changes and.
Speaker Change: The only kind of a meaningful change was in the support area.
Speaker Change: But this is not like as a trend so we see stability on head count.
Speaker Change: Okay. Thank you very much.
Speaker Change: We'll go next to Maria in Penn Plaza at Ehow.
Speaker Change: Maria Your line is open. Please go ahead.
Speaker Change: And you may have yourself muted.
Speaker Change: Hearing no response, we'll move next to list up random at Bank of America.
Speaker Change: Hi, Good afternoon, everyone. Thank you for taking my questions I have two here on my side the first one.
Speaker Change: In terms of the costs and expenses we saw a.
Speaker Change: A significant increase in R&D.
Speaker Change: And I wanted to understand if there is there a specific new projects or a reason for this increase sorry, if it's according to what.
<unk> was already expected for the company and also.
Speaker Change: If you could give us an update on the expansion for the U S. If we're seeing any.
Speaker Change: Differences or are you continuing to see the same momentum we were having previously thank you.
Speaker Change: Hello, Hello, Thank you I'll get the first one roof Mariano ones get to the second one.
Speaker Change: Move to the microphone.
Speaker Change: So a bolt on our R&D expense increase.
Speaker Change: In the first quarter of 2005, our non-GAAP R&D expenses increased by nine 3% year over year.
Speaker Change: Consistent with what with our stated strategy to invest in what we see is with tax greatest long term differentiated product.
Speaker Change: This increase reflects our deliberate committed.
Speaker Change: To deepen.
Speaker Change: To deepen and broaden e-commerce platform will continue to invest in expanding the das and completeness of our product suite reinforcing our competitive advantage both in <unk>, but most recently <unk> b as well.
Speaker Change: Super and supporting scalable growth across multiple geographies that you can see it in multiple customer segments.
Speaker Change: And as we shared in prior quarters, we've been hinting at high in a measured and disciplined way along with the product roadmap and strategic priorities. So this quarter growth also reflects a normalization of hydro activity following periods of slower onboarding cycles as.
Speaker Change: Well as the continued advancement of critical innovation initiatives.
Speaker Change: Gil remains central to our ability to win and retain enterprise customers and also to unlock new cross sell and up sell opportunities through projects like the four four.
Speaker Change: The one that I mentioned <unk> with text ads and others. So it's not only necessary, but it's strategic beyond that.
Speaker Change: Gasoline, but like every other company descent software company in the World, we are investing higher in changing the way we design software, we build softer with AI and this is not only.
Speaker Change: This is not only changing the way, we design and build software internally, but it will change in this changing the way we interface with our customers with interface with our partners and also it also informs the.
Speaker Change: Services and products that we will deliver in the near future all of this requires.
Speaker Change: Disciplined but extensive investment in R&D.
Speaker Change: I can answer both.
Speaker Change: The U S sales.
Speaker Change: Sales motion is evolving in line.
Speaker Change: With our expectation and with our long term strategy. So we are focusing on landing and expanding high value enterprise customers building durable relationships and delivering innovation that really drives measurable business or impact so well.
Speaker Change: We have.
Speaker Change: Few high impact signed logos that we'll be analysis through the year.
Speaker Change: Which we believe will further enrich <unk> narrative and strengthening market best perception.
Speaker Change: Like Manchester City Football club now in the implementation.
Speaker Change: <unk> highlight the global relevance and scalability of the Dx platform. These customers are not only large in <unk> potential.
Many range into the hundreds of millions even billions of dollars, but they also demonstrate our growing ability.
Speaker Change: As a strategic partner in complex and high Stakes.
Speaker Change: So no not.
Speaker Change: Significant change just a growing momentum in our brand in the deals.
Speaker Change: You can deploy.
Speaker Change: Very clear thank you for the answers.
Leonardo: We'll go next to Leonardo almost at UBS.
Leonardo: Hi, Good night everyone.
Speaker Change: Got a couple of questions. So first.
Speaker Change: The macro situation that you asked what the tariffs if you could discuss a little bit.
Speaker Change: What's the sentiment with the companies you discussed how are they feeling about their budgets and their willingness to.
