Thank you, Julia. Welcome everyone, and thank you for joining our third quarter 2024 earnings conference call. We are proud to report that our product innovation and expanded platform capabilities continue to be key drivers of growth, further strengthening our competitive moat. Through our complete and composable approach, we are deepening relationships with existing customers while also attracting high-profile brands and retailers, driving both top-line growth and profitability. VTEX made strong strides toward profitable growth. During a period of macro uncertainty, we continued delivering strong subscription revenue growth while also optimizing our cost basis, resulting in a gross profit growth of 28% in FX neutral this quarter. Significant progress is also noticeable on a Rule of 40 basis, with VTEX achieving 32% this quarter, up from 28% in the same period last year. We may be slightly more than a handful of quarters away from reaching the 40% target presented on our Investor Day last year. Finally, as macro uncertainty may begin to clear, we have streamlined VTEX to fully capitalize on the attractive market opportunities ahead. We are proud to serve some of the most influential brands and retailers, fostering trusted relationships and supporting their success, which ultimately pushes us toward our vision to become the backbone for connected commerce. On top of our existing customer’s robust performance, adding new customers further strengthens our growth engine. New contract signatures have remained robust. This quarter, we are excited to highlight the successful go-live of Fast Shop in Brazil, one of the big accounts we were implementing throughout the year. This solid sales momentum in our most mature market, compounded by the progress in the US and Europe, and newer products such as our B2B offering and VTEX Ad Network, gives us confidence in our long-term profitable growth potential. On Q3,…

Thank you, Geraldo. Hi everyone, I am pleased to share VTEX's Q3, 2024 financial results. This quarter our GMV reached US$4.4 billion, marking a year-over-year growth of 10% in US dollars and 17% in FX neutral, with same-store sales remaining in the teens range. Our revenue stood at US$56.0 million, representing a year-over-year increase of 11% in US dollars and 19% on an FX neutral basis. Subscription revenue reached US$53.9 million, representing an increase of 13% in US dollars and 22% in FX neutral, primarily driven by good momentum in new contract signatures, solid performance from existing customers, and cross-selling of add-on services. Services revenue totaled US$2.1 million, a by-design reduction given that the evolution of our ecosystem has allowed our new customers in the US and Europe to rely less on direct services from VTEX, which in many cases were sold at a loss to onboard our initial larger customers in these regions. Now, going to our costs and expenses. Our non-GAAP gross margin reached 75%, up from 71% in the same quarter last year. The approximately 410 basis points year-over-year improvement was mainly driven by hosting cost efficiencies, resulting in our non-GAAP subscription gross margin increasing 230 basis points, reaching 79% in Q3, 2024 from 76% in the same quarter last year. While work remains to fully reach our Investor Day subscription gross margin target model goal, future improvements may be more marginal. Moving down the P&L, this quarter we achieved a positive 14% non-GAAP operating income margin, marking a 10 percentage point improvement year-over-year. Our non-GAAP total operating expenses were US$34.2 million, slightly up from US$34.1 million in the same quarter last year. As mentioned earlier, most of this margin expansion is driven by revenue growth, supported by a well-invested and efficient organizational structure, which will allow…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from a line of Marcelo Santos from JP Morgan. Your line is open.

Hi, good evening. Thanks for taking my questions. The first question is, if you could provide some additional color on the growth of subscription revenues, how is that going per region? You had some tougher situation in Argentina, so I just wanted to, if you could focus a bit there, but also talk about the other regions. And the second question is, do you see this margin level as sustainable and are you happy with the growth margin combo? How would you consider that? Thank you.

