Zenvia : 2Q22 Financial Statements

Strong top-line increase from organic growth and M&A integration

Net Revenues up 50% YoY with Adjusted Gross Margin expanding 500bps to 38% in Q2

Numbers are within the full-year guidance range

New reporting breakdown by SaaS and CPaaS to increase transparency and simplify understanding

São Paulo, August 15, 2022 - Zenvia Inc. (NASDAQ: ZENV), the leading cloud-based CX communications platform in Latin America, empowering companies to transform their existing communications with end customers along their life cycle, today reported its second quarter of 2022 operational and financial metrics.

Cassio Bobsin, Founder & CEO of ZENVIA, said: "A couple of weeks ago, we held an Investor Day on Nasdaq where we shared our long-term strategy and how we envision the future of Customer Experience (CX). We believe that since the rise of civilization and modern society, we've been building organizations based on processes designed for scale and efficiency. This was a great achievement of the industrial revolution. The world is in process of transformation, and value creation has shifted from production efficiency to customer efficiency. Humans are not designed to interact with bureaucratic organizations. We are designed to interact with other human beings. Ultimately, people should be able to talk to companies as if they were also humans. That's why Zenvia is shaping a new world of experiences."

Shay Chor, CFO & IRO of ZENVIA, said: "Starting Q2 2022, and similar to the approach of our Investor Day, we will break down revenues, gross profit and margin by SaaS and CPaaS, our two main business lines. This breakdown will allow for a deeper glimpse into our business and is more aligned with how we understand and manage our company, especially following the organizational restructuring announced last June. It also demonstrates that we are effectively a SaaS company as over half of our gross margin already comes from the software business. As we finished up the first half of 2022, Zenvia is smarter and more robust than ever. Our top-line and gross margin results attest that we are on the right path to creating value. Our client base grew 37%, bringing revenues up 50%, while our adjusted gross profit rose 73% and the gross margin jumped 500bps. We just started cross-selling our solutions and tools to a growing client base. R&D expenses also grew to represent about 12% of revenues. We expect these expenses to remain at this level for the next couple of years, following the launch of new products that will significantly leverage our growth and market positioning. And, despite the current uncertain environment and the challenges involving tech companies, we are reaffirming our guidance for the year."

	Key Financial Metrics			Q2 2022		Q2 2021			YoY			H1 2022			H1 2021		YoY
Total Customers	14,740		10,773		36.8%		14,740		10,773	36.8%
Net Revenues (BRL MM)	203.9	135.7	50.3%		401.5		258.3	55.4%
Adjusted Gross Profit (BRL MM)	77.0		44.6		72.6%		143.8		78.0	84.3%
Adjusted Gross Margin	37.8%		32.9%			5.0p.p.	35.8%		30.2%	5.6p.p.

Key operating highlights

• We unified our portfolio: Zenvia Attraction, Zenvia Conversion, Zenvia Service and Zenvia Success, unified on our Quantum platform to break down all CX barriers and unlock the true potential for end customers
• We closed the Movidesk acquisition on May 2nd, 2022, adding 2,500 customers, with an Annual Recurring Revenue (ARR) of BRL 46 million. We expect to fully integrate Movidesk in a twelve- month period ending May 2023.
• Integration of D1 and SenseData is moving as expected, with cross-selling solutions being already delivered to some of our customers. We expect to fully integrate these businesses by the end of 2022.
• Last June, we announced a tactical reorganization of our business structure, with fully-dedicated teams to focus on strengthening its three existing business lines - SaaS, CPaaS, and Consulting - thus allowing for more autonomy when it comes to revenue generation activities.

Our Business Lines

To better reflect the current stage of our business and align with the recent reorganization of our corporate structure, starting this quarter we will report a revenue breakdown by SaaS and CPaaS, instead of SMS and Beyond SMS. We believe this change will allow all stakeholders to better understand our business and growth levers.

According to IDC, the total addressable market (TAM) in Latin America for SaaS will be $5.4 billion in 2026, growing from $3.2 billion in 2021, while the CPaaS will grow from $0.9 billion in 2021 to $3.6 billion in 2026. Both markets will sum up to $9.0 billion in 2026, from $4.0 billion in 2021.

