Despegar.com(US:DESP)2024-08-16 01:50Financial Data and Key Metrics Changes - Gross bookings grew by 4% year-on-year to $1.3 billion, but increased by 37% in constant currency, indicating strong underlying demand despite foreign exchange headwinds [5][39] - Total revenues reached $185 million, a 12% year-on-year increase, with an impressive 46% growth when adjusted for foreign exchange impacts [6][39] - Adjusted EBITDA was $37 million, up 22% year-over-year, and adjusted net income reached $30.2 million, a 397% increase compared to the previous year [7][43] Business Line Data and Key Metrics Changes - B2C bookings totaled $1.1 billion, with strong demand in Brazil and Mexico, particularly in higher-margin packages and hotel sales [7] - B2B gross bookings expanded by 43% year-over-year, while white-label operations grew by 7% [9][20] - Non-air revenues accounted for 64% of total sales, contributing to a take rate of 13.8% [6][43] Market Data and Key Metrics Changes - In Brazil, gross bookings increased by 22% in constant currency, despite floods affecting 5% to 8% of transactions [40] - Mexico's gross bookings rose by 9.4% year-over-year, driven by higher-margin international travel packages [41] - Other Latin American markets saw a 10% decline in gross bookings, but a 67% increase on an FX-neutral basis [42] Company Strategy and Development Direction - The company is focusing on higher-margin package sales and expanding its loyalty program, Pasaporte Despegar, which grew by 65% year-on-year [10][11] - A strategic alliance with World2Meet was formed to streamline operations and focus on core business areas [16] - The company aims to enhance its technology platform and expand its B2B and white-label business segments [20][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant foreign exchange headwinds and temporary impacts from flooding but expressed confidence in the core business's performance [47][56] - The revenue guidance for the year was lowered from at least $820 million to at least $760 million, while adjusted EBITDA guidance was raised to at least $160 million [47][48] - The company remains optimistic about long-term growth potential and plans to continue investing in technology and marketing [49][51] Other Important Information - The company was included in the Russell stock indexes, marking a significant milestone [17] - The loyalty program's growth reflects a commitment to enhancing customer experience and retention [10][11] - The AI travel assistant, SOFIA, has seen increased user engagement and will be integrated into B2B operations [30][35] Q&A Session Summary Question: Guidance clarification regarding top-line and EBITDA changes - Management explained the reduction in top-line guidance was due to FX headwinds, divestiture of the DMC business, and temporary flooding impacts, while the increase in EBITDA guidance reflects strong core business performance and operational efficiencies [54][56] Question: Country-level performance comparison - Management noted that while Brazil's gross bookings increased significantly, Mexico's growth was more modest due to different market dynamics, with underlying demand remaining strong despite FX impacts [63][64] Question: Details on DMC divestment - Management could not disclose exact revenue figures for DMC but indicated it had lower margins compared to the overall company, and the divestment was seen as a positive strategic move [67][68]