Hello, everyone, and welcome to VTEX's Earnings Conference Call for the second quarter of 2025. I'm Julia Vater Fernández, VP of Investor Relations. Joining me today are Geraldo Thomaz Júnior., our Founder and Co-CEO; and Ricardo Camatta Sodré, our Chief Financial Officer. Also joining us for the Q&A session are Mariano Gomide de Faria, Founder and Co-CEO; and Andre Spolidoro, Chief Strategy Officer. Before we begin, please note that today's remarks may include forward-looking statements. These statements are based on our current assumptions and projections, and actual results may differ. Additional information regarding risks and uncertainties is detailed in our Form 20-F for the year ended December 31, 2024, and other filings with the SEC, all of which are available on our Investor Relations website. During this call, we may also reference certain non-GAAP financial measures. Reconciliations to the most comparable GAAP figures can be found in our Q2 2025 earnings press release also available on our Investor Relations website. With that, let me turn the call over to Geraldo. Geraldo, the floor is yours.

Thank you, Julia. Welcome, everyone, and thanks for joining our second quarter 2025 earnings conference call. VTEX continued to deliver resilient performance driven by disciplined execution and relevant progress on our global expansion. Despite the challenging market for our retailer base in Brazil and Argentina and more gradual overall market demand from new customers migrations, our AI initiatives on support cost efficiency, combined with our disciplined execution, delivered a quarter of resilient operational profitability. As a result, we have raised our non-GAAP income from operations and free cash flow guidance by over 10%. On the global expansion front, we're excited to highlight key developments this quarter, including the expansion of our partnership with Whirlpool in the U.S. for the launch of the KitchenAid website and the addition of the new enterprise customers across both the U.S. and Europe. It is encouraging to see the U.S. and Europe, large and attractive markets, growing twice as fast as the overall company. Turning to subscription revenue. We recorded $57.2 million, representing 11% year-over-year increase in FX neutral. That's within our guidance in U.S. dollars, but below on an FX-neutral basis. From a GMV perspective, this performance was primarily impacted by Argentina, where the early signs of recovery seen in the first quarter did not continue with the second quarter reflecting a reversal on that trend. Additionally, we observed a mix shift in Brazil. New and large customers that have a lower implied take rate demonstrated greater resilience amid the high-interest-rate environment. While this shift has an overweight impact on GMV growth, it translated into a more modest contribution to revenue. Despite a challenging market, the continued resilience and scalability of our business model enabled us to maintain strong financial discipline and operational leverage. Our gross profit reached $45.3 million, up 15.2% in FX…

Thank you, Geraldo. Hi, everyone. I'm pleased to share with you VTEX's Q2 2025 financial results. In the second quarter of 2025, GMV reached $4.8 billion, growing 9% year-over-year in U.S. dollars and 14% on an FX-neutral basis. This led to subscription revenue reaching $57.2 million compared to $54.0 million in Q2 of last year, a 6% increase in U.S. dollars and 11% on an FX-neutral basis. As mentioned by Geraldo, subscription revenue for the quarter came in within guidance in U.S. dollars, but below on FX-neutral basis. From a GMV perspective, that's driven primarily by a reversal in Q2 of the recovery trend we started to see in Q1 in Argentina. From a subscription revenue perspective, we also saw a mix shift in Brazil with new and larger customers gaining representation. Although these customers have lower implied take rates that represented a more limited contribution to our revenue growth in Q2, our scalable model results in similar margins, which is clearly demonstrated by our gross margin improvements. While this challenging market environment introduced short-term headwinds, it also underscores the strength and resilience of our business model. Designed for scalability and efficiency, our model allows us to navigate volatility while protecting operational profitability. We have maintained a disciplined execution while continuing to invest strategically in our platform and global expansion. This balanced approach drove meaningful margin expansion and further validated the operating leverage embedded in our model. Reflecting these dynamics, our non-GAAP subscription gross margin reached 80% in Q2 2025, up 180 basis points year-over-year from 78% in Q2 2024. This expansion continues to be driven primarily by gains in customer support efficiency, where we are further scaling AI-powered automation to improve service quality while reducing support costs. This trend reinforces our commitment to operational excellence and position us to…

[Operator Instructions] All right. It looks like our first question today comes from the line of Marcelo Santos with JPMorgan.

