Zenvia, Inc. Q2 FY2023 earnings call

• Resolved funding gap while balancing revenue growth and profitability. - Progress in integrating systems and platforms, capitalizing on cross-selling opportunities like bundled service packages. - Unveiled AI power tools (Zenvia Understand, chatbots) to enhance customer journey and internal processes. - Vision of 'One Zenvia' focusing on fluid, engaging, and personal customer experiences, including selling products in suite format, leveraging AI, and constructing a customer data platform. - Concentrated on key initiatives like product bundling and cross-selling to advance the One Zenvia vision.

In the second quarter of 2023, Zenvia's total revenues dropped 5% year-over-year but saw a nearly 8% sequential increase from Q1 2023. Gross profit increased by over 9% y-o-y, with EBITDA at BRL15 million, marking four consecutive quarters of positive EBITDA. For segments: SaaS gross profit in Q2 was BRL42 million, up 1.7% y-o-y, with a margin of 62.2%; CPaaS gross profit was up 18% y-o-y, reaching a margin of 32%. In H1 2023, SaaS gross profit was BRL88 million, up 20%, with a margin of 65%, and CPaaS gross profit was up 21%, with a margin of 37%. Sequentially, revenues grew 7.7% driven by recovery in profitable SMS volumes, with SaaS excluding consulting to large enterprises up 2% q-o-q.

• Reiterated EBITDA guidance, aiming at the low end of revenue guidance and close to the top end of EBITDA guidance. - Confident in delivering solid EBITDA in 2023 to reach the 15% EBITDA margin target. - Expecting growth in the second-half due to CPaaS seasonality (Q4 has Black Friday/Christmas impact) and improving pipeline for large enterprise clients as the economy improves.

• Risk of delisting from NASDAQ due to minimum bid price, but confident in reverting it by continuing to deliver strong results and solving funding gaps. - Managing debt and funding gaps, including bank debt, client advances, and earn-out payments, but confident in rolling over debt and generating sufficient cash flow to address these.

Q: How should we read the focus on large clients going into the second-half of the year and their impact on margins?

A: Zenvia keeps a strong profile of large customers. They are seeing more adoption of the portfolio, with SaaS solutions being integrated into the platform to migrate customers from CPaaS to software-based usage, which will increase margins over time.

Q: Can you comment more on the CPaaS competitive environment?

A: CPaaS is more competitive than SaaS, but Zenvia has a strong regional position, leveraging that to compete better, achieve cost advantages with carriers, and sustain growth.

Q: What do you see the company's stock looking like in five years?

A: Confident in strong results from cross-selling and bundling initiatives, expecting the next five years to show a strong position as Zenvia becomes a leader in customer experiences software.

Q: Can you comment on the One Zenvia?

A: One Zenvia involves integrating corporate systems, billing, products, user interface, and business model to provide a unified suite for customers, expected to be available in Q1-Q2 next year.

Q: Can you comment on the risk of delisting from NASDAQ?

A: Confident in reverting delisting by continuing to deliver strong results and solving funding gaps without needing technical solutions like reverse splits.