Earnings Call Transcript - VTEX Q1 2023

Julia Vater Fernandez, Investor Relations Director

Hello, everyone, and welcome to the VTEX Earnings conference call for the quarter ended March 31, 2023. I'm Julia Vater Fernandez, Investor Relations Director for VTEX. Our senior executives presenting today are Geraldo Thomaz Jr., Founder and Co-CEO, and Ricardo Camatta Sodre, Chief Financial Officer. Additionally, Mariano Gomide de Faria, Founder and Co-CEO, and Andre Spolidoro, Chief Strategy Officer, will be available during today's Q&A session. I would like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, industry trends and product and technology initiatives. These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the current available information, you are cautioned not to place undue reliance on these forward-looking statements. Certain risks and uncertainties are described under Risk Factors and the Forward-Looking Statement sections of VTEX Form 20-F for the year ended December 31, 2022, and other VTEX filings within the U.S. Securities and Exchange Commission, which are available on our Investor Relations website. Finally, I would like to remind you that during the course of this conference call, we may discuss some non-GAAP measures. A reconciliation of those measures to the nearest comparable GAAP measures can be found in our first quarter 2023 earnings press release available on our Investor Relations website. Now I'll turn the call over to Geraldo. Geraldo, the floor is yours.

Geraldo Thomaz Jr., Founder and Co-CEO

Thank you, Julia. Welcome, everyone, and thanks for joining our first quarter 2023 earnings conference call. The year's first quarter has been promising as we have experienced robust growth and successful implementation of strategy in all regions. This has further reinforced our leading position in the digital landscape of Latin America and enhanced our presence globally. It gives me great pleasure to share with you the strides we have made in establishing VTEX as one of the leading worldwide digital commerce platforms. Despite the persistent challenges presented by the macroeconomic environment, we achieved a strong performance in the first quarter, with GMV growing by 22% year-over-year, a reflection of the resilient performance of our customers. The performance of our customers during this period allowed us to surpass our revenue projections, while at the same time, we delivered quarter-over-quarter subscription gross margin improvement. In the first quarter of 2023, we added several new customers who previously did not have an online store presence in the countries they started operating with us. This includes Prezunic, TodoDia and Rede D’Or in Brazil, Intime in Chile, and Only Muebles in Colombia. We've also added customers that migrated from other platforms. This includes companies that went live in Q1, such as Banco Provincia in Argentina, Whitebird in Canada, Easy in Colombia, Farmaenlace in Ecuador, Canali in Italy, Sonepar in Peru, Floria in Romania and CornerUp in the U.S. Going back to the first quarter 2023. In addition to attracting new customers, we also focus on strengthening our relationships with existing customers by supporting their expansion efforts. During the first quarter, several premier brands and retailers chose to expand their operations with us by opening new stores and further integrating with us. This includes: Belcorp, who added a store in Ecuador, currently operating in 6 countries in Latin America; CAE, who had 2 of its brands B2C stores in Canada, operating with us, both B2B and B2C in North America; Mazda, who added a store in the Netherlands currently operating in 6 countries in Europe; H&M, who added a store in Ecuador currently operating in 5 countries in Latin America; Motorola, who added a store in Singapore currently operating in 20 countries across the globe; and Samsung is now present in 4 countries, both B2B and B2C across the globe. The decision of these brands to expand their operations with us is a testament to the strength of our platform, its relevant value proposition and the trust we have built with our customers. We are excited to continue supporting them as they expand their reach into new geographies and leverage the assets of their physical stores. I would like to draw attention to a significant event in the first quarter of 2023, the NRF Retail's Big Show, which brings together the most influential players in the retail industry to set trends and discuss the future of retail. The event was held in New York City and attracted over 6,000 retailers and 2,500 unique brands from over 90 countries. During the event, we positioned VTEX as a challenger brand, focusing on profitable growth for our customers, highlighting our out-of-the-box capabilities and raising awareness among participants. Also during the event, we announced the release of our proprietary white paper, 'Three investments to drive e-commerce growth' by VTEX's analyst in Residence, Jordan Jewell, which I would like to invite you all to take a look at, available at VTEX's homepage. In the first quarter of 2023, we are excited to announce our partnership with Kount, an Equifax company, one of the most well-known credit bureaus globally. This partnership will allow us to offer our customers a world-class antifraud solution, further enhancing the security and reliability of our platform. This partnership will also be monetized through a profit-sharing approach with minimum monthly fees. Finally, we are pleased to formally announce that we have initiated the monetization process of our ISV's partner ecosystem. To this end, we have successfully concluded agreements with key players such as Inswitch, an omnichannel 360 Fintech-as-a-Service that will help our customers to implement digital financial service quickly and efficiently. Although we do not foresee a significant contribution to revenue in the immediate future, these partnerships and other initiatives establish a strong groundwork for monetizing our ecosystem and the long-term revenue growth for VTEX. Let me now share with you some success stories of our customers that demonstrate the capabilities of our platform and the remarkable outcomes they have achieved. I'm thrilled to share Samsung's recent success in creating data observability