Hello, everyone, and welcome to the VTEX Earnings Conference Call for the quarter ended December 31, 2025. I'm Julia Vater Fernandez, VP of Investor Relations for VTEX. Our senior executives presenting today are Geraldo Thomaz Jr., Founder and Co-CEO; and Ricardo Camatta Sodre, Chief Financial Officer. Additionally, Mariano Gomide de Faria, Founder and Co-CEO; and Andre Spolidoro, Chief Strategy Officer, will be available during today's Q&A session. I would like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, industry trends and product and technology initiatives. These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the current available information, you are cautioned not to place undue reliance on these forward-looking statements. Certain risks and uncertainties are described under Risk Factors and Forward-Looking Statements sections of VTEX's Form 20-F for the year ended December 31, 2025, and other VTEX filings within the U.S. Securities and Exchange Commission, which are available on our Investor Relations website. Finally, I would like to remind you that during the course of this conference call, we might discuss some non-GAAP measures. A reconciliation of those measures to the nearest comparable GAAP measures can be found in our fourth quarter 2025 earnings press release available on our Investor Relations website. With that, I hand the call over to Geraldo. Geraldo, the floor is yours.

Thank you, Julia, and good afternoon, everyone. Thank you for joining us today. Today's call is primarily about giving shareholder transparency into how we're positioning VTEX to strengthen growth over time. Let me start by acknowledging that our recent growth has been below our long-term ambition. We believe that this is largely cyclical, not structural, driven primarily by 3 external factors: a more challenging macro environment in Brazil and Argentina; and a more promotional marketplace environment in Brazil; and longer decision cycles as enterprises reassess its priorities in a rapidly evolving AI landscape. More broadly, we recognize the market debate around AI and what it means for software. Although the combination of rapid AI innovation with limited tangible commerce applications so far may elongate sales cycle, the consistent view from our conversations with enterprise CIOs is that AI will change how software is built and operated, but it won't eliminate the need for deeply integrated enterprise-grade platforms that run mission-critical processes. And while AI lowers the cost of writing code, it raises the bar for security, complex integrations and reliability, precisely the attributes enterprises rely on VTEX to provide and consistent with broadly stable dollar churn we delivered in 2025. As value shifts from seat-based to outcome-based, VTEX is certainly aligned with this shift. We are not just building AI features. We're building the mission-critical backbone for connected commerce that global brands can rely on to deploy AI safely and effectively. We could dive deeper into each of 3 external factors mentioned. But as we cannot control the environment, let's focus on what we can control, our execution and product road map. Starting on that, we see a clear opportunity to improve growth with a plan anchored in 4 levers: global expansion, B2B, retail media, and AI. While we execute…

Thank you, Geraldo, and hello, everyone. I will now walk you through our financial performance for the fourth quarter and the full year of 2025. Before going into the details, I'd like to frame the year in context. As mentioned by Geraldo, while the external environment pressured our customers' GMV growth and lengthened enterprise decision cycles, 2025 demonstrated the resilience of our business model and the strengthen of our unit economics. As evidenced, we continue to drive efficiency gains and deliver record profitability even in a slower growth environment. In the fourth quarter of 2025, our GMV reached $6.3 billion, representing a year-over-year growth of 17.2% in U.S. dollars and 10.0% in FX-neutral. For the full year, GMV reached $20.5 billion, up 12.1% in U.S. dollars and 12.9% in FX-neutral. Subscription revenue reached $66.7 million in the fourth quarter, representing a growth of 12.2% year-over-year in U.S. dollars and 5.4% in FX-neutral. For the full year, subscription revenue reached $234.9 million, growing 7.9% in U.S. dollars and 9.5% in FX-neutral. Turning to revenue retention. In 2025, subscription revenue from existing stores reached $194 million, and our net revenue retention was 99.5% in FX-neutral. Annual dollar churn remained broadly stable year-over-year. However, given that roughly 60% of our revenue come from a take rate on our customers' GMV, the decline in net revenue retention compared to 2024 was primarily driven by lower same-store sales growth of 6.8% in FX-neutral in 2025. This lower same-store sales growth reflected continued softness in Argentina and more muted consumer spending in Brazil, which weakened over the course of the year. A key highlight for the year was the continued improvement in the profitability of our existing stores. Existing stores gross margin increased from 80% in 2024 to 82% in 2025, while operating margin reached 44%,…

[Operator Instructions] Our first question comes from the line of [indiscernible] with JPMorgan.

