Despegar.com, Corp. (NYSE: DESP), (“Despegar” or the “Company”)
a leading online travel company in Latin America, today announced
unaudited results for the three- and six-month periods ended June
30, 2018. Financial results are expressed in U.S. dollars and are
presented in accordance with U.S. generally accepted accounting
principles.
Second Quarter 2018 Key Highlights
- Transactions up 18% year-over-year
- Gross bookings up 12%
year-over-year
- Revenue up 4% year-over-year
- Packages, Hotels and Other Travel
Products accounted for 59% of total revenue in 2Q18, up 704 basis
points from second quarter 2017
- Mobile transactions up 37%
year-over-year, accounting for 33% of total transactions in
2Q18
- Over 43 million cumulative mobile
application downloads as of June 30, 2018, up 32%
year-over-year
- Adjusted EBITDA decreased 9%
year-over-year
- Operating cash flow of $0.3 million in
2Q18, compared to $7.3 million in 2Q17
Message from CEO
Commenting on the Company’s results, Damian Scokin, CEO stated,
“Against a challenging macro backdrop, we reported solid second
quarter 2018 results, with gross bookings up 12% year-on-year.
Although a good performance, currency volatility in Latin America
hurt overall industry demand, and caused a mix-shift from
international to domestic travel and impacted FX translation on
gross bookings. In this context, we took advantage of our leading
market position and financial strength, including lowest cost
operating structure, to gain market share at an accelerated pace
compared with past quarters. We also grew twice as fast as our main
competitors in some markets. Additionally, we continued investing
in enhancing customer satisfaction and in technology to provide new
products and services for our customers. In the near-term, these
actions put pressure on margins, but will drive benefits in the
future, further differentiating us from the competition and
expanding our market share.”
Mr. Scokin further commented, “With over two decades experience
operating in the region, we have the expertise and resources to
navigate through various economic cycles and a business model that
provides flexibility. We are already well positioned with a large
and stable customer base as we continue to see consumers shift
their travel expenditures online and to mobile and believe we will
be generating improved margins when macro conditions improve. We
remain focused on our long-term strategic priorities. To that end,
we have made significant progress as higher margin Packages, Hotels
and Other Travel Products now account for 59% of revenue, over
one-third of transactions are now via mobile and NPS after trip
experience scores have improved 400 basis points year over
year”.
Operating and Financial Metrics Highlights (In millions,
except as noted)
2Q18 Pro Forma
2Q17 Adj. 2Q17 % Chg
1H18
Pro Forma 1H17
% Chg Operating metrics
Number of transactions 2.6 2.2
– 2.2 18 %
5.1 4.3 18 % Gross bookings
$ 1,184.4 $ 1,061.0 –
$ 1,061.0 12 % $ 2,415.9 $
2,080.1 16 % Mix of mobile transactions
33 % 28 % – 28 %
32 % 27 % -
Financial
metrics
Revenues $
128.3 $ 123.4 ($0.1 ) $ 123.5
4 % $ 276.8 $ 245.1 13 %
Air 53.2 59.9 (1.1
) 60.9 (11 %) $ 114.1
116.6 (2 %) Packages, Hotels & Other
Travel Products 75.1 63.6
1.0 62.6 18 % $ 162.8
128.4 27 % Net income
1.2 2.9 (0.5 )
3.4 (57 %) 17.6
15.0 17 % Adjusted EBITDA 12.0
13.1 (0.1 ) 13.2
(9 %) 39.3 37.8 4
%
Note: For comparison purposes, the Company
has presented Pro-forma 2Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
Overview of Second Quarter 2018 Results
Operating Metrics
Transactions rose 18% to 2.6 million in 2Q18 from 2.2 million in
the year-ago period, while gross bookings increased 12% to $1,184.4
million in 2Q18, from $1,061.0 million in the second quarter of
2017. Across key markets in which it operates, particularly
Argentina, Despegar faced slower travel market growth and currency
depreciation. Against this backdrop, the Company was focused on
leveraging its strong competitive position and lowest cost
operating structure to accelerate market share gains at a faster
pace than historical, in the $100 billion Latin American travel
market, and improve customer satisfaction levels, which contributed
to higher transaction growth.
