Semantix, Inc. (NASDAQ: STIX), a leading Latin American end-to-end
data and enterprise AI platform provider, today announced its
financial results for the quarter ended March 31, 2023.
“Since increasing focus on our core proprietary SaaS only one
quarter ago, we are pleased with the vigor and traction we are
seeing in prioritizing higher-quality proprietary SaaS revenue,
with accompanying relevant improvements in our gross margin
profile, reflecting our culture of always seeking efficiency in our
business,” said Leonardo Santos, CEO and Founder of Semantix. “I
remain confident in our ability to deliver sustainable growth this
year while making progress delivering against key initiatives.”
First Quarter 2023 Financial Highlights
- Net revenue for the first quarter of 2023 of R$40 million,
reflecting an increase of 1% year-over-year as compared to the
first quarter of 2022, with proprietary SaaS revenue growth
partially offset by slight decreases in revenue from our
third-party SaaS and AI & data and analytics services business
lines.
- Proprietary SaaS revenue for the first quarter of 2023 grew 4%
year-over-year.
- Gross profit increased 33% in the first quarter of 2023
year-over-year as compared to the first quarter of 2022, with gross
margin improving 10 percentage points year-over-year to 43% in the
first quarter of 2023, primarily due to the improved performance of
third-party SaaS products gross margin reflecting the
prioritization of higher margin contracts during the period.
- Semantix had 17 customers in 1Q23 each contributing more than
US$1 million in revenue in the last twelve months.
- Adjusted EBITDA loss in the first quarter of 2023 was R$34
million, due primarily to ramping-up investments in talent as well
as sales and marketing efforts.
- Cash and cash equivalents of R$232 million as of March 31,
2023. Net cash (net of the loans and borrowings) was R$161 million
as of March 31, 2023.
Key Business Highlights
- Control and Efficiency: successfully implemented an ERP system
to streamline Semantix’s operations and to improve its internal
controls.
- People and leadership: Semantix hired Bruno Bonfanti, a former
executive at Google, in the newly created role of Channel and
Ecosystem Director.
- Partnership program: Semantix relaunched its global partnership
program, already consisting of 70 partners. Semantix’s partners
will now be categorized into four groups based, each with different
approaches and benefits: Semantix Partner, Sales Partner,
Implementation Partner and Independent Software Vendor.
- Product Development:
- Recently launched GenAI, Semantix’s
Generative AI product, which captured approximately 1,300 sign-ups
already in this first month.
- Quantum computing: launched a
sandbox to pull and use data in simulations.
- SDP Genius: introduced a large
language model framework within the SDP platform to improve
usability, learn from customers and incorporate feedback, query
response times and automate communications between teams.
- Implemented a new feature within our
integration module that enables obfuscation of personal and
sensitive data in transition, increasing data security and user
experience.
- Implemented a module for financial
institutions, SDP Financial, a purpose-built tool for complex
analysis of financial product design, aiming to resolve business
challenges through leveraging public data sets from the financial
community.
- Customer advisory board: Semantix is implementing a Customer
Advisory Board, inviting key customers from our different industry
verticals to design and test new features, which provides valuable
input for Semantix’s product roadmap.
1Q23 Financial Metrics(In BRL million, except
for percentages)
|
1Q 2023 |
1Q 2022 |
Y/YChange |
Net Revenue |
R$ 40 |
R$ 39 |
1% |
Gross Profit |
R$ 17 |
R$ 13 |
33% |
Gross Margin |
43% |
32% |
10 pp |
Adjusted EBITDA |
(R$ 34) |
(R$15) |
130% |
Adjusted EBITDA Margin |
(85%) |
(37%) |
(48 pp) |
|
Mar 31, 2023 |
Dec 31, 2022 |
Change |
Cash and
Cash Equivalents |
R$
232 |
R$
338 |
(31%) |
Net Cash
(Debt) |
R$
161 |
R$
259 |
(38%) |
|
|
|
|
Financial Outlook
Based on current market conditions and management expectations,
and subject to a variety of factors described below, Semantix
continues to expect that:
- Proprietary SaaS revenue for 2023
will be between R$ 75 million and R$ 80 million, implying growth in
the range of 40% and 50% in 2023 compared with 2022.
