1Q24 Earnings Conference Call
May 16, 2024
DISCLAIMER
This presentation includes forward-looking statements. We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and | |
financial trends affecting our business and our market. Some of the factors, risks and uncertainties that might materially affect the forward-looking statements contained herein and may make an | |
investment in our securities speculative or risky include, but are not limited to, the following: the ongoing COVID-19 pandemic is disrupting the global economy and the travel industry, and | |
consequently adversely affecting our business, results of operations and cash flows, and it is difficult to predict the full extent of the impact that the pandemic will have on our Company; we are | |
subject to the risks generally associated with doing business in Latin America and risks associated with our business concentration within this region; general declines or disruptions in the travel | |
industry may adversely affect our business and results of operations; our business and results of operations may be adversely affected by macroeconomic conditions; we are exposed to fluctuations | |
in currency exchange rates; if we are unable to maintain or increase consumer traffic to our sites and our conversion rates, our business and results of operations may be harmed; our business could | |
be negatively affected by changes in search engine algorithms and dynamics or other traffic-generating arrangements; we operate in a highly competitive and evolving market, and pressure from | |
existing and new companies, as well as consolidation within the industry, may adversely affect our business and results of operations; if we are unable to maintain existing, and establish new, | |
arrangements with travel suppliers, our business may be adversely affected; we rely on the value of our brands, and any failure to maintain or enhance consumer awareness of our brands could | |
adversely affect our business and results of operations; we rely on information technology, including third-party technology, to operate our business and maintain our competitiveness, and any | |
failure to adapt to technological developments or industry trends, including third-party technology, could adversely affect our business; we are subject to payments-related fraud risk; any system | |
interruption, security breaches or lack of sufficient redundancy in our information systems may harm our business; our ability to attract, train and retain executives and other qualified employees, | |
particularly highly-skilled IT professionals, is critical to our business and future growth; our business depends on the availability of credit cards and financing options for consumers; internet | |
regulation in the countries where we operate is scarce, and several legal issues related to the internet are uncertain; acquisitions could present risks and disrupt our ongoing business; we may not be | |
able to consummate acquisitions or other strategic opportunities in the future; we are a foreign private issuer under U.S. securities regulations and, as a result, we will not be subject to U.S. proxy | |
rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. issuer; and the strategic interests of our significant | |
shareholders may, from time to time, differ from and conflict with our interests and the interests of our other shareholders. | |
We operate in a competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have | |
an impact on the forward-looking statements contained in this presentation. In particular, the COVID-19 pandemic, and governments' extraordinary measures to limit the spread of the virus, are | |
disrupting the global economy and the travel industry, and consequently adversely affecting our business, results of operation and cash flows and, as conditions are uncertain and changing rapidly, | |
it is difficult to predict the full extent of the impact that the pandemic will have or when travel will resume to pre-pandemic levels.. The words "believe," "may," "should," "aim," "estimate," "continue," | |
"anticipate," "intend," "will," "expect" and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed | |
future results of operations, business strategies, capital expenditures, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation | |
and the effects of competition. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or to revise any forward-looking statements | |
after the date of this presentation because of new information, future events or other factors, except as required by law. In light of the risks and uncertainties described above, the future events and | |
circumstances discussed in this presentation might not occur or come into existence and forward-looking statements are thus not guarantees of future performance. Considering these limitations, | |
you should not make any investment decision in reliance on forward-looking statements contained in this presentation. This presentation includes industry, market and competitive position data and | |
forecasts that we have derived from independent consultant reports, publicly available information, industry publications, official government information, other third-party sources and our internal | |
data and estimates. Independent consultant reports, industry publications and other published sources generally indicate that the information contained therein was obtained from sources believed | |
to be reliable. The inclusion of market estimations in this presentation is based upon information obtained from third-party sources and our understanding of industry conditions. Although we | |
