Despegar.com(US:DESP)2024-05-17 00:13Financial Data and Key Metrics Changes - Despegar reported gross bookings of $1.3 billion for Q1 2024, a 12% year-over-year increase, with a 42% increase in constant currency [4] - Adjusted EBITDA reached $39 million, up 126% year-over-year, resulting in an adjusted EBITDA margin of 22.4%, the highest since the company's IPO [14][91] - Adjusted net income for the quarter was $22.4 million, representing a 68% year-over-year increase compared to $13.3 million in Q1 2023 [14][91] Business Segment Data and Key Metrics Changes - B2C bookings grew 10% year-on-year to $1.1 billion, driven by strong hotel and package sales, particularly in Brazil and Mexico [5][29] - B2B segment gross bookings increased by 47% year-on-year, while white-label operations saw an 11% year-on-year increase [92] - Non-air revenue surged past air ticket sales, accounting for 65% of the revenue mix, with travel packages reaching 36% of gross bookings [13][100] Market Data and Key Metrics Changes - In Brazil, gross bookings increased by 27% year-over-year, reaching $580 million, while in Mexico, bookings grew 26% year-over-year to $275 million [12][98] - Overall gross bookings in Latin America experienced an 8% decrease to $436 million, primarily due to FX pressures in Argentina and Chile [99] Company Strategy and Development Direction - The company aims to expand package revenue, drive direct traffic through mobile apps, and nurture its loyalty program while maintaining a competitive cost structure [17] - Despegar is focusing on enhancing its digital travel assistant, SOFIA, to improve customer engagement and streamline the booking process [10][112] - The company is exploring opportunities beyond Latin America for potential B2B partnerships and market expansion [26][101] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the online travel market's positive trends and maintained a revenue guidance of at least $820 million for 2024, equating to a robust annual growth of at least 16% [15] - The outlook for the business remains bullish, with expectations for reported revenue growth to accelerate in Q2 2024 [15][105] - Management noted that the current market conditions are more positive than 90 days ago, with expectations for continued operational leverage and top-line growth [56] Other Important Information - The loyalty program, Pasaporte Despegar, reached 26 million members, an 83% year-on-year increase, with points redemption activity exceeding 12.7% of total transactions [94] - The company reported a total cash and cash equivalents of $213 million, reflecting a decline of $15 million year-over-year due to dividend payments and cash utilization strategies [30] Q&A Session Summary Question: What are the drivers for revenue acceleration in Q2? - Management indicated that the increasing growth trend in the B2B business and strong market conditions in Brazil and Mexico are key drivers for expected revenue acceleration [105] Question: What is contributing to the increase in app penetration? - The app's user-friendliness, tailored offers, and push notifications have significantly contributed to the increase in app penetration [105] Question: What markets is the company looking to expand into? - The company is focusing on Brazil and Mexico for B2B growth while exploring opportunities beyond Latin America [26] Question: How is the company managing factoring expenses? - The strategy involves utilizing cash on the balance sheet to reduce factoring expenses, which is expected to improve net income [40][50] Question: What is the company's approach to offline sales in Brazil? - The company aims to capture a portion of the offline market, which accounts for 50% of travel sales in Latin America, and convert those customers to online [110]