The Company’s business is organized into two segments: (1) Air,
which consists of the sale of airline tickets, and (2) Packages,
Hotels and Other Travel Products, which consists of travel packages
(the bundling of two or more products together which can include
airline tickets and hotel rooms), as well as stand-alone sales of
accommodations (including hotels and vacation rentals), car
rentals, bus tickets, cruise tickets, travel insurance and
destination services.
Despegar’s focus on driving growth in the higher-margin
Packages, Hotels and Other Travel Products segment maintains
momentum, reaching 42% of transactions up from 40% in 2Q17. The
average selling price (“ASP”) in 2Q18 decreased 5% year-over-year
to $454 per transaction, mainly reflecting a mix-shift from
international to domestic travel in Argentina impacted by the
challenging economic environment, along with the effect from
overall local currency depreciation, specifically, 30% in Argentina
and 15% in Brazil. This more than offset the continued mix-shift to
higher ASP packages and higher supplier local currency price
increases within similar product segments.
Brazil remains the largest market by transactions for Despegar,
accounting for 42% of total transactions and grew 21%
year-over-year in 2Q18. Transactions increased 11% year-over-year
in Argentina and 15% year-over-year in Mexico in the second quarter
of 2018.
Despegar continues to make solid progress in driving mobile
transaction growth. During 2Q18, the number of transactions via
mobile rose 37% year-over-year, with 33% of all transactions
completed on the mobile platform, up from 28% in 2Q17.
Key Operating Metrics (In
millions, except as noted)
2Q18 2Q17 % Chg
$ % of total $ % of total
Gross Bookings $ 1,184.4
$ 1,061.0 12
% Average selling price (ASP) (in $) $ 454
$ 480 (5 %)
Number of
Transactions by Segment & Total
Air 1.5
58 % 1.3 60 % 14 % Packages,
Hotels & Other Travel Products 1.1 42 %
0.9 40 % 23 %
Total Number of
Transactions 2.6 100
% 2.2 100 %
18 %
Revenue
Total revenue increased 4% to $128.3 million in 2Q18, from pro
forma $123.4 million in the year-ago period, reflecting solid
growth in Packages, Hotels & Other Travel Products. Total
revenue margin declined 80 basis points year-on-year, to 10.8% in
2Q18, due to reductions in customer fees and discounts in package
transactions to gain market share during the current weaker demand
environment and mix-shift from international to lower-margin
domestic destinations.
- Air segment revenue was $53.2
million in 2Q18, decreasing 11% year-over-year from pro forma $59.9
million in the year-ago period. Transactions were up 14%
year-on-year resulting in market share gains despite increased
competition, particularly from the supplier direct channel, and
slower overall market growth. Higher volumes were offset by a 22%
decrease in average revenue per transaction resulting from the
Company’s strategy of lowering air customer fees in several markets
to drive market share gains and provide additional cross-selling
opportunities, along with a mix-shift from international to
lower-margin domestic travel driven by local currency depreciation,
particularly in Argentina.
- Packages, Hotels & Other Travel
Products segment revenue rose 18% in the second quarter of 2018
in 2Q18 to $75.1 million, from pro forma $63.6 million in 2Q17,
driven by a 23% increase in the number of transactions, partially
offset by a 4% decline in revenue per transaction resulting mainly
from the slower macro backdrop and currency depreciation along with
price discounts. The Packages, Hotels and Other Travel Products
segment accounted for 59% of total revenue in 2Q18, up from 52% in
the same period of the prior year.
