PCOM - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone. Thank you for participating in today's conference call to discuss Points International's financial results for the second quarter ended June 30, 2021. Delivering today's prepared remarks are Chief Executive Officer, Robert McLean; President, Christopher Barnard; and Chief Financial Officer, Erick Georgiou.

Following their prepared remarks, the management team will open up the call for any questions.

Before we go further, I would like to turn the call over to Cody Slach of Gateway Investor Relations, Points International's IR adviser, as he reads the company's safe harbor that provides important cautions regarding forward-looking statements. ahead. go please Cody,

Cody Slach

may be contain the statements or Canadian questions. laws. meaning Please in forward-looking conference to response within on call of your Management securities U.S. may refer and make reminded you. additional remarks statements that this the also Thank to forward-looking

press forward-looking assumptions Although predict. to uncertainties action company making issued not statements well subject and undertake used are to and and not management U.S. to in were statements Certain may that this of guarantees important such call these results documents reasonable, with applied revise required Points' statements forward-looking financial could and prove as whether With that does or forward-looking the Except to MacLean. otherwise. statements release assumptions be turn and call that included factors by the are the are update as cause statements I'll the second to filed in difficult prior Executive or result to Officer, law, in such not securities correct. differ future Canadian over as of other material information, Important making believes risks as obligation Rob? are quarter Rob actual any events said, are our any to Chief performance or results materially new future a regulators.

Robert MacLean

Thanks, Cody, and good afternoon, everyone.

strong growth, sequential second year-over-year our drive the from continued and to QX. During quarter, we momentum sustaining

execution to This flexible as business our benefits baseline of development to activity reflects near-term the level, metrics improved quarter quarter, outpaced expectations Our and growth acceleration across both of last travel ongoing marketing an metrics. and top the representing with financial consecutive our also well industry across sequential key our and and strategy growth commitment transaction as bottom to recovery, further promotional third operational our our relative our line travel. activity of an partnerships. momentum performance tied On

well continue second of resilience the recovery around the the the strengthened world, the we From for our road quarter. hard began trends recovery monitor a at standpoint, As seeing to ahead. the us quarter pace first the and of end throughout team's positioned we has work macroeconomic

continue variant. and rates demand fluid throughput of since frequency In U.S., June have rise, the travel the beginning spiking both pace concerns the Delta of recovery the vaccination and consumer particularly remains XXXX. for As highest case in March with of global counts travel to alone, The TSA recorded travel level the especially accelerated. surrounding

health have optimistic their of continuously changes and improvements in protocols, global cautiously hotel airline We this trends but seen about Mid are remain in businesses. respective in many monitoring current business. partners our our landscape,

demand Our they benefited U.S. partners as have experienced tailwinds. from increased vaccination

the U.S.-based in In second generated of results financial record fact, we our with partnerships one quarter. quarterly

with our these to patterns base world. help return across ongoing While pleased their growth pre-Covid address below many normal to the pent-up demand partners levels, travelers' support around we're vary to and

We've We Accelerate new business Airlines pandemic. during on partners deepened three core launches service like Southwest recovery and several service our for the Anything through have this now and we drivers. the provided relationships continued offer with execution service advance own growth the of support launched the new our we through existing our subscription our

additional and that their activity. the we're support, and using our our advancing loyalty Guest new necessarily not options So on By most recent frequent far, ones we of with offering including in launch of have of partners and forms July. Anything providing customers our program four in innovative market flexible, our Etihad rely capabilities miles, points travel earning Accelerate deployments service do the both for platform

these also within travel. and partnerships outside of to deploy and services, continuing explore the new we're we As new build

focusing allows renters, on us announced into Our with bringing extensive recently a new innovative our Rewards exciting program Built rewards and collaborate for territory. an most partnership to capabilities with

