Livea Mitsubara

Livea Mitsubara inquired about the factors contributing to the elongated sales cycles, seeking insights into potential turning points, market intelligence from CTOs, and conditions necessary for normalization. Additionally, she asked for clarification on the primary drivers behind the fourth-quarter gross margin gains, specifically if they were solely AI-driven or if other elements contributed.

Answer

Mariano Gomide de Faria, Founder and Co-CEO, explained that the elongation of sales cycles is due to a 'wait and see' effect regarding AI's future impact on software, causing enterprises to delay infrastructure decisions. He noted that win rates and churn remain stable, indicating a market-wide hesitation rather than a VTEX-specific issue. Ricardo Camatta Sodré, CFO, confirmed that the 3 percentage point increase in subscription gross margin was almost entirely AI-driven, specifically from automating support functions for existing customers, building on previous hosting optimizations.

Livea Mitsubara asked about the turning point for elongated sales cycles, seeking market intelligence on when normalization might occur. She also inquired if the gross margin gains in Q4 were solely AI-driven or if other elements contributed.

Answer

Mariano Gomide de Faria, Founder and Co-CEO, explained that sales cycle elongation is due to a market-wide 'AI wait and see effect,' not a deterioration in competitiveness, with win rates and churn remaining stable. Ricardo Camatta Sodré, CFO, confirmed that the 3 percentage point increase in subscription gross margin was primarily AI-driven, stemming from support function automation, and is sustainable.