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Operator: Good morning, and thank you for standing by. Welcome to Zenvia’s Q4 2024 Earnings Conference Call. Today’s speakers are Mr. Cassio Bobsin, Zenvia’s Founder and CEO; and Shay Chor, CFO and Investor Relations Officer. Please be advised that today’s conference is being recorded, and a replay will be available at the company’s IR website, where you can also access today’s presentation. At this time all participants are in a listen-only-mode. After the prepared remarks there will be a question-and-answer session. [Operator Instructions] Now I’d like to welcome one of our speakers for today, Mr. Cassio Bobsin, Founder and CEO. Sir, the floor is yours.

Cassio Bobsin: Good morning, everyone. I’m Cassio Bobsin, Founder and CEO. Thank you for joining us here today. I’d like to start by talking briefly about the AI revolution we are all witnessing. As we look around the world in Brazil, it’s clear that AI is no longer a promise. AI has become a strategic priority for companies looking to reinvent how they connect with customers. In global markets, we see AI driving everything from personalized product recommendations to proactive customer service. Brands are using AI to automate workflows, understand intent in real time and scale human-like conversations across channels. In Brazil, this trend is also accelerating. Businesses of all sizes from large banks and retailers to fast-growing start-ups are all integrating AI into their CX strategies to improve efficiency, reduce response times and deepen customer relationships.

But customers today don’t live on a single platform. They move across WhatsApp, Instagram, on mail, chat, SMS, always expecting fluid personalized and consistent experiences at every touch point. That is why AI is in just a tool. It’s now a core pillar of how companies engage with their audience and how they can sell more and serve better their customers. And this is exactly where Zenvia is focused, empowering businesses to unify those interactions and bring intelligence context and scale to every conversation no matter the channel. Let’s see the next slide. This AI revolution marks the beginning of our new strategic cycle that we announced in January as it builds on what we achieved in 2024 and sets the stage for more innovation, efficiency and value creation moving forward.

Strategic cycles play a critical role in shaping the direction and growth of the company and allow us to adapt to market changes, focus our resources and position ourselves for long-term success. It is always worth remembering that Zenvia’s mission since our inception over 20 years ago has always been to revolutionize the experience that customers have with companies and brands. We recognized 3 distinct strategic cycles so far in this mission, and we just closed the third one and launched the fourth one, as you can see in this slide. We had our first cycle, which was basically our start-up phase after being born in a garage as an SMS provider, then evolved to the second cycle where we expanded our messaging capabilities and consolidated ourselves as the leading SMS broker in Brazil with a series of acquisitions.

The third and latest strategic cycle began in 2018 when we decided to evolve from a leading Brazilian CPaaS to become the most comprehensive CX SaaS in Latin American. After a series of acquisitions held before and after our IPO of companies that only complemented our CPaaS business, but also reinforced our strategy and vision for the future, all overcoming challenges in their integration. We officially launched the Zenvia Customer Cloud in 2024. Zenvia Customer Cloud is the culmination of this vision and is now our core business moving forward. So as of January 2025, we have entered our fourth strategic cycle centered on accelerating the growth of our newly defined core business. Let’s dive in on Zenvia Customer Cloud on the next slide. We’re truly excited about Zenvia Customer Cloud and the immense potential it brings to our company.

This platform represents a pivotal milestone in our journey and in our commitment to enhancing customer experiences. Zenvia Customer Cloud is powered by AI-driven solutions and robust data analytics and is designed to adapt Sembly [ph] to businesses of all sizes and across diverse industries. Clients already using it report enhanced customer engagement, increased sales and reduced costs. Zenvia Customer Cloud was born with AI at its core to help companies not only automate but truly personalize intelligence, especially when managing the experience of thousands of customers in a single unified environment. It is important to highlight here that the launch of Zenvia Customer Cloud was leveraged by 2 important and strategic initiatives, the use of product-led growth PLG strategies and our international expansion in Latin America.

