Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Thursday, May 7, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Co-CEO and Founder — Geraldo Thomaz Jr.
  • Chief Financial Officer — Ricardo Camatta Sodre
  • Co-Founder and Director — Mariano Gomide

TAKEAWAYS

  • GMV -- $5.1 billion, reflecting a 17% increase in U.S. dollars and 7% increase on an FX-neutral basis.
  • Subscription Revenue -- $60 million, up 14% in U.S. dollars and 4% FX-neutral, compared to $52.6 million in the prior year quarter.
  • Non-GAAP Subscription Gross Margin -- 81.5%, expanding by 240 basis points year over year, largely due to AI-driven automation and FX tailwind.
  • Total Gross Margin -- 80%, a 400 basis-point improvement year over year, driven by gains in subscription margin and a shift away from services as partners take on more implementations.
  • Total Non-GAAP Operating Expenses -- $38 million, a 6% increase year over year, with deliberate investment growth in R&D and stable sales and G&A spending.
  • Non-GAAP Income from Operations -- $10.6 million, doubling from $5.3 million, resulting in a 17.4% operating margin, 770 basis points higher year over year.
  • Non-GAAP Net Income -- $8.1 million, up 51% year over year, partially offset by mark-to-market losses in U.S. dollar-denominated cash investments that recovered in April.
  • Free Cash Flow -- $13.3 million, doubling year over year for a 21.9% free cash flow margin.
  • Share Repurchases -- 2.5 million Class A shares bought at an average of $3.86 per share, totaling $9.7 million in repurchases under the $50 million buyback program.
  • Guidance for Q2 2026 -- Subscription revenue expected to grow low- to mid-single-digit FX-neutral percentage; gross profit to increase mid-single-digit FX-neutral percentage; non-GAAP operating and free cash flow margins to be in the high-teens to low-20s percent range.
  • Fiscal 2026 (period ending Dec. 31, 2026) Full-Year Guidance -- Subscription revenue growth guided at mid-single-digit FX-neutral percentage; gross profit at high-single-digit FX-neutral growth; non-GAAP income from operations and free cash flow both targeted in the low-20s percent margin range.
  • Currency Impact -- If FX rates remain as in April, reported U.S. dollar subscription revenue growth guidance for Q2 anticipates an additional 10.3 percentage points, and 8.6 percentage points for fiscal 2026 (period ending Dec. 31, 2026).
  • AI Product Developments -- Launch of Vtex AI Workspace and developer kit; early adoption by customers such as Whirlpool, Mobly, and Casa do Vidro; real-time automation examples given for catalog and promotions management.
  • B2B and Global Markets Contribution -- B2B and global markets both grew in the low-20% range and are contributing disproportionately to overall growth but remain a smaller portion of the revenue base.

Need a quote from a Motley Fool analyst? Email [email protected]

RISKS

  • Ricardo Camatta Sodre said, "The moderation in GMV growth relative to last quarter was primarily driven by Brazil, where the high interest rate environment and persistent promotional marketplace behavior continue to pressure consumer demand in proprietary channels."
  • Subscription and gross profit growth guidance for full year and Q2 both reflect lowered expectations, attributed mainly to decelerating Brazil GMV, especially as FX-neutral GMV growth in Brazil slowed from mid-teens in the prior quarter to mid-single-digit in Q1 due to moderation in same-store sales.
  • Geraldo Thomaz Jr. said, "we acknowledge that recent growth has been below our long-term ambitions," framing near-term results as underwhelming relative to historic objectives.

SUMMARY

Executives emphasized a major strategic pivot to AI-native commerce, highlighted by the roll-out of the Vtex AI Workspace and supporting platforms, which have begun to demonstrate measurable automation and conversion benefits for select early adopters. B2B and global markets were called out as delivering higher percentage growth than the core revenue base, though management acknowledged their current scale remains small relative to overall operations. Guidance revisions downward for top-line and gross profit growth explicitly tie back to moderating Brazil GMV, reflecting currency and consumer headwinds; leadership maintained long-term confidence and highlighted ongoing investment in R&D and innovation. Product monetization for AI is still in early stages, with plans to expand from outcome-based pricing models once broader customer adoption occurs.