- Total revenue for 2023 will increase
above 10% compared to the previous year.
Historically, Semantix has received a higher volume of orders
from new and existing customers during the second half of the year
and, in particular, in the fourth quarter of each year, which we
believe is due to, among other factors, the procurement, budgeting,
and deployment cycles of many of our customers, particularly large
enterprise customers.
Conference Call and Webcast Information
Semantix will host a conference call today, May 8, 2023, at 8:30
a.m. Eastern Time to discuss its financial results and financial
outlook. The conference call will be webcast live on Semantix’s
Investor Relations website at ir.semantix.ai/news-events/events.
Parties interested in participating via telephone may register
using this online form. Upon registration, all telephone
participants will receive the dial-in number along with a unique
PIN number that can be used to access the call. A replay of the
conference call webcast will be archived on Semantix’s Investor
Relations website for at least 30 days.
Forward-Looking Statements
This press release and the earnings call referencing this press
release contain forward-looking statements and forward-looking
information within the meaning of applicable United States
securities legislation that involve substantial risks and
uncertainties (collectively herein referred to as “forward-looking
statements”). All statements other than statements of historical
facts contained in this press release and addressed on our earnings
call, including statements regarding our future financial position,
results of operations, business strategy and plans and objectives
of management for future operations, are forward-looking
statements. For example, forward-looking statements include,
without limitation, statements concerning the following: the growth
of Semantix’s business and its ability to realize expected results,
including with respect to its net revenue, gross profit, gross
margin, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA
margin, cash and cash equivalents and net cash (debt); the
viability of its growth strategy, including with respect to its
ability to grow market share in Brazil and internationally,
particularly through the expansion of its proprietary SaaS data
solutions, grow revenue from existing customers, and consummate and
achieve expected benefits through acquisitions; opportunities,
trends and developments in the data industry, including with
respect to future financial performance in the industry; the size
of Semantix’s total addressable market; macroeconomic and
geopolitical factors, including as a result of the policies and
actions of the new administration in Brazil following the 2022
presidential election. In some cases, you can identify forward
looking statements by terminology such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,”
“would,” “could,” “plan,” “project,” “forecast,” “predict,”
“potential,” “seem,” “seek,” “future,” “outlook,” “target,” “trend”
or other similar expressions (or the negative versions of such
words or expressions).
Such forward-looking statements are based on the current
expectations of our management and are inherently subject to
uncertainties and changes in circumstance and their potential
effects and speak only as of the date of such statement. There can
be no assurance that future developments will be those that have
been anticipated. Such forward-looking statements are subject to
risks, uncertainties, and other factors which could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements and could adversely affect the
outcome and financial effects of the plans and events described
herein. In addition, even if the outcome and financial effects of
the plans and events described herein are consistent with the
forward-looking statements contained in this press release and the
earnings call referencing this press release, those results or
developments may not be indicative of results or developments in
subsequent periods. Although Semantix has attempted to identify
important risks and factors that could cause actual actions, events
or results to differ materially from those described in
forward-looking statements, there may be other factors and risks
that cause actions, events or results not to be as anticipated,
estimated or intended. Forward-looking information contained in
this press release and the earnings call referencing this press
release are based on current estimates, assumptions, expectations
and projections, including with respect to the management’s
expectations regarding Semantix’s growth based on historical
financial results and anticipated commercial developments, the
anticipated success of current strategies for market penetration in
Brazil and globally in light of competition from existing market
participants and the emergence of competitors in the future,
management’s expectations with respect to the development of
technology and other proprietary intellectual property by Semantix
based on existing technological realities and strategies with
respect to intellectual property development, management’s
expectations regarding the likelihood Semantix will be able to
enter into commercial arrangements with relevant third-parties and
customers, Semantix’s ability to maintain adequate margins based on
financial metrics available to management, the ability of Semantix
to finance its ongoing capital needs, the continued involvement of
Semantix’s management in Semantix’s operations and the ability of
Semantix to attract and retain talent in the future, which are
based on the information available as of the date of this press
release, and, while considered reasonable by Semantix, are
inherently uncertain. Historical statements contained in this
document regarding past trends or activities should not be taken as
a representation that such trends or activities will continue in
the future. In this regard, certain financial information contained
herein has been extracted from, or based upon, information
available in the public domain and/or provided by Semantix. In
particular, historical results should not be taken as a
representation that such trends will be replicated in the future.