operations using VTEX IO. This project has allowed Samsung to improve its operational efficiency by more intelligently centralizing and integrating information from multiple channels. The project was initiated just 2 weeks before Black Friday 2022 and has since produced remarkable results for its digital commerce operation in Brazil. Relying on VTEX IO back-end services and APIs, Samsung implemented various solutions including pixel app templates, order feed, order hook and custom control dashboards, also an alert mechanism via Telegram. The result was a more proactive operation, informed decision-making and an enhanced customer experience with better delivery quality and faster response times. Six months after implementation, Samsung saw a decrease in response time from 4 hours to 40 minutes. With this success, Samsung continues developing innovative launch strategies and automation to improve inventory tracking and predict purchase flow, ensuring peace of mind for themselves, their partners, and end customers. Overall, this project has been a game changer for Samsung and set a new operational excellence standard. Claro, a leading telecommunication company in Latin America chose VTEX's composable architecture as their digital commerce platform in Peru to simplify their current architecture and achieve a fast time to market. With our out-of-the-box features, Claro solved their business requirements, including marketplaces. Divvino, one of Brazil's largest online wine platforms, connected with VTEX to improve its front-end capability and ensure a frictionless migration for its subscribers. As a result, Divvino now has an internal marketplace and has increased its revenue channels by selling new products such as wine accessories. A high aesthetic wear brand operating in Saudi Arabia and the United Arab Emirates chose VTEX for our headless implementation capabilities and flexibility to culture-specific product requirements. With our platform, they now have a catalog that enables multi-language product translations and the Checkout.com payment tool, which provides a better customer experience for the users. Vital Mayorista, a large wholesale supermarket brand in Argentina customized their checkout with different payment options with VTEX. Furthermore, the customer incorporated a shopping cart rule feature during the checkout process, enabling the implementation of purchasing rules for approving, canceling, or modifying online orders. This has assisted their consumers in adhering to the requirements necessary for completing the purchase, leading to an increase in conversion rates. With these key improvements, Vital has increased their orders by more than 140%. Banco Provincia, a publicly listed bank in Argentina selected VTEX as their technology partner due to our ability to handle complex architecture requirements, including adding sellers and implementing multiple internal and external integrations. VTEX's previous experience with similar customers such as Banco Inter made us a suitable choice for Banco Provincia. With VTEX's help, Banco Provincia successfully launched its platform, becoming a highly successful marketplace in Argentina with a daily record of more than 10,000 orders. Although their journey is ongoing, Banco Provincia plans to double the number of sellers in their portal and expand the product catalog in various industries with VTEX's assistance. Their continued drive to enhance the platform will enable their growth and success. Oba Hortifruti, a grocery chain with more than 70 stores and 2 distribution centers in Brazil, chose VTEX's omnichannel strategy to leverage sales opportunities. With our features such as shipping from stores and pick-up in stores, Oba improved their logistics and customized their web and user experience. Jeffers Pet, an online pet retailer in the U.S. that operates in B2C and B2B models chose VTEX to strengthen its customer experience and increase sales using our Live Shopping feature. Our customers have experienced a significant increase in their conversion rates during live events, doubling their average sales volume during the session. I also want to share an update on the Cia. Hering case, a major Brazilian fashion group with over 800 physical stores. Recapping, they replatformed to VTEX in only 3 months, focusing the process on growth and website performance. The replatforming process provided our customers with a fully customizable storefront, faster user experience, improved checkout experience, and first-party apps and multiple channel integrations. As a result, the company saw already a 30% increase in the average order value and a 40% decrease in their abandoned carts. To include the operational update, I would like to inform you that our ESG framework has been made available on our Investor Relations website, highlighting all the initiatives VTEX has implemented and supported in these regards. At VTEX, we believe in leading by example and driving positive change in the world through ethical and responsible actions. We see ourselves as agents of transformation in the e-commerce field working towards a more sustainable society. In our desired future, we declare and are committed to become the leaders in diversity within the technology sector, value the importance of fostering a culture that embraces multiple perspectives and creating a safe and respectful environment for all members of our ecosystem. I would like to express my gratitude to our 1,339 VTEX employees who are dedicated to making our declared future a reality, as well as to our customers, partners and investors. Before I turn the call to Ricardo, I'm happy to inform you that we will be hosting the VTEX Day, the largest e-commerce event in Latin America and third globally on June 5th and 6th in Sao Paulo. I'm excited to invite you to come and experience the VTEX culture and witness the strength of our ecosystem at this magnificent event. Additionally, on June 6th, we'll be holding a Q&A session for investors, where Mariano and I will answer all these questions and exchange ideas. If you are interested in participating in this session, contact Julia and she will provide all the details. We will be delighted to have you join us. I will now hand the call over to Ricardo to discuss our financial performance for the quarter.

