VTEX NYSE: VTEX reported second-quarter results marked by modest subscription revenue growth amid weaker consumer demand in Brazil and Argentina, while profitability and free cash flow increased sharply as the company continued to invest in artificial intelligence, B2B commerce, advertising and international expansion.
For the quarter ended June 30, 2026, gross merchandise value reached $5.7 billion, up 18% year over year in U.S. dollars and 7% on an FX-neutral basis. Subscription revenue was $63.8 million, increasing 11% in U.S. dollars but just 1.3% on an FX-neutral basis.
Founder and co-CEO Geraldo Thomaz Jr. said high interest rates, a promotional marketplace environment in Brazil, softer consumer demand in Argentina and longer enterprise decision cycles weighed on near-term growth. He said the company’s established B2C commerce business in Brazil and the rest of Latin America declined modestly on an FX-neutral basis, while churn and competitive win rates remained stable.
“This is primarily a volume and customer mix story, not a competitiveness story,” Thomaz said, adding that VTEX’s installed base was transacting less in a weak consumer environment.
Customer mix and updated outlook
Chief Financial Officer Ricardo Camatta Sodré said the gap between GMV growth and subscription revenue growth reflected a customer mix shift toward larger accounts. Larger customers have lower take rates but similar gross margins, lower churn and higher lifetime value, according to the company.
Smaller and mid-sized customers were more affected by weaker consumption conditions in Brazil, while larger accounts held up better. Sodré said the shift toward larger enterprise accounts is deliberate, although its pace during the second quarter was faster than anticipated.
VTEX said it expects approximately flat FX-neutral subscription revenue growth in the third quarter, with low-single-digit FX-neutral gross profit growth. The company is targeting a non-GAAP operating margin and free cash flow margin in the low 20% range for the quarter.
For the full year, VTEX now expects low-single-digit FX-neutral subscription revenue growth and mid-single-digit FX-neutral gross profit growth, while maintaining targets for non-GAAP operating and free cash flow margins in the low 20% range. The outlook reflects weaker consumption trends in Brazil during June and July as well as the continuing customer mix shift toward larger enterprises.
Assuming foreign-exchange rates remain near July average levels, the company said FX effects would add about 7 percentage points to reported U.S.-dollar subscription revenue growth in the third quarter and 8.1 percentage points for the full year.
Margins and cash flow expand
Despite slower revenue growth, VTEX reported improved margins. Non-GAAP subscription gross margin rose about two percentage points year over year to 81.8%, while total non-GAAP gross margin, including services, increased three percentage points to 80.4%.
Sodré attributed the improvement to AI-powered customer-support automation, disciplined cost management and a lower emphasis on services as the company’s partner ecosystem takes on a greater portion of complex implementations. Total non-GAAP operating expenses were $38 million, broadly flat sequentially, while headcount declined nearly 4% from the prior quarter.
Non-GAAP operating income increased 62% year over year to $13.8 million, representing a 21.4% margin. Free cash flow rose 79% to $12.7 million, for a 19.8% margin.
The company also repurchased 6.2 million Class A common shares during the quarter at an average price of $3.76 per share, spending $23.2 million under its share repurchase program.
Growth drivers outpace core business
VTEX said its four growth drivers—global expansion, B2B, ads and AI—represented approximately 18% of subscription revenue and grew 20% on an FX-neutral basis in the second quarter. The remaining portion of subscription revenue declined by roughly 2% on an FX-neutral basis, according to management’s discussion during the call.
In North America, Thomaz said VTEX is increasingly working with global system integrators including EY and Accenture rather than relying primarily on direct prospecting. The company held its first North American system-integrator bootcamp during the quarter and said it generated qualified B2B opportunities.
In Europe, VTEX said it is concentrating commercial resources on markets with stronger enterprise demand. The company also renewed its long-term partnership with German customer OBI, which management described as a key reference customer in the region.
B2B remains a central focus, with VTEX emphasizing its ability to support commerce through self-service portals, WhatsApp, field sales applications and other channels on a single platform. Management cited Whirlpool’s B2B expansion in Brazil, Electrolux’s launch in Chile, Panasonic in Brazil and Grupo Nazan in Mexico as examples of B2B activity.
Mariano Gomide de Faria, founder and co-CEO, said VTEX is prioritizing AI-powered tools for field sales representatives and managers, including capabilities to identify active and lapsed customers, monitor portal activity and highlight high-probability sales opportunities. He said the initiative is a near-term product priority, though the company did not provide a specific launch date.
AI and advertising initiatives
The company said its VTEX CX Platform, which is already contributing revenue, recorded more than 200 trial activations since VTEX DAY. Management said implementation time has been reduced from 30 days to one week, while its AI agents have maintained conversation containment rates above 92% and problem-resolution rates above 80%.
VTEX also said it has more than 100 enterprise customers on the wait list for its AI Workspace, which includes AI capabilities across merchandising, content, fulfillment and commercial analytics. The company said it is not yet reporting operational or financial contributions from AI Workspace.
Meanwhile, VTEX continued to expand its Ads Platform with AI-driven campaign creation, automated budget management, attribution tools and AI-generated creative assets. It also established relationships with agency groups including WPP, Publicis and Omnicom and cited a partnership with Magnite.
Management said the company remains focused on converting its product and commercial investments into sustained revenue growth while acknowledging that the macroeconomic environment in Brazil has not yet improved.
About VTEX (NYSE:VTEX)
VTEX is a global commerce platform provider that offers a full suite of software-as-a-service (SaaS) solutions designed to power online retail and marketplace operations. Its cloud-native platform combines e-commerce, order management and marketplace capabilities in a single environment, enabling brands and retailers to launch and scale digital commerce initiatives without the need for extensive in-house infrastructure. The company's API-first architecture and microservices design support headless implementations, allowing businesses to integrate front-end experiences, third-party applications and custom modules with minimal development overhead.
Founded in 1999 and headquartered in São Paulo, Brazil, VTEX has expanded its reach to serve customers across Latin America, North America, Europe and Asia-Pacific.
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