  • Leadership consistently identified operational efficiency and cash generation as key strengths, citing automation gains in both customer support and post-sales resulting in margin expansion.
  • Management reported no major deterioration in competitive win rates or customer churn, despite ongoing macro pressures and longer enterprise sales cycles in B2B and B2C.
  • Share repurchase activity was conducted under the $50 million 12-month authorization, with 2.5 million Class A common shares repurchased at an average price of $3.86 per share, for a total cost of $9.7 million in the first quarter.
  • Early customer use cases for AI (Whirlpool, TheCapsule) produced evidence of time and content optimization gains, compressing tasks from days to minutes with measurable conversion improvement.
  • AI investment is being leveraged internally for efficiency, with higher product throughput and the bundling of previously manual services into automated software outcomes.

INDUSTRY GLOSSARY

  • GMV (Gross Merchandise Volume): The total value of merchandise sold through the platform over a specific period, measured before deducting returns or cancellations, and independent of the company's direct revenue.
  • FX-neutral: Growth rate computed after adjusting for changes in foreign currency exchange rates, isolating underlying operational performance from currency impacts.
  • B2B: Business-to-business commerce solutions and sales channels targeting enterprise or wholesale clients, distinct from consumer-facing (B2C) channels.
  • AI Workspace: VTEX’s proprietary back-office interface that orchestrates automated commerce workflows through AI agents for tasks such as catalog, promotions, and search optimization.
  • Free Cash Flow Margin: Free cash flow expressed as a percentage of revenue, indicating operating cash efficiency relative to top-line sales.

Full Conference Call Transcript

Geraldo Thomaz Jr.: Good afternoon, everyone. Thank you for joining us. Last quarter, we outlined a clear strategic framework centered on four key growth factors: global expansion, B2B, retail media, and AI. In the first quarter, we continued to execute against this strategy. Today, we will update you on several recent product launches that directly reinforce our positioning across these opportunities. From a financial perspective, our top-line results were in line with our guidance, while our profitability and cash generation both doubled year over year and exceeded our guidance. This reinforces the resilience of our model and our disciplined execution in a dynamic macro environment.

While we acknowledge that recent growth has been below our long-term ambitions, we remain committed to executing with discipline and driving long-term value creation. Starting with our vision and product launches, we see our industry entering a new phase where artificial intelligence transitions from a conceptual layer into a structural driver of growth, efficiency, and competitive advantage. We see this as an attractive opportunity for Vtex. In the last technological revolution—the cloud—we architected our platform to fully embrace it from inception with a multitenant approach, avoiding the technical debt that constrains many legacy systems.

Now a highly scalable foundation positions us to capitalize on the AI technological shift, enabling us to rapidly deploy innovation and operate at scale as we navigate this new era. At the heart of this transformation is our reinvented Vtex Commerce Platform. We are moving beyond the traditional software-as-a-service model to deliver what we believe is the first AI-native commerce suite—one that delivers simplicity, ease of use, and, most importantly, tangible and measurable business outcomes for our customers. This is AI with real impact. The command center for this new paradigm is the Vtex AI Workspace. This is where our agents for catalog, promotions, and search collaborate.

They are engineered to do more than just flag problems: they autonomously diagnose root causes, architect strategic action plans, and execute them with minimal human oversight. For example, our catalog agent does not just manage data—it hunts for revenue opportunities. It systematically analyzes an entire product assortment by leveraging real-time shopper navigation data to understand precisely where and how the catalog should change to increase conversion. It sees where customers drop off, what search terms lead to dead ends, and how they interact with product attributes. Armed with these insights, the agent autonomously optimizes the catalog.

It goes beyond simple data entry, performing tailored content improvements across millions of SKUs by enriching descriptions, standardizing attributes, and ensuring every item aligns with our brands’ merchandise guidelines. This allows our customers to maintain a high-quality, high-converting catalog at a scale and speed previously unimaginable, turning a traditionally labor-intensive process into a strategic advantage. This is just one of many intelligent experiences that are now possible. By laying this groundwork, we are paving the way not only to expand our own suite of agents, but to eventually enable a marketplace where customers and partners can deploy third-party agents, creating a truly open and extensible conversational ecosystem.

