Vtex 6-K, filed Mar 2, 2023
Vtex (VTEX)
6-K
2023-03-02
For: 2023-03-02
View Original
Added on
July 04, 2026
About this 6-K
Vtex filed this 6-K on March 2, 2023.
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 March 2023.
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
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PART I - FINANCIAL INFORMATION
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3 |
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Item 1 - Financial Statements | 3 |
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Consolidated Balance Sheets | 4 |
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Consolidated Statements of Profit or Loss | 6 |
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Consolidated Statements of Changes in Shareholder’s Equity | 7 |
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Consolidated Statements of Cash Flows | 8 |
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Notes to Consolidated Financial Statements | 9 |
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Item 2 – Management’s discussion and analysis of financial condition and results of operations | 31 |
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| PART II - OTHER INFORMATION | 43 |
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Item 1 - Signatures | 43 |
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2
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Index to Financial Statements
VTEX
Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Profit or Loss
Consolidated Statements of Changes in Shareholder’s Equity
Consolidated Statements of Cash Flows
Notes to the consolidated Financial Statements
3
VTEX
Consolidated balance sheets
In thousands of U.S. dollars, unless otherwise indicated
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
24,394
|
121,006
|
||||||
|
Restricted cash
|
1,608
|
1,183
|
||||||
|
Marketable securities and short-term investments
|
214,164
|
177,191
|
||||||
|
Trade receivables
|
36,844
|
34,682
|
||||||
|
Recoverable taxes
|
5,122
|
6,881
|
||||||
|
Deferred commissions
|
663
|
263
|
||||||
|
Prepaid expenses
|
4,152
|
7,911
|
||||||
|
Derivative financial instruments
|
117
|
-
|
||||||
|
Other current assets
|
93
|
399
|
||||||
|
Total current assets
|
287,157
|
349,516
|
||||||
|
Non-current assets
|
||||||||
|
Trade receivables
|
5,432
|
6,143
|
||||||
|
Deferred tax assets
|
17,710
|
12,572
|
||||||
|
Prepaid expenses
|
204
|
343
|
||||||
|
Recoverable taxes
|
3,334
|
556
|
||||||
|
Deferred commissions
|
1,790
|
1,246
|
||||||
|
Other non-current assets
|
957
|
435
|
||||||
|
Right-of-use assets
|
4,818
|
5,183
|
||||||
|
Property and equipment, net
|
3,909
|
4,711
|
||||||
|
Intangible assets, net
|
31,210
|
33,644
|
||||||
|
Investments in joint venture
|
1,152
|
621
|
||||||
|
Total non-current assets
|
70,516
|
65,454
|
||||||
|
Total assets
|
357,673
|
414,970
|
||||||
The above consolidated balance sheets should be read in conjunction with the accompanying notes.
4
VTEX
Consolidated balance sheets
In thousands of U.S. dollars, unless otherwise indicated
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
LIABILITIES
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable and accrued expenses
|
34,136
|
29,537
|
||||||
|
Loans and financing
|
1,153
|
2,087
|
||||||
|
Taxes payable
|
4,128
|
5,035
|
||||||
|
Lease liabilities
|
1,898
|
1,105
|
||||||
|
Deferred revenue
|
20,332
|
16,598
|
||||||
|
Derivative financial instruments
|
-
|
133
|
||||||
|
Accounts payable from acquisition of subsidiaries
|
299
|
4,260
|
||||||
|
Other current liabilities
|
70
|
133
|
||||||
|
Total current liabilities
|
62,016
|
58,888
|
||||||
|
Non-current liabilities
|
||||||||
|
Accounts payable and accrued expenses
|
511
|
1,977
|
||||||
|
Loans and financing
|
-
|
1,192
|
||||||
|
Taxes payable
|
160
|
160
|
||||||
|
Lease liabilities
|
3,737
|
4,886
|
||||||
|
Accounts payable from acquisition of subsidiaries
|
-
|
2,163
|
||||||
|
Deferred revenue
|
13,923
|
16,204
|
||||||
|
Deferred tax liabilities
|
2,464
|
2,045
|
||||||
|
Other non-current liabilities
|
185
|
266
|
||||||
|
Total non-current liabilities
|
20,980
|
28,893
|
||||||
|
EQUITY
|
||||||||
|
Issued Capital
|
19
|
19
|
||||||
|
Capital reserve
|
390,885
|
390,466
|
||||||
|
Other reserves
|
127
|
652
|
||||||
|
Accumulated losses
|
(116,373
|
)
|
(63,955
|
)
|
||||
|
Equity attributable to VTEX’s shareholders
|
274,658
|
327,182
|
||||||
|
Non-controlling interests
|
19
|
7
|
||||||
|
Total shareholders’ equity
|
274,677
|
327,189
|
||||||
|
Total liabilities and equity
|
357,673
|
414,970
|
||||||
The above consolidated balance sheets should be read in conjunction with the accompanying notes.
5
VTEX
Consolidated statements of profit or loss
In thousands of U.S. dollars, unless otherwise indicated
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
Subscription revenue
|
42,732
|
34,529
|
148,475
|
118,466
|
||||||||||||
|
Services revenue
|
2,753
|
2,587
|
9,145
|
7,307
|
||||||||||||
|
Total revenue
|
45,485
|
37,116
|
157,620
|
125,773
|
||||||||||||
|
Subscription cost
|
(11,491
|
)
|
(10,469
|
)
|
(41,408
|
)
|
(38,380
|
)
|
||||||||
|
Services cost
|
(3,103
|
)
|
(3,291
|
)
|
(11,424
|
)
|
(11,212
|
)
|
||||||||
|
Total cost
|
(14,594
|
)
|
(13,760
|
)
|
(52,832
|
)
|
(49,592
|
)
|
||||||||
|
Gross profit
|
30,891
|
23,356
|
104,788
|
76,181
|
||||||||||||
|
Operating expenses
|
||||||||||||||||
|
General and administrative
|
(7,052
|
)
|
(6,913
|
)
|
(28,348
|
)
|
(31,889
|
)
|
||||||||
|
Sales and marketing
|
(12,404
|
)
|
(17,459
|
)
|
(67,798
|
)
|
(63,521
|
)
|
||||||||
|
Research and development
|
(14,059
|
)
|
(11,915
|
)
|
(57,205
|
)
|
(45,186
|
)
|
||||||||
|
Other losses
|
(402
|
)
|
(211
|
)
|
(1,356
|
)
|
(1,514
|
)
|
||||||||
|
Loss from operations
|
(3,026
|
)
|
(13,142
|
)
|
(49,919
|
)
|
(65,929
|
)
|
||||||||
|
Financial income
|
7,645
|
2,295
|
23,770
|
7,414
|
||||||||||||
|
Financial expense
|
(4,939
|
)
|
(3,664
|
)
|
(31,401
|
)
|
(12,058
|
)
|
||||||||
|
Financial result, net
|
2,706
|
(1,369
|
)
|
(7,631
|
)
|
(4,644
|
)
|
|||||||||
|
Equity results
|
347
|
190
|
1,106
|
587
|
||||||||||||
|
Income (loss) before income tax
|
27
|
(14,321
|
)
|
(56,444
|
)
|
(69,986
|
)
|
|||||||||
|
Income tax
|
||||||||||||||||
|
Current
|
(136
|
)
|
(35
|
)
|
(877
|
)
|
(1,646
|
)
|
||||||||
|
Deferred
|
(213
|
)
|
3,731
|
4,902
|
11,118
|
|||||||||||
|
Total income tax
|
(349
|
)
|
3,696
|
4,025
|
9,472
|
|||||||||||
|
Net loss for the period
|
(322
|
)
|
(10,625
|
)
|
(52,419
|
)
|
(60,514
|
)
|
||||||||
|
Attributable to controlling shareholders
|
(323
|
)
|
(10,625
|
)
|
(52,418
|
)
|
(60,511
|
)
|
||||||||
|
Non-controlling interest
|
1
|
-
|
(1
|
)
|
(3
|
)
|
||||||||||
|
Loss per share
|
||||||||||||||||
|
Basic loss per share
|
(0.002
|
)
|
(0.056
|
)
|
(0.275
|
)
|
(0.333
|
)
|
||||||||
|
Diluted loss per share
|
(0.002
|
)
|
(0.056
|
)
|
(0.275
|
)
|
(0.333
|
)
|
||||||||
The above consolidated statements of profit or loss should be read in conjunction with the accompanying notes.
6
VTEX
Consolidated statements of changes in shareholders’ equity
In thousands of U.S. dollars, unless otherwise indicated
|
Issued capital
|
Capital reserve
|
Other
reserves |
Accumulated losses
|
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 year
|
-
|
-
|
-
|
(60,511
|
)
|
(60,511
|
)
|
(3
|
)
|
(60,514
|
)
|
|||||||||||||||||
|
Other comprehensive income (loss)
|
-
|
-
|
548
|
-
|
548
|
-
|
548
|
|||||||||||||||||||||
|
Total comprehensive loss for the year
|
-
|
-
|
548
|
(60,511
|
)
|
(59,963
|
)
|
(3
|
)
|
(59,966
|
)
|
|||||||||||||||||
|
Transactions with owners of the Company
|
-
|
|||||||||||||||||||||||||||
|
Exercise of stock options
|
-
|
3,830
|
-
|
-
|
3,830
|
-
|
3,830
|
|||||||||||||||||||||
|
Issue of ordinary shares as consideration for a business combination
|
-
|
1,469
|
-
|
-
|
1,469
|
-
|
1,469
|
|||||||||||||||||||||
|
Capital contribution
|
-
|
1,000
|
-
|
-
|
1,000
|
-
|
1,000
|
|||||||||||||||||||||
|
Issuance of common shares in initial public offering
|
2
|
317,807
|
-
|
-
|
317,809
|
-
|
317,809
|
|||||||||||||||||||||
|
Share issuance costs
|
-
|
(21,491
|
)
|
-
|
-
|
(21,491
|
)
|
-
|
(21,491
|
)
|
||||||||||||||||||
|
Buyback of shares
|
-
|
(407
|
)
|
-
|
-
|
(407
|
)
|
-
|
(407
|
)
|
||||||||||||||||||
|
Share-based compensation
|
-
|
9,217
|
-
|
-
|
9,217
|
-
|
9,217
|
|||||||||||||||||||||
|
Transactions with non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
7
|
7
|
|||||||||||||||||||||
|
Acquisition of non-controlling interests
|
-
|
96
|
-
|
-
|
96
|
(123
|
)
|
(27
|
)
|
|||||||||||||||||||
|
Total transactions with owners of the Company
|
2
|
311,521
|
-
|
-
|
311,523
|
(116
|
)
|
311,407
|
||||||||||||||||||||
|
At December 31, 2021
|
19
|
390,466
|
652
|
(63,955
|
)
|
327,182
|
7
|
327,189
|
||||||||||||||||||||
|
At January 1, 2022
|
19
|
390,466
|
652
|
(63,955
|
)
|
327,182
|
7
|
327,189
|
||||||||||||||||||||
|
Net loss for the year
|
-
|
-
|
-
|
(52,418
|
)
|
(52,418
|
)
|
(1
|
)
|
(52,419
|
)
|
|||||||||||||||||
|
Other comprehensive income (loss)
|
-
|
-
|
(525
|
)
|
-
|
(525
|
)
|
-
|
(525
|
)
|
||||||||||||||||||
|
Total comprehensive loss for the year
|
-
|
-
|
(525
|
)
|
(52,418
|
)
|
(52,943
|
)
|
(1
|
)
|
(52,944
|
)
|
||||||||||||||||
|
Transactions with owners of the Company
|
-
|
|||||||||||||||||||||||||||
|
Exercise of stock options
|
-
|
567
|
-
|
-
|
567
|
-
|
567
|
|||||||||||||||||||||
|
Issue of ordinary shares as consideration for a business combination
|
-
|
3
|
-
|
-
|
3
|
-
|
3
|
|||||||||||||||||||||
|
Share repurchase program (note 14.2)
|
-
|
(12,798
|
)
|
-
|
-
|
(12,798
|
)
|
-
|
(12,798
|
)
|
||||||||||||||||||
|
Share-based compensation
|
-
|
12,647
|
-
|
-
|
12,647
|
-
|
12,647
|
|||||||||||||||||||||
|
Transactions with non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
13
|
13
|
|||||||||||||||||||||
|
Total transactions with owners of the Company
|
-
|
419
|
-
|
-
|
419
|
13
|
432
|
|||||||||||||||||||||
|
At December 31, 2022
|
19
|
390,885
|
127
|
(116,373
|
)
|
274,658
|
19
|
274,677
|
||||||||||||||||||||
The above consolidated statements of changes in shareholders’ equity should be read in conjunction with the accompanying notes.