Ricardo Camatta Sodre, Chief Financial Officer

Thank you, Geraldo. Hi, everyone. I'm pleased to share VTEX's Q1 2023 financial results with you. Despite the challenging macroeconomic environment, our company's top line performance remained robust, as highlighted by Geraldo, our Q1 GMV achieved 22% year-over-year growth in U.S. dollars and 21% on an FX-neutral basis. Our Q1 revenue exceeded our expectations and surpassed the upper end of our guidance, reaching $42.3 million and reflecting a year-over-year growth of 22% in U.S. dollars and 22% on an FX-neutral basis. This outcome clearly demonstrates the resiliency of our blue-chip customer base, and we are reassured to observe that we are continuing to assist our customers in outperforming the market. Double-clicking on our top line, our subscription revenue reached $39.8 million in the first quarter of 2023, from $32.6 million in the same quarter last year, a year-over-year increase of 22% in U.S. dollars and 22% on an FX-neutral basis. Our services revenue reached $2.5 million in the first quarter of 2023 from $2.1 million in the same quarter last year, a year-over-year increase of 21% in U.S. dollars and 28% on FX-neutral. Even with seasonality being a headwind this quarter, our subscription gross margin was slightly better than last quarter's. Our non-GAAP subscription gross profit was $29.4 million compared to $22.7 million in the first quarter of 2022. Non-GAAP subscription gross margin was 73.9% in the first quarter of 2023 compared to 73.5% in the last quarter and 69.6% in the same quarter of 2022. The 430 basis points year-over-year margin expansion shows the commitment of our team to keep improving our margins. This margin improvement was driven mainly by the migration of non-core services to more efficient hosting providers and the optimization and operational leverage of our support cost. We are more than proud of what we have achieved in this front, and we are excited about what is to come. We delivered a year-over-year improvement of 190 basis points on our overall gross margin in Q1. We are working on a few implementations in the U.S. and Europe, where we have proactively invested in our services offering to ensure successful go-lives. By design, this impacted our services gross margin. And therefore, our overall gross margin experienced a slight decline quarter-over-quarter. While this commercial decision may have a small impact on our gross margin in the short term, it will position us better in newer regions in the medium to long term, enabling us to implement new customers smoothly and successfully. Our non-GAAP total operating expenses reached $31.9 million in the first quarter of 2023 from $29.1 million in the prior quarter and $35.9 million in the same period last year. The year-over-year improvement reflects the organizational restructuring we made over the past couple of quarters. As a result of the better-than-expected margin improvements with the top line coming at a robust pace, our non-GAAP operating income improved from a negative 39.5% margin in the same quarter last year to a negative 9.7% margin in the first quarter of 2023. This represents a 30 percentage point improvement year-over-year. As of the 3 months ended March 31, 2023, VTEX had a negative $5.0 million free cash flow compared to a positive $2.5 million in the prior quarter and a negative $16.1 million free cash flow in the first quarter of 2022. Before I move to the outlook for the second quarter and fiscal year 2023, I would like to update you on the share repurchase program approved in August of last year. As of March 31, 2023, the remaining balance under this authorization was nearly $12 million. We repurchased 4.6 million shares at an average price of $3.91 per share. We expect to continue executing our plan based on the evaluation of market conditions and applicable legal requirements. Looking ahead, while macroeconomic conditions remain uncertain, we are pleased with the resiliency of our results. We are confident in our ability to navigate these uncertainties and remain committed to supporting our customers through every step of their journey. We are currently targeting revenue in the $45.0 million to $45.8 million range for the second quarter of 2023, implying a year-over-year growth of 19% on an FX-neutral basis in the middle of the range. For the full year 2023, considering the current performance of the company, we are increasing the bottom of the range, now targeting the full year to end between 16% and 19% on FX-neutral year-over-year basis, implying a range of $185 million to $190 million based on year-to-date average FX rates. In conclusion, we remain committed to our customers' digital transformation journey and supporting them with the appropriate set of tools and products. Despite the uncertain times we are currently facing, our customer base continues to show its resiliency. We are grateful for our customers' unwavering trust in VTEX platform, which is evident through our consistently low annual revenue churn. This has resulted in a robust business model for VTEX that will continue to generate growth in a sustainable and ambitious manner. As we continue executing on our strategy for profitable growth, we anticipate a substantial year-over-year expansion in our non-GAAP operating income margins in the second quarter of 2023, followed by incremental improvements in the second half of the year. Our commitment to delivering value for our customers, partners and shareholders has never been stronger, and we are excited about the opportunities ahead. With that, let's open it up for questions now. Thank you.