Speaker Change: Prioritize from.
Speaker Change: And.
Speaker Change: Type of solutions, our backend cloud migration, so how do you how does.
Speaker Change: Are you seeing some clients in this in this context I think I'll I'll give to this question. Thank you.
Speaker Change: Alright. Thanks.
Speaker Change: So.
Speaker Change: Speaking on both macro more broadly and then we can talk about.
Speaker Change: U S and tariffs so we see the tax well positioned to drive amid the evolving global trade landscape. Despite the shifting.
Speaker Change: Trade tariffs currency fluctuations in supply chain, we alignments.
Speaker Change: If you look at our robust performance in Q1 highly.
Speaker Change: Highlighted by the 17% growth year over year in FX neutral on the GMP side.
Speaker Change: Healthy subscription revenue growth of 15% it underscores <unk> resilience and adaptability during these dynamic market condition.
Speaker Change: The current macroeconomic environment has prompted many enterprises to reassess their supply chains and seek more agile cost effective solutions.
Speaker Change: Although these inquiries and creates volatility and impacts that are hard to predict and forecast. So far Latin America has been less impacted than other regions.
Speaker Change: And historically no challenging economic periods prompt enterprises to reassess their technology infrastructure, emphasizing cost efficiency flexibility and rapid time to market and be tactical Ms platform is uniquely positioned to meet these demands.
Speaker Change: Offering a comprehensive solution that supports our operational agility and resilience.
Speaker Change: With this context in mind, we are pleased with Q1 performance, particularly in the context of ongoing macroeconomic volatility.
Speaker Change: Our results came in that top of the subscription revenue guidance range with margins, improving significantly reflecting consistent execution across the business and aligning with the expectations, we outlined last quarter.
Speaker Change: When we issue our outlook. We also took a balanced view factory persistent consumption headwinds alongside the operational momentum.
Speaker Change: We are seeing across the company debt.
Speaker Change: That balance perspective remains intact.
Speaker Change: Having said that and if we look at April six.
Speaker Change: Since there has been more movement in this macroeconomic front in April April has exhibited increased volatility.
Speaker Change: Stronger performance in the first half followed by a softer second half.
Speaker Change: The shifting Easter seasonality.
Speaker Change: From Q1 last year to Q2. This year has made it more difficult to extrapolate underlying trends.
Speaker Change: The uncertainty around the timing of customer go lives ended trajectory of consumption. So against this backdrop, we are maintaining our full year guidance range, while Q1 results were solid.
Speaker Change: On the top of the guidance, we believe it's prudent to keep our outlook unchanged at given the evolving conditions are observed early in Q2.
Speaker Change: And regarding Q2 guidance, we are maintaining the same midpoint of 14% we issued for Q1 guidance.
Speaker Change: The slightly wider range of three percentage points for Q2 versus two percentage points. Previously for Q1 reflects increase uncertainty is theme from this heightened global market volatility and less visibility into future GMP performance.
Speaker Change: And if we were to adjust for the Easter calendar shift, which fell in Q1 last year in Q2. This year the underlying trends suggest both quarters Q1, and Q2 would reflect a similar growth profile.
Speaker Change: For us in the stability of our underlying performance and then more specific on the U S and tariff impacts.
Speaker Change: We have.
Speaker Change: It's more market share in the U S. So we are in.
<unk> is exposed to these macroeconomic movement, it's more macro story than a macro story, but we remain in a.
Speaker Change: Very.
Speaker Change: Clothes and absorbing this shift in how we can position ourselves and Indiana. We continue to focus one what we can control, meaning adding value to our existing customers by helping them accelerate their sales efficiency, attracting new customers and continue to evolve with pheno product innovation and platform expansion initiatives.
Speaker Change: <unk>, while keeping a disciplined approach to cost and expenses.
Speaker Change: Thank you Phil drag glad I stayed with just one question very very good answer.
Speaker Change: We'll go next.
Speaker Change: Thanks, a lot.
Speaker Change: Well move next to Maria Clara and fantasy at Ehow.
Speaker Change: Hey, guys can you hear me.
Speaker Change: Yes, we can yes.
