Vtex 6-K, filed May 12, 2022
Vtex (VTEX)
6-K
2022-05-12
For: 2022-05-12
View Original
Added on
April 08, 2026
About this 6-K
Vtex filed this 6-K on May 12, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF
1934
For the month of May 2022.
Commission File Number 001-40626
VTEX
(Exact name of registrant as specified in its charter)
N/A
(Translation of registrant’s name into English)
125 Kingsway, WC2B
6NH London, United
Kingdom
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Table of Contents
|
PART I - FINANCIAL INFORMATION
|
3 |
|
Item 1 - Financial Statements
|
3 |
|
Condensed consolidated interim Balance Sheets
|
4 |
|
Condensed consolidated interim Statements of Profit or Loss
|
6 |
|
Condensed consolidated interim Statements of Changes in Shareholder’s Equity
|
7 |
|
Condensed consolidated interim Statements of Cash Flows
|
8 |
|
Notes to condensed consolidated interim Financial Statements
|
9 |
|
Item 2 – Management’s discussion and analysis of financial
condition and results of operations
|
27 |
|
PART II - OTHER INFORMATION
|
41 |
|
Item 1 - Signatures
|
41 |
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Index to Financial Statements
VTEX
Condensed consolidated interim Financial Statements
Condensed consolidated interim Balance Sheets
Condensed consolidated interim Statements of Profit or Loss
Condensed consolidated interim Statements of Changes in Shareholder’s Equity
Condensed consolidated interim Statements of Cash Flows
Notes to the condensed consolidated interim Financial Statements
3
VTEX
Condensed consolidated interim balance sheet
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
Note
|
March 31, 2022
|
December 31, 2021
|
|||||||||
|
ASSETS
|
|||||||||||
|
Current assets
|
|||||||||||
|
Cash and cash equivalents
|
3
|
99,624
|
121,006
|
||||||||
|
Restricted cash
|
810
|
1,183
|
|||||||||
|
Marketable securities and short-term investments
|
4
|
176,061
|
177,191
|
||||||||
|
Trade receivables
|
5
|
35,386
|
34,682
|
||||||||
|
Recoverable taxes
|
7,696
|
6,881
|
|||||||||
|
Deferred commissions
|
375
|
263
|
|||||||||
|
Prepaid expenses
|
9,527
|
7,911
|
|||||||||
|
Other current assets
|
581
|
399
|
|||||||||
|
Total current assets
|
330,060
|
349,516
|
|||||||||
|
Non-current assets
|
|||||||||||
|
Trade receivables
|
5
|
6,038
|
6,143
|
||||||||
|
Deferred tax assets
|
6.1
|
17,469
|
12,572
|
||||||||
|
Prepaid expenses
|
464
|
343
|
|||||||||
|
Recoverable taxes
|
588
|
556
|
|||||||||
|
Deferred Commission
|
1,645
|
1,246
|
|||||||||
|
Other non-current assets
|
448
|
435
|
|||||||||
|
Right-of-use assets
|
7
|
6,372
|
5,183
|
||||||||
|
Property and equipment, net
|
8
|
5,191
|
4,711
|
||||||||
|
Intangible assets, net
|
9
|
34,394
|
33,644
|
||||||||
|
Investment in joint venture
|
321
|
621
|
|||||||||
|
Total non-current assets
|
72,930
|
65,454
|
|||||||||
|
Total assets
|
402,990
|
414,970
|
|||||||||
The above condensed consolidated interim balance sheet should be read in conjunction with the accompanying notes.
4
VTEX
Condensed consolidated interim balance sheet
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
LIABILITIES
|
Note
|
March 31, 2022
|
December 31, 2021
|
||||||||
|
Current liabilities
|
|||||||||||
|
Accounts payable and accrued expenses
|
10
|
27,937
|
29,537
|
||||||||
|
Loans and financing
|
11
|
2,786
|
2,087
|
||||||||
|
Taxes payables
|
12
|
4,304
|
5,035
|
||||||||
|
Lease liabilities
|
7
|
1,485
|
1,105
|
||||||||
|
Deferred revenue
|
20,447
|
16,598
|
|||||||||
|
Derivative financial instruments
|
-
|
133
|
|||||||||
|
Accounts payable from acquisition of subsidiaries
|
3,087
|
4,260
|
|||||||||
|
Other current liabilities
|
204
|
133
|
|||||||||
|
Total current liabilities
|
60,250
|
58,888
|
|||||||||
|
Non-current liabilities
|
|||||||||||
|
Accounts payable and accrued expenses
|
1,112
|
1,977
|
|||||||||
|
Loans and financing
|
11
|
497
|
1,192
|
||||||||
|
Taxes payable
|
12
|
160
|
160
|
||||||||
|
Lease liabilities
|
7
|
5,859
|
4,886
|
||||||||
|
Accounts payable from acquisition of subsidiaries
|
-
|
2,163
|
|||||||||
|
Deferred revenue
|
17,646
|
16,204
|
|||||||||
|
Deferred tax liabilities
|
6.2
|
2,357
|
2,045
|
||||||||
|
Other non-current liabilities
|
290
|
266
|
|||||||||
|
Total non-current liabilities
|
27,921
|
28,893
|
|||||||||
|
EQUITY
|
14
|
||||||||||
|
Issued capital
|
19
|
19
|
|||||||||
|
Capital reserve
|
393,587
|
390,466
|
|||||||||
|
Other reserves
|
4,248
|
652
|
|||||||||
|
Accumulated losses
|
(83,045
|
)
|
(63,955
|
)
|
|||||||
|
Equity attributable to VTEX’s shareholders
|
314,809
|
327,182
|
|||||||||
|
Non-controlling interests
|
10
|
7
|
|||||||||
|
Total shareholders’ equity
|
314,819
|
327,189
|
|||||||||
|
Total liabilities and equity
|
402,990
|
414,970
|
|||||||||
The above condensed consolidated interim balance sheet should be read in conjunction with the accompanying notes.
5
VTEX
Condensed consolidated interim statements of profit or loss
(Unaudited)
|
Three months ended
|
|||||||||||
|
Note
|
March 31, 2022
|
March 31, 2021
|
|||||||||
|
Subscription revenue
|
32,580
|
24,658
|
|||||||||
|
Services revenue
|
2,087
|
1,266
|
|||||||||
|
Total revenue
|
15
|
34,667
|
25,924
|
||||||||
|
Subscription cost
|
(9,996
|
)
|
(8,715
|
)
|
|||||||
|
Services cost
|
(2,607
|
)
|
(2,108
|
)
|
|||||||
|
Total cost
|
(12,603
|
)
|
(10,823
|
)
|
|||||||
|
Gross profit
|
22,064
|
15,101
|
|||||||||
|
Operating expenses
|
|||||||||||
|
General and administrative
|
(6,921
|
)
|
(7,223
|
)
|
|||||||
|
Sales and marketing
|
(17,900
|
)
|
(11,035
|
)
|
|||||||
|
Research and development
|
(13,925
|
)
|
(8,423
|
)
|
|||||||
|
Other income (losses)
|
8
|
(449
|
)
|
||||||||
|
Loss from operations
|
(16,674
|
)
|
(12,029
|
)
|
|||||||
|
Financial income
|
4,292
|
531
|
|||||||||
|
Financial expense
|
(9,013
|
)
|
(1,886
|
)
|
|||||||
|
Financial result, net
|
(4,721
|
)
|
(1,355
|
)
|
|||||||
|
Equity results
|
219
|
96
|
|||||||||
|
Loss before income tax
|
(21,176
|
)
|
(13,288
|
)
|
|||||||
|
Current
|
6.3
|
(427
|
)
|
(207
|
)
|
||||||
|
Deferred
|
6.3
|
2,512
|
1,034
|
||||||||
|
Total income tax
|
2,085
|
827
|
|||||||||
|
Net loss for the period
|
(19,091
|
)
|
(12,461
|
)
|
|||||||
|
Attributable to controlling shareholders
|
(19,090
|
)
|
(12,458
|
)
|
|||||||
|
Non-controlling interest
|
(1
|
)
|
(3
|
)
|
|||||||
|
Loss per share
|
16
|
||||||||||
|
Basic loss per share
|
(0.100
|
)
|
(0.072
|
)
|
|||||||
|
Diluted loss per share
|
(0.100
|
)
|
(0.072
|
)
|
|||||||
The above condensed consolidated interim statements of profit or loss should be read in conjunction with the accompanying notes.
6
VTEX
Condensed consolidated interim statements of changes in shareholders’ equity
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
Issued
capital
|
Capital
reserve
|
Other
reserves
|
Accumulated
losses
|
Total equity
attributable to
VTEX’s
shareholders
|
Non-controlling
interests
|
Total
shareholders’
equity
|
||||||||||||||||||||||
|
At January 1, 2021
|
17
|
78,945
|
104
|
(3,444
|
)
|
75,622
|
126
|
75,748
|
||||||||||||||||||||
|
Net loss for the period
|
-
|
-
|
-
|
(12,458
|
)
|
(12,458
|
)
|
(3
|
)
|
(12,461
|
)
|
|||||||||||||||||
|
Foreign cumulative conversion adjustment
|
-
|
-
|
(543
|
)
|
-
|
(543
|
)
|
-
|
(543
|
)
|
||||||||||||||||||
|
Transactions with owners of the Company
|
||||||||||||||||||||||||||||
|
Exercise of stock options
|
-
|
828
|
-
|
-
|
828
|
-
|
828
|
|||||||||||||||||||||
|
Issue of ordinary shares as consideration for a business combination
|
-
|
3
|
-
|
-
|
3
|
-
|
3
|
|||||||||||||||||||||
|
Capital contribution
|
-
|
1,000
|
-
|
-
|
1,000
|
-
|
1,000
|
|||||||||||||||||||||
|
Buyback of shares
|
-
|
(328
|
)
|
-
|
-
|
(328
|
)
|
-
|
(328
|
)
|
||||||||||||||||||
|
Share-based compensation
|
-
|
1,560
|
-
|
-
|
1,560
|
-
|
1,560
|
|||||||||||||||||||||
|
Transactions with non-controlling interests
|
-
|
96
|
-
|
-
|
96
|
(123
|
)
|
(27
|
)
|
|||||||||||||||||||
|
-
|
3,159
|
-
|
-
|
3,159
|
(123
|
)
|
3,036
|
|||||||||||||||||||||
|
At March 31, 2021
|
17
|
82,104
|
(439
|
)
|
(15,902
|
)
|
65,780
|
-
|
65,780
|
|||||||||||||||||||
|
At January 1, 2022
|
19
|
390,466
|
652
|
(63,955
|
)
|
327,182
|
7
|
327,189
|
||||||||||||||||||||
|
Net loss for the period
|
-
|
-
|
-
|
(19,090
|
)
|
(19,090
|
)
|
(1
|
)
|
(19,091
|
)
|
|||||||||||||||||
|
Foreign cumulative conversion adjustment
|
-
|
-
|
3,596
|
-
|
3,596
|
-
|
3,596
|
|||||||||||||||||||||
|
Transactions with owners of the Company
|
||||||||||||||||||||||||||||
|
Exercise of stock options
|
-
|
19
|
-
|
-
|
19
|
-
|
19
|
|||||||||||||||||||||
|
Issue of ordinary shares as consideration for a business combination
|
-
|
3
|
-
|
-
|
3
|
-
|
3
|
|||||||||||||||||||||
|
Share-based compensation
|
-
|
3,099
|
-
|
-
|
3,099
|
-
|
3,099
|
|||||||||||||||||||||
|
Transactions with non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
4
|
4
|
|||||||||||||||||||||
|
-
|
3,121
|
-
|
-
|
3,121
|
4
|
3,125
|
||||||||||||||||||||||
|
At March 31, 2022
|
19
|
393,587
|
4,248
|
(83,045
|
)
|
314,809
|
10
|
314,819
|
||||||||||||||||||||
The above condensed consolidated interim statements of changes in shareholders’ equity should be read in conjunction with the accompanying notes.