Operator, Operator

Our first question comes from Marcelo Santos with JPMorgan.

Marcelo Santos, Analyst

The first question, I wanted to understand a bit better if you could give some more color on the GMV growth. It was a good growth in the first quarter, but there was a sequential deceleration. So if you could explain the moving parts here, and I think that would be very interesting. And the second question is about the competitive environment. When a Brazilian software company launched a new brand called Wake targeting midsized companies. Is that something that somehow crosses your path or that you have seen impacting maybe the low end of your clients? Or is this totally a different business?

Geraldo Thomaz Jr., Founder and Co-CEO

Marcelo, this is Geraldo speaking. Good to talk to you. So about the GMV growth, we think that we are outperforming the general market although the pace of the GMV growth is lower than last year, mainly because of the same-store sales, VTEX same-store is decelerating a little bit. We're still growing more than the average market. And we attribute that to the fact that we have a more robust customers and also that the platform allows these customers to succeed. I think the greatest and latest example of that is the fact that we have this capability that allows our customers to deliver from physical stores, deliver from physical store is very good for most of our customers, especially fashion customers. They have less rupture, they have more inventory available at the website. It allows also the salesperson at the physical store to sell products that are not available at the currently at the physical store. So this allows collaboration between the online and offline world in a very seamless way. And this is growing a lot as VTEX's capabilities is ramping up very fast. In the last 2 years, we almost more than doubled the volume of what we call collaborative orders on omnichannel, it was less than half of 2 years ago. So this is our explanation for our growth on GMV more than the market recently. The competition with Wake like e-commerce platforms, we have several competitors, all the time, there's always a new set of competitors. I do believe Wake is positioned to compete with our Tier 3 and Tier 2 customers, we're going to do our work as we should do, and we're going to serve our customers the best way possible.

Operator, Operator

And our next question comes from the line of Clarke Jeffries with Piper Sandler.

Clarke Jeffries, Analyst

I wanted to follow up on the sort of question around GMV growth. And specifically, was it in line with your expectations? And what it seems most curious to me is the deceleration in GMV growth, but the actual acceleration in subscription growth. Was there a reason or a dynamic in which a typical economic model was changing such that GMV growth coming down didn't result in an equal drawdown in subscription?

Ricardo Camatta Sodre, Chief Financial Officer

Yes. Clarke, Ricardo here. Thank you for the question. Very good question. So on the GMV growth, what we saw was, as Geraldo mentioned, for the existing stores, existing customers, same-store sales was slightly below but we did see new customers coming on board especially through some upselling initiatives that was above what we expected. So this helps to explain also your second part of the question, that because of this slightly better mix or higher mix of new customers that have a slightly higher implied take rate because they paid the fixed fee. But in the beginning, they don't bring a lot of GMV, has improved this performance on the revenue side. So that has matched a little bit more the GMV growth with the revenue growth. Hopefully, that answers the question.