And this intelligence extends far beyond the back office; it transforms the entire customer journey. For shoppers, our new storefront with an AI personal shopper combines conversational interactions, semantic search, and hyper-personalization to guide discovery and dramatically increase conversion rates. For our B2B customers, we are streamlining complex sales cycles with B2B commerce and AI order quotes, enabling sales teams to generate complete, accurate quotes instantly from a simple file upload or even a voice command. More broadly, our B2B and global expansion strategy are being significantly enhanced as the inherent complexity of managing multi-country, multi-currency operations is precisely the challenge our AI works is designed to address at scale.

To capture demand wherever it emerges, our integrations with Google Universal Commerce protocol enable shoppers to discover products and check out directly within Gemini and Google web AI modes, with a native cart synced back to our platform. And to empower our entire ecosystem, we introduced the Vtex AI Developer Kit, embedding AI assistance directly into developer workflows across tools like Cursor, Copilot, and others, while connecting them to Vtex’s knowledge base to accelerate development and drive innovation. We are delivering a platform where AI enhances operators, drives conversion for shoppers, accelerates sales for B2B teams, and empowers developers to build faster. This is a complete end-to-end vision for AI-native commerce.

But today, Vtex is much more than its commerce platform. We have evolved into a multiproduct company. Beyond our core commerce platform, we now offer two additional strategic solutions—our CX platform and our Ads platform—both enhanced with AI, where we have also introduced significant recent advancements. In our CX platform, we go beyond the traditional storefront to capture demand wherever it originates. The Vtex CX platform redefines customer experience through coordinated AI agents that operate seamlessly across the entire journey, making commerce more fluid and conversational. This includes a truly multichannel approach where AI guides discovery and transactions across web, WhatsApp, and other messaging interfaces.

We have introduced a fully integrated WhatsApp store, enabling consumers to complete their entire purchase journey without leaving the conversation, as well as voice commerce for real-time interactions. Importantly, this capability extends into the post-purchase phase, where autonomous post-sales agents manage order status, exchanges, and returns with over 91% automation, allowing human teams to focus on more complex, high-value engagements. In our Ads platform, we are significantly enhancing the power of our platform by embedding AI across orchestration and campaign execution. This enables our customers to transform their digital environments into high-margin media assets and unlock new revenue streams.

With our AI campaign management capabilities, retailers and their brand partners can move beyond manual workflows—simply defining an objective such as improving return on ad spend—while AI agents autonomously build and optimize multichannel campaigns to deliver results. This is further strengthened by AI-driven insights offering real-time visibility into performance attribution and market share, all within a privacy-first framework supported by a secure data clean room. Ultimately, we are helping customers convert their traffic into a scalable and strategic growth lever. While we have just launched these updates, we are already seeing some early but encouraging results.

For instance, Whirlpool has leveraged our AI capabilities to identify underperforming products, diagnose content gaps, and automatically generate optimized assets, compressing what was two days of manual work into minutes while improving conversion. At TheCapsule, our promotions agent enables real-time competitive responses through automated campaign recommendations. Across these use cases, the pattern is clear: AI is poised to redefine how customers drive sales, accelerate execution, and capture new levels of operational efficiency. These outcomes are particularly relevant in the context of enterprise commerce, where operations are complex, mission-critical, and increasingly global. Customers are not simply selecting a software vendor; they are selecting a strategic backbone that can scale, adapt, and evolve with the next generation of commerce.

With knowledge that it is early days and our excitement around this innovation is not yet reflected in our current growth rates, to be fully transparent, we are still evaluating the long-term transformational impact of these waves at scale. However, our commitment is to remain data-driven and grounded in reality, and we look forward to updating you on broader adoption in the coming quarters. We have embedded AI at the core of Vtex, transforming the company into what we believe is the first AI-native commerce suite. We believe Vtex is uniquely positioned to serve this role.

Our multitenant software-as-a-service architecture, outcome-aligned business model, and deep transactional data foundation allow us to deploy innovation at scale and align directly with our customers’ success. With that, let me welcome some new customers who went live in 2026, including Central Gana in Argentina; Amadin Paraíba and L’unelli in Brazil; VPCL in Canada; HomeSentry in Colombia; and Omicás in Portugal.