I would like to explore a little bit the point of the sales cycle. So what I would like to understand is mainly if you see a turning point on this elongated sales cycle, I mean, from your conversations with CTOs and the industry players, what is the feedback that you are having regarding this point? And is there any market intelligence that you could share with us to help us understand when this could normalize? And what do you think is necessary to happen in the market to change the scenario? Is there something that you see as a turning point? And the second point that I would like to explore is the gross margin gains in the fourth quarter. Is it all coming from AI? Is there other elements that are helping you to bring this margin level up?

Mariano will take the first question, and I can take the second one. Mariano?

Yes, I can take. So, make no mistake, what we were seeing is not a deterioration in competitiveness, but a clear elongation of sales cycle. 2024 was a record year for bookings. In 2025, we signed fewer new contracts. That's a fact. And RFP processes are taking longer to close. So, enterprise customers are simply taking more time to make platform decisions due to macro scenarios and uncertainty of AI future. The primary driver is what we call the AI wait-and-see effect. There is an enormous amount of discussions around how AI will reshape software. When companies are making a 5 to 10 years infrastructure decision with high switching costs, they want clarity. So, decisions are being delayed, sales cycles are being elongated. Importantly to mention is that our win rates remain stable. Our churns remain in the mid-single digits and is stable. And this is, in my opinion, a market-wide excitation, not a VTEX-specific issue. In response, we streamlined our sales and marketing organization to operate more efficient, leveraging all the new AI paradigm and capabilities. The productivity gains are being redirected into R&D, accelerating our AI road map and positioning VTEX an AI-first native platform for commerce enterprise companies. So yes, momentum is slower, and cycles are longer, but fundamentals remain strong. Sodre?

Thanks, Mariano. On the second question on gross margin. As we mentioned in the prepared remarks, we gained roughly 3 percentage points in subscription gross margin this quarter, from 78.8% to 81.8%. And this is basically all AI-driven. So, just to recap over the past 3 years, we gained a lot of subscription gross margin. Over the first 2 years in this 3-year period was mostly driven by hosting optimizations and gains. Over the last 1 year, so during 2025, it was driven on the support function of our existing customers. And by automating the support using AI tools, we have managed to gain 3 percentage points in margin, and this is sustainable going forward as well.

And our next question comes from the line of Lucca Brendim with Bank of America.

I have 2 on my side here. The first one, if you could comment a little bit on what you think are the main risks and also the main opportunities of AI that you see for the company, both in the short term, but also in the long term? And how do you think both sides will pan out in the long run? And also, second, if you could comment a little bit on capital allocation. You guys announced the new buyback program, which is very robust. So, how can we think about what VTEX plans to do with the cash generation that will be coming in the next years?

