Normalized EBITDA of BRL 76.1 million within the guidance range for FY 2023Strict cost control led G&A as % of revenues to 16.0% in FY23 from 19.5% in FY 2022 SÃO PAULO, May 13, 2024 /PRNewswire/ -- Zenvia Inc. (NASDAQ:ZENV), the leading cloud-based CX solution in Latin America empowering companies to transform their customer journeys, today reported its operational and financial metrics for the fourth quarter and full year of 2023. Cassio Bobsin, Founder & CEO of ZENVIA, said: "As we close the year, I extend gratitude to all stakeholders for their commitment to our long-term strategy. 2023 marked the culmination of a challenging yet rewarding phase of integrating multiple acquisitions into Zenvia, strengthening our position as a leading cloud-based CX solution in Latin America. Our Adjusted EBITDA at the end of the period, of nearly BRL 80 million, attests our ability to balance profitability with the challenge of executing the integrations.  We resolved our medium and long-term funding gap through strategic financial renegotiations and a personal investment, reflecting my deep belief in our vision and the excellence of our team. We are now ready to unlock solid and profitable growth. We're enthusiastic about future opportunities and expanding our presence in Brazil and Latin America. Thank you for your trust and support as we build a promising future for our company." Shay Chor, CFO & IRO of ZENVIA, said: "We are pleased to report our results for the period, highlighting the delivery of our EBITDA within FY 2023 guidance. Our new EBITDA guidance for 2024 contemplates an YoY increase of around 70% to a range between BRL 120 million and BRL 140 million, which reflects our healthy portfolio with a balanced profitable mix, streamlined internal structure and leverage under control. After our recent restructuring, we are closer to having the right capital structure to support our strategic objectives while maximizing shareholder value. We appreciate your continued trust and support as we move ahead, committed to building a profitable and exciting future for Zenvia." Key Financial Metrics (BRL MM) Q4 2023 Q4 2022 YoY FY 2023 FY 2022 YTD Total Active Customers(1) 12,929 13,336 -3.1 % 12,929 13,336 -3.1 % Revenues 217.0 174.9 24.1 % 807.6 756.7 6.7 % Gross Profit 109.4 89.5 22.2 % 330.5 288.9 14.4 % Gross Margin 50.4 % 51.2 % -9.5 p.p. 40.9 % 38.2 % 0.4 p.p. Non-GAAP Adjusted Gross Profit(2) 122.2 102.5 19.2 % 382.6 333.0 14.9 % Non-GAAP Adjusted Gross Margin(3) 56.3 % 58.6 % (2.3 p.p.) 47.4 % 44.0 % 3.4 p.p. Operating Loss (EBIT) -2.1 -209.8 -99.0 % -10.7 -289.0 -96.3 % Adjusted EBITDA(4) 22.1 -52,4 n.m 77.1 (77.3) n/m Normalized EBITDA(5) 29.5 23.0 28.0 % 76.1 23.5 n/m Loss for the Period -31.5 -162.2 -80.6 % -60.8 -243.0 -75.0 % Cash Balance 63.7 100.2 -36.4 % 63.7 100.2 -36.4 % Net cash flow from (used in) operating activities 13.9 26.9 -48.3 % 162.5 108.5 49.9 % (1) We define an Active Customer as an account (based on a corporate taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an Inactive Customer. (2) For a reconciliation of our Non-GAAP Gross Profit to Gross Profit, see Selected Financial Data section below. (3) We calculate Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by revenue. (4) For a reconciliation of our Adjusted EBITDA to Loss for the Period, see Selected Financial Data section below. (5) For a reconciliation of our Normalized EBITDA to Loss for the Period, see Selected Financial Data section below. Financial Highlights Q4 2023 Revenues totaled BRL 217.0 million, up 24.1% when compared to BRL 174.9 million in Q4 2022 as a result of both SaaS (+16.1% YoY) and CPaaS (+29.7%) expansion. While SaaS expanded among all customer profiles, CPaaS expanded SMS volumes mainly with wholesalers and large enterprises. Non-GAAP Adjusted Gross Profit of BRL 122.2 million was up 19.2% YoY while Non-GAAP Adjusted Gross Margin decreased by 2.3 percentage points to 56.3% YoY, primarily driven by the higher mix of CPaaS in the period, mainly from large enterprises with lower margins, coupled with lower margins in SaaS which also grew in large enterprises.  