No statement in this document is intended to be nor may be
construed as a profit forecast.
Nothing in this press release and the earnings call referencing
this press release should be regarded as a representation by any
person that the forward-looking statements set forth herein will be
achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements in this press release
and the earnings call referencing this press release, which speak
only as of the date they are made and are qualified in their
entirety by reference to the cautionary statements herein. This
press release also contains certain financial forecast information
of Semantix. Such financial forecast information constitutes
forward-looking information and is for illustrative purposes only
and should not be relied upon as necessarily being indicative of
future results. The assumptions and estimates underlying such
financial forecast information are inherently uncertain and are
subject to a wide variety of significant business, economic,
competitive, and other risks and uncertainties. Actual results may
differ materially from the results contemplated by the financial
forecast information contained in this press release, and the
inclusion of such information in this press release should not be
regarded as a representation by any person that the results
reflected in such forecasts will be achieved. You must make your
own determinations as to the reasonableness of these projections,
estimates, goals, trends and other statements and should also note
that if one or more estimates change, or one or more assumptions
are not met, or one or more unexpected events occur, the
performance and results set forth in such projections, estimates,
goals, trends and other statements may not be achieved. We can give
no assurance as to future operations, performance, results or
events.
WE DO NOT UNDERTAKE ANY OBLIGATION AND EXPRESSLY DISCLAIM ANY
RESPONSIBILITY TO UPDATE OR REVISE, OR PUBLICLY DISCLOSE ANY UPDATE
OR REVISION TO, ANY FINANCIAL FORECASTS CONTAINED HEREIN TO REFLECT
CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY
HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE
FORECASTS. HOWEVER, WE MAY ELECT TO UPDATE OUR BUSINESS OUTLOOK AT
ANY TIME FOR ANY REASON.
Non-GAAP Financial Measures
This press release includes certain non-IFRS financial measures
and industry metrics such as EBITDA, EBITDA margin, Adjusted
EBITDA, Adjusted EBITDA margin and net cash (debt). These measures
are an addition, and not a substitute for or superior to, measures
of financial performance prepared in accordance with IFRS and
should not be considered as an alternative to net income, operating
income or any other performance measures derived in accordance with
IFRS. Semantix believes that these measures (including on a
forward-looking basis) provide useful supplemental information to
investors about Semantix, particularly as they exclude the impacts
of certain events that we believe are isolated in nature incurred
as part of our recent expansion and, therefore, not reflective of
our underlying results. Semantix’s management does not consider
these non-IFRS measures in isolation or as an alternative to
financial measures determined in accordance with IFRS. Semantix’s
management uses forward-looking non-IFRS measures to evaluate
Semantix’s projected financials and operating performance. However,
there are a number of limitations related to the use of these
measures, including that they exclude significant expenses that are
required by IFRS to be recorded in Semantix’s financial statements,
including certain expenses with D&O insurance, gains from fair
value of Semantix’s warrants and concentrated expenses of an
extraordinary nature incurred in connection with our
recently-completed business combination with a SPAC. In addition,
other companies may calculate non-IFRS measures or industry metrics
differently or may use other measures to calculate their financial
performance, and therefore, Semantix’s non-IFRS measures and
industry metrics may not be directly comparable to similarly titled
measures of other companies. Additionally, to the extent that
forward-looking non-IFRS financial measures are provided, they are
presented on a non-IFRS basis without reconciliations of such
forward-looking non-IFRS measures due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations.