Hi, Marcelo. Ricardo here. Thanks for your question. So, in Q3 we achieved a total revenue growth of 18.7% in FX Neutral. That's close to the midpoint of the guidance range of 18% to 20% that we provided last quarter. And that's also a two-year CAGR in FX Neutral of 22% for total revenue, and on your question, 23% for subscription revenue. It's important to note these two-year CAGR, given that last year we were positively impacted by an acceleration of consumption in Argentina from August until November and as mentioned in last year's earnings call. And I would also add that from organic revenue growth, it was very similar to the total revenue growth, as the Weni acquisition contributed only a negligible amount to our revenue and did it solely in the last month of the quarter. So, continuing on your question, the subscription revenue, right, we delivered a robust year-over-year growth of 22% in FX Neutral. Even against these challenging comps in Argentina, where last year's pre-devaluation consumption behavior affected the baseline. And as mentioned last quarter, Argentina remained a couple percentage points headwind to our growth this quarter. And as noted in the Q4 outlook, we expect this headwind to reduce by December when Argentina FX devaluation happened last year and consumption started adjusting. And our ex-Argentina performance underscores the strong underlying performance of the company on a more recurring basis. And I would also add that as we rely more on the VTEX ecosystem of partners, we experience a by-design reduction in our services offering. This decision negatively impacts our services revenue and positively impacts our gross margin and bottom line, as in many instances these services were sold at a loss. So, the strategic by-design decision to increase our services offering last year was a consequence of the first couple bigger implementations we were doing in the U.S. and Europe. And now, as the ecosystem matures and already did larger implementations, we are confident to lower the services offering, minimizing the impact on our margins. So, looking ahead, as we lap the tough comps, the strong performance of existing stores and our robust sales momentum are fundamental factors that instill confidence in our ability to deliver solid, profitable growth. So, I believe that answers the first question. Marcelo, could you please repeat the second question?

The second question is about the sustainability of margins and if you are happy with the growth margin combo.

Yeah, perfect. I am happy to start on this one and others feel free to compliment. So, the margin is sustainable, yes. We have a target model of 80% for the subscription gross margin. We are making progress toward that. We are at 78.5% in this quarter. So we still have 1.5 percentage points to get there. From the overall gross margin, we are at 74% and change and the target is 75%. So, we are moving towards that level. And then, when we look at the operating margin, we reached 14% this quarter, while our goal is 20%. So, these incremental margins will come as we scale and drive revenue leverage over time. So, we are a high growth company and we continue to prioritize this revenue growth and we are committed to profitable growth with additional well-aligned hires in R&D and sales marketing as we see fit. So, as this momentum continues, we will certainly update you all on the progress. But we feel like we have a well-invested structure at the moment and we will continue to improve on margins going forward.

Perfect. Thank you very much.

Our next question comes from a line of Cesar Medina from Morgan Stanley. Your line is open.

Hi, thanks for taking my call. A quick question. Can you provide more context on what you highlighted as a strong new contract signature momentum? I'm asking this, because it seems as if bookings that you reported in the quarter accelerated. So, it would be great to have some color in terms of what's going on, where is this coming from, what type of sectors, and more importantly, the mix of regions where you are getting this acceleration. Thank you.

So, I can take this one and, Sodre, if you please join adding anything. So thanks for the question. Mariano here. As mentioned in our prepared remarks, our global pipeline shows steady improvement, followed by our unique composable and complete commerce platform. We deliver very low TCO compared to our competitors, pretty fast time to market, and very flexible solution for testing multiple go-to-market strategies. Our technical sales model, successfully customer case studies and recognition from IDC, from Forrester, and from Gartner, all contribute to this momentum that you might see. So, in today's challenging retail landscape with high interest rate, VTEX popped as the partner for the sustainable growth and profitable growth. So, in Brazil, to be more narrow on the analysis, we see strong B2C growth potential as more players are now open to migrate to VTEX, moving away from the legacy platforms or homegrown. In that sense, this quarter we had two lives that is an evidence of this movement, like Fast Shop and Bemol. Big retailers based on homegrown and custom legacy migrating for VTEX. And there are only a couple – these are only an example of a couple of the clients under implementation. But as you know, we just comment the clients that goes live. On the B2B side, also grows as the company modernized their front-end and channels approach, which gave us a huge opportunity to keep growing and redefining the commerce landscape in Brazil and Latin America. In the United States and Europe, our portfolio is expanding across categories, omnichannel marketplace customers, including Hearst in the U.S. and OBI in Europe. We also have H Mart in the U.S., Auchan in Europe. And this quarter, we can celebrate go-lives from Colgate-Palmolive and Keune, both in B2B models across the U.S. and Europe. Colgate now operates both B2C and B2B in the U.S., while Keune is live in four European countries, so further expanding their retail footprint with VTEX. So these milestones, coupled with industry recognition have significantly strengthened our brand presence and our pipeline. We are confident in our path forward, building on execution, reputation, and customer success histories to capture the market opportunity that's ahead of us.