Our PLG strategies give users flexible and self-service access to our software. They can start small, explore features at their own pace and scale in an easy way as their needs grow. This is all made possible by integrating our services into this unified platform, which makes the experience intuitive and adaptable for businesses of any industry and type. Because it fits so well with our clients need, it leads to higher adoption, stronger long-term relationships and a scalable revenue model, positioning Zenvia for sustainable growth in a fast-moving market. Another key differentiator is our shift to a volume-based pricing model, where clients pay based on the number of interactions they have with their clients and prospects rather than the traditional perceived SaaS model that we had before.

This approach is enabled by an extensive use of AI in our software, which minimizes our customers’ reliance on human agents, enhances efficiency for their operations and unlocks greater revenue generation potential for us with much less complexity. And our international expansion, particularly in Argentina and Mexico, where we already had a presence, is performing well and delivering results. These international clients are already delivering a solid contribution to the success of Zenvia Customer Cloud, further validating our strategy. The initial results we already achieved with Zenvia Customer Cloud in these first months leaves us energized and optimistic about the opportunities that lie ahead after this challenging 2024. As we enter this important new strategic cycle, we are laser-focused on driving organic growth by leveraging our unified platform and market opportunities, evolving and accelerating our partnership ecosystem, boosting profitability through smarter operations and efficiency, while reducing leverage to strengthen our financial foundation.

At the same time, we’re committed to building the optimal capital structure to support our ambitions and ensure long-term resilience. These combined efforts are expected to position us to unlock meaningful sustainable value as we move forward in our journey. I’ll now hand the call over to Shay to present our financial performance, and I’ll be available for the Q&A session later on.

Shay Chor: Thank you, Cassio. Good morning, everyone. Let’s start on the next slide and continue talking about Zenvia Customer Cloud, as Cassio just mentioned. This slide brings a snapshot of Zenvia Customer Cloud, which was officially launched back in October ’24 and generated revenues of around BRL180 million in the full year of ’24. We closed the year with almost 6,000 companies already using the platform, 20% of which were international companies, mainly from Mexico and Argentina. In terms of growth, we estimate that this operation will expand by 25% to 30% in 2025, achieving a gross margin of between 68% and 70% and positive EBITDA margin. Our estimates are based on solid data showing the market is set to keep growing at a strong double-digit pace in the coming years.

On top of that, our new unified operating model with advanced automation and AI and the acceleration of our partner ecosystem puts us in a better position to make the most of this opportunity. Let’s now move to the next slide and talk to numbers from the quarter and the year. Q4 was a particularly challenging quarter for us as several headwinds converge and weigh on profitability despite continued top line growth and disciplined cost management. Starting on the left, we can see revenues reaching BRL231 million, up 7% year-over-year. This was primarily driven by a strong volume growth in CPaaS, which offset declines in SaaS revenues. However, as we move to the next chart, we can see the pressure on margin. Our adjusted gross profit declined 60% to BRL49 million, with gross margin decreasing to 21%.

There were 2 main drivers behind this. First, on the CPaaS side, we saw a higher mix in the quarter coming from strong growth but at lower margins. This was further impacted by a BRL27.8 million SMS cost adjustment related to the full year, but only recognized entirely in Q4 rather than being spread across previous quarters. As you can see in the center chart, this had a major effect on our CPaaS gross profit and margin. If we exclude this onetime item, CPaaS adjusted gross margin would have been close to 22%, which is much more in line with our expected range of 20% to 25% as opposed to the reported 4%. We view this impact as a nonrecurring and expect margins to normalize progressively over the course of 2025 as we move on with our strategy.

Second, in SaaS, margin declined to tighter profitability from our enterprise clients who continue to operate in a highly competitive environment. Additionally, we incurred higher costs related to the launch of Zenvia Customer Cloud. As we continue rolling out the new operations, we expect to see better results from our SaaS segment throughout 2025. As a result of both these effects, CPaaS adjusted gross profit was only BRL6 million, while SaaS reached BRL43 million, with margin declining in both segments. EBITDA when excluding earn-out expenses and the SMS impact I just mentioned, closed the quarter at BRL35 million, a 6% decline versus the BRL37 million recorded in Q4 of ’23. We expect this level to be a recurring quarterly EBITDA going into ’25.

