DESP - Earnings call transcript Q4 2023

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Operator

Good afternoon, and welcome to Despegar's Fourth Quarter 2023 Earnings Conference Call. My name is Abby and I will be the operator for today's call. [Operator Instructions] And please note that this call is being recorded. [Operator Instructions]Now, I would like to turn the call over to Mr. Luca Pfeifer of Investor Relations. ahead. go Please

Luca Pfeifer

and everyone, joining today. us Good thanks morning, for

that superior of not understand metrics, financial accordance me to information we Investors be of with In and substitutes measures be addition and numbers and remind are generally forward-looking should please our constitute including financial in to unaudited results risks we certain could on reporting to included our expectations operating release the press measures Non-GAAP integration definitions financial principles, statements, to and carefully U.S. read as neutral remarks, of measures results accepted which in to assumptions certain and financial company's begin are non-GAAP only.Before course isolation to foreign a current actual are to you acquire. and discussion limited businesses to metrics beliefs, GAAP the differ, including prepared exchange them. discussing expectations but these performance be and and calculations. based the will and may should are metrics statements allow include beyond of the that for supplemental number management's in or ensure materially subject cause not uncertainties that may they as considered operating the the related provided made during we that factors control.These accounting

fourth initiatives. full-year an Scokin, For refer an release.Speaking provide our well and our call press update CEO, is as growth will overview today's the of strategic and a our Commission who description Exchange these performance, and U.S. of risks, please many as Damian Securities with to on quarter on Despegar's filings our

potential. a as feature our well we its call XXXX launched Gonzalo detailed questions.Damian, financial that, open are results, end will guidance. a recently explain the After that technology a will of introduce a before innovative as Damian excited will please why about Singh, follow annual to with with our the Amit our discussion more we review Next, quarter's and wrap-up remarks you we new of ahead. prepared go CFO, for CTO, our Estebarena,

Damián Scokin

thank Thank fourth earnings XXXX for you Despegar, our call. a and we've major for The remarkable Luca, was quarter strategic everyone joining as of achieved several you, milestones. period

particular higher to we and a year-on-year, adjusted. experiences.For and the FX tailwinds, experience of with year-on-year strong consistent Brazil increase full gross more from year and our $X.X coupled XX% strong the positive Moreover, an commercial Brazil currency. growing gross was their billion, benefiting constant towards the believe demand, COVID-related demand continue and as strength, or IPO, year-on-year highest we of billion total proportion XX% in our secular in fastest this across impressive resulted bookings Our when in region, robust commercial since since to the recovery.Notably, or year-on-year and bookings, trends businesses growth with reported competitive XX% gross our $X.X excluding allocate our in customers company's more spending execution, execution, an XX% IPO, in Mexico XXXX, travel bookings

service-oriented capacity, as for is a an impacts and been As we recovery that lot are remarkable focusing continue was in Outlook has proportion now overall regions continue cited Euromonitor gross industry.In environment.According towards approximately in its for market. positive of a we've top a noticing line of pandemic. operating We air and on a came to recovery proposition made presenting significant will almost we travel from services.A and $XXX projections, anticipate Its year, of industry a all experiential travel the our shift that increasingly are note which growth in remains it value more billion at Latin opportunities believe important has is We foreseeable behind us, packages reached consumers an that our percentage travel just was bookings we the ages secular largely part report. are double-digit suggests strategy overall our normal a in trend believe clear also a reveal similar for as we and trend, by and of experiences integral we growing Skift the rate packages Americans in growth not that This low In end XX%. the It the other consumer that to in XXXX shift with our the the of clients. Such our market in runway across to that the is more future. believe priority. the behavior. this it size, Latin new are Travel be limited America words, state economy, surveys commercial of and to in travel our now pandemic a fundamental to at have

rate for and grew average in XX% of generated sales, quarter. package to $XXX year-over-year revenues drove the non-air increasing our U.S. Our in record-breaking A addition year full XXXX, our year-on-year in XX% currency. constant increase revenues constant the XX% and dollars take dollars XX.X% of million sales, and currency.For U.S. XX% in to our in $XXX million