7
VTEX
Consolidated statements of cash flows
In thousands of U.S. dollars, unless otherwise indicated
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Net loss for the year
|
(52,419
|
)
|
(60,514
|
)
|
||||
|
Adjustments for:
|
||||||||
|
Depreciation and amortization
|
4,616
|
4,072
|
||||||
|
Deferred income tax
|
(4,902
|
)
|
(11,118
|
)
|
||||
|
Loss on disposal of rights of use, property, equipment, and intangible assets
|
(9
|
)
|
54
|
|||||
|
Expected credit losses from trade receivables
|
852
|
887
|
||||||
|
Share-based compensation
|
12,202
|
9,217
|
||||||
|
Provision for payroll taxes (share-based compensation)
|
(1,125
|
)
|
7,611
|
|||||
|
Adjustment of hyperinflation
|
5,175
|
2,274
|
||||||
|
Equity results
|
(1,106
|
)
|
(587
|
)
|
||||
|
Fair value (gains) losses
|
2,522
|
(1,188
|
)
|
|||||
|
Other and foreign exchange, net
|
534
|
666
|
||||||
|
Change in operating assets and liabilities
|
||||||||
|
Trade receivables
|
(3,579
|
)
|
(16,749
|
)
|
||||
|
Recoverable taxes
|
(671
|
)
|
(2,692
|
)
|
||||
|
Prepaid expenses
|
3,947
|
(2,741
|
)
|
|||||
|
Other assets
|
(583
|
)
|
186
|
|||||
|
Accounts payable and accrued expenses
|
5,229
|
7,417
|
||||||
|
Taxes payable
|
(1,495
|
)
|
3,102
|
|||||
|
Deferred revenue
|
1,157
|
12,330
|
||||||
|
Other liabilities
|
745
|
(364
|
)
|
|||||
|
Cash used in operating activities
|
(28,910
|
)
|
(48,137
|
)
|
||||
|
Income tax paid
|
(312
|
)
|
(4,854
|
)
|
||||
|
Net cash used in operating activities
|
(29,222
|
)
|
(52,991
|
)
|
||||
|
Cash flows from investing activities
|
||||||||
|
Dividends received from joint venture
|
147
|
-
|
||||||
|
Purchase of short-term investment
|
(111,612
|
)
|
(177,816
|
)
|
||||
|
Redemption of short-term investment
|
78,011
|
1,053
|
||||||
|
Purchase of marketable securities
|
(9,003
|
)
|
-
|
|||||
|
Redemption of marketable securities
|
-
|
16,857
|
||||||
|
Interest and dividend received from short-term investments
|
1,110
|
588
|
||||||
|
Payment of business acquired
|
(1,692
|
)
|
(5,712
|
)
|
||||
|
Acquisitions of intangible assets
|
-
|
(368
|
)
|
|||||
|
Acquisitions of property and equipment
|
(340
|
)
|
(1,383
|
)
|
||||
|
Net cash used in investing activities
|
(43,379
|
)
|
(166,781
|
)
|
||||
|
Cash flows from financing activities
|
||||||||
|
Derivative financial instruments
|
(746
|
)
|
-
|
|||||
|
Changes in restricted cash
|
(348
|
)
|
246
|
|||||
|
Proceeds from the exercise of stock options
|
567
|
3,830
|
||||||
|
Net-settlement of share-based payment
|
(1,615
|
)
|
(2,705
|
)
|
||||
|
Capital increase
|
-
|
1,000
|
||||||
|
Capital increase - proceeds from initial public offering, net of transaction costs
|
-
|
296,318
|
||||||
|
Buyback of shares
|
(12,798
|
)
|
(2,423
|
)
|
||||
|
Payment of loans and financing
|
(2,651
|
)
|
(10,886
|
)
|
||||
|
Interest paid
|
(56
|
)
|
(104
|
)
|
||||
|
Principal elements of lease payments
|
(1,263
|
)
|
(913
|
)
|
||||
|
Lease interest paid
|
(670
|
)
|
(680
|
)
|
||||
|
Net cash provided by (used in) financing activities
|
(19,580
|
)
|
283,683
|
|||||
|
Net increase (decrease) in cash and cash equivalents
|
(92,181
|
)
|
63,911
|
|||||
|
Cash and cash equivalents, beginning of the year
|
121,006
|
58,557
|
||||||
|
Effect of exchange rate changes
|
(4,431
|
)
|
(1,462
|
)
|
||||
|
Cash and cash equivalents, end of the year
|
24,394
|
121,006
|
||||||
|
Non-cash transactions:
|
||||||||
|
Lease liabilities arising from obtaining right-of-use assets
|
983
|
494
|
||||||
|
Issue of ordinary shares as consideration for a business combination
|
3
|
1,469
|
||||||
|
Unpaid amount related to acquisition of non-controlling interest
|
-
|
27
|
||||||
|
Unpaid amount related to business combinations
|
-
|
8,264
|
||||||
|
Dividends from joint venture used to pay accounts from acquisition of subsidiaries
|
448
|
-
|
||||||
|
Transactions with non-controlling interests
|
13
|
7
|
||||||
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.
8
VTEX
Notes to the consolidated financial statements
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. VTEX’s services enable 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. The platform is also designed to be the operating
system for the commerce ecosystem, enabling enterprise brands and retailers to orchestrate their network of consumers, business partners, suppliers, and fulfillment providers in one place with a complete Commerce, Marketplace, and OMS solution. VTEX
assists global companies build, manage and deliver native and advanced business-to-business (B2B), business-to-consumer (B2C), and Marketplace commerce experiences with competitive time-to-market.
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 condensed interim financial statements:
|
Company
|
Place of business/
country of incorporation
|
Relationship
|
Principal business activity
|
% of Ownership
as of December 31,
|
|
|
2022
|
2021
|
||||
|
VTEX (“VTEX”)
|
Cayman
|
Holding
|
Technology Services
|
||
|
VTEX Informática S.A. (“VTEX ARG”)
|
Argentina
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
VTEX Brasil Tecnologia para Ecommerce LTDA. (“VTEX Brazil”)
|
Brazil
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
VTEX Day Eventos Ltda. (“VTEX DAY”)
|
Brazil
|
Subsidiary
|
Production of events
|
100
|
100
|
|
Loja Integrada Tecnologia para Softwares S.A. (“Loja Integrada”)
|
Brazil
|
Subsidiary
|
Technology Services
|
99.58
|
99.87
|
|
Suiteshare Tecnologia da Informação S.A (“Suiteshare”) (i)
|
Brazil
|
Subsidiary
|
Technology Services
|
-
|
100
|
|
VTEX Chile SPA (“VTEX CHI”)
|
Chile
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
VTEX Colombia Tecnologia para Ecommerce S.A.S. (“VTEX COL”)
|
Colombia
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
VTEX Commerce Cloud Solutions LLC (“VTEX USA”)
|
USA
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
VTEX Ecommerce Platform Limited (“VTEX UK”)
|
UK
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
Soluciones Cloud En Ecommerce S. De R.L. De C.V. (“VTEX MEX”) (ii)
|
Mexico
|
Subsidiary
|
Technology Services
|
100
|
99.99
|
|
EI Education S.A.P.I de C.V. (“Escuela de Internet or “Escuela”)
|
Mexico
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
Peru Tecnologia para ECOMMERCE S.A.C. (“VTEX PERU”) (iii)
|
Peru
|
Subsidiary
|
Technology Services
|
100
|
100
|
|
VTEX Platform España, S.L. ("VTEX ESP") (iv)
|
Spain
|
Subsidiary
|
Technology Services
|
100
|
-
|
|
VTEX Ecommerce Platform Limited - Sede Secondaria (“VTEX ITA”) (iii)
|
Italy
|
Branch
|
Technology Services
|
100
|
100
|
|
VTEX Ecommerce Platform Limited London - Sucursala Bucuresti (“VTEX ROM”) (iii)
|
Romania
|
Branch
|
Technology Services
|
100
|
100
|
|
VTEX Ecommerce Platform Platform Limited – Sucursal em Portugal (“VTEX PORT”) (iii)
|
Portugal
|
Branch
|
Technology Services
|
100
|
100
|
(i) Suiteshare was acquired in April 2021. March 2022 it was merged into VTEX Brazil.
(ii) In May 2021, the Group acquired the non-controlling interest of VTEX MEX.
(iii) VTEX PERU, VTEX ITA, VTEX ROM and VTEX PORT were created in 2021 to fulfill the Group’s operational needs.
(iv) VTEX ESP was created in March/ 2022 to fulfill the Group’s operational needs.
The Group also holds VT Comercio, a joint venture (“JV”) established in July 2019 with a participation of 50%.
1.1 Initial Public Offering “IPO”
On July 21, 2021, the Company completed its IPO, offering 21,850,000 of its Class A common shares, of which 13,876,702 new shares offered by the Group and other 5,123,298 shares offered by the selling shareholders,
and the entire exercise of the underwriter’s option to purchase 2,850,000 newly issued shares.
The initial offering price was US$19.00 per Class A common share, resulting in gross proceeds of US$317,809. The Company received net proceeds of US$296,318 after deducting US$19,863 in underwriting discounts and
commissions and US$1,628 of other offering expenses. The Group also recognized in the Profit and loss the amount of US$1,253 related to shares offered by the selling shareholders and other expenses not directly related to the IPO.
The shares offered and sold in the IPO were registered under the Securities Act of 1933, as amended, pursuant to the Company’s Registration Statement on Form F-1 (Registration No. 333-257400), which was declared
effective by the Securities and Exchange Commission on July 21, 2021. The common shares began trading on the New York Stock Exchange (“NYSE”) on July 21, 2021, under the symbol “VTEX.”
9
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
2
|
Basis of presentation and consolidation
|
The accounting policies described in detail below have been consistently applied to all periods presented in these consolidated financial statements, unless otherwise stated. The financial statements are applicable for
the group consisting of VTEX and its subsidiaries. The accounting policies have been consistently applied by the Group.
|
a.
|
Basis for preparation of consolidated financial statements
|
The consolidated financial statements of the VTEX Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”).
The consolidated financial statements are presented in U.S. dollars (“US$”) which is the functional currency of VTEX (Group’s parent company) and presentation currency of the Group. All amounts have been rounded to the
nearest thousands of US$, 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; (iii) Annual Improvements to
IFRS Standards 2018–2020 and (iv) Onerous Contracts – Cost of Fulfilling a Contract – Amendments to IAS 37.
