UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2024.
Commission File Number 001-40628
Zenvia Inc.
(Exact name of registrant as specified in its charter)
N/A
(Translation of registrant’s name into English)
Avenida Paulista, 2300, 18th Floor, Suites 182
and 184
São Paulo, São Paulo, 01310-300
Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE:
Exhibit 1 to this Current Report
on Form 6-K contains certain information relating to the financial position and financial results of Zenvia Inc., or the Company, as of
June 30, 2024 and for the six-month period ended June 30, 2024 and 2023.
* * *
This Current Report on Form 6-K,
including Exhibit 1 hereto, includes certain forward-looking statements that are based principally on current expectations and on projections
of future events and financial trends that currently affect or might affect the Company’s business, and are not guarantees of future
performance. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates,
forecasts, and projections, as well as the beliefs and assumptions of management. Words such as "expect," "anticipate,"
"should," "believe," "hope," "target," "project," "goals," "estimate,"
"potential," "predict," "may," "will," "might," "could," "intend,"
variations of these terms or the negative of these terms and similar expressions are intended to identify these statements. Forward-looking
statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Zenvia’s
control. Zenvia’s actual results could differ materially from those stated or implied in forward-looking statements due to several
factors, including but not limited to: our ability to innovate and respond to technological advances, changing market needs and customer
demands, our ability to successfully acquire new businesses as customers, acquire customers in new industry verticals and appropriately
manage international expansion, substantial and increasing competition in our market, compliance with applicable regulatory and legislative
developments and regulations, the dependence of our business on our relationship with certain service providers, among other factors.
You are cautioned not to put undue reliance on such forward-looking statements. The Company undertakes no obligation, and expressly disclaims
any obligation, to update or revise any forward-looking statements, whether because of new information, future events or otherwise. The
risks and uncertainties relating to the forward-looking statements in this Current Report on Form 6-K, including Exhibit 1 hereto, include
those described under the captions “Forward-Looking Statements” in the Company’s annual report on Form 20-F for the
year ended December 31, 2023.
Exhibit 1 to this Current Report
on Form 6-K contains Non-GAAP financial measures. The Non-GAAP financial measures are not measures of financial performance calculated
in accordance with IFRS and should not be considered replacements or alternatives to net income or loss, cash flow from operations or
other IFRS measures of operating performance or liquidity. The Non-GAAP financial measures are provided to enhance overall understanding
of the Company’s current financial performance and its prospects of the future. These measures may be different from the Non-GAAP
financial measures used by other companies. Non-GAAP financial measures should solely be viewed in addition to, and not as a substitute
for, the analysis of the Company’s results reported in accordance with IFRS. Non-GAAP financial measures have limitations in that
they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with IFRS.
These Non-GAAP financial measures are reconciled to the Company’s most directly comparable IFRS financial measures.
This
Current Report on Form 6-K, including Exhibit 1 hereto, is hereby incorporated by reference into the registration statements of the Company
on Form S-8 (File Nos. 333-277723, 333-270376, 333-266045) and
Form F-3 (File No. 333-280284) and shall be deemed to be a part thereof from the date on which this report on Current Report on Form 6-K
is furnished to the SEC, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the
Securities Act, or the Securities Exchange Act of 1934, as amended.
About ZENVIA
ZENVIA is driven by the purpose of empowering companies to
create unique experiences for end-consumers through its unified CX SaaS end-to-end platform. ZENVIA empowers companies to transform their
existing customer experience from non-scalable, physical and impersonal interactions into highly scalable, digital-first and hyper-contextualized
experiences across the customer journey. ZENVIA’s unified end-to-end CX SaaS platform provides a combination of (i) SaaS focused
on campaigns, sales teams, customer service and engagement, (ii) tools, such as software application programming interfaces, or APIs,
chatbots, single customer views, journey designers, documents composer and authentication and (iii) channels, such as SMS, Voice, WhatsApp,
Instagram and Webchat. Its comprehensive platform assists customers across multiple use cases, including marketing campaigns, customer
acquisition, customer onboarding, warnings, customer services, fraud control, cross-selling and customer retention, among others. ZENVIA's
shares are traded on Nasdaq, under the ticker ZENV.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: September 6, 2024
Zenvia Inc.
By: /s/ Cassio Bobsin
Name: Cassio Bobsin
Title: Chief Executive Officer
Exhibit 1
Management’s
discussion and analysis of financial condition and results of
operations for the six months ended June 30, 2024 compared to the six months
ended June 30, 2023
The following discussion and analysis of our financial condition and results
of operations should be read in conjunction with (i) our audited consolidated financial statements included in our annual report on Form
20-F for the year ended December 31, 2023, or our 2023 Form 20-F, or audited consolidated financial statements, (ii) the information set
forth under “Item 5. Operating and Financial Review and Prospects” in our 2023 Form 20-F and (iii) our unaudited interim condensed
consolidated financial statements as of June 30, 2024 and for the six-month period ended June 30, 2024 and 2023 available on the Current
Report on Form 6-K which we furnished to the SEC on September 5, 2024 (Acc-no:0001292814-24-003361), or unaudited interim condensed consolidated
financial statements. Unless the context otherwise requires, all references to “Zenvia Inc.,” “Zenvia,” the “company,”
“we,” “our,” “ours,” “us” and similar terms are to Zenvia Inc. and its consolidated subsidiaries
and jointly controlled companies.