So, thank you very much, Lucca, for the question. I am Geraldo, I'll answer that. So, first of all, like AI is not a feature that we create. It's a structural shift comparable to the move to the cloud that we did a decade ago and make us viable as a company. Our role in this transition is very clear to be the mission-critical orchestration layer of AI-driven commerce. AI is lowering the cost of writing code. Everybody is talking about it, but it's raising the bar for security integration and reliability. Global enterprise, they don't buy lines of code. They buy future-driven domain knowledge packaged around security and reliability. They need a backbone that propels them for the future with resilience and security. As commerce fragments across AI agents, bots, and new interfaces, the front end becomes increasingly commoditized. But every transaction still needs a centralized system of records to validate inventory, manage price, and trigger fulfillment. That orchestration layer, the single source of true is where VTEX operates. We have a cloud-native multi-tenant architecture that give us access to billions of real-world commerce data points across a lot of verticals. That deterministic data is a strategic asset for training proprietary models, something similar that are on legacy platform that they cannot replicate. In our own operations, Sodre and Mariano talked about this already, we're seeing a lot of tangible impact. So, I would say, Lucca, that the risk is that for us and for any other software company is that we don't embrace and adopt the revolution, the technological revolution. But if we do a software company that goes to this technological shift, they will be stronger, not weaker. And we are working very hard to get there with the strength that we already got from a lot of years from now, which is the credibility, the security, the customer base, the proprietary data, I think there's a lot of room for us to use and leverage the AI revolution.

And on the capital allocation, Lucca, so our capital allocation is guided by a simple principle. We prioritize long-term value creation while maintaining the flexibility to navigate a dynamic macro environment. So, we are operating from a position of significant financial strength. As our year-end 2025, we held roughly $200 million in cash. So, this robust position, combined with our consistent free cash flow generation allow us to announce a new $50 million 12-month share repurchase program that you just mentioned. So, we view buybacks as a disciplined tool to optimize our capital structure and importantly, to mitigate dilution from our share-based compensation program. While organic growth remains our primary focus, and we talked a lot in the prepared remarks about how we plan to reaccelerate the organic growth, and we are investing more in R&D to boost our AI transformation and strengthen our main key growth pillars. We are also strategically active in the M&A market. More recently, our approach has been about acquiring capabilities that accelerates our product road map to enhance the platform differentiation. So, you've seen this recently with the Weni acquisition, which strengthened our Agentic CX product and Newtail, which accelerated our retail media capabilities. So, our capital allocation remains anchored in discipline ROI and long-term view for the shareholders.

And your next question comes from the line of Rafael Oliveira with UBS.

I got 2 questions here on my side. So first, I want to start here by asking what are the main drivers that could drive revenue growth back to double digits in the next few years? If you could disclose any regional breakdown on the current macro backdrop would be very helpful. And the second question would be, how is the B2B pipeline evolving, both in terms of size and quality? And again, any color on the global expansion of B2B will be very helpful.

Good. I'll get that. So to address the path forward, like we know, as I said in the first remarks, we're not satisfied and we think that we have a lot of more bandwidth to deal with more complex problems to reaccelerate the comp to initiate other -- to start other initiatives that will make the company accelerate and go back to the growth we were used to. So, first of all, we need to distinguish between what is cyclical and what is structural. While our Q4 of 2025 subscription revenue growth of 5.4% FX-neutral reflect a cyclical slowdown, mostly driven by macro softness in Brazil and Argentina and also an unusually promotional marketplace environment our structural foundations have never been stronger in my opinion. We have deliberately evolved VTEX into a multiproduct company, AI-driven commerce platform, and we are now seeing double-digit growth momentum across 4 levers that will power our next phase. And I'll try to give some picture on these 4 levers. So, first of all is the global expansion. Our markets in the U.S. and Europe delivered 22% subscription revenue growth in 2025. These operations are now approaching breakeven contribution margins and are becoming largely self-funded. Second is B2B commerce. This is a natural extension of our platform that effectively doubles our addressable market in our opinion, roughly half of our new deals in the U.S. and EMEA are now B2B related as enterprise migrate from outdated 20 years old legacy system to a modern architecture. The third one is retail media. We moved from a pilot to a core engine this year by enabling retailers to monetize their digital traffic, capturing ad revenue that represents 3% to 8% of GMV for marketplaces. We're creating a high-margin accretive revenue streams for our customers and for VTEX. The fourth one is the AI-first approach. AI is already delivering measurable outcomes such as the 3 percentage point expansion on the gross margin that we talked about, but we'll also reinvest these productivity gains back into R&D to lead the transition to our AI workspace and vision products that can be transformational to our customers. For the full year of 2026, as comps ease throughout the year, we anticipate a trajectory of gradual acceleration with the expectation that we will exit the year at a faster pace than we entered. While we recognize there are external factors that we do not control such as the interest rate cycles, the consumption cadence, the broader market volatility, we believe we have the right tools to help our customers reaccelerate their same-store sales and reinvigorate our own sales funnel. So, we're staying the course, executing with discipline and positioning the tax as the backbone for the next era of connected commerce. All of that while delivering record profitability, as you noticed.