These amendments had no impact on the consolidated 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 consolidated 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 consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
3
|
Cash and cash equivalents
|
The breakdown of cash and cash equivalents is as follows:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Cash and cash bank deposits
|
18,930
|
120,928
|
||||||
|
Time deposits and other investments
|
2,271
|
-
|
||||||
|
Investment funds
|
3,193
|
78
|
||||||
|
Total
|
24,394
|
121,006
|
||||||
|
4
|
Marketable securities and short-term investments
|
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Marketable securities
|
10,119
|
-
|
||||||
|
Short-term investments
|
204,045
|
177,191
|
||||||
|
Marketable securities and short-term investments
|
214,164
|
177,191
|
||||||
4.1 Marketable securities
The following table shows the changes in the balances:
|
2022
|
2021
|
|||||||
|
Opening balance on January 1
|
-
|
16,969
|
||||||
|
Additions
|
9,003
|
-
|
||||||
|
Redemption
|
-
|
(16,857
|
)
|
|||||
|
Interest received
|
-
|
(324
|
)
|
|||||
|
Accrued interest
|
1,141
|
-
|
||||||
|
Fair value gains (losses)
|
-
|
212
|
||||||
|
Exchange differences
|
(25
|
)
|
-
|
|||||
|
Closing balance on December 31
|
10,119
|
-
|
||||||
4.2 Short-term investments
The following table shows the changes in the balances:
|
2022
|
2021
|
|||||||
|
Opening balance on January 1
|
177,191
|
-
|
||||||
|
Additions
|
111,612
|
177,816
|
||||||
|
Redemption
|
(78,011
|
)
|
(1,053
|
)
|
||||
|
Fair value gains (losses)
|
(4,766
|
)
|
428
|
|||||
|
Exchange differences
|
(1,981
|
)
|
-
|
|||||
|
Closing balance on December 31
|
204,045
|
177,191
|
||||||
11
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
5
|
Trade receivables
|
Trade receivables are as follows:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Trade receivables
|
43,084
|
41,972
|
||||||
|
Expected credit losses
|
(808
|
)
|
(1,147
|
)
|
||||
|
Total trade receivables
|
42,276
|
40,825
|
||||||
|
Current
|
36,844
|
34,682
|
||||||
|
Non-current
|
5,432
|
6,143
|
||||||
The changes in expected credit losses for trade receivables are as follows:
|
2022
|
2021
|
|||||||
|
Opening balance on January 1
|
(1,147
|
)
|
(649
|
)
|
||||
|
Addition, net
|
(852
|
)
|
(887
|
)
|
||||
|
Addition from acquisition of subsidiaries
|
-
|
(100
|
)
|
|||||
|
Write-off
|
1,114
|
429
|
||||||
|
Exchange differences
|
77
|
60
|
||||||
|
Closing balance on December 31
|
(808
|
)
|
(1,147
|
)
|
||||
The trade receivables by maturity are distributed as follows:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Current
|
39,188
|
38,456
|
||||||
|
Overdue:
|
||||||||
|
From 1 to 30 days
|
2,087
|
1,251
|
||||||
|
From 31 to 60 days
|
454
|
847
|
||||||
|
From 61 to 90 days
|
359
|
439
|
||||||
|
From 91 to 120 days
|
295
|
113
|
||||||
|
From 121 to 300 days
|
701
|
866
|
||||||
|
Total
|
43,084
|
41,972
|
||||||
|
6
|
Current and deferred tax
|
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Loss allowances for financial assets
|
270
|
75
|
||||||
|
Bonus provision
|
1,712
|
750
|
||||||
|
Lease
|
392
|
366
|
||||||
|
Share-based compensation (i)
|
3,130
|
3,224
|
||||||
|
Hyperinflationary adjustments
|
37
|
89
|
||||||
|
Tax loss (ii)
|
10,513
|
6,445
|
||||||
|
Others (iii)
|
1,656
|
1,623
|
||||||
|
Total deferred tax assets
|
17,710
|
12,572
|
||||||
|
(i)
|
Mainly related to RSU amounts that are treated as temporary differences until the instrument is vested.
|
|
(ii)
|
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. In Brazil, tax losses are not subject to
statute of limitation and ought to be used observing the limits established by the local tax legislation.
|
|
(iii)
|
Most of the amounts appointed as Others in the deferred tax assets reconciliation correspond to temporary differences arising from operations carried out in Brazil. It refers to provision for sales
commission, unrealized exchange variation, adjustments for operations marked to market (MTM), and provision for payment of suppliers. The remainder portion refers to a miscellaneous of items scattered in concepts determined by local tax
laws in Argentina, Brazil, Chile, and Colombia.
|
12
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
6.2 Deferred tax liabilities
6.3 Income Tax expense
The balance comprises temporary differences attributable to:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Acquisition of subsidiaries
|
1,409
|
1,687
|
||||||
|
Temporary differences
|
827
|
283
|
||||||
|
Others
|
228
|
75
|
||||||
|
Total deferred tax liabilities
|
2,464
|
2,045
|
||||||
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
Current tax
|
||||||||||||||||
|
Current tax on profits for the year
|
(136
|
)
|
(35
|
)
|
(877
|
)
|
(1,646
|
)
|
||||||||
|
(136
|
)
|
(35
|
)
|
(877
|
)
|
(1,646
|
)
|
|||||||||
|
Deferred income tax
|
||||||||||||||||
|
Decrease (increase) in deferred tax
|
(213
|
)
|
3,731
|
4,902
|
11,118
|
|||||||||||
|
(213
|
)
|
3,731
|
4,902
|
11,118
|
||||||||||||
|
Income tax
|
(349
|
)
|
3,696
|
4,025
|
9,472
|
|||||||||||
13
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
7
|
Leases
|
7.1 Amounts recognized in the
balance sheet
The balance sheet shows the following amounts related to leases:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Right-of-use assets
|
||||||||
|
Office buildings
|
4,818
|
5,183
|
||||||
|
Total
|
4,818
|
5,183
|
||||||
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Lease liabilities
|
||||||||
|
Current
|
1,898
|
1,105
|
||||||
|
Non-current
|
3,737
|
4,886
|
||||||
|
Total
|
5,635
|
5,991
|
||||||
The following table shows the changes in the right-of-use asset and lease liabilities:
|
2022
|
2021
|
|||||||
|
Right-of-use assets
|
||||||||
|
Opening balance on January 1
|
5,183
|
5,076
|
||||||
|
New lease agreements
|
942
|
384
|
||||||
|
Lease agreements from acquired subsidiaries
|
-
|
722
|
||||||
|
Remeasurement
|
99
|
494
|
||||||
|
Depreciation
|
(1,347
|
)
|
(1,069
|
)
|
||||
|
Write-off
|
(352
|
)
|
(110
|
)
|
||||
|
Hyperinflation adjustment
|
5
|
1
|
||||||
|
Exchange differences
|
288
|
(315
|
)
|
|||||
|
Closing balance on December 31
|
4,818
|
5,183
|
||||||
|
2022
|
2021
|
|||||||
|
Lease liabilities
|
||||||||
|
Opening balance on January 1
|
5,991
|
6,153
|
||||||
|
New lease agreements
|
942
|
384
|
||||||
|
Lease agreements from acquired subsidiaries
|
-
|
446
|
||||||
|
Remeasurement
|
41
|
494
|
||||||
|
Interest added
|
671
|
696
|
||||||
|
Principal elements of lease payments
|
(1,263
|
)
|
(913
|
)
|
||||
|
Interest payment
|
(670
|
)
|
(680
|
)
|
||||
|
Write-off
|
(423
|
)
|
(111
|
)
|
||||
|
Exchange differences
|
346
|
(478
|
)
|
|||||
|
Closing balance on December 31
|
5,635
|
5,991
|
||||||
14
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
7.2 Amounts recognized in the
Statement of profit or loss
The statement of profit or loss presents the following amounts related to leases:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
Depreciation charge of office buildings
|
371
|
287
|
1,347
|
1,069
|
||||||||||||
|
Interest expense (included in financial expense)
|
154
|
170
|
671
|
696
|
||||||||||||
|
Total
|
525
|
457
|
2,018
|
1,765
|
||||||||||||
|
8
|
Property and equipment, net
|
Details of the Group’s property and equipment balance are presented below:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Leasehold improvements
|
2,811
|
2,796
|
||||||
|
Machinery and equipment
|
307
|
279
|
||||||
|
Furniture and fixture
|
836
|
740
|
||||||
|
Computers and peripherals
|
4,346
|
3,987
|
||||||
|
Accumulated depreciation
|
(4,391
|
)
|
(3,091
|
)
|
||||
|
Property and equipment, net
|
3,909
|
4,711
|
||||||
|
9
|
Intangible assets, net |
Details of the Group’s intangible assets balance are presented below:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Software
|
4,291
|
4,091
|
||||||
|
Trademark
|
218
|
207
|
||||||
|
Intellectual property
|
2,675
|
2,540
|
||||||
|
Customer contracts
|
9,394
|
9,336
|
||||||
|
Goodwill
|
20,965
|
21,598
|
||||||
|
Others
|
519
|
493
|
||||||
|
Accumulated amortization
|
(6,852
|
)
|
(4,621
|
)
|
||||
|
Intangible assets, net
|
31,210
|
33,644
|
||||||
15
VTEX
Notes to the consolidated financial statements
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:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Trade payables
|
14,064
|
12,668
|
||||||
|
Accounts payable to related parties
|
-
|
27
|
||||||
|
Social charges
|
5,537
|
7,048
|
||||||
|
Profit-sharing
|
9,484
|
7,203
|
||||||
|
Provision for vacation and benefits
|
5,506
|
4,333
|
||||||
|
Others
|
56
|
235
|
||||||
|
Total
|
34,647
|
31,514
|
||||||
|
Current
|
34,136
|
29,537
|
||||||
|
Non-current
|
511
|
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
|
December 31, 2022 | December 31, 2021 | ||||||
|
BNDES (i)
|
6.5% p.a
(Brazilian Reais)
|
Brazil
|
Mar/23
|
189
|
891
|
|||||
|
Itaú (ii)
|
100% CDI + 2.5% p.a
(Brazilian Reais)
|
Brazil
|
May/23
|
964
|
2,388
|
|||||
|
Total
|
1,153
|
3,279
|
||||||||
|
Current
|
1,153
|
2,087
|
||||||||
|
Non-current
|
-
|
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.
11.2 Changes in loans and
financing
|
2022
|
2021
|
|||||||
|
Opening balance on January 1
|
3,279
|
6,359
|
||||||
|
Loans from acquisition of subsidiaries
|
-
|
8,038
|
||||||
|
Payment of loans (i)
|
(2,651
|
)
|
(11,002
|
)
|
||||
|
Interest charged
|
62
|
94
|
||||||
|
Interest paid
|
(56
|
)
|
(104
|
)
|
||||
|
Basis adjustment on the fair value hedge (ii)
|
273
|
333
|
||||||
|
Exchange differences
|
246
|
(439
|
)
|
|||||
|
Closing balance on December 31
|
1,153
|
3,279
|
||||||
|
(i)
|
In 2021 the amount of US$7,919 was paid to a third party at the acquisition date to settle preexisting debts of WorkArea and US$119 was paid to a third party post-acquisition date, which VTEX assumed in the
business combination.
|
|
(ii)
|
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. Refer to note 18.1(ii) for additional detail.
|
16
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
12
|
Taxes payable
|
The breakdown of taxes payable is as follows:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Income tax payable
|
673
|
524
|
||||||
|
Other taxes payable
|
3,615
|
4,671
|
||||||
|
Total
|
4,288
|
5,195
|
||||||
|
Current
|
4,128
|
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:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Civil
|
6
|
17
|
||||||
|
Labor
|
95
|
16
|
||||||
|
Tax
|
84
|
53
|
||||||
|
Total
|
185
|
86
|
||||||
The breakdown of existing contingencies classified as possible by the Group, based on the evaluation of its legal advisors, for which no provision was recognized, is as follows:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Civil
|
118
|
123
|
||||||
|
Labor
|
-
|
189
|
||||||
|
Tax
|
878
|
10
|
||||||
|
Total
|
996
|
322
|
||||||
On October 9, 2020, Mirakl, Incorporated, filed a complaint for unspecified damages and preliminary and permanent injunctive relief in the United States District Court for the District of Massachusetts against our
subsidiary VTEX Commerce Cloud Solutions LLC, or VTEX U.S., and certain of its employees that were formerly employed by the plaintiff.
