ZENVIA releases results for the third quarter and first nine months of 2024

Zenvia, one of the leading providers of cloud-based customer experience (CX) solutions in Latin America, enabling companies to create personalized, engaging, and seamless experiences throughout the entire customer journey, announced today its operational and financial metrics for the third quarter of 2024 (3Q 2024) and the nine months of 2024 (9M 2024).

Cassio Bobsin, founder and CEO of ZENVIA,comenta: “O destaque deste trimestre foi a conclusão do plano estratégico que iniciamos em 2018, que nos permitiu lançar oficialmente o Zenvia Customer Cloud, um marco significativo em nosso compromisso de aprimorar o relacionamento das marcas com seus clientes por meio de soluções práticas e orientadas por IA. Youearly adoptersThey have already noticed improvements in lead quality, conversion rates, and customer satisfaction, demonstrating the immediate value of this technology. At the same time, this launch is the foundation of Zenvia's SaaS-based CX strategy for the next five years. Furthermore, we advanced in simplifying our operations and became more efficient, resulting in a remarkable reduction in G&A expenses as a percentage of revenue compared to the previous year. The launch of Zenvia Customer Cloud and the increase in our operational efficiency reflect our focus on enabling more well-informed and personalized interactions with consumers, adding value to our clients and shareholders.

Shay Chor, CFO and Investor Relations Officer at Zenvia, says: This quarter, we accelerated our organic expansion with double-digit growth in both revenue and profitability. We also take advantage of temporary, one-time revenue generation opportunities in our CPaaS segment, while in the SaaS segment we observe significant growth in SMEs. The combination of increased revenues with strict expense control allowed Zenvia to record the highest quarterly EBITDA in the last three years, putting us on track to achieve theguidanceof the year. Last but not least, we continue to seize working capital opportunities to ensure the conversion of EBITDA into cash.

1. We calculate Gross Margin as Gross Profit divided by revenue.
2. In December 2023, the company identified that the provision for doubtful debts and the amortization costs of intangibles were underestimated. The amount was recalculated in the annual financial statements, and Management retrospectively revised the first six months of 2023 for comparison purposes.
3. We define an Active Customer as an account (based on a CNPJ) at the end of any period that has been a source of any type of revenue in the previous three months. Customers who did not generate revenue in the previous three months are classified as Inactive Customers.

Q3 2024 Highlights

• Revenues totaled R$ 284.4 million, a 30% increase compared to R$ 218.6 million in Q3 2023, as a result of the annual expansion of SaaS (+16%) and CPaaS (+37%). The CPaaS recorded a high, but temporary, volume with certain clients while the SaaS grew mainly with small and medium-sized enterprises (SMEs).
• The Adjusted Gross Profit of R$ 102.5 million grew by 22% compared to the previous year, while the Adjusted Gross Margin decreased by 2.3 percentage points, totaling 36.0%. This reduction is mainly due to
  1. Largest CPaaS mix during the period due to specific temporary one-time volumes, which were opportune for revenue generation. We do not expect the same level of volume in the fourth quarter of 2024.
  2. Lower SaaS margins due to tighter margins in the Enterprise segment, which continue to reflect a very competitive environment, more than offsetting the better mix of SMEs.
• The total number of active clients reached 12,200 in the quarter, with 6,400 from SaaS and 6,000 from CPaaS. As mentioned in the last quarter, this year-over-year reduction reflects a cleanup of the customer base that occurred in the second quarter of 2024.
• Normalized EBITDA was positive at R$ 41.2 million in the quarter, a 153% increase compared to Q3 2023, benefiting from higher revenues and strict expense control. This was our highest quarterly EBITDA in three years.
• Cash balance of R$102.7 million, a sequential increase of R$13.3 million as a direct result of our focus on preserving cash without compromising our sustainable growth, including the continued use of working capital instruments.
• On October 15th, Zenvia announced the official launch of Zenvia Customer Cloud, an AI-based solution created to transform the customer experience, integrating solutions for all stages of the journey – from marketing and sales to service management and relationship management. Zenvia Customer Cloud allows companies to manage their interactions with customers through various channels, including WhatsApp, email, SMS, and apps, on a single centralized platform. This unified approach simplifies processes, reducing the need for multiple software solutions and increasing productivity through intelligent automation. The platform leverages AI-enabled automation to increase productivity and efficiency, positioning Zenvia for solid and profitable growth while providing deeper insights into customer behavior.

Highlights of 9M 2024

• Revenues totaled R$ 728.2 million, a 23% increase compared to R$ 590.6 million in the 9M 2023, as a result of the annual expansion of SaaS (+15%) and CPaaS (+28%).
• Adjusted Gross Profit of R$296.3 million grew 14% year-over-year, while Adjusted Gross Margin fell 3.2 percentage points year-over-year to 40.7%, due to the higher mix of CPaaS in revenues, combined with lower margins in the Enterprise segment of the SaaS business and the increase in infrastructure costs related to the final phase of the integration of the acquired companies.
• Normalized EBITDA was positive at R$ 98.1 million in the period, a 151% increase compared to 9M 2023, which is in line with our expectations and the delivery of the guidance of R$ 120 million to R$ 140 million for the year.