Airlines with Announcements strategic travel partnership like On that our been both our our pre-COVID these performance by signal support Home we are XXXX. we front, financial to regain long-running able have the partnership trajectory starting expanding and announced QX which to with first momentum. Frontier in Chef, their

will in our our recent more progress launches commitment extremely and You business proud date. team's hear call, from about I'm development and later Christopher the of to

have leverage remain enhance expect Looking the and new discussions our to expand third pipeline have ahead, continue very our business, to Underscoring I capabilities and and new launches marketing automated existing is service our growing we growth in market. with further to our work and very healthy we to both of positive. a partnership partners driver, services

for a travel. level, broad made customers and working As an challenge the has announced continue an are as last operational to subscription throughout scale a platform-focused such important existing services service and us features seamless, points This active altogether, capabilities loyalty customers offerings members. level, and value capabilities more of airlines our like a Anything earning to return flexible service. The approach of directly adopting accordingly. On equally quarter, options, pandemic, their and an steady served today's and range range of our we our and we have and to for partners recovery. for enabled for into options Loyalty to new through of miles and On these optimize more introduce our adaptable continued Accelerate pillar them ways an increasingly transform they've source industry-wide accelerating of they customers essential growing are translates liquidity into have programs to source and financial hotels. allowed enhancement made preparing our for steady resource operators them as

are programs, in we inherent ability enhance value flexibility. our ever, loyalty than and more confident to Now

the our Coupled service our with industry throughout strengthens and challenges then our foundation Our to past second provide focus built to partner second growth. additional suite we've our positioned navigate over will now some us resilient some on remain of has activity. the I financial solid our XXXX. own perspective runway over the it supports year. will and The well adapting performance on our partners financial our our and to hand highlights Christopher for review growth half pipeline developing strategy, definitely Erick? Erick allowed quarter, for significant future and operational we for and

Erick Georgiou

thanks you, everyone. Thank and on otherwise, IFRS. and for Unless presented with accordance noted in Rob, dollars joining, are U.S. all call figures in today's

quarter, across representing third We million $XX.X financial year-over-year Rob with As benefit in mentioned, generated a core sequential million quarter our on the metrics. XXXX ago to increase to of XXX% the in revenue our operations basis. of tailwinds reopening of quarter second our have continued compared consecutive growth of QX an $XXX year

XX% benefited traditional half Consistent XX% throughout last of have the bulk quarter our started from to 'XX. towards quarter the in the of closely hotel revenue travel. of generated quarter context, metrics More our our million we generally was quarter from activity, in encouraged COVID-XX impacts. second Gross million the over and notably, results due ago both For in from We in sustained from remain XXXX. of $XXX U.S. our more what quarter profit sequential first by This with short-term second with in widespread marketing $XX.X partner and baseline with profit increased was continued the strength the XXXX. among improvement was a increased in which top continued partners. On across quarters. quarter generated up $X.X line promotional of past million we million our the the from our QX, improvements performance, in our back the activity base XX% and oriented sequentially fourth also in revenue over transaction year recovery our is QX renewed 'XX, several our continued COVID-XX-related which seeing momentum QX highly $X or basis, gross positive carrier

As Canadian subsidies. decrease $XX.X a wage outset believe an expected we from we of line have in the that ago dollar. and at our the ago confidence an quarter exchange started of on received of in some to we QX primarily of of expenses rise in From a quarter. foreign spending recognized a Operating and and compensation the to The increase we operating year-over-year $XX.X expected the million drivers. quarter with increased put Share-based in prior second $XX.X extent, million, million expenses, easing million driven a approximately a first spending year solid are aforementioned in sequential headwinds Accordingly, increase we core easing the of both year we and some the trajectory. trending. metrics, decrease relative over restrictions expenses the now coming transaction pandemic and more the were strengthen in over one we line the over have was The put XXXX lesser our to quarter underlying gained the impacts funding growth normalize second wage growth our gradually of subsidy of to year on $X.X we the place perspective, in in representing restrictions place by million are top as quarters, and offset $X.X in increase to over $XXX,XXX quarter decline $XXX,XXX from XXXX. historical the a

program for time, subsidy do emergency we anticipate While QX the further participation. this quarter was now believe subsidies. to And that we Canada has the at extended been not wage any September, our final