On April 14, 2021, the court denied the motion to dismiss. On October 4, 2021, the court granted VTEX's motion to appoint an independent expert to manage forensic discovery. On December 31, 2021, the court approved a forensic protocol to be
employed by the independent expert. As of December 31, 2022, the parties are conducting discovery. Although VTEX plans to defend itself against such lawsuit, the Company is not able to predict the outcomes of such lawsuit at this current early
stage. On December 31, 2022 and 2021, this contingency was classified as possible, however at the end of the reporting period it was not possible to estimate the future cash outflows at this stage of the lawsuit, and, therefore, it was not included
in the table above.
17
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
14
|
Shareholders’ equity
|
14.1 Issued capital
The total share capital is as follows:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Number of ordinary nominative shares
|
188,992,529
|
191,028,642
|
||||||
|
Par value
|
0.0001
|
0.0001
|
||||||
|
Total issued capital
|
19
|
19
|
||||||
In July 2021, within the completion of the IPO, each of the existing shares (common shares) were converted into Class A or Class B shares. Therefore, the Company now has two classes of common shares: Class A common
shares and Class B common shares. The rights of Class A common shares and Class B common shares holders are identical, except to voting, conversion, and transfer restrictions applicable to the Class B common shares. Each Class A common share is
entitled to one vote. Each Class B common share is entitled to 10 votes and convertible into one Class A common share as provided in the Articles of Association. Holders of Class A common shares and Class B common shares vote together as a single
class on all matters unless otherwise required by law. Refer to note 1.1 for additional details.
14.2 Capital reserve
Share repurchase program
On August 08, 2022 the Board of Directors authorized the repurchase of shares of the Company's Class A common shares for an aggregate consideration of up to US$30 million and it is scheduled to expire on August 08,
2023. Repurchases under the Company's program may be made from time to time in open market or privately negotiated transactions in accordance with applicable laws, including the Securities and Exchange Commission Rule 10b-18. The timing of
repurchases will depend on factors including market conditions and prices, the Company’s liquidity requirements and alternative uses of capital. Any repurchased shares may be canceled or remain available for use in connection with its equity
incentive plans and for other corporate purposes.
In 2022, 3,287,960 Class A common shares were repurchased on the program for the amount of US$12,723, and during the last quarter of 2022 the Group canceled 3,206,936 Class A common shares also as part of the
program. The Company has also incurred in US$ 75 with transaction costs related to repurchase of shares.
18
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
On December 31, 2022, the Company holds 81,024 (December 31, 2021 – 0) Class A common shares in treasury.
|
15
|
Revenue from services provided
|
The Group revenue derives mainly 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 (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
Subscriptions
|
46,712
|
37,668
|
162,132
|
129,292
|
||||||||||||
|
Taxes on subscriptions
|
(3,980
|
)
|
(3,139
|
)
|
(13,657
|
)
|
(10,826
|
)
|
||||||||
|
Revenue from subscriptions
|
42,732
|
34,529
|
148,475
|
118,466
|
||||||||||||
|
Services provided
|
2,919
|
2,894
|
9,799
|
8,154
|
||||||||||||
|
Taxes on services
|
(166
|
)
|
(307
|
)
|
(654
|
)
|
(847
|
)
|
||||||||
|
Services revenue
|
2,753
|
2,587
|
9,145
|
7,307
|
||||||||||||
|
Total revenue
|
45,485
|
37,116
|
157,620
|
125,773
|
||||||||||||
|
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 affecting all potential weighted average dilutive common stock, including options and restricted stock units.
The following table contains the loss per share of the Group for the three and twelve-month period ended December 31, 2022 and 2021:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
Loss attributable to the stockholders of the Group
|
(322
|
)
|
(10,625
|
)
|
(52,419
|
)
|
(60,514
|
)
|
||||||||
|
Weighted average number of outstanding common shares (thousands)
|
190,167
|
190,983
|
190,695
|
181,554
|
||||||||||||
|
Basic and diluted loss per share
|
(0.002
|
)
|
(0.056
|
)
|
(0.275
|
)
|
(0.333
|
)
|
||||||||
In the three and twelve months period ended December 31, 2022 and 2021, the number of shares used to calculate diluted net loss per share of common stock attributable to common stockholders is the same as the number
of shares used to calculate basic net loss per share of common stock attributable to common stockholders for the year presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. The number of the
potentially dilutive shares that would have been anti-dilutive is disclosed in note 17.
19
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
17
|
Share-based compensation
|
17.1 Share-based
compensation: VTEX
Prior to November 2021, certain members of management and employees received share-based compensation under a share option plan and a restricted share plan, or the Pre-IPO plans. Although grants made pursuant to the
Pre-IPO plans prior to the adoption of the 2021 Share Plan (as defined below) remain valid, the outstanding pools of the Pre-IPO plans have been canceled and no additional grants may be made. VTEX has awarded 6,368,130 stock options and 1,441,305
restricted share units under the Pre-IPO plans that are currently outstanding and not exercised or settled.
On November 11, 2021, the Board of Directors approved the VTEX 2021 Share Plan, or the 2021 Share Plan, substituting the Pre-IPO plans.
Eligible participants of the 2021 Share Plan include certain members of management and employees. Beneficiaries under 2021 Share Plan may be granted stock options and/or restricted shares units on certain determined
criteria. The final eligibility of any beneficiary to participate in the 2021 Share Plan is determined by the Board of Directors.
On November 7, 2022, the Board of Directors amended and restated the 2021 Share Plan and authorized an increase of the number of shares that were available to be issued under the 2021 Share Plan (the “Plan Share
Reserve”) to include (i) an additional 2,600,000 Class A common shares to be reserved for issuance to offset an aggregate of approximately 2,600,000 stock options and restricted stock units that were previously granted under Pre-IPO Plans and have
been since forfeited or were expected to be forfeited by December 31, 2022.
As of December 31, 2022, VTEX has awarded 3,345,616 stock options and 2,067,889 restricted share units under the 2021 Share Plan that are currently outstanding and not exercised. 515,177 Class A common shares remain
available for issuance under the 2021 Share Plan, amended and restated. Pursuant to the terms of the 2021 Share Plan, the Plan Share Reserve automatically renews on the first day of each fiscal year, by a number of Class A common shares equal to (1)
1.8% of the outstanding share capital on the last day of the immediately preceding fiscal year or (2) the number of Class A common shares as otherwise determined by the Board of Directors.
Both stock options and Restricted Stock Units instruments (“RSUs”) are exercisable as long as the director or employee fulfills the worked periods after the options are granted.
20
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
Set out below are summaries of options granted under the plans:
|
Number of
options
(thousands)
|
Weighted
average
exercise price
|
Remaining contractual
terms in years
|
Weighted
average grant
date fair value
|
|||||||||||||
|
At December 31, 2021
|
8,809
|
4.78
|
5.37
|
1.58
|
||||||||||||
|
Granted during the period
|
3,910
|
4.39
|
-
|
1.98
|
||||||||||||
|
Forfeit during the period
|
(2,508
|
)
|
7.22
|
-
|
3.19
|
|||||||||||
|
Exercised during the period (i)
|
(497
|
)
|
1.14
|
-
|
0.46
|
|||||||||||
|
At December 31, 2022
|
9,714
|
4.18
|
4.37
|
1.41
|
||||||||||||
|
Stock options exercisable as of December 31, 2022
|
3,270
|
3.82
|
3.95
|
1.07
|
||||||||||||
(i) The number of Stock-options withheld for tax purposes was 79 thousand shares (25 thousand shares in 2021).
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 year ended December 31, 2022:
|
●
|
Target Asset Price - US$4.40 per share (December 31, 2021 - US$10.72 per share)
|
|
●
|
Risk-Free Interest Rate – 3.83% (December 31, 2021: 1.14%)
|
|
●
|
Volatility – 55.68% (December 31, 2021: 51.89%)
|
|
●
|
Expected dividend: None
|
The following table summarizes the RSU granted under the plan:
|
Number of
RSUs
(thousands)
|
Weighted
average grant
date fair value
|
|||||||
|
At December 31, 2021
|
3,001
|
7.70
|
||||||
|
RSU granted
|
2,354
|
5.94
|
||||||
|
Forfeit during the period
|
(940
|
)
|
7.91
|
|||||
|
Settled (i)
|
(906
|
)
|
5.86
|
|||||
|
At December 31, 2022
|
3,509
|
6.94
|
||||||
(i) The number of RSUs withheld for tax purposes was 234.1 thousand shares (125 thousand shares in 2021).
The fair value of the restricted stock units granted was calculated using the same Target Asset Price used in the Stock Options appraisal model.
21
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
In November 2022, the Group modified some stock option instruments, changing the original vesting period and exercise price, and migrated some stock option instruments to RSU. Such modifications were carried out to
reflect the recent fall in the company’s share price. The total incremental fair value of US$1,527 will be recognized as an expense over the period from the modification date to the end of the vesting period. The expense for the original option
granted will continue to be recognized as if the terms had not been modified. The fair value of the modified options was determined using the same models and principles of the original contract.
For the year ended December 31, 2022, there was US$16,538 (US$26,997 in 2021) 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 1.84 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 year ended December 31, 2022, was US$12,390 (US$18,857 in 2021). For the year ended December 31, 2022, the
Group recorded in the capital reserve the amount of US$12,066 (US$8,736 in 2021).
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.
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 December 31, 2021
|
23.57
|
12.37
|
6.35
|
5.47
|
||||||||||||
|
Granted during the period
|
-
|
-
|
-
|
-
|
||||||||||||
|
Forfeit during the period
|
(15.15
|
)
|
12.78
|
-
|
5.82
|
|||||||||||
|
Exercised during the period
|
-
|
-
|
-
|
-
|
||||||||||||
|
At December 31, 2022
|
8.42
|
13.48
|
5.35
|
5.66
|
||||||||||||
|
Stock options exercisable as of December 31, 2022
|
6.31
|
13.48
|
5.35
|
5.49
|
||||||||||||
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.
|
22
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
The weighted average inputs used in the year ended December 31, 2022:
|
●
|
Target Asset Price - Not applicable for the period (December 31, 2021 - US$13.06 per share)
|
|
●
|
Risk-free interest rate in Brazilian Reais - Not applicable for the period (December 31, 2021: 8.81%)
|
|
●
|
Volatility - Not applicable for the period (December 31, 2021: 47.69%)
|
|
●
|
Expected dividend: None
|
The following table summarizes the RSU granted under the plan:
|
Number of
RSUs
(thousands)
|
Weighted
average grant
date fair value
|
|||||||
|
At December 31, 2021
|
83.03
|
11.22
|
||||||
|
RSU granted
|
327.27
|
6.54
|
||||||
|
Forfeit during the period
|
(76.24
|
)
|
10.70
|
|||||
|
Settled (i)
|
(48.78
|
)
|
9.69
|
|||||
|
At December 31, 2022
|
285.28
|
6.42
|
||||||
(i) The number of RSUs withheld for tax purposes was 8.3 thousand shares.
For the year ended December 31, 2022, there was US$1,026 (2021 – US$942) 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 1.98 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 year ended December 31, 2022, was US$363 (US$728 in 2021). For the year ended December 31, 2022,
the Group recorded in the capital reserve the amount of US$581 (US$481 in 2021).