Other Business Metrics
Proprietary SaaS and Resale of Third-party
Software: Proprietary SaaS consists of Semantix’s data
platform software, while resale of third-party Software consists of
the resale of licenses from third-party data platform software
providers.
Customers with Trailing 12-Month Revenue Greater than
US$1 Million: Large customer relationships lead to scale
and operating leverage in our business model. Compared with smaller
customers, large customers present a greater opportunity for us to
sell additional capacity because they have larger budgets, and a
wider range of potential use cases. As a measure of our ability to
scale with our customers and attract large enterprises, we count
the number of customers that contributed more than US$1 million in
revenues in the trailing 12 months, considering the Brazilian real
to US Dollar exchange rate as of March 31, 2023. Our customer count
is subject to adjustments for acquisitions, consolidations,
spin-offs, and other market activity.
Net Cash (Debt): Net cash (debt) reflects
Semantix’s cash and cash equivalents balance at a given date in
time, net of the loans and borrowings balance as of the same
date.
About Semantix
Semantix is Latin America’s first fully integrated data software
platform. Semantix has more than 300 clients with operations in
approximately 15 countries using Semantix’s software and services
to enhance their businesses. The company was founded in 2010 by CEO
Leonardo Santos. For more information, visit www.semantix.ai.
|
Semantix, Inc. Consolidated Statement of
Profit or Loss (in BRL thousands) |
|
|
|
Three Months Ended, |
|
March 31 |
|
2023 |
2022 |
Revenues |
39,679 |
39,434 |
Cost of sales |
(22,805) |
(26,726) |
Gross profit |
16,874 |
12,708 |
Operating expenses |
|
|
Sales and marketing expenses |
(14,252) |
(9,252) |
General and administrative expenses |
(36,192) |
(22,305) |
Research and development |
(12,696) |
(7,278) |
Other expenses |
— |
(17,463) |
Operating loss |
(46,266) |
(43,590) |
|
|
|
Financial income |
10,363 |
4,295 |
Financial expenses |
(14,461) |
(6,493) |
Net financial results |
(4,098) |
(2,198) |
|
|
|
Loss before income tax |
(50,364) |
(45,788) |
Income tax |
2,549 |
1,902 |
Loss for the period |
(47,815) |
(43,886) |
|
Semantix, Inc.Consolidated Statement of
Cash Flows(in BRL thousands) |
|
|
|
Three months ended |
|
March 31, |
|
2023 |
2022 |
Loss for the period |
(47,815) |
(43,886) |
Adjustments to reconcile loss for the period |
|
|
Depreciation and amortization |
7,970 |
3,711 |
Deferred income tax |
(2,549) |
(2,062) |
Onerous contract |
- |
(1,174) |
Fair value adjustment of derivatives financial instruments |
8,738 |
- |
Stock option plan |
857 |
1,235 |
Trade and other receivables expected loss |
1,294 |
685 |
Accounts receivable write-off and Write-off of creditor
invoice |
(238) |
(355) |
Provision for contingencies |
1,517 |
(3,856) |
Interest accrued |
2,761 |
5,257 |
Interest paid |
(976) |
(2,341) |
Change in operating assets and liabilities |
(38,859) |
(8,489) |
Net cash outflow from operating activities |
(67,300) |
(51,275) |
Purchase and development of intangible assets |
(9,976) |
(7,351) |
Acquisition of subsidiaries net of cash acquired |
(1,988) |
- |
Acquisitions of property and equipment |
(55) |
(164) |
Net cash outflow from investment activities |
(12,019) |
(7,515) |
Loans obtained |
- |
82,015 |
Acquisition of non-controlling interest |
5,018 |
- |
Payment of loans |
(10,109) |
(10,800) |
Purchase of treasury shares |
(22,144) |
- |
Lease payments |
(393) |
(341) |
Net cash inflow (outflow) from financing