Historical Results of Operations
Six-Month Period Ended June 30, 2024 Compared to Six-Month Period
Ended June 30, 2023
The following table sets forth our consolidated statements
of profit or loss for the six-month periods ended June 30, 2024 and 2023.
| |
Six-Month Period ended June 30, |
|
|
| |
2024 |
|
2023
Restated(1) |
|
Variation |
| |
(in thousands of R$) |
|
(%) |
| Revenue |
443,795 |
|
371,966 |
|
19.3% |
| Cost of services |
(275,403) |
|
(222,631) |
|
23.7% |
| Gross profit |
168,392 |
|
149,335 |
|
12.8% |
| Sales and marketing expenses |
(53,360) |
|
(52,249) |
|
2.1% |
| General and administrative expenses |
(64,563) |
|
(68,795) |
|
-6.2% |
| Research and development expenses |
(28,867) |
|
(25,113) |
|
14.9% |
| Allowance for expected credit losses |
(6,895) |
|
(21,977) |
|
-68.6% |
| Other income and expenses, net |
(14,406) |
|
(536) |
|
n.m. |
| Operating profit (loss) |
301 |
|
(19,335) |
|
n.m. |
| Finance expenses |
(105,133) |
|
(35,849) |
|
193.3% |
| Finance income |
7,472 |
|
6,612 |
|
13.0% |
| Financial expenses, net |
(97,661) |
|
(29,237) |
|
234.0% |
| Loss before taxes |
(97,360) |
|
(48,572) |
|
100.4% |
| Deferred income tax and social contribution |
30,094 |
|
19,639 |
|
53.2% |
| Current income tax and social contribution |
(4,927) |
|
(3,006) |
|
63.9% |
| Total Income Tax and Social Contribution |
25,167 |
|
16,633 |
|
51.3% |
| Loss of the period |
(72,193) |
|
(31,939) |
|
126.0% |
| |
|
|
|
|
|
|
n.m. = not meaningful
(1) In December 2023, the Company identified that the allowance for expected credit losses and
cost with amortization of intangibles was understated. The calculation was reassessed in the annual financial statements and Management
has retrospectively revised the first six months of 2023 for comparison purposes. For further information see note “1.Operations
..b-Correction of error – effect in consolidated statement of profit or loss, consolidated statement of changes in equity and cash
flow” of our unaudited interim condensed consolidated financial statements.
Revenue
Our revenue increased by R$71,829 thousand, or 19.3%,
to R$443,795 thousand in the six-month period ended June 30, 2024, from R$371,966 thousand in the six-month period ended June 30, 2023,
mainly as a result of (i) an increase of R$53,081 thousand in revenue from our CPaaS segment, mainly due to an increase in revenue from
our SMS services, and (ii) an increase of R$18,748 thousand in revenue from our SaaS segment, mostly due to the expansion in revenues
from large enterprise customers.
Cost of services
Our cost of services
increased by R$52,772 thousand, or 23.7%, to R$275,403 thousand in the six-month period ended June 30, 2024, from R$222,631 thousand
in the six-month period ended June 30, 2023, mainly as a result of (i) an increase of R$32,404 thousand in our cost of services within
the CPaaS segment, mainly due to an increase in our cost related to SMS services, and (ii) an increase of R$20,368 thousand in our cost
of services within the SaaS segment, mainly due to the increase of cost with large enterprise customers combined with costs related to
enhancing the infrastructure from acquired companies.
Gross profit
As a result of the above, our gross profit increased
by R$19,057 thousand, or 12.8%, to R$168,392 thousand in the six-month period ended June 30, 2024, from R$149,335 thousand in the six-month
period ended June 30, 2023. As a percentage of our revenue, our gross profit decreased to 37.9% in the six-month period ended June 30,
2024, from 40.1% in the six-month period ended June 30, 2023, mainly due to an increase of revenues
in the CPaaS segment and the increase in revenues with large enterprises customers in the SaaS segment, which have a lower contribution
margin than the small and medium customers.
Sales and marketing expenses
Our sales and marketing expenses increased
by R$1,111 thousand, or 2.1%, to R$53,360 thousand in the six-month period ended June 30, 2024, from R$52,249 thousand in the six-month
period ended June 30, 2023, mainly as a result of higher expenses related to marketing and software licenses, partially offset by a slight
decrease in personnel expenses in the sales and marketing teams.
General and administrative expenses
Our general and administrative expenses decreased
by R$4,232 thousand, or 6.2%, to R$64,563 thousand in the six-month period ended June 30, 2024, from R$68,795 thousand in the six-month
period ended June 30, 2023, mainly as a result of lower expenses related to outsourced services and software licenses.