We also expanded our relationship with existing customers such as Whirlpool, which launched its Compre Geraeta Parceiros in Brazil, its official B2B channel for distributors, resellers, and authorized service centers; and Electrolux, which launched a B2B channel in Chile; Grupo Itchasac, which launched EBC Atacado de Beleza in Brazil, its official B2B channel for beauty professionals and resellers; Much Leiser, which launched the official OPPO store in Brazil, expanding the smartphone brand’s presence in the country; and Dafiti expanded to Chile, adding to its operation in Brazil. Now, before I hand the call over to Ricardo, I would like to express my sincere gratitude to our 1,147 Vtex employees, our customers, partners, and investors for their continued trust and support.

Together, we are building the future of commerce. Ricardo, over to you.

Ricardo Camatta Sodre: Thank you, Geraldo. Hi, everyone. I am pleased to share with you Vtex’s financial results. In Q1 2026, GMV reached $5.1 billion, up 17% in U.S. dollars and 7% FX-neutral. Subscription revenue was $60 million versus $52.6 million in Q1 2025, an increase of 14% in U.S. dollars and 4% FX-neutral. The moderation in GMV growth relative to last quarter was primarily driven by Brazil, where the high interest rate environment and persistent promotional marketplace behavior continue to pressure consumer demand in proprietary channels. In Q1, our non-GAAP subscription gross margin reached 81.5%, representing an expansion of 240 basis points year over year.

This improvement is mainly driven by structural gains in AI-powered automation in customer support and, to a smaller extent, a positive FX tailwind. Our total gross margin, including services, reached 80%, an expansion of 400 basis points year over year. This continued improvement reflects not only steady gains in subscription gross margin, but also our deliberate de-emphasis of services, as our global partner ecosystem increasingly leads complex implementations with reduced reliance on Vtex-led services. Our expense management continues to reflect our alignment with long-term growth priorities. Total non-GAAP operating expenses in the first quarter were $38 million, up 6% year over year.

While Sales & Marketing and G&A remained relatively stable, we deliberately increased investment in R&D, focusing on innovation, product development, and AI capabilities that reinforce our competitive positioning. In other words, even as we extend margins, we are simultaneously strengthening the foundation for sustainable, profitable growth. As a result, our non-GAAP income from operations reached $10.6 million, doubling from $5.3 million in Q1 2025. This also represented a non-GAAP operating margin of 17.4%, up 770 basis points year over year. In short, our operational discipline continues to translate into stronger margins and a more profitable growth trajectory while we focus on revenue reacceleration. Non-GAAP net income was $8.1 million in Q1 2026, up 51% year over year.

This earnings step-up reflects strong underlying operational performance, driven by operating leverage and efficiency gains, reinforcing the sustainability of our model. This was partially offset by unrealized mark-to-market losses on our U.S. dollar-denominated investment-grade cash position held in Cayman, following a significant repricing of the yield curve toward the end of the quarter, which has already recovered in April. These continued profitability gains are showing up in our cash generation, which remained strong once again this quarter. Free cash flow for the quarter was $13.3 million, doubling year over year and reaching a free cash flow margin of 21.9%. We also maintained a disciplined approach to share repurchases.

During the first quarter, under the $50 million 12-month share repurchase program for Class A shares approved in February 2026, we repurchased 2.5 million Class A common shares at an average price of $3.86 per share, for a total cost of $9.7 million. As we look ahead, our focus remains on disciplined execution as we work toward growth reacceleration, focused on our four growth levers: global expansion, B2B, ads, and AI. While macro headwinds persist—particularly in Brazil, where high interest rates and promotional marketplace behavior continue to weigh on GMV growth—we remain encouraged by the quality of new customer additions, our competitive positioning among global enterprise customers, and the compelling market opportunity across our four key long-term growth initiatives.

