Hello, everyone and thank you for being with us today. I got to say, I love this video. The first time I saw Johnny’s Journey was back in December 2021. At that point, I was with Zenvia for less than three months. And that was the moment when I understood what we do and where we are going.

So I hope this video was enlightening to you as it was for me a couple of months ago. Now, before I jump specifically into Q2 numbers, I would like to highlight that this is the fourth quarterly earnings we publish post our IPO.

So it’s important for us to emphasize the improved results quarter after quarter after quarter reflects how the proceeds from our IPO were critically allocated to M&A and R&D, which puts us exactly where we planned to be, contributing to our accelerated transformation into a SaaS company.

That’s what this snapshot of our Q2 and first half 2022 numbers show. It has been a strong quarter both in terms of organic growth and acquisitions integration into our results. These numbers have already consolidated two months of Movidesk since the transaction closed in May.

We recorded BRL204 million in revenue for Q2, an increase of 50% year-over-year due to a solid client base expansion of 37% and the consolidation of Movidesk over the past two months. The growth in the first half was even better, with a 55% year-over-year increase, totaling BRL402 million in revenues.

Of this total, BRL70 million came from the three recently acquired companies. The acceleration of our transformation into a SaaS company is also already positively impacting our margins.

The gross margin for Q2 stood at almost 38%, a solid increase of 5 percentage points from Q2 2021, while for the first half the gross margin was 35.8%, up 5.6 percentage points from the year before. As you will see further in the slides, these numbers are all within the guidance range for the year.

As of Q2, we are starting to report results under a new breakdown. One that is more aligned with our decision-making process and will make it easier for you to understand what we do and where we are going. The format change is also driven by the announcement we made in mid-June on the evolution of our business areas, CPaaS and SaaS.

While the CPaaS business still generates 71% of our revenues, over half of our gross profit is already coming from SaaS, which actually makes us a SaaS company. So let’s take a deeper dive into our SaaS numbers.

Revenues originated from our SaaS business, which is now headed by Raphael Godoy, our former CMO, totaled BRL115 million, with a monthly revenue recurrence of over 80%.

This means that we are talking about an annual recurring revenue of this business, including full consolidation of Movidesk, at almost BRL226 million as of June and almost BRL280 million as of December 2022. We currently serve over 6,500 SaaS customers, generating an adjusted gross margin of 66.5%.

Other important metrics are the NRE of 120% and a CAC Payback of approximately 11 months. Keep in mind, that these numbers are just a fraction of the total addressable market for SaaS services in Latin America, which is expected to reach BRL29 billion by 2026, according to IDC. Out of this almost BRL30 billion is TAM, 60% is white space.

And we have jumped from zero to slightly over 2% market share in just one year. So there is a huge opportunity for us to continue growing our SaaS revenues at the 50% level we have been growing, bringing Zenvia to another level of size and profitability.

Our CPaaS business, now headed by the CRO Cris Franco, is also very healthy and continues to expand. Although the future growth of the company will be coming mostly from our SaaS business, there is value in our CPaaS business that cannot be ignored.

For 2022, this business is expected to reach around BRL600 million in revenues, with a gross margin of approximately 23%, generated by almost 9,000 clients. CPaaS is a fast growing market in Latin America, which is expected to multiply by 3.5x in the next five years, from a total market size of BRL3.5 billion to nearly BRL19 billion according to IDC.

Moving on to Slide 11, you can see that in this quarter, half of the growth came organically, and the other half from acquisitions. These results fully consolidate D1 and SenseData, and consider only two months of Movidesk.

Together, the three companies contributed approximately BRL70 million to our consolidated net revenues, while the organic growth brought BRL73 million. This combination of solid organic growth with M&A positively impacted our adjusted gross margin, which went up almost 6 percentage points to reach 35.8% in the first half.

And in the second quarter, our margin has already reached 38%. All these metrics are within the guidance range for the full year, as you can see in the next slide. Our total revenue growth and adjusted gross margin for the six months of the year are both within the guidance range.

For the second half of the year, we expect to continue to focus on integrating our M&As and improving profitability, as we add a full six months of Movidesk gross margins into our numbers. We expect to generate positive EBITDA during the second half of the year, while our operating cash flow should already be at breakeven in the next six months.

Finally, I would like to say that we know that funding gap is a concern. While this issue does not prevent us from sleeping, we do not live in denial. We have been working on several different alternatives and we expect to be able to announce something to you in the next coming months. With this in mind, we can now move to the Q&A session..

[Operator Instructions] Our first question comes from Lucas Chaves, sell-side analyst UBS. Please, Lucas you may go ahead with your question..

So, hi guys, and thank you for having my question. So how you think you’re going to grow in client terms? And could you provide more informative integration with Movidesk clients, please? And if I am allowed a second question and in line with the first, how was the price dynamics in this quarter? Thank you..