Research and development expenses
Our research and development expenses increased
by R$3,754 thousand, or 14.9%, to R$28,867 thousand in the six-month period ended June 30, 2024, from R$25,113 thousand in the
six-month period ended June 30, 2023, mainly as a result of higher personnel expenses in the research and development related teams.
Allowance for expected credit losses
Our allowance for expected credit losses decreased by
R$15,082 thousand, or 68.6%, to R$6,895 thousand in the six-month period ended June 30, 2024, from R$21,977 thousand in the six-month
period ended June 30, 2023, mainly as a result of improved control over customer billing and collecting processes.
Other income and expenses, net
Our other income and expenses, net increased
by R$13,870 thousand to R$14,406 thousand in expenses in the six-month period ended June 30, 2024, from R$536 thousand in expenses
in the six-month period ended June 30, 2023, mainly due to earn-out expenses of R$10,161
thousand in the period, as a result of the renegotiations of earn-out payments related to our past acquisitions.
Financial expenses, net
Our financial expenses, net increased
by R$68,424 thousand, or 234.0%, to R$97,661 thousand in the six-month period ended June 30, 2024, from R$29,237 thousand in the
six-month period ended June 30, 2023, mainly as a result of the following:
Finance expenses
Our finance expenses increased
by R$69,284 thousand, or 193.3%, to R$105,133 thousand in the six-month period ended June 30, 2024, from R$35,849 thousand in the
six-month period ended June 30, 2023, mainly as a result of an increase of R$31,340 thousand in losses on derivative instruments, an increase
of R$21,364 thousand in expenses with interest and the adjustment to present value of liabilities from our past acquisitions and an increase
of R$14,100 thousand in foreign exchange losses.
Finance income
Our finance income increased
by R$860 thousand, or 13.0%, to R$7,472 thousand in the six-month period ended June 30, 2024, from R$6,612 thousand in the six-month
period ended June 30, 2023, mainly as a result of an increase of R$2,671 thousand in interest and adjustment to present value of liabilities
from our past acquisitions and an increase of R$1,910 thousand in other financial income, partially offset by a decrease of R$2,522 thousand
in interests on financial instruments and a decrease of R$1,282 thousand in foreign exchange gain.
Loss before taxes
As a result of the above, our loss before taxes increased
by R$48,788 thousand, or 100.4%, to R$97,360 thousand in the six-month period ended June 30, 2024, from R$48,572 thousand in the six-month
period ended June 30, 2023.
Total Income Tax and Social Contribution
Our total income tax and social contribution increased
by R$8,534 thousand, or 51.3%, to R$25,167 thousand in the six-month period ended June 30, 2024, from R$16,633 thousand in the six-month
period ended June 30, 2023, mainly as a result of the following:
Our deferred income tax and social contribution totaled
R$30,094 thousand in the six-month period ended June 30, 2024, an increase of R$10,455 thousand, compared to the six-month period ended
June 30, 2023, when deferred income tax and social contribution totaled R$19,639 thousand. This increase in deferred income tax and
social contribution is mainly due to the benefit derived from tax losses and negative basis of social contribution and customer portfolios
and platforms.
Our current income tax and social contribution in the
six-month period ended June 30, 2024 was R$4,927 thousand, an increase of R$1,921 thousand, compared to the six-month period ended June
30, 2023, when current income tax and social contribution totaled R$3,006 thousand, mostly due to income tax and social contribution expenses
in the subsidiaries that had profit in the period.
Loss of the period
As a result of the above, our loss of the period increased
by R$40,254 thousand, or 126.0%, to R$72,193 thousand in the six-month period ended June 30, 2024, from R$31,939 thousand in the six-month
period ended June 30, 2023.