Let’s now move to the analysis of the results of the year. In this slide, we show our annual revenue and non-GAAP adjusted gross profit over the last 3 years. On the revenue side on the left, both segments presented growth in the period. The CPaaS market proved to be much more dynamic and volatile than expected, expanding 25% year-over-year between ’23 and ’24 after growing only 3% in the previous year. Our SaaS remained in a highly competitive environment, growing at high single digits in the same period as compared to double digits the year before. But this revenue performance, along with the margin impacts we just discussed, particularly from Q4, drove the overall gross margin compression in the year as seen on the chart on the right. Looking ahead, I would like to emphasize again here that we have been investing a lot on the integration of the SaaS solution, and we expect to start to leverage on the growth of SaaS under Zenvia Customer Cloud.

As we move more and more into it, integrating all businesses into the new business model, the company is increasingly transitioning into a full SaaS model, generating MRR through monthly subscription, seats and usage volume. Let’s now look into the profitability for the year in more detail. This slide gives us a consolidated view on how gross profit and margin performed in ’24. Again, profitability was impacted by the newly acquired CPaaS clients with lower margins and the competitive environment for enterprise and SaaS, along with the cost adjustments we just discussed. I would like to highlight here that despite the impact this quarter, we believe this strategy with the newly acquired CPaaS clients will pay off over the medium to long term as we deepen this relationship and we don’t need additional G&A expenses to manage them.

Moving on, let’s now discuss our G&A. Over the past 2 years, we stayed laser focused on tightly controlling costs, cutting BRL3 million in G&A expenses in total, thanks to our streamlining efforts that started at the end of ’22 when our G&A to revenue ratio reached almost 23%. As you can see in this slide, this ratio went down to 12% in ’24 from 16% in ’23 and from 19.5% in ’22, down by 760 basis points in this 2-year period. We are very proud to have been able to pivot the company this way, improving both the productivity and profitability, which are vital for this next phase of growth, as Cassio mentioned in his opening remarks. As we enter ’25, we remain committed to keeping our focus on streamlining our operations to drive efficiency. We announced in January a headcount reduction projected to generate cost saving of additional BRL30 to BRL35 million in ’25, even after accounting for severance expenses.

And we are also counting on AI and automation to have an even deeper impact in streamlining efforts moving forward. As a result of all our efforts on both the revenue side and G&A side, EBITDA multiplied by almost 5 times in these 2 years, but fell short of the full year ’24 guidance for the reason I already explained. Even though our revenues went up 19% year-over-year to BRL960 million and the G&A expenses went down 11% year-over-year, it was not enough to offset the lower gross profit margin. We are frustrated that we couldn’t reach our EBITDA guidance for ’24, but at the same time, we are confident about ’25, given the early improvements we are already seeing in the first month of the year. Moving on to the next slide. Another key index that we always like to highlight is our EBITDA minus CapEx. This metric not only highlights our operational efficiency, but also helps you understand how well we are positioning ourselves to deleverage, fund future growth, maintain financial flexibility and reward shareholders.

As you can see in this slide, in ’22, when we deducted the CapEx from our EBITDA, we still saw a negative figure. It turned positive in ’23 and improved even more in ’24, even considering the increase in CapEx related to the investment in data center this year. When we look year-over-year, our EBITDA minus CapEx improved BRL26 million in ’24, but for the 2 years, the performance is even better, an improvement of BRL53 million. We also ended the year with a cash balance of BRL117 million. We expect EBITDA to continue growing at a faster pace than our CapEx as it has been the case for the last few years. CapEx for ’25 should remain at the same level of ’24. Zenvia Customer Cloud is the growth engine for our company from now on. Moving on to the next slide to talk about our next steps.