Last We savings our change to as accurately performance with to final this side. continue view our incurred companies. continue result view. to operating of our a a and to line note expenses with decreased tech-enabled on reflect our We other line and align expense made monitor statement platform closely quarter, prior other would and on pandemic. expenses internally expenses business the we into how that also cost top COVID-XX travel realize more we functional the have reclassified income typically more to we One in

contains supplement As format. earnings reclassified in in standard quarters the a this our disclosure, issued comparative today our to release XXXX financial

year EBITDA by second million XXXX for to aforementioned driven our $X.X increases approximately Moving of bottom $XXX,XXX and significantly The up quarter came $X.X to was in compared largely million quarter up at line. the than the the the in increase more profit. from gross in XXx 'XX. in ago QX Adjusted

Turning sheet. to our balance

$XX the sales second of the on first $XX total proceeds deal the QX, of increase bought full quarter. repayment of quarter, of increase from XXXX, included both in by were $XX during overall the million at first at The approximately of the our of million quarter funds offset activity end the XXXX reflective available borrowings Our million was partially and facility platform the of across financing the our of a end from representing credit approximately at million end the $XX higher borrowings. which significant

comfortable of road remain we ahead. are our As liquidity for capitalized XXXX, second position the with continue into and we the half well

September. in Lastly, share we renew decided have program to our buyback

to through trends well turn geographies accelerate this and in Christopher. active not sequential our not progress allocation currently attuned industry's are With half We are and to the pace program. in the we positions do summary, In our capital an opportunistic I'll continued to across year. a us financial and our further renewal us the growth to overall current that, market metrics and in the over currently optimism term, be recovery part to as strategy in the position sheet While near foundation. partner confidence improvements our it fashion activity financial balance our closely year-over-year remain core across second well give the our and intend us of of better strength of varying But case. initiate as as

Christopher Barnard

Erick. Thanks, our QX, depth we services grow of and continue Throughout portfolio. to the breadth

we Our core three highlight recent executing are on drivers. growth how our deployments

We of in continue expect relationships to announce the and program our worldwide, and to new half build the pipeline partners loyalty new aggressively continue year. to we second of launch

automation We introducing within mentioned of our all data net expand focused platform's types the loyalty We capabilities regions as new with expanding office performance. partnerships on key and as opportunities economics the overall programs. region. continue an to to by incremental key to to market activity assisting Rob earlier, a XXXX analytics in end several opened return continue as of our launches, and a partner continue presence And this our Singapore means driving driver deepen increased as our our a to our level. and our sustained partners regional improve look we forward and in see pre-Covid will From a current efforts advance be platform developing our flexibility our APAC that of perspective, recent capabilities in growth strengthen in launching in services foothold new to to they services to in

to regional and global build additional looking As to we're slowly surely initiatives APAC recovery relationships. continue, but returning these trends pre-pandemic expansion

newer recently have launching recently region additional and enhance card we've earned and the see demonstrates APAC expansion with regional second partnerships XXXX, Airways' Anything quarter to in and service miles adding and the East. services Etihad Privilege QX strong Anything with in similar region, allows us Continuing acceleration relevant the for we second activities ability also in the that a miles one only to of tier a travel, efforts launch the in of made on rental. to the highlighting launch a and as Dubai and is not the extends expands earnings, we and progress in region stages services of carrier through program months. to in of program's coming also necessarily number and the our the to more We launched Club through hotel July, quarter, suite, one also car their travel program our hotel Accelerate adaptable current the our fact, with appointment example credit leading In Emirates in our bookings rewards only launches Qatar members deepen also pleased options signed a Skywards program Qatar accelerate in with with are long-term Middle This services in announced Middle those activity to car but region, announcements to Lately, Guest our These on frequent deployment the with do market Club rely service members our travel Eastern prior enabling the our program. business adding comprehensive spending pending substantial including with new will our footprint on that alone. activity. not depend of final our earn redeem the of partnership Accelerate offices this after that the forward We're also opening their services that look in launching progress flag traction capabilities beyond but not beyond launch. loyalty any with Privilege