Non-GAAP Financial Measures for the Six-Month Periods Ended June 30,
2024 and 2023
| |
Six-Month Period ended June 30, |
| |
2024 |
|
2024 |
|
2023(6)
Restated |
| |
(in thousands of US$)(1) |
|
(in thousands of R$) |
| Gross Profit |
30,292 |
|
168,392 |
|
149,335 |
| Non-GAAP Gross Profit(2) |
34,869 |
|
193,831 |
|
175,696 |
| Gross Margin(3) |
37.9% |
|
37.9% |
|
40.1% |
| Non-GAAP Gross Margin(3) |
43.7% |
|
43.7% |
|
47.2% |
| Operating Loss |
54 |
|
301 |
|
(19,335) |
| Non-GAAP Operating Profit (4) |
4,630 |
|
25,740 |
|
7,026 |
| Loss for the period |
(12,987) |
|
(72,193) |
|
(31,939) |
| Adjusted EBITDA(5) |
8,397 |
|
46,680 |
|
22,733 |
| |
|
|
|
|
|
|
| (1) |
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.5589 to US$1.00, as reported by the Brazilian Central Bank as of June 30, 2024. The U.S. dollar equivalent information presented in this current report should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. |
| (2) |
We calculate Non-GAAP Gross Profit as gross profit plus amortization of intangible assets acquired from business combinations. For a reconciliation of Non-GAAP Gross Profit to gross profit, see “—Reconciliation of Non-GAAP Financial Measures—Reconciliation of Non-GAAP Gross Profit.” |
| (3) |
We calculate gross margin as gross profit divided by revenue. We calculate Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by revenue. |
| (4) |
We calculate Non-GAAP Operating Profit by adding back in the Operating Profit the amortization of intangible assets acquired from business combinations. For further information on Non-GAAP Operating Profit, see “Part I. Introduction––Special Note Regarding Non-GAAP Financial Measures––Non-GAAP Gross Profit, Non-GAAP Gross Margin and Non-GAAP Operating Profit (Loss)” in our 2023 Form 20-F. |
| (5) |
We calculate Adjusted EBITDA as loss adjusted by income tax and social contribution (current and deferred), financial expenses, net, depreciation and amortization, plus expenses related to IPO grants and goodwill impairment. For a reconciliation of Adjusted EBITDA to profit, see “—Reconciliation of Non-GAAP Financial Measures—Reconciliation of Adjusted EBITDA. |
| (6) |
.In December 2023, the Company identified that the allowance for expected credit losses and cost with amortization of intangibles was understated. The calculation was reassessed in the annual financial statements and Management has retrospectively revised the first six months of 2023 for comparison purposes. For further information see note “1.Operations .b-Correction of error – effect in consolidated statement of profit or loss, consolidated statement of changes in equity and cash flow” of our unaudited interim condensed consolidated financial statements. |
Reconciliation of Non-GAAP Financial Measures
The below presents certain non-GAAP financial measures,
which are not recognized under IFRS, specifically Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Profit (Loss), Adjusted
EBITDA. These non-GAAP financial measures are used by our management for decision-making purposes and to assess our financial and operating
performance, generate future operating plans and make strategic decisions regarding the allocation of capital. For additional information
on our Non-GAAP measures see “Part I. Introduction—Special Note Regarding Non-GAAP Financial Measures” in our 2023 Form
20-F.
Reconciliation of Non-GAAP Gross Profit
| |
Six-Month Period ended June 30, |
| |
2024 |
|
2024 |
|
2023(5)
Restated |
| |
(in thousands of US$) (1) |
|
(in thousands of R$) |
| |
|
|
|
|
|
| Gross profit |
30,292 |
|
168,392 |
|
149,335 |
| (+) Amortization of intangible assets acquired in business combinations |
4,576 |
|
25,439 |
|
26,361 |
| Non-GAAP Gross Profit(2) |
34,869 |
|
193,831 |
|
175,696 |
| Revenue |
79,835 |
|
443,795 |
|
371,966 |
| Gross margin(3) |
37.9% |
|
37.9% |
|
40.1% |
| Non-GAAP Gross Margin(4) |
43.7% |
|
43.7% |
|
47.2% |
| (1) |
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R5.5589 to US$1.00, as reported by the Brazilian Central Bank as of June 30, 2024. The U.S. dollar equivalent information presented in this current report should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. |
| (2) |
We calculate Non-GAAP Gross Profit as gross profit plus amortization of intangible assets acquired from business combinations. For further information on Non-GAAP Gross Profit, see “Part I. Introduction––Special Note Regarding Non-GAAP Financial Measures–– Non-GAAP Gross Profit, Non-GAAP Gross Margin and Non-GAAP Operating Profit (Loss)” in our 2023 Form 20-F. |
| (3) |
We calculate gross margin as gross profit divided by revenue. |
| (4) |
We calculate Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by revenue. |
| (5) |
In December 2023, the Company identified that the allowance for expected credit losses and cost with amortization of intangibles was understated. The calculation was reassessed in the annual financial statements and Management has retrospectively revised the first six months of 2023 for comparison purposes. For further information see note “1.Operations .b-Correction of error – effect in consolidated statement of profit or loss, consolidated statement of changes in equity and cash flow” of our unaudited interim condensed consolidated financial statements. |
Reconciliation of Non-GAAP Operating Profit (Loss)
| |
Six-Month Period ended June 30, |
| |
2024 |
|
2024 |
|
2023(3)
Restated |
| |
(in thousands of US$)(1) |
|
(in thousands of R$) |
| Operating loss |
54 |
|
301 |
|
(19,335) |
| (+) Amortization of intangible assets acquired in business combinations |
4,576 |
|
25,439 |
|
26,361 |
| Non-GAAP Operating Profit(2) |
4,630 |
|
25,740 |
|
7,026 |
| |
|
|
|
|
|
|
| (1) |
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.5589 to US$1.00, as reported by the Brazilian Central Bank as of June 30, 2024. The U.S. dollar equivalent information presented in this current report should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. |
| (2) |