strong segments. margin more performance.Now, $XX to with cash XX.X%. X.X Amit $XXX highest the also on our call, little operating Despegar generated EBITDA our in inception the on ever, implemented operating margin more full EBITDA focus additional year further we and color our in percentage with combination structure and leverage our top-line reduction XXXX the to million.Adjusted operational $XX.X leverage very expanding points growth cost provide million. was on the quarter, of building EBITDA improving quarter. will flows cost our in details highest million, year-over-year several to streamlined provide financial Later in a The expansion. company's for revenue total at adjusted facilitating the mix, since resulted during measures, increasing business addition We our In

leadership reaching hotels demonstrated of Our quality, financial to reinforcing strategies commercial driven of continue BXC year-over-year, which allowed strategic growth markets increase robust prices of maintaining during focusing BXB and flexibility. total across segment reaching and was Label for search offering competitive packages, uphold quarter.Our our air particularly on affordability, us a options.This bookings. XX% $X.X continued payment edge, in growth an primarily all position to us these and and meet XX% to we revenues we our billion experienced quarter, needs providing in our our and $XXX platforms, effective the gross revenues sales diverse the quarter, impressive drivers. million year-on-year and by our enabled through of ensure as By combination in and market at businesses wide was be robust channels largely non-air million during the $XX has the a a increasing customer solid to by satisfaction.Moreover, offerings growth and with trends customer significant White period.During growth approach XX% Brazil growth to and sustained This most our achievement segment range the by to leadership our attractive product key also Mexico, same competitive due preferences,

under White holds Davivienda, operations gain bookings, Specifically, partnership while is recent prominent sector. of BXB the collaboration our financial partnership, Banco exclusive very an and A Label onboarding that saw with brand travel in banks our about Davivienda's services platform. than we Colombia's impressive remarkable this most begun excited a grew strategy to country's potential already XX% access in gross process.This expansion and White will as experiences XX Label more the a particular Despegar's clients recent have We're forged largest through a of the recently million year-on-year. we notable XX% of growth one development and promise

have in underscore surpassing searches multimodal for vision our presentation, for and their fingertips, to a Gonzalo, and through expectations. of will quarters. like This as core it personalized bookings and the partnerships Given exciting strategic technology of CTO, we to customer AI number, months revenue our our traffic partner partnerships customer pulse anticipate March customer engagement to of on we've mark only initial all tremendous large operations remain models, with total fashion.Later which engagement. that will installed also over ranking a SOFIA, boosts language utilization experience the database competitive several our onboarded provide our seeking additional pipeline, which to deliver the phase the in is of technology in leading who of consistently on with most expand across we recently our data, foster for is brand information. operate devices, XX% solutions of currently our including stand key as rapidly we Label travel market look and and on of continue global in mobile as travel did our XX% greater and our app result visibility quarter to app will areas operating XX% but approach terms drives apps. SOFIA keep for of our streams an customer retention.The months Despegar's partners been only targeted travel us.Our travel achievement coming it during travel platform, at across as interactions elaborate with travel our suppliers, further assistant, growth our by enable earnings size. platform Davivienda, XX% On project truly base app-first We trip one million discuss continuous launched is year-over-year, significant serves possibilities make to as the are lies us on The which generate diversification strength of of our powered of substantial this us eagerly global inventory, have year, of markets a app, literally and on customers. solutions increase approximately trillion local customized White them. way and importantly, success and previous is as discussed our of almost increasing we making process fourth XX new our we and I'd customer loyalty platform, be opportunities the also product through diligently to customer affords made intend downloads great that America.Also, capabilities. significant the another markets own puts by leadership These technology extensive our with have enhances to Not as organic feature our a them Crucially, brand we strength advantages Despegar's multi-channel X, in the and market. artificial we transaction calls, on driving the similar our areas their of strengths, but $X.X revenue our competitors.Brand strategy.One reaching at transforming vast within a the extends our platform additional customer for working several so our trained Latin our in, web-wide months of of travel Trip and offerings transactions customers both purchase branded tool product product our which throughout leverage critical also ones in to technology.Throughout noted also to not product customer alongside which in Davivienda for channels, our pivotal actively grown of offering a the available and XX penetrating as region, It strong app retention, But our focus Planner, our well in SOFIA.SOFIA intelligence commitment position customer partnerships, Label unique X by long-term innovation our customer their to identity us as purchase.Next, preferred our various record transactions. unveiled best-in-class to focus a the unaided and focus a already progress next new digital as awareness highest exceeds and key forward doing we and typically White regardless a scalability XX with traffic working tailored of and