7
VTEX
Condensed consolidated interim statements of cash flows
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
Loss of the period
|
(19,091
|
)
|
(12,461
|
)
|
||||
|
Adjustments on loss of the period
|
||||||||
|
Depreciation and amortization
|
1,094
|
794
|
||||||
|
Deferred income tax
|
(2,512
|
)
|
(1,034
|
)
|
||||
|
Loss on disposal of rights of use, property, equipment, and intangible assets
|
(46
|
)
|
28
|
|||||
|
Allowance for doubtful accounts
|
122
|
429
|
||||||
|
Share-based compensation
|
3,099
|
1,560
|
||||||
|
Provision for payroll taxes (share-based compensation)
|
(1,232
|
)
|
-
|
|||||
|
Adjustment of hyperinflation
|
717
|
402
|
||||||
|
Profit on investments in joint venture
|
(219
|
)
|
(96
|
)
|
||||
|
Fair value losses
|
3,840
|
274
|
||||||
|
Other costs and foreign exchange, net
|
(1,940
|
)
|
1,049
|
|||||
|
Working capital adjustments
|
||||||||
|
Trade receivables
|
(759
|
)
|
(1,087
|
)
|
||||
|
Recoverable taxes
|
(847
|
)
|
46
|
|||||
|
Prepaid expenses
|
(1,737
|
)
|
278
|
|||||
|
Other assets
|
(306
|
)
|
148
|
|||||
|
Accounts payable and accrued expenses
|
(1,143
|
)
|
1,008
|
|||||
|
Taxes payable
|
(427
|
)
|
(402
|
)
|
||||
|
Deferred revenue
|
5,291
|
2,758
|
||||||
|
Other liabilities
|
410
|
(482
|
)
|
|||||
|
Cash used in operating activities
|
(15,686
|
)
|
(6,788
|
)
|
||||
|
Income tax paid
|
(304
|
)
|
(658
|
)
|
||||
|
Net cash used in operating activities
|
(15,990
|
)
|
(7,446
|
)
|
||||
|
Cash flows from investing activities
|
||||||||
|
Purchase of short-term investment
|
(6,587
|
)
|
-
|
|||||
|
Redemption of short-term investment
|
3,631
|
-
|
||||||
|
Redemption of marketable securities
|
-
|
554
|
||||||
|
Interest received
|
-
|
285
|
||||||
|
Payment of subsidiaries net of cash acquired
|
(1,268
|
)
|
(13
|
)
|
||||
|
Acquisitions of property and equipment
|
(95
|
)
|
(541
|
)
|
||||
|
Net cash (used in) provided by investing activities
|
(4,319
|
)
|
285
|
|||||
|
Cash flows from financing activities
|
||||||||
|
Derivative financial instruments
|
(718
|
)
|
-
|
|||||
|
Changes in restricted cash
|
373
|
212
|
||||||
|
Proceeds from the exercise of stock options
|
19
|
828
|
||||||
|
Net-settlement of share-based payment
|
(598
|
)
|
-
|
|||||
|
Capital increase
|
-
|
1,000
|
||||||
|
Buyback of shares
|
-
|
(2,344
|
)
|
|||||
|
Payment of loans and financing
|
(657
|
)
|
(9,004
|
)
|
||||
|
Interest paid
|
(20
|
)
|
(40
|
)
|
||||
|
Principal elements of lease payments
|
(279
|
)
|
(200
|
)
|
||||
|
Lease interest paid
|
(176
|
)
|
(176
|
)
|
||||
|
Net cash used in financing activities
|
(2,056
|
)
|
(9,724
|
)
|
||||
|
Net decrease in cash and cash equivalents
|
(22,365
|
)
|
(16,885
|
)
|
||||
|
Cash and cash equivalents, beginning of the period
|
121,006
|
58,557
|
||||||
|
Effect of exchange rate changes
|
983
|
(1,365
|
)
|
|||||
|
Cash and cash equivalents, end of the period
|
99,624
|
40,307
|
||||||
|
Supplemental cash flow information:
|
||||||||
|
Lease liabilities arising from obtaining right-of-use assets
|
931
|
53
|
||||||
|
Issue of ordinary shares as consideration for a business combination
|
3
|
3
|
||||||
|
Unpaid amount related to acquisition of non-controlling interest
|
-
|
27
|
||||||
|
Unpaid amount related to business combinations
|
-
|
6,712
|
||||||
|
Dividends receivable used to pay accounts from acquisition of subsidiaries
|
448
|
-
|
||||||
|
Transactions with non-controlling interests
|
4
|
-
|
||||||
The above condensed consolidated interim statement of cash flows should be read in conjunction with the accompanying notes.
8
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 1. |
General information
|
VTEX (“VTEX” or the “Company”) and its subsidiaries, or collectively referred to as the “Group”, provide a software-as-a-service digital commerce platform for enterprise brands and retailers. The VTEX platform enables
customers to execute their commerce strategy, including building online stores, integrating, managing orders across channels, and creating marketplaces to sell products from third-party vendors.
The Group enables customers to implement multiple go-to-market strategies. VTEX’s platform combines commerce, order management and marketplace functionality, allowing enterprises to sell a wide assortment of products
across multiple channels. By integrating with suppliers, distributors, third-party vendors, franchisees, warehouses, and brick-and-mortar stores, enterprises can rapidly implement new business models and digital experiences, including
direct-to-consumer, marketplace, conversational and interactive commerce, ship from store, endless aisle, and drop-ship.
The Company's shares, under the symbol “VTEX”, are listed on the New York Stock Exchange (“NYSE”).
The following entities are part of the Group and are being consolidated in these unaudited interim condensed financial statements:
|
Interest held by the Group (%)
|
||||||
|
Company
|
Place of
business/
country of
incorporation
|
Relationship
|
Principal
business
activity
|
March 31,
2022
|
December 31,
2021
|
March 31,
2021
|
|
VTEX (“VTEX”)
|
Cayman
|
Holding
|
Technology Services
|
|||
|
VTEX Argentina S.A. (“VTEX ARG”)
|
Argentina
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Brasil Tecnologia para
E-commerce LTDA. (“VTEX Brazil”)
|
Brazil
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Publicidade e Eventos Ltda. (“VTEX DAY”)
|
Brazil
|
Subsidiary
|
Production of events
|
100
|
100
|
100
|
|
Dlieve Tecnologia S.A. (“Dlieve”)
|
Brazil
|
Subsidiary
|
Technology Services
|
-
|
-
|
100
|
|
Ciashop Soluções para Comércio Eletrônico S.A. (“Ciashop”)
|
Brazil
|
Subsidiary
|
Technology Services
|
-
|
-
|
100
|
|
Loja Integrada Tecnologia Para Softwares S.A. (“Loja Integrada”)
|
Brazil
|
Subsidiary
|
Technology Services
|
99.81
|
99.87
|
100
|
|
VTEX Chile SPA (“VTEX CHI”)
|
Chile
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Colombia Tecnologia para Ecommerce S.A.S. (“VTEX COL”)
|
Colombia
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
VTEX Commerce Cloud Solutions LLC (“VTEX USA”)
|
USA
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
WebLinc Corporation (“WorkArea”)
|
USA
|
Subsidiary
|
Technology Services
|
-
|
-
|
100
|
|
VTEX Ecommerce Platform Limited (“VTEX UK”)
|
UK
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
EICOM Limited (“EICOM”)
|
UK
|
Subsidiary
|
Technology Services
|
-
|
-
|
100
|
|
VTEX Mexico Soluciones en Ecommerce S. de R.L. de C.V. (“VTEX MEX”)
|
Mexico
|
Subsidiary
|
Technology Services
|
99.99
|
99.99
|
99.95
|
|
EI Education S.A.P.I de C.V. (“Escuela”)
|
Mexico
|
Subsidiary
|
Technology Services
|
100
|
100
|
100
|
|
Suiteshare Tecnologia da Informação S.A. (“Suiteshare”) (ii)
|
Brazil
|
Subsidiary
|
Technology Services
|
-
|
100
|
-
|
|
Peru Tecnologia para ECOMMERCE S.A.C. (“VTEX PERU”)
|
Peru
|
Subsidiary
|
Technology Services
|
100
|
100
|
-
|
|
VTEX Platform España, S.L. ("VTEX ESP") (i)
|
Spain
|
Subsidiary
|
Technology Services
|
100
|
-
|
-
|
|
Vtex Ecommerce Platform Limited - Sede Secondaria (“VTEX ITA”)
|
Italy
|
Branch
|
Technology Services
|
100
|
100
|
-
|
|
Vtex Ecommerce Platform Limited London - Sucursala Bucuresti (“VTEX ROM”)
|
Romania
|
Branch
|
Technology Services
|
100
|
100
|
-
|
|
Vtex Ecommerce Platform Limited – Sucursal em Portugal (“VTEX PORT”)
|
Portugal
|
Branch
|
Technology Services
|
100
|
100
|
-
|
|
(i)
|
VTEX ESP was created in March/2022 to fulfill the Group’s operational needs.
|
|
(ii)
|
Suiteshare was merged in VTEX Brazil in March/2022.
|
9
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 2. |
Basis of Presentation and Consolidation
|
The accounting policies described in detail below have been consistently applied to all periods presented in these unaudited condensed consolidated interim financial statements, unless otherwise stated. The financial
statements are applicable for the group consisting of VTEX and its subsidiaries. The accounting policies have been consistently applied by the Group.
| a. |
Basis for preparation of the unaudited condensed consolidated interim financial statements
|
The unaudited condensed consolidated interim financial statements of VTEX Group for the three-month period ended March 31, 2022, have been prepared in accordance with IAS 34 – Interim Financial Reporting as issued by
the International Accounting Standards Board (“IASB”).