Skywords briefly linked Salaam optionality to to Our commitment QX geographies. to our to partnership the card services, on UAE their which with demonstrates rapidly year existing of of our loyalty exchange convert purchases to customers our providing developing through capability across use their This value programs; new Emirates and enables an in gives Mashreq and the can new Returning Mashreq services start to relationships program how Skywards existing strong relationship ability greater to Mashreq into earn expand suite flagship Salaam of they relationship deep the Emirates. deployment and with recently customers points our Emirates. two first mile. Bank our our Mashreq debit additional program Qatar the rewards We've credit a and

how We Turning members regardless We of activity. Southwest to allowing that services subscription Hotels deposits top QX, they balance core to our Radisson with through North America year. in the last monthly April, cross-sell we in our deployed services Rapid to announced of towards frequently QX during of one a another of set Rewards adding with capability build points Airlines our travel. transfer added service

X earn between We Frontier a can now also one airline longest-running services up meal partners Chef. platform new miles largest Miles facilitated Through first of and XXX country. our the orders the one Airlines, their Home kit our in Frontier of members Home through delivery Denver-based Chef, partnership to on

Chef of this strategy. growth earlier, diversified and to onset further pandemic. before our mid-XXXX, presence through diversification supporting to vertical our to towards with airline the legacy path partners we Recently, with the As Being making new newer program resilience of partnership the able one testament a we and our continue through partnership one of our our non-travel grow on Rob mentioned The launched rewards Home of homeownership. rent in points Rewards. earn partnership Build allows to our build is renters engagements

number points hotel several members include larger we Rewards choose their they service, they by traveler an of availability Exchange rent with we across program. July, loyalty which And of we the as options August, expansion from first expect program our saw Bilt we look the our exchange operators on use Aeroplan expand with platform Airlines program. launched points of our regular further and Travel forward services the real-time loyalty the new Canada's their more exchange into and with milder converting Rewards. can increased that we partners, Advantage in our initiating the financial growth tenured their this new and are added seamlessly can our Rewards longest The For time exchange of line Air Citi payments accumulate In and service business programs program, American Working teams integrated. our exciting we by is over ThankYou to the recent of network. continued in exchange this leveraging opportunity Miles Bilt development option supporting program with for Ultimate partnership to additional progress with drivers. Rewards selection as Chase us, optimization type And an additional our lastly, services growth deployments preferred demonstrate platform. core

Within the we growing before the strong date we new some strategy of are key for these, acceleration developments pandemic. expansion in also have A deployed we're returning our regions. services initiatives to suite of introduced

continue As business development we ramp diversify efforts, to our are base. to our we partnership primed

pre-pandemic presence our innovative Rewards. are partnerships In growing terms levels. as pre-pandemic products way of like their our partners we a travel using Bilt our like to benefits that to Chef expanding are existing programs capabilities non-travel in directly service and Home vertical ongoing new so doing partnerships growing we themselves, through and return we Yet support

platform positions for the our and partner provide is and team's our we services expanding value innovation on us well network, our to continued central the collectively to flexibility As our recover recovery. focus optimizing pandemic, from

in and As are we second we of enter stronger the emerging as more a efficient the XXXX, from half company. pandemic

are proven Our three resilient. growth drivers and

as foundation developing of new robust strong focus recovery. a work balance our a important us recovery. foundation industry's partners our our the for build allowed the will to services new I'm team's opportunities diligent and we giving in global that have to proud financial We're to continued market value return continue very a loyalty support Further, sheet date in for cost our role our current shareholders play of our and that strong set services we to launching partnerships, platform and the the now program advancing growth. for for our allowed of role prudent Our optimize for our we can on and business strong growth and preserve and call has improving Operator, questions. to partnerships alike, the partner both us continuously open network. partners management to and up us -

Operator

your Your questions. question Instructions] of proceed Please Capital [Operator is with from first RBC McReynolds with line the Drew Markets.

