VTEX Q4 Earnings Call Highlights

Key Points

• Management says the recent slowdown is largely cyclical, not structural, blaming a tougher macro in Brazil/Argentina, a more promotional marketplace, and an “AI wait‑and‑see” effect that has lengthened enterprise decision cycles while win rates and churn stayed stable.
• VTEX is prioritizing four growth levers—global expansion, B2B, retail media, and AI—which made up roughly 15% of subscription revenue in Q4, grew ~20% FX‑neutral, and drove nearly half of subscription revenue growth.
• Profitability strengthened as AI‑driven support automation lifted gross margins (~+3 percentage points) and operating margins improved, the company ended 2025 with about $200M cash, launched a $50 million buyback, and guided to modest FX‑neutral subscription growth with higher margins for 2026.

VTEX NYSE: VTEX executives used the company’s fourth-quarter 2025 earnings call to address slower growth trends, outline a plan aimed at strengthening longer-term expansion, and highlight profitability gains that management tied largely to AI-driven automation.

Management frames slower growth as cyclical, not structural

Founder and Co-CEO Geraldo Thomaz Jr. said VTEX’s “recent growth has been below our long-term ambition,” but management believes the slowdown is primarily cyclical. He pointed to three external factors: a more challenging macro environment in Brazil and Argentina, a more promotional marketplace environment in Brazil, and longer decision cycles as enterprises reassess priorities amid a rapidly evolving AI landscape.

During the Q&A, Founder and Co-CEO Mariano Gomide de Faria echoed that view, emphasizing that VTEX is not seeing a deterioration in competitiveness. He said 2024 was a “record year for bookings,” while 2025 saw fewer new contracts as RFP processes took longer to close. He described an “AI wait and see effect,” arguing that enterprise customers making multi-year infrastructure decisions want more clarity on how AI will reshape software. He also said win rates remained stable and churn remained stable in the mid-single digits, framing the dynamic as “market-wide hesitation,” not VTEX-specific.

Thomaz added that while AI may lower the cost of writing code, it raises the bar for security, complex integrations, and reliability—areas where he believes enterprises continue to require “deeply integrated enterprise-grade platforms” to run mission-critical processes. He also referenced “broadly stable dollar churn” in 2025.

Four growth levers: global expansion, B2B, retail media, and AI

VTEX said it is focusing on four growth levers to improve growth over time: global expansion, B2B, retail media, and AI. Thomaz said that in the fourth quarter these initiatives represented roughly 15% of subscription revenue, grew about 20% on an FX-neutral basis, and contributed to nearly half of subscription revenue growth. He also said the addressable market for these levers is “materially larger” than the company’s core Latin American opportunity.

Management provided examples across each area:

• Global expansion: Thomaz said global markets delivered 22% subscription revenue growth in 2025. He highlighted a partnership with Manchester City in Europe, saying the stadium tour store reached a first milestone enabling personalized fan experiences in a single flow.
• B2B: VTEX emphasized enterprise B2B features such as contract pricing, curated catalogs, PunchOut, and omnichannel fulfillment. Thomaz said Mondelēz launched B2B in Brazil on VTEX, extending a multi-region footprint. Later in the call, Thomaz said roughly half of VTEX’s new deals in the U.S. and EMEA were B2B-related, which he said effectively doubles the company’s addressable market within the enterprise tier.
• Retail media: Thomaz described 2025 as a turning point, with the business moving “from pilots to a core growth engine.” He said VTEX Ads supports on-site, off-site, and in-store campaigns with closed-loop attribution based on first-party data. As an example, management cited SCT achieving a 39% increase in average conversion rate, an average ROAS above 17x, and month-over-month acceleration in sales driven by retail media performance.
• AI: VTEX said it is redesigning products with an AI-first approach and also applying AI in operations. Thomaz said Brazilian retailers such as Americanas and CNA are using Weni by VTEX to automate high-volume support journeys with integrations across orders, invoices, and CRM. He also said AI automation in support expanded gross margins by approximately 3 percentage points.