The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in an annual consolidated financial statement. Accordingly, this report is to be read in
conjunction with the Group’s annual consolidated financial statements for the year ended December 31, 2021, and any public announcements made by the Group during the interim reporting period.
The accounting policies adopted are consistent with those of the previous financial year, except for the income tax estimation (see note 6) and the adoption of new and amended standards as set out below.
The unaudited condensed consolidated interim financial statements are presented in U.S. dollars (“USD”, “US$”, or “$”), which is the Company’s functional and presentation currency. All amounts are rounded to the
nearest thousands, except when otherwise indicated.
| b. |
New standards, interpretations, and amendments adopted by the Group
|
In 2022 the Company has adopted the following new interpretation and amendments: (i) Amendments to IAS 16 - Property, Plant and Equipment; (ii) Amendments to IFRS 3 - Business Combinations; and (iii) Annual
Improvements to IFRS Standards 2018–2020.
These interpretations and amendments had no impact on the unaudited condensed consolidated interim financial statements of the Group.
| c. |
Critical estimates and accounting judgments
|
Management has made judgments and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these
estimates. Accounting estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are
recognized prospectively.
In preparing these unaudited condensed consolidated interim financial statements, the significant judgments and estimates made by management in applying the Group’s accounting policies and the key sources of estimation
uncertainty were the same as those set at the consolidated financial statements for the year ended December 31, 2021. No retrospective adjustments were made.
10
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 3. |
Cash and cash equivalents
|
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Cash and cash bank deposits
|
95,773
|
120,928
|
||||||
|
Investment funds
|
3,851
|
78
|
||||||
|
Cash and cash equivalents
|
99,624
|
121,006
|
||||||
| 4. |
Marketable securities and short term investments
|
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Marketable securities
|
-
|
-
|
||||||
|
Short-term investments
|
176,061
|
177,191
|
||||||
|
Marketable securities and short-term investments
|
176,061
|
177,191
|
||||||
| 4.1. |
Short-term investments
|
The following table shows the changes in the balances:
|
2022
|
||||
|
Opening balance on January 1
|
177,191
|
|||
|
Additions
|
6,587
|
|||
|
Redemption
|
(3,631
|
)
|
||
|
Gains (losses)
|
(3,795
|
)
|
||
|
Exchange differences
|
(291
|
)
|
||
|
Closing balances on March 31
|
176,061
|
|||
| 5. |
Trade receivables
|
Trade receivables are as follows:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Trade receivables
|
42,508
|
41,972
|
||||||
|
Loss allowances
|
(1,084
|
)
|
(1,147
|
)
|
||||
|
Total trade receivables
|
41,424
|
40,825
|
||||||
|
Current
|
35,386
|
34,682
|
||||||
|
Non-current
|
6,038
|
6,143
|
||||||
11
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
The changes in loss allowances for trade receivables are as follows:
|
2022
|
||||
|
Opening balance on January 1
|
(1,147
|
)
|
||
|
Addition, net
|
(122
|
)
|
||
|
Write-off
|
223
|
|||
|
Exchange differences
|
(38
|
)
|
||
|
Closing balances on March 31
|
(1,084
|
)
|
||
The trade receivables by maturity are distributed as follows:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Current
|
38,823
|
38,456
|
||||||
|
Overdue between:
|
||||||||
|
From 1 to 30 days
|
1,711
|
1,251
|
||||||
|
From 31 to 60 days
|
554
|
847
|
||||||
|
From 61 to 90 days
|
181
|
439
|
||||||
|
From 91 to 120 days
|
291
|
113
|
||||||
|
From 121 to 300 days
|
948
|
866
|
||||||
|
Total
|
42,508
|
41,972
|
||||||
| 6. |
Current and deferred tax
|
| 6.1. |
Deferred tax assets
|
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Loss allowances for financial assets
|
111
|
75
|
||||||
|
Bonus provision
|
717
|
750
|
||||||
|
Lease
|
438
|
366
|
||||||
|
Share-based compensation
|
3,439
|
3,224
|
||||||
|
Hyperinflationary adjustments
|
70
|
89
|
||||||
|
Tax loss (i)
|
11,344
|
6,445
|
||||||
|
Others
|
1,350
|
1,623
|
||||||
|
Total deferred tax assets
|
17,469
|
12,572
|
||||||
| (i) |
Tax losses increase is driven mainly by the current investment position of the Brazilian operations. These amounts are expected to be offset in the foreseeable future.
|
| 6.2. |
Deferred tax liabilities
|
The balance comprises temporary differences attributable to:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Acquisition of subsidiaries
|
1,620
|
1,687
|
||||||
|
Temporary differences
|
464
|
283
|
||||||
|
Others
|
273
|
75
|
||||||
|
Total deferred tax liabilities
|
2,357
|
2,045
|
||||||
12
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 6.3. |
Income tax expense
|
Income tax expense is recognized based on management’s estimate of the weighted average effective annual income tax rate expected for the full financial year.
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
Current tax
|
||||||||
|
Current tax on profits for the period
|
(427
|
)
|
(207
|
)
|
||||
|
Deferred income tax
|
||||||||
|
Decrease in deferred tax
|
2,512
|
1,034
|
||||||
|
Income tax
|
2,085
|
827
|
||||||
| 7. |
Leases
|
| 7.1. |
Amounts recognized in the balance sheet
|
The balance sheet shows the following amounts relating to leases:
|
|
March 31, 2022
|
December 31, 2021
|
||||||
|
Right-of-use asset
|
||||||||
|
Office buildings
|
6,372
|
5,183
|
||||||
|
Total
|
6,372
|
5,183
|
||||||
|
|
March 31, 2022
|
December 31, 2021
|
||||||
|
Lease liabilities
|
||||||||
|
Current
|
1,485
|
1,105
|
||||||
|
Non-current
|
5,859
|
4,886
|
||||||
|
Total
|
7,344
|
5,991
|
||||||
13
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
The following table shows the changes in the right-of-use asset and lease liabilities:
|
2022
|
||||
|
Right-of-use asset
|
||||
|
Opening balance on January 1
|
5,183
|
|||
|
New lease agreements
|
931
|
|||
|
Hyperinflation adjustment
|
1
|
|||
|
Depreciation
|
(303
|
)
|
||
|
Write off
|
(218
|
)
|
||
|
Exchange differences
|
778
|
|||
|
Closing balances on March 31
|
6,372
|
|||
|
Lease liabilities
|
||||
|
Opening balance on January 1
|
5,991
|
|||
|
New lease agreements
|
931
|
|||
|
Interest added
|
176
|
|||
|
Principal elements of lease payment
|
(279
|
)
|
||
|
Interest payment
|
(176
|
)
|
||
|
Write off
|
(267
|
)
|
||
|
Exchange differences
|
968
|
|||
|
Closing balances on March 31
|
7,344
|
|||
| 7.2. |
Amounts recognized in the statement of profit or loss
|
The statement of profit or loss presents the following amounts relating to leases:
|
Three months ended
|
||||||||
|
|
March 31, 2022
|
March 31, 2021
|
||||||
|
Depreciation charge of office buildings
|
303
|
244
|
||||||
|
Interest expense (included in finance cost)
|
176
|
176
|
||||||
|
Total
|
479
|
420
|
||||||
| 8. |
Property and equipment, net
|
Details of the Group’s property and equipment balance are shown in the tables below:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Leasehold improvements
|
3,319
|
2,826
|
||||||
|
Machinery and equipment
|
329
|
279
|
||||||
|
Furniture and fixture
|
830
|
710
|
||||||
|
Computer and peripherals
|
4,611
|
3,987
|
||||||
|
Accumulated depreciation
|
(3,898
|
)
|
(3,091
|
)
|
||||
|
Property and equipment, net
|
5,191
|
4,711
|
||||||
| 9. |
Intangible assets, net
|
Details of intangible assets and changes in the Group’s intangible assets balances are presented below:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Software
|
4,762
|
4,090
|
||||||
|
Trademark
|
244
|
207
|
||||||
|
Intellectual property
|
2,881
|
2,541
|
||||||
|
Customer contracts
|
9,520
|
9,337
|
||||||
|
Goodwill
|
23,023
|
22,374
|
||||||
|
Others
|
581
|
493
|
||||||
|
Accumulated amortization
|
(6,617
|
)
|
(5,398
|
)
|
||||
|
Intangible assets, net
|
34,394
|
33,644
|
||||||
14
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 10. |
Accounts payable and accrued expenses
|
The breakdown of accounts payable and accrued expenses is as follows:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Trades payable
|
12,113
|
12,668
|
||||||
|
Accounts payable to related parties
|
26
|
27
|
||||||
|
Social charges
|
5,490
|
7,048
|
||||||
|
Profit sharing
|
5,029
|
7,203
|
||||||
|
Provision for vacation and benefits
|
6,333
|
4,333
|
||||||
|
Other
|
58
|
235
|
||||||
|
Total accounts payable and accrued expenses
|
29,049
|
31,514
|
||||||
|
Current
|
27,937
|
29,537
|
||||||
|
Non-current
|
1,112
|
1,977
|
||||||
| 11. |
Loans and financing
|
| 11.1. |
Breakdown of loans and financing
|
Loan and financing operations are summarized as follows:
|
Interest rate
|
Country
|
Maturity
|
March 31, 2022
|
December 31, 2021
|
||||||
|
BNDES (i)
|
8.5% p.a.
(Brazilian Reais)
|
Brazil
|
Mar/2023
|
840
|
891
|
|||||
|
Itaú (ii)
|
100% CDI+ 2.65 p.a.
(Brazilian Reais)
|
Brazil
|
May/2023
|
2,443
|
2,388
|
|||||
|
Total
|
3,283
|
3,279
|
||||||||
|
Current
|
|
2,786
|
2,087
|
|||||||
|
Non-current
|
|
497
|
1,192
|
| (i) |
In March 2017, the Group raised R$15,577 corresponding to US$5,014 from Brazilian National Bank for Economic and Social Development (BNDES) to finance the development of new ecommerce technologies.
|
| (ii) |
In June 2019, the Group raised €6,909, corresponding to US$7,782 for working capital purposes. On the same date, a swap was contracted to hedge the amount against foreign exchange rate, designating the financial instrument as a fair value
hedge.
|
15
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 11.2. |
Changes in loans and financing
|
|
2022
|
||||
|
Opening balance on January 1
|
3,279
|
|||
|
Payment of loans
|
(657
|
)
|
||
|
Interest charged
|
19
|
|||
|
Interest paid
|
(20
|
)
|
||
|
Basis adjustment on the fair value hedge (i)
|
108
|
|||
|
Exchange differences
|
554
|
|||
|
Closing balances on March 31
|
3,283
|
|||
| (i) |
In June 2019, the subsidiary VTEX BRA designated the loan in euros with Itaú bank as a fair value hedge. Losses on the financial instrument that are measured at fair value have been recognized as a financial expense.
|
| 12. |
Taxes payable
|
The breakdown of taxes payable is as follows:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Income tax payable
|
647
|
524
|
||||||
|
Other taxes payable
|
3,816
|
4,671
|
||||||
|
Total taxes payable
|
4,463
|
5,195
|
||||||
|
Current
|
4,304
|
5,035
|
||||||
|
Non-current
|
160
|
160
|
||||||
| 13. |
Contingencies
|
The Group is party to civil and labor lawsuits involving loss risks. Provisions for losses resulting from lawsuits are estimated and updated by the Group, based on analysis from the Group’s legal advisors.