23
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
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 profit and loss which includes both stock-based compensation of VTEX and Loja Integrada, which includes
social charges and taxes:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December 31, 2022
|
December 31, 2021 | December 31, 2022 | December 31, 2021 | |||||||||||||
|
Subscription cost
|
(164
|
)
|
(71
|
)
|
(502
|
)
|
(696
|
)
|
||||||||
|
Services cost
|
(88
|
)
|
(79
|
)
|
(156
|
)
|
(376
|
)
|
||||||||
|
General and administrative
|
(1,476
|
)
|
(1,008
|
)
|
(4,366
|
)
|
(7,087
|
)
|
||||||||
|
Sales and marketing
|
(1,142
|
)
|
(610
|
)
|
(2,885
|
)
|
(5,530
|
)
|
||||||||
|
Research and development
|
(1,716
|
)
|
176
|
(4,844
|
)
|
(5,896
|
)
|
|||||||||
|
Total
|
(4,586
|
)
|
(1,592
|
)
|
(12,753
|
)
|
(19,585
|
)
|
||||||||
|
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:
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Financial assets:
|
||||||||
|
Cash and cash equivalents
|
24,394
|
121,006
|
||||||
|
Restricted cash
|
1,608
|
1,183
|
||||||
|
Marketable securities
|
10,119
|
-
|
||||||
|
Trade receivables
|
42,276
|
40,825
|
||||||
|
Total
|
78,397
|
163,014
|
||||||
|
Financial liabilities:
|
||||||||
|
Trade payables
|
14,064
|
12,695
|
||||||
|
Lease liabilities
|
5,635
|
5,991
|
||||||
|
Loans and financing
|
1,153
|
3,279
|
||||||
|
Accounts payable from acquisition of subsidiaries
|
-
|
1,470
|
||||||
|
Total
|
20,852
|
23,435
|
||||||
24
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
(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
|
||||||||
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Financial assets:
|
||||||||
|
Short-term investments
|
204,045
|
177,191
|
||||||
|
Derivative financial instruments (i)
|
117
|
-
|
||||||
|
Total
|
204,162
|
177,191
|
||||||
|
Carrying amount
|
||||||||
|
December 31, 2022
|
December 31, 2021
|
|||||||
|
Financial liabilities:
|
||||||||
|
Derivative financial instruments
|
-
|
133
|
||||||
|
Accounts payable from acquisition of subsidiary ("earn out")
|
299
|
4,953
|
||||||
|
Total
|
299
|
5,086
|
||||||
(i) In 2022, VTEX ARG had positions in future derivative financial instruments raised through Matba Rofex designated as foreing exchange protection hedge for intercompany loans obtained with VTEX UK, with a total
notional value of US$5,000 and last maturity date in March 2023.
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 "financial results, net".
For the years ended December 31, 2022 and 2021, the Group had positions in Swap derivative financial instruments designated as a hedge of foreign currency debt, raised through Itaú bank. The hedge contracts had
maturity dates equal to those of the loan raised in foreign currency (note 11), which was also raised through Itaú bank. The contract is due May 2023. Additionally, on December 31, 2022, the Group also had positions in future derivative financial
instruments designed as a hedge of foreign currency risk related to loans obtained with intercompany transactions. The hedge contracts had maturity dates equal to those of the principal, which was raised through Matba Rofex. The last hedge contract
is due March 2023.
25
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
The following amounts were recognized in profit or loss in relation to financial instruments:
|
Three months ended
(unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
Net gain (loss) on financial instruments
|
548
|
(73
|
)
|
2,364
|
(193
|
)
|
||||||||||
The following amounts were recognized in profit or loss in relation to marketable securities and short-term investments:
|
Three months ended
(unaudited)
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
Net gain (loss) on marketable securities and short-term investments
|
3,675
|
428
|
(4,766
|
)
|
640
|
|||||||||||
|
a.
|
Fair value hierarchy
|
This section provides details about the judgments and estimates made for determining the fair values of the financial instruments recognized and measured at fair value in the financial statements. The Group has
classified its financial instruments into the three levels prescribed under the accounting standards to indicate the reliability of the inputs used in determining fair value. An explanation of each level follows underneath the table.
|
December 31, 2022
|
||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
||||||||||
|
Assets
|
||||||||||||
|
Short-term investments
|
204,045
|
-
|
-
|
|||||||||
|
Derivative financial instruments
|
-
|
117
|
-
|
|||||||||
|
Liabilities
|
||||||||||||
|
Accounts payable from acquisition of subsidiary ("earn-out")
|
-
|
-
|
299
|
|||||||||
|
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 subsidiary ("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.
26
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
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;
|
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 is 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 December 31, 2022, the fair value of the earn-out amounts US$299
(December 31, 2021 - US$4,953).
The following table presents the changes in level 3 items for the year ended on December 31, 2022:
|
2022
|
2021
|
|||||||
|
Opening balance on January 1
|
4,953
|
542
|
||||||
|
Acquisitions of subsidiaries
|
-
|
6,483
|
||||||
|
Payments of principal/finance charges - earn-out
|
(916
|
)
|
(1,378
|
)
|
||||
|
Earn-out adjustment
|
(3,740
|
)
|
(785
|
)
|
||||
|
Exchange differences
|
2
|
91
|
||||||
|
Closing balance on December 31
|
299
|
4,953
|
||||||
27
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
b.
|
Fair values of other financial instruments (unrecognized)
|
The Group also has several financial instruments which are not measured at fair value in the balance sheet. As at December 31, 2022, these instruments’ fair values are not different from 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 December 31, 2022:
|
Carrying amount
|
Fair value
|
|||||||
|
Financial assets:
|
||||||||
|
Marketable securities
|
10,119
|
9,948
|
||||||
|
Total
|
10,119
|
9,948
|
||||||
|
Financial liabilities:
|
||||||||
|
Loans and financing
|
1,153
|
990
|
||||||
|
Total
|
1,153
|
990
|
||||||
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 and policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, the use of
derivatives 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 consolidated 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, 2022, available in the 20-F filing.
28
VTEX
Notes to the consolidated financial statements
In thousands of U.S. dollars, unless otherwise indicated
|
19
|
COVID-19 impact
|
The COVID-19 pandemic spread rapidly in 2020, with many cases. Measures taken by various governments to contain the virus have affected economic activity. Throughout 2021 commerce has experienced growth, with
increasing vaccination and a perspective of return to normalcy. In November 2022, a new wave of COVID-19 hit China, which is evaluating social and sanitary mechanisms to reduce the impact on its economy. The Group has taken several measures to
monitor and mitigate the effects of COVID-19, such as safety and health measures for its directors and employees (such as social distancing and working from home).
At this stage, the impact on the Group’s business and results has been positive. As the Group operates in an online environment, we have found increased demand for the products and services.
The Group has not accessed any revolving line of credit or loans nor modified the periods of payments of other financial liabilities. Also, the terms and conditions with customers have remained the same, and because of
the business model, there is no expected delay in the collection of trade receivables.
The financial statements are prepared on an ongoing basis, and there is no doubt regarding the Group’s ability to continue it for further periods.
The Group will continue to follow the various government policies in each country in which the Group operates. In parallel, we will do our utmost to continue operations in the best and safest way possible without
jeopardizing the health of the Company’s employees.
|
20
|
Russian invasion of Ukraine
|
In late February 2022, Russian military forces launched significant military action against Ukraine and continued sustained conflict and disruption in the region are likely. In response to Russia’s invasion of Ukraine,
the United States, the European Union, the United Kingdom and several other countries have imposed far-reaching sanctions and export control restrictions on Russian entities and individuals.
As the Group does not have financial exposure in Russia and Ukraine, the Company has not been impacted by the conflict so far. The Company will continue to monitor this situation to further evaluate possible future
impacts on our operations.
|
21
|
Subsequent events
|
During January and February of 2023, the Company has canceled 815,065 Class A common shares, of which 81,024 shares were held in treasury as of December 31,
2022, and 734,041 were repurchased after December 31, 2022, under the repurchase share program.
29
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, 2022 and 2021
included elsewhere in this document.
Overview
VTEX is the enterprise digital commerce platform where global brands and retailers run their world of commerce. Our platform is designed to be the operating system for the commerce ecosystem, enabling enterprise brands
and retailers to orchestrate their complex network of consumers, business partners, suppliers, and fulfillment providers in one place. VTEX puts its customers’ business on a fast path to growth with a complete Commerce, Marketplace, and OMS solution.
We help global companies build, manage and deliver native and advanced B2B, B2C, and Marketplace commerce experiences with competitive time-to-market and without complexity so they can stay relevant for the modern, convenience driven consumer.
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. VTEX has been a leader in accelerating the digital commerce transformation in Latin America and is expanding globally. Our platform is engineered to enterprise-level standards and functionality with approximately 84% of our GMV coming from
large, blue-chip companies (i.e. customers with more than US$10 million of GMV per year). We are trusted by more than 2,600 customers with over 3,400 active online stores across 38 countries to connect with their consumers in a meaningful way.
VTEX benefits from the acceleration of digitalization globally, and in particular in Latin America, 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 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 a leader in the IDC MarketScape: Worldwide B2C Digital Commerce Platforms 2020 Vendor
Assessment, and a “Strong Performer” in the Gartner Peer Insights ‘Voice of the Customer’: Digital Commerce, January 2022 report. We were also recognized as Visionary in the Gartner® Magic Quadrant™ for Digital Commerce, August 2022 report.
Additionally, we were named a “Contender” in The Forrester Wave™: B2C Commerce Solutions and VTEX was awarded medals in each one of the 12 categories evaluated in the “Paradigm B2B Combine 2022 Digital Commerce Solutions for B2B, Midmarket edition.”
We offer access to our platform on a subscription basis, which accounted for 93.9% of our revenue for the three months ended December 31, 2022, compared to 93.0% of our revenue for the three months ended December 31,
2021. 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 December 31, 2022, our GMV increased to US$3.9 billion from US$2.9 billion in the three months ended December 31, 2021 representing an increase of 34.4% in USD and 29.2% on an FX neutral basis. In the same period, our revenue
increased to US$45.5 million from US$37.1 million, representing an increase of 22.5% in USD and 19.6% on an FX neutral basis.
30
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.
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
|
Twelve months ended
|
|||||||||||||||
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
|||||||||||||
|
(in millions of U.S. Dollars, unless otherwise indicated)
|
||||||||||||||||
|
GMV
|
3,903.7
|
2,905.6
|
12,687.7
|
9,665.8
|
||||||||||||
|
GMV growth FX neutral (%)
|
29.2
|
%
|
16.1
|
%
|
26.8
|
%
|
31.1
|
%
|
||||||||
31
Seasonality and quarterly operations results
Due to our transaction-based subscription model, similar to most retail businesses, we experience seasonal fluctuations in our net sales and operating results. Historically, we have generated higher net sales in the
fourth quarter, which includes the “Black November” period in Brazil (a commercial sales season, a month-long, introduced by Brazilian ecommerce websites in 2010 and equivalent to Black Friday in the United States) and other ecommerce events in Latin
American countries. The first quarter of the year is our slowest period, as the months of January, February and March correspond to vacation time in Brazil and other Latin American countries, and the first quarter is impacted by Carnival in Brazil.