Importantly, while this affects our near-term growth outlook, it does not change our conviction in the structural opportunity across our four growth levers, nor our ability to continue improving profitability. With that, for Q2 2026, we expect subscription revenue to grow at a low- to mid-single-digit percentage rate on an FX-neutral year-over-year basis; gross profit to grow at a mid-single-digit percentage rate on an FX-neutral year-over-year basis; non-GAAP income from operations to be in the high-teens to low-20s percentage margin; and free cash flow to be in the high-teens to low-20s percentage margin.

For the full year 2026, we now expect subscription revenue to grow at a mid-single-digit percentage rate on an FX-neutral year-over-year basis and gross profit to grow at a high-single-digit FX-neutral rate, while maintaining our outlook for non-GAAP income from operations in the low-20s percentage margin and free cash flow also in the low-20s percentage margin. Assuming FX rates remain broadly consistent with April’s average rates, the FX-neutral growth guidance outlined above would translate into higher reported U.S. dollar subscription revenue growth, adding approximately 10.3 percentage points in the second quarter and 8.6 percentage points to the full year 2026.

We continue executing with discipline, investing behind our four growth levers to drive durable growth and shareholder value, while improving profitability and maintaining a strong balance sheet. We will now open the call for questions. Thank you.

Operator: We will now begin the question and answer session. To ask a question, simply press star followed by the number 1 on your telephone keypad. Please pick up your handset and ensure that your phone is not on mute when asking your question. Our first question comes from the line of Lucca Brendim with Bank of America. Please go ahead.

Lucca Brendim: Hi, good afternoon. Thank you for taking my question. I have two from my side. First, could you comment on the main drivers for the reduction in the guidance for top-line growth and gross profit growth for the year—was it mainly driven by macro and competition, or was there something else? Also, does this guidance incorporate anything from the new AI products you have been rolling out, or are those still not incorporated into the guidance? Second, could you give us an update on how you are seeing expansion in the United States and Europe, and the clients that were still in the process to go live—if everything is proceeding according to expectations or if there were any changes?

Thank you.

Ricardo Camatta Sodre: Hi, Lucca. Good afternoon. Let me start with the guidance. For Q2 and for the full year, we are aligning our short-term outlook with what we are seeing in the business today, while remaining confident in the long-term opportunity. For Q2, we are guiding subscription revenue growth in the low- to mid-single-digit range on an FX-neutral basis, essentially reflecting a continuation of recent trends, particularly in Brazil, where macro conditions remain challenging and continued marketplace promotional intensity is temporarily pressuring proprietary channels. For full-year 2026, we now expect mid-single-digit subscription revenue growth on an FX-neutral basis.

The vast majority of this guidance adjustment reflects a lower growth outlook for Brazil GMV, as FX-neutral GMV growth in Brazil decelerated from mid-teens in Q4 to the mid-single-digit range in Q1, driven by a meaningful moderation in same-store sales. Looking beyond Q2, growth is expected to come primarily from the ramp-up of customers we signed in 2025, combined with continued execution across our four strategic growth levers—global expansion, B2B, ads, and AI. On the profitability side, we remain confident. We are targeting non-GAAP operating margin and free cash flow margin in the low-20s for the full year, supported by structural efficiency gains across the organization.

While current market conditions affect our near-term growth outlook, they do not change our conviction in the structural opportunity across our four growth levers, nor our ability to continue improving profitability. The message here is realism in the near term combined with continued discipline and conviction in the long term.

Geraldo Thomaz Jr.: On the AI contribution to revenue, our AI strategy is about transforming how we serve customers and deliver value through the product. The Vtex AI Workspace is the first product we are offering within this strategy. The idea is to rebuild Vtex from the ground up, informed by the AI revolution. We are seeing interest from a small group of early adopters, such as Whirlpool, Mobly, and Casa do Vidro, who are actively using the product. Our focus is deliberate: prove value creation and satisfaction for a small number of early adopters, then expand.

There may be opportunities to monetize these products in different ways over time, but our expectation is that the biggest value after this AI-driven transformation will be acceleration of the sales pipeline as customers see a new way of operating commerce with Vtex.

Mariano Gomide: Regarding the United States and Europe, we are seeing good momentum. We continue to close relevant enterprise brands, and we are building a strong and healthy pipeline in both regions. The demand environment from a strategic standpoint remains encouraging, although sales cycles are longer than in the past. Demand is solid for an AI-native commerce suite that delivers efficiency. Global markets—which for us are basically the U.S. and Europe—grew in the 20 handle in Q1. Although they represent a smaller portion of our revenue base, our global markets expansion is contributing disproportionately to our overall growth, and we expect that contribution to increase over time as it scales.