As we move into this next phase, our focus remains clear. We’ll continue to accelerate organic growth, supported by the increasing scalability of our new platform. At the same time, we are streamlining operations even further with AI playing a key role, not just in how we serve clients, but in how we operate internally with greater efficiency and intelligence. As a means to sharpen our focus on our core business and drive the expansion of our ecosystem, we’ll carefully evaluate opportunities to divest noncore assets as we disclosed in January. We believe we own assets that hold significant value in their segment and an opportunistic divestment to play a key role in optimizing our capital structure. As we embark on our new strategic cycle, we are focused on expanding Zenvia Customer Cloud in Brazil and Latin America.

Our priorities are accelerating organic growth while continuing to deleverage the company. We are working hard for these actions to result in a more efficient company with exceptionally solid business metrics, enabling us to unlock value to our shareholders. I couldn’t close this call without thanking you all for your support in ’24, which, as I said in the beginning of my prepared remarks, was a transformative year for us. We appreciate your continued trust as we move ahead. We are committed to building a profitable and exciting future for Zenvia. Based on what we have seen so far, we expect to report a good start for the year with Q1 numbers by mid-June. We cannot anticipate specific number at this point, but I can say that we are seeing revenue growth picking up, fast margin recovering and EBITDA tracking at healthy levels.

With this, we conclude our prepared remarks, and we are ready to take your questions.

Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Armageddon [ph] Two questions from me. Can you take it, Shay?

Shay Chor: Yes, yes. I’ll read it and I’ll…

Operator: Okay. Thank you.

Shay Chor: So first question, could you provide clarity on Zenvia’s full year 2025 revenue outlook? Specifically, how should investors model the Customer Cloud segment 25% to 30% projected growth in relation to your traditional SaaS CPaaS business line? To what extent do you anticipate customer cloud revenues to cannibalize existing revenue streams versus creating net new growth? Thanks, Ami, for your question. So I’ll start by trying to separate the revenues here, so it’s easier for everybody to understand. When we think about the SaaS business, the entire SaaS business in ’24, we generated approximately BRL320 million in revenues. Given that we stated that Zenvia Customer Cloud was about BRL180 million, so that is the part that we are saying that it’s going to grow about 25% to 30%, the BRL180 million that we generated in under Zenvia Customer Cloud.

There are still about BRL140 million in other SaaS businesses that we expect to be flattish to 5% growth. So SaaS — we can even consider that SaaS legacy business. So those are businesses that in the M&A that we did, they don’t fit under Zenvia Customer Cloud, but they still generate decent revenue and they still generate decent profitability. So those are businesses that we’ll keep investing to make them updated, but we’ll not put a lot of effort to keep growing those businesses. They are important clients that are with us for a while, and we’ll keep them with us investing in what they need. But there will be no effort as we are putting effort on Zenvia Customer Cloud. Now on the CPaaS business, it’s actually been surprising us. ’24 was surprising in terms of growth.

We understand that this business should be growing between 5% and 8%, but it grew way faster than this in ’24. We are anticipating a ’25 that it’s growing — it should move back to that 5% to 8% growth. But in the first couple of months of this year, we are seeing that CPaaS continue growing faster. Second question, could you provide an update on the current status of your planned divestments? Has the company established any specific milestones or time line for completing this process that you’re able to share with investors? We are not able to share any specific details on divestment. As we said on our January 13 statement, we’ll be opportunistic on evaluating divestment alternatives. The main focus of the divestment is to improve our capital structure, so deleverage balance sheet.

So that’s what we should have — investors should have in mind. And on top of that, obviously, we’ll continue doing all liability management that we need to do to deleverage balance sheet. If you look into our financial statements that we published late last week, in the subsequent event, we detailed that we renegotiated debt with the debt that we have — with the loans that we have with banks. Most of them, we were granted a 6-month grace period on the principal amortization. So that is the kind of thing we’ll continue doing in parallel to divestment because divestment we don’t control. We need to be opportunistic. And in any case, we need to continue doing liability management to make our EBITDA fit into our capital structure. I’ll keep going here because I see there’s no live questions, okay?

Operator: Okay, Shay. Thank you.

