Zenvia, Inc. Earnings Call: Growth Amid Challenges

Zenvia, Inc. Class A ((ZENV)) has held its Q4 earnings call. Read on for the main highlights of the call.

Zenvia, Inc. recently held its earnings call, revealing a mixed sentiment among stakeholders. While there is optimism surrounding the growth potential of the Zenvia Customer Cloud and effective cost management strategies, concerns were raised regarding the challenges faced in Q4 profitability and an EBITDA shortfall. The company’s strategic focus on AI, international expansion, and cost efficiency is seen as a positive step towards future growth.

Launch of Zenvia Customer Cloud

The launch of the Zenvia Customer Cloud in October 2024 marked a significant milestone for the company. The platform generated BRL180 million in revenue for the year, with nearly 6,000 companies utilizing its services. Looking ahead, it is expected to grow by 25% to 30% in 2025, with a projected gross margin of 68% to 70%.

International Expansion Success

Zenvia’s international operations, particularly in Argentina and Mexico, have been performing exceptionally well. This success has contributed to the growth of the Zenvia Customer Cloud and validated the company’s strategic direction. The international clientele now makes up 20% of the platform’s user base.

Cost Management and G&A Reduction

The company has made significant strides in cost management, reducing G&A expenses by 760 basis points over two years. This reduction, from 23% of revenue in 2022 to 12% in 2024, is attributed to streamlining efforts and the integration of AI technologies.

Positive EBITDA Minus CapEx Trend

Zenvia reported a positive trend in EBITDA minus CapEx, improving by BRL26 million year-over-year in 2024. This reflects the company’s operational efficiency and positions it well for future growth.

Q4 2024 Profitability Challenges

Despite overall revenue growth, Zenvia faced profitability challenges in Q4 2024. A BRL27.8 million SMS cost adjustment led to a 60% decline in gross profit, reducing it to BRL49 million, with a gross margin decrease to 21%.

SaaS Margin Pressure

The company experienced pressure on its SaaS margins due to tighter profitability from enterprise clients and increased costs associated with the launch of the Zenvia Customer Cloud.

EBITDA Shortfall

Despite a 19% increase in revenue and an 11% decrease in G&A expenses, Zenvia’s EBITDA for 2024 fell short of guidance. This shortfall was primarily due to lower gross profit margins.

Forward-Looking Guidance

Looking forward, Zenvia is emphasizing a strategic shift towards the Zenvia Customer Cloud, which is projected to grow by 25% to 30% in 2025. The company aims to achieve a gross margin of 68% to 70% for the platform. Additionally, Zenvia is transitioning to a volume-based pricing model to enhance revenue generation and streamline customer interactions.

In conclusion, Zenvia’s earnings call presented a mixed outlook with both positive growth prospects and notable challenges. The company’s strategic focus on AI, international expansion, and cost efficiency is promising, yet the profitability challenges in Q4 and the EBITDA shortfall remain areas of concern. Investors will be keenly watching how Zenvia navigates these challenges while capitalizing on its growth opportunities.