We calculate Non-GAAP Operating Profit by adding back in the Operating Profit the amortization of intangible assets acquired from business combinations. For further information on Non-GAAP Operating Profit, see “Part I. Introduction––Special Note Regarding Non-GAAP Financial Measures–– Non-GAAP Gross Profit, Non-GAAP Gross Margin and Non-GAAP Operating Profit (Loss)” in our 2023 Form 20-F. |
| (3) |
In December 2023, the Company identified that the allowance for expected credit losses and cost with amortization of intangibles was understated. The calculation was reassessed in the annual financial statements and Management has retrospectively revised the first six months of 2023 for comparison purposes. For further information see note “1.Operations .b-Correction of error – effect in consolidated statement of profit or loss, consolidated statement of changes in equity and cash flow” of our unaudited interim condensed consolidated financial statements. |
Reconciliation of Adjusted EBITDA
| |
Six-Month Period Ended June 30, |
| |
2024 |
|
2024 |
|
2023(3)
Restated |
| |
(in thousands of US$)(1) |
|
(in thousands of R$) |
| Loss for the period |
(12,987) |
|
(72,193) |
|
(31,939) |
| (+) Income tax and social contribution (current and deferred) |
(4,527) |
|
(25,167) |
|
(16,633) |
| (+) Financial expenses, net |
17,568 |
|
97,661 |
|
29,237 |
| (+) Depreciation and amortization |
8,343 |
|
46,379 |
|
42,068 |
| Adjusted EBITDA(2) |
8,397 |
|
46,680 |
|
22,733 |
| |
|
|
|
|
|
|
| (1) |
Solely for the convenience of the reader, certain Brazilian real amounts have been translated into U.S. dollars at the selling rate of R$5.5589 to US$1.00, as reported by the Brazilian Central Bank as of June 30, 2024. The U.S. dollar equivalent information presented in this current report should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at this rate or any other rate. |
| (2) |
We calculate Adjusted EBITDA as loss adjusted by income tax and social contribution (current and deferred), financial expenses, net, depreciation and amortization. For further information on Adjusted EBITDA, see “Part I. Introduction––Special Note Regarding Non-GAAP Financial Measures––Adjusted EBITDA” in our 2023 Form 20-F. |
| (3) |
In December 2023, the Company identified that the allowance for expected credit losses and cost with amortization of intangibles was understated. The calculation was reassessed in the annual financial statements and Management has retrospectively revised the first six months of 2023 for comparison purposes. For further information see note “1.Operations .b-Correction of error – effect in consolidated statement of profit or loss, consolidated statement of changes in equity and cash flow” of our unaudited interim condensed consolidated financial statements. |
Liquidity and Capital Resources
The following discussion of our liquidity and capital
resources is based on the financial information derived from our unaudited interim condensed consolidated financial statements.
Liquidity
Our cash and cash equivalents include cash on hand and
short-term investments maturing in up to 90 days with financial institutions. As of June 30, 2024 and December 31, 2023, our cash and
cash equivalents amounted to R$89,411 thousand and R$63,742 thousand, respectively. This increase in cash and cash equivalents reflects
mainly due to capital increase of R$49,997 thousand, proceeds from loans and borrowings of R$50,801 thousand and net cash flow from operating
activities of R$5,269 thousand, partially offset by R$10,780 thousand in payments of loans, borrowings and debentures, as well as R$34,546
thousand in payments in installments for acquisitions of subsidiaries and R$33,507 thousand in net cash flow used in investing activities.
As of June 30, 2024, our loans, borrowings and debentures
amounted to R$129,564 thousand, of which R$73,527 thousand was current liabilities and R$56,037 thousand was non-current liabilities.
As of June 30, 2024, we also had R$99,936 thousand in current liabilities from acquisitions and R$187,096 thousand in non-current liabilities
from acquisitions.
During 2022, we focused on increasing gross profit and implementing
cost-cutting initiatives, such as the review of our corporate structure, which reduced our current workforce by 9% and is in line with
the acceleration of the integration of our acquisitions. These actions were instrumental for us to deliver improved cash generation in
2024, and we are committed to continue pursuing new operational efficiencies for the next 12 months. In addition to the improvement in
operations, we previously announced on February 6, 2024 the conclusion of several renegotiations with our creditors, including banks,
debenture holders and holders of other liabilities related to past M&A activity. These renegotiations include an extension of payment
terms on bank loans and debentures from up to 18 months to 36 months (with final maturity in December 2026), extension of payment terms
of liabilities related to past M&A transactions from up to 36 months to up to 60 months (with final maturity in December 2028) and
the possibility of converting certain M&A liabilities into our equity (potential conversion estimated at circa 65% of total M&A
liabilities). See “Item 3. Key Information—D. Risk Factors—Certain Risks Relating to Our Business and Industry—Our credit facility arrangements contain restrictive and financial
covenants that may limit our operating flexibility and any default under such debt agreements may have a material adverse effect on our
financial condition and cash flows,” “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital
Resources—Indebtedness—Financing Agreements” and “Item 4. Information on the Company—B. Business Overview—Our
Post-IPO Acquisitions—Consummated Acquisitions” in our 2023 Form 20-F.
On February 6, 2024, we issued 8,860,535 Class A common shares
to Bobsin Corp due to a private placement investment in the Company, resulting in a capital increase in the amount of R$49,997 thousand.