The following table sets forth our unaudited quarterly consolidated statement of profit or loss data for each of the last eight quarters of the period ended December 31, 2022. The unaudited consolidated statement of
profit or loss data below has been prepared on the same basis as the audited consolidated financial statements included elsewhere in this annual report on Form 20-F and, in our opinion, reflects all necessary adjustments, consisting only of ordinary
course recurring adjustments, necessary to fairly and accurately state this information. These historical unaudited quarterly results of operations are not necessarily indicative of the results of operations for a full year or any future period. In
particular, our quarterly results of operations have been positively affected by a significant growth in ecommerce sales in the markets in which we operate due to the widespread closure of brick-and-mortar stores and behavioral changes associated
with social distancing as a result of the COVID-19 pandemic. This increase in sales has bolstered our total revenue, driven predominantly by increases in our customer sales and revenue. 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.”
|
For the three months ended (unaudited)
|
||||||||||||||||||||||||||||||||
|
(in US$ millions)
|
March
31, 2021 |
June
30, 2021 |
September
30, 2021 |
December
31, 2021 |
March
31, 2022 |
June
30, 2022
|
September
30, 2022
|
December
31, 2022 |
||||||||||||||||||||||||
|
Subscription revenue
|
24.7
|
29.7
|
29.6
|
34.5
|
32.6
|
36.7
|
36.5
|
42.7
|
||||||||||||||||||||||||
|
Services revenue
|
1.3
|
1.2
|
2.2
|
2.6
|
2.1
|
2.1
|
2.2
|
2.8
|
||||||||||||||||||||||||
|
Total revenue
|
25.9
|
30.9
|
31.9
|
37.1
|
34.7
|
38.7
|
38.8
|
45.5
|
||||||||||||||||||||||||
|
Subscription cost
|
(8.7
|
)
|
(9.5
|
)
|
(9.7
|
)
|
(10.5
|
)
|
(10.0
|
)
|
(10.2
|
)
|
(9.8
|
)
|
(11.5
|
)
|
||||||||||||||||
|
Services cost
|
(2.1
|
)
|
(2.8
|
)
|
(3.1
|
)
|
(3.3
|
)
|
(2.6
|
)
|
(2.8
|
)
|
(2.9
|
)
|
(3.1
|
)
|
||||||||||||||||
|
Total cost
|
(10.8
|
)
|
(12.2
|
)
|
(12.8
|
)
|
(13.8
|
)
|
(12.6
|
)
|
(13.0
|
)
|
(12.6
|
)
|
(14.6
|
)
|
||||||||||||||||
|
Gross profit
|
15.1
|
18.7
|
19.1
|
23.4
|
22.1
|
25.7
|
26.1
|
30.9
|
||||||||||||||||||||||||
|
Operating expenses
|
||||||||||||||||||||||||||||||||
|
General and administrative
|
(7.2
|
)
|
(7.8
|
)
|
(9.9
|
)
|
(6.9
|
)
|
(6.9
|
)
|
(7.4
|
)
|
(6.9
|
)
|
(7.1
|
)
|
||||||||||||||||
|
Sales and marketing
|
(11.0
|
)
|
(15.7
|
)
|
(19.3
|
)
|
(17.5
|
)
|
(17.9
|
)
|
(21.3
|
)
|
(16.2
|
)
|
(12.4
|
)
|
||||||||||||||||
|
Research and development
|
(8.4
|
)
|
(10.7
|
)
|
(14.2
|
)
|
(11.9
|
)
|
(13.9
|
)
|
(15.4
|
)
|
(13.8
|
)
|
(14.1
|
)
|
||||||||||||||||
|
Other income (losses)
|
(0.4
|
)
|
(0.9
|
)
|
0.0
|
(0.2
|
)
|
0.0
|
(0.5
|
)
|
(0.5
|
)
|
(0.4
|
)
|
||||||||||||||||||
|
Loss from operation
|
(12.0
|
)
|
(16.4
|
)
|
(24.4
|
)
|
(13.1
|
)
|
(16.7
|
)
|
(18.9
|
)
|
(11.3
|
)
|
(3.0
|
)
|
||||||||||||||||
|
Financial result, net
|
(1.4
|
)
|
(1.4
|
)
|
(0.6
|
)
|
(1.4
|
)
|
(4.7
|
)
|
(5.4
|
)
|
(0.2
|
)
|
2.7
|
|||||||||||||||||
|
Equity results
|
0.1
|
0.1
|
0.2
|
0.2
|
0.2
|
0.3
|
0.3
|
0.3
|
||||||||||||||||||||||||
|
Income (loss) before income tax
|
(13.3
|
)
|
(17.6
|
)
|
(24.8
|
)
|
(14.3
|
)
|
(21.2
|
)
|
(24.1
|
)
|
(11.2
|
)
|
0.0
|
|||||||||||||||||
|
Income tax
|
0.8
|
2.1
|
2.8
|
3.7
|
2.1
|
2.6
|
(0.3
|
)
|
(0.3
|
)
|
||||||||||||||||||||||
|
Net loss for the period
|
(12.5
|
)
|
(15.5
|
)
|
(22.0
|
)
|
(10.6
|
)
|
(19.1
|
)
|
(21.5
|
)
|
(11.5
|
)
|
(0.3
|
)
|
||||||||||||||||
|
Earnings (loss) per share
|
||||||||||||||||||||||||||||||||
|
Basic and diluted earnings
(loss) per share (US$)
|
(0.07
|
)
|
(0.09
|
)
|
(0.12
|
)
|
(0.06
|
)
|
(0.10
|
)
|
(0.11
|
)
|
(0.06
|
)
|
(0.00
|
)
|
||||||||||||||||
32
The following table sets forth selected consolidated profit (loss) statements data for each of the periods indicated as a percentage of total revenue.
|
For the three months ended (unaudited)
|
||||||||||||||||||||||||||||||||
|
March
31, 2021 |
June
30, 2021 |
September
30, 2021 |
December
31, 2021 |
March
31, 2022 |
June
30, 2022 |
September
30, 2022
|
December
31, 2022 |
|||||||||||||||||||||||||
|
Total revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||||||||||
|
Subscription cost
|
(33.6
|
)%
|
(30.6
|
)%
|
(30.6
|
)%
|
(28.2
|
)%
|
(28.8
|
)%
|
(26.3
|
)%
|
(25.2
|
)%
|
(25.3
|
)%
|
||||||||||||||||
|
Services cost
|
(8.1
|
)%
|
(8.9
|
)%
|
(9.6
|
)%
|
(8.9
|
)%
|
(7.5
|
)%
|
(7.3
|
)%
|
(7.4
|
)%
|
(6.8
|
)%
|
||||||||||||||||
|
Total cost
|
(41.8
|
)%
|
(39.6
|
)%
|
(40.1
|
)%
|
(37.1
|
)%
|
(36.3
|
)%
|
(33.6
|
)%
|
(32.6
|
)%
|
(32.1
|
)%
|
||||||||||||||||
|
Gross profit
|
58.2
|
%
|
60.4
|
%
|
59.9
|
%
|
62.9
|
%
|
63.7
|
%
|
66.4
|
%
|
67.4
|
%
|
67.9
|
%
|
||||||||||||||||
|
Operating expenses
|
||||||||||||||||||||||||||||||||
|
General and administrative
|
(27.9
|
)%
|
(25.3
|
)%
|
(31.2
|
)%
|
(18.6
|
)%
|
(19.9
|
)%
|
(19.2
|
)%
|
(17.9
|
)%
|
(15.5
|
)%
|
||||||||||||||||
|
Sales and marketing
|
(42.6
|
)%
|
(50.9
|
)%
|
(60.7
|
)%
|
(47.0
|
)%
|
(51.6
|
)%
|
(55.1
|
)%
|
(41.7
|
)%
|
(27.3
|
)%
|
||||||||||||||||
|
Research and development
|
(32.5
|
)%
|
(34.6
|
)%
|
(44.5
|
)%
|
(32.1
|
)%
|
(40.1
|
)%
|
(39.8
|
)%
|
(35.6
|
)%
|
(30.9
|
)%
|
||||||||||||||||
|
Other income (losses)
|
(1.7
|
)%
|
(2.8
|
)%
|
0.0
|
%
|
(0.6
|
)%
|
0.0
|
%
|
(1.2
|
)%
|
(1.3
|
)%
|
(0.9
|
)%
|
||||||||||||||||
|
Loss from operation
|
(46.4
|
)%
|
(53.1
|
)%
|
(76.5
|
)%
|
(35.4
|
)%
|
(48.1
|
)%
|
(48.9
|
)%
|
(29.1
|
)%
|
(6.7
|
)%
|
||||||||||||||||
|
Financial result, net
|
(5.2
|
)%
|
(4.4
|
)%
|
(1.8
|
)%
|
(3.7
|
)%
|
(13.5
|
)%
|
(14.0
|
)%
|
(0.5
|
)%
|
5.9
|
%
|
||||||||||||||||
|
Equity results
|
0.4
|
%
|
0.5
|
%
|
0.5
|
%
|
0.5
|
%
|
0.6
|
%
|
0.7
|
%
|
0.7
|
%
|
0.8
|
%
|
||||||||||||||||
|
Income (loss) before income tax
|
(51.3
|
)%
|
(57.0
|
)%
|
(77.7
|
)%
|
(38.6
|
)%
|
(61.1
|
)%
|
(62.2
|
)%
|
(28.9
|
)%
|
0.1
|
%
|
||||||||||||||||
|
Income tax
|
3.2
|
%
|
6.9
|
%
|
8.8
|
%
|
10.0
|
%
|
6.1
|
%
|
6.8
|
%
|
(0.9
|
)%
|
(0.8
|
)%
|
||||||||||||||||
|
Net loss for the period
|
(48.1
|
)%
|
(50.1
|
)%
|
(68.9
|
)%
|
(28.6
|
)%
|
(55.0
|
)%
|
(55.4
|
)%
|
(29.8
|
)%
|
(0.7
|
)%
|
||||||||||||||||
The following table sets forth our Non-GAAP income (loss) from operations for each of the periods indicated:
|
March
31, 2021 |
June
30, 2021 |
September
30, 2021 |
December
31, 2021 |
March
31, 2022 |
June
30, 2022 |
September
30, 2022 |
December
31, 2022 |
|||||||||||||||||||||||||
|
Loss from operation
|
(12.0
|
)
|
(16.4
|
)
|
(24.4
|
)
|
(13.1
|
)
|
(16.7
|
)
|
(18.9
|
)
|
(11.3
|
)
|
(3.0
|
)
|
||||||||||||||||
|
Share-based compensation expense
|
3.2
|
5.5
|
9.3
|
1.6
|
2.5
|
0.9
|
4.8
|
4.6
|
||||||||||||||||||||||||
|
Amortization of intangibles related to acquisitions
|
0.3
|
0.5
|
0.5
|
0.8
|
0.5
|
0.6
|
0.5
|
0.5
|
||||||||||||||||||||||||
|
Offering expenses ("IPO") (i)
|
-
|
-
|
1.3
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
|
Non-GAAP Income (Loss) from Operation
|
(8.5
|
)
|
(10.4
|
)
|
(13.3
|
)
|
(10.9
|
)
|
(13.7
|
)
|
(17.4
|
)
|
(6.0
|
)
|
2.1
|
|||||||||||||||||
(i) Offering expenses ("IPO") are related to shares offered by the selling shareholders and other one-off IPO expenses.
Impacts of the COVID-19 pandemic
As a result of the COVID-19 pandemic, which was declared a global pandemic by the World Health Organization in March 2020, 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 and enabled our customers to rapidly scale and digitally transform their businesses during the COVID-19 pandemic. This increase in GMV of our customers has resulted in
significant revenue growth for us, driven predominantly by increases in our transaction-based fees.
Even though the online purchasing trend demonstrated to have staying power through 2021 and 2022, we started to see a mean reversion towards the pre-pandemic ecommerce levels of growth. Our customer’s online channels
experienced a decrease in growth rates, which affected our business growth, financial condition, and operating results. As the COVID-19 pandemic is increasingly controlled, we expect that the decrease in such growth rates will continue. 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 year ended December 31, 2022, our revenue
increased 25.3% in U.S. dollars compared to 2021 (22.3% on an FX neutral basis), while revenues increased 27.5% in U.S. dollars (29.8% on an FX neutral basis) in December 31, 2021 compared to 2020. We expect that our total revenue may be subject to
increased fluctuations in the near-term as a result. See note 19 for more details.