Thanks, Lucas for your question. So I’ll start on a more quantitative view and Cassio can add from a qualitative view and how competitive dynamics are especially on the CPaaS business. As you know, we’ve been focusing our results and our operations on profitability.

And specifically this year, what we’ve done in first half and the second half of this year – in this first quarter and second quarter of this year was to pass on to prices the higher cost that the telco operators are charging us. So we did have an impact, especially in Q2.

We lost approximately 500 clients on the CPaaS business and that’s related, as I mentioned to profitability. The flip side of it is that we are still growing our business organically about 30% a year in terms of revenues. And the positive obviously is that gross profit expanded more than expected.

It was a good quarter, even in terms of EBITDA when we clean out one-offs from EBITDA, we generated an EBITDA that was negative, only BRL2 million, so practically breakeven. And we are already running when we look into the second half of this year, as we’ve been guiding that we already running with a positive EBITDA margin.

So it has an impact when we pass onto prices. But we’ve decided that at this moment with all the difficulties that tech companies are having in terms of funding, we decided that we need to focus on profitability. Cassio, you can go ahead on with a more qualitative view..

Yes. In terms of small customers, I mean, very, very small customers, we do have some that are more transaction or prepaid that don’t create lots of value for the long run. So we’re focusing on customers that we can upsell and cross sell continuously.

Thus the amount of customers can vary depending on how we’re focusing more on recurrent than transactional customers. So that’s what we’ve been doing. And looking from – you asked about Movidesk, right? So we’re already working together with Movidesk operation as being part of as Zenvia portfolio. That’s why we rebranded it for as Zenvia Service.

And we are generating customers from – customers from both ways, both customers coming from Movidesk and getting other products from Zenvia and other way around as well. So they’re doing pretty well. And in that sense, it was pretty early weeks of integration going on.

That’s why we have a very interesting perspective looking forward to the end of the year and 2023 in terms of combined growth of all the SaaS solutions..

Thank you. That was very clear. Thank you..

And I think you had also a question Lucas on Movidesk integration, right? Cassio if you want to….

Yes. That’s what I meant, the integration coming in terms of client generation from both ways..

Okay..

Yes, yes. Thanks..

Our next question comes from Diego Vergara, sell-side analyst for Goldman Sachs. Please, Diego, you may go ahead..

Yes. Good morning guys. Thanks for taking my question. I guess, the first question, I just wanted to understand the organic growth in the second quarter, especially because if I’m not mistaken here, it seems that you have like a massive deceleration in the quarter relative to the first quarter. So if you can – if you don’t mind just commenting on that.

That would be great. Thank you..

Thanks, Diego. And you’re right. The organic growth accelerated in Q2 versus Q1 and the main reason as we mentioned is that we decided to take a more conservative stance and generate more gross profit, gross margin and more EBITDA. So you’re right. It has accelerated, it will depend on how the competitive dynamics move forward.

We reiterated our guidance. We continue to expect organic growth to be slightly above 30% for full year. But that will depend ultimately on the competitive dynamics going forward. And obviously we can move prices up and down, depending on how aggressive we want to be in terms of revenues.

But again, as of now it’s important for us to emphasize that while we continue to see total revenue growth still at about 50% a year, we decided that that we need to focus on profitability and generating cash flow rather than simply growing.

So if we need to decelerate slightly in terms of organic growth and total growth that will be done as long as it generates more EBITDA.

At the end of the day, we’re focusing on generating cash flow and EBITDA rather than focusing on revenue, especially because as you know, better than we do investors are not paying anymore EBIT to sales, they’re paying on EBIT to EBITDA, if not, EBIT to – or PE, sorry.

So that’s why we decided that it’s more important for us to generate gross profit and EBITDA than to focus solely on revenue growth..

Understood. Shay, thank you. Thank you. I really appreciate your transparency here. So look the second question is related to your balance sheet.

I mean, you mentioned in the call that you are trying to find some options from here, but you have roughly BRL380 million in a debt, almost BRL200 million in current liabilities related to acquisitions and that.

So can you just comment on the options you are considering from here? And also if you can just provide like the reason to revise down the earn-outs related to Movidesk, because we saw on the filings that the number expected right now it’s a little bit lower than what we saw last quarter. Thank you..

Okay. So let me start with the earn-out. So those things are very fluid, right? So obviously we track on a quarterly basis how the businesses are doing and we do adjustments.

There was a reason, for instance, if you look our reported EBITDA of minus – for the first half of minus BRL22 million versus the BRL9 million that we say, it’s the underlying recurring EBITDA for the first half that has to do with the fact that we need to do adjustments in the year now.

So for instance, in the second quarter we booked an adjustment of almost BRL10 million for SenseData and BRL4 million for Sirena because they delivered more than we – they were delivering up to that point. So we need to do adjustment and from an accounting perspective, all those adjustments, they do impact EBITDA.

So that’s very fluid and it goes up and down depending on how the companies are running versus the business plan. As to the funding gap, we are discussing several different alternatives from debt to equity instruments. So all of them are available to us.