Shay Chor: This is one for Cassio. Now that AI is a reality, as you mentioned, what are you seeing as a new hot topic or things that change is a thing that could happen differently in ’25?

Cassio Bobsin: As during 2024, we built the foundations to blend AI into the core of our Zenvia Customer Cloud. We see that the adoption of simple use cases that was the beginning of AI into the platform is now evolving into a more interconnected use case, which combines the data that companies have considering the history of their customers’ transactions, the history of past interactions with these customers to then create more sophisticated customer journeys and experiences for these customers. So we’re beginning to see the adoption of agents that we are offering our customers within the customer to automate some more complex journeys and complex interactions that use that data to help end customers to solve their issues to understand what is the best offer for them to anticipate what could be offered for them in terms of marketing offerings and so forth and so on.

So we are starting to see the use of the combination of data and our past interactions into more personalized experiences for end customers.

Shay Chor: Thanks, Cassio. Another one here for you. I remember at some point, you talked about charging per interaction. The SaaS industry mostly on a per seat basis, can you elaborate more on this?

Cassio Bobsin: Sure. Historically, SaaS companies charge to their platform, their software per seat, which is like a legacy from the old ways of selling software per license. But as we see the adoption of SaaS, even though it evolves human agents operate in the software, when you go into automation and AI, you expect customers to use your software not for increasing the amount of human agents using the software, but going into – deeper into how to use data and use AI to create more value for their operations, for their businesses. So what we changed, and this is something that in the next couple of years will be the major trend in SaaS is not to charge per seat solely, but migrate that to per usage. And per usage, depending on the business and the software you’re providing means different things.

In our case, as we are providing software for customer experiences, it makes sense to charge companies in terms of how many interactions they have with their end customers. And we did that movement last year. Now we charge our software, the whole of Zenvia Customer Cloud per interaction with end customers. And what happens when we do that is that we don’t limit that many — the way users — human agents are using the software, but we actually stimulate them to adopt different features that would provide, for instance, chatbots or agents for marketing purposes or automation over campaigns or ways to help these agents to be more productive. And this for companies actually help them to be more efficient to reduce costs. So – and from our perspective, we’re benefiting our customers.

And at the same time, we’re capturing more volume and more revenues from these same customers as they use more of our software, we are able to charge more per usage. And we see that this is the way we are going to – over the next couple of years, be able to monetize our customer base more and more as usually companies — our customers usually start with one use case, usually no automation or a very simple use case. And over time, they begin using our software for other use cases for other departments, for other parts of the customer journey. And that brings, of course, more interactions that are managed by our software. That’s why we see that will create – and it is already creating a positive flow in terms of revenue from customers.

Shay Chor: Okay. Moving forward here. Back on the divestment. Can you also not share if [indiscernible] is even interested at this moment? I understand you can’t give specific details, but is there any serious interest currently? Unfortunately, we cannot provide any details on divestment. I can ensure you all that we’ve been working hard, looking into all alternatives and options that we have. But again, we cannot share any further details at this point. Another one here for you, Cassio. I have noticed that in the past few months, there has been a bigger focus from the team on the franchise model, as well as new partnerships. Could you talk us through what the ultimate vision is here? Are there customer acquisition tools, retention or pure-play monetization opportunities?

Cassio Bobsin: Sure. As we’ve been evolving Zenvia Customer Cloud, we understood that for companies to go deeper into the usage of the platform to create journeys that go end-to-end from sales — marketing to sales, customer service, customer engagement. Sometimes it’s necessary not only to have the software available, but also to have someone by our side that is a specialist on your kind of company and your vertical and your region and the kind of use case you’re trying to evolve. So we always had some partners working with us to help on these use cases. But as we saw last year, this demand for more sophisticated usage of our software, we understood that there was a very interesting opportunity to evolve these partners into franchises where these partners, they not only help us to sell the platform, but also help customers to achieve their operating results.

