Despegar.com, Corp. (NYSE:DESP) Q1 2023 Earnings Conference Call May 18, 2023 10:00 AM ET Company Participants Luca Pfeifer - Investor Relations Damian Scokin - Chief Executive Officer Conference Call Participants Joao Soares - Citigroup Operator Good morning, and welcome to Despegar's First Quarter 2023 Earnings Call. A slide presentation is accompanying today's webcast and is available in the Investors section of the company's website, www.investor.despegar.com. There will be an opportunity for you to ask ...

Financial Performance - Gross Bookings reached $1.1 billion, up 44% YoY, driven by the recovery in Latin American travel demand [4] - Total Adjusted EBITDA increased 154% YoY to $17.3 million, marking the strongest performance since 1Q18 [4] - Revenues rose 41% YoY to $158.7 million, achieving a record quarterly level with a Take Rate of 13.8% [4] - Total Revenue for Q1 2023 reached $158,707,000, a 41% increase compared to $112,414,000 in Q1 2022 [64] - Gross Profit for Q1 2023 was $107,680,000, reflecting a 54% increase from $69,856,000 in Q1 2022 [64] - Operating Income for Q1 2023 was $7,258,000, a significant improvement from an operating loss of $4,802,000 in Q1 2022 [64] - Total Adjusted EBITDA for Q1 2023 was $17,272,000, compared to a loss of $22,256,000 in Q1 2021 [65] - Net loss for the three months ended March 31, 2023, was $697 thousand, a significant improvement compared to a net loss of $30,918 thousand for the same period in 2022 [68] Customer Engagement - The number of Loyalty Program members surged 343% YoY to 14.0 million, indicating strong customer engagement [4] - The number of transactions is a key metric indicating customer engagement, although specific figures were not provided [58] Market Performance - Gross Bookings in Brazil grew 89% YoY to $458 million, with transactions increasing 35% in the same period [7] - Brazil accounted for 43% of total transactions in 1Q23, increasing 35% YoY, with Gross Bookings growing 89% YoY to $XXX million [26] - Mexico represented 18% of 1Q23 transactions, with ASPs increasing 24% and Gross Bookings rising 23% YoY [27] - Transactions in the rest of Latin America decreased 13% YoY, but ASPs grew 43%, leading to a 24% increase in Gross Bookings [28] Revenue Composition - The proportion of Travel Packages in Gross Bookings reached 34%, up 4 percentage points YoY, enhancing the revenue mix [6] - Total Revenue increased 41% YoY to $158.7 million, driven by a shift towards Packages, Hotels & Other Travel Products, which grew 44% to $98.0 million [30] - The company’s revenue is primarily derived from commissions and service fees, with additional income from advertising and financial services [55] Operating Expenses - Operating Expenses rose 34% YoY to $100.5 million, primarily due to a 70% increase in Selling and Marketing expenses [34] - Selling and Marketing expenses increased by 70% to $51,892,000 in Q1 2023 from $30,517,000 in Q1 2022 [64] Cash Flow and Liquidity - Operating cash flow was positive at $5.2 million, compared to $32.2 million in 1Q22, reflecting a shift in cash generation [4] - Cash and cash equivalents decreased by $17.0 million to $228.0 million, mainly due to preferred dividend payments and tax payments [42] - Despegar generated $5.2 million in Cash from operating activities in 1Q23, down from $32.2 million in 1Q22 [43] - Net cash flows provided by operating activities were $5,179 thousand, down from $32,200 thousand in the prior year, indicating a decrease of 83.9% [68] - Cash and cash equivalents decreased to $205,143 thousand from $219,167 thousand, a decline of 6.4% [66] Guidance and Future Outlook - The company reaffirms its 2023 annual guidance, projecting revenues between $640 million and $700 million and Adjusted EBITDA of $80 million to $100 million [16] Assets and Liabilities - Total assets increased to $821,754 thousand as of March 31, 2023, up from $804,192 thousand as of December 31, 2022, representing a growth of 2.0% [66] - Current liabilities rose to $590,177 thousand, an increase of 4.5% from $564,485 thousand at the end of 2022 [66] - Total liabilities increased to $782,434 thousand, up from $763,193 thousand, marking a rise of 2.2% [67] - The company reported an increase in trade accounts receivable to $170,672 thousand, up 15.8% from $147,398 thousand [66] - The company’s accumulated losses slightly increased to $644,019 thousand from $643,322 thousand, indicating a marginal rise of 0.1% [66] - The company’s total shareholders' deficit attributable to Despegar.com Corp was $127,962 thousand, a slight increase from $127,150 thousand [66] Financial Services - Koin's EBITDA improved by $2.1 million YoY to negative $2.5 million, moving closer to breakeven in the second half of the year [9] - Financial Services segment reported a Total Adjusted EBITDA of negative $2.5 million, an improvement from negative $4.6 million in 1Q22 [45] - The Financial Services segment includes loan origination and processing services, contributing to diversified revenue streams [57] Seasonal Impact - Seasonal variations significantly impact Despegar's financial results, with higher bookings typically in the third and fourth quarters for the Southern hemisphere [53] Geographic Presence - Despegar operates in 19 countries across Latin America, enhancing its market presence and customer reach [60]

