VTEX’s Margins and Revenue Headwinds: AI-Driven Gains Clash With Macroeconomic and Customer Mix Challenges

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $63.8 million in subscription revenue, growing 11% in US dollars and 1.3% on an FX neutral basis
• Gross Margin: Non-GAAP subscription gross margin reached 81.8%, an improvement of approximately two percentage points year over year. Total non-GAAP gross margin, including services, reached 80.4% compared to 77.4% in Q2 2025, representing an improvement of 3 percentage points year-over-year.
• Operating Margin: Non-GAAP operating margin was 21.4%, representing approximately 7 percentage points of expansion versus the same quarter of last year.

Guidance:

• Q3 2026: Targeting approximately flat FX-neutral subscription revenue growth, low single-digit FX-neutral gross profit growth, non-GAAP operating margin in the low 20s, and free cash flow margin also in the low 20s.
• Full year 2026: Targeting low single-digit FX-neutral subscription revenue growth, mid-single-digit FX-neutral gross profit growth, non-GAAP operating margin in the low 20s, and free cash flow margin also in the low 20s.

Business Commentary:

Revenue Challenges and Macro Environment:

• VTEX's subscription revenue reached $63.8 million, growing 11% in US dollars and 1.3% on an FX neutral basis. The company's FX neutral growth was 7%, impacted by a challenging macro environment.
• The revenue challenges were primarily due to high interest rates and a promotional marketplace environment in Brazil, softer consumer demand in Argentina, and longer enterprise decision cycles.

Growth Drivers Performance:

• VTEX's four growth drivers—global expansion, B2B, ads, and AI—represented approximately 18% of subscription revenue and grew 20% on an FX neutral basis in Q2.
• The strong performance was due to improved pipeline quality, increased adoption of AI in enterprise buying decisions, and successful expansion into new markets and customer segments.

Profitability and Margin Expansion:

• The company reported a non-GAAP operating income of $13.8 million, growing 62% year-over-year, with a margin of 21.4%, indicating 7 percentage points of expansion from the same quarter last year.
• This was driven by structural gains in AI power, customer support automation, and disciplined cost management, particularly in gross margin improvements.

Customer Mix and Volume Pressure:

• VTEX's revenue was impacted by a shift in customer mix toward larger enterprise accounts, which carry lower take rates, affecting revenue growth.
• This shift, along with a weak consumer environment affecting smaller and mid-sized customers, contributed to the modest decline in the core B2C commerce business.

Sentiment Analysis:

Overall Tone: Neutral

• The call acknowledges a 'challenging' macro environment with 'softer consumer demand' and revenue 'below our internal expectations,' but highlights 'strong' profitability and margin expansion, with growth drivers outperforming the consolidated business and expressing confidence in the long-term product and commercial progress.

Q&A:

• Question from Marcelo Santos (JP Morgan): Concerns about potential cost pressures and scaling if revenue re-acceleration occurs.
  Response: Management sees margin improvements as durable, driven by structural gains in AI and automation, with R&D investment increasing marginally for future growth, and sales/marketing expenses adjusted based on demand, allowing for potential margin expansion with revenue growth.

• Question from Nadia Instantoji (Itao): Asks about competitive environment evolution and if AI-related discussions are delaying client decisions.
  Response: Management sees no meaningful change in competition, with VTEX's AI-native architecture strengthening its positioning; customers are taking longer to make decisions due to macro conditions, not competitiveness, with win rates and churn remaining stable.

• Question from Luca Brendam (Bank of America): Asks to break down revenue deceleration between existing customers and new customers, and for outlook on core business reacceleration.
  Response: Revenue deceleration is attributed to customer mix shift towards larger accounts and weaker consumption in Brazil, not competitive issues; the core business (ex-growth drivers) declined modestly, but growth drivers (18% of revenue) grew 20%, with management targeting margin expansion in the low 20s.