Total number of active customers reached 12.9k, being 7.1k from SaaS and 6.3k from CPaaS. Adjusted EBITDA was positive BRL 22.1 million in the quarter, up BRL 74 million from negative BRL 52.4 million in Q4 2022 and +39.2% sequentially. This includes the positive BRL1.6 million impact from the non-cash earn-out reversal of expenses related to SenseData in Q4 2023. In the quarter we also had non-recurrent impact related to previous quarters, which negatively impacted our normalized EBITDA in R$ 9.0 million. Therefore, the Normalized EBITDA for Q4 2023 is BRL 29.5 million, up 78.9% sequentially and an increase of 28.0% YoY.  Financial Highlights FY 2023 Revenues totaled BRL 807.6 million, up 6.7% when compared to BRL 756.7 million in Q4 2022 as a result of both SaaS (+13.2% YoY) and CPaaS (+3.3%) expansions. Strong Non-GAAP Adjusted Gross Profit of BRL 382.6 million, up 14.9% YoY, with Non-GAAP Adjusted Gross Margin expanding 3.4 p.p. to 47.4%, due to better revenue mix. Adjusted EBITDA evolved to positive BRL 77.1 million in FY 2023, up BRL 154 million from negative BRL 77.1 million in FY 2022. This stronger Adjusted EBITDA is mainly related to the 14.4% increase in Gross Profit coupled with strict cost control that led to a 12.6% drop in G&A expenses to BRL 128.8 million in FY 2023 from BRL 147.5 million in FY 2022. This reduced the ratio of G&A as a percentage of revenues to 16.0% in FY23 from 19.5% in FY22. Normalized EBITDA was BRL 76.1 million, more than 3x the Normalized EBITDA recorded in 2022 of BRL 23.5 million, and a record high of the Company. Subsequent Events On February 6, 2024, Zenvia announced that it had entered into agreements with a group of stakeholders aimed at addressing its existing funding gap. The transactions included: Type Extension ofshort-term debtwith banks Renegotiationof Movidesk's earnout Renegotiationof D1'searnout Amount BRL 100 MM BRL 207 MM BRL 20 MM Negotiation Payment terms were extended to 36 months, with a 6-month grace period and 30 monthly payments Payment terms were extended to 60 months, with Zenvia's option to convert ˜BRL100 MM of total debt into equity, subject to certain conversion periods agreed between the parties Payment terms were extended to 36 months, with a 6-month grace period and 30 monthly payments New final maturity December 2026 December 2028 December 2026   In addition, Cassio Bobsin, Zenvia's Founder and CEO acquired, through Bobsin Corp, 8,860,535 Class A common shares at a price of US$ 1.14 per share, equal to the Nasdaq closing price on January 30, 2024, totaling an investment of approximately BRL 50 million. Under the terms of the investment agreement, over the next three years, Bobsin Corp is entitled to additional cash or equity returns based on certain liquidity or corporate transaction events, with potential returns tied to the appreciation of Zenvia's share price. This arrangement could lead to a maximum shareholder dilution of about 11% at the time of such events. The Company also introduced, on the same date, its Normalized EBITDA guidance for 2024, with a range between BRL 120 million and BRL 140 million, implying almost 70% increase for the year when compared to the midpoint of the range. Considering the announced transactions and the guidance for 2024, the main financial impacts of the operation are the following: (i) Zenvia's cash outflow to pay financial liabilities in 2024 was reduced by approximately BRL 120 million; (ii) Zenvia's average debt (including earnouts and bank loans) term improves from current 1.6 to 2.8 years; and (iii) Zenvia's pro-forma leverage at the end of 2024, considering the new 2024 Normalized EBITDA guidance and the conversion of the full permitted amount of Movidesk's earnout into equity for the period, would be approximately 2.0x. As a result of the improved capital structure mentioned above, Zenvia raised additional funding with local Brazilian banks in the amount of R$ 40 million by the end of April 2024. On May 2, 2024, Zenvia announced the hiring of Mr. Gilsinei Hansen for the newly-created role of  Chief Revenue Officer (CRO), reporting to Cassio Bobsin. The new role was created to consolidate the current segments into one single Business area which will be responsible for the entire customer journey. The new area will be organized by customer profile/segment instead of by solution/product, with a focus on strengthening the Company's integrated offering, improving experiences for all customers, and driving profitable growth. Mr. Hansen