As always, we will share more details and customer names as they go live. Overall, we are encouraged by what we are seeing.

Operator: Our next question comes from the line of Analyst with J.P. Morgan. Please go ahead.

Analyst: Hi. I would like to make two questions. Thank you for the opportunity. First, I would like to explore the B2B segment. Could you share more details about how your B2B strategy is advancing? We heard strong feedback from industry players regarding this market during your Vtex Day in Brazil, so it would be interesting to hear how your commercial pipeline is evolving, when we should see traction in revenues coming from this segment, and if the new logos of Whirlpool in Brazil in B2B and Electrolux in Chile should help unlock value in this segment. Thank you.

Mariano Gomide: On B2B, we continue to see solid traction, particularly in the U.S. and Europe, where roughly half of our pipeline is already coming from B2B solution opportunities. In Brazil and broader LatAm, as expected, adoption has been slower. A big part of our effort there has been educating the market on the value of digitalizing B2B channels and replacing very old legacy interfaces for B2B. Encouragingly, we are now starting to see increased demand in Brazil and growing interest across the LatAm region. On the product side, we are focused on strengthening our B2B solutions, making them more robust, and supporting multiple B2B sales channels—self-service portals, call centers, sales teams, and automation, among others.

Our goal is to be the transactional backbone for our customers across all B2B and B2C channels. As a data point, B2B grew roughly in the 20 handle in Q1. Although it represents a smaller portion of our revenue base, our B2B solution is contributing disproportionately to our overall growth, and we expect that contribution to increase over time as it scales. It is still early, but we are seeing the right signals in terms of both pipeline and market awareness, and we remain very focused and encouraged by the trajectory so far.

Analyst: May I make just one follow-up? Another feedback we heard from the industry is that the B2B sales cycle should take longer than B2C. Can you share more details on this front—the differences between the sales cycle and the closing process—and your outlook for when this should appear more prominently in your revenue growth?

Mariano Gomide: Overall, the sales cycle has been getting longer in recent years for both enterprise B2B and B2C customers, largely driven by macro conditions and what we describe as an “AI wait-and-see.” When companies make long-term infrastructure decisions, they want clarity on how AI will reshape their stack, so naturally decision-making is taking longer. On the other hand, AI is affecting implementations in a positive way—shortening the process of implementing the software. So while the sales cycle is getting longer—and we do not expect that to change soon while AI remains a major consideration—the implementation dimension is generating good signals for us. Importantly, we are not seeing deterioration in our win rates or churn; those fundamentals remain intact.

Operator: Our next question will come from the line of Maria Clara Infantozzi with Itaú. Please go ahead.

Maria Clara Infantozzi: Hi, everyone. Thanks for the opportunity. First, could you please explain how you intend to monetize your new AI launches going forward? Does it make sense to think about increasing take rates with AI products gaining penetration? Second, can you please give us an update on how you feel about the competitive environment both in Brazil and in Argentina? Thank you.

Geraldo Thomaz Jr.: On AI monetization, it is too early to give very detailed information because there is still a lot of discovery happening in the market. Many say the path is to charge by outcomes, and that aligns with how AI creates value. In our case, we have charged by outcomes since 2012, and our Vtex CX platform also charges per outcome—particularly for services that do not require a human in the loop. We believe that as AI increases the output and results of our software, we will be able to charge more accordingly.

Also, as we transform the product into an AI-informed, AI-based software suite, we expect customers to move beyond the wait-and-see and resume modernizing their commerce infrastructure—and we will be there to serve them, with sales normalizing over time.

Operator: This is the operator. I apologize, but there will be a slight delay in our call. Please hold, and we will resume momentarily. You may resume the meeting.