activities |
(27,655) |
70,874 |
Increase (decrease) in cash and cash
equivalents |
(106,974) |
12,084 |
Cash and cash equivalents at the beginning of the year |
338,020 |
52,149 |
Cash and cash equivalents at the end of the year |
231,765 |
66,168 |
Effect of exchange rate changes |
719 |
1,935 |
Increase (decrease) in cash and cash
equivalents |
(106,974) |
12,084 |
|
|
|
Supplemental non-cash flow information |
|
|
Remeasurement of lease agreement |
211 |
- |
Unpaid amount related to business combination |
33,062 |
- |
Other receivables related to the sale of non-controlling
interest |
5,018 |
- |
|
Semantix,
Inc. Consolidated Statement of Financial
Position(in BRL thousands) |
|
|
|
|
March 31, 2023 |
March 31, 2022 |
ASSETS |
|
|
Cash and cash equivalents |
231,765 |
338,020 |
Trade receivables and other, net |
135,809 |
139,546 |
Tax receivables |
14,958 |
11,317 |
Prepaid expenses and other assets |
26,371 |
35,060 |
PP&E, Intangible and right of use asset |
163,757 |
156,110 |
Deferred tax asset |
23,756 |
22,488 |
Total current assets |
404,154 |
519,169 |
Total non-current assets |
192,262 |
183,372 |
Total assets |
596,416 |
702,541 |
|
|
|
LIABILITIES |
|
|
Loans and borrowings |
70,289 |
78,671 |
Trade and other payables |
92,790 |
107,695 |
Lease liabilities and other liabilities |
47,356 |
64,676 |
Taxes payable |
10,464 |
14,733 |
Derivatives financial instruments |
15,737 |
6,412 |
Deferred income tax |
7,648 |
8,929 |
Total current liabilities |
140,089 |
181,390 |
Total non-current liabilities |
104,195 |
99,726 |
Total liabilities |
244,284 |
281,116 |
|
|
|
EQUITY |
|
|
Share capital |
425 |
425 |
Additional paid-in capital |
872,771 |
872,771 |
Capital reserves |
21,157 |
20,300 |
Other comprehensive income |
(7,004) |
(6,840) |
Treasury shares |
(22,651) |
(508) |
Accumulated loss |
(516,493) |
(468,869) |
Non-controlling interests |
3,927 |
4,146 |
Total equity |
352,132 |
421,425 |
Total equity + liabilities |
596,416 |
702,541 |
|
Semantix
Inc. GAAP to Non-GAAP Adjusted EBITDA and Adjusted
EBITDA Margin Reconciliations(in BRL thousand) |
|
|
|
Three Months Ended, |
|
March 31, |
(in R$ thousands) |
2023 |
2022 |
Loss for the period |
(47,815) |
(43,886) |
(+/-) Net interest income (expenses) |
(5,829) |
4,002 |
(+/-) Income tax |
(2,549) |
(1,902) |
(+) Depreciation and amortization |
7,959 |
3,718 |
EBITDA |
(48,234) |
(38,069) |
(+) Stock option expenses (1) |
1,087 |
1,565 |
(+) Transaction expenses (2) |
- |
21,763 |
(+) D&O Expenses (3) |
4,611 |
- |
(+/-) Fair Value of Derivative Financial Instruments (4) |
8,696 |
- |
Adjusted EBITDA |
(33,839) |
(14,740) |
Net Revenue |
39,679 |
39,434 |
Adjusted EBITDA Margin |
-85% |
-37% |
(1) Consists of expenses related to stock
option grants under our 2021 stock option plan and a stock option
plan adopted by us in 2020, including payroll expenses in the
amounts of R$0.2 million and R$0.3 million in the three-month
periods ended March 31, 2023 and 2022, respectively.(2)
Consists of concentrated expenses of an extraordinary nature
related to third-party advisory, support services, travelling and
events incurred in connection with our business combination with a
SPAC that are not expected to be ongoing.(3) Consists of
expenses related to D&O Insurance (directors’ and officers’
liability insurance). (4) Consists of gains from fair value
of Semantix Warrants.
Investor ContactAdriano AlcaldeChief Financial
Officer & IRir@semantix.ai
Press
Contactsemantix@rpmacomunicacao.com.br
Source: Semantix, Inc
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