Clarke Jeffries, Analyst

Yes, absolutely. And then I think a follow-up to that is really around some of the commentary around maybe subsidizing or maybe being flexible on price for the services and implementation. So fair to say that there was some economic sensitivity around the implementation, but that the customers were more than willing to pay the fixed fee on the subscription fee once implemented, and this is really around trying to accelerate or reduce the friction to adoption. And then I guess, the last follow-up to that is, how long do you expect to maybe have those concessions? Is it still a good ROI to maybe be flexible on services to promote adoption?

Mariano Gomide de Faria, Founder and Co-CEO

Yes. So Mariano here, thank you for the question. So I think you are mentioning about the service gross margin. So the overall gross margin in Q1, it was an improvement year-over-year from 63.6% to 65.6%. But the quarter-over-quarter was a compression, right? So seasonality can explain part of the quarter-over-quarter if you see last year's, but we also made a deliberate commercial decision to closely support the implementation of relevant new customers in the U.S. and in Europe. And these are kind of overcare it is to ensure the success of their go-lives. So as a result of this strategy move, we are creating strong relationships with recent signed customers, ensuring a high-quality integration and onboarding experience and advancing our expansion into these new geos with reputational cases. This is quite important for our declared future to pursue reputational cases, it is what makes us strong. But while this decision may impact our service in the gross margin in the short term, it will position us better in newer regions as U.S. and Europe in the mid and long term. Additionally, it is important to clarify that this commercial decision should not compromise our ability to reach a sustainable breakeven by the fourth quarter of this year. And we have mentioned in previous earnings calls. So we are on track, instead of it will enable us to pursue a much greater market opportunity. So we are optimistic by taking this decision, and we are looking forward for the results of it.

Operator, Operator

And our next question comes from the line of Franco Granda from D.A. Davidson.

Franco Granda, Analyst

I was hoping to follow up on the gross margin question on the other side of the business and the subscription side. You obviously had some nice uptick from your infrastructure improvements. But I was wondering, is there more room for upside there? Or how should we think about that as we go through the year?

Geraldo Thomaz Jr., Founder and Co-CEO

Thank you for the question. This is Geraldo speaking. At the time of the IPO, our gross margin was smaller than it had been historically, and we were experiencing significant growth by bringing in customers and rapidly investing in new capabilities due to the pandemic. Since about a year ago, we have seen consistent improvements in our gross margins, which is a result of deliberate efforts in R&D and optimizations in our support processes. This involves enhancing our hosting capabilities, making them more efficient, transitioning from Windows to Linux instances, and upgrading to more modern processors. There is still room for improvement in this area. While our growth may be a bit slower, we now have more bandwidth in R&D to focus on these enhancements. So, to answer your question, we will continue to invest in improving our gross margin. However, don't expect to see a sharp increase like we did with the subscription gross margin, which improved by 400 basis points year-over-year. You can anticipate more gradual improvements instead.

Franco Granda, Analyst

All right. That's some good color. I appreciate it. And then for my second question, I was hoping to get some color on the costs associated with Loja Integrada, your SMB business. On the 6-K, it was filed, they noticed that the cost nearly doubled year-over-year. Can you speak about those increases that?

Ricardo Camatta Sodre, Chief Financial Officer

Ricardo here. Happy to take that one. So on the 6-K, we don't disclose the breakout of the expenses for Loja Integrada versus the overall VTEX. We do have some disclosure on the stock-based compensation for the management team there, but that's not the full picture of the expenses for Loja Integrada. But what I could say is that Loja Integrada has been performing in a similar pace to VTEX, I would say, both on a revenue growth perspective, as well as on operating margin perspective. So it's not exactly the same, but it is similar. So they are going through the same trends that we are seeing that VTEX on the overall numbers, right? The underneath the numbers, the details are pretty different because they are in the SMB business. And VTEX is more enterprise, but the overall numbers are similar. So it's not a boost to our results, but it's not also a detriment to our results.

Operator, Operator

And our next question comes from the line of Cesar Medina with Morgan Stanley.

Cesar Medina, Analyst

On the commentary in the release, you mentioned that you haven't seen additional reservation on sales cycles. And on that front, can you comment on how this is impacting sales time, ramp time, your backlog and more importantly, your expansion outside of Brazil, in LatAm and developed markets?

Mariano Gomide de Faria, Founder and Co-CEO

Yes, I’m happy to answer that, Mariano. The sales cycle remains consistent. However, the maturity level of each region can affect the sales cycle. Overall, we are observing a kind of standardization in the sales cycles across regions. Therefore, we do not anticipate any major surprises, either positive or negative, in relation to the sales cycle.