Ricardo Camatta Sodre: Continuing on the competitive environment, we have not seen a meaningful change in competitive intensity among direct commerce technology providers. We have taken a different approach to AI—rebuilding the platform to be AI-native rather than layering incremental features on top of legacy systems as we see some players doing. That allows us to deliver better usability and, more importantly, real outcomes to our customers. We feel our strategic positioning has strengthened with this approach. We are a geographically agnostic, comprehensive commerce suite with efficiency benefits driven by our engineering scale and a founder-led culture, which together give us the reputation to lead in AI commerce.

Mariano Gomide: To complement, we look at competition across two dimensions. First, consumer behavior: traffic is fragmenting beyond traditional channels like Google, Instagram, and marketplaces. Messaging platforms like WhatsApp, LLMs, and emerging AI interfaces are playing a more relevant role. This shift may be slow and then sudden, and those new channels could take a significant portion of traffic. In a tough macro, high-interest-rate environment, brands and retailers are being challenged to find efficiency and be more conservative in growth, not financing consumers as before. Second, on technology providers, as Ricardo said, we do not see a significant change in competitive intensity. Our AI-native approach is the core of our differentiation.

Operator: Our next question comes from the line of Analyst with UBS. Please go ahead.

Analyst: Hi, everyone. Thanks for taking the question. It is about the roadmap of your AI investments. We have seen some margin expansion and an increase in R&D as a percentage of revenues. R&D is an ongoing investment, but should we expect this increase to be transitory or to persist in the interim? Any detail would be helpful. Thank you.

Geraldo Thomaz Jr.: Thank you for the question. We recently introduced our Vtex Vision in 2026, laying out how we are approaching AI and turning it into real, measurable impact. At the core is a unified suite of AI-powered platforms orchestrating key commerce workflows across Commerce, Customer Experience, and Ads. This AI-native commerce suite is now available for selected customers. First, the Vtex Commerce Platform is powered by the AI Workspace—the new back-office front end that is evolving into an AI-native operating system. It allows customers to move from manually executing tasks to orchestrating outcomes with AI agents handling workflows like search optimization, catalog management, pricing, and data insights.

Second, the Vtex CX platform extends into the customer journey with agents that drive discovery and improve conversion through conversational commerce while automating post-sales. In some cases, we are already seeing 90–91% automation levels in customer interactions, which translate directly into higher efficiency and better conversion. Third, the Vtex Ads platform brings AI into retail media, enabling retailers to monetize their traffic and giving brands more effective, data-driven campaign execution. From a roadmap perspective, we are expanding this ecosystem with new agents and capabilities across all three platforms—from search and content optimization to B2B assisted sales and advanced campaign management in ads.

The key focus right now is twofold: keep innovating at high speed and drive adoption of what we have already launched so it translates into tangible results for customers. Regarding R&D investment levels, despite the significant product transformation underway, you are not seeing a meaningful increase in our R&D expenditures. This is also related to AI adoption by our teams. We are transforming internally to leverage AI to be much more efficient—improving throughput in product development, customer support, and sales. You are already seeing this in how we support our customers.

The internal manifestation of this revolution is higher throughput, better bundling of products that deliver higher-level jobs, and converting what was previously a service into software-driven outcomes—for example, retail media campaign creation handled autonomously. There is a lot of work ahead—it is still early days for AI—but we are encouraged by the trajectory.

Operator: This concludes our question and answer session. I will now turn the call back over to Geraldo for any closing comments.

Geraldo Thomaz Jr.: As we step back, what we are building at Vtex is increasingly clear. We are redefining how commerce operates. The convergence of our cloud-native foundations with AI is enabling us to move from systems that support decisions to systems that execute them. We are still in the early stages of this transformation, but the direction is clear. AI is already delivering measurable impact across our customers—driving higher conversion, faster execution, and greater efficiency—and as adoption expands, we believe this can become a fundamental driver of long-term value creation for both our customers and our shareholders.

At the same time, our evolution into a multiproduct platform—Commerce, CX, and Ads—positions us to capture a broader share of the commerce value chain while reinforcing our role as a strategic partner to global enterprise customers. Looking ahead, our priorities remain consistent: disciplined execution, continued innovation, and scaling these capabilities across our base. We are confident in our ability to translate this strategy into sustainable growth, margin expansion, and durable competitive advantage. Thank you all for your time and continued support. You may now disconnect.