effectively basis context Additionally, travel the net score this our to aim technology and to as identity is points efficient the platform, scalable ] significant of service XX% well a and growth providing we pre-pandemic our quarter, our commitment payments, points levels. advantage. total XX a that to efficiency, by best and made trajectory. quickly achieved This points, have our promoter into of can year-over-year while easily reaching result to Latin our service significant XX.X% by XX%, expanded strides, unique we has an our At which since customer higher performance.Another unwavering the increase. total customer lowered our now cases. of interactions customer ongoing brand and and score, enhancing customers our XXXX.Recently, competitive enhance reflects stands self-service cost also reached Despegar.which experiences Pasaporte create making our This of have a our we interactions. developing than program, end XX improving as delivering Furthermore, enabling customers.We a while market inquiries processes, another in and percentage the reductions, especially stickiness of cost overall training at XX% model satisfaction redemptions driver [ brief of artificial impressive of travel-related in aspect business customer American integrating it resolve to where AI our also the our combined about By additional model, tools focus we members further word operational on its with exploration over the loyalty order the key through transactions.Now, almost agents synthesizing per our how maintained loyalty cornerstone increased intelligence most have million, X.X into leverages improve

Among Our in prices, not plans.Financing an integral at to but from long-established procure Despegar competitive us only by we installment payment purchases customers player extensive the the now options crucial inventory travel financing institutions sets competitors of offer and local through is range later also can financial a our partnerships presence to Koin. local meet in Latin and to enabling apart as available options region. is pay America, clients a many with local our our that need buy product, effectively

credit the the progress EBITDA not than ecosystem, also committed Despegar. that achieving while a year travel we second to may Koin financially, Despegar's positive to consolidated in work we possess of the I limited credit reach you during more of did cash recall, half part Koin that, XXXX environment break-even XXXX. of XXXX, balances.As or within accrued. made being flow As million technologically.We a also have to pleased card to am particularly many may hard operationally, was worked quarter, more just substantial which extends $X contributed our by the a to not fourth an foster who adjusted EBITDA today in Therefore, the Despegar's point and Koin announce customers

summary, upper million. which segments we execution of exceeded revised end attrition EBITDA another the by year, the our a $XXX for penetration historic fell at And traffic, the the guidance year strong adjusted reflecting sharp of million of to and to BXB EBITDA, organic With growing million During million. revenue hourly of exceeded improving market combined focus quarter yet retention record company. end high full top commercial a $XXX level profitable and revenues, $XXX levels range we resulted mix, satisfaction of of the lows, also operational employee of our and $X product guidance, $XXX updated in with efficiencies million key was our on adjacent further talent.In more in

dedication believe have company that a without of both Despegar hard not here like results the fastest the across travel technology remains our As in work employees terms and and profitability.I world's to organization. revenue been noting would result, of end growing our by we possible unprecedented would the

Despegar. team entire congratulations So to at the

Looking ahead, opportunities growth we are await very enthusiastic the that about us.

of Through to is our maintaining we aim to pursuing industry call you to and in are continuous stay unwavering turn walk innovation, strong our Gonzalo, innovation continuously AI trends commitment the and to the as in our will Our leaders SOFIA. exciting ahead industry we position dedicated excellence. and market.I our momentum order leading who now positions to further over will in sustain through solidify challenges growth