Cesar Medina, Analyst

And the international expansion, how are your clients outside of Brazil reacting amid the macro uncertainty?

Mariano Gomide de Faria, Founder and Co-CEO

I would like to share updates on our international expansion. We changed our approach to a more technical sales strategy early last year, focusing on building proofs of concept and engaging clients in a more technical manner. This was made possible by the features and capabilities of the VTEX platform, which allows us to demonstrate our value by showing the product rather than just selling it. This method is proving effective, as we are seeing improvements in our conversion rates. It is also becoming more challenging for competitors to mimic our proof-of-concept strategy. Furthermore, we are allocating more resources to our tech teams to participate in initial calls with prospects. I believe VTEX is at the forefront of this approach. We are heavily investing in the U.S. and Europe by integrating more engineering support early in the customer journey. We expect to announce some of the customers we have signed contracts with in the coming quarters as they prepare for their launches. Additionally, there is strong demand in the B2B sector, and VTEX offers a unique proposition with our digital commerce platform, distributor order management, and marketplace-ready solutions, setting us apart in the B2B arena. We are optimistic that we are heading in the right direction, and as we bring more reputable clients on board, we anticipate attracting more brands in the U.S. and Europe. Companies like Gartner and IDC have recognized our growth, and their increased coverage of VTEX is a positive indicator of our growing reputation. We remain optimistic about the upcoming quarters and years in the U.S. and Europe.

Operator, Operator

Our next question comes from Luca Brendan with Bank of America.

Unidentified Analyst, Analyst

Two questions here. The first one, if you could just clarify a little bit on those higher expenses to support the implementation costs, is this related just to clients that are yet to go live? Or has this already been implemented before with the previous clients? And then the second question, if you could give us some color on how you're seeing the e-commerce market mainly in Brazil, but if you could also give a color on how things are going in the other regions compared to what we saw in the first quarter, if you're seeing some sort of recovery or if the market remains difficult?

Ricardo Camatta Sodre, Chief Financial Officer

Luca, Ricardo here. Happy to answer the first one. So on the investment that we are making on the services side, this is connected with the implementation. So new customers coming on board, it's not with the existing customers of VTEX. It's very specific on helping cases that we have signed customers in U.S. and Europe to undergo a successful implementation and go live.

Mariano Gomide de Faria, Founder and Co-CEO

The e-commerce market is facing significant challenges, with many retailers globally struggling. This situation is influenced by several factors, including COVID, war, inflation, and high interest rates, creating some of the worst macroeconomic conditions seen in the past 30 years. Retailers needing to adapt to this new environment will likely face difficulties, as evidenced by companies like Bed Bath & Beyond and others in the U.S. and Europe, which may go bankrupt. Latin America might be slightly more resilient due to its companies being accustomed to crises, but the overall impact remains evident. The cost of money has increased significantly, leading customers to make more pragmatic choices. VTEX positions itself as a foundational platform for connected commerce, enabling quicker market entry than other platforms. While we should approach the potential demand with caution due to the ongoing crisis, there may be opportunities for us to assist clients seeking to move away from custom software to a more streamlined approach like VTEX. We anticipate maintaining a consistent pace, projecting our revenue for the next two quarters to be between $45 million and $45.8 million year-over-year, reflecting a 19% FX neutral growth. For 2023, we expect revenues to fall between $185 million and $190 million, representing a 16% to 19% FX neutral growth. We have not altered our previous guidance from the last quarter.

Operator, Operator

And there are no further questions at this time. Geraldo Thomaz, I'll turn the call back over to you.

Geraldo Thomaz Jr., Founder and Co-CEO

To conclude the earnings call, I would like to thank everyone who joined us today for our first quarter 2023 earnings conference call. We're excited to share our successes from the past quarter which includes robust growth and successful implementation of strategy in all regions, further reinforcing our leading position in the digital landscape of Latin America and enhancing our presence globally. We have experienced an increase in GMV by 22% year-over-year, which reflects our customers' resilient performance even in challenging times. We have also expanded our customer base, adding several new customers and strengthening our relationship with the existing ones. I'm looking forward to keeping you updated on new customer adds across the years. Great things are about to come. We continue to be excited about our path of being the backbone for connected commerce. Thank you again for your continued support, and we look forward to your participation on our future updates. You may now disconnect.

Operator, Operator

And this concludes today's conference call. You may now disconnect.