Q2 2025 VTEX Earnings Call
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Okay.
Hello, everyone and welcome to <unk> earnings Conference call for the second quarter of 10 to 25, I'm Giulia butter Fernandez VP of Investor Relations, joining me today or should I look that much when you're away from there and co CEO and he got hooked on like a food Hall, our Chief Financial Officer also joining us for the Q&A session.
Or the money I know, what I mean, everybody your thunder ankle CEO and he's putting daughter Chief strategy Officer before we begin. Please note that today's remarks may include forward looking statements. These statements are based on our current assumptions and projections are not told results maybe for others.
Information regarding risks and uncertainties is detailed in our form 20-F for the year ended December 31st send it in before and other filings with the SEC all of which are available on our Investor Relations website.
In this call. We May also reference certain non-GAAP financial measures reconciliations to the most comparable GAAP figures can be found in our Q2 trends and besides earnings press release also available on our investor relation website with that let me turn the call over to get out of it although that's always yours. Thank.
Thank you Julia.
Welcome everyone and thanks for joining our second quarter 2025 earnings conference call.
<unk> continued to deliver resilient performance driven by disciplined execution and relevant progress on our global expansion.
Quite a challenging market for our retailer base in Brazil, and Argentina, a more gradual overall market demand from new customers migrations.
Our initiatives support cost efficiency combined with our disciplined execution delivered a quarter of resilient operational profitability.
As a result, we have raised our non-GAAP income from operations and free cash flow guidance by over 10%.
All the global expansion front, we're excited to highlight key developments this quarter, including the expansion of our partnership with Grupo <unk> in the U S for the launch of the Kitchenaid website and the addition of the new enterprise customers across both the U S and Europe.
Got.
It is encouraging to see the U S and Europe large and attractive markets growing twice as fast as the overall company.
Turning to subscription revenue, we recorded $57 $2 million, representing 11% year over year, increasing the FX neutral that's within our guidance in U S dollars, but below.
FX neutral basis.
From a GMP perspective. This performance was primarily impacted by ASIC team that were the early signs of recovery team in the first quarter did not continue with the second quarter, reflecting a reversal on that threat.
Additionally, we observed the mix shift in Brazil.
Our large customers that have a lower implied take rate demonstrated great resilience amid the high interest rate environment. While this shift has an overweight impact on <unk> growth is translated into a more modest contribution to revenue.
Despite the challenging market the continued resilience and scalability of our business model enabled us to maintain strong financial discipline and operational leverage.
Gross profit reached at $45 3 million up 15, 2% in FX neutral representing a three five percentage points margin increase year over year.
Our non-GAAP income from operations increased by 46% in FX neutral to $8 $5 million, representing a 14, 4% margin and a three 3% pointed just margin increase versus the same quarter of last year.
These resilient operational profitability and stable churn levels gives us the confidence and capacity to double down on our strategic initiatives that will fuel our next phase of growth.
We are actively investing in <unk> commerce, and retail media to hypotension underpenetrated areas that are already unlocking new revenue streams and reinforcing our position as a key partners to enterprise brands.
Combined with the progress of our global exploration these initiatives form a powerful engine for scalable value creation.
Together, they reflect a disciplined growth strategy that positions with tax to capture significant upside in the years ahead.
Moving to our commercial and product update for the quarter and keeps you. We successfully brought several new customers life, including although yoga Amit go so business Godless jogger lasts.
And Lindsay in Brazil, sharp a Z in Kosovo pricing in Mexico cash scenes in FES Delta House in Portugal, Rose, rather sports and American water resources in the U S.
We also strengthened relationship with key existing customers, who know did group added the <unk> store in Colombia, now running <unk> C models across four countries in Latin America.
Can you continue to expand <unk> presence across Europe, adding, Sweden, and Norway, Germany, Belgium, France, Netherlands, and UK operations.
LG launched the new starting near corridor, expanding its presence across Latin America.
<unk> launch it stock in Brazil. They are multi brand outlet that offers discounted items from across the group's premium fashion labels expanding its support to follow Oxitec stores that already includes the lead ball, Joan Joan do that Linda and if you're at all.