Financial Performance and Losses - COVID-19 pandemic significantly disrupted the company's business, resulting in net losses of $68.5 million in 2022, $105.9 million in 2021, and $142.9 million in 2020, with negative operating cash flows of $118.3 million in 2020 and $36.5 million in 2021, although positive operating cash flows of $36.7 million were achieved in 2022[56] - The company's accumulated losses reached $643.3 million, and shareholders' deficit was $127.2 million as of December 31, 2022[56] Geographic and Revenue Concentration - Brazil accounted for 35% of the company's total transactions in 2022, Mexico for 20%, and Argentina for 14%[50] - The company relies heavily on Latin America, with substantially all revenue derived from the region, and operations primarily located there[50] Macroeconomic and Political Risks - The company faces risks from macroeconomic and political conditions, including inflation, interest rates, and geopolitical conflicts, which could adversely affect its business[52] - Political and social instability in Latin America, including government interventions and economic downturns, could adversely affect the company's business[189][191] - Inflation rates in Brazil, Mexico, and Argentina were 5.8%, 7.8%, and 94.8% respectively in 2022, increasing operational costs and financial risks[195] - Exchange rate fluctuations, such as the Argentine peso depreciating 64.4% in 2022, could negatively impact revenue and demand for travel services[197] - Exchange controls in Brazil and Argentina have significantly impacted the company's ability to transfer funds and convert local currencies to USD, with the Blue Chip Swap Rate spread reaching 94.2% in 2022, 96.8% in 2021, and 66.7% in 2020[202] - The company faces risks from potential increases in foreign exchange controls in Brazil and Argentina, which could restrict payments to foreign creditors, suppliers, and dividend distributions to shareholders[201][203] Financial Services and Credit Risks - The company's financial services business is exposed to risks such as inadequate credit analysis, ineffective collection efforts, and changes in market interest rates[39] - The company's business depends on the availability of credit cards and financing options for consumers, as well as the reliability of internet and e-commerce growth in Latin America[39] - The Central Bank in Argentina enacted restrictions on credit card installment plans for international travel products, which could impact the company's business[96] - The company relies on banks or payment processors to collect payments, and changes in credit card association fees or rules could adversely affect its business[97][98][99] - The company's "Buy Now, Pay Later" option relies on Koin's proprietary risk model, which uses multiple variables to predict consumer repayment capacity, but assumptions and projections may prove incorrect, leading to potential losses[115] - Customers using the "Buy Now, Pay Later" option often have limited credit histories and are more susceptible to economic downturns, making repayment predictions particularly challenging[115] - The company's ability to collect on loans is dependent on consumer financial stability, and factors like job loss, illness, or bankruptcy can adversely affect collections[117] - The company faces risks from potential changes in market interest rates, which could increase delinquencies, defaults, and charge-offs, adversely affecting operations[120] - The company relies on funding sources for its financial services business, and disruptions in credit markets or rising interest rates could adversely affect funding availability and terms[122] - The company depends on the accuracy of customer information for credit analysis, and inaccuracies could lead to increased defaults and losses[123] IT and Cybersecurity Risks - The company's ability to attract and retain highly-skilled IT professionals is critical for its future growth[39] - The company is at risk of system interruptions, security breaches, and insufficient redundancy in its IT systems, which could harm operations and reputation[78][79] - The company is subject to payments-related fraud risks, including chargebacks and fraudulent bookings, which could negatively impact financial performance[82] - The company may fail to identify fraudulent suppliers, leading to unauthorized access to user data and reputational damage[84] - The company faces challenges in attracting and retaining highly-skilled IT professionals, which is critical for its business and future growth[85][86] - High attrition rates of qualified personnel could adversely affect the company's ability to expand its business and increase personnel expenses and training costs[88] - The company relies on third-party systems and service providers, and any disruption or adverse change in their businesses could have a material adverse effect on its operations[91][92][93] Competition and Market Risks - The company's competitive success in the travel market depends on factors such as price, brand recognition, customer service, and consumer payment options[61] - The company faces competition from regional and global OTAs, meta-search companies, Airbnb, and social media channels, which may require reducing service fees and revenue margins to maintain competitiveness[62] - Travel suppliers are increasingly promoting direct distribution channels, offering loyalty rewards and lower transaction fees, which could diminish the company's access to supplier-provided content[64] - The company relies heavily on Expedia for hotel and lodging products, with Expedia being the preferred provider in Latin America under the Expedia Outsourcing Agreement[65] - The company generates revenue through commissions and incentive payments from airline suppliers, which may reduce or eliminate these payments, impacting revenue unless service fees are increased[72] - A substantial portion of the company's revenue depends on airline ticket sales, making it vulnerable to industry changes such as consolidation, bankruptcies, and airfare fluctuations[74][75] Legal and Regulatory Risks - The company recorded reserves of $8.8 million for probable losses related to lawsuits and