Pursuant to the terms of the investment agreement, for a period of three years from the closing date of the investment, Bobsin Corp. will
be entitled to receive, as a return on its investment, additional cash or an equivalent amount in common shares issued by us, upon the
occurrence of certain future liquidity or corporate transaction events (such as the occurrence of an equity follow-on or a transaction
resulting in a change of our control). The calculation of such investment returns will be linked to the appreciation of our share price
over this period of time, and can lead to a maximum dilution of around 11% in our shareholder base at the time of the liquidity or corporate
event, if any.
The return on investment (premium) to be paid upon the occurrence
of a liquidity event is based on the value of the Company's shares. According to IFRS 9, this premium meets the characteristics of an
embedded derivative in the investment agreement. At initial recognition, the derivative is measured at fair value, separate from the investment
value, and recognized as a derivative financial liability without impacting the profit or loss. In subsequent measurements, any changes
in the fair value of the derivative are recognized in profit or loss.
On February 6, 2024 (initial recognition), a capital increase
of R$838 thousand was recognized in the unaudited interim condensed consolidated financial statements, and the embedded derivative was
valued at R$49,159 thousand. As of June 30, 2024, mainly due to the appreciation of the Company’s share price, the fair value of
the embedded derivative increased to R$92,757 thousand, and R$33,211 thousand was recorded in the statements of profit or loss as finance
expenses.
We believe that the combination
of the above mentioned initiatives and the expected future operating cash flow will be enough to cover for our medium and long term financial
obligations. Nevertheless, we will continue to seek to optimize the Company's working capital needs by renegotiating payment terms with
suppliers and anticipating future revenues with clients. Considering our short-term financial contractual obligations and commitments
after giving effect to the above-mentioned renegotiations and capital injection, we expect a cash outlay of R$58,846 thousand for the
next twelve months mainly for satisfying our existing short-term indebtedness as it becomes due, including interest, and payments due
from acquisitions. We believe our working capital and projected cash flows from operations, combined with new sources of financing already
under negotiations, will be sufficient for the Company’s requirements for the next twelve months. As a result of these factors,
we continue to have a reasonable expectation that we will be able to continue operations in the foreseeable future. However, our liquidity
assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may
seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements
and the adequacy of available funds will depend on many factors, including those described in “Item 3. Key Information—D.
Risk Factors” in our 2023 Form 20-F. We may not be able to secure additional financing to meet our operating requirements on acceptable
terms, or at all. See “Item 3. Key Information—D. Risk Factors—Certain Risks Relating to Our Business and Industry—We
have substantial liabilities and may be exposed to liquidity constraints, which could adversely affect our financial condition and results
of operations” in our 2023 Form 20-F.
We regularly evaluate opportunities to enhance our financial
flexibility through a variety of methods, including, without limitation, through the issuance of debt securities and entering of additional
credit lines. As a result of any of these actions, we may be subject to restrictions and covenants in the agreements governing these transactions
that may place limitations on us, and we may be required to pledge collateral to secure such instruments.
As of June 30, 2024, we did not have any off-balance
sheet arrangements.
Consolidated Statements of Cash Flows
The following table sets forth certain consolidated
cash flow information for the years indicated:
| |
For the Six-Month Period Ended June 30, |
| |
2024 |
|
2023(1)
Restated |
| |
(in thousands of R$) |
| Net cash flow from operating activities |
5,269 |
|
132,318 |
| Net cash flow used in investing activities |
(33,507) |
|
(17,438) |
| Net cash flow from / (used in) financing activities |
54,793 |
|
(69,914) |
| Exchange rate change on cash and cash equivalents |
(886) |
|
(2,630) |
| Net (decrease)/increase in cash and cash equivalents |
25,669 |
|
42,336 |
| (1) |
In December 2023, the Company identified that the allowance for
expected credit losses and cost with amortization of intangibles was understated. The calculation was reassessed in the annual financial
statements and Management has retrospectively revised the first six months of 2023 for comparison purposes. For further information see
note “1.Operations .b-Correction of error – effect in consolidated statement of profit or loss, consolidated statement of
changes in equity and cash flow” of our unaudited interim condensed consolidated financial statements. |
Net cash flow (used in)/from operating activities
For the six-month period ended June 30, 2024, net cash
from operating activities amounted to R$5,269 thousand, a decrease of R$127,049 thousand compared to R$132,318 thousand of net cash from
operating activities for the six-month period ended June 30, 2023, primarily as a result of:
| ● | Loss for the period of R$72,193 thousand combined with non-cash expenses, consisting primarily of depreciation
and amortization of R$46,379 thousand, income tax and social contribution of R$25,167 thousand, allowance for expected credit losses of
R$6,895 thousand, increase of fair value of derivative financial instruments of R$33,211 thousand and others, which amounted to R$28,465
thousand; |
| ● | Partially offset by net cash used in changes in operating assets and liabilities totaling R$1,550 thousand,
principally due to an increase in trade and other receivables of R$29,655 thousand, partially offset by the increase of R$23,274 thousand
in the balance of suppliers, compared to net cash from changes in operating assets and liabilities totaling R$101,028 thousand in the
six month period ended June 30, 2023; and |
| ● | Payments of interest of R$7,266 thousand over our interest paid on loans and leases from financial institutions,
a decrease of R$4,294 thousand compared to R$11,560 thousand in the six-month period ended June 30, 2023. |
Net cash flow used in investing activities
Net cash used in investing activities increased by R$16,069
thousand, to R$33,507 thousand in the six-month period ended June 30, 2024, from R$17,438 thousand in the six-month period ended June
30, 2023, primarily due to acquisition of property, plant and equipment in the amount of R$8,566 thousand in the six-month period ended
June 30, 2024 and a low comparison base due to the redemption of interest earning bank deposit of R$8,160 thousand in the previous period.
