Despegar.com(DESP) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenues of $178 million for the quarter, representing a year-over-year growth of 22% in dollars and 43% in constant currency, marking a record for the company [50][68] - Adjusted EBITDA reached $24.7 million, reflecting a significant year-over-year increase of 106% [94][117] - Gross bookings totaled $1.4 billion, with a year-over-year growth of 25% in dollars and 44% in constant currency [82][68] Business Line Data and Key Metrics Changes - The B2B channel is growing almost twice as fast as the B2C channel, now representing 15% of total gross bookings [65][90] - The B2B2C channel accounted for 8% of total bookings, indicating strong performance in this area [58][84] - Package sales have increased to 30% of gross bookings, up four percentage points year-over-year [90] Market Data and Key Metrics Changes - Gross bookings in Brazil grew 44% year-over-year, reaching $561 million, while Mexico saw a 32% increase in gross bookings [104][70] - The overall Latin American travel market is estimated to be around $150 billion, with expectations of double-digit growth rates in the coming years [51][68] - The company observed an 8% year-over-year improvement in gross bookings across the rest of Latin America, with a 66% increase in constant currency [78] Company Strategy and Development Direction - The company is focused on leveraging technology, particularly generative AI, to enhance customer experience and operational efficiency [60][27] - There is a commitment to expanding the B2B and B2B2C footprint beyond Latin America, indicating potential for future growth [84][65] - The integration of WhatsApp for customer inquiries and bookings is part of the strategy to improve customer engagement [76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in the fourth quarter and beyond, driven by strong travel trends and increased airline capacity [120][28] - The company is confident in maintaining a strong top-line growth profile and an even stronger adjusted EBITDA growth profile in the coming years [99][120] - Management highlighted the importance of operational efficiencies and the potential for further margin improvements [93][94] Other Important Information - The company generated $34 million in operating cash flow, compared to $10 million in the same quarter last year, and paid $8 million in dividends [72] - The total cash position increased to $255.7 million, providing financial flexibility for growth initiatives [98] Q&A Session All Questions and Answers Question: Can you clarify the income tax this quarter? - Management explained that the higher tax was largely due to strong bookings trends in certain entities, particularly in Argentina, and the exhaustion of net operating losses from the previous quarter [111] Question: Can you provide an update on coin and its scaling opportunities? - Management indicated that while there is potential for growth in the coin business, they will proceed cautiously to maintain portfolio quality [114] Question: What is the competitive backdrop in Brazil following a competitor's bankruptcy? - Management noted that the bankruptcy of a large competitor has created opportunities for market share gain and has changed the competitive dynamics favorably for the company [18][16]