The breakdown of existing contingencies classified as probable by the Group, based on the evaluation of its legal advisors, which are recognized as a liability, is as follows:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Civil
|
5
|
17
|
||||||
|
Labor
|
48
|
16
|
||||||
|
Tax
|
-
|
53
|
||||||
|
Total
|
53
|
86
|
||||||
The breakdown of existing contingencies classified as possible by management, based on the evaluation of its legal advisors, for which no provision was recognized is as follows:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Civil
|
199
|
123
|
||||||
|
Labor
|
199
|
189
|
||||||
|
Tax
|
12
|
10
|
||||||
|
Total
|
410
|
322
|
||||||
16
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 14. |
Shareholders’ equity
|
| 14.1. |
Share Capital
|
The total share capital is as follows:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Number of ordinary nominative shares
|
191,212,487
|
191,028,642
|
||||||
|
Par value
|
0.0001
|
0.0001
|
||||||
|
Total share capital
|
19
|
19
|
||||||
| 15. |
Revenue from services provided
|
The Group revenue derives mostly from the transfer of services rendered and fees charged as services are provided, therefore, mostly recognized over time. Disaggregation of revenue by major product lines are as follows:
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
Subscriptions
|
35,675
|
26,809
|
||||||
|
Tax on subscriptions
|
(3,095
|
)
|
(2,151
|
)
|
||||
|
Revenue from subscriptions
|
32,580
|
24,658
|
||||||
|
Services provided
|
2,254
|
1,371
|
||||||
|
Taxes on services
|
(167
|
)
|
(105
|
)
|
||||
|
Revenue from services
|
2,087
|
1,266
|
||||||
|
Revenue from subscription and services
|
34,667
|
25,924
|
||||||
| 16. |
Earnings (loss) per share
|
Basic earnings (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding
during the year.
Diluted earnings per share are computed by giving effect to all potential weighted average dilutive common stock, including options and restricted stock units.
17
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
The following table contains the loss per share of the Group for the three months periods ended March 31, 2022 and 2021:
|
Three months ended
|
||||||||
|
Basic earnings (loss) per share
|
March 31, 2022
|
March 31, 2021
|
||||||
|
Loss attributable to the stockholders of the Group
|
(19,090
|
)
|
(12,458
|
)
|
||||
|
Weighted average number of outstanding common shares (thousands)
|
191,165
|
171,953
|
||||||
|
Basic and diluted earnings loss per share
|
(0.100
|
)
|
(0.072
|
)
|
||||
In the three months ended March 31, 2022, the Company was in a loss position and therefore diluted loss per share is equal to basic loss per share.
| 17. |
Share-based compensation
|
| 17.1. |
Share-based compensation: VTEX
|
VTEX provides share-based compensation to selected directors and employees as a stock-option plan.
Under both stock-option plan and RSUs, usually the options have a term of 5 or 6 years as of the grant date. They are exercisable as long as the director or employee fulfills the worked periods after the options are
granted (usually 4 or 5 years, with 1/4 or 1/5 of the options exercisable each year).
Set out below are summaries of options granted under the plan:
|
|
Number of
options
(thousands)
|
Weighted
Average
Exercise
Price
|
Remaining
Contractual
Terms in Years
|
Weighted
Average Grant
Date Fair
Value
|
|
At January 1, 2022
|
8,809
|
4.78
|
5.37
|
1.58
|
|
Granted during the period
|
659
|
7.63
|
-
|
3.58
|
|
Forfeit during the period
|
(193)
|
7.32
|
-
|
3.31
|
|
Exercised during the period (i)
|
(6)
|
3.15
|
-
|
0.63
|
|
At March 31, 2022
|
9,269
|
4.95
|
5.24
|
1.69
|
|
Stock options exercisable as of March 31, 2022
|
3,138
|
3.27
|
4.59
|
0.75
|
(i) The number of Stock-options withheld for tax purposes was 1.3 thousand shares.
18
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
The fair value of the stock options granted was calculated based on the Binomial Options Pricing
Model considering the average contract term. The model inputs for options included:
| ● |
Strike Price - Average price weighted by the quantity granted;
|
| ● |
Target Asset Price – The trading price closest to the granting date of the options or the trading price derived from an independent valuation report;
|
| ● |
Risk-Free Interest Rate - US Treasury interest rate, according to the contractual term;
|
| ● |
Volatility - According to comparable peer entities listed on the stock exchange.
|
The weighted average inputs used in the three-month period ended March 31, 2022:
| ● |
Target Asset Price - USD 6.15 per share (December 31, 2021 - 10.72 per share)
|
| ● |
Risk-Free Interest Rate - 1.94% (December 31, 2021: 1.14%)
|
| ● |
Volatility - 50.61% (December 31, 2021: 51.89%)
|
| ● |
Expected dividend: None
|
The following table summarizes the RSU options granted under the plan:
|
|
Number of RSUs
(thousands)
|
Weighted Average Grant
Date Fair Value
|
||||||
|
At January 1, 2022
|
3,001
|
7.70
|
||||||
|
RSU granted
|
1,060
|
7.71
|
||||||
|
Forfeit during the period
|
(168
|
)
|
7.02
|
|||||
|
Settled (i)
|
(220
|
)
|
7.25
|
|||||
|
At March 31, 2022
|
3,673
|
7.76
|
||||||
(i) The number of RSUs withheld for tax purposes was 41 thousand shares.
The fair value of the restricted stock units granted was calculated using the same Target Asset Price used in the Stock Options appraisal model.
For the three-month period ended March 31, 2022, there was US$ 28,608 of remaining unamortized compensation costs, including social charges, related to unvested stock options and RSUs granted to the Group’s employees.
This cost will be recognized over an estimated weighted average remaining period of 2.10 years. Total unamortized compensation costs will be adjusted for future changes in estimated forfeitures.
The total expense, including taxes and social charges related to the share-based compensation plan for the three-month period ended March 31, 2022, was US$ 2,413 (the three-month period ended March 31, 2021: US$
1,317). For the period ended March 31, 2022, the Group recorded in the capital reserve the amount of US$ 2,587 (the three-month period ended March 31, 2021: US$ 1,317).
19
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 17.2. |
Share-based compensation: Loja Integrada
|
On April 29, 2021, VTEX introduced a new share-based compensation plan to selected directors and employees as a stock-option and RSU plan in Loja Integrada, a subsidiary wholly owned. This share-based compensation plan
also has RSU and Stock Options. Under both stock-option plan and RSUs, the options have a term of 7 years as of the grant date. They are exercisable as long as the director or employee fulfills the worked periods after the options are granted
(usually 4 or 5 years, with 1/4 or 1/5 of the options exercisable each year).
The fair value of the stock options granted was calculated based on the Binomial Options Pricing
Model considering the average contract term. The model inputs for options included:
| ● |
Strike Price - Average price weighted by the quantity granted;
|
| ● |
Target Asset Price – The trading price closest to the granting date of the options or the trading price derived from an independent valuation report;
|
| ● |
Risk-Free Interest Rate - Future CDI, according to the contractual term;
|
| ● |
Volatility - According to comparable peer entities listed on the stock exchange.
|
The weighted average inputs used in the three-month period ended March 31, 2022:
| ● |
Target Asset Price - USD 8.66 per share (December 31, 2021 - 13.06 per share)
|
| ● |
Risk-free interest rate in Brazilian Reais - 8.81% (December 31, 2021: 8.81%)
|
| ● |
Volatility - 47.69% (December 31, 2021: 47.69%)
|
| ● |
Expected dividend: None
|
Set out below are summaries of options granted under the plan:
|
|
Number of
options
(thousands)
|
Weighted
Average
Exercise
Price
|
Remaining
Contractual
Terms in Years
|
Weighted
Average Grant
Date Fair
Value
|
||||||||||||
|
At January 1, 2022
|
23.57
|
12.37
|
6.35
|
5.47
|
||||||||||||
|
Granted during the period
|
-
|
-
|
-
|
-
|
||||||||||||
|
Forfeit during the period
|
-
|
-
|
-
|
-
|
||||||||||||
|
Exercised during the period
|
-
|
-
|
-
|
-
|
||||||||||||
|
At March 31, 2022
|
23.57
|
14.57
|
6.11
|
6.44
|
||||||||||||
20
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
The following table summarizes the RSU options granted under the plan:
|
|
Number of RSUs
(thousands)
|
Weighted Average Grant
Date Fair Value
|
||||||
|
At January 1, 2022
|
83.03
|
11.22
|
||||||
|
RSU granted
|
-
|
-
|
||||||
|
Forfeit during the period
|
(4.77
|
)
|
13.22
|
|||||
|
Settled (i)
|
(10.10
|
)
|
13.22
|
|||||
|
At March 31, 2022
|
68.16
|
13.22
|
||||||
(i) The number of RSUs withheld for tax purposes was 3 thousand shares.
For the three-month period ended March 31, 2022, there was US$ 579, of remaining unamortized compensation cost, including social charges, related to unvested stock options and RSUs granted to the Group’s employees.
This cost will be recognized over an estimated weighted-average remaining period of 1.99 years. Total unamortized compensation costs will be adjusted for future changes in estimated forfeitures.
The total expense, including taxes and social charges related to the Loja Integrada share-based compensation plan for the three-month period ended March 31, 2022, was US$ 61. For the period ended March 31, 2022, the
Group recorded in the capital reserve the amount of US$ 512.
| 17.3. |
Amounts recognized in the statement of profit or loss
|
The following table illustrates the classification of stock-based compensation in the Consolidated Statements of Operations which includes both stock-based compensation of VTEX and Loja Integrada:
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
Subscription cost
|
(87
|
)
|
(108
|
)
|
||||
|
Services cost
|
(26
|
)
|
(33
|
)
|
||||
|
General and administrative
|
(989
|
)
|
(1,173
|
)
|
||||
|
Sales and marketing
|
(729
|
)
|
(729
|
)
|
||||
|
Research and development
|
(643
|
)
|
(1,116
|
)
|
||||
|
Total
|
(2,474
|
)
|
(3,159
|
)
|
||||
21
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 18. |
Financial Instruments
|
| 18.1. |
Financial instruments by category
|
| (i) |
Financial instruments valued at amortized cost
|
Financial instruments valued at amortized cost represent financial assets and liabilities whose Group’s business model maintained to receive
contractual cash flows. The aforementioned comprise exclusively payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are subsequently measured using the
effective interest method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified, or impaired.