Okay. About the B2B, can you -- if I'm not answering correctly, but can you please repeat the B2B question, if I misunderstand. But just an overall perspective on B2B. VTEX is a company that has 3 products and multiple solutions. The products are commerce platform, Retail Media platform and Agentic CX platform. And we do support with those 3 products, multiple solutions, omnichannel B2C, B2B commerce, advertising, retail media for advertisers, retail media for publishers. About B2B, we are seeing that B2B is getting traction. Something that we call an acceleration phase, each in deploys and pipeline generation. Our commerce platform product delivers multiple solutions, specialist in B2B, showing great momentum. So, in fact, something that we can share is roughly half of our deals in the U.S. and EMEA are now B2B related. So that effectively doubles our addressable market within the enterprise tier. If I don't -- if I didn't answer what you wanted about B2B, please let me know.

No, it was super clear. I was just asking about how the B2B pipeline is evolving, but thanks for the color. If I may do just a follow-up here on the AI team. How are you guys seeing the development of these new AI tools from the large tech or LLM providers? Are you guys seeing some competitive pressure? And if you guys could comment about agentic e-commerce and how this should be maybe beneficial for the B2C platforms?

I think every one of us are very impressed with the velocity of this evolution and eventually are getting to conclusions that are maybe faster than we should have. I don't -- I see that this AI company, they are very powerful. They are doing a lot of nice work, a lot of aggregated value, but they're also enabling companies like us to deliver even better software, just like the cloud revolution, they are enabling us to build much better software. And if we embrace that technology, if we embrace the APIs that they provide to us, I believe that companies like us can provide to the retailers and brands, and manufacturers a better solution than they could do it alone. Why? Because these are high-risk workflows. These are problems that are difficult to articulate. These are problems that require more than building software. This requires credibility, as I said, security, compliance, and trust. And I believe we're better positioned as a domain application to provide the solution to our customers than the generic ones. This was always true. We always believed that in every revolution, when open-source code arrived, we believed that when everybody thought open-source code would dominate the world, and we are here selling software, selling subscriptions. When the cloud revolution came, everybody thought that people would internalize their software because now it's so easy to deploy a server and software industry, and VTEX is much bigger because of the cloud revolution, not despite that. And now I believe that the AI revolution will give us even more strength to deliver even more value to our customers.

And just adding up on Geraldo's comments here. If the question on LLMs were about the kind of monopoly on traffic control that can generate the way we see the world of traffic, we used to be controlled by Meta, Google, and a few marketplaces. And now with new entrants like Chinese brands becomes a huge traffic controller, OpenAI, with the LLM like cracking the code of becoming a huge aggregator. Actually, we are seeing more fragmentation in the traffic industry. So, when the traffic layers fragment, the backbone for a multichannel operation increases value. WhatsApp in LatAm, for example, is a huge traffic originator. So, the world is evolving in creating more channels and not more consolidation of channels. We see it as a foundation for strengthening the positioning of anyone in the backbone for the commerce market as we are.

We talk about that in our founder's letter on this annual earnings report. I think it's worth it to take a look at our perspective on how this revolution affects us and the market in general.

And our final question comes from the line of Maddie Schrage with KeyBanc Capital Markets.

