Q2 2025 Zenvia Inc Earnings Call
There is a there are some questions here on the webcast I'll I'll start with that Matt.
Keep going and.
Can you put a bit more color on for guidance for Zimmer customer cloud households, we're looking in Q4 in terms of bookings how does the franchise channel doing and are you still expecting to hit the 200 million BRL target.
Five to 70 gross margin range for the full year.
Let me let me.
Start here with some with numbers and and then cashflow feel free to add some qualitative.
Points about about Saba customer cloud and there are a couple of other questions on it.
So in terms of numbers as we said earlier in the year in January everyone. We talked about the new strategic cycle and our focus on driving customer calls.
We disclosed that we were expecting.
This business to be around 200 million reais.
Rising in revenues with a growth of between 25 around 25% and gross margin close to 70% and we are keeping this is as you saw in our <unk>.
It's here in the first half of the year.
Customer cloud is growing close to 25%, 23%. So it is as we were expecting in the end.
We will continue to maintain.
Our expectations of a business around 200 million rise in revenues and gross margin of around 7% growing close to 25% no no changes no changes to that.
Oh gosh I think it would be interesting if you can share some thoughts on how is it going.
Questions here about if we've changed anything since we launched the business in October there was an acceleration of the business now in the second quarter.
Can you share some qualitative points in your view on how well, we can say because of the cloud.
Sure, although we have this.
Outside one cut.
Mcleod are doing pretty well, we're excited with the.
Performance of the business as it looks like the revenue growth, but also on the usage of the software with its a very important fast.
Model that is based on how much of companies use our software we're seeing very strong adoption.
Todd.
For instance.
Q2, we had around 80% increase in total usage.
Turning to Q1, because if a customer called which means these oh.
Block off stream of adoption of the software is going to bring results.
Short to mid term for companies, so it's doing pretty well that sounds simple.
As you model, we launched that in Q1, so it's still early days after discharge it but its already represents around 15% of our Oh.
Omar in Brazil, with the country that will be launched in first of all.
These models, which even though it's early days, it's already are already making a difference.
Mara.
We have around maturity.
So for instance is that made sales we had zero.
And John Rachel.
Got it.
Around 34.
And we're starting to adopt this model outside of Brazil, as well where they have.
Some partners in this.
Countries.
Both them into franchisees and.
Mid term.
This strategy to be the next couple of quarters.
The main generator off Neil Mirage part of business, which means we're building skill around customer calls.
This is how do we pretty well business wise, that's why we when we hit the targets Edward.
I'm happy for.
Mid to long term.
Improved on the combination of new customers and faster adoption of which of course translates into revenue. So we're excited about these results.
Thanks, guys.
Another question here.
So on the Sip S sides are despite margins the new level or should we expect some recovery.
So as I as I mentioned and costs also just just mentioned she passed has been very competitive we saw.
Uh huh.
And Costa correct me, if I'm wrong here, but the last time, we saw Bina said being that competitive awards in the second half of 'twenty two.
We saw a lot of pricing pressure.
And but we are.
Navigating this and we understand that our.
Our strategies are.
Is the right one in terms of and we've been accelerating revenues, which means we are competitive and pricing that will obviously put some pressure on margins in the short term.
But that's important from a relationship perspective in that business helps are generating EBIT.
After all so it's important to keep that in mind.
And also a first half of the year is usually when we have a cost increases from the carriers and we pass that through prices throughout the year. So we expect later in the year closer to year end and Q4.
Do you have to pass through most of the of the.
Awesome.
The subjects from the carriers and therefore margins will stop.
Stabilize at the higher level than it is.
Right now.
But it's.
Commoditized business. It gets volatile he gets a pricing pressure from time to time there was a.
The logic behind our one of the logics behind our decision to move the less the strategic cycle to move and to diversify revenues into a different type of business and add the value to difficult channel, which was the business back in late 2008.
18th 2019.
So.
It's still a good chunk of our revenues in the end.
It is important to although margins are under pressure due to important is a desk.
So it generates EBITDA.
I don't know if you want to add anything on this.
And the market dynamics.
Yeah sure.
Executing a long term strategy.
And we're sticking to the plan.
There is of course to the maturity off Mr. Bass, This model, which brings more pressure on the margins it's highly competitive.
And of course, there is the volatility that affects results. That's why we understand that when we compare that with the SaaS.
Which is oh.
Every business is comparatively suffer but is more stable and we can grow our customer base and have a more of a carpenter.
Revenue that's much more reliable in terms of forecasting so I understand that this strategy.
Despite the IPO.
It's the one that's been executing and is doing pretty well with the acquisitions are doing inspections of launching the new product that completes all of that and it's performing pretty well, so I'll see that although with how.
We're thinking about it and it's working.
Another here for Ya catch you on the enterprise side, how are you seeing the businesses on both the thing because from our cloud and the rest of South how would the dynamics have been.
Sure.
I'm the boss business is pretty mature, it's low margin high volume and being able to keep that enterprise customers are what else we are.
A main player in a more robust irobot Ralph reliable in Brazil, So we're able to keep the best customers on board.
That's why we have all these are not big revenue unless you bought fight I know look a fast, especially there because of the cloud we aimed initially into F&B. That's a it was the beginning of the launch of the product, but as we brought.
This product in our whole experience.
Customers choose some of our customers they are starting to adopt as well that's why we are seeing.
Hum.
Bye.