The Group has the following financial instruments valued at amortized cost:
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Financial assets:
|
||||||||
|
Cash and cash equivalents
|
99,624
|
121,006
|
||||||
|
Restricted cash
|
810
|
1,183
|
||||||
|
Trade receivables
|
41,424
|
40,825
|
||||||
|
Total
|
141,858
|
163,014
|
||||||
|
Financial liabilities
|
||||||||
|
Trade payables
|
12,139
|
12,695
|
||||||
|
Lease liabilities
|
7,344
|
5,991
|
||||||
|
Loans and financing
|
3,283
|
3,279
|
||||||
|
Accounts payable from acquisition of subsidiaries
|
-
|
1,470
|
||||||
|
Total
|
22.766
|
23,435
|
||||||
| (ii) |
Financial instruments valued at fair value through profit or loss
|
Financial instruments are classified at fair value through profit or loss when this classification significantly reduces a possible measurement or recognition inconsistency (sometimes referred to as “accounting
mismatch”) that would occur due to the measurement of assets or liabilities or the recognition of their gains and losses on different bases. Gains/losses on financial instruments that are measured at fair value through profit or loss are recognized
as financial income or expense in the profit or loss for the period.
The Group has the following financial instruments valued at fair value through profit or loss:
|
Carrying amount
|
||||||||
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Financial assets:
|
||||||||
|
Current
|
||||||||
|
Marketable securities and short-term investments
|
176,061
|
177,191
|
||||||
|
Total
|
176,061
|
177,191
|
||||||
|
Carrying amount
|
||||||||
|
March 31, 2022
|
December 31, 2021
|
|||||||
|
Financial liabilities:
|
||||||||
|
Current
|
||||||||
|
Derivative financial instruments (i)
|
-
|
133
|
||||||
|
Accounts payable from acquisition of subsidiaries (”earn-out”)
|
3,087
|
4,953
|
||||||
|
Total
|
3,087
|
5,086
|
||||||
| (i) |
The Group used to hedge the exposure of foreign currency risk related to loans obtained with related parties by contracting a Non-Deliverable Forward (“NDF”) derivative financial instrument raised through Itaú Bank . The instrument had a
total notional value of US$ 4.600 and was fully settled on March 15, 2022 for USD 718.
|
22
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
The Group uses derivative financial instruments to hedge against the risk of change in the foreign exchange rates. Therefore, they are not
speculative. The derivative financial instruments designated in hedge operations are initially recognized at fair value on the date on which the derivative contract is executed and are subsequently re-measured to their fair value. Changes in the
fair value of any of these derivative instruments are immediately recognized in the income statement under "net financial income".
For the three months period ended March 31, 2021, the Group had positions in Swap derivative financial
instruments designated as hedge of foreign currency debt. The hedge contracts had maturity dates equal to those of the loan raised in foreign currency. The last hedge contract matures in March 2023.
The following amounts were recognized in profit or loss in relation to derivatives:
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
Net gain (loss) on financial instruments
|
(80
|
)
|
364
|
|||||
The following amounts were recognized in profit or loss in relation to marketable securities and short term investments:
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
Net gain (loss) on marketable securities and short-term investments
|
(3,795
|
)
|
(119
|
)
|
||||
23
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| a. |
Fair value hierarchy
|
This section provides details about the judgments and estimates made for determining the fair values of the financial instruments that are recognized and measured at fair value in the financial
statements. To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level
follows underneath the table.
|
March 31, 2022
|
||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
||||||||||
|
Assets
|
||||||||||||
|
Short-term investments
|
176,061
|
-
|
-
|
|||||||||
|
Liabilities
|
||||||||||||
|
Accounts payable from acquisition of subsidiaries (“earn-out”)
|
-
|
-
|
3,087
|
|||||||||
|
December 31, 2021
|
||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
||||||||||
|
Assets
|
||||||||||||
|
Short-term investments
|
177,191
|
-
|
-
|
|||||||||
|
Liabilities
|
||||||||||||
|
Derivative financial instruments
|
-
|
133
|
-
|
|||||||||
|
Accounts payable from acquisition of subsidiaries (“earn-out”)
|
-
|
-
|
4,953
|
|||||||||
There were no transfers between levels 1, 2 and 3 for recurring fair value measurements during the third quarter of 2022.
The Group’s policy is to recognize transfers into and out of fair value hierarchy levels as at the end of the reporting period.
| • |
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted
market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
|
| • |
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using
valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in
level 2.
|
| • |
Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. This is the case for
unlisted equity securities.
|
Specific valuation techniques used to value financial instruments could include the use of quoted market prices or dealer quotes for similar instruments:
| • |
the use of quoted market prices or dealer quotes for similar instruments
|
| • |
for interest rate swaps – the present value of the estimated future cash flows based on observable yield curves;
|
| • |
for foreign currency forwards - the present value of future cash flows based on the forward exchange rates at the balance sheet date;
|
24
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
The majority of the resulting fair value estimates are included in level 2, except for a contingent consideration payable (“earn-out”), where the fair values have been determined based on present values
and the discount rates used were adjusted for counterparty or own credit risk.
Fair value measurements using significant unobservable inputs (level 3)
The fair value of the earn-out classified as level 3 is calculated based on the judgment of the Group and the probability of meeting the goals of each acquisition made during the year. The Sale and Purchase agreement
of each acquisition established if the clients of the acquired entities migrate to the Groups platform and reach an agreed amount, the seller will be entitled to an earn-out. As at March 31, 2022, the fair value of the earn-out amounts US$ 3,087
(December 31, 2021 - US$ 4,953).
The following table presents changes in the maximum earn-out, which are the only level 3 items for the three months ended March 31, 2022:
|
2022
|
||||
|
At January 1
|
4,953
|
|||
|
Acquisitions of subsidiaries
|
(898
|
)
|
||
|
Payments of principal/finance charges - earn-out
|
(492
|
)
|
||
|
Earn-out adjustments
|
(478
|
)
|
||
|
Exchange differences
|
2
|
|||
|
At March 31
|
3,087
|
|||
| b. |
Fair values of other financial instruments (unrecognized)
|
The group also has a number of financial instruments which are not measured at fair value in the balance sheet. As at March 31, 2022, for these instruments, the fair values are not different to their carrying amounts,
since the interest receivable/payable is either close to current market rates or the instruments are short-term in nature. Differences were identified for the following instruments at March 31, 2022:
|
Carrying amount
|
Fair value
|
|||||||
|
Financial liabilities
|
||||||||
|
Loans and financing
|
3,283
|
3,356
|
||||||
|
Total
|
3,283
|
3,356
|
||||||
25
VTEX
Notes to the condensed consolidated interim financial statements
(Unaudited)
In thousands of U.S. dollars, unless otherwise indicated
| 18.2. |
Financial risk management
|
The risk management of the Group is predominantly controlled by a central treasury department (Group treasury) under policies approved by the board of directors. Group treasury identifies, evaluates,
and hedges financial risks in close co-operation with the Group’s operating units. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk,
credit risk, the use of derivative and non-derivative financial instruments, and investment of excess liquidity.
When all relevant criteria have been met, hedge accounting will be applied
to remove the accounting mismatch between the hedging instrument and the hedged item. This will effectively result in recognizing interest expense at a fixed interest rate for the hedged floating rate loans and inventory at the fixed foreign
currency rate for the hedged purchases.
The unaudited condensed consolidated interim financial statements do not include all financial risk management information and disclosures required
in the annual financial statements; they should be read in conjunction with the Group’s annual financial statements for the year ended December 31, 2021, available in the 20-F filing.
26
Item 2 – Management’s discussion and analysis of financial condition and results of operations
This Management's Discussion and Analysis of Financial Condition and Results of Operations section may contain certain forward-looking statements that involve risks and
uncertainties. Our actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements for several reasons, including those described in our prior filings with the U.S. Securities and
Exchange Commission.
The following analysis and discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements as of December
31, 2021 included elsewhere in this document.
Overview
VTEX is where commerce happens. Our platform is designed to be the Operating System for the commerce ecosystem. We enable enterprise brands and retailers to orchestrate their complex network of
consumers, business partners, suppliers, and fulfillment providers. We are building the global digital commerce infrastructure that enables enterprises to be relevant for the modern, convenience-driven consumer.
VTEX provides a software-as-a-service digital commerce platform for enterprise brands and retailers. Our platform enables our customers to execute their commerce strategy, including building online
stores, integrating and managing orders across channels, and creating marketplaces to sell products from third-party vendors. Founded in Brazil, we have been a leader in accelerating the digital commerce transformation in Latin America and are
expanding globally. Our platform is engineered to enterprise-level standards and functionality with approximately 82% of our GMV coming from large, blue-chip companies (i.e. customers with more than US$10 million of GMV per year). As of December 31,
2022 we are trusted by more than 2,400 customers with over 3,200 active online stores across 38 countries to connect with their consumers in a meaningful way.
We benefit from the acceleration of digitalization globally, and in particular in Latin America, the fastest-growing region in the world in 2020, where ecommerce is still underpenetrated.
Accelerating ecommerce growth, evolving consumer expectations and the proliferation of digital shopping alternatives are raising the bar for brands and retailers in order to stay relevant. Legacy structures developed over years force enterprises to
choose between deep customization and speed to market. Our technology combined with our ecosystem of partners solves this problem. We deliver flexibility and simplicity to complex, mission critical commerce operations. VTEX was named as leader in the
IDC MarketScape: Worldwide B2C Digital Commerce Platforms 2020 Vendor Assessment, and Gartner named us as a Visionary in its 2020 report, Magic Quadrant for Digital Commerce, Worldwide.
We offer access to our platform on a subscription basis, which accounted for 94.0% of our revenue for the three months ended March 31, 2022. Our subscription revenue is based on a fixed subscription
fee and a transaction-based fee. The transaction-based fee accounts for most of our subscription revenues and is primarily structured as a take rate or percentage of the total value of the orders processed through our platform, including value added
taxes and shipping, which we refer to as our GMV. Our transaction-based fee model aligns our success with our customers’ success and our revenue grows as our customers’ GMV grows. In the three months ended March 31, 2022, our GMV increased to US$2.7
billion from US$2.0 billion in the three months ended March 31, 2021 representing an increase of 33.3% in USD and 27.9% on an FX neutral basis. In the same period, our revenue increased to US$34.7 million from US$25.9 million, representing an
increase of 33.7% in USD and 29.7% on an FX neutral basis.
