Revenue growth (FY 2024)

FY 2024

FX‑neutral YoY revenue growth: 18% to 20%; implied revenue range: $231M–$235M "

FX‑neutral YoY revenue growth: 18.5% to 19.5%; implied revenue range: $230M–$232M "

no change

Non‑GAAP Operating Income and Free Cash Flow Margin (FY 2024)

FY 2024

Target range: high single digits to low teens "

Raised target to low teens "

raised

Sales momentum and new contract signings

Q2, Q1, and Q4 earnings calls consistently highlighted strong sales momentum and robust new contract signings across multiple regions with a focus on their composable commerce platform. " " " " " " "

Q3 emphasized robust sales momentum with accelerated contract wins and geographical expansion – notably new wins in Brazil, the U.S., Europe, and regions like Austria and Colombia. " "

Consistently positive: The narrative remains upbeat with expanding geographic reach and increased signing activity.

Subscription revenue growth and margin improvement targets

Previous periods detailed steady subscription revenue growth and significant improvements in subscription gross margins through operational efficiencies, with targets set around 80% and overall margin improvements. " " " " " "

Q3 reported subscription revenue of $53.9 million, 13% YoY growth in USD, and noted margin improvements with a non-GAAP subscription gross margin of 79% – just shy of their target, alongside overall operating margin improvements. " " "

Steady improvement: Ongoing positive momentum in revenue growth and margin expansion, with incremental progress toward stated targets.

Global market expansion and volatile markets (Argentina)

Q1, Q2, and Q4 emphasized global expansion with strong performance in the U.S., Europe, and Latin America, while noting that Argentina remained a persistent headwind due to macroeconomic volatility. " " " "

Q3 continued to highlight strong performance in key markets (U.S. and Europe) while acknowledging that Argentina remains a headwind due to past pre-devaluation consumption issues, although this is expected to ease by December. "

Consistent with caution: Global expansion continues robustly, with persistent, yet expected-to-mitigate challenges in Argentina.

Macroeconomic headwinds and regional volatility affecting consumption

Earlier calls (Q1, Q2, Q4) discussed macroeconomic headwinds and volatile consumer behavior, especially impacted by economic slowdowns in regions like Argentina and uncertain consumer confidence. " " " "

In Q3, executives noted that macroeconomic headwinds—especially in Argentina—are still influencing consumption, with comparisons affected by the previous year’s pre-devaluation behavior. "

Steady caution: The narrative remains similar, with consistent challenges noted, though underlying strength in other regions is maintained.

FX devaluation and currency fluctuation risks impacting revenue guidance

Q1, Q2, and Q4 discussions focused on FX devaluation and currency risks, particularly highlighting the impact of Argentina’s devaluation and adjustments in guidance to account for FX-neutral growth. " " "

Q3 confirmed that FX devaluation remains a couple of percentage points headwind in Argentina, but noted that the effects should ease as conditions normalize, with revenue guidance provided on an FX-neutral basis. " "

Unchanged impact: Currency risks remain a moderate challenge, with adjustments in guidance continuing to mitigate FX fluctuation effects.

High interest rates and cautious corporate budgeting affecting growth prospects

Q1 and Q2 described how high interest rates and cautious budgeting were weighing on corporate spending, though VTEX’s low TCO proposition helped offset these pressures. " "

Q3 did not explicitly revisit this topic, with focus shifting to strong sales and contract momentum despite a challenging retail backdrop. "

Faded mention: This topic was prominent in earlier periods but is not directly mentioned in Q3, suggesting less emphasis this period.

Competitive landscape dynamics and market pressures

While earlier Q1, Q2, and Q4 calls provided little specific commentary on competitive dynamics, the focus was on market expansion and customer wins. " " "

Q3 specifically stated that the competitive environment remains stable, with no significant shifts and steady revenue churn in the mid-single digits. "

Emerging reassurance: Q3 explicitly addresses and reassures stability in competition, adding clarity to the competitive landscape.

Mature ecosystem of system integrators

Q1 and Q2 earnings emphasized a mature ecosystem of system integrators with over 1,000 partners and thousands of VTEX IO extensions, contributing to lower direct implementation costs and improved scalability. " " " Q4 did not highlight this topic.

Q3 reiterated the benefits of a mature SI ecosystem, noting a decline in direct services and associated revenue as partners increasingly drive implementations, which improves margins. "

Consistently positive: The matured SI ecosystem continues to be a strategic asset, reinforcing scalability and margin improvement.

Industry analyst recognition and enhanced pipeline visibility

Across Q1, Q2, and Q4, VTEX noted strong industry analyst recognition (from Gartner, IDC, etc.) that enhanced their pipeline visibility and bolstered their market positioning. " " "

Q3 maintained that industry analyst recognition remains a key factor in driving contract momentum and pipeline strength, with recognitions from IDC, Forrester, and Gartner supporting continued growth. "

Sustained strength: Recognition by industry analysts continues to support and enhance pipeline visibility and credibility.

Decline and volatility in services revenue

Q1 and Q2 acknowledged that services revenue was volatile and declining as a result of deliberate strategic shifts towards subscription revenue, with direct services often delivered at a loss. " " " Q4 did not emphasize this aspect.

Q3 confirmed a by design reduction in services revenue (only 4% of total revenue) due to an evolving ecosystem where new customers rely increasingly on SI partners, leading to higher profitability. " "

Intentional decline: Continuing trend toward lower and more predictable services revenue as part of a strategic pivot to a subscription-based model.

GMV growth and high‐value enterprise customer expansion

Q1, Q2, and Q4 highlighted robust GMV growth and the expansion of high‐value contracts, with increasing numbers of customers contributing significant annual recurring revenue, particularly those paying over $250K annually. " " " " "

Q3 reported GMV of $4.4 billion with steady growth and noted further expansion in high‐value enterprise customer wins across global markets, reinforcing the high-profile customer base. " "

Steady upward trend: Consistent strong GMV performance with continued expansion of high‐value enterprise customers, indicating positive growth momentum.

Potential margin pressure due to increased investments

In Q4, there was discussion about the possibility of margin pressure if accelerated growth led to higher investment levels, with management noting that expense adjustments would be made as needed. " Q1 and Q2 had no specific reference to this.

Q3 did not mention potential margin pressure due to high-growth investments, with the focus instead on maintaining healthy operating margins and leveraging scale for improved profitability. " "

Faded topic: Previously raised in Q4, it is not mentioned in Q3—suggesting that margin pressure concerns have eased or are less top-of-mind as the focus shifts to scaling and profitability improvements.