Revenue
Breakdown1 2Q18 Pro Forma 2Q17
Adj. 2Q17 % Chg2 $
% of total $ % of total $ $ % of
total
Revenue by business segment (in $Ms)
Air 53.2
41 % 59.9 48 %
(1.1 ) 60.9 49 % (11 %)
Packages, Hotels & Other Travel Products 75.1
59 % 63.6 52 % 1.0
62.6 51 % 18 %
Total revenue
$ 128.3 100 % $ 123.4
100 % ($0.1 ) $ 123.5
100 % 4 % Revenue per
transaction (in $)
Air 35.1
45.2 (0.8 ) 46.0
(22 %) Packages, Hotels & Other Travel
Products 68.6 71.7
1.1 70.6
(4 %)
Total revenue per transaction
$ 49.2 $
55.8 ($0.0 )
$ 55.9 (12
%) Total revenue margin
10.8 % 11.6
% 11.6
% (80) bps 1. Net of sales tax
2. For comparison purposes, the Company
has presented Pro-forma 2Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
Cost of Revenue and Gross Profit
Cost of revenue, which mainly consists of credit card
processing fees, bank fees related to customer financing
installment plans offered and fulfillment center expenses, was
$42.1 million in 2Q18 compared to $35.1 million in 2Q17, an
increase of 20%. As a percentage of revenue, cost of revenue rose
by 438 basis points to 32.8% from 28.4% in the comparable period a
year ago. The increase in cost of revenue was primarily driven by a
higher mix of transactions completed on an installment plan, a
marketing tool the Company uses to drive conversion, along with
higher installment plan costs from the sharp interest rate hike
primarily in Argentina. Incremental costs to operate the
fulfillment center reflecting the Company’s increased focus on
customer service also contributed to higher cost of revenues,
partially offset by continued reduction in fraud and efficiency
improvements in the fulfillment center.
Additionally, credit card merchant fee expense increased
reflecting a higher mix of transactions where the Company was the
credit card merchant of record rather than airline suppliers which
allowed Despegar to offer more attractive customer financing
options.
Gross Profit decreased 2% year-on-year to $86.2 million
in 2Q18, reflecting lower revenue margins as a result of the
Company’s initiatives to accelerate market share growth and
investments in support of improving customer satisfaction
levels.
Cost of Revenue and Gross
Profit (In millions, except as noted)
2Q18
Pro Forma 2Q17
Adj. 2Q17 % Chg1
Revenue $ 128.3 $ 123.4
($0.1 ) $ 123.5 4 % Cost of Revenue $
42.1 $ 35.1 $ 35.1
20 % % of revenues 32.8 % 28.4 %
28.4 % +438 bps
Gross
Profit 86.2
88.3 (0.1 )
88.4 (2 %) Gross Profit Margin
67.2 % 71.6 %
71.6 % (438) bps
1. For comparison purposes, the Company
has presented Pro-forma 2Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
Operating Expenses
Total operating expenses in 2Q18 decreased 0.5% to $79.2
million, from $79.6 million in 2Q17 mainly benefiting from the
regional currency depreciation, principally in Argentina which
accounts for approximately half of total operating expenses. As a
percentage of revenue, total operating expenses declined 274 basis
points to 61.7%, from 64.5% in the comparable period a year ago.
Year-over-year declines of 120 basis points in selling and
marketing as a percentage of revenue and 184 basis points in
general and administrative, more than offset a 31 basis point
increase in technology and product development expenses.
- Selling and marketing expenses
of $43.5 million were basically flat as compared to 2Q17. As a
percentage of revenue, selling and marketing expenses in 2Q18
decreased to 33.9% from 35.1% in 2Q17, benefiting from the regional
currency depreciation, a lower level of marketing investment and
improving efficiencies.
- General and administrative (G&A)
expenses declined 9% year-over-year to $17.0 million, from
$18.6 million in the second quarter of 2017, driven by currency
depreciation in Argentina during the period and reduced bonus
expense. Consequently, G&A as a percentage of revenues declined
184 basis points to 13.2% in 2Q18 from 15.1% in 2Q17.
- Technology and product development
expenses increased 6% year-over-year to $18.7 million in 2Q18,
compared to $17.6 million in 2Q17 reflecting increased technology
headcount partially offset by lower expenses from currency
depreciation in Argentina where the majority of headcount is based.
As a percentage of revenue, technology and product expenses
increased by 31 basis points year-over-year to 14.6% as the Company
continues to invest in its technology and product development
platform.