27
Key metric— Gross merchandise value
The key metric we use to measure our performance, identify trends affecting our business, formulate our business plan projections and support our strategic decisions is GMV. Due to the seasonality of
ecommerce and the foreign exchange effects resulting from the volatility of the currencies of the jurisdictions where we operate (particularly Latin America countries) vis-à-vis the U.S. Dollar (which is our functional currency), our management
compares GMV on a year-over-year and foreign exchange neutral basis. The foreign exchange neutral measures are calculated by using the average monthly exchange rates for each month during the previous year, adjusted by inflation in countries with
hyper-inflation, and applying them to the corresponding months of the current year, so as to calculate what our results would have been had exchange rates remained stable from one year to the next.
Key metric— Gross merchandise value (continued)
GMV is the total value of customer orders processed through our platform, including value added taxes and shipping. Our GMV does not include the value of orders processed by our SMB customers or B2B
transactions. Due to our transaction-based subscription model, we believe that GMV growth is linked with our revenue growth and we track GMV as an indicator of the success of our customers, the performance of the platform and our market share.
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
(in millions of U.S. Dollars, unless otherwise indicated)
|
||||||||
|
GMV
|
2,714.6
|
2,036.10
|
||||||
|
GMV growth FX neutral (%)
|
27.9
|
%
|
142.3
|
%
|
||||
Seasonality and quarterly operations results
Our transaction-based subscription model, similar to most retail businesses, experiences seasonal fluctuations. Historically, we have generated higher net sales in the fourth quarter, as a
consequence of the concentration of special dates during that quarter.
The following table sets forth our quarterly condensed consolidated interim profit (loss) statement data for each of the last historical nine quarters. The condensed consolidated interim profit
(loss) statement data below has been prepared on the same basis as the audited consolidated financial statements included elsewhere in this document and, in our opinion, reflects all necessary adjustments, consisting only of ordinary course recurring
adjustments, necessary to present this information fairly and accurately. These historical quarterly results of operations are not necessarily indicative of the results of operations for any future period. In particular, since the second quarter of
2020 we were positively affected by the ecommerce surge as a consequence of lockdowns during the COVID-19 Pandemic. We expect seasonal patterns to remain the same as in prior years and we believe that the expansion of ecommerce may normalize once the
COVID-19 pandemic is sufficiently controlled, which may adversely affect our financial performance and operating metrics in the future. See below “—Impacts of the COVID-19 Pandemic.”.
28
|
For the three months ended
(unaudited)
|
|||||||||
|
(in US$ millions)
|
March
31, 2020
|
June
30, 2020
|
September
30, 2020
|
December
31, 2020
|
March
31, 2021
|
June
30, 2021
|
September
30, 2021
|
December
31, 2021
|
March
31, 2022
|
|
Subscription revenue
|
15.4
|
23.9
|
26.3
|
27.7
|
24.7
|
29.7
|
29.6
|
34.5
|
32.6
|
|
Services revenue
|
1.2
|
1.3
|
1.3
|
1.4
|
1.3
|
1.2
|
2.2
|
2.6
|
2.1
|
|
Total revenue
|
16.6
|
25.3
|
27.7
|
29.1
|
25.9
|
30.9
|
31.9
|
37.1
|
34.7
|
|
Subscription cost
|
(5.1)
|
(5.8)
|
(7.1)
|
(9.8)
|
(8.7)
|
(9.5)
|
(9.7)
|
(10.5)
|
(10.0)
|
|
Services cost
|
(1.7)
|
(1.7)
|
(1.7)
|
(2.0)
|
(2.1)
|
(2.8)
|
(3.1)
|
(3.3)
|
(2.6)
|
|
Total cost
|
(6.7)
|
(7.5)
|
(8.8)
|
(11.9)
|
(10.8)
|
(12.2)
|
(12.8)
|
(13.8)
|
(12.6)
|
|
Gross profit
|
9.9
|
17.8
|
18.9
|
17.2
|
15.1
|
18.7
|
19.1
|
23.4
|
22.1
|
|
Operating expenses
|
|||||||||
|
General and administrative
|
(3.1)
|
(2.4)
|
(3.3)
|
(5.1)
|
(7.2)
|
(7.8)
|
(9.9)
|
(6.9)
|
(6.9)
|
|
Sales and marketing
|
(5.7)
|
(5.4)
|
(5.3)
|
(7.5)
|
(11.0)
|
(15.7)
|
(19.3)
|
(17.5)
|
(17.9)
|
|
Research and development
|
(4.1)
|
(3.6)
|
(4.5)
|
(6.8)
|
(8.4)
|
(10.7)
|
(14.2)
|
(11.9)
|
(13.9)
|
|
Other income (losses)
|
(0.0)
|
(0.3)
|
(0.3)
|
0.1
|
(0.4)
|
(0.9)
|
0.0
|
(0.2)
|
0.0
|
|
Income (loss) from operation
|
(3.1)
|
6.1
|
5.5
|
(2.1)
|
(12.0)
|
(16.4)
|
(24.4)
|
(13.1)
|
(16.7)
|
|
Financial result
|
(2.8)
|
1.6
|
(0.6)
|
(1.3)
|
(1.4)
|
(1.4)
|
(0.6)
|
(1.4)
|
(4.7)
|
|
Equity results
|
(0.0)
|
0.0
|
0.0
|
0.1
|
0.1
|
0.1
|
0.2
|
0.2
|
0.2
|
|
Income (loss) before income tax
|
(5.9)
|
7.7
|
5.0
|
(3.3)
|
(13.3)
|
(17.6)
|
(24.8)
|
(14.3)
|
(21.2)
|
|
Income tax
|
0.7
|
(2.0)
|
(2.0)
|
(0.9)
|
0.8
|
2.1
|
2.8
|
3.7
|
2.1
|
|
Net loss of the period
|
(5.2)
|
5.7
|
3.0
|
(4.3)
|
(12.5)
|
(15.5)
|
(22.0)
|
(10.6)
|
(19.1)
|
|
Loss per share
|
|||||||||
|
Basic and diluted income (loss)
per share (US$)
|
(0.03)
|
0.03
|
0.02
|
(0.02)
|
(0.07)
|
(0.09)
|
(0.12)
|
(0.06)
|
(0.10)
|
29
The following table sets forth selected condensed consolidated interim profit (loss) statements data for each of the periods indicated as a percentage of total revenue.
|
|
For the Three Months ended
(unaudited)
|
||||||||
|
|
March
31, 2020
|
June
30, 2020
|
September
30, 2020
|
December
31, 2020
|
March
31, 2021
|
June
30, 2021
|
September
30, 2021
|
December
31, 2021
|
March
31, 2022
|
|
Total revenue
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription cost
|
(30.4)%
|
(23.0)%
|
(25.6)%
|
(33.8)%
|
(33.6)%
|
(30.6)%
|
(30.6)%
|
(28.2)%
|
(28.8)%
|
|
Services cost
|
(10.1)%
|
(6.6)%
|
(6.1)%
|
(6.9)%
|
(8.1)%
|
(8.9)%
|
(9.6)%
|
(8.9)%
|
(7.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost
|
(40.5)%
|
(29.6)%
|
(31.7)%
|
(40.7)%
|
(41.8)%
|
(39.6)%
|
(40.1)%
|
(37.1)%
|
(36.3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
59.5%
|
70.4%
|
68.3%
|
59.3%
|
58.2%
|
60.4%
|
59.9%
|
62.9%
|
63.7%
|
|
Operating expenses
|
|||||||||
|
General and administrative
|
(18.6)%
|
(9.5)%
|
(12.1)%
|
(17.6)%
|
(27.9)%
|
(25.3)%
|
(31.2)%
|
(18.6)%
|
(19.9)%
|
|
Sales and marketing
|
(34.5)%
|
(21.2)%
|
(19.0)%
|
(25.7)%
|
(42.6)%
|
(50.9)%
|
(60.7)%
|
(47.0)%
|
(51.6)%
|
|
Research and development
|
(24.4)%
|
(14.4)%
|
(16.3)%
|
(23.5)%
|
(32.5)%
|
(34.6)%
|
(44.5)%
|
(32.1)%
|
(40.1)%
|
|
Other income (losses)
|
(0.3)%
|
(1.0)%
|
(1.0)%
|
0.4%
|
(1.7)%
|
(2.8)%
|
0.0%
|
(0.6)%
|
0.0%
|
|
Income (loss) from operation
|
(18.4)%
|
24.3%
|
19.9%
|
(7.1)%
|
(46.4)%
|
(53.1)%
|
(76.5)%
|
(35.4)%
|
(48.1)%
|
|
Financial result
|
(16.8)%
|
6.2%
|
(2.1)%
|
(4.6)%
|
(5.2)%
|
(4.4)%
|
(1.8)%
|
(3.7)%
|
(13.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity results
|
(0.1)%
|
0.0%
|
0.1%
|
0.2%
|
0.4%
|
0.5%
|
0.5%
|
0.5%
|
0.6%
|
|
Income (loss) before income tax
|
(35.2)%
|
30.5%
|
17.9%
|
(11.5)%
|
(51.3)%
|
(57.0)%
|
(77.7)%
|
(38.6)%
|
(61.1)%
|
|
|
|
|
|
|
|
|
|
||
|
Income tax
|
4.0%
|
(8.1)%
|
(7.2)%
|
(3.2)%
|
3.2%
|
6.9%
|
8.8%
|
10.0%
|
6.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss of the period
|
(31.2)%
|
22.4%
|
10.8%
|
(14.7)%
|
(48.1)%
|
(50.1)%
|
(68.9)%
|
(28.6)%
|
(55.0)%
|
30
|
|
For the Three Months ended
(unaudited)
|
||||||||
|
|
March
31, 2020
|
June
30, 2020
|
September
30, 2020
|
December
31, 2020
|
March
31, 2021
|
June
30, 2021
|
September
30, 2021
|
December
31, 2021
|
March
31, 2022
|
|
|
(in US$ millions)
|
||||||||
|
Income (loss) from
operation
|
(3.1)
|
6.1
|
5.5
|
(2.1)
|
(12.0)
|
(16.4)
|
(24.4)
|
(13.1)
|
(16.7)
|
|
|
|
|
|
|
|
||||
|
Share-based
compensation expense
|
0.3
|
0.4
|
0.6
|
2
|
3.2
|
5.5
|
9.3
|
1.6
|
2.5
|
|
Amortization of
intangibles related to
acquisitions
|
0.4
|
0.2
|
0.1
|
0.2
|
0.3
|
0.5
|
0.5
|
0.7
|
0.5
|
|
Offering expenses
(“IPO”) (i)
|
-
|
-
|
-
|
-
|
-
|
-
|
1.3
|
-
|
-
|
|
|
|
|
|
|
|
||||
|
Non-GAAP Income
(Loss) from
Operations
|
2.4
|
6.8
|
6.3
|
0.1
|
(8.5)
|
(10.4)
|
(13.3)
|
(10.9)
|
(13.7)
|
(i) Offering expenses ("IPO") are related to shares offered by the selling shareholders and other one-off IPO expenses.