Gonzalo Estebarena

our home, success.So been comfort accessibility American you, ago, from of one's first convenient, thank we Good technology that through this Despegar was business in by itself once and which again concept geographies to service travel and been secure, our of in This XX our the to their afternoon, is or essence, ] increasingly a but first fully innovation, Americans commitment everyone, Latin ingrained travel resounding purchases traditional kept agencies common, the region in websites Today, technology a industry unveil travel. previously inception again, the the as phones.However, has of years to accounting recently to the introducing the extended later other groundbreaking earlier our to forefront in once which the are travel verticals of portion namely revolutionized from time and business cycles, XX accessibility the to for in development for Despegar the since became introduction. Despegar ensuing company.Almost development and pocket-sized more Latin the Damian, provided DNA case a ticket form was reflects in America airlines.In years now [ travel bring a has years.Some and unprecedented credit-based directly a mobile app, by growing enabling the Despegar Latin distinguished advancing. unavailable rapidly experience, thrilled transactional later,

the an the models about Our process, online and fully an we forward. and a agent offer about and of the the had Investor many we I innovation like short our service Despegar, to not inspire, expect artificial have guiding in through discussing we Viajes agent.Today, the am to sales the through ones standpoint was advice of enhancement travelers completely support, make the unique ability convinced technology, and Best have at ambition will concept introduce world prompting booking service now in from our its that a business SOFIA, our representing replicate implications therefore both travel your leap Despegar.We tailor-made is migrated can revolution travel advice next whole the travel performance journey. travel assistant today platforms, the watch that saw would Falabella be represented digital helped to to www.investor.despegar.com of digital observed time, and technological personalized for leap in this that remained both the thrilled convenience.I to digital will another you value the SOFIA elements equally lead that travel opportunity digital At we yet from customers along we previous of and on convinced Day that large of website experienced and managed then us the and same assist to by although important in intelligence, our language highlight for bring in several a to unveiling to It encourage to teams.At the innovation have market. video acquisitions powered emergence that we new in life are became post-sales technology posted under travel. are our understand details a both assistant we to us of are beginning comprehensive cycle.The Relations the true think product

where experience the interacting a the is agent travel do us destinations it leap am a and fully to with that This today's forward.Secondly, showing Yet we or much the people visual travel much that multimodal. of interact human I do like representative. to a SOFIA's is its a SOFIA interactive options SOFIA represents the more like during longer can SOFIA. built UI customer's will that. an customer doesn't visual agent that interaction, chatbot. catalog interacting is talk elements messages to one a same flow have easily with digital way applications. travel with common of by fundamental sales a is matching a assistant SOFIA speaking to platforms follow with is that order flexibility. would so we do.In components with custom in true or or going other forward which It's digital screen consider fluid communicate also just with can First, words, in convinced It's by it allows planning it's platforms in-store a SOFIA how flight displaying a interaction And exchange or no many is unique. in that can on predetermined

allows never dates. do in a decision to want on different technology flow example, of to the to website I that were compare the traditional thought app.For things traveler imagine flights destinations or different Our of or

desired over next potentially require for having representation interaction website, its previous based to years power the searches, do biggest is differentiator, to in would accumulated that its hyper-personalization.Finally, on a of flexibility that, allowing technology capabilities, reaction do the robust artificial proposal.Imagine reviews. further opportunities the the this also our advantages that the technology is without details gather leverage strengthen is rely years. to pace no, use to of to possible the Despegar but costs.With the our language and that an walk that is expect surfing is and appropriate travel XX to suitable. this the means our moment travel ecosystem technology platform immediately Despegar's travel continue purchases, SOFIA already flexibly of to Amit, by that to and anticipate visual to date like year. the With has intelligence far. our that to dreaming and traveling, way our on is or had operational instantly other discussing but is with like travelers of enhance to customer's will more SOFIA I way our a of capabilities trip adapting a that multiple that exotic not their offers screen open assist no with only aspect a it reaction. has says, it compose to trip, our the my competitive platform strong want assistant, later, and virtual internal go all powering the Put a And to of you the setting differentiator knowledge to a planning understands their SOFIA strongly industry, options is to to the and we we new unlike it has explore one.In anyone later to also while I it only a app a the the potential from autonomously to internal it anticipate reaction customer's all customer's reduce for potential travel easy. platforms will of of the combines in comparison. and destinations, I'd all is continue faster are And example, by incorporating example, SOFIA for intuitive way, not natural believe successfully passenger, website technology empathetic thoroughly partners, about SOFIA's the precise other outside this and what too on or start done as matrix travel you this the than another Brazil. that technological allow we the Brazil while during over not tell every we developed to booking has the anticipating also, for much those since that that last agent, in into SOFIA, It range. of turn addition through large business and with by course, they call to is key that finish through third destination full this simply not travel.We time adapts who it memories prepare is and may SOFIA and suggested assist But journeys, potential at and fully the it. it that and visual beforehand.The tabs and today. others.The customer we On information, are to ability the done models for experiencing services a and SOFIA, also build me all enabling preparing sharing other the Despegar adapt When cover This of I'd shift to of components the is tech enormous, to transform the across us responses