Components of our results of operations
The following is a summary of the principal line items comprising consolidated statements of profit or 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.
33
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) subscription fees charged to customers based on a percentage of the GMV or a fee per order processed on our platform; and (b) subscription 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 6.1% of our revenue for the
three months ended December 31, 2022, compared to 7.0% for the three months ended December 31, 2021. For the twelve months ended on December 31, 2022, the consulting services revenue accounted for 5.8% of our revenue, compared to 5.8% for the twelve
months ended December 31, 2021.
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. We expect administrative expenses
to increase as a result of becoming a publicly traded company and compliance requirements derived from the Sarbanes-Oxley Act. Public company costs include expenses associated with annual and quarterly reporting, investor relations, register and
transfer agent fees, incremental insurance costs, accounting and legal services, and other investments to strengthen corporate governance and internal controls.
34
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 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 result, net
Financial result, net consists of financial income and financial expenses. Financial income consists of interest earned on financial instruments, foreign exchange gains, gains from fair value of financial instruments
and other financial income. Finance expense consists mostly of foreign exchange losses, financial losses from fair value of derivative and 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. Our effective tax rate is mostly impacted by permanent book-to-tax differences and the lack of recognition of a
deferred tax asset at the level of certain legal entities.
Historical consolidated results of operations
Comparison of results of operations for the three and twelve months ended December 31, 2022 and 2021
The following table sets forth our consolidated income statements for the three and twelve months ended December 31, 2022 and 2021. The period-to-period comparison of financial results is not necessarily indicative of
future results.
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
(in US$ thousands)
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022 |
December
31, 2021
|
||||||||||||
|
Subscription revenue
|
42,732
|
34,529
|
148,475
|
118,466
|
||||||||||||
|
Services revenue
|
2,753
|
2,587
|
9,145
|
7,307
|
||||||||||||
|
Total revenue
|
45,485
|
37,116
|
157,620
|
125,773
|
||||||||||||
|
Subscription cost (1)
|
(11,491
|
)
|
(10,469
|
)
|
(41,408
|
)
|
(38,380
|
)
|
||||||||
|
Services cost (1)
|
(3,103
|
)
|
(3,291
|
)
|
(11,424
|
)
|
(11,212
|
)
|
||||||||
|
Total cost
|
(14,594
|
)
|
(13,760
|
)
|
(52,832
|
)
|
(49,592
|
)
|
||||||||
|
Gross profit
|
30,891
|
23,356
|
104,788
|
76,181
|
||||||||||||
|
Operating expenses
|
||||||||||||||||
|
General and administrative (1)
|
(7,052
|
)
|
(6,913
|
)
|
(28,348
|
)
|
(31,889
|
)
|
||||||||
|
Sales and marketing (1)
|
(12,404
|
)
|
(17,459
|
)
|
(67,798
|
)
|
(63,521
|
)
|
||||||||
|
Research and development (1)
|
(14,059
|
)
|
(11,915
|
)
|
(57,205
|
)
|
(45,186
|
)
|
||||||||
|
Other losses
|
(402
|
)
|
(211
|
)
|
(1,356
|
)
|
(1,514
|
)
|
||||||||
|
Loss from operation
|
(3,026
|
)
|
(13,142
|
)
|
(49,919
|
)
|
(65,929
|
)
|
||||||||
|
Financial result, net
|
2,706
|
(1,369
|
)
|
(7,631
|
)
|
(4,644
|
)
|
|||||||||
|
Equity results
|
347
|
190
|
1,106
|
587
|
||||||||||||
|
Income (loss) before income tax
|
27
|
(14,321
|
)
|
(56,444
|
)
|
(69,986
|
)
|
|||||||||
|
Income tax
|
(349
|
)
|
3,696
|
4,025
|
9,472
|
|||||||||||
|
Net loss for the period
|
(322
|
)
|
(10,625
|
)
|
(52,419
|
)
|
(60,514
|
)
|
||||||||
(1) Includes stock-based compensation expenses as follows:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||
|
(in US$ thousands)
|
December
31, 2022
|
December
31, 2021
|
December
31, 2022
|
December
31, 2021
|
||||||||||||
|
Subscription cost
|
(165
|
)
|
(71
|
)
|
(502
|
)
|
(696
|
)
|
||||||||
|
Services cost
|
(88
|
)
|
(79
|
)
|
(156
|
)
|
(377
|
)
|
||||||||
|
General and administrative
|
(1,476
|
)
|
(1,008
|
)
|
(4,366
|
)
|
(7,087
|
)
|
||||||||
|
Sales and marketing
|
(1,142
|
)
|
(610
|
)
|
(2,885
|
)
|
(5,529
|
)
|
||||||||
|
Research and development
|
(1,715
|
)
|
176
|
(4,844
|
)
|
(5,896
|
)
|
|||||||||
|
Total
|
(4,586
|
)
|
(1,592
|
)
|
(12,753
|
)
|
(19,585
|
)
|
||||||||
Total revenue
The components of our total revenue during the three and twelve-months period ended on December 31, 2022 and 2021 were as follows:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||||||||||
|
(in US$ thousands, except percentages)
|
December
31, 2022
|
December
31, 2021
|
Variation
|
December
31, 2022
|
December
31, 2021
|
Variation
|
||||||||||||||||||
|
Subscription revenue
|
42,732
|
34,529
|
23.8
|
%
|
148,475
|
118,466
|
25.3
|
%
|
||||||||||||||||
|
Services revenue
|
2,753
|
2,587
|
6.4
|
%
|
9,145
|
7,307
|
25.2
|
%
|
||||||||||||||||
|
Total revenue
|
45,485
|
37,116
|
22.5
|
%
|
157,620
|
125,773
|
25.3
|
%
|
||||||||||||||||
Total revenue for the three months ended December 31, 2022 was US$45.5 million, an increase of US$8.4 million, or 22.5% in US$ or 19.6% on an FX neutral basis, from US$37.1 million in the same period of 2021. The
increase in total revenue was primarily driven by: an increase in GMV of 34.4% in US$ or 29.2% on an FX neutral basis to US$3.9 billion for the three months ended December 31, 2022, from US$2.9 billion in the same period of 2021, which also led to
higher revenues from transaction-based fees as percentage of total subscription revenues and the expansion of our operations outside of Brazil.
Total revenue for the twelve months ended December 31, 2022 was US$157.6 million, an increase of US$31.8 million, or 25.3% in US$ or 22.3% on an FX neutral basis, from US$125.8 million in the same period of 2021. The
increase in total revenue was primarily driven by: an increase in GMV of 31.3% in US$ or 26.8% on an FX neutral basis to US$12.7 billion for the twelve months ended December 31, 2022, from US$9.7 billion in the same period of 2021, which also led to
higher revenues from transaction-based fees as percentage of total subscription revenues; (2) an increase of 6.0% in the number of active online stores using our platform during the year which we believe is mainly attributable to the impacts of the
increased penetration of ecommerce accelerating the digitalization plan of enterprises as a result of changing end-consumer purchase behavior (to favor online purchases); and (3) the expansion of our operations outside of Brazil.
35
Total cost
The components of our total cost during the three and twelve-months periods ended on December 31, 2022 and 2021 were as follows:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||||||||||
|
(in US$ thousands, except percentages)
|
December
31, 2022
|
December
31, 2021
|
Variation
|
December
31, 2022
|
December
31, 2021
|
Variation
|
||||||||||||||||||
|
Subscription cost
|
(11,491
|
)
|
(10,469
|
)
|
9.8
|
%
|
(41,408
|
)
|
(38,380
|
)
|
7.9
|
%
|
||||||||||||
|
Services cost
|
(3,103
|
)
|
(3,291
|
)
|
(5.7
|
)%
|
(11,424
|
)
|
(11,212
|
)
|
1.9
|
%
|
||||||||||||
|
Total cost
|
(14,594
|
)
|
(13,760
|
)
|
6.1
|
%
|
(52,832
|
)
|
(49,592
|
)
|
6.5
|
%
|
||||||||||||
Total cost for the three months ended December 31, 2022 increased by US$0.8 million, or 6.1%, to US$14.6 million for the three months ended December 31, 2022 from US$13.8 million in the same period of 2021, principally
due to an increase in IT & hosting expenses given the increased number of online stores and GMV processed on our platform.
Total cost for the twelve months ended December 31, 2022 increased by US$3.2 million, or 6.5%, to US$52.8 million for the twelve months ended December 31, 2022 from US$49.6 million in the same period of 2021,
principally due to an increase in IT and hosting expenses, which increased by US$1.9 million, or 6.8%, to US$29.2 million in 2022 from US$27.4 million in 2021 given the increased number of online stores and GMV processed on our platform and an
increase in expenses related to compensation of our infrastructure team.
Gross profit
As a result of the above, our gross profit increased by US$7.5 million, or 32.3% to US$30.9 million for the three months ended December 31, 2022 from US$23.4 million in the same period of 2021. As a percentage of our
total revenue, our gross profit increased to 67.9% in the three months ended December 31, 2022 from 62.9% in the three months ended December 31, 2021, mainly due to operational hosting cost efficiencies.
Our gross profit increased by US$28.6 million, or 37.6% to US$104.8 million for the twelve months ended December 31, 2022 from US$76.2 million in the same period of 2021. As a percentage of our total revenue, our gross
profit increased to 66.5% in the twelve months ended December 31, 2022 from 60.6% in the twelve months ended December 31, 2021, mainly due to operational hosting cost efficiencies.
Operating expenses
General and administrative
General and administrative expenses during the three and twelve-month period ended on December 31, 2022 and 2021 were as follows:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||||||||||
|
(in US$ thousands,except percentages)
|
December
31, 2022
|
December
31, 2021
|
Variation
|
December
31, 2022
|
December
31, 2021
|
Variation
|
||||||||||||||||||
|
General and administrative
|
(7,052
|
)
|
(6,913
|
)
|
2.0
|
%
|
(28,348
|
)
|
(31,889
|
)
|
(11.1
|
)%
|
||||||||||||
|
Percentage of total revenue
|
(15.5
|
)%
|
(18.6
|
)%
|
-
|
(18.0
|
)%
|
(25.4
|
)%
|
-
|
||||||||||||||
36
Our general and administrative expenses increased by US$0.1 million, or 2.0%, to US$7.1 million for the three months ended December 31, 2022 from US$6.9 million in the same period of 2021. Primarily due to an increase
in compensation expense, which includes share-based compensation, that was mostly offset by a decrease in outsourcing expenses.
For the twelve months ended December 31, 2022, our general and administrative expenses decreased by US$3.5 million, or 11.1%, to US$28.3 million from US$31.9 million in the same period of 2021, primarily due to the
decrease in outsourcing expenses as a result of the non-recurrence in 2022 of expenses with IPO readiness services and the decrease in expenses related to share-based compensation.
Sales and marketing
Sales and marketing expenses during the three and twelve-month ended on December 31, 2022 and 2021 were as follows:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||||||||||
|
(in US$ thousands, except percentages)
|
December
31, 2022
|
December
31, 2021
|
Variation
|
December
31, 2022
|
December
31, 2021
|
Variation
|
||||||||||||||||||
|
Sales and marketing
|
(12,404
|
)
|
(17,459
|
)
|
(29.0
|
)%
|
(67,798
|
)
|
(63,521
|
)
|
6.7
|
%
|
||||||||||||
|
Percentage of total revenue
|
(27.3
|
)%
|
(47.0
|
)%
|
-
|
(43.0
|
)%
|
(50.5
|
)%
|
-
|
||||||||||||||
Our sales and marketing expenses decreased by US$5.1 million, or 29.0%, to US$12.4 million for the three months ended December 31, 2022 from US$17.5 million for the three months ended December 31, 2021, primarily due
to (1) the decrease in expenses related to compensation as our sales and marketing workforce decreased as a result of the Company’s efforts to optimize its structure, (2) decreased in marketing and events expenses and (3) decrease in expenses related
to outsourcing.