will also oversee two important growth initiatives: the rollout of Zenvia Customer Cloud, Zenvia's unified, multichannel solution that centralizes and manages customer data; and the Company's international expansion. SaaS Business SaaS Key Operational & Financial Metrics (BRL MM and %) Q4 2023 Q4 2022 YoY FY 2023 FY 2022 YTD Revenues 83.6 72.0 16.1 % 295.0 260.6 13.2 % Gross Profit 41.1 40.7 1.0 % 136.3 128.6 5.9 % Gross Margin 49.2 % 56.5 % (7.4) p.p 46.2 % 49.4 % (3.2) p.p Non-GAAP Adjusted Gross Profit (1) 54.0 53.8 0.4 % 188.3 172.7 9.1 % Non-GAAP Adjusted Gross Margin(2) 64.5 % 74.6 % (10.1) p.p 63.8 % 66.3 % (2.4) p.p Net Revenue Expansion (NRE)(3) 102 % 124 % -21.6 p.p 102 % 124 % -21.6 p.p Total Active Customers(4) 7,127 6,231 14.4 % 7,127 6,231 14.4 % (1) For a reconciliation of the Non-GAAP Adjusted Gross Profit of our SaaS business segment to Gross Profit of our SaaS business segment, see Selected Financial Data section below. (2) We calculate Non-GAAP Adjusted Gross Margin of our SaaS business segment as Non-GAAP Gross Profit of our SaaS business segment divided by revenue of our SaaS business segment. (3) We believe that SaaS Net Revenue Expansion (NRE) rate is one of the most reliable indicators of our future revenue trends, as measuring our SaaS Net Revenue Expansion (NRE) rate on revenue generated from our customers provides a more meaningful indication of the performance of our efforts to increase revenue from existing customers. In order to calculate SaaS Net Revenue Expansion (NRE) rate, we first select the cohort of customers on a prior trailing twelve months period, sum up the total revenue of these customers for the applicable twelve-month period and divide this sum by the sum of the total revenue of these same customers on the prior trailing twelve-month period. (4) We define an Active Customer as an account (based on a corporate taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an Inactive Customer. In Q4 2023, our SaaS business Revenue went up 16.1% YoY to BRL 83.6 million, of which BRL 62.5 million was recurring-based, compared to BRL 72.0 million in Q4 2022, of which BRL 59.8 million was recurring-based. When we compare FY 2023 to FY 2022, the increase of 13.2% was mainly driven by the growth of SMBs customers. Sequentially, our Q4 2023 SaaS revenues increased 11.1%, from BRL 75.3 million in Q3 2023, mostly with SMBs customers, which should form the cornerstone of our growth strategy for 2024. Our SaaS annual recurring revenue (ARR)(5) at the end of December 2023 went up to BRL 250 million, from BRL 233 million at the end of September 2023 and BRL 239 million at the end of December 2022, mainly as a result of M&A integration and increase in SMBs businesses. As expected, H2 2023 numbers already recovered from the negative impact of the downsell in large enterprises on the consulting business related to the macroeconomic impact in H1 2023 and posted an increase of 1.5% when we compare FY 2023 to FY 2022. Still, the downsell pulled Net Revenue Expansion down to 102% compared to 124% in Q4 2022. Even though there are already signs of improvement in the conversion of sales cycle to large enterprise customers, we expect most of the positive impact to be recorded only in 2024. In terms of our profitability metrics, Q4 2023 Non-GAAP Adjusted Gross Profit was practically stable YoY at BRL 54.0 million from BRL 53.8 million. The increase in revenues from large enterprises combined with lower margins in the downsell resulted in lower Non-GAAP Adjusted Gross Margin from SaaS, despite the growth with SMBs customers. As a result, SaaS Non-GAAP Adjusted Gross Margin was down 10.1 percentage points YoY to 64.5%. For the FY 2023, our Non-GAAP Adjusted Gross Profit went up 9.1%, mostly as a result of the growth of SMBs customers. SaaS Case Study: Ânima Educação (B3:ANIM)Ânima, a leading educational group in Brazil with 400,000 students, has integrated Zenvia's customer experience solution into its marketing and sales operations to improve engagement and effectiveness across its digital channels. The initiative aimed to offer a more integrated and seamless experience to attract and serve students swiftly and effectively. As part of the implementation, Ânima set up specific customer journeys for new enrollments, re-engaging ...