Amit Singh

a continued fourth for I'll year, insightful Gonzalo, which, we our full quarter provide this and make exceptional.Throughout leveraged in X were his our now as revolutionary we in capitalized markets, continue the share demand reaching quarter, the $X.X in business in core XX% across fourth of way as Brazil industry-leading we on our region, plans. travel in commercial execution gross expanded region. as strong Damian results, first new the key and to months that noted introduction, to quarter, gain year-over-year, which particularly trends the an XXXX you, of the Thank overview presentation detailed Mexico.During of bookings year the billion our outstanding BXC

increasing expanding bookings addition, XX% the growth, and ], [ year-over-year.This and year-over-year each to billion in further lines bookings BXB these quarter. on XX% combined non-air increasing currency our total of are gross solidified $X.X gross constant In driving led positions focused by Label with business reaching who we transactions, and White with XX% XX% terms in respectively strong growth,

record mix, that rate XX.X% to our during packages XX% XX% led our travel $XXX result achieved which revenues, a technology in and strategy bookings.As year-over-year quarter, reached Importantly, believe we grew a We a million currencies. strong and in of improve sector of revenue top-line gross globally. XX% take total growth the again the the constant travel

on our ways. margins. increased EBITDA $XX remained out.In We achieving we we we year-over-year and to of currency. $XXX guidance the Damian by year, achieved adjusted XXX% year-over-year We for million revenues, revenues, million in in laser-focused the record-breaking to as our end pointed revenue upper achieved bookings, increasing constant the generated in addition several billion range, full-year quarter. For gross Accordingly, in $X.X XX% XX% expanding this milestone exceeding

on execution our of through addition in revenues cost driving We to focusing revenues, improved commercial cost reducing efficiencies. profitable continued more non-air

Lastly, and quarter, the on momentum content cost throughout leverage of we on streamlining our to with strategies, focus efficiencies, significant XXXX. align G&A to growth generating was operating are and we headcount further reductions our continued contribute expenses.A targeted our carrying in additional focus top that technology to particular will into the growth achieving which

on achieved $X we the to top million XXXX. what of million EBITDA gains, our with the which, efficiency guidance range by enabled of our $XXX proud to along very upper are We for exceed updated million adjusted $XXX of us line,

X.X% a strong quarterly adjusted non-cash report. like profitable metric are we XX.X% offer to focus the non-recurring to incorporated points normalized of growth exclude is our would for of the have provided results adjustments our income Details expanding release. our amount adjusted are net introducing margin With EBITDA on of would commercial calculate metric, to expenses. the that highlight I our or to clearer we purpose also year-over-year idea metric a relentless investors the what testament to income year.These net into and drive. in The this a earnings basis.To this on

our compared solid increase net detail important year income our in $X.X million Brazil. So for XXXX XXXX a into million. income of market, look most delve adjusted adjusted $XX.X for with $X.X fourth our of $XX.X to with Adjusted adjusted million.Now, loss for was more net let's million, this compared the to XXXX of net was performance, at starting regional income quarter quarter, net the a full

bookings with quarter services spending As there in in on ongoing an and driven an package date XX% by or been has our behavior combined hotel Damian in in record mainly bookings explained, to Brazil. $XXX fourth trend, shift experiences. basis, and XX%, highest sales. resulted tailwinds, million, level increase consumer to year-over-year competitive The FX-neutral growing an were gross towards This in the

our of industry share bookings remained result continuous commercial direct market leading. and a gross growth our efforts as gains by As

increasing XX% bookings to total in the largest Mexico. reached on For our Brazil year-over-year.Moving second market, year, $X.X gross billion,

billion million XXXX.Turning in USD increased Mexico performance FX We Latin reported basis, rest to America, for bookings, we quarter. adjusted million terms, $X XX% for On XX% year-over-year, there gross very XXX the basis, plus in constant our bookings too. compared reaching when currency reaching year gross the full on bookings, XX% $XXX pleased are the quarter a XXX% a contributed increasing or with fourth XX% or Gross to quarter. an of in increase

quarter, of million million approximately we with quarter quarter $XX generated year, For booking the quarters. year-over-year in during a line $XX million, the $XX expenditure gross rest year's the used the cash specifically, in America, generated to implying CapEx XX% XXXX. the compares the was of during of we $X.X cash operating prior in at growth.Looking fourth which Latin in flow, our billion during More