Speaker Change: Great. Thanks for taking my question I was wondering if you exclude the explorer.
Speaker Change: Todays subscription raising new debt.
Speaker Change: Geography and per category.
Speaker Change: It came in above our expectations and the top of the guidance and I was wondering if I could get more color on.
Speaker Change: How the productivity gains of clients in Brazil involving anywhere in our expectations going forward, especially for.
Speaker Change: <unk>. Thank you so much.
Great idea happy true started years and others feel free to chime in so we don't in open up.
Speaker Change: A breakdown by geography or by category on a quarterly basis, we do this on an annual basis, but happy to share some qualitative color as we mention when we publish Q4 talking about guidance for Q1 and for the year.
Speaker Change: Taking a more.
Speaker Change: Measured approach.
Speaker Change: On the same store sales given.
Higher.
Speaker Change: Interest rates in many geographies and.
Speaker Change: In heightened macro volatility.
Speaker Change: And we are working very hard to implement the customers that we signed last year to put them lives.
Speaker Change: And these customers that have a range of different categories.
Speaker Change: <unk> mentioned, a few customers that went live this quarter highlight of americanas in Brazil, So Brazil is helping.
Speaker Change: The growth of the company with these new customers going live and also U S and Europe as.
Speaker Change: Most of the contribution comes from adding new customers.
Speaker Change: Through our platform in increasing our our growth.
Speaker Change: So no.
Speaker Change: Relevant.
Speaker Change: Highlights or low lights versus expectations I would say.
Speaker Change: That we laid off less last quarter.
Speaker Change: Yes.
Speaker Change: Great. Thank you and if I could make another question related to day everything you asked me get business can you. Please comment a bit more on the economics Asquith business anyhow.
During the 2025 guidance. Thank you.
Speaker Change: So thank you Maria.
Speaker Change: The business itself is very material right now, but we're very confident that we.
Speaker Change: We're doing the right things to make a material business inside the testing in the near future and in the businesses is that connecting our existing customers that call. It the publishers to advertisers.
Speaker Change: So they can do they can have a new media to advertise the media that we call retail media retail media is like advertising using the first by the data off of the publishers.
Speaker Change: The motions at our customers at <unk> and this is like.
Speaker Change: Network business and we're very strong on one side of the network and because we're strong in one side of the network.
Speaker Change: Ramping up very fast.
Speaker Change: The size of the network the advertisers after the acquisition of new tail.
Speaker Change: We can say that we have almost 400 advertisers already.
Speaker Change: Announcing and doing advertising our network.
Speaker Change: This combined with our <unk>.
Speaker Change: Hundreds of publishers.
Speaker Change: And give us a competitive edge in a very good position to help and to monetize all the inventory that the retailers Ken Ken can.
Speaker Change: Can sell to this to the industry manufacturers to their to their suppliers.
Speaker Change: Great. Thank you so much Sir again curious.
Speaker Change: Okay.
Speaker Change: And that concludes our Q&A session I will now turn the conference back over to Gerardo Tomasz for closing remarks. Thank you for the great questions to close I want to reiterate the confidence we have in the trajectory with <unk>, we started the year with solid execution drove profitability.
Speaker Change: And free cash flow in a seasonally soft quarter.
Speaker Change: This performance reflects not just the short term wins, but the strength of the foundations, we've laid doorbell the past year built on disciplined resiliency and clear strategic direction.
Speaker Change: We're gaining meaningful traction across regions, winning and expanding with enterprise customers, who choose the tax not just for technology was for outcomes.
Speaker Change: I've talked to market improve its margins and simpler operations among many other reasons.
Speaker Change: As we continue to evolve from a platform into a comprehensive Congress suite, we've laid the groundwork for our future shape. It by dialogue with automation with culture that Gtx will remain at the forefront of digital Congress transformation.
Speaker Change: We're excited by what's ahead, we will continue to execute with focus ku with disciplined and purpose and deliver long term value for our customers partners employees and shareholders.
Speaker Change: We're just getting started.
Speaker Change: Thank you again for your time and partnerships. We look forward to speaking with you in our next earnings call have a great rich.
Speaker Change: And that concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].