Mondee (US:MOND)2024-08-14 21:07Financial Performance - The company achieved nearly $3 billion in annual gross bookings, primarily in the leisure travel market segment originating in North America [138]. - For the three months ended June 30, 2024, the company processed 1,134 transactions, compared to 721 transactions in the same period of 2023, representing a 57.3% increase [149]. - Gross bookings for the three months ended June 30, 2024, were $677,957 thousand, slightly down from $679,244 thousand in the same period of 2023 [149]. - Revenues for the three months ended June 30, 2024, increased by $1.6 million or 3% compared to the same period in 2023, primarily driven by acquisitions [165]. - Revenue from the Travel Marketplace segment increased by $1.4 million or 2% due to higher commission revenues from travel products and services, despite working capital constraints [166]. - Revenues for the six months ended June 30, 2024, increased by $9.6 million or 9% compared to the same period in 2023, primarily driven by acquisitions [180]. - Revenue growth in the Travel Marketplace segment was supported by a 3% increase in gross bookings value and a 59% increase in the number of transactions processed [181]. Expenses and Losses - Personnel expenses increased by $9.7 million or 79% due to stock-based compensation and additional headcount from recent acquisitions [169]. - Sales and marketing expenses decreased by $2.0 million or 5% due to reduced marketing spend following the divestiture of LBF [168]. - Total operating expenses for the three months ended June 30, 2024, increased by $6.0 million or 9.6% compared to the same period in 2023 [163]. - Net loss for the three months ended June 30, 2024, was $25.5 million, an increase of $10.9 million or 74.6% compared to the same period in 2023 [163]. - The company recorded a provision for credit losses, net, of $0.4 million, an increase of 1126% compared to the same period in 2023 [172]. - Personnel expenses increased by $15.5 million or 78% for the six months ended June 30, 2024, mainly due to stock-based compensation and increased headcount from acquisitions [183]. - Sales and marketing expenses rose by $0.9 million or 1%, driven by a 12% increase in affiliate marketing expenses [182]. - Interest expense increased by $4.4 million or 52% primarily due to market increases in the SOFR benchmark and additional debt amendment fees [175]. - Interest expense for the three months ended June 30, 2024, was $12,618 thousand, up 55.3% from $8,125 thousand in the same period of 2023 [198]. - Adjusted Net Loss for the three months ended June 30, 2024, was $(10,030) thousand, a 135.3% increase from $(4,263) thousand in the same period of 2023 [201]. Cash Flow and Liquidity - As of June 30, 2024, the company had $32.3 million in cash and cash equivalents, restricted cash, and short-term investments available for working capital [207]. - For the six months ended June 30, 2024, cash provided by operating activities was $11.1 million, despite a net loss of $45.0 million, offset by non-cash charges of $36.7 million [221]. - Cash used in investing activities for the six months ended June 30, 2024, was $7.9 million, primarily for the purchase of property, equipment, and software [223]. - Cash used in financing activities during the same period was $5.3 million, due to payments related to earn-out consideration and debt repayment [226]. - The company was in breach of the liquidity financial covenant on the Term Loan as of June 30, 2024, but this breach was waived by the Twenty-first Amendment [220]. Strategic Initiatives - The company plans to expand its international footprint by acquiring distributors and platforms beyond North America and Latin America [141]. - The company is focused on expanding its penetration of the "gig economy" segment of the travel market, aiming to serve gig workers seeking more flexibility [140]. - The company has successfully integrated twenty travel companies into its technology-enabled ecosystem, enhancing its competitive position [138]. Economic and Market Factors - Macroeconomic factors such as rising interest rates and inflation may negatively impact the company's results of operations [143]. - The company has operations exposed to interest rate risk and foreign currency risk, particularly with fluctuations in the Brazilian real [229]. - A hypothetical 10% adverse change in the U.S. dollar against the Brazilian real would have resulted in an increase of $5.1 million to revenues and an increase of $0.4 million to net profit for the six months ended June 30, 2024 [232]. Internal Controls and Compliance - Management's remediation efforts to address material weaknesses in internal control over financial reporting are ongoing and have not yet been completed [236]. - Management concluded that as of June 30, 2024, disclosure controls and procedures were not effective due to previously identified material weaknesses [235]. - There were no changes in internal control over financial reporting that materially affected the Company during the quarter ended June 30, 2024 [237]. - None of the pending legal proceedings are expected to have a material adverse effect on the Company's financial condition or results of operations [239].