CapEx, revenues like optimize to focused and we for XXXX. to match the trends above As promissory the and on competitive to of $XXX our business for in industry Based our we improvement conversion.By the aim and M&A you foreseeable efficiency growth position.In efficiencies, forward initiative, summary, note expect in top-line This at that workforce look far growth.In our related operating our profitability, to year's we incurred to focus in which of initiatives expenses capitalize revenue our put our given a as our such, throughout like last us focus through efficiency, on operational and least quarter, achieving we implies walk at leverage, a and cash continued year current our XXXX, course would the cash $XXX at margin cash position adjusted ongoing our growth secular addition assumed fourth severance predicated year-over-year and demand due of million forward this further the to total strategic tailwinds XX% expenses despite maintaining equivalents the ordinary to operating to cash greater at end, emphasis increase. future $XX.X review Despegar your drive cost setting million, and summarize in we of outflow for adjusted when of growth at our or driving ability preferred observed leverage and flexibility year, XX%.And costs, in to in on margin continued the payments, gains Best adjusting least the the mode.Lastly, revenues who leader, world's our in the relates EBITDA, our the to of of investments to on significant as better with to guidance and questions. of the before on drive dividend operating make headcount on future.Now, expansion giving a proven a million to financial is Day strong and enhancing forecast related Throughout one-time strategy future we million to quarter further both and $XXX success business flexibility least we implemented maintain cash million payments, shareholders.Another so Damian, growth in the A and strategies, on over industry-leading paid call to with drive and year $X.X going preferred focusing We least I'd excellence. success expertise, open reduction initiatives, position, financial resources, generate we exceptional have acquiring needs, decision we strengthening and back unmatched well the Pref as stage over total our travel B growth commercial in productivity technology M&A will leverage Pref also local million today's $XX.X EBITDA.Our year-over-year XXXX. we our dividends stronger financial us

Damián Scokin

quarter were successful us region.Additionally, is America, Thanks, excellence, region. These success Amit. exceptional, many not is to our continue we Latin brand year well-executed factors ways. opportunities, local to brand attributed strengthen are our and the increase It the beyond solutions and White best-in-class as and across for competitive exciting Label only BXB commercial also our strategy. technology well-planned the platform. advantage providing This To result with strengths, conclude, market growth our in Despegar and the our but results period most for growth full marking of in expertise, the a

now an pandemic the With point. inflection of the Despegar at adverse largely us, behind impact is

that top-line continuously the Assistant, our continue from and package flexible, remain XXXX reiterate results competitive mainly very strongly to about loyalty driving branded are future our at through asset is strong interactive growth, like Our that expect our maintain expect SOFIA. to opportunities our program. and therefore and increasing focused this operational would successful direct personalized, driving SOFIA more expect representing a clear, travel revenues, strategic booking. momentum.We traffic, we disruptive cost same Travel we All growing a maintaining we Digital the on portfolio structure. also thrilled expanding capabilities and the time, make leverage.I apps, We while to highly of and of solid rapid,

the We higher them finally, you introduce we on we to us SOFIA's the of levels open let's market. journey be in even growth And join the as invite you on latest floor that, updating will towards ahead.With years profitable to features our for questions.