We’ve been discussing, what’s the most interesting for us in terms of a cost, what generates more value for all the stakeholders? So it's a complex negotiation with several moving parts. And as I mentioned, I believe that we are close to be able to announce some of those instruments working.

And unfortunately at this point, Diego, we cannot discuss specifically, as you can imagine. But we are confident that in the next couple of months we'll be able to announce. And I think that the funding gap will be an issue that is behind us in a couple of months..

Understood. Thank you, Shay..

So there is a question here on the web. On the cash flow side, looks like we generated R$21 million in positive operating cash flow due to prepayment and supply. Do you elaborate a bit more on this? So yes, we did generate a decent operating free cash flow.

It has to do with some of working capital tools that we have, for instance, client prepayment with no cost so anticipation at zero cost. Some negotiations with suppliers to pay in longer so basically improvement of – both improvement of DSO and improvement of DPO practically with no cost and those two continue to be used.

As we focus now more on cash flow will continue to use all tools available to us to improve our working capital. This business is not a business that has a lot of working capital requirements. Actually, we get paid by our clients faster than we pay our suppliers, but it doesn't mean that we cannot continue pursuing to improve working capital.

So we've been focusing on all tools available to us to generate more cash..

[Operator Instructions].

I have a question. Another question here on the – from the web, so on the margin side, does your full year 2022 guidance imply a margin contraction in the second half? It does not, in the first half of the year, we deliver the gross profit of 35.8% accumulated. And we do have a guidance for the year between 35% and 36%.

So as we reiterated this guidance, the second half gross margin should be pretty much in line with the first half gross margin..

If I can add Shay here. It's also because and in fact, our revenue mix, we still expect growth of our margins, but as we go we have the fourth quarter, CPaaS have a natural seasonality due to Black Friday and also Christmas. We expect to have revenue, the CPaaS revenue represent a little bit more than when we compare to the first half of the year.

So due to this revenue mix, you may seem that, okay. If you're delivering a bit more higher here and you expect to start the growth faster yet, that's all true, but we have a revenue mix between first half of the year and second half in CPaaS due to natural seasonality..

Another one from the web, on your new positioning, can you tell us how was that received by clients? Do you have early stages evidence of how things are going? I think Cassio, can you go ahead on this one?.

Yes. Sure. We're getting lots of feedback from customers that they're getting to know all of our products now that it's easier for them to understand how they can apply their own businesses. So we're starting to get cross sell opportunities, because it became easier to understand what each product it's aimed for in terms of processes.

It's a bit early to get that quantified but we do see that happening with customers when we are engaging with them. We're also structuring better ways for customers as they enter our sales process to be clearly identified in their needs. So they can be start using the best product for them.

We're doing that with both former acquisitions and also the new acquired companies that are also part of this portfolio. That's what I sort of end up from a question about Movidesk and also SenseData, now being labeled as Zenvia Service and Zenvia Success.

So we're getting these better understanding of portfolio working out, not just on cross sell, but also in customer acquisition. And we expect them on the phone requires to have that quantified.

Of course, it's not that easy to try to understand if that's exactly the reason why we are seeing those moving in terms of customer acquisition and cross sell, but we are seeing that happening. So we expect to see positive results of that unification of our portfolio and position..

Thanks Cassio. As a follow up to that, there's another one here on the web. Can you comment on the specific competitive dynamics on the SaaS and if you're seeing any of the global players playing differently, more aggressive or not versus your new position..

Yes. In terms of SaaS competition, we do have two kinds of competitors. We have global players and we have small niche players.

We see that global players they tend to move pretty slow in terms of adjusting their offerings for specific parts of the world, which gives us a very interesting dynamics of becoming more present in the markets that were solely being served by global players.

And now we're entering at those markets and getting pretty interesting to get some big customers using your SaaS solutions. So it's doing pretty well in that sense. Looking at SMBs, it's a pretty open space. Most of these customers are still in a very simple digital solutions, meaning mail plus website kind of dynamics.

And then we bring all these structured solutions that can leverage different ways for them to sell more and to serve better their customers. They see that value and they start using that kind of solution. So we pretty much opening up the market for SMBs across the region.

And we don't see very strong competition from the small niche players on the much respective market..

[Operator Instructions] This conclude our question-and-answer session. I would like to turn the conference back over to Mr. Cassio Bobsin for his closing remarks..

Well, thank you very much all for spending the time here to get to see with the evolution of the business. We're very optimistic about everything that we've been delivering in this first year as a public company.

We're doing pretty well in terms of growth, in terms of market expansion and portfolio now being unified, combining both R&D initiatives and M&A operations that we did over the last couple months. So all these have been combined create a very strong and competitive platform for customer experiences.

And the way we're seeing that companies are transforming their customer journeys using digital, and we are making that transformation happen. So thank you very much for your time and see you in the next earnings release. Thank you very much..

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 a nice day..