Whirlpool launch of Kitchenaid, and the west marking its first U S store launch with vertex while continue our global relationship in over 20 countries.
This recent go lives highlight the global competitiveness of our platform as we deepen the adoption with existing customers attract new ones and expand our network of partners.
With clear on display at vertex day 2025 were 25000 participants experienced heart our ecosystem is coming together to power real World Congress across B to B B to C and hybrid models.
Building on that <unk>, we're now set to launch the latest edition of <unk> vision, our digital initiatives designed to provide visibility into our product roadmap and demonstrate how our innovation priorities are directly aligned with customers' needs together.
These two initiatives reflect meaningful progress across four strategic pillars Bto B covers retail media omni channel and a gentle commerce first bid shall be commerce remains one of our top strategic priorities, we are introducing a newly he architecture.
B to B buyer portal designed to solve for the complexity of corporate push days. It includes embedded tools for governance, such as multi level organizational management budgets and controls and approval based workflows are low side Native born chart integrate.
<unk> to connect seamlessly with external procurement system.
Innovations allow larger organizations to scale purchasing through efficient self service experience.
While maintaining compliance and overall oversight.
Second retail media is emerging as a transformative force in digital commerce, and we are positioning detect ads as a fully integrated monetization AMG as retailers seek new profit levers and advertisers the med measurable outcomes our plot.
Platform is introducing features such as video AD formats off site traffic integrations and in store media Activations. We're also entering a strategic partnership with global integrating <unk> ads with Brazil largest media network to enable.
Hi impact co pays.
These advancements elevate vitek beyond commerce infrastructure to become the operating system for retail media monetization.
Third Omnichannel Congress, which remains a cornerstone for our product strategy as enterprise mid <unk> unified digital and physical experiences.
We are introducing AI powered semantic search and product recommendations designed to increase conversion through contextual intent based discovery new in store innovations such as staff will fall through is far more bio device into secured payment terminals for assisted selling at.
Additionally, the delivery promise feature enables shoppers to view fulfillment options Q2 by speed location and method directly from the search of product detail page.
These capabilities reinforced our commitment to delivering seamless personalized commerce experiences at scale.
Last but not least a gentle Congress is redefining operational agility for our customers. We are introducing AI agents that ultimate core workflows reduce complexity and accelerate time to value. These include a customer service agent powered by.
When capable of resolving inquiries across channels like Whatsapp Instagram in EMEA.
Visual editor agents that empowers non technical teams to modified storefronts in real time without cold.
And the data insights agents that serious face real time business intelligence through natural language queries.
With these capabilities embedded into the <unk> platform.
Enabling enterprise customers to scale with precision and unlock new efficiencies through intelligent automation.
These highlights are just a glimpse of the powerful innovations, we're bringing to the market.
To discover the full breadth of product releases and strategic advancements we invite you to stay tuned for the upcoming addition of pretax vision.
But innovation for US is never an end in itself.
Every product we build every capability. We introduced is guided by a single objective delivering extraordinary outcomes for our customers now, let's take a look on how this vision translate into measurable impact on the ground through customer success stories that reflects.
Real value for our platform Whirlpool launch it kitchenaid commerce sites in the U S marking.
Cash towards first with tax implementation in the market.
The platform migration, where post launch of kitchenaid and the U S market that strategic shift to a model is scalable commerce architecture.
This site integrates with four distribution centers for nationwide fulfillment and connect seamlessly to ERP CRM.
CRM and pricing system via our robust middleware layer.
The share count experiences is also fully hazardous supporting multiple payment methods, including credit card pay Paul and buy now pay later solutions.
Platform also enables an handset customer experiences such as headless login product personalization through engraving gift wrapping options and a range of warranty plans all natively support within vertex with the rollout kitchen AIDS improved.
Site performance and reduced development overhead, while establishing a standardized architecture that is already accelerating future deployments over in other markets.
The Delta House, Portugal's Mahlstick Corning coffee brand marks the brands first venture into commerce with the Greenfield project followed by <unk>.
More than just the online coffee store Delta House offers a curated selection of products across categories like wine peers water soft drinks and snacks delivering experiences that capture the quality Walnut and heritage of the Delta brand.
<unk> was selected for its flexibility in designing personalize that user journeys it support for multiple payment methods and its native features such as pickup points, allowing the brand to engage customers in new interactive waste.
One of the key differentiators of the tax unified <unk>, which enables delta team to manage logistics payments marketing and customer service from a single integrated environments.
With a few to read the architecture and a seamless shopping experience. The Delta House brings that Delta cafes is spirit online connecting tradition and innovation, while laying a solid foundation for digital growth.
Road runners sports, a leading U S specialty retailer operating since 1983 modernize its e-commerce operation by migrating from a legacy platform to vertex adopting a headless API first architecture built to use.
<unk> digital and physical channels.
Rather than re platforming all at once the company opted for a phase it migration strategy.
Moving the T commerce engine to be tax and now progressive adopting native capabilities. The new architecture features a fully decoupled front end integrated with third party services, while vertex manages co.
Commerce functions like catalog pricing and promotion.
This implementation of Lockett faster innovation and efficiency Fort Road venues sports Tonia complex tech stack into scalable streamline and future proof operation.
These spots with smart a leading provider of industrialized it construction systems in Brazil expanded its these two capabilities with the launch of a bto B commerce channel powered by detects.
After identifying that a large share of enterprise customers were using these b to C side. The company built a tailored experience for professional buyers such as contractors installers and distributors leveraging the <unk> suite, the new channel offer.
Features like customer segmentation personalized pricing quick reordering and digital quotation requests all designed to reduce negotiation tie and increased purchase frequency.
By assigning customer commercial terms during the client onboarding.
<unk> smart illuminated repetitive negotiations, while enabling recurring order with greater speed and confidence.
Operation is fully integrated with companies ERP, ensuring control over pricing taxes and inventory, while also supporting omni channel coordination with its 43 physical stores.
With 60% of its product portfolio manufactured in house.
Company delivers both efficiency and reliability to be to be clients.
This new channel not only improves operational agility and customers in sites, but also advances spouses March mission should make modern sustainable constructions more assessable and scalable.
Retail media is another area, where we've seen meaningful evolution.
Detect AD delivers value across the full records system, both for publishers and advertisers.
A standout examples b mall, a leading Brazilian retailer leveraging detect ads to monetize its digital storefronts.
Racket, a global consumer goods company driving performance to target retail media Activations.
BMO ads is transforming them all ecommerce operation into a powerful model amortization engine and its largest campaign the activated the sponsored products dynamic banners and more advertising formats.
Generating over 1 million Brazilian reais in incremental sales and achieving an outstanding rose above 40 Act.
Success came from precise targeting dynamic CPC management and strong collaboration fueled by regional demand insights and real time optimization.
<unk> chose vertex AD network to scale its retail business strategy, achieving a breakthrough in performance and media efficiency, particularly within the complex pharmaceutical channel.
Moving from Fragmenting media buys to a fully integrated data driven approach racket activated campaigns across 19 retail partners, resulting in seven fold increase in retail media driven sales and a five fold boost in campaign activity both.
While tripling its rollouts with the structure inventory flexible formats, and real time optimization Vitek AD enabled record to align media data and operations, establishing a scalable high impact retail media aging their cluster.
<unk>.
Now to wrap up before passing the floor to <unk> I would like to take a moment to recognize the dedication of our 12 183 feet, Texas, whose talent and commitment are instrumental in bringing our vision to life.
Also want to extend my sincere gratitude to our customers partners and investors for Derek.
Continued trust and collaboration.
With that I will hand, the call over to Ricardo Thank you Jordan.
Hi, everyone I am pleased to share with you <unk> Q2, 2025 financial results in.
In the second quarter of 2025, GMT reached $4 8 billion.
Growing 9% year over year in U S dollars and 14% on an FX neutral basis.
This led to subscription revenue, reaching $57 2 million compared.
Compared to $54.0 million in Q2 of last year, a 6% increase in U S dollars and 11% on an FX neutral basis.
As mentioned by Geraldo subscription revenue for the quarter came in within guidance in U S dollars, but below on FX neutral basis.
From a G&A perspective, that's driven primarily by a reversal in Q2 of the recovery trend we started to see in Q1 in Argentina.
From a subscription revenue perspective, we also saw a mix shift in Brazil, with new and larger customers gaining representation. Although these customers have lower implied take rates that represented a more limited contribution to our revenue growth due to our scalable model results in similar margins, which is.
Clearly demonstrated by our gross margin improvements.
While this challenging market environment introduced short term headwinds. It also underscores the strength and resilience of our business model.
Designed for scalability and efficiency, our model allow us to navigate volatility while protecting operational profitability.
We have maintained a disciplined execution, while continuing to invest strategically in our platform and global expansion.
This balanced approach drove meaningful margin expansion and further validated the operating leverage embedded in our model.
Reflecting these dynamics our non-GAAP subscription gross margin reached 80% in Q2, 2025 up 180 basis points year over year from 78% equal to 2024.
These expansion continues to be driven primarily by gains in customer support efficiency, where we are further scaling AI power automation to improve service quality, while reducing support costs.
This trend reinforces our commitment to operational excellence and position us to sustained strong margin performance over the long term.
Our total gross margin, which includes services rose to 77% up 350 basis points year over year compared to 74% in Q2 2024.
Aside from the subscription gross margin gains, which I just described our overall gross margin also keeps benefiting from declining mix of services revenue as we increasingly leverage our ecosystem of partners to support implementation projects.
Turning to expenses as I mentioned before we remain firmly committed to disciplined management, while allocating capital strategically to support long term growth and innovation.
In Q2, non-GAAP operating expenses totaled 37.0 million.
Renting a 4% increase year over year.
This quarter, we had flattish G&A and sales and marketing expenses contributing to a two percentage point year over year reduction in their combined weight as a percentage of total revenue.
These efficiency created additional room to support our continued investments in R&D focus on expanding and enhancing our platform capabilities.
This balance between disciplined and strategic investments continues to deliver results.
non-GAAP income from operations reached $8 5 million up from $6 3 million in Q2, 2024, representing an increase of 35% U S dollars.
These drove eight three percentage points year over year margin expansion, resulting in a 14% non-GAAP operating margin for the quarter.
<unk> results underscores our commitment to profitable growth and reflect the positive trajectory of our financial model.
In the more complex and volatile business environment.
Our financial discipline also translate into strong cash generation.
We foresee the efficiency and resiliency of our cash conversion profile.
Free cash flow for the quarter was $7 1 million up from $3.0 million in the same quarter of last year.
Resulting in a free cash flow margin of 12% an improvement of seven percentage points year over year.
On a year to date basis free cash flow was $13 $8 million remaining very aligned with our year to date non-GAAP income from operations.
In this light disciplined capital allocation remains a key priority as we focus on delivering long term value to our shareholders.
This quarter, we concluded the share repurchase program authorized by our board of directors in December 2024.
As accurate as part of our broader capital allocation strategy to maximize shareholder returns.
In Q2, we repurchased 0.8 million shares at an average price of $4 $82 per share considering the current and the previous year's share repurchase activities total shares we purchased reach at $16 <unk> million with an average price of $4 $86 per share.
And a total cost of $78 2 million.
On July 31, 2025, our board of directors authorized an additional share repurchase program for an aggregate consideration of up to $40 million. As we look ahead, we continue to navigate a challenging market environment.
The volatility observed in Q2, particularly the reversal of recovery in Argentina, and the mix shift in Brazil.
Alongside hydro related contract cancellations and slower decision, making cycles among retailers and brands has introduced additional impact into near term revenue forecasts.
Nevertheless, we remain confident in our competitive positioning our global expansion strategy and the resilience of our business model.
With our focus on innovation efficiency and scalability detect is well positioned to capture the long term trends shaping global commerce.
With that in mind for the third quarter of 2025, we are targeting FX neutral year over year subscription revenue growth in the range of 6% to 9%, implying a range of 57 $5 million to $59.0 million.
For the full year 2025, we are now targeting FX neutral year over year subscription revenue growth of 9% to 12%.
Implying a range of $233 million to $239 million based on July's average FX rates.
Turning to our margin outlook backed by disciplined cost and expense management and ongoing operational efficiencies. We are raising our full year 2025 outlook for non-GAAP income from operations and free cash flow margins to the high teens.
Reflecting the strength of our execution and the scalability of our platform.
With that although we are review our subscription revenue forecast by 2% in U S. Dollars, we are increasing our non-GAAP income from operations and free cash flow in dollar amounts by more than 10% to conclude our Q2 performance reinforces the resilience of our business model disciplined execution.
Fusion and long term growth Foundation.
We are particularly encouraged by the relevant progress in the U S and Europe, and the attractive long term opportunity <unk> and retail media.
Despite a challenging market <unk> remains well positioned with a globally competitive platform.
Strategy, and an increasing relevance among global enterprise brands.
With that let's open it up for questions now thank you.
Thank you and at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad once again star one.
And we will pause just a moment to compile the Q&A roster.
Alright, it looks like our first question today comes from the line of Marcellus Santos with JP Morgan Marcello. Please go ahead.
Hi, good evening, Thanks for taking my questions I have two.
Regarding the guidance so could you please discuss.
The decline in the guidance in terms of <unk>, and new <unk> and new subscriptions sold like I'm, just trying to break down how much is.
The growth in GM view of your clients the variable component of your revenues and how much would that be due to a longer time to close new contracts and to bring new clients in the second in the margin and increased margin expectations could you. Please discuss more in detail, which which are the lines that are scaling the mall store.
Adding most benefit that give you confidence that this increased margin Luka. Thank you.
Okay.
Thanks Michelle.
Let me walk you through the context behind our Q3 guidance and the full year outlook.
So our Q3 in fiscal year 2025 guidance reflect a couple of factors. We are closely monitoring as you mentioned in your question.
So the first factor is the GM deep performance of our existing customers.
Variable that we have limited control over.
Starting with our customer base in Argentina.
After signs of recovery in Q1, Q2, we reverted back to negative double digit <unk> year over year FX neutral growth.
Prompting the change in our outlook.
And moving to Brazil.
We are seeing a continued mix shift towards larger enterprise customers.
Strategically positives.
But with softer near term revenue conversion due to the lower implied take rate.
Though we are still in our attractive margins.
And it's important to note that while we don't control, we can always predict the GMB performance of our existing customers.
We are increasing our efforts to work more closely with them supporting the execution of our strategies and unlocking additional growth opportunities through the platform.
The second factor.
Driving a significantly smaller and smaller impact is that we are also seeing softer overall market migrations in our view isolated cones reconciliation stay too high risk implementations.
While some of these projects may still come true, we excluded them from our near term forecast given what we see as the most likely scenario.
And it's important to mention that although we see some isolated cancellations the more strategic projects, we have under implementation remain on track.
So I'll leave these.
These dynamics drove five percentage points revision in our FX neutral subscription growth guidance for the year.
And equivalent to a 2% U S dollar revenue adjustment at the midpoint of our guidance.
And as I said, the large majority of the FX neutral impact comes from the Argentina, and Brazil, <unk> with a much smaller portion coming from the soft overall market demand and a few isolated contract cancellations.
That said, we expect some acceleration in Q4 supported by easier comps and continued traction in the U S and Europe.
And then with that on the profitability side, which is also part of our guidance.
Our updated guidance highlights the strength of the model.
Despite reducing 2025 revenue guidance by 2% in U S dollars and the midpoint.
Our full year non-GAAP operating income and free cash flow margin outlook by over 10% in dollar amounts. So this speaks to the durability of our platform.
The disciplined execution and our ability to deliver profitable growth even more complex.
Conditions.
And where the margin improvement is.
Marcello year to date, our non-GAAP operating income margin is up approximately four percentage points versus last year, driven by no gains in the AI support automation Mauro.
More autonomous implementations and the acquisition of maturity so in a lot of it coming from the gross margin sites.
On the expense side, despite investing more in R&D, G&A and sales and market sales and marketing are flat year over year in absolute terms and the ladder sales or marketing had some head count reduction in the first half of the year that should show some savings in the second half of the year.
And for context like we ended 2024, we had 13% non-GAAP operating margin.
That combined with what I, just mention our position us on track to reach high teens margins for 2025 supporting our decision to raise the full year operating income and free cash flow margin guidance as we did.
So there is margin expansion not only boost the profitability, but also creates room to invest in high impact R&D areas like <unk> retail media and E Commerce like Gerald mentioned in his prepared remarks. So it is a clear validation of our ability to scale with discipline and drive long term shareholder value.
Perfect. Thank you very much.
Alright, Thank you Marcelo and our next question comes from the line of Luca Brendan with Bank of America Luca. Please go ahead.
Hi, Good afternoon. Thank you for taking my questions I also have two here.
Following on the similar lines from Marcello on the larger clients on the U S and Europe that you mentioned would it be coming in in the next few quarters.
Were there any changes in terms of when those will be coming lives may be a delay.
If that was in <unk>.
Please stay on the guidance in some way or when we're talking about those clients, which should spec something similar.
Isolation isolated cancellations were also.
One of those clients and then second more on a structural level. If you guys are seeing any changes in terms of competition in any particular region with.
The new competitors are growing in Latam or.
<unk> continued to see similar trends overall, thank you.
Okay.
Okay. Thank you for the question.
On the implementation cycle, we're not seeing any change significant change.
Spike the macro volatility we the projects undergoing we don't see any kind of shorten or lodging and off.
Ambition cycle.
Of course, we are signing.
More enterprise deals.
In Europe, and it's grown twice as the Latam business.
The tier one clients have larger.
Implementation cycle, but this is already in the guidance on.
On the competition.
We're seeing traction.
In our international strategic markets means U S and Europe.
So the highlights growing momentum in our global expansion confirms that our platform is resonating more mature competitive regions.
Key milestone that makes the point on that.
Launch of the kitchen, H E Commerce web site in the United States.
<unk> has been a long time.
Partner, but these marks their first implementation with us in the U S and strong validation of our platform.
We are still focused on making to Geneva customer success and turning these into our <unk> implementation.
We are also bringing online large scale customers with millions in annual GMB, which should further boost momentum and credibility in Europe. We had several go lives this quarter and continued progress towards the highly anticipated Manchester City Football Club project.
Millstones reflects our ryzen strategic relevance in the region.
Across both regions constructions, signing momentum solid the pipeline has grown and why we made significant strides we still just getting started in those regions too.
To finish the tax position as a complete complete and proposal platform maturing and matching the demand of enterprise BTG and VW platforms in the U S and EMEA I hope I answered the question.
Okay very clear thank you for the answer.
Okay. Thank you very much.
And again folks if you would like to ask a question again star one on your Touchtone phone once again star one.
And we will pause just a moment for further callers.
Okay going once going twice.
It appears there is a another color and that is Maria and fantasy without Ito Maria. Please go ahead.
Hey, guys. Thank you.
I have two questions. The first one related to Argentina can you give us more color on the main drivers for the deterioration in the operating remains given Joe can you. Please comment on how you perceive the competitive landscape evolving there Angel and also regarding Brazil, I just witnessed.
You guys kill.
Tell us how.
Can you calibrate for potential consumption deceleration in Brazil in the second half of tenure in our current guidance.
Thank you.
Yeah.
Hi Marie.
As a reminder, we don't disclose regional performance so on a quarterly basis, we disclose annually, but I can give there actually commentary for.
We know what we are seeing in Argentina, and then once we have the full year, which means we can go into more details. So Argentina was a significant drag this quarter.
As I mentioned in the prepared remarks.
Q1, we saw promising signs of GMB growth recovery from our customer base in Argentina.
To give you a sense.
The gmg FX neutral year over year growth is started Q1 in the double digit negative range and exited in the high single digit positive range by March.
So we expected that trend to at least keep stable in Q2.
Instead, the recovery reversed for our customer base and GMB grow fell back to the double digit negative territory.
In Q2.
And given that there is the hot sales event in EMEA.
Argentina has a heavier weight in Q2. So these reversal had a meaningful impact for us.
So so Argentina remains volatile markets now.
Now, we still remain focused on the long term opportunity.
Gaining share supporting our customers and driving additional adoption.
And we weathered volatility in the region before in EMEA emerging stronger by staying close to our customer base and executing with discipline.
So on the overall competitive.
Competitive landscape in the <unk> in the market looking at other digital commerce platforms, we don't see any any changes specifically in Argentina.
On the competitive landscape.
<unk> and then maybe if you could repeat on your second question. Please.
Sure. Thank you for answering just regarding operating trends in Brazil. During the second half of the year I just wanted to make sure. How do you calibrate Carey expectation for potential deterioration of consumption in the second half incident here. Thank you.
Yeah.
Perfect perfect.
Great question so.
In Brazil, we did see some same store sales deceleration.
In Q2, although the total gmg FX neutral growth in Brazil.
In the low twenty's and pretty stable versus Q1, because we know we have new customers joining.
But we had that mix shifts towards new and larger enterprise customers.
With lowering light acreage that I did mention on the prepared remarks.
So we are assuming a deceleration in the second half given how we saw 200.
The same store sales.
Deceleration in the second half of the year.
Now there is a lot of moving pieces here with the interest rates and FX and other <unk>.
Political and macroeconomic.
Points right. So it's it's hard for us through to forecast the GM deal for our customers, but behind bedding in the guidance.
<unk> deceleration.
In the second half of the year for Brazil, given for how long the interest rates have been high in the country.
And how does this compare with the Src Cartersville tells that that Youre starting to today's silhouette.
Yes, so we saw a deceleration of same store sales.
Q4 of last year.
I would say that Q1 was more line, we saw more deceleration in Q2.
And so we're embedding that to the second half of the year as well.
Thank you. Thank you.
Thank you Maria.
And our final question today comes from the line of Gustavo <unk> Gustavo. Please go ahead.
Hello.
Yes.
Gustavo you there.
Yes.
Hi, everyone. Good evening, thanks for taking the question I'll stick to one.
The company has been very vocal about <unk>.
<unk> eight.
Retail media as well most recently.
Considering this recent market volatility if you could comment on.
And how.
Any churn has changed in the strategy and the pace of the rollout of those solutions.
With clients.
Yes.
Thank you.
Okay.
Hello, Gustavo Javier so.
Although this all this these two initiatives.
Did not then macroeconomics in my perspective to slow big structural change in the market.
If there is.
Structural change in the market it will be to reinforce the value proposition of both days.
Initiatives.
As as you know like retail media is.
Q4 any.
Retailer to be.
Scalable and profitable during two new phase of commerce likely you'll need to monetize.
Personnel inventory you need to monetize your.
Data proprietary data and especially like if you consider the current macroeconomic conditions.
This is a must have for all retailers.
Across the globe.
Including that the retailers on <unk>. This is a trend that we've seen like people bid.
We spent some investment like 10 years ago or 10 years ago in vitro.
In the West in Europe, now, they're open to renew.
Legacy solutions, and we are seeing in Brazil.
Wanting to have self service portal, serving the customer through the to deduce two channel and this is Seth.
Second the trend, it's not related to the conjecture. So the strategy is the same all days macroeconomics shifts are not inform you in the new actions on this on this.
<unk> ventures.
Alright. Thank.
Thank you.
Thank you Gustavo.
And that does conclude our Q&A session today I will now turn the call back over to Gerardo Thomas for closing remarks draw though.
Thank you for the great questions before we close I wanted to leave you with the confidence we have in detects directions and long term vision.
<unk> product bets like <unk> and retail media redefine how enterprises operate and monetize while agenda commerce is bringing AI powered autonomy into the present this.
<unk> innovations aren't incremental to foundational shift designs to meet the re award needs of global brands.
We're also seeing that vision translating to results.
We are making relevant progress in the U S in Europe, and we're just scratching the surface of the opportunity.
With a growing base of high quality customers and a platform built to scale our long term outlook is strong.
We're more committed than ever to delivering enduring value to our customers partners and shareholders. Thank you for your continued trust. We will look forward to the road ahead. The best of the tax is still to come.
Thank you for your continued support and partnership we will look forward to sharing more progress with you in the coming quarters.
Thank you for joining us today have a great day.
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