31
Impacts of the COVID-19 pandemic
As a result of the COVID-19 pandemic, the ecommerce market experienced a surge in growth. Governments encouraged consumers to stay at home for extended periods of time, and retail purchases shifted
from offline and brick-and-mortar purchases to online ecommerce, as companies accelerated the digitalization of their businesses. Consequently, ecommerce sales in our major markets have increased significantly. Our business responded to the shifting
commerce dynamics, enabling our customers to rapidly scale and digitally transform their businesses during the COVID-19 pandemic. Our customers' GMV increase has resulted in significant revenue growth for us, driven predominantly by our
transaction-based fees.
In 2021, online commerce penetration continued to increase, demonstrating that the 2020 acceleration in online consumption appears sustainable, despite the gradual reopening of brick-and-mortar
retail stores which generated a mean reversion of ecommerce growth. While we believe that the structural shifts that favor ecommerce will continue as the world recovers from COVID-19, we do not expect to experience the same growth in our business
going forward. For example, in the three months ended March 31, 2022, our revenue increased 33.7% in U.S. dollars and 29.7% on an FX neutral basis compared to 2021 – while revenues increased 55.8% in U.S. dollars and 77.0% on an FX neutral basis in
the three month ended March31, 2021 compared to 2020. We believe that the expansion of ecommerce may normalize once the COVID-19 pandemic is fully lapped, which may adversely affect our financial performance and operating metrics. See note 27 of our
unaudited condensed consolidated interim financial statements
Components of our results of operations
The following is a summary of the principal line items comprising condensed consolidated interim income of profit and loss.
Total revenue
Our total revenue consists of (1) subscription and support revenue, arising from a multichannel cloud and SaaS-based platform focused on ecommerce; and (2) revenue from professional services and
other, arising substantially from consulting services.
Subscription revenue
Subscription revenue consists of revenue derived from (1) a mix of transaction-based fees and fixed subscription fees, in each case derived from customers using our platform; (2) our SMB business;
and (3) other business units that generate recurring revenue to us.
Transaction-based fees comprise (a) commission fees charged to customers based on a percentage of the GMV or a fee per order processed on our platform; and (b) commission fees charged to marketplace
partners, payment providers, and any other services provided through our app store.
Fixed subscription fees comprise (a) yearly or multi-year upfront fees paid by merchants to reduce future variable fees. In case of early termination of the annual upfront fees, we refund merchants
for the remaining term of the contract; and (b) fixed monthly fee for using our platform in any given month. Fixed fees are paid to us at the beginning of the applicable subscription period, regardless of the length of the subscription period. As
subscription fees are received in advance of providing the related services, we record deferred revenue on our consolidated balance sheet for the unearned revenue and recognize revenue ratably over the related subscription period.
Services revenue
Services revenue consists primarily of revenue derived from consulting services which are recognized over time during the period that services are performed. Services revenue accounted for 6.0% of
our revenue for the three months ended March 31, 2022, compared to 4.9% for the three months ended March 31, 2021.
32
Cost of revenue
Our total cost consists of (1) subscription cost; and (2) services cost.
Subscription cost of revenue
Subscription cost consists mainly of costs related to hosting related and customer support costs. The hosting related costs include third-party providers, software related platform operating costs,
and compensation for our infrastructure team. Support costs are mostly driven by personnel cost, and represent expenses related to the support we provide to our customers.
Services cost of revenue
Services cost consist mainly of personnel costs and/or third-party expenses to provide the professional services advisory for a specific project of a customer project.
Operating expenses
Our operating expenses consist of general and administrative expenses, sales and marketing expenses, and research and development expenses.
General and administrative expenses consist primarily of (1) personnel-related expenses (including stock-based compensation) for our finance, support operation departments, legal and compliance
teams; (2) corporate expenses; and (3) corporate overhead allocation. General and administrative expenses also include costs related to business acquisitions, legal and other professional services fees and depreciation and amortization.
Sales and marketing expenses consist primarily of (1) personnel-related expenses (including stock-based compensation) and commissions paid to the direct sales team, the success team, partnership
sales team and sales enablement team; (2) travel-related expenses; (3) marketing and events expenses; (4) finder fee commissions; and (5) the allocation of corporate overhead. We plan to continue to incur sales and marketing expenses in the regions
that we currently have a presence as well as in new regions over time in order to continue to enhance our brand awareness and our capabilities to attract new customers.
Research and development expenses consist primarily of (1) personnel-related expenses (including stock-based compensation) for product development, product management and product design; (2) software
subscription costs related to the product; and (3) the allocation of corporate overhead. We expect to increase the research and development expenses to continue investing in product innovation, and in the development of new products.
Financial results
Financial results consist of financial income and financial expenses. Financial income consists of interest earned on bank deposits, foreign exchange gains, short-term investment gains and other
financial income. Financial expense consists mostly of foreign exchange losses, short-term investment losses, losses from fair value of financial instruments, interest on lease liabilities and adjustment of hyperinflation in Argentina.
Income tax
Provision for income taxes consists primarily of income taxes, current and deferred, in certain foreign jurisdictions in which we conduct business. The current and deferred income taxes are
calculated based on the tax laws enacted or substantively enacted at the end of the reporting period in the countries in which we operate and generate taxable income.
33
In 2020, VTEX Brazil benefited from tax incentives pursuant to the Lei do Bem aimed at companies that conduct research and development activities. This
benefit allowed an additional deduction of research and development expenditures ranging between 60% and 80% of the amounts originally spent, thereby reducing the income and social contribution tax base of VTEX Brazil. For 2021, considering that VTEX
Brazil is in a loss position, the R&D benefit did not apply.
Currently we are running losses in most of our subsidiaries, and to that extent and considering the profitability expected in the foreseeable future our most relevant operation has been booking the
related tax losses as part of our deferred tax assets.
Historical operations results
Comparison of results of operations for the three months ended March 31, 2022 and 2021
The following table sets forth our condensed consolidated interim income statements for the three months ended March 31, 2022 and 2021. The period-to-period comparison of financial results is not
necessarily indicative of future results.
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
(in US$ thousands)
|
||||||||
|
Subscription revenue
|
32,580
|
24,658
|
||||||
|
Services revenue
|
2,087
|
1,266
|
||||||
|
Total revenue
|
34,667
|
25,924
|
||||||
|
Subscription cost (1)
|
(9,996
|
)
|
(8,715
|
)
|
||||
|
Services cost (1)
|
(2,607
|
)
|
(2,108
|
)
|
||||
|
Total cost
|
(12,603
|
)
|
(10,823
|
)
|
||||
|
Gross profit
|
22,064
|
15,101
|
||||||
|
Operating expenses
|
||||||||
|
General and administrative (1)
|
(6,921
|
)
|
(7,223
|
)
|
||||
|
Sales and marketing (1)
|
(17,900
|
)
|
(11,035
|
)
|
||||
|
Research and development (1)
|
(13,925
|
)
|
(8,423
|
)
|
||||
|
Other income (losses)
|
8
|
(449
|
)
|
|||||
|
Income (loss) from operation
|
(16,674
|
)
|
(12,029
|
)
|
||||
|
Financial result
|
(4,721
|
)
|
(1,355
|
)
|
||||
|
Equity results
|
219
|
96
|
||||||
|
Income (loss) before income tax
|
(21,176
|
)
|
(13,288
|
)
|
||||
|
Income tax
|
2,085
|
827
|
||||||
|
Net income (loss) for the period
|
(19,091
|
)
|
(12,461
|
)
|
||||
34
(1) Includes stock-based compensation expenses as follows:
|
Three months ended
|
||||||||
|
March 31, 2022
|
March 31, 2021
|
|||||||
|
(in US$ thousands)
|
||||||||
|
Subscription cost
|
(87
|
)
|
(108
|
)
|
||||
|
Services cost
|
(26
|
)
|
(33
|
)
|
||||
|
Research and development
|
(643
|
)
|
(1,116
|
)
|
||||
|
Sales and marketing
|
(729
|
)
|
(729
|
)
|
||||
|
General and administrative
|
(989
|
)
|
(1,173
|
)
|
||||
|
Total
|
(2,474
|
)
|
(3,159
|
)
|
||||
Total revenue
The components of our total revenue during the three months ended March 31, 2022 and 2021 were as follows:
|
Three months ended
|
||||||||||||
|
(in US$ thousands, except percentages)
|
March 31, 2022
|
March 31, 2021
|
Variation
|
|||||||||
|
Subscription revenue
|
32,580
|
24,658
|
31.1
|
%
|
||||||||
|
Services revenue
|
2,087
|
1,266
|
64.8
|
%
|
||||||||
|
Total revenue
|
34,667
|
25,924
|
33.7
|
%
|
||||||||
Total revenue for the three months ended March 31, 2022 was US$34.7 million, an increase of US$8.7 million, or 33.7% in US$ or 29.7% on an FX neutral basis, from US$25.9 million in the same period of
2021. The increase in total revenue was primarily driven by: (1) an increase in GMV of 33.3% in US$ or 27.9% on an FX neutral basis to US$2.7 billion for the three months ended March31, 2022, from US$2.0 billion in the same period of 2021, which also
led to higher revenues from transaction-based fees as percentage of total subscription revenues; (2) an increase in the number of active online stores using our platform during the last three months; and (3) the expansion of our operations outside of
Brazil.
Total cost
The components of our total cost during the three months periods ended March 31, 2022 and 2021 were as follows:
|
Three months ended
|
||||||||||||
|
(in US$ thousands, except percentages)
|
March 31, 2022
|
March 31, 2021
|
Variation
|
|||||||||
|
Subscription cost
|
(9,996
|
)
|
(8,715
|
)
|
14.7
|
%
|
||||||
|
Services cost
|
(2,607
|
)
|
(2,108
|
)
|
23.6
|
%
|
||||||
|
Total cost
|
(12,603
|
)
|
(10,823
|
)
|
16.5
|
%
|
||||||
Total cost for the three months ended March 31, 2022 increased by US$1.8 million, or 16.5%, to US$12.6 million for the three months ended March 31, 2022 from US$10.8 million in the same period of
2021, principally due to an increase in expenses related to compensation as our workforce increased to support our growth.
35
Gross profit
As a result of the above, our gross profit increased by US$7.0 million, or 46.1% to US$22.1 million for the three months ended March 31, 2022 from US$15.1 million in the same period of 2021. As a
percentage of our total revenue, our gross profit increased to 63.7% in the three months ended March 31, 2022 from 58.2% in the three months ended March 31, 2021, since the increase in hosting costs was lower than the increase in subscription revenue
generated, impacting the subscription gross profit.