Source: IDC Custom Analytics for Zenvia

SaaS Business

The SaaS business line carries higher gross margins and is the business from where most of our growth will come in the future. During the IPO, we practically only had Zenvia Conversion and communication channels as part of our offering. Twelve months later, Zenvia is talking directly with the marketing and sales departments, acting along the entire customer experience journey. More than half of our margin already comes from our solutions, when nearly three years ago this percentage was zero.

	SaaS Key Operational & Financial Metrics			Q2 2022			H1 2022
	Total Customers	6,593	6,593
	Net Revenues (BRL MM)	64.5	116.4
	Adjusted Gross Margin	68.5%	66.5%
	Net Revenue Expansion (NRE)	120%	120%

According to IDC, Zenvia was already among Latin America's top 10 SaaS players by the end of 2021, with 2.2% of market share. This means we have already changed the customer experience of over 40 million people in LatAm with our SaaS solutions, compared to a total population of 925 million in the region, which means that we can still change the experience of 95% of them.

Source: IDC Custom Analytics for Zenvia

The Latin American SaaS market is expected to reach US$5.4 billion in value by 2026, with a market size of $2.2 billion, and a CAGR of 12.0% and 19.3%, respectively. Our SaaS revenues have been growing faster than the market as we gain market share. Our products are designed to solve the pains of LatAm businesses, from price point to suitability, giving us a competitive advantage. Our offering competes with global suites

that are not tropicalized for local needs and are usually charged in US dollars. Furthermore, our offering off- the shelf promotes an easy adoption and a short sales cycle.

Source: IDC Custom Analytics for Zenvia

Our SaaS Portfolio

Since our IPO a year ago, Zenvia has evolved its product portfolio organically and through acquisitions. Our platform now provides four SaaS solutions designed for each phase of customers' journey, starting with the first interaction with the brand and all the way to a continuous relationship with the company.

	Solution			Former			Focus
				Zenvia Campaign		Active end-customer acquisition campaigns
				Sirena			Converting leads into sales using multiple communication channels
				Movidesk		Enabling companies to provide amazing customer service with
					structured support across multiple channels
							Enabling companies to continuously engage customers based on
				Sensedata			their individual context, promoting healthy and long-lasting
							relationships, transforming data into insights

Our SaaS solutions can be used alone or combined, allowing companies to start a program in a really simple way in a matter of minutes, or they can go all the way to a fully integrated, automated, and intelligent customer journey. We also provide CX Tools that can be used to integrate and automate the customer experiences in various ways. Our main tools are APIs, Bots, Natural-language understanding (NLU) and Docs. The Quantum platform connects all our solutions and tools with the client's systems and processes.

Companies can access our platform and start choosing from any solution or tool. As they go deeper into adopting multiple parts of the platform, we can break down all CX barriers and unlock the true potential for end customers.

CPaaS Business

	CPaaS Key Operational & Financial Metrics			Q2 2022			H1 2022
	Total Customers	8,647	8,647
	Net Revenues (BRL MM)	139.4	285.1
	Adjusted Gross Margin	22.9%	22.9%

The population in Latin America is highly connected and a heavy user of social media and social networks. This leads companies to centralize the communication with end customers through these digital channels, mainly WhatsApp and Instagram, which are the most popular and widely used. Even though SMS is still currently responsible for most of the CPaaS volume in the region, WhatsApp and Instagram are growing at a much faster pace.

To reach the population through multiple channels, companies need to

1. Use communications application programming interfaces (APIs), to enhance customer engagement, notifications, service management, marketing automation and business intelligence applications
2. Apply real-time communications solutions that are easy to create and scalable.
3. Simplify the process of embedding programmable voice and messaging applications, creating cost- effective and agile enterprise cloud applications

According to IDC, Zenvia was the top CPaaS player in Latin America by the end of 2021, with 13% of market share. The CPaaS Latin American market is expected to multiply by roughly 3x, reaching $3.1 billion in size and $3.5 billion in TAM by 2026. It means that although the addressable market is expected to continue growing at an accelerated pace, white space is limited. We expect to maintain our leadership position.

Source: IDC Custom Analytics for Zenvia

Source: IDC Custom Analytics for Zenvia