And just to further complement from a financial perspective, Cesar, the increase in deferred revenue is consistent with the strong contract signature momentum mentioned in the prepared remarks and by Mariano just now. And now having said that, it's important to note that there was also some increase in the deferred revenue duration. Therefore, adjusting by average duration, the increase in deferred revenue was a bit more modest than what is presented in our balance sheet, without any duration adjustment, but still a pretty solid improvement.

Got it. Thank you so much.

Your next question comes from the line of Leonardo Olmos from UBS. Your line is open.

Hi, everyone. Just one question from my side. Can you talk a little bit about system integrators? Can you talk about your current relationship with them? How has it been evolving? What types of strategy are you thinking about for 2025? And if you have one or more competitors, they are growing relevance in terms of those distributions in system integrators. Thank you.

Yep. So, VTEX ecosystem matures. We are seeing, as you can see on our numbers and the service revenue of VTEX, it's not increasing as the revenue. That's a sign that our ecosystem of SIs are maturing in all regions. So, VTEX’s needs to provide direct service has declined. So, system integrators in new geos now bring stronger experience in executing implementation projects on our platform. And therefore, since the Q1, you can notice that we gradually reduce our direct roles in our implementations resulting in a lower contribution from service revenue and higher margins and you can expect that as our target company. We believe the SI, it is pretty complete and can be a strength or leverage for us to deploy projects all over the world. Our focus remains on subscription revenue, the core of our product-driven business model, and a key driver of profitability. Leveraging a mature ecosystem of system integrators enables us to have this global reach, global support, and a profitable growth. Notably, 96% of our revenue are subscription-based, while service contributes 4% only. So, subscription revenue is the true indicator of the business health, and in Q3 [ph], it grew 22% FX-neutral, paired with our increasing gross profit, which rose 28% in FX-neutral this quarter. Did I answer your question?

Yes, yes, and great news. Just a small part of my question, if you could maybe double-click on it. The competitor spark that I asked? Is there any competitor that is advancing with SIs or any other form? Thank you.

So competition, the competitive environment has remained stable. While we always receive questions about peers potentially expanding from long-tail or SMB segments, or some enterprise competitors displaying increased aggressiveness in one region or another region, we haven't observed any significant shifts. Our overall annual revenue churn remains consistent in the mid-single-digit range, and we continue to gain market share globally. Nevertheless, we are monitoring the competitive environment, ensuring our value prop and technology stack to remain highly competitive. But just summarizing, we didn't see any kind of major shift in the competitive landscape.

Great. All right. Another great news. Thank you very much. Have a good night.

[Operator Instructions] And there are no further questions, so this does conclude our question-and-answer session. I will now turn the call over to Geraldo Thomaz, Founder and Co-CEO of VTEX, for closing remarks.

In conclusion, I would like to reaffirm our commitment to delivering profitable growth and our objective of returning to the Rule of 40. This quarter's progress reflects the dedication of our team at VTEX. Once we set our goals, we work relentlessly to achieve them, no matter the scale of our ambitions. With over 20 years of history, we can confidently say that VTEX grows stronger each year, and this year is no exception. We are honored to support some of the world's leading brands and retailers as we define commerce together. Bridging the gap between physical and digital channels, and strengthening an industry with immense potential ahead. Our purpose is to keep our customers ahead of the curve, adaptable, and resilient in the face of constant change. With strong sales momentum and continued platform innovation, VTEX is well positioned for sustained growth and to solidify its role as an e-commerce leader on a global basis. We have a long, invigorating journey ahead of us, and we are here to seize it as we remain fully committed to delivering value to our customers, investors and stakeholders, and as we continue our journey to becoming the backbone for connected commerce. Thank you, everyone, for being part of this journey. We look forward to keeping you updated at our next earnings call. You may disconnect now. Have a wonderful week.

This concludes today’s conference call. Thank you for your participation. You may now disconnect.