Operating Expenses (In millions,
except as noted)
2Q18
Pro Forma 2Q17
2Q17 % Chg1 Selling and
marketing $ 43.5 $ 43.3 $ 43.3
0.4
%
% of revenues 33.9 % 35.1 %
35.1 % -120 bps General and administrative $
17.0 $ 18.6 $ 18.6 (9 %)
% of revenues 13.2 % 15.1 %
15.1 % (184) bps Technology and product development
$ 18.7 $ 17.6 $ 17.6
6 % % of revenues 14.6 % 14.3 %
14.3 % +31 bps
Total operating expenses
$ 79.2 $ 79.6
$ 79.6
(0.5
%)
Total operating expenses as a % of revenues 61.7 %
64.5 % 64.4 % (274) bps
1. For comparison purposes, the Company
has presented Pro-forma 2Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
Financial Income/Expenses
In 2Q18, the Company reported a net financial expense of $5.3
million compared to a net financial expense of $1.6 million in
2Q17. The increase was mainly due to higher foreign exchange losses
from currency fluctuations across the region and higher credit card
receivable factoring expenses in Brazil as a result of the increase
in gross bookings. This was partially offset by higher interest
income from invested cash balances.
Income Taxes
The Company reported an income tax expense of $0.5 million in
2Q18, compared to $3.8 million in 2Q17. The effective tax rate in
2Q18 was 28%, compared to 59% in 2Q17. The lower rate in 2Q18 is
primarily driven by the full recognition of deferred tax assets in
certain subsidiaries that were reduced by a valuation allowance in
previous years.
Adjusted EBITDA & Margin
Adjusted EBITDA was $12.0 million in 2Q18 compared to pro-forma
$13.1 million in the comparable year-ago period, with the margin
contracting 128 basis points to 9.3% from 10.6% in the prior year
period. The reduction in margin is primarily related to lower
customer fees in air and price discounts in packages, together with
higher installment expense to support top line growth.
Adjusted EBITDA Reconciliation &
Adjusted EBITDA Margin (In millions, except as noted)
2Q18
Pro Forma 2Q17
Adj. 2Q17 % Chg1
Net income/ (loss) $ 1.2 $ 2.9
($0.5 ) $ 3.4 (57 %)
Add (deduct):
Financial expense, net 5.3
1.6 1.6 228
% Income tax expense 0.5 4.3
0.4 3.8 (89 %)
Depreciation expense 1.5 1.4
- 1.4 8 %
Amortization of intangible assets 2.2
2.0 - 2.0 9
% Share-based compensation expense 1.3
0.9 - 0.9
36 %
Adjusted EBITDA $ 12.0 $
13.1 ($0.1 ) $ 13.2 (9
%) Adjusted EBITDA Margin 9.3
% 10.6 %
10.7 % (128) bps
1. For comparison purposes, the Company
has presented Pro-forma 2Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
Balance Sheet and Cash Flow
Unrestricted cash and cash equivalents at June 30, 2018 was
$390.7 million, compared to $371.0 million at December 31, 2017,
reflecting cash flow generated during the six-months ended June 30,
2018.
Despegar generated positive cash flow from operating activities
of $0.3 million compared to $7.3 million in 2Q17. This reduction
was mainly due to an increase in VAT credits, other tax credits
related to a technology incentive program and a reduction in travel
supplier payables.
During 2Q18, the Company’s capital expenditures were $7.8
million compared to $5.4 million during 2Q17. Funds were primarily
used for technology hardware and office expansion.
Subsequent Events
Board of Directors Approves Share Repurchase Program
On August 9, 2018, the Company’s board of directors approved a
share repurchase program that enables the Company to repurchase up
to $75 million of its shares effective immediately and expiring in
one year. Share repurchases may be made through a variety of
methods, including in the open market, a 10b5-1 program and through
privately negotiated transactions. The timing and number of shares
repurchased will depend on a variety of factors, including price,
general business and market conditions, and alternative investment
opportunities.
The Company is not obligated to acquire any specific number of
shares and the repurchase program may be suspended, terminated or
modified at any time for any reason.
Files Registration Statement
We expect to file this week a registration statement with the
Securities and Exchange Commission to register shares held by
affiliates of Tiger Global. The primary purpose of this
registration statement is to enable Tiger Global to distribute its
shares to its limited partners as one of its funds nears its end of
life. We expect a majority of the shares being registered will be
distributed to Tiger’s LPs.
Argentina Considered Hyperinflationary Market
As of July 1, 2018, as a result of a three-year cumulative
inflation rate greater than 100% and following the guidance of ASC
830 the U.S. dollar became the functional currency of the Company’s
Argentine subsidiary. This change in functional currency is to be
recognized prospectively in the financial statements. As a result,
the impact of any change in currency exchange rate on the Company’s
balance sheet accounts will be reported in the Net financial
income/(expense) line of the income statement instead of Other
comprehensive income.
2Q18 Earnings Conference Call
When: 8:00 a.m. Eastern time, August 16, 2018 Who:
Mr. Damián Scokin, Chief Executive Officer Mr. Michael Doyle, Chief
Financial Officer Mr. Javier Kelly, Investor Relations
Dial-in: 1-866-270-1533 (U.S. domestic); 1-412-317-0797
(international) Webcast:
CLICK HERE
Use of Non-GAAP Financial Measures
This announcement includes certain references to Adjusted EBITDA
and non-GAAP financial measures. The Company defines:
Adjusted EBITDA is defined as net
income/(loss) exclusive of financial income/(expense), income tax,
depreciation, amortization and share-based compensation
expense.
Free cash flow is defined as cash
flow from operating activities less capital expenditures including
capitalized software.
Adjusted EBITDA and Free cash flow are not measures recognized
under U.S. GAAP. Accordingly, readers are cautioned not to place
undue reliance on this information and should note that these
measures as calculated by the Company, may differ materially from
similarly titled measures reported by other companies, including
its competitors. Adjusted EBITDA margin refers to Adjusted EBITDA
as defined above divided by revenue.
Definitions and concepts
Average Selling Price (ASP): reflects gross bookings
divided by the total number of transactions.
Gross Bookings: Gross bookings is an operating measure
that represents the aggregate purchase price of all travel products
booked by the Company’s customers through its platform during a
given period. The Company generates substantially all of its
revenue from commissions and other incentive payments paid by its
suppliers and service fees paid by its customers for transactions
through its platform, and, as a result, it monitors gross bookings
as an important indicator of its ability to generate revenue.
Number of Transactions: The number of transactions for a
period is an operating measure that represents the total number of
customer orders completed on our platform in such period. The
number of transactions is an important metric because it is an
indicator of the level of engagement with the Company’s customers
and the scale of its business from period to period but, unlike
gross bookings, the number of transactions is independent of the
average selling price of each transaction, which can be influenced
by fluctuations in currency exchange rates among other factors.
Revenue: The Company reports its revenue on a net basis,
deducting cancellations and amounts that it collects as sales
taxes. Despegar derives substantially all of its revenue from
commissions and other incentive payments paid by its suppliers and
service fees paid by its customers for transactions through its
platform. To a lesser extent, Despegar also derives revenue from
the sale of third-party advertisements on its websites and from
certain suppliers when their brands appears in the Company
advertisements in mass media.
Revenue Margin: calculated as revenue divided by gross
bookings.
Seasonality: Despegar’s financial results experience
fluctuations due to seasonal variations in demand for travel
services. Bookings for vacation and leisure travel are generally
higher during the fourth quarter, although to date and prior to the
revenue recognition change beginning in the second quarter of 2018,
the Company has recognized more revenue associated with those
bookings in the second quarter of each year. Latin American
travelers, particularly leisure travelers, who are Despegar’s
primary customers, tend to travel most frequently at the end of the
fourth quarter and during the second quarter of each year.
About Despegar.com
Despegar is the leading online travel company in Latin America.
Operating across 20 countries, Despegar provides a broad suite of
travel products, including airline tickets, travel packages, hotel
bookings and other travel products to over 17 million customers.
With a mission “to make travel possible”, the Company’s one-stop
marketplace enables millions of users to find, compare, plan and
easily purchase travel services and products. Through Despegar’s
websites and leading mobile apps, it offers products from over 300
airlines, more than 450,000 accommodation options, as well as
approximately 1,000 car rental agencies and approximately 240
destination services suppliers with more than 7,700 activities
throughout Latin America. The Company owns and operates two
well-recognized brands, Despegar, its global brand, and Decolar,
its Brazilian brand. Despegar is traded on the New York Stock
Exchange (NYSE: DESP). For more information, please
visit www.despegar.com.
Forward-Looking Statements
This press release may include forward-looking statements. We
base these forward-looking statements on our current beliefs,
expectations and projections about future events and financial
trends affecting our business and our market. Many important
factors could cause our actual results to differ substantially from
those anticipated in our forward-looking statements.
Forward-looking statements are not guarantees of future
performance. 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.
-- Financial Tables Follow --
Unaudited Consolidated Statements of
Operations for the three and six - month periods ended June
30, 2018 (in thousands U.S. dollars, except as noted)
2Q18
Pro Forma 2Q17
Adj. 2Q17 % Chg2
1H18
Pro Forma 1H17
% Chg Revenue $ 128,259
$ 123,403 ($59
) $ 123,462 4
% $ 276,852 $
245,082 13 % Cost of revenue
42,088 35,087
35,087 20 % 85,734
66,227 29 %
Gross profit
86,171 88,316
(59 ) 88,375
(2 %) 191,118
178,855 7 % Operating
expenses Selling and marketing 43,450
43,289 43,289
0 % 89,860 78,835
14 % General and administrative 16,986
18,618 18,618
(9 %) 32,874 37,487
(12 %) Technology and product development
18,732 17,644
17,644 6 % 37,957
33,052 15 %
Total operating expenses
79,168 79,551 79,551 (0 %)
160,691 149,374 8 %
Operating income
7,003 8,765
(59 ) 8,824 (20 %)
30,427 29,481
3 % Net financial income (expense)
(5,292 ) (1,611 )
(1,611 ) 228 % (8,123 ) (7,767 )
5 %
Net income before income taxes
1,711 7,154
(59 ) 7,213 (76 %)
22,304 21,714
3 % Income tax expense 471
4,254 448 3,806
(89 %) 4,706 6,672
(29 %)
Net income 1,240
2,900 (507 )
3,407 (57 %)
17,598 15,041
17 % Basic EPS (in $) 0.02
0.05 0.06
(64 %) 0.25 0.26
(1 %) Diluted EPS (in $) 0.02
0.05 0.06
(64 %) 0.25 0.26 (1 %)
Basic shares weighted average1 69,179
58,518 58,518
69,142 58,518
Diluted shares weighted average1
69,189 58,609
58,609 69,152
58,609
As a % of Revenues
Cost of revenue
32.8 % 28.4 % 28.4 %
+438 bps 31.0 % 27.0 % +395 bps
Gross profit 67.2 % 71.6 %
71.6 % (438) bps 69.0 %
73.0 % (395) bps Operating expenses
Selling and marketing
33.9 % 35.1 % 35.1 %
(120) bps 32.5 % 32.2 % +29 bps
General and administrative 13.2 % 15.1
% 15.1 % (184) bps 11.9 %
15.3 % (342) bps Technology and product
development 14.6 % 14.3 %
14.3 % +31 bps 13.7 %
13.5 % +22 bps Total operating expenses 61.7 %
64.5 % 64.4 %
(274) bps 58.0 % 60.9 % (291) bps
Operating income 5.5 % 7.1 %
7.1 % (164) bps 11.0 %
12.0 % (104) bps Net income before income taxes
1.3 % 5.8 %
5.8 % (446) bps 8.1 % 8.9 % (80)
bps Net income 1.0 % 2.4 %
2.8 % (138) bps 6.4 %
6.1 % +22 bps 1. In thousands
2. For comparison purposes, the Company
has presented Pro-forma 2Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
Key Financial & Operating Trended
Metrics (in thousands U.S. dollars, except as noted)
Pro Forma 1Q17
2Q17 3Q17 4Q17
1Q18 2Q18 FINANCIAL RESULTS
Revenue $ 124,999
$ 123,462 $
131,468 $ 144,011
$ 148,593 $ 128,259
Revenue Recognition Adjustment ($3,321 )
($59 ) $ 1,310 $ 7,578
Cost of revenue 31,140
35,087 37,869
38,383 43,646 42,088
Gross profit 90,538 88,316
94,909 113,206 104,947 86,171
Operating expenses Selling and marketing
35,546 43,289 41,097
46,356 46,410
43,450 General and administrative
18,869 18,618 15,318
19,821 15,888
16,986 Technology and product development
15,408 17,644
18,907 19,349 19,225
18,732
Total operating expenses
69,823 79,551
75,322 85,526
81,523 79,168
Operating income 20,715
8,765
19,587 27,680
23,424 7,003 Net
financial income (expense) (6,156 )
(1,611 ) (2,880 ) (6,232 )
(2,831 ) (5,292 )
Net income before income
taxes 14,559
7,154 16,707
21,448 20,593
1,711 Adj. Net Income tax expense
2,418 4,254 4,373
2,617 4,235
471 Income tax expense 2,486
3,806 4,190 1,512
4,235 471 Adjustment
$ 68 ($448 ) ($183 )
($1,105 )
Net income
/(loss) 12,141
2,900 12,334
18,831 16,358
1,240 KEY METRICS
Operational Gross bookings $
1,019,102 $ 1,061,026
$ 1,116,022 $
1,258,398 $ 1,231,497
$ 1,184,355 - YoY growth 54 %
40 % 32 % 26 % 21
% 12 %
Number of transactions
2,129 2,210
2,298 2,419
2,514 2,607 - YoY growth
30 % 30 % 25 %
19 % 18 % 18 % Air 1,246
1,324 1,328
1,386 1,362 1,513
- YoY growth 34 % 31 % 22
% 13 % 9 % 14 % Packages, Hotels
& Other Travel Products 883
886 970 1,033
1,152 1,094 - YoY growth
25 % 27 % 29 % 28
% 30 % 23 %
Revenue per transaction
$ 57.2 $ 55.8
$ 57.8 $
62.7 $ 59.1 $
49.2 - YoY growth
3 % (12 %) Air $
45.6 $ 45.2 $ 44.3 $ 47.7
$ 44.7 $ 35.1 - YoY growth
(2 %)
(22 %) Packages, Hotels & Other Travel Products
$ 73.5 $ 71.7 $ 76.2
$ 82.7 $ 76.2 $ 68.6 - YoY
growth
4 % (4 %)
ASPs $
479 $ 480 $
486 $ 520 $
490 $ 454 - YoY growth
18 % 8 % 6 %
6 % 2 % (5 %)
Net income/ (loss) $ 12,141 $ 2,900
$ 12,334 $ 18,831 $ 16,358
$ 1,240
Add (deduct):
Financial expense, net 6,156
1,611 2,880 6,232
2,831 5,292 Income tax expense
2,418 4,254
4,373 2,617 4,235
471 Depreciation expense 1,343
1,362 1,337
1,033 859 1,475
Amortization of intangible assets 1,517
2,039 2,454 2,741
2,018 2,228 Share-based
compensation expense 1,176 930
959 1,224
983 1,266
Adjusted EBITDA
$ 24,751 $ 13,096
$ 24,337 $ 32,678
$ 27,284 $ 11,972
Unaudited Consolidated Balance Sheets
as of June 30, 2018
(in thousands U.S. dollars, except as noted)
As of June 30, 2018 As of December 31, 2017 ASSETS
Current assets
Cash and cash equivalents $ 390,716 $ 371,013
Restricted cash and cash equivalents $ 12,790 $
29,764 Accounts receivable, net of allowances $
195,472 $ 198,273 Related party receivable
6,004 5,253 Other current assets and
prepaid expenses 42,739 29,405
Total current assets 647,721 633,708
Non-current assets Other Assets
4,789 4,658 Restricted cash and
cash equivalents 10,000 10,000
Property and equipment net 17,221
16,171 Intangible assets, net 37,261
35,424 Goodwill 36,108
38,733 Total non-current assets 105,379
104,986
TOTAL ASSETS
753,100 738,694 LIABILITIES AND
SHAREHOLDERS’ DEFICIT
Current
liabilities Accounts payable and accrued
expenses 45,549 45,609 Travel
suppliers payable 153,961 174,817
Related party payable 94,022
84,364 Loans and other financial liabilities
23,479 8,220 Deferred Revenue
1,178 30,113 Other liabilities
33,336 39,751 Contingent liabilities
4,061 4,732 Total current liabilities
355,586 387,606
Non-current
liabilities Other liabilities
2,045 1,015 Contingent liabilities
2,704 7,115 Related party
liability 125,000 125,000 Total
non-current liabilities 129,749 133,130
TOTAL LIABILITIES 485,335
520,736 SHAREHOLDERS’ EQUITY
(DEFICIT) Common stock
253,535 253,535 Additional paid-in capital
318,693 316,444 Other reserves
(728 ) (728 ) Accumulated other comprehensive
income 3,681 16,323 Accumulated
losses (307,416 ) (367,616 ) Total
Shareholders' Equity Attributable / (Deficit) to Despegar.com Corp
267,765 217,958
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
753,100 738,694
Unaudited Statements of Cash Flows for
the three and six-month period ended June 30, 2018 and 2017
(in thousands U.S. dollars, except as noted)
3 months ended June 30, 6 months ended June
30, 2018
2017
2018 2017 Cash flows from operating activities
Net
income $ 1,240 $
3,407 $ 17,598
$ 18,801 Adjustments to reconcile net income
to net cash flow from operating activities
Unrealized foreign currency
translation losses 861 28
1,228 686 Depreciation
expense 1,475 1,362
2,334 2,705 Amortization
of intangible assets 2,228 2,039
4,246 3,556 Stock
based compensation expense 1,266
930 2,249 2,106
Interest and penalties (257 ) 4
– 454 Income taxes
142 1,623 3,007
2,795 Allowance for doubtful accounts
(330 ) 175 313
743 Provision / (recovery) for
contingencies 609 302
1,124 779 Changes in
assets and liabilities, net of non-cash transactions
(Increase) / Decrease in
accounts receivable, net of allowances 179
(27,399 ) (17,588 )
(40,544 ) (Increase) / Decrease in related party receivables
68 (122 ) (757 )
(1,386 ) (Increase) / Decrease in other assets and prepaid
expenses (16,871 ) (2,143 )
(27,191 ) 430 Increase / (Decrease) in
accounts payable and accrued expenses (1,970 )
5,523 7,627 13,621
Increase / (Decrease) in travel suppliers payable
5,427 20,482 9,461
14,251 Increase / (Decrease) in other
liabilities 7,134 3,534
2,507 2,528 Increase /
(Decrease) in contingencies (3,780 )
(152 ) (4,383 ) (637 ) Increase /
(Decrease) in related party liabilities 3,688
(1,864 ) 14,230 10,208
Increase / (Decrease) in deferred revenue (818
) (434 ) (1,480 ) (5,815
)
Net cash flows provided by / (used in) operating
activities 291
7,295 14,525
25,281 Cash flows from investing activities
Payments
for short-term investments –
(238 ) – (238 ) Acquisition of
property and equipment (3,851 ) (1,970
) (7,264 ) (4,122 )
Increase of intangible assets including
internal-use software andwebsite development
(3,987 ) (3,381 ) (6,632
) (6,157 )
Net cash (used in) /provided by
investing activities (7,838 )
(5,589 ) (13,896
) (10,517 ) Cash flows from
financing activities
Increase / (Decrease) in loans and other financial
liabilities 9,357 5,318
16,376 6,676
Net cash
(used in) / provided by financing activities
9,357 5,318
16,376 6,676
Effect of exchange rate changes on cash,
cash equivalents andrestricted cash
(13,653 ) (556 ) (14,276
) 689
Net increase / (decrease) in cash, cash
equivalents and restricted cash
(11,843 ) 6,468
2,729
22,129
Cash, cash equivalents and restricted cash
as of beginning of theperiod
425,349 134,826
410,777 119,165 Cash, cash
equivalents and restricted cash as of end of the period
413,506 141,294
413,506 141,294
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180816005154/en/
Despegar.com, Corp.Investor RelationsJavier
Kelly, (+5411) 5173 3501investorelations@despegar.com
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