Net cash flow (used in)/from financing activities
Net cash from financing activities increased by R$124,707
thousand, to R$54,793 thousand in the six-month period ended June 30, 2024, from R$69,914 thousand of net cash used in financing activities
in the six-month period ended June 30, 2023. This increase is mainly due to a capital increase of R$49,997 thousand, combined with proceeds
from loans and borrowings of R$50,801 thousand and a decrease of payments of borrowings of R$30,623 thousand.
Indebtedness
We had total indebtedness consisting of loans, borrowings
and debentures in the amount of R$129,564 thousand and R$87,796 thousand as of June 30, 2024
and December 31, 2023, respectively.
In 2023, we renegotiated new terms to be applied as
of the year 2024 for the financial covenants of loans and financing. The most restrictive net debt-to-EBITDA financial covenant to which
we are currently subject requires that such ratio does not exceed 2.5x and which is measured at the end of each fiscal year. In addition
to these, we are also subject to other covenants related to indebtedness level. Furthermore, our working capital agreements contain a
cross-default provision that may be triggered by a default under one of our other financing agreements. A cross default provision means
that a default on one loan would result in a default of our other loans.
On March 31, 2024, we assessed the covenant clauses
of our loans and financings with the aim of mitigating non-compliance with the entirety of the restrictive clauses in our annual measurement.
As part of the action plan, the Company renegotiated certain covenant clauses with financial institutions, obtained waivers to ensure
compliance and received the necessary consents from these institutions. We do not anticipate short- and medium-term impacts on our operations
resulting from possible breaches of restrictive clauses.
As of the date of this current report, we were in compliance
with such financial covenants.
Financing Agreements
The table below sets forth selected information regarding
substantially all of our outstanding indebtedness as of June 30, 2024 and December 31, 2023:
| |
|
|
As
of |
| |
Interest
rate p.a. |
|
June
30, 2024 |
|
December
31, 2023 |
| |
|
|
(in thousands of R$) |
| Working capital |
100% CDI+2.51% to 6.55% and 8.60% |
|
113,730 |
|
69,667 |
| Debentures |
18.16% |
|
15,834 |
|
18,129 |
| Total |
|
|
129,564 |
|
87,796 |
| Current |
|
|
73,527 |
|
36,191 |
| Noncurrent |
|
|
56,037 |
|
51,605 |
Working Capital
Zenvia Brazil has certain working capital credit facilities
with Itaú Unibanco S.A., Banco Votorantim S.A., Banco ABC Brasil S.A., Banco do Brasil S.A., Banco Safra, Banco Santander Brasil
SA and Banco Bradesco S.A, as described below. These working capital facilities bear interest at rates between 100% CDI+2.51% to 100%
CDI+6.55% and 8.60% per annum and mature between June 27, 2023 and May 24, 2025. As of June 30, 2024, the total outstanding principal
amount of the working capital arrangements was R$113,730 thousand.
In November 2020, Zenvia Brazil entered into an agreement
with Banco Votorantim S.A. for a credit line offered by the Brazilian government through the Fundo Garantidor para Investimentos,
or FGI, program in the amount of R$10,000 thousand. Through the FGI program, BNDES guarantees the transaction, aiming to facilitate access
to credit lines for businesses. Following a one year grace period during which principal and interest is payable, the CCB will be paid
in 36 monthly installments with the first installment of principal and interest due on December 10, 2021 and the last installment due
on November 11, 2024.
In November 2020, Zenvia Brazil entered into an agreement
with Banco ABC Brasil S.A. for a credit line offered by the Brazilian government through the FGI program in the amount of R$7,000 thousand.
Following a one year grace period during which interest is payable, the CCB will be paid in 36 monthly installments with the first installment
of principal and interest due on December 10, 2021 and the last installment due on November 11, 2024.
On February 3, 2021, Zenvia Brazil entered into two
financing agreements with Banco do Brasil S.A. in the aggregate amount of R$50,000 thousand, being one agreement in the amount of R$18,000
thousand with an eighteen-month grace period and 24 months of amortization and the other agreement in the amount of R$32,000 thousand
with a twelve-month grace period and 36 months of amortization. The last installments of these agreements are payable on August 27, 2024
(R$18,000 thousand) and February 27, 2025 (R$32,000 thousand), respectively. These agreements were renegotiated granting additional six
months of grace period, without changing the final installment date.