claims, $2.6 million for labor and social security contingencies, and $27.2 million for tax contingencies as of December 31, 2022[128] - The company estimates potential losses related to tax, labor, and social security contingencies to be between $81.0 million and $154.0 million, though these are not deemed probable[129] - A reserve of $41.9 million was established for uncertain tax positions as of December 31, 2022[131] - The company is subject to various laws and regulations related to data privacy, data protection, and cybersecurity, and any failure to comply could result in penalties or loss of customer trust[137] - Potential adverse effects on business due to changes in tax laws or regulations, including increased tax liabilities and costs[139][140][141][142][143] - Risk of non-compliance with anti-corruption and economic sanctions laws, leading to penalties and reputational damage[144][145][146][147][148] - Involvement in legal proceedings related to consumer protection, labor, tax, or antitrust regulations, which could result in significant financial impact[149][150][151] - Challenges in protecting intellectual property rights and potential infringement claims from third parties[152][153][154][155] - Increased labor costs and compliance risks due to labor laws and union pressures, particularly in high-inflation regions like Argentina[156][157][158][159][160] - Regulatory inquiries and potential fines related to consumer protection, tax, and antitrust laws, impacting business operations[161][162] - Negative impact on consumer confidence and business reputation due to customer complaints or regulatory actions[163][164][165] Technology and Innovation - Shift in consumer behavior towards mobile platforms, requiring continuous innovation in mobile app development and user experience[166][167] - Dependence on compatibility with mobile operating systems like Android and iOS, which could affect app usage and user engagement[168] Expedia Partnership - Expedia provides substantially all hotel and lodging products for the company outside Latin America, with a preferred provider status in Latin America[169] - Expedia pays monthly marketing fees based on a percentage of gross booking value, with a minimum requirement of $5.0 million over six months to avoid a $125.0 million termination fee[170] Liquidity and Financing - The company may face liquidity constraints and explores additional financing sources, including equity, debt, and factoring activities, to improve liquidity and lower capital costs[174] - The company may issue additional equity or equity-linked securities to fund working capital, capital expenditures, or acquisitions, potentially diluting existing shareholders' ownership[217] Seasonal and Operational Risks - Seasonal fluctuations in travel demand impact revenue, with variable costs aligning closely with booking volumes and fixed costs remaining stable[177] - The company uses derivative financial instruments to manage currency and interest rate risks, but volatility in currencies like the Brazilian real, Mexican peso, and Argentine peso could result in net losses[181] ESG and Climate Risks - ESG-related costs and risks are increasing, with potential impacts on reputation, employee retention, and customer/partner relationships[182] - Climate change could disrupt travel and operations due to severe weather events, water shortages, and changing consumer preferences[186] Corporate Governance and Shareholder Risks - The company granted 622,781 RSUs in 2022, 723,908 RSUs in 2021, and 1,409,680 RSUs in 2020 to directors, senior management, and personnel, potentially diluting shareholder value[219] - The company may lose its foreign private issuer status if a majority of shareholders, directors, or management become U.S. citizens or residents, leading to increased regulatory compliance costs[214] - The company is exempt from certain NYSE corporate governance requirements, such as having a majority independent board or a compensation committee, due to its foreign private issuer status[210] - The company's internal control over financial reporting is subject to Section 404 of the Sarbanes-Oxley Act, and any material weaknesses could harm investor confidence and financial reporting reliability[215] - The company's stock price and trading volume could decline if securities or industry analysts issue unfavorable reports, downgrade shares, or cease coverage[220] - The company's ordinary shares may experience significant price fluctuations and liquidity risks due to market volatility, particularly in emerging markets and technology sectors[221][222] - A significant portion of the company's ordinary shares are held by affiliates, which may not be sold unless registered under the Securities Act or an exemption is available[225] - Certain shareholders have demand and/or piggyback registration rights, enabling them to sell ordinary shares in a U.S. public offering[225] - The company is incorporated under BVI law, making it difficult for U.S. investors to enforce judgments against the company or its directors and officers[226] - BVI courts have exclusive jurisdiction over disputes related to the company and shareholders' investments, with U.S. federal courts being the exclusive forum for Securities Act claims[227] - Punitive damages awarded under U.S. federal securities laws are likely unenforceable in BVI courts[228] - BVI courts may impose civil liability on the company or its officers and directors if claims align with BVI law, but damages may differ from foreign court awards[229] - U.S. court judgments, particularly those based on U.S. federal securities laws, are not automatically enforceable in BVI courts[230] - Shareholders of BVI companies may lack standing to initiate derivative actions in U.S. courts due to the company's exclusive jurisdiction clause[231] - Shareholder rights and fiduciary responsibilities under BVI law are less clearly defined compared to U.S. jurisdictions like Delaware[232] Global Economic and Political Developments - The company's operations and financial performance could be adversely affected by global economic and political developments, including restrictions on travel, immigration, or trade[205][206]