Customers have welcomed to the initial mutual focus, but it's doing well for us the sales cycles are longer and that's what it takes more time, but we're seeing that through a combination of office from based on their best customer support than a customer who is also operating so it's a it's a get it an upside on the initial strategy.
And we're be able with the whole experience to the team has in serving this customer to be able to bring that to a project.
I think another one here could you. This is this is for me could you. Please provide some color on cash flow and divestitures sure so on cash flow.
We put it on the presentation charged with it.
If we're looking to our trailing last 12 months EBITDA is close to on a normalized basis, it's close to 100 million Reais.
Which is pretty much the same level that we saw.
In the last couple of quarters, which means our thinking.
Thinking about your cash flow. So EBITDA is about 100 million reais.
12 months.
There is about 35 40 million rising and Capex that you have to exclude from that EBITDA.
So that leaves us with approximately 60 to 65 million Reais.
And cash flow to serve the debt, which is pretty much puts us close to breakeven.
Bye bye yearend.
And that's why we've been analyzing alternatives to divest theres no.
Not much we can add on.
On an on.
On the selling assets on top of what we are already mentioned in our prepared remarks.
We've been analyzing opportunities in looking into alternatives.
And if and when.
There is anything new to talk about it too.
But oh, the market and investors.
No one moment.
As of now there is nothing we can add them.
Okay.
Yeah.
Uh huh.
How should we think about the potential divestment of the past and they need to view. The CFO had mentioned that they tend to sell for onetime revenue, which would be more than $100 million is that achievable.
Put the company in a net cash position if you manage to sell it.
So again.
We we can't discuss specifically any of the divestments are.
We have possibilities.
I did mention a historical correct I did mention historical.
Transactions in the past close to one time revenue.
But that's on a global basis and it's very.
Again, it depends on the market conditions it depends on on.
Macro environment, such as our interest rates are such.
Such as the volatility in the local market. So it's a again it could range and we.
We are looking more into divestment.
Doesn't matter if it's a E. If she passed if each other SaaS at the we don't see in the long term is as relevant to the business. The reality is that the asset divestments has to do with.
Deleveraging balance sheet, it should be opportunistic to deleverage balance sheet as simple as that and we understand that all of our assets are important they they add value for our clients.
So it's a matter of using this as a financial strategy to accelerate balance sheet deleveraging and been able actually to to.
To have a better.
Capital structure to accelerating that customer from them. So.
With that we're not sharing any numbers antibody ratio now what we can say is we are looking in an opportunistic way to delever the balance sheet.
Hugo can you report to see if there's any questions in life to be.
Sure.
Again, you have a question. Please use the Q&A I come to the bottom of your screen right down and we will open your microphone. If you prefer not to open to the microphone. Please right no microphone at the end of the question and operator, we read it aloud.
It's like this is a Google.
So this concludes our Q&A session I'd like to turn the conference back over to Mr. Cassio, Bobst and <unk> for his closing remarks.
Yeah.
Actually we have a question on the air for first password. This last one sorry, yeah yeah.
Yes, It just came in.
Casa what do you think the business will look like in two to three years.
Wow, what I found when I ask question as well.
We've been working on them it's too.
The core of India.
Mute around a younger customer cloud.
And that means that were.
Working into.
<unk> companies are centralized way to manage all customer relationships, especially for Beecher C. A R masses, which be companies.
And this means providing our software for marketing sales customer support and service and customer engagement.
Uh huh.
And this is overtime.
It's the kind of technology that will be.
Although it's not nowadays.
Different providers, it's very specialized providers.
It is getting more unified so we're seeing this adoption.
Companies are using just one provider to manage all of these relationships.
We are building these softer rishi that's great great lots of benefits.
Benefits.
That's in the context of automation the way.
We provide that for our customers is a way that helps them to automate and reduce costs.
More efficient.
Provide more value to their customers. So when I look at from a business perspective.
We're in the right track to beat our yes AI.
<unk> SaaS provider for this Congress and this means getting very sticky getting current revenues at.
At which builds off course are strong.
Business over time.
We're not disclosing that and things are fine.
But are we.
We tend to move from these are volatile revenues low margins to Rob <unk>.
Our stable high margin business as it would be able to optimize the whole company, we're seeing that we're able to increase recurring revenues and reduce our G&A.
Of course, a combination off are not the only.
Very strong growth, but with a high profitability on the whole business, that's up for beauty as a founder and CEO of not revealing the foundations and the seen the results of the strategy.
Why I see that for the next two to three years, it's going to be a very different company.
H y finish Weiss.
And we're seeing that upgrading.
And the early days of a customer called <unk>.
And we expect to have all these benefits in the next two to three years.
So for that I also.
Those here.
Cost. Thank you very much for all your attention too.
Gene evolution of Sandy.
New building, there's a strategy.
From a long term.
We are just starting a new strategic cycle.
Then the customer called at its core.
We expect that next couple of quarters, we're going to understand how these all playing out to be a very strong AI SaaS provider.
For our Latin America, and the whole world. Thank.
Thank you very much.
So this concludes our Q&A session and I'd like to turn the conference back over to Mr. Kestenbaum inquiries closing remarks.
Alrighty close my remarks.
That's a that's it guys. Thank you very much your next time.
The conference has now concluded Zambia's IR team is at your disposal to answer any additional questions. Thank you for attending today's presentation. You may now disconnect have a nice day.