On May 24, 2022, Zenvia Brazil entered into an agreement
with Banco Votorantim S.A. for a CCB in the aggregate amount of R$20,000 thousand, which is secured by a fiduciary assignment (cessão
fiduciária) of credit rights represented by payment notes (direitos creditórios lastreados pelos recebimentos de
clientes) and certain deposits/financial investments (depósitos/aplicações financeiras). On December 28,
2023, Zenvia Brazil signed an amendment with Banco Votorantim S.A. for a CCB (Cédula de Crédito Bancário)
in the original aggregate amount of R$20,000 thousand, establishing a new amortization schedule comprised of 36 installments, six-months
of grace period and 30 installments for payment of principal amount. The CCB first installment, which includes principal, is due
on July 29, 2024 and the last installment on December 28, 2026.
On December 28, 2023, Zenvia Brazil entered into an
agreement with Banco do Brasil S.A. for a CCB in the aggregate amount of R$30,000 thousand, which is secured by a fiduciary assignment
(cessão fiduciária) of credit rights represented by payment notes (direitos creditórios lastreados pelos
recebimentos de clientes). Following a six-month grace period during which no interest is payable, the CCB will be paid in 30 monthly
installments with the first installment of principal and interest due on July 27, 2024 and the last installment on December 27, 2026.
On January 20,
2021, Zenvia Brazil entered into a financing agreement with Banco Bradesco S.A. in the aggregate amount of R$30,574 thousand for working
capital purposes. Following a one year grace period during which interest is payable, the loan will be paid in 36 monthly installments
with the first installment of principal and interest due on February 21, 2022 and the last installment due on January 20, 2025. On
January 3, 2024, Zenvia Brazil signed an amendment, current balance R$11,073 thousand, establishing a new amortization schedule comprised
of 36 installments, six months of grace period and 30 amortization period of principal, with the first installment of principal and interest
due on July 29, 2024 and the last installment on December 28, 2026.
On January 4, 2024, Zenvia Brazil
entered into an agreement with Itaú Unibanco S.A. for a CCB (Cédula de Crédito Bancário), in the aggregate
amount of R$12,000 thousand, establishing an amortization schedule comprised of 36 installments, six months of grace period and 30 amortization
period of principal, with the first installment of principal and interest due on July 1, 2024 and the last installment on January 1, 2027.
On April 12, 2024, Zenvia Brazil entered into an agreement
with Banco ABC Brasil S.A. for a Commercial Promissory Notes Loan in the original aggregate amount of R$15,000 thousand, establishing
an amortization schedule comprised of 18 installments, six-months of grace period and twelve-months installments of principal. In this
transaction, we have a swap component with a CDI limit of up to 15.3% for the first six installments, which serves as a protective mechanism.
The first installment of principal and interest is due on November 12, 2024 and the last installment on October 12, 2025.
On April 16, 2024, Zenvia Brazil
signed an amendment with Banco Santander (Brasil) S.A. for a 4131 Loan in the original aggregate amount of R$25,000 thousand, establishing
a amortization schedule comprised of 12 installments, three-months of grace period and nine-months installments of principal, with the
first installment of principal and interest due on August 16, 2024 and the last installment on April 16, 2025.
Debentures
On May 10, 2021, Zenvia, through its subsidiary D1,
issued debentures, not convertible into shares and secured by the fiduciary assignment (cessão fiduciária) of (i)
receivables equivalent to two times the amount of the last installment, which are deposited into an escrow account controlled by the debenture
holder and (ii) 10% of D1 common shares in the total amount of R$45,000 thousand. This debenture deed was amended on July 30, 2021, September
12, 2022, March 17, 2023, April 17, 2023 and December 18, 2023. Pursuant to the last amendment, the fixed interest rate amounts to 18.16%
per annum and the amortization schedule is of 36 monthly installments, the first of which was due on January 30, 2024 and the last installment
is due on December 30, 2026.
Selected Operating Data
The following table sets forth summary information regarding
certain of our key performance metrics as of the periods indicated:
| |
As
of June 30, |
| |
2024 |
|
2023 |
| |
|
|
|
| Number of Active customers(1) |
11,849 |
|
14,740 |
| Net Revenue Expansion (NRE) rate for both the CPaaS and SaaS segments(2) |
112.9% |
|
93.1% |
| |
|
|
|
|
| (1) |
We believe that the number of our active customers is an important indicator of the growth of our business, the market acceptance of our platform and future revenue trends. We define an active customer as an account (based on a corporate taxpayer registration number) at the end of any period that was the source of any amount of revenue for us in the preceding three months. We classify a customer from which we generated no revenue in the preceding three months as an inactive customer. |
| (2) |
We believe that Net Revenue Expansion (NRE) rate is one of the most reliable indicators of our future revenue trends, as measuring our Net Revenue Expansion (NRE) rate on revenue generated from our customers provides a more meaningful indication of the performance of our efforts to increase revenue from existing customers. In order to calculate Net Revenue Expansion (NRE) rate, we first select the cohort of customers on a prior trailing twelve months period, sum up the total revenue of these customers for the applicable twelve month period and divide this sum by the sum of the total revenue of these same customers on the prior trailing twelve month period. |
Zenvia (NASDAQ:ZENV)
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