• Question from Gustavo Farias (UBS): Asks for more color on new B2B go-to-market strategy and expectations for B2B in Brazil, and if higher client bankruptcies are being seen due to high interest rates.
  Response: B2B strategy focuses on expanding AI-powered sales capabilities for field reps as a near-term priority; no significant increase in bankruptcies yet, but the environment is tough, prompting customers to seek efficiency, with potential for deterioration.

Contradiction Point 1

Durability and Drivers of High Margins

It directly impacts expectations regarding the sustainability of financial performance, a critical factor for investor confidence.

Marcelo Santos (JP Morgan) - Marcelo Santos (JP Morgan)

2026Q2: Gross margin improvements (now ~81.8%) are seen as durable due to structural gains from AI and automation. - Ricardo Camata Sodré(CFO)

How will specific costs be affected and which factors will scale in a re-acceleration environment, impacting high margins' durability? - Marcelo Santos (JPMorgan)

2026Q2: The gross margin improvements are seen as durable, driven by hosting optimizations and AI-powered support cost automation over the past five quarters. - Ricardo Camatta Sodré(CFO)

Contradiction Point 2

Attribution of Revenue Challenges

It involves differing explanations for revenue performance, which can significantly affect market perception and strategic responses.

What is Nadia Instantoji's role in Itao's earnings call? - Nadia Instantoji (Itao)

2026Q2: Headwinds are macroeconomic and related to customer mix, not competitive. - Mariano Gomide de Faria(CEO)

To what extent are current revenue challenges due to a more difficult competitive environment and are AI-related discussions delaying client decisions and extending sales cycles? - Maria Clara Infantozzi (Itaú)

2026Q2: Revenue challenges are not due to competitive pressure. The competitive landscape is stable with win rates and churn unchanged. - Mariano Gomide de Faria(CEO)

Contradiction Point 3

Primary Source of Revenue Headwinds

It reflects inconsistency on the main factor affecting revenue growth, crucial for understanding business performance and forecasting.

Nadia Instantoji (Itao) - Nadia Instantoji (Itao)

2026Q2: Headwinds are macroeconomic and related to customer mix, not competitive. Win rates, churn, and customer engagement remain stable. - Mariano Gomide de Faria(CEO)

To what extent are current revenue challenges and extended sales cycles due to a difficult competitive environment and AI-related discussions? - Lucca Brendim (Bank of America)

2026Q1: The guidance reduction reflects a continuation of recent trends, particularly in Brazil, where macro conditions remain challenging and marketplace promotional intensity is pressuring proprietary channels. - Ricardo Camatta Sodré(CFO) & Mariano Gomide de Faria(CEO)

Contradiction Point 4

Competitive Landscape Intensity

It pertains to the assessment of competitive pressures, affecting strategic positioning and market confidence.

Nadia Instantoji (Itao) - Nadia Instantoji (Itao)

2026Q2: **Competitive Landscape:** No significant change observed. Competitors' AI announcements are incremental features on legacy systems, unlike VTEX's AI-native architecture. - Mariano Gomide de Faria(CEO)

How much are current revenue challenges driven by a more competitive environment? - Maria Clara Infantozzi (Itaú)

2026Q1: On the technology provider side, competition has not intensified meaningfully; VTEX's approach of rebuilding the platform as AI-native... strengthens its strategic positioning. - Mariano Gomide de Faria(CEO) / Ricardo Camatta Sodré(CFO)

Contradiction Point 5

Sales Cycle Elongation and Customer Decision-Making

It involves differing explanations for sales cycle delays, impacting expectations for revenue growth and business planning.

What were the key takeaways from Nadia Instantoji (Itao)'s earnings call? - Nadia Instantoji (Itao)

2026Q2: Customers are taking longer to make long-term decisions, but this is attributed to the macro environment, not competitive pressure. - Mariano Gomide de Faria(CEO)

How are current revenue challenges influenced by a difficult competitive environment and AI-related delays in client decisions and extended sales cycles? - Unknown Analyst (JPMorgan)

20260227-2025 Q4: The elongation is due to a market-wide “AI wait-and-see effect,” with enterprises delaying 5-10 year infrastructure decisions due to macro uncertainty and desire for AI clarity. - Mariano Gomide de Faria(CEO)