I have 2, both regarding the guidance. So could you please discuss the decline in the guidance in terms of GMV and new subscriptions sold? Like I'm just trying to break down how much is the growth in GMV of your clients, the variable component of your revenues? And how much would that be due to a longer time to close new contracts and to bring new clients in? And the second, in the margin -- increased margin expectations, could you please discuss more in detail which are the lines that are scaling the most or yielding most benefit that give you confidence that this increased margin will come?

Thanks, Marcelo. Let me walk you through the context behind our Q3 guidance and the full-year outlook. So our Q3 and fiscal year 2025 guidance reflects a couple of factors we are closely monitoring, as you mentioned in your question. So the first factor is the GMV performance of our existing customers, a variable that we have limited control over. So starting with our customer base in Argentina, after signs of recovery in Q1, Q2 reversed back to negative double-digit GMV year-over-year FX-neutral growth, prompting the change in our outlook. And moving to Brazil, we are seeing a continued mix shift towards larger enterprise customers. This is strategically positive, but with softer near-term revenue conversion due to the lower implied take rate, although we're still attractive margins. And it's important to note that while we don't control, we can't always predict the GMV performance of our existing customers, we are increasing our efforts to work more closely with them, supporting the execution of their strategies and unlocking additional growth opportunities through the platform. The second factor driving a significantly smaller impact is that we are also seeing softer overall market migrations and a view isolated contract cancellations tied to high-risk implementations. While some of these projects may still come through, we excluded them from our near-term forecast given what we see as the most likely scenario. And it's important to mention that although we see some isolated cancellations, the most strategic projects we have under implementation remain on track. So all in, these dynamics drove a 5 percentage point revision in our FX-neutral subscription growth guidance for the year and equivalent to a 2% U.S. dollar revenue adjustment at the midpoint of our guidance. And as I said, the large majority of the FX-neutral impact comes from the Argentina and…

And our next question comes from the line of Luca Brendim with Bank of America.

I also have 2 here. Following on the similar line to Marcelo, on the larger clients on the U.S. that you -- and Europe that you mentioned would be coming in, in the next few quarters. Were there any changes in terms of when those will be coming live, maybe a delay? And if that was implicit in the guidance in some way? Or when we're talking about those clients, we should expect something similar, and if the isolated cancellations were also in one of those clients? And then a second, more on a structural level, if you guys are seeing any changes in terms of competition in any particular region with the new competitors that are growing in LatAm, or if you continue to see similar trends overall?

Okay. Thank you for the question. On the implementation cycle, we are not seeing any change, significant change. Despite the macro volatility, the project is undergoing, we don't see any kind of shortening or enlargement of the implementation cycle. Of course, we are signing more enterprise deals in U.S. and Europe, and it's growing twice as the LatAm business. And the Tier 1 clients have a larger implementation cycle, but it's already in the guidance. On the competition, we are seeing traction in our international strategic markets, means U.S. and Europe. So the highlights growing momentum is our global expansion confirms that our platform is resonating in more mature competitive regions. A key milestone that makes the point on that was the launch of KitchenAid, e-commerce website in the United States. Whirlpool has been a longtime VTEX partner, but this marks their first implementation with us in the U.S., a strong validation of our platform. We are very focused on making KitchenAid a customer success and turning this into a reference implementation. Alongside it, we are also bringing online large-scale customers with billions in annual GMV, which should further boost momentum and credibility. In Europe, we had several go-lives this quarter and continue progressing towards the highly anticipated Manchester City Football Club project. These milestones reflect our rising strategic relevance in the region. Across both regions, contracting signing momentum is solid. The pipeline is growing. And while we made significant strides, we're still just getting started in those regions. To finish, VTEX's position as a complete and composable platform is maturing and matching the demand of enterprise B2C and B2B platforms in the U.S. and EMEA. I hope I answered the question.

[Operator Instructions] It appears there is another caller, and that is Maria Infantozzi with Itaú.

I have 2 questions. The first one related to Argentina. Can you give us more color on the main drivers for the deterioration in the operating momentum of the region? Can you please comment on how you perceive the competitive landscape evolving in the region? And also regarding Brazil, I just wanted to ask you guys to tell us how you calibrate for a potential consumption deceleration in Brazil in the second half of the year in your current guidance, please?