Q4 and full-year 2025 financial performance

CFO Ricardo Camatta Sodré said 2025 demonstrated resilience in VTEX’s model and “strengthen[ed]” unit economics despite slower growth and longer sales cycles. In the fourth quarter, GMV reached $6.3 billion, up 17.2% year-over-year in U.S. dollars and 10.0% in FX-neutral terms. For the full year, GMV was $20.5 billion, up 12.1% in U.S. dollars and 12.9% FX-neutral.

Subscription revenue was $66.7 million in Q4, growing 12.2% year-over-year in U.S. dollars and 5.4% FX-neutral. Full-year subscription revenue was $234.9 million, up 7.9% in U.S. dollars and 9.5% FX-neutral.

On retention, Sodré said subscription revenue from existing stores was $194 million in 2025, and FX-neutral net revenue retention was 99.5%. He said the year-over-year decline in NRR versus 2024 was driven primarily by lower same-store sales growth, given that roughly 60% of VTEX revenue comes from a take rate on customers’ GMV. Same-store sales growth was 6.8% FX-neutral in 2025, which he attributed to softness in Argentina and more muted consumer spending in Brazil.

Profitability improved, according to management. Existing stores’ gross margin increased to 82% in 2025 from 80% in 2024, and operating margin reached 44%, up 1 percentage point year-over-year. Sodré said this marked the second consecutive year that this P&L exceeded the Rule of 40.

For Q4, VTEX reported subscription gross profit of $54.6 million and subscription gross margin of 81.8%, up from 78.8% a year earlier. Total gross margin increased to 79.6% from 75.0%. Sodré attributed the margin improvement largely to AI-powered customer support automation, along with a higher mix of subscription revenue.

Operating expenses were $38 million in Q4, resulting in non-GAAP operating income of $16.2 million and operating margin of 23.8%, up from 19.9% in the prior-year quarter. The company’s December sales and marketing reorganization resulted in about $2 million of severance expense above normalized levels; excluding that impact, Sodré said operating margin would have been just under 27%.

Free cash flow was $11.1 million in the quarter, a 16.3% margin. Adjusted for one-off severance payments above normalized levels, Sodré said free cash flow margin would have been just over 19%.

Reorganization, capital allocation, and buyback

Management discussed a December reorganization in sales and marketing that impacted nearly 100 headcounts. Thomaz said the change simplified management layers and centralized the global team for greater agility and efficiency. In response to a question about international growth, executives said the company is shifting away from a region-heavy go-to-market approach toward more function-oriented teams and increased reliance on its ecosystem, while still supporting localization needs.

On capital allocation, VTEX announced a new $50 million, 12-month share repurchase program for Class A shares. Sodré said the company ended 2025 with roughly $200 million in cash and described buybacks as a way to optimize capital structure and mitigate dilution from share-based compensation. He also said VTEX remains active in M&A, with a focus on acquiring capabilities that accelerate its roadmap, referencing Weni (to strengthen agentic CX) and Newtail (to accelerate retail media capabilities).

2026 outlook: modest growth, continued margin focus

For the first quarter of 2026, VTEX guided for FX-neutral subscription revenue growth at a mid-single digit percentage rate and FX-neutral gross profit growth at a high single-digit percentage rate. The company expects non-GAAP operating margin in the mid-teens percentage range and free cash flow margin in the high teens percentage range. For the full year 2026, VTEX is targeting FX-neutral subscription revenue growth at a mid- to high-single digit percentage rate, FX-neutral gross profit growth at a high single-digit to low-teens percentage rate, non-GAAP operating margin in the low twenties percentage range, and free cash flow margin in the low twenties percentage range.

Sodré added that, assuming FX rates remain broadly consistent with January 2026 averages, the FX-neutral guidance would translate into higher reported U.S. dollar subscription revenue growth, adding approximately 8.4 percentage points in Q1 and 4.5 percentage points for the full year.

In closing remarks, Thomaz said VTEX delivered record profitability in a difficult environment while increasing R&D investments to accelerate its AI transformation. He said management remains focused on executing across the four growth levers and believes VTEX is aligned with the direction of enterprise commerce.

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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