For the twelve months ended December 31, 2022, our sales and marketing expenses increased by US$4.3 million, or 6.7%, to US$67.8 million from US$63.5 million for the same period of 2021, primarily due to the
investments we made in the first half of the 2022, partially offset by the reduction of our Sales and Marketing headcount, made on the second half of 2022. Although our Sales and Marketing workforce decreased, we will continue to invest in new
regions in the Latin America region, such as Mexico, as well as other geographies, including Europe and the United States.
Research and development
Research and development expenses during the three and twelve-month period ended on December 31, 2022 and 2021 were as follows:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||||||||||
|
(in US$ thousands, except percentages)
|
December
31, 2022
|
December
31, 2021
|
Variation
|
December
31, 2022
|
December
31, 2021
|
Variation
|
||||||||||||||||||
|
Research and development
|
(14,059
|
)
|
(11,915
|
)
|
18.0
|
%
|
(57,205
|
)
|
(45,186
|
)
|
26.6
|
%
|
||||||||||||
|
Percentage of total revenue
|
(30.9
|
)%
|
(32.1
|
)%
|
-
|
(36.3
|
)%
|
(35.9
|
)%
|
-
|
||||||||||||||
Our research and development expenses increased by US$2.1 million, or 18.0% to US$14.1 million for the three months ended December 31, 2022 from US$11.9 million for the three months ended December 31, 2021, primarily
due to the increase in expenses related to share-based compensation and outsourcing expenses.
For the twelve months ended December 31, 2022, our research and development expenses increased by US$12.0 million, or 26.6%, to US$57.2 million from US$45.2 million for the same period of December 31, 2021, primarily
due to the investments we made in the first half of the 2022, partially offset by the reduction of our R&D headcount, made on the second half of 2022.
37
Financial result, net
The components of our financial results during the three and twelve months ended on December 31, 2022 and 2021 were as follows:
|
Three months ended (unaudited)
|
Twelve months ended
|
|||||||||||||||||||||||
|
(in US$ thousands, except percentages)
|
December
31, 2022
|
December
31, 2021
|
Variation
|
December
31, 2022
|
December
31, 2021
|
Variation
|
||||||||||||||||||
|
Financial income
|
7,645
|
2,295
|
233.1
|
%
|
23,770
|
7,414
|
220.6
|
%
|
||||||||||||||||
|
Financial expense
|
(4,939
|
)
|
(3,664
|
)
|
34.8
|
%
|
(31,401
|
)
|
(12,058
|
)
|
160.4
|
%
|
||||||||||||
|
Financial result, net
|
2,706
|
(1,369
|
)
|
(297.7
|
)%
|
(7,631
|
)
|
(4,644
|
)
|
64.3
|
%
|
|||||||||||||
Our financial result amounted to an revenue of US$2.7 million for the three months ended December 31, 2022, compared to an expense of US$1.4 million for the three months ended December 31, 2021.
Our financial result amounted to an expense of US$7.6 million for the twelve months ended December 31, 2022, compared to an expense of US$4.6 million for the twelve months ended December 31, 2021.
Explanations for the variations in the above referred period are set forth below:
Financial income
Financial income increased by US$5.4 million, or 233.1%, to US$7.6 million for the three months ended December 31, 2022 from US$2.3 million for the three months ended December 31, 2021, mainly due to (1) an increase in
marketable securities and short term investments gains to US$3.8 million in December 31, 2022 from US$1.4 million in December 31, 2021 and; (2) an increase in interest earned on bank deposits of US$2.0 million in December 31, 2022.
Financial income increased by US$16.4 million, or 221.0%, to US$23.8 million in 2022 from US$7.4 million in 2021, mainly due to (1) an increase in marketable securities and short term investments gains to US$9.1
million in December 31, 2022 from US$1.6 million in December 31, 2021; (2) gains from fair value of financial instruments to US$4.8 million in December 31, 2022 from US$2.3 million in December 31, 2021 and; (3) an increase in foreign exchange gains
to US$7.3 million in December 31, 2022 from US$3.0 million in December 31, 2021.
Financial expense
Financial expense increased by US$1.3 million, or 34.8%, to US$4.9 million for the three months ended December 31, 2022 from US$3.7 million for the three months ended December 31, 2021, mainly due to (1) mark-to-market
losses given rising interest rates affected our cash, marketable securities and short-term investments; (2) an increase in foreign exchange losses to US$2.9 million in December 31, 2022 from US$1.1 million in December 31, 2021.
Financial expense increased by US$19.3 million, or 160.4%, to US$31.4 million in 2022 from US$12.0 million in 2021, mainly due to (1) mark-to-market losses given rising interest rates affected our cash, marketable securities and short-term
investments; (2) an increase in foreign exchange losses to US$8.5 million in December 31, 2022 from US$4.2 million in December 31, 2021, and; (3) an increase in adjustment of hyperinflation to US$5.2 million in December 31, 2022 from US$2.3 million
in December 31, 2021.
38
The following tables show the unrealized gain and loss position recorded in our Balance Sheet as at December 31, 2022 and December 31, 2021:
|
As at December 31, 2022 (unaudited)
|
||||||||||||||||
|
|
||||||||||||||||
|
Amortized cost
|
Gross
unrealized gain
|
Gross
unrealized loss
|
Fair value
|
|||||||||||||
|
Short-term investments
|
208,177
|
1,013
|
(5,145
|
)
|
204,045
|
|||||||||||
|
As at December 31, 2021 (unaudited)
|
||||||||||||||||
|
|
||||||||||||||||
|
Amortized cost
|
Gross
unrealized gain
|
Gross
unrealized loss
|
Fair value
|
|||||||||||||
|
Short-term investments
|
176,775
|
540
|
(124
|
)
|
177,191
|
|||||||||||
Net loss for the period
As a result of the above, our net loss amounted to US$0.3 million for the three months ended December 31, 2022, compared to US$10.6 million for the three months ended December 31, 2021.
As a result of the above, our net loss amounted to US$52.4 million for the twelve months ended December 31, 2022, compared to US$60.5 million for the twelve months ended December 31, 2021.
Consolidated statements of cash flows
The following table sets forth certain consolidated cash flow information for the periods indicated:
|
For the twelve months ended
|
||||||||
|
(in US$ thousands, except percentages)
|
December
31, 2022
|
December
31, 2021
|
||||||
|
Net cash used in operating activities
|
(29,222
|
)
|
(52,991
|
)
|
||||
|
Net cash used in investing activities
|
(43,379
|
)
|
(166,781
|
)
|
||||
|
Net cash provided by (used in) financing activities
|
(19,580
|
)
|
283,683
|
|||||
|
Net increase (decrease) in cash and cash equivalents
|
(92,181
|
)
|
63,911
|
|||||
Net cash provided by (used in) operating activities
For the year ended December 31, 2022, net cash used in operating activities decreased by US$23.8 million to US$29.2 million of net cash used in operating activities in the year ended December 31, 2022 from US$53.0
million of net cash used in operating activities in the year ended December 31, 2021, primarily as a result of:
|
●
|
a decrease in net loss of the year to US$52.4 million for the year ended December 31, 2022, from a net loss of the year of US$60.5 million for the year ended December 31, 2021;
|
|
●
|
changes in operating assets which consisted mainly of an increase in trade receivables in the amount of US$3.6 million for the year ended December 31, 2022, compared to an increase of US$16.7 million for the
year ended December 31, 2021, and a decrease in prepaid expenses in the amount of US$3.9 million for the year ended December 31, 2022, compared to an increase of US$2.7 million for the year ended December 31, 2021. This was partially offset
by:
|
|
●
|
changes in operating liabilities which consisted mainly of US$1.2 million increase in deferred revenue for the year ended December 31, 2022, compared to an increase of US$12.3 million for the year ended
December 31, 2021, and an decrease in taxes payable in the amount of US$1.5 million for the year ended December 31, 2022, compared to an increase of US$3.1 million for the year ended December 31, 2021.
|
39
Net cash provided by (used in) investing activities
For the year ended December 31, 2022, net cash used in investing activities decreased by US$123.4 million of net cash used to US$43.4 million in the year ended December 31, 2022, from US$166.8 million in the year ended
December 31, 2021, primarily as a result of (1) a decrease in the purchase of short term investment to US$111.6 million for the year ended December 31, 2022, from US$177.8 for the year ended December 31, 2021; and (2) an increase in the redemption of
short-term investments to US$78.0 million for the year ended December 31, 2022, from US$17.9 for the year ended December 31, 2021.
Net cash provided by (used) in financing activities
Net cash used in financing activities amounted to US$19.6 million for the year ended December 31, 2022 from a net cash provided by financing activities of US$283.7 million for the year ended December 31, 2021. The
change in net cash from financing activities is primarily attributable to (1) decrease in equity raises, which decreased to nil for the year ended December 31, 2022 from US$296.3 million for the year ended December 31, 2021 as a result of the
consummation of our initial public offering; and (2) increase in cash used to buy back shares, to US$12.8 million for the year ended on December 31, 2022 from US$2.4 million for the year ended on December 31, 2021, as part of our repurchase of
shares program, partially offset by a decrease in payment of loans and financing to US$2.7 million for the year ended December 31, 2022, from US$10.9 million for the year ended December 31, 2021.
Capital expenditures
Our capital expenditures, consisting of purchase of property and equipment and intangible assets, for the twelve months ended December 31, 2022 and 2021, amounted to US$0.3 million and US$1.8 million, respectively,
representing 0.2% and 1.4% of our total revenue for the twelve months ended December 31, 2022 and 2021, respectively.
For 2023, we expect to maintain the capital expenditures as a percentage of our total revenue in line with the ratios we delivered in 2022. 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 December 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:
40
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 exposure to market risk for changes in interest rates relates primarily to our cash, cash equivalents, restricted cash, marketable securities and short-term investments. Our investments are made for capital
preservation purposes, and we do not enter into investments for trading or speculative purposes. Our trade receivables account payable, and other liabilities do not bear interest.
Our cash, cash equivalents, restricted cash, marketable securities and short-term investments consist primarily of interest-bearing accounts held by our parent company in USD. Such interest-earning instruments carry a
degree of interest rate risk. To minimize interest rate risk, we intend to maintain our portfolio of cash equivalents in a variety of investment-grade securities, which may include commercial papers, money market funds, and government and
non-government debt securities. Because of the short-term maturities of our cash, cash equivalents, restricted cash, and marketable securities, as of December 31, 2022, we are not materially exposed to the risk of changes in market interest rates.
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.
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. In the years ended December 31, 2022 and December 31, 2021, 15.6% and 17.3% of our revenues were denominated in, or linked to, U.S. dollars, respectively. As of December 31, 2022 and December 31, 2021, our assets were represented by 66.1%
and 69.6% in U.S. dollars, 33.9% and 30.4% in other currencies. As of December 31, 2022 and December 31, 2021, our liabilities, excluding our total shareholders’ equity, were represented by 13.2% and 16.9% in U.S. dollars, 86.8% 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.
41
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: March 02, 2023
|
|
VTEX | |
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Ricardo Camatta Sodre |
|
|
Name: |
Ricardo Camatta Sodre |
|
|
Title: |
Chief Financial Officer |
42