Maria, as a reminder, we don't disclose regional performance on a quarterly basis. We disclose annually, but I can give directionally commentary for what we are seeing in Argentina. And then once we have the full year release, we can go into more details. So Argentina was a significant drag this quarter. As I mentioned in the prepared remarks, in Q1, we saw promising signs of GMV growth recovery from our customer base in Argentina. To give you a sense, the GMV FX-neutral year-over-year growth started Q1 in the double-digit negative range and exited in the high single-digit positive range by March. So we expected that trend to at least keep stable in Q2. But instead, the recovery reversed for our customer base and GMV growth fell back to the double-digit negative territory in Q2. And given that there is the hot sales event in May, Argentina has a heavier weight in Q2. So this reversal had a meaningful impact for us. So Argentina remains a volatile market. Now we still remain focused on the long-term opportunity of gaining share, supporting our customers, and driving additional adoption. And we weathered volatility in the region before and emerged stronger by staying close to our customer base. and executing with discipline. So on the overall competitive landscape in the market, looking at other digital commerce platforms, we don't see any changes specifically in Argentina on the competitive landscape. And then Maria, if you could repeat on your second question, please?

Just regarding the operating trends in Brazil for the second half of the year, I just wanted to make sure how do you calibrate your expectations for a potential deceleration of consumption in the second half of this year?

Perfect. Perfect. Yes. Great question. So in Brazil, we did see some same-store sales deceleration in although the total GMV FX- neutral growth in Brazil was in the low 20s and pretty stable versus Q1 because we have new customers joining. But we had that mix shift towards new and larger enterprise customers with lower implied take rates that I mentioned on the prepared remarks. So we are assuming a deceleration in the second half, given how we saw the same-store sales deceleration in the second half of the year. Now there's a lot of moving pieces here with the interest rates and FX, and other political and macroeconomic points, right? So it's hard for us to forecast the GMV of our customers, but we are embedding in the guidance some deceleration in the second half of the year for Brazil, given for how long the interest rates have been high in the country.

And how does this compare with the fourth quarter results of the past year? Sorry, just this follow-up.

Yes. So we saw a deceleration of same-store sales in Q4 of last year. I would say that Q1 was more aligned. We saw more deceleration in Q2. And so we are embedding that to the second half of the year as well.

And our final question today comes from the line of Gustavo [indiscernible].

I'll stick to one. So the company has been very vocal about B2B, during VTEX Day and retail media as well in most recent one. Considering this recent market volatility, if you could comment on if and how anything has changed in the strategy and the pace of the rollout of those solutions with clients?

So all these 2 initiatives, they're not on macroeconomics in my perspective, there's no big structural change in the market. Actually, if there is a structural change in the market, it will be to reinforce the value proposition of both these initiatives. As you know, like retail media is key for any retailer to be sustainable and profitable during the new phase of commerce, like you need to monetize your personal inventory, you need to monetize your data, your proprietary data and especially like if you consider the current macroeconomic conditions, this is a must-have for all the retailers across the globe, including retailers. On B2B, this is a trend that we're seeing like people did spend some investment like years ago, 10 years ago in B2B in the U.S. and Europe. Now they're open to renew because legacy solutions. And we're seeing in Brazil, like people wanting to have self-service portal, serving the customer through the digital channel. And this is a secular trend. It's not related to the conjuncture. So the strategy is the same. All these macroeconomic shifts are not informing any new actions on these 2 ventures.

And that does conclude our Q&A session today. I will now turn the call back over to Geraldo Thomaz for closing remarks. Geraldo?

Thank you for the great questions. Before we close, I wanted to leave you with the confidence we have in VTEX's directions and long-term vision. Our bold product paths like B2B and retail media are redefining how enterprises operate and monetize, while agentic commerce is bringing AI-powered autonomy into the present. These innovations aren't incremental. They're foundational shifts designed to meet the real-world needs of global brands. We're also seeing that vision translates into results. We are making relevant progress in the U.S. and Europe, and we're just scratching the surface of the opportunity. With a growing base of high-quality customers and a platform built to scale, our long-term outlook is strong. We're more committed than ever to delivering enduring value to our customers, partners, and shareholders. Thank you for your continued trust. We look forward to the road ahead. The best of VTEX is still to come. Thank you for your continued support and partnership. We look forward to sharing more progress with you in the coming quarters. Thank you for joining us today. Have a great day.