Drew McReynolds

Thanks everyone. and for follow-up. much good a questions very and afternoon Two me maybe

quarter Thank half, going base the cost would government be upon Erick, in or gross or how that more in some as be a kind obviously comment there, unpack be bit. adding little OpEx granularity. modeling a inevitably little are of the of should would Just that some of That's of bit kind subsidies. QX, on for that half And Is back specific the get thanks guess less have on great. into margin maybe for then the we there's that you, more great. build those if the restrictions the of but trend secondly, in to a terms you. kind could any the I to we mix just XX%, you OpEx year eased? interested that And back evolving the of the over of in question excluding just

Erick Georgiou

Thanks, Drew. Yes.

on expense starting maybe So side. the

growing relatively and during us expenses obviously, put would think forward kept sequentially on careful, at likely flat side. place very the We resourcing quarter-to-quarter. those COVID, how spending the going We've pandemic. we that how So for we was use in we I onset the as of partner been that important of which restrictions in monitor

so tap, now with turning what slowly on speak, see line the growth. you'll think in I to us concert doing is top

kind of would way. that I model So

what right impacting probably and principal activity the market It's say, side, On I partners agency margin think is the quarter. I that. partners. just had mix would would in the by gross that, mix say campaign I word of in level too, for the impacted obviously is that of second the we always

we a that wouldn't it obviously I mentioned had out was that QX. had quarter. per activity that see in Rob LP record think economics. with substantial the plays and a unit driven We'll business. marketing I tend for does QX trend That by long-term that bring consider one very how to lower

Drew McReynolds

but Okay. That's revenue And to last great. an who to there's frankly, see for collegial in me. a number bit great And one follow-up know so eye-popping don't here this, ask little I improvement. of QX.

that. see to great So

down In either terms where of weakness, of greatest pockets by upside kind see kind turning of glass you laggards do geography? the of here, the or vertical or

Robert MacLean

really that the at Yes, kind of least think, U.S. quarter of airlines, opportunity has U.S. Drew, to the the jurisdictions. market hotels back the Rob. is an in in carriers we've about a second growth the grow still room all get the been not impacted U.S. lots the with the way it's has and have, still of lot very The And domestically and of had have strong, the driver pretty market. to I European domestic particular, results, airlines other market. in been heard clearly the

long So go, to there's going our should for really a I to forward. think but regions good way those all contribute us, in of which signs growth

Drew McReynolds

so Thanks much. super. Okay,

Operator

comes question Gary Research. Prestopino questions. Barrington Please with next The your of proceed line from with the

Gary Prestopino

Good afternoon everyone.

miles the charge here, questions that Exchange tickets. I just of Is programs, availability exchange exchange is? understand. these you credit couple availability an what that airlines you is to so companies a where card allow to Just use

Christopher Barnard

the miles. Chris. for it's It airline tickets, its Gary, for is actually not

American or think… turn you ultimate Emirate maybe private rewards So Airlines Thankyou what AAdvantage take miles. launched just case points and That's into miles I into your points can them we Citibank

Gary Prestopino

AAdvantage miles.

Okay.

Christopher Barnard

current their mile balance flight and redeeming of adding a their to balance for miles. you're larger the with So obviously customers then

Gary Prestopino

on And then pipeline Great. to to make QX sure clear I just through continued as talk the you want it from about I you're Okay. could has the halfway was here to how how build then build that. QX? quarter? And

Robert MacLean

Rob. Gary, it's Yes,

since we're COVID. of has probably the quite through I pipeline saw think strong, business we've or the new of been We accelerated beginning as indicated, quarter, I XX expansion think, three and expansion or new variety with products. new on with the partners so of coming partners on platform, we've XXXX existing second in of our and the XXXX, or had really either products a

I with think our drivers that about. Christopher speak that's growth consistent just have very heard you would

progress think I has So to nicely. progressed pipeline continue - quite

I think with we're is remember, and products - as that. forward, industry that just to well to growth seeing from we them for trend not demand and our look the looking their who are any services from programs, We're positioned drive and loyalty continuing. still help abatement

Christopher Barnard

I'll well. Gary, seeing limited to across strength the that. to add We're It's different one. geographies as not

world, previous the volumes So very regions. on around growth earlier some point the all Rob's strong seeing to of the transaction question, we're in while pipeline

Gary Prestopino

then on or variant? what's to experience and these any Okay. mean I to Delta are this starting I cancellations. that morning this going listening watching, some airlines it, think, was And said comments CNBC they I of on with

out obviously, you maybe would - you would for that and is why that had guidance quarter that quarter? mean, put didn't assume, great a gives concern, I considering it such close you So also I any this assume

Robert MacLean

Obviously, from But everybody their on and it. an or our like we're eye pipeline any in demand not Thanks, else. that think business I our partners seen keeping to slowdown Yes. an certainly eye members We're our this in or we've point. keeping Rob. We're Gary, forward. on looking it's

Gary Prestopino

of to XX% to things, I way media the the would Asia disclosure mean the you good that name I sensationalizes you there in And that in the assume that's up, a of question it. that terms just give have Pacific and that could signed you the tried you carrier? that because a carrier hear answer us Well, can't time, Okay. issue of I ask

Robert MacLean

the announcement we product. the typically and of the the of - we'll the new And launch when sorry, coordinate partner try Yes. launched

making products. suite development products So I was the announcing anticipate We're bit think we launching of at get brand of them into signed And the we and as we indicated, the time. would agreement. to little the a that to members, available when typically closer their to heavily it

Gary Prestopino

you so Thank much.

Operator

Instructions] The line with of Woo proceed with Ed comes [Operator next question questions. Ascendiant the from your Please Capital.

Edward Woo

any for more Or is, Yes. you the in the back plan of this year that quarter? had typically pulled the be of quarter. and the success promotions Congratulations year? do on the the you you'll think that second half launching you that My programs was into promotions that of question because just

Robert MacLean

QX baseline continues strong, Yes. indicated Campaign some Ed, its we activity strong, was was Rob. Thanks for saw very to that. his Erick as in prepared results, very remarks. improve. good activity

that activity So as of has driven. kind that Erick travel described near-term

QX all that, performed the was, as our of into are we the working was see I really planned all So in continue upside see our all QX. for half mean of went very promos half certainly their to partners part, well. year, there's activity campaign of most hard through well. It wasn't a case a very, for We'll activity second business bringing to kind very second significant and of the opportunity really recover. on who strong QX of still basis. partners and broad as our think revenue It

expect the second year. fully I merchandising plans the to marketing robust So and of see half in

Edward Woo

investments as the revenue well platform big more. in as investing mentioned coming going that to on and back Great. maybe as back be product bit little the product? making spending the guys you And Are is a travel business you back, then in

Erick Georgiou

Yes, Erick Ed its here.

the think product on investing something side, I always I mean, one, we're that's in.

us. for fluid very it's So

core is platform. this the part of and team a they're working very company, on R&D Our constantly

us see think stop don't I you'll So there.

Edward Woo

good luck. Great, well thank you and

Operator

At back I remarks. to like would over the time, session. MacLean this question-and-answer to this Mr. concludes for closing turn our call

Robert MacLean

you today's and thank for We'd with speaking call forward quarter third Great. all Thanks like look results. we when listening everyone our day. report to in on for to Good again us. joining

Operator

gentlemen, today's teleconference. and conclude does Ladies this

You this at your for time. participation. lines Thank you may disconnect your

Points.com (PCOM) 12 Aug 212021 Q2 Earnings call transcript