believe that this information is reliable, the information has not been independently verified by us. Trademarks and service marks appearing in this presentation are the property of their respective | |
holders. This presentation includes preliminary financial information which is subject to year-end audit and adjustment. | 2 |
Profitable Growth on Improving Revenue Mix and Operating Leverage
Consistent commercial execution, improving revenue mix and robust | |
performance in key markets drove revenues +9% YoY to $173.7 M | |
Adj. EBITDA +126% YoY to $39 M, on strong packages sales coupled with | |
operating efficiencies, resulting in record 22.4% Adj. EBITDA margin and | |
Adj. Net Income of $22 M (+68% YoY) | |
1Q | Robust growth trends and opportunities in B2C, while B2B/B2B2C |
Executive | growing faster as we leverage our highly scalable technology platform |
Summary | |
SOFIA, our AI Trip Planner, has new booking features and design | |
updates that further enhance the customer journey | |
Total cash(1)of $213 M, providing flexibility to drive organic growth and make | |
select acquisitions |
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- Cash & Cash Equivalents including restricted cash as of end of period Q1 2024 is $ 213,111 out of which $ 2.1 million is classified as held for sale
Substantial Near and Long-term Market Opportunities Can Sustain Despegar's Strong Growth Trajectory
Significant Market Opportunities
World
Latam
$2.2T(1)
Global Market
Greenfield opportunity to grow B2B/B2B2C product in market expanding 9% CAGR1until 2028
$150B(1)
Current Potential Market
Highly fragmented;
Expected to grow low double digits
>$1.3B 1Q24
Strong Growth
1Q B2C growth of 10% YoY,
B2B grew GB 47% YoY during 1Q with White Label expanding 11% YoY
8%
9%
83%
~80 White Label partners across Banking/ Retail/ Travel space
Connected ~15K offline Agencies
Generated across LATAM, with majority in Brazil and Mexico
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- Source: Euromonitor
Driving More Organic Traffic Expands our Competitive Moat as the Market Leader
1 Installed base (# of mobile devices) | 2 App-based transactions (% of total) |
+37%
+1284 bps
DESP apps maintain top position among most popular travel apps in LatAm
Installed base +37% YoY to ~17 million mobile devices
App-based transactions reached all-timehigh of 48.9% (+1284 bps YoY)
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Despegar Expands Strategic Partnership with Brazil's Largest Loyalty Program; Livelo
Banco do Brasil & Bradesco:
Brazil's 2nd and 3rd largest Banks
+45 million loyalty members gain exclusive access
- 100 billion accumulated reward points
Leading Travel Technology
Company in LATAM
Best in class inventory with +230 airlines, +1.5M accommodations options
Leading technology platform enables customized offerings
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Significant Upgrade to SOFIA Including New Booking Features and Improved Design
Hotels integration
New personalized initial board | And more coming soon! |
- Hotel Recommendations and option to search by: city, dates, stars, meal plan, budget, key amenities (e.g., pool, gym, beach)
- Improved design
- Initial personalization by user's stage in the travel cycle (Non buyers, Buyers, In-trip,Post-trip) and country
- After-salesintegration
- Maps with special offers
- Smart filtering and improved memory
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Key Focus Areas Continue to Drive Improving Revenue Mix while Diversifying Revenue Streams
Focus Areas | Objectives | 1Q19 1Q23 1Q24 |
Revenue Diversification
Multichannel
Customer Focus
Packages (% of GB) | 21% | 34% | 36% |
GB weight MEX + BRA | 53% | 59% | 66% |
B2B1 as % of total GB | 5.2% | 14.5% | 16.7% |
App share of online B2C2 | 21.2% | 36.1% | 48.9% |
(% transactions) | |||
# of Loyalty Members (M) | 0.0 | 14.0 | 25.7 |
% of point redemptions2 | 0.0% | 7.5% | 12.7% |
NPS post Trip | 67.5% | 67.0% | 71.2% |
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(1)Includes B2B and B2B2C services.
(2)2019: D!; 2022 & 2023: D + BD + VF + VN (excl. VN Passagens).
Commercial Execution and Strong Demand Trends in Key Focus Markets Drive Growth in Gross Bookings
1 Gross Bookings (YoY %Growth) | 2 Average Selling Price (YoY %Growth) |
Brazil
México
Strong commercial execution in combination with improving competitive tailwinds drove growth in higher-ticket international travel and vacation package sales
Strong demand trends continue, driven by international transaction growth, particularly with regard to margin-accretivepackage and hotel sales
Rest of Latam
As Reported Gross Bookings in line with expected FX volatility observed in Argentina and Chile with solid demand
trends in Colombia | 9 9 |
Effective Commercial Strategy and Expanding Operating Leverage Lead to Strongest Adj. EBITDA Margin since IPO
- Revenue ($ M) vs Take Rate (%)
Take Rate | 13.8% | 12.8% | 12.9% | 13.4% | 13.4% |
- Adj. EBITDA Evolution (% vs $M)
Adj. EBITDA as a % of Revenue | Adj. EBITDA in $ million |
Revenues +9% YoY to $173.7 M, a quarterly high
Strong Take Rate at 13.4%, reflecting focus on profitable growth
Adj. EBITDA +126% YoY to $39 M, on revenue growth and strong operating leverage
Adj. EBITDA Margin +11.6 pp YoY to 22.4%
Strongest Adj. EBITDA Margin since IPO
Operating leverage achieved through YoY efficiency gains in G&A and T&C, -73bps & -45bps as % of GB, respectively
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Despegar.com Corp. published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 20:19:06 UTC.