Obviously, you guys called out some macro headwinds, but also we're emphasizing global expansion as a key growth lever. So, how are you thinking about the pace and prioritization of geographic investments? And then, in particular, as you guys move faster internationally, what do you think is the biggest factor in terms of gaining traction? Was it brand awareness, maybe partnerships, or product localization? Is there something we should call out?

Perfect. I can give some color, and Geraldo can give as well. We cannot avoid to understand that a company that will leverage the most of the AI revolution is the company that can group competencies under org charts. So recently, precisely in December, we changed a lot of our regional approaches by having the same competencies of people below different managers in many regions in the world, countries, and regions. We understood that we need to bring them more in specialization, like a functional-oriented org chart. So we announced a big reorg on the growth structure, where now a majority of the sales and marketing organizations are oriented by functions. And with that, we can leverage most of the AI agentic revolution. The agents are unified by knowledge. What we are seeing, VTEX has reached the level of a brand by being recognized on Gartner for 2 consecutive years as the customer choice in the Gartner voice. The brand of VTEX was able to produce clients in all the regions. And now with the globally oriented by function org chart, we can deliver through our ecosystem services and solutions among any kind of regional definition. We believe the company that will crack the code on really using AI in favor of operational gains will be the one with a global readiness by joining human plus agentic labor. And so, the regional approach lost importance for us. This doesn't mean that the regional localization, is less. It's quite the opposite. We reduced our solution architect layer of FTEs, increasing the trust we do have in our ecosystem. That's a sign of the maturity of our ecosystem in the world. We are delivering global projects in Abu Dhabi, in Asia, in EMEA, in Africa, in North America, in LatAm. And now we are doing this through the ecosystem. That is a transition coming from the last 5 years. So, we are not seeing any more the go-to-market of VTEX heavily or kind of exclusively based on regions. Now we are defining our scope to the world that is 3 products commerce platform, a Retail Media platform, and Agentic CX platform with multiple solutions. The 2 the biggest solutions are B2B commerce and omnichannel B2C.

Super helpful. And if I could just ask 1 follow-up. In your conversations with CIOs and digital leaders, how often are you guys talking about discoverability in the age of agentic commerce and conversion?

The AI, agentic, is a kind of top-notch topic in any RFP today, right? What VTEX is really focused is to deliver the value aggregation of the disruption in technology. Talking about the technology itself doesn't aggregate outcomes to our customers. But with the Agentic CX platform of VTEX, we have already deployed clients that have saved 80% in the customer service costs. This is AI for us. AI is a median to deliver the outcome that our clients need. And our clients all over the world, they trust us to future-proof them in terms of AI. So, the AI bet of VTEX is pretty big. It's all across all our products and solutions. But the one that I would say, that is delivering the most results, it is our solution of agentic customer service based on our product of Agentic CX platform.

There are no further questions at this time. I will now turn the call back over to Geraldo Thomaz for closing remarks. Geraldo?

Before we conclude, I want to step back once more and reflect on where VTEX stands today. 2025 tested the market, our customers, and our industry, but it also reaffirmed the strength of our foundation. We navigated a challenging environment to deliver record profitability while deepening our relevance with enterprise customers. Crucially, we did this while increasing our investment in R&D to accelerate our AI transformation. As we look ahead, our focus is on execution. As discussed, we remain focused on our 4 growth levers, global expansion, B2B, retail media, and AI. We believe VTEX is structurally aligned with where enterprise commerce is going, and that alignment positioned us to improve growth over time as these initiatives scale. Finally, I want to thank our employees, customers, partners, and investors for their continued trust. VTEX has been built over decades by navigating moments of transition, just like [Technical Difficulty]. Our history shows that our willingness to adapt early and invest with discipline creates durable value over time. We entered the next chapter with clarity, resiliency, and confidence in our ability to deliver long-term growth and profitability. Thank you for joining us today, and we look forward to updating you in our progress in the quarters ahead.

That concludes today's call. You may now disconnect.