So we’ve been evolving that model since end of last year. It’s going much better than we expected. And we’re aiming to scale that even more. We are not disclosing any numbers at this time. But over the next couple of months, we’re going to be able to disclose how these new sales channel is performing. But it’s safe to say that over the next couple of quarters will become the major sales channel for Zenvia. So we’re adding a new sales channel. It’s performing pretty well, and I expect that will help us to achieve strong growth in the next couple of quarters.

Shay Chor: Thank you, Cassio. Moving forward here, Will 2025 gross margin for both SaaS and CPaaS get back above ’23 levels or will we stay below that? So for those who are not in front of the numbers, just to help you guys here, the gross margin on the SaaS business in ’23 was 46%. And on the CPaaS was 20 — should be — in ’24 was 26%. So looking into ’25, on the SaaS business, we should expect gross margin to be back to the levels of ’23. So let’s call it between 45% and 50%. And on the CPaaS business, the 26% we presented in ’24 should be a normalized level. So slightly below that, maybe closer to 25%. So I would say that it should be closer to ’23 levels in terms of the SaaS business and close to ’24 levels in terms of the — on the CPaaS business.

I’ll keep going here. I understand you’re not providing at this point any guidance for ’25. So could you tell us what are your main goals or challenges for this year? So Cassio, I’ll start with pure financial, and I’ll let you run through operations and strategic, okay? In terms of financials, I would say that main goals for ’25, first is deleverage balance sheet and align our EBITDA – better align our EBITDA to capital structure of the company. And the second thing is do better than we did in ’24 in terms of EBITDA, in terms of profitability. Those are the main goals for us from a pure financial perspective. Cassio, I don’t know if you want to add something in the operations or product trend.

Cassio Bobsin: Sure. Well, as we are aware, we operating CPaaS as a mature business. Also, as I mentioned, we have the legacy SaaS that we are continuing to operate, but we expect material growth. But when we look to Zenvia Customer Cloud, our pockets of investment over the last 2, 3 years, we are seeing an amazing performance. We’re seeing a big evolution of the software of customer experiences, and that is resulting into not only a strong customer acquisition, but especially more engagement from our own current customers using the software. We’re seeing more adoption of the software, I would say, at least around 0.5% – half of our customer base using Zenvia Customer Cloud is already using for 2 or more use cases, meaning 10 times — more than 10 times what we had before Zenvia Customer Cloud.

And that not only gives us a strong retention of these customers that go into a more deeper adoption, but we see they grow their revenues with us. So this combination of a stronger customer acquisition and a deeper adoption of our software and combined with usage-based business model is generating a very interesting combination of revenue growth for Zenvia Customer Cloud. And as gross margins for this business are pretty healthy, we are seeing that over the next couple of quarters, we’ll be able to make this business become the strongest portion of the whole company, generating cash. It’s already EBITDA positive. And these – all this combined gives us a very optimistic overview for 2025.

Shay Chor: Thanks, Cassio. I got another one seems to be the last one for the time being. How should we look at EBITDA margins for this year? Same story as the gross margins? So again, we’re not providing specific numbers. As I mentioned, we are targeting and one of our main goals for ’25 is to improve EBITDA from what we delivered in ’24. I cannot share any specific level, but I can say that we are aiming at doing better than we did in ’24. Hugo, we have no further questions here so far.

Operator: [Operator Instructions]

Shay Chor: I guess that’s it, Hugo.

Operator: Thank you, sir. So this concludes our Q&A session. I’d like to turn the conference back over to Mr. Cassio Bobsin for his closing remarks.

Cassio Bobsin: Thank you, everyone, for joining us on this call. 2024 was a very challenging year for us. And we see that on the other side, we were able to base all the foundations during the last year that are now becoming the basis for our 2025 high expectations. We’re seeing that the market is pretty healthy and our performance is doing amazingly well in Q1. We expect that to continue over the next couple of quarters. And so I expect to see all of you in the next couple of weeks, so we can share our Q1 numbers. So to you, and thank you very much.

Operator: The conference has now concluded. Zenvia’s IR area is at your disposal to answer any additional questions. Thank you for attending today’s presentation. You may now disconnect. Have you all a nice day.