Despegar.com, Corp. (NYSE:DESP) Q4 2022 Earnings Call Transcript March 16, 2023 10:00 AM ET Company Participants Luca Pfeifer - Investor Relations Damián Scokin - Chief Executive Officer Alberto López-Gaffney - Chief Financial Officer Conference Call Participants Kevin Kopelman - Cowen Operator Good morning, and welcome to Despegar's Fourth Quarter 2022 Earnings Call. The slide presentation is accompanying today's webcast and is available in the Investors section of the company's website, www. investor.desp ...

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 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of March 2023 Commission File Number: 001-38209 Despegar.com, Corp. (Translation of registrant's name into English) Juana Manso 999 Ciudad Autónoma de Buenos Aires Argentina C1107CBR (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under c ...

Despegar.com, Corp (NYSE:DESP) Q3 2022 Earnings Conference Call November 17, 2022 10:00 AM ET Company Participants Luca Pfeifer - Investor Relations Damián Scokin - Chief Executive Officer Alberto López-Gaffney - Chief Financial Officer Conference Call Participants Kevin Kopelman - Cowen Operator Good morning, and welcome to the Despegar's Third Quarter 2022 Earnings Call. A slide presentation is accompanying today's webcast, and is available in the Investors section of the company's Web site, www.investor. ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15b-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of August 2022 Commission File Number 001-38209 DESPEGAR.COM, CORP. (Exact name of registrant as specified in its charter) British Virgin Islands (Jurisdiction of incorporation or organization) Juana Manso 999 Ciudad Autónoma de Buenos Aires, Argentina C1107CBR (Address of principal executive offices) Indicate by chec ...

Call End: 10:27 Despegar.com, Corp (NYSE:DESP) Q1 2022 Earnings Conference Call May 19, 2022 10:00 AM ET Company Participants Natalia Nirenberg - Investor Relations Damian Scokin - Chief Executive Officer Alberto Lopez-Gaffney - Chief Financial Officer Conference Call Participants Alejandra Aranda - ITAU Karen Kenny - Morgan Stanley Emily Lavin - Cowen and Co. Operator Good morning, and welcome to Despegar's First Quarter 2022 Earnings Call. A slide presentation is accompanying today's webcast and is availa ...

Table of Contents Title of each classTrading SymbolName of each exchange on which registered Ordinary Shares, no par value DESP The New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION ...