Adj. EBITDA Increases 106% YoY on Record
Quarterly Revenues and Improving Operational Efficiency
Despegar.com, Corp. (NYSE: DESP) (“Despegar” or the
“Company”), Latin America’s leading travel technology company,
today announced unaudited financial results for the three-months
ended September 30, 2023 (“third quarter 2023” or “3Q23”).
Financial results are expressed in U.S. dollars and are presented
in accordance with U.S. generally accepted accounting principles
(“U.S. GAAP”). Financial results are preliminary and subject to
year-end audit and adjustments. All comparisons in this
announcement are year-over-year (“YoY”), unless otherwise
noted.
3Q23 Financial and Operating Highlights (for definitions,
see page 12)
- Gross Bookings increased 25% YoY to $1.4 billion, a record
high, driven by strong execution of our growth strategies, and
robust demand environment
- Revenues increased 22% YoY to a record $178.1 million, with
Take Rate of 12.9% as the Company maintains focus on profitable
growth
- Adjusted EBITDA increased 106% YoY to $24.7 million, driven by
strong revenue growth and ongoing efforts to generate operational
efficiencies
- Significant growth in B2B and B2B2C businesses that reached a
combined 15% of gross bookings, up 435 bps YoY
- Travel Packages as a percentage of Gross Bookings reached 30%,
up 411 bps YoY
- Operating cash flow was positive $33.8 million, compared to
positive $10.4 million in 3Q22
- Total Cash position of $255.7 million, at September 30, 2023,
up $11.8 million sequentially
- Loyalty Program members increased 113% YoY to 19.9 million
- App transactions increased 558 bps YoY, reaching a record 40.1%
of total transactions in the quarter
Damian Scokin, Despegar’s CEO, said: “We delivered a
record-breaking quarter in terms of gross bookings and revenue, as
we continue advancing our growth strategy and effectively
capitalizing on the strong demand environment. Our strategy to
expand non-air and travel package sales, coupled with significant
gains in our B2C and B2B verticals, continue driving strong
profitable growth, all underpinned by Despegar’s best-in-class
technology platform. Another key near and long-term growth driver
is our exceptional brand recognition, which is helping us gain
market share in the region’s under penetrated and expanding travel
market. That brand strength is reflected in surging use of our
apps, while steadily rising loyalty membership reaffirms our status
as Latin America’s premier travel technology company.”
Amit Singh, the Company’s CFO, added, “It is noteworthy that
Despegar’s revenues and adjusted EBITDA are growing at industry
leading levels, a testament to strong execution of our growth
strategies and sharp focus on generating operational efficiencies.
Additionally, robust operating cash flow and a growing cash
position give us the financial flexibility to continue investing in
technology and growth initiatives that generate higher shareholder
returns. In the same vein, we intend to use Despegar’s strong
balance sheet to our strategic advantage to make select
acquisitions that will enhance our travel ecosystem and offerings
as well as strengthen Despegar’s competitive moat. Guiding our
investments and operating decisions are our primary objectives:
achieving sustainable profitable growth at industry leading levels,
maintaining an agile, streamlined and cost-effective structure, and
continuously enhancing our cash generation capabilities.”
2023 Financial Guidance
The Company is raising the lower end of its 2023 annual
guidance:
- Revenue: $670 million to $700 million, vs. $640 million to $700
million before
- Adjusted EBITDA: $90 million to $100 million, vs. $80 million
to $100 million before
See our Investor Relations website at
www.investor.despegar.com.
Disclaimer: The 2023 financial guidance reflects
management’s current assumptions regarding numerous evolving
factors that are difficult to accurately predict, including those
discussed in the Risk Factors set forth in the Company’s Annual
Report on Form 20-F filed with the United States Securities and
Exchange Commission (the “SEC”).
Reconciliations of forward-looking non-GAAP measures,
specifically the 2023 Adjusted EBITDA guidance, to the relevant
forward-looking GAAP measures are not being provided, as the
Company does not currently have sufficient data to accurately
estimate the variables and individual adjustments for such guidance
and reconciliations. Due to this uncertainty, the Company cannot
reconcile projected Adjusted EBITDA to projected net income without
unreasonable effort.
The 2023 financial guidance constitutes forward-looking
statements. For more information, see the “Forward-Looking
Statements” section in this release.
Key Operating and Financial Metrics
The following table presents key operating metrics of Despegar’s
travel and financial services businesses as well as key financial
metrics on a consolidated basis, post-intersegment eliminations
between these businesses.
(in millions, except as noted)
3Q23
3Q22
Δ %
Operating metrics
Number of transactions
2.384
2.208
8
%
Gross bookings
$
1,383.1
$
1,104.3
25
%
TPV Financial Services (1)
$
18.6
$
17.8
4
%
Average selling price (ASP) (in $)
$
581
$
503
16
%
Number of Transactions by Segment &
Total
Air
1.2
1.1
4
%
Packages, Hotels and Other Travel
Products
1.2
1.1
15
%
Financial Services
0.0
0.0
(80
)%
Total Number of Transactions
2.4
2.2
8
%
Financial metrics
Total Revenue
$
178.1
$
145.6
22
%
Total Adjusted EBITDA (2)
$
24.7
$
12.0
106
%
Net loss
$
(0.3
)
$
(9.3
)
(97
)%
Net loss attributable to Despegar.com,
Corp
$
(0.3
)
$
(9.3
)
(97
)%
Average Shares Outstanding - Basic (3)
77,166
76,609
1
%
Average Shares Outstanding - Diluted
(3)
77,166
76,609
1
%
EPS Basic (4)
$
(0.11
)
$
(0.22
)
(52
)%
EPS Diluted (4)
$
(0.11
)
$
(0.22
)
(52
)%
Note that Despegar´s 3Q22 earnings press release indicated that
weighted common average shares outstanding totaled 81,544 thousand
(basic and diluted) at September 30, 2022 when the amount should
have been 76,609 thousand as presented in the table above. More
information is available in our 2022 Annual Report on Form 20-F
filed on April 27, 2023 with the SEC (1)
Presented on a pre-intersegment
elimination basis. Intersegment TPV amounted to $17.4 million in
3Q23 and $ 12.9 million in 3Q22.
(2)
Financial services segment reported a
Total Adjusted EBITDA of negative $0.7 million compared to negative
$5.2 million in 3Q22, as the company improved the spread between
Take Rate and projected losses
(3)
In thousands
(4)
Round numbers.
Revenue Breakdown
The following table reconciles the intersegment revenues of the
Company’s three business segments for the quarters ended September
30, 2023 and 2022:
(in millions, except as noted)
3Q23
3Q22
Δ %
$
% of total
$
% of total
Revenue by business segment
Travel Business
Air Segment
$
63.9
36
%
$
59.3
41
%
8
%
Packages, Hotels & Other Travel
Products Segment
$
111.4
63
%
$
85.2
59
%
31
%
Total Travel Business
$
175.3
98
%
$
144.5
99
%
21
%
Financial Business
Financial Services Segment
$
10.8
6
%
$
3.8
3
%
184
%
Total Financial Business
$
10.8
6
%
$
3.8
3
%
184
%
Intersegment Eliminations
$
(7.9
)
(4
)%
$
(2.7
)
(2
)%
192
%
Total Revenue
$
178.1
100
%
$
145.6
100
%
22
%
Total Revenue margin
12.9
%
13.1
%
(26) bps
Unaudited Consolidated Statements of
Operations for the three-month periods ended September 30, 2023 and
2022 (in thousands of U.S. dollars, except as noted)
3Q23
3Q22
Δ %
Total Revenue
$
178,149
$
145,596
22
%
Cost of revenue
$
(57,599
)
$
(50,305
)
14
%
Gross profit
$
120,550
$
95,291
27
%
Operating expenses
Selling and marketing
$
(56,529
)
$
(46,174
)
22
%
General and administrative
$
(21,382
)
$
(24,873
)
(14
)%
Technology and product development
$
(26,440
)
$
(22,834
)
16
%
Total operating expenses
$
(104,351
)
$
(93,881
)
11
%
Loss from equity investments
$
(948
)
$
(105
)
n.m.
Operating income
$
15,251
$
1,305
n.m.
Financial results, net
$
(3,215
)
$
(15,359
)
(79
)%
Net income / (loss) before income
taxes
$
12,036
$
(14,054
)
n.m.
Income tax (expense) / benefit
$
(12,351
)
$
4,767
n.m.
Net loss
$
(315
)
$
(9,287
)
(97
)%
Net loss attributable to Despegar.com,
Corp
$
(315
)
$
(9,287
)
(97
)%
n.m.: Not Meaningful
Unaudited Consolidated Balance Sheet as
of September 30, 2023 and June 30, 2023 (in thousands of U.S.
dollars, except as noted)
ASSETS
As of September 30, 2023
As of June 30, 2023
Current assets
Cash and cash equivalents
$
221,681
$
218,535
Restricted cash and cash equivalents
$
33,160
$
24,434
Accounts receivable, net of allowances
$
199,724
$
211,787
Loan receivables, net
$
16,023
$
16,911
Related party receivable
$
13,736
$
12,092
Other current assets and prepaid
expenses
$
49,374
$
47,346
Total current assets
$
533,698
$
531,105
Non-current assets
Other assets and prepaid expenses
$
75,549
$
81,752
Loan receivables, net
$
1,072
$
974
Restricted cash
$
866
$
965
Lease right-of-use assets
$
18,317
$
18,912
Property and equipment net
$
16,176
$
14,848
Intangible assets net
$
97,361
$
97,461
Goodwill
$
150,632
$
154,125
Total non-current assets
$
359,973
$
369,037
TOTAL ASSETS
$
893,671
$
900,142
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses
$
86,638
$
74,037
Travel suppliers payable
$
370,218
$
355,821
Related party payable
$
51,824
$
59,791
Short-term debt
$
28,280
$
27,984
Deferred Revenue
$
30,684
$
29,057
Other liabilities
$
83,802
$
92,235
Contingent liabilities
$
7,630
$
12,020
Lease Liabilities
$
4,402
$
5,075
Total current liabilities
$
663,478
$
656,020
Non-current liabilities
Other liabilities
$
14,078
$
15,991
Contingent liabilities
$
15,500
$
15,300
Long term debt
$
2,403
$
2,734
Lease liabilities
$
14,608
$
14,811
Related party liability
$
125,000
$
125,000
Total non-current liabilities
$
171,589
$
173,836
TOTAL LIABILITIES
$
835,067
$
829,856
Series A non-convertible preferred
shares
$
127,300
$
127,594
Series B convertible preferred shares
$
46,700
$
46,700
Mezzanine Equity
$
174,000
$
174,294
SHAREHOLDERS’ DEFICIT
Common stock
$
288,240
$
288,240
Additional paid-in capital
$
303,359
$
310,218
Other reserves
$
(728
)
$
(728
)
Accumulated other comprehensive loss
$
(11,669
)
$
(7,458
)
Accumulated losses
$
(616,331
)
$
(616,013
)
Treasury Stock
$
(78,267
)
$
(78,267
)
Total Shareholders' Deficit Attributable
to Despegar.com Corp
$
(115,396
)
$
(104,008
)
TOTAL LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS’ DEFICIT
$
893,671
$
900,142
Unaudited Statements of Cash Flows for
the three-month periods ended September 30, 2023 and 2022 (in
thousands of U.S. dollars, except as noted)
3 months ended September 30,
2023
2022
Cash flows from operating activities
Net loss
$
(315
)
$
(9,287
)
Adjustments to reconcile net income /
(loss) to net cash flows from operating activities:
Unrealized foreign currency translation
(gain) / losses
$
(12,502
)
$
6,379
Depreciation expense
$
1,535
$
2,144
Amortization expenses
$
6,902
$
6,871
Earnout
$
(110
)
$
(1,136
)
Indemnity
$
110
$
1,136
Loss from equity investments
$
948
$
105
Stock based compensation expense
$
1,042
$
1,305
Amortization of lease right-of-use
assets
$
332
$
1,008
Interest and penalties
$
1,459
$
540
Income tax expense / (benefit)
$
8,037
$
(5,128
)
Allowance for expected credit losses
$
2,748
$
2,634
Provision for contingencies
$
1,609
$
4,402
Changes in assets and liabilities net of
non-cash transactions:
Increase in trade accounts receivable, net
of credit expected loss
$
3,774
$
22,743
Increase in Loans receivables, net of
allowance
$
(133
)
$
(7,925
)
Increase in related party receivables
$
(2,311
)
$
(6,207
)
Increase in other assets and prepaid
expenses
$
(49
)
$
(33,161
)
Increase / (decrease) in accounts payable
and accrued expenses
$
23,473
$
(9,782
)
Increase / (decrease) in travel suppliers
payable
$
32,135
$
(2,577
)
(Decrease) / increase in other
liabilities
$
(22,757
)
$
38,826
Decrease in contingent liabilities
$
(5,256
)
$
(5,364
)
Decrease in related party liabilities
$
(8,424
)
$
(2,205
)
Increase in lease liability
$
500
$
2,032
Increase in deferred revenue
$
1,010
$
3,021
Net cash flows provided by operating
activities
$
33,757
$
10,374
Cash flows from investing activities:
Origination of loans receivable, net of
allowance
$
(5,228
)
$
(5,698
)
Collection on loan receivables
$
2,008
$
2,651
Payment for other assets
$
—
$
(6,591
)
Payment for acquired businesses, net of
cash acquired
$
—
$
(3,017
)
Acquisition of property and equipment
$
(3,181
)
$
(1,748
)
Capital expenditures, including
internal-use software and website development
$
(7,495
)
$
(6,964
)
Net cash flows used in investing
activities
$
(13,896
)
$
(21,367
)
Cash flows from financing activities:
Net increase / (decrease) of short term
debt
$
5,518
$
(1,090
)
Proceeds from issuance of short-term
debt
$
5,731
$
18,598
Payment of short-term debt
$
(4,751
)
$
(7,892
)
Payment of long-term debt
$
(1,221
)
$
(355
)
Payment of dividends to stockholders
$
(8,359
)
$
(802
)
Exercise of stock-based awards
$
—
$
254
Proceeds from debenture issuance by
securitization program
$
1,497
$
1,047
Payments of debenture issuance by
securitization program
$
(690
)
$
—
Payments for acquired non-controlling
interest
$
—
$
(800
)
Purchase of treasury stock
$
—
$
(4,610
)
Net cash flows (used in) / provided by
financing activities
$
(2,275
)
$
4,350
Effect of exchange rate changes on cash
and cash equivalents and restricted cash
$
(5,813
)
$
(5,042
)
Net increase / (decrease) in cash and
cash equivalents and restricted cash
$
11,773
$
(11,685
)
Cash and cash equivalents as of
beginning of the period and restricted cash
$
243,934
$
274,764
Cash and cash equivalents as of end of
the period and restricted cash
$
255,707
$
263,079
Adjusted EBITDA Reconciliation
(in Thousands, except as noted)
3Q23
3Q22
Δ %
Net loss
$
(315
)
$
(9,287
)
(97
)%
Add (deduct):
Financial results, net
$
3,215
$
15,359
(79
)%
Income tax expense / (benefit)
$
12,351
$
(4,767
)
n.m.
Depreciation expense
$
1,535
$
2,144
(28
)%
Amortization of intangible assets
$
6,902
$
6,871
—
%
Share-based compensation expense
$
1,042
$
1,305
(20
)%
Acquisition transaction costs
$
—
$
390
n.m.
Total Adjusted EBITDA
$
24,730
$
12,015
106
%
n.m.: Not Meaningful
Geographic Breakdown
(in millions, except as noted)
3Q23 vs. 3Q22 - As Reported
Brazil
Mexico
Rest of Latin America
Total
3Q23
3Q22
Δ %
3Q23
3Q22
Δ %
3Q23
3Q22
Δ %
3Q23
3Q22
Δ %
Transactions ('000)
1,036
811
28
%
436
428
2
%
912
968
-6
%
2,384
2,208
8
%
Gross Bookings
561
389
44
%
283
215
32
%
539
500
8
%
1,383
1,104
25
%
TPV Financial Services (1)
19
18
4
%
—
—
—
%
—
—
—
%
19
18
4
%
ASP ($)
543
486
12
%
648
502
29
%
591
517
14
%
581
503
16
%
Revenues
178
146
22
%
Gross Profit
121
95
27
%
3Q23 vs. 3Q22 - FX Neutral
Brazil
Mexico
Rest of Latin America
Total
3Q23
3Q22
Δ %
3Q23
3Q22
Δ %
3Q23
3Q22
Δ %
3Q23
3Q22
Δ %
Transactions ('000)
1,036
811
28
%
436
428
2
%
912
968
-6
%
2,384
2,208
8
%
Gross Bookings
523
389
34
%
238
215
11
%
829
500
66
%
1,590
1,104
44
%
TPV Financial Services (1)
17
18
-3
%
—
—
—
%
—
—
—
%
17
18
-3
%
ASP ($)
506
486
4
%
545
502
9
%
909
517
76
%
667
503
33
%
Revenues
208
146
43
%
Gross Profit
140
95
47
%
(1)
Presented on a pre-intersegment
elimination basis. Intersegment TPV amounted to $17.4 million in
3Q23 and $12.9 million in 3Q22
Key Financial & Operating Trended
Metrics (in thousands of U.S. dollars, except as noted)
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
FINANCIAL RESULTS
Revenue
$
124,556
$
112,414
$
134,421
$
145,596
$
145,542
$
158,707
$
165,524
$
178,149
Cost of revenue
$
(53,765
)
$
(42,558
)
$
(45,149
)
$
(50,305
)
$
(44,897
)
$
(51,027
)
$
(60,000
)
$
(57,599
)
Gross profit
$
70,791
$
69,856
$
89,272
$
95,291
$
100,645
$
107,680
$
105,524
$
120,550
Operating expenses
Selling and marketing
$
(34,582
)
$
(30,517
)
$
(42,214
)
$
(46,174
)
$
(46,245
)
$
(51,892
)
$
(51,695
)
$
(56,529
)
General and administrative
$
(18,689
)
$
(23,523
)
$
(27,037
)
$
(24,873
)
$
(26,092
)
$
(22,672
)
$
(8,396
)
$
(21,382
)
Technology and product development
$
(19,508
)
$
(20,735
)
$
(21,407
)
$
(22,834
)
$
(25,015
)
$
(25,971
)
$
(26,448
)
$
(26,440
)
Total operating expenses
$
(72,779
)
$
(74,775
)
$
(90,658
)
$
(93,881
)
$
(97,352
)
$
(100,535
)
$
(86,539
)
$
(104,351
)
Gain / (loss) from equity investments
$
343
$
117
$
16
$
(105
)
$
(192
)
$
113
$
(285
)
$
(948
)
Operating (loss) / income
$
(1,645
)
$
(4,802
)
$
(1,370
)
$
1,305
$
3,101
$
7,258
$
18,700
$
15,251
Financial results, net
$
(3,809
)
$
(7,023
)
$
(10,529
)
$
(15,359
)
$
(12,543
)
$
(12,595
)
$
(3,947
)
$
(3,215
)
Net (loss) / income before income
taxes
$
(5,454
)
$
(11,825
)
$
(11,899
)
$
(14,054
)
$
(9,442
)
$
(5,337
)
$
14,752
$
12,036
Income tax benefit / (expense)
$
(7,545
)
$
(19,093
)
$
(1,266
)
$
4,767
$
(5,717
)
$
4,640
$
13,251
$
(12,351
)
Net (loss) / income
$
(12,999
)
$
(30,918
)
$
(13,165
)
$
(9,287
)
$
(15,159
)
$
(697
)
$
28,003
$
(315
)
Net income attributable to non-controlling
interest
$
526
—
—
—
—
$
—
—
—
Net income / (loss) attributable to
Despegar.com, Corp
$
(12,473
)
$
(30,918
)
$
(13,165
)
$
(9,287
)
$
(15,159
)
$
(697
)
$
28,003
$
(315
)
Adjusted EBITDA
$
9,002
$
6,787
$
10,594
$
12,015
$
12,525
$
17,272
$
29,957
$
24,730
Net (loss) /income
$
(12,999
)
$
(30,918
)
$
(13,165
)
$
(9,287
)
$
(15,159
)
$
(697
)
$
28,003
$
(315
)
Add (deduct):
Financial results, net
$
3,809
$
7,023
$
10,529
$
15,359
$
12,543
$
12,595
$
3,947
$
3,215
Income tax (benefit) / expense
$
7,545
$
19,093
$
1,266
$
(4,767
)
$
5,717
$
(4,640
)
$
(13,251
)
$
12,351
Depreciation expense
$
1,497
$
1,672
$
1,699
$
2,144
$
1,504
$
1,716
$
3,091
$
1,535
Amortization of intangible assets
$
6,909
$
6,584
$
6,937
$
6,871
$
8,593
$
6,813
$
7,257
$
6,902
Share-based compensation expense
$
2,241
$
3,333
$
3,328
$
1,305
$
(673
)
$
1,485
$
910
$
1,042
Acquisition transaction costs
—
—
—
$
390
—
—
—
—
Adjusted EBITDA
$
9,002
$
6,787
$
10,594
$
12,015
$
12,525
$
17,272
$
29,957
$
24,730
Note: The Company reclassified Financial
Bad Debt from General and Administrative expenses to Cost of
Revenue for the periods under analysis
3Q23 Earnings Conference Call
When:
4:30 p.m. Eastern time, November 9,
2023
Who:
Mr. Damián Scokin, Chief Executive
Officer
Mr. Amit Singh, Chief Financial
Officer
Mr. Luca Pfeifer, Investor Relations
Dial-in:
1 888 330 2413 (U.S. domestic); 1 240 789
2721 (International)
Pre-Register: You may pre-register at any time: click
here. To access Despegar’s financial results call via telephone,
callers need to press # to be connected to an operator.
Webcast: CLICK HERE
Definitions and concepts
Average Selling Price (“ASP”): reflects Gross Bookings
divided by the total number of Transactions.
Foreign Exchange (“FX”) Neutral: calculated by using the
average monthly exchange rate of each month of the quarter and
applying it to the corresponding months in the current year, so as
to calculate what the results would have been had exchange rates
remained constant. These calculations do not include any other
macroeconomic effects such as local currency inflation effects.
Net Promoter Score (“NPS”): a customer loyalty and
satisfaction metric that measures the willingness of customers to
recommend a company, product, or service to others.
Gross Bookings (“GB”): Gross Bookings is an operating
measure that represents the aggregate purchase price of all travel
products booked by the Company’s travel customers through its
platform during a given period related to our travel business. In
its quarterly earnings releases, Despegar presents Gross Bookings
net of withholding taxes on international trips in Argentina which
have been in effect since 2020. 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, the Company
monitors Gross Bookings as an important indicator of its ability to
generate revenue. In this presentation the Company has also recast
previously reported segment financial information for the quarters
ended September 30, 2022 to reflect its new reportable segments.
The segment change has no impact on the Company’s historical
consolidated financial results.
Seasonality: Despegar’s financial results experience
fluctuations due to seasonal variations in demand for travel
services. Despegar’s most significant market, Brazil, and much of
South America where Despegar operates, are located in the southern
hemisphere where summer travel season runs from December 1 to
February 28 and winter runs from June 1 to August 31. Despegar’s
most significant market in the Northern hemisphere is Mexico where
summer travel season runs from June 1 to August 31 and winter runs
from December 1 to February 28. Accordingly, traditional leisure
travel bookings in the Southern hemisphere are generally the
highest in the third and fourth quarters of the year as travelers
plan and book their summer holiday travel. The number of bookings
typically decreases in the first quarter of the year. In the
Northern hemisphere, bookings are generally the highest in the
first three quarters as travelers plan and book their spring,
summer and winter holiday travel. The seasonal revenue impact is
exacerbated with respect to income by the nature of variable cost
of revenue and direct S&M costs, which are typically timed with
booking volumes, and the more stable nature of fixed costs.
Packages: refers to custom packages formed through the
combination of two or more travel products, which may include
airline tickets, hotels, car rentals, or a combination of these. By
bundling these items together and securing them in a single
transaction, we can present customers with a unified package at a
single, quoted price. This approach not only enables us to provide
travelers with more affordable options compared to purchasing
individual products separately but also facilitates the
cross-selling of multiple products within a single transaction.
Total Adjusted EBITDA: is calculated as net income/(loss)
exclusive of financial result, net, income tax, depreciation and
amortization, impairment charges, stock-based compensation expense,
restructuring charges and acquisition transaction costs.
Total Revenue: The Company reports its revenue on a net
basis for the majority of its transactions, deducting cancellations
and amounts collected as sales taxes. The Company presents its
revenue on a gross basis for some transactions when it
pre-purchases flight seats. These transactions have been limited to
date. Despegar derives substantially all of its revenue from
commissions and incentive fees paid by its travel suppliers and
service fees paid by the travelers for transactions through its
platform. To a lesser extent, Despegar also derives revenue from
advertising, its installment loans and Buy Now, Pay Later offered
through the company’s fintech platform Koin and other sources (i.e.
destination services, loyalty and interest revenue). For more
additional information regarding Despegar’s revenue recognition
policy, please refer to “Summary of significant accounting
policies” note of Despegar’s Financial Statements.
Total Revenue Margin (also “Take Rate”): calculated as
revenue divided by the sum of Gross Bookings and Total Payment
Volume.
Total Payment Volume (“TPV”): is an operating measure
that represents the US dollar loan volume processed by "Buy Now,
Pay Later" financing solution during a specific period of time.
Reporting Business Segments: The Company operates a
Travel Business and a Financial Services Business which are
structured as follows:
Our travel business is comprised of two reportable segments:
“Air” and “Packages, Hotels and Other Travel Products. Our “Air”
segment primarily consists of facilitation services for the sale of
airline tickets on a stand-alone basis and excludes airline tickets
that are packaged with other non-airline flight products. Our
“Packages, Hotels and Other Travel Products” segment primarily
consists of facilitation services for the sale of travel packages
(which can include airline tickets and hotel rooms), as well as
stand-alone sales of hotel rooms (including vacation rentals), car
rentals, bus tickets, cruise tickets, travel insurance and
destination services. Both segments also include the sale of
advertisements and incentives earned from suppliers.
Our financial services business is comprised of one reportable
segment: “Financial Services”. Our “Financial Services” segment
primarily consists of loan origination to our travel business’
customers and to customers of other merchants in various
industries. Our “Financial Services” segment also consists of
processing, fraud identification, credit scoring and IT services to
our travel business, and to third-party merchants.
Transactions: We define the number of transactions as the
total number of travel customer orders completed on our platform or
the financing merchant customers (excluding Decolar) of the “Buy
Now, Pay Later” solution during a given 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 our business from period to period. However, 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.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. We base these forward-looking statements on our current
beliefs, expectations and projections about future events and
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. 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 press release.
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.
Considering these limitations, you should not make any investment
decision in reliance on forward-looking statements contained in
this press release.
About Despegar.com
Despegar is the leading travel technology company in Latin
America. For over two decades, it has revolutionized the tourism
industry in the region through technology. With its continuous
commitment to the development of the sector, Despegar today is
comprised of a consolidated group that includes Despegar, Decolar,
Best Day, Viajes Falabella, Viajanet Stays and Koin, and has become
one of the largest travel companies in Latin America.
Despegar operates in 20 countries in the region, accompanying
Latin Americans from the moment they dream of traveling until they
share their memories. With the purpose of improving people's lives
and transforming the shopping experience, Despegar has developed
alternative payment and financing methods, democratizing the access
to consumption and bringing Latin Americans closer to their next
travel experience. Despegar’s common shares are traded on the New
York Stock Exchange (NYSE: DESP). For more information, visit
Despegar’s Investor Relations website
https://investor.despegar.com/ .
About This Press Release
This press release does not contain sufficient information to
constitute a complete set of interim financial statements in
accordance with U.S. GAAP. The financial information is this
earnings release has not been audited.
Use of Non-GAAP Financial Measures
This earnings release includes certain references to Total
Adjusted EBITDA, a non-GAAP financial measure. For the year ended
December 31, 2020, Despegar changed the calculation of Total
Adjusted EBITDA reported to the chief operating decision maker to
exclude restructuring charges and acquisition costs. The Company
defines:
Total Adjusted EBITDA as net
income/(loss) exclusive of financial result, net, income tax,
depreciation and amortization, impairment charges, stock-based
compensation expense, restructuring charges and acquisition
transaction costs.
Adjusted EBITDA is not a measure 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, differ materially from similarly titled measures
reported by other companies, including its competitors.
To supplement its consolidated financial statements presented in
accordance with U.S. GAAP, the Company presents foreign exchange
(“FX”) neutral measures.
This non-GAAP measure should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with U.S. GAAP and may be different from non-GAAP measures used by
other companies. In addition, this non-GAAP measure is not based on
any comprehensive set of accounting rules or principles. Non-GAAP
measures have limitations in that they do not reflect all of the
amounts associated with our results of operations as determined in
accordance with U.S. GAAP. This non-GAAP financial measure should
only be used to evaluate our results of operations in conjunction
with the most comparable U.S. GAAP financial measures.
On page 10 of this earnings release the company shows FX neutral
measures to the most directly comparable GAAP measure. The Company
believes that comparing FX neutral measures to the most directly
comparable GAAP measure provides investors an overall understanding
of our current financial performance and its prospects for the
future. Specifically, we believe this non-GAAP measure provides
useful information to both management and investors by excluding
the foreign currency exchange rate impact that may not be
indicative of our core operating results and business outlook.
The FX neutral measures were calculated by using the average
monthly exchange rates for each month during 2022 and applying them
to the corresponding months in 2023, so as to calculate what
results would have been had exchange rates remained stable from one
year to the next. The table below excludes intercompany allocation
FX effects. Finally, this measure does not include any other
macroeconomic effect such as local currency inflation effects, the
impact on impairment calculations or any price adjustment to
compensate for local currency inflation or devaluations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109497210/en/
IR Contact Luca Pfeifer Investor Relations Phone:
(+57)3153824802 E-mail: luca.pfeifer@despegar.com
Despegar com (NYSE:DESP)
Historical Stock Chart
From Apr 2024 to May 2024
Despegar com (NYSE:DESP)
Historical Stock Chart
From May 2023 to May 2024