Operating expenses
General and administrative
General and administrative expenses during the three ended March 31, 2022 and 2021 were as follows:
|
Three months ended
|
||||||||||||
|
(in US$ thousands, except percentages)
|
March 31, 2022
|
March 31, 2021
|
Variation
|
|||||||||
|
General and administrative
|
(6,921
|
)
|
(7,233
|
)
|
(4.2
|
%)
|
||||||
|
Percentage of total revenue
|
20.0
|
%
|
27.9
|
%
|
-
|
|||||||
Our general and administrative expenses decreased by US$0.3 million, or 4.2%, to US$6.9 million for the three months ended March 31, 2022 from US$7.2 million in the same period of 2021, primarily due
to the decrease in outsourcing expenses due to the use of non-recurring services in 2021, partially offset by the appreciation of foreign currencies.
Sales and marketing
Sales and marketing expenses during the three ended March 31, 2022 and 2021 were as follows:
|
Three months ended
|
||||||||||||
|
(in US$ thousands, except percentages)
|
March 31, 2022
|
March 31, 2021
|
Variation
|
|||||||||
|
Sales and marketing
|
(17,900
|
)
|
(11,035
|
)
|
62.2
|
%
|
||||||
|
Percentage of total revenue
|
51.6
|
%
|
42.6
|
%
|
-
|
|||||||
Our sales and marketing expenses increased by US$6.9 million, or 62.2%, to US$17.9 million for the three months ended March 31, 2022 from US$11.0 million for the three months ended March 31, 2021,
primarily due to the increase in expenses related to compensation as our sales and marketing workforce increased to support our growth and the appreciation of foreign currencies.
Research and development
Research and development expenses during the three ended March 31, 2022 and 2021 were as follows:
|
Three months ended
|
||||||||||||
|
(in US$ thousands, except percentages)
|
March 31, 2022
|
March 31, 2021
|
Variation
|
|||||||||
|
Research and development
|
(13,925
|
)
|
(8,423
|
)
|
65.3
|
%
|
||||||
|
Percentage of total revenue
|
40.2
|
%
|
32.5
|
%
|
-
|
|||||||
36
Our research and development expenses increased by US$5.5 million, or 65.3%, to US$13.9 million for the three months ended March 31, 2021 from US$8.4 million for the three months ended March 31,
2021, primarily due to the increase in expenses related to compensation as our research and development workforce to support our growth and the appreciation of foreign currencies.
Financial results
The components of our financial results during the three ended March 31, 2022 and 2021 were as follows:
|
Three months ended
|
||||||||||||
|
(in US$ thousands, except percentages)
|
March 31, 2022
|
March 31, 2021
|
Variation
|
|||||||||
|
Financial income
|
4,292
|
531
|
708.3
|
%
|
||||||||
|
Financial expense
|
(9,013
|
)
|
(1,886
|
)
|
377.9
|
%
|
||||||
|
Financial result
|
(4,721
|
)
|
(1,355
|
)
|
248.4
|
%
|
||||||
As a result, our financial result amounted to an expense of US$4.7 million for the three months ended March 31, 2022, compared to an expense of US$1.4 million for the three months ended March 31,
2021.
Explanations for the variations in the above referred period are set forth below:
Financial income
Financial income increased by US$ 3.8 million, or 708.3%, to US$ 4.3 million for the three months ended March 31, 2022 from US$0.5 million for the three months ended March 31, 2021, mainly due to (1)
an increase in gains from fair value of fair value of financial instruments to US$ 1.8 million in March 31, 2022 from US$ 0.4 million in March 31, 2021, which was partially offset by losses from fair value of derivative financial instruments as
detailed below and; (2) an increase in foreign exchange gains to US$ 1.7 million in March 31, 2022 from US$ 0.1 million in March 31, 2021, which was partially offset by foreign exchange losses as detailed below.
Financial expense
Financial expense increased by US$7.1 million, or 377.9%, to US$9.0 million for the three months ended March 31, 2022 from US$1.9 million for the three months ended March 31, 2021, mainly due to (1)
short-term investment losses given (1) rising interest rates and general risk-off environment negatively affected our US$176.1 million investments compared to nil in March 31, 2021; (2) an increase in losses
from fair value of derivative financial instruments to US$ 1.9 million in March 31, 2022 from nil in March 31, 2021, which was offset by gains from fair value of derivative financial instruments as detail above and; (3) an increase in foreign
exchange losses to US$ 1.6 million in March 31, 2022 from US$ 0.8 million in March 31, 2021, which was partially offset by foreign exchange gains as detailed below.
Net loss for the period
As a result of the above, our net loss amounted to US$19.1 million for the three months ended March 31, 2022, compared to US$12.5 million for the three months ended March 31, 2021.
37
Condensed consolidated interim statements of cash flows
The following table sets forth certain condensed consolidated interim cash flow information for the periods indicated:
|
For the three months ended
|
||||||||
|
(in US$ thousands, except percentages)
|
March 31, 2022
|
March 31, 2021
|
||||||
|
Net cash provided by (used in) operating activities
|
(15,990
|
)
|
(7,446
|
)
|
||||
|
Net cash provided by (used in) investing activities
|
(4,319
|
)
|
285
|
|||||
|
Net cash provided by (used in) financing activities
|
(2,056
|
)
|
(9,274
|
)
|
||||
|
Increase (decrease) in cash and cash equivalents
|
(22,365
|
)
|
(16,885
|
)
|
||||
Net cash provided by (used in) operating activities
For the period ended March 31, 2022, net cash used in operating activities increased by US$8.5 million to US$16.0 million from US$7.4 million in the period ended March 31, 2021, primarily as a result
of:
| ● |
(1) an increase in net loss to US$19.1 million for the period ended March 31, 2022, compared to a net loss of US$12.5 million for the period ended March 31, 2021, primarily due to the expansion of our workforce; (2) an increase in other
costs and foreign exchange, net to an expense of US$1.9 million for the period ended March 31, 2022, compared to an income of US$1.0 million for the period ended March 31, 2021; and (3) and working capital adjustments which consisted mainly
of an increase in prepaid expenses of US$1.7 million for the period ended March 31, 2022, compared to a decrease of US$0.3 million for the period ended March 31, 2021, which was partially offset by:
|
| ● |
(1) an increase in deferred revenue of US$5.3 million for the period ended March 31, 2022, compared to an increase of US$2.8 million for the period ended March 31, 2021, and (2) an increase in fair value gains to US$3.8 million for the
period ended March 31, 2022, compared to an increase of US$0.3 million for the period ended March 31, 2021.
|
Net cash provided by (used in) investing activities
For the period ended March 31, 2022, net cash provided by (used in) investing activities changed by US$4.6 million to US$4.3 million of net cash used in investing activities from US$0.3 million of
net cash provided by investing activities for the period ended March 31, 2021, primarily as a result of (1) an increase in the purchase of short term investment to US$6.6 million for the period ended March 31, 2022, from nil for the period ended
March 31, 2021; and (2) an increase in the acquisition of subsidiaries net of cash acquired to US$1.3 million for the period ended March 31, 2022, from almost nil for the period ended March 31, 2021; which was partially offset by an increase in the
redemption of short-term investments to US$3.6 million for the period ended March 31, 2022, from nil for the period ended March 31, 2021.
Net cash provided by (used in) financing activities
Net cash used in financing activities decreased by US$7.7 million to US$2.1 million for the period ended March 31, 2022 from US$9.7 million for the period ended March 31, 2021. This decrease is
primarily attributable to a decrease in the payments of loans and financing to US$0.7 million for the period ended March 31, 2022 from US$9.0 million for the period ended March 31, 2021.
38
Capital expenditures
Our capital expenditures, consisting of purchase of intangibles and property and equipment, for the periods ended March 31, 2022, 2021, amounted to US$0.1 million and US$0.6 million, respectively,
representing 0.3% and 2.3% of our total revenue for the periods ended March 31, 2022 and 2021, respectively.
We expect to slightly increase our capital expenditures to support the growth in our business and operations. For 2022, we have budgeted capital expenditures of US$2.0 million. We expect to meet our capital expenditure needs for at least the next 12 months from our net cash provided by operating activities and our existing cash and cash equivalents.
Off-balance sheet arrangements
As of March 31, 2022, we did not have any off-balance sheet arrangements.
Quantitative and qualitative disclosures about market risk
We are exposed to market risks in the ordinary course of our business, including the effects of foreign currency fluctuations, derivative financial instruments, credit risk and liquidity risk.
Information relating to quantitative and qualitative disclosures about these market risks is described below:
Interest rate risk
The interest risk arises from the possibility of us incurring losses due to fluctuations in interest rates in respect of fair value of future cash flows of a financial instrument.
Our main exposure to interest rate risk is related to loans and financing payable subject to variable interest rate, principally the CDI rate. Our investments are made for capital preservation
purposes and we do not enter into investments for trading or speculative purposes. Our trade receivables, accounts payable and other liabilities do not bear interest.
The following table summarize our financial instruments exposed to an interest rate risk as of March 31, 2022:
|
Transaction
|
Interest rate risk (i)
|
Book value
|
|
|
(in millions of US$)
|
|||
|
Loans and financing
|
SELIC, CDI and TJLP
|
3,283
|
|
|
Accounts payable on acquisition of subsidiaries
|
CDI
|
3,087
|
(i) Risk-free interest rate in Brazilian Reais.
As of March 31, 2022, we are not materially exposed to the risk of changes in market interest rates mostly due to the purpose of our investments.
Foreign currency exchange risk
We have significant operations internationally that are denominated in foreign currencies. Our exposure to foreign exchange risk is primarily related to fluctuations between the U.S. Dollar and the
Latin American countries in which we operate (primarily the Brazilian real, Argentine peso, Colombian peso and Chilean peso). We transact business in various foreign currencies and have significant international revenues and costs. Our cash flows, results of operations and certain of our intercompany balances are exposed to
foreign exchange rate fluctuations that may differ materially from expectations. We may record significant gains or losses due to foreign currency fluctuations and related hedging activities.
39
Our subsidiaries generate revenues and incur most of their expenses in the respective local currencies of the countries in which they operate. As a result, our subsidiaries use their local currency
as their functional currency. As of the three months ended March 31,2022 and in the year ended December 31, 2021, 16.8% and 17.3% of our revenues were denominated in, or linked to, U.S. dollars, respectively. As of the three months ended March 31,
2022 and in the year ended December 31, 2021, our assets were represented by 70.6% and 69.6% in U.S. dollars, 29.4% and 30.4% in other currencies. As of the three months ended March 31, 2022 and in the year ended December 31, 2021, our liabilities,
excluding our total shareholders’ equity, were represented by 15.4% and 16.9% in U.S. dollars, 84.6% and 83.1% in other currencies.
We are exposed to foreign exchange fluctuations on the revaluation of foreign currency assets and liabilities. We use foreign exchange derivative products to hedge intercompany loans, and debt for
operational purposes. By their nature, derivative financial instruments involve risk, including the credit risk of non-performance by counterparties. We use derivatives for hedging purposes and not as speculative investments.
40
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: May 12, 2022
|
|
VTEX
By: /s/ André Spolidoro Ferreira Gomes
|
|
Name: André Spolidoro Ferreira Gomes
Title: Chief Financial Officer
|
41