VTEX Q2 Earnings Call Highlights

Q2 growth slowed amid weaker demand: GMV increased 18% year over year to $5.7 billion, but subscription revenue rose only 1.3% on an FX-neutral basis as Brazil and Argentina faced softer consumption, promotional pressure and longer enterprise sales cycles.

Profitability and cash flow improved sharply: Non-GAAP operating income rose 62% to $13.8 million, while free cash flow increased 79% to $12.7 million. Gross margins benefited from AI-powered support automation, cost discipline and greater partner involvement in implementations.

VTEX lowered its growth outlook while investing in future drivers: The company expects low-single-digit FX-neutral subscription growth for 2026, but said global expansion, B2B, advertising and AI grew 20% and now represent about 18% of subscription revenue.

VTEX NYSE: VTEX reported second-quarter results marked by modest subscription revenue growth amid weaker consumer demand in Brazil and Argentina, while profitability and free cash flow increased sharply as the company continued to invest in artificial intelligence, B2B commerce, advertising and international expansion.

For the quarter ended June 30, 2026, gross merchandise value reached $5.7 billion, up 18% year over year in U.S. dollars and 7% on an FX-neutral basis. Subscription revenue was $63.8 million, increasing 11% in U.S. dollars but just 1.3% on an FX-neutral basis.

Founder and co-CEO Geraldo Thomaz Jr. said high interest rates, a promotional marketplace environment in Brazil, softer consumer demand in Argentina and longer enterprise decision cycles weighed on near-term growth.

He said the company’s established B2C commerce business in Brazil and the rest of Latin America declined modestly on an FX-neutral basis, while churn and competitive win rates remained stable.

“This is primarily a volume and customer mix story, not a competitiveness story,” Thomaz said, adding that VTEX’s installed base was transacting less in a weak consumer environment.

Customer mix and updated outlook Chief Financial Officer Ricardo Camatta Sodré said the gap between GMV growth and subscription revenue growth reflected a customer mix shift toward larger accounts.

Larger customers have lower take rates but similar gross margins, lower churn and higher lifetime value, according to the company.

Smaller and mid-sized customers were more affected by weaker consumption conditions in Brazil, while larger accounts held up better.

Sodré said the shift toward larger enterprise accounts is deliberate, although its pace during the second quarter was faster than anticipated.

VTEX said it expects approximately flat FX-neutral subscription revenue growth in the third quarter, with low-single-digit FX-neutral gross profit growth.

The company is targeting a non-GAAP operating margin and free cash flow margin in the low 20% range for the quarter.

For the full year, VTEX now expects low-single-digit FX-neutral subscription revenue growth and mid-single-digit FX-neutral gross profit growth, while maintaining targets for non-GAAP operating and free cash flow margins in the low 20% range.

The outlook reflects weaker consumption trends in Brazil during June and July as well as the continuing customer mix shift toward larger enterprises.

Assuming foreign-exchange rates remain near July average levels, the company said FX effects would add about 7 percentage points to reported U.S.-dollar subscription revenue growth in the third quarter and 8.1 percentage points for the full year.

Margins and cash flow expand Despite slower revenue growth, VTEX reported improved margins.

Non-GAAP subscription gross margin rose about two percentage points year over year to 81.8%, while total non-GAAP gross margin, including ...