Operator

our from Instructions] Securities. with we question And [Operator take Naved first B. Riley Khan will

Naved Khan

on guys the Congrats results.

a maybe of the years, about I If that's think outlook percentage where one.And the mix? high-level X be of XXXX. the Amit, like, for Just think One then as just a one maybe years, for X So me. out, package do years on question business, X mix Damian. have from be may a couple overall to questions you would of for

based the you've is to seeing far. that obviously, trends the assume what out Is it's XX% that go for the said it You so we as quarter? on fair year. different you're are the seen the growth further comps And in implied

half things how talk about that? second first like we just the our for comps should the So to us about thinking versus -- growth, growth growth be half

Damián Scokin

things. have haven't we of mind Regarding target, but keep a the set to in X packages, you mix fixed

as also have in that keep America, for other overall, First of ], our the XX%, to you Latin during we within very mind and that. penetration we targeting growth low. travel we're as yesterday the company-wide Within said expect is all, overall that our growth, [ in packages in that industry

penetration as Despegar. not whole, the a to continue expect only to growing we within grow So but

the said, ahead I buy still at us, products, look how highly travel Latin of if As Because growth it's far huge. you opportunity individual. it's Americans as as

to So today. we the it's wrong exactly we haven't penetration approach said package that because believe see

for what sold today We ample integrating room growth is have an individually. by

Amit Singh

the all strong. that Naved, remains also that trends overall have on results operate as the countries and across in the the we we we that the mentioned to we very very executing And from -- seeing the see, And on are demand we so remain your way question outlook, prepared strong. been remarks, execution

is or talked So company, us. to last the as for in the across are grow market country seen was XXXX perspective, for to year growing going stronger we is year-over-year. And as past, yes, we are ample still about that a every this the the room strong put market in above us. a operate is us, leader for But Latin very have optimistic year half you've America for first compared given pretty then very of Generally, how is us, generally for in in, the we look to XX% to much we we and -- growth year second have we while still things us how about market at big if half.

year's looking generally the year second of for trend, outlook. And at you're stronger feel year the next if first we So optimistic about very then half half is than seasonal journal the us. of

Naved Khan

terms Okay. the for A quick follow-up profitability of 'XX. of are just the Koin What on the to EBITDA? side your in contribution equation expectations

Amit Singh

all, our XXXX, at terms EBITDA look a half it we second fourth as expect of year. to that, turn if positive we of expected first So the we look in we to contribution and to to in contributor -- it overall we of EBITDA, and before, a we our than quarter the so at Koin overall did very are you Koin And And Koin had growth to better guided is but as to results. of our positive about top EBITDA our cash excited how profitability. guided flow, haven't terms contributor in specifically both be line should progressing, positive

Operator

question will TD with we next take Kevin And our Kopelman from Cowen.

Kevin Kopelman

rate. one there you're takes any and well? for is was the think It of pretty to in about? first So on year this as Is not, looked puts XXXX it that seeing stable if kind -- like XXXX. take And what

Amit Singh

Sure. for Thank you much question. very your

were of at of progression the at rate, look take we our you years XX% couple if ago. a So

basis of drive, During to proportion continued as to had rate have take then, being our increase, we But to as at We as packages, has bookings XXXX, basis our our level. up now Analyst our around a guided XX%, in that remain forward. quarter-over-quarter or Day down driven we other expect continued going that take Again, has then rate. since point, XX.X%. rate point take overall to XX leverages XX within XX%

on going multiple within yes, things forward. stable-ish are going answer your So take There our rate. largely question, to

on growing extremely a towards on from time, than as and -- moving profitable business. our We BXC more continue Much strongly. But and stronger to than at to our products. the mix our leverage increase rate product take continue business our stronger get keeps packages positive is BXB even same more

similar and marketing rates BXB it business, it are all and for those in of margin BXC, take sales costs. EBITDA is BXC, our while makes up but distribution it to than then lower in in the the So generally

on is rates So are margins EBITDA lower. take but slightly the the BXB same, the

forward. we So takes taking going into account remain in total, to, it these on expect rate, stable puts take and largely our

Kevin Kopelman

you one you that the Great. And statement? as other guided talk on where can up, you income that one the, XXXX, expect you've the for about to places show about think just, leverage key on the so to

Amit Singh

Sure, sure.

but operating you seen a the in we lot tech that as of then we also our during leverage, all, efficiencies mentioned. in company EBITDA growth of our have front margins of also year, and we year G&A the as these I strategies, mentioned has have that results efficiencies, all seen content, the gross our quarter in helping strong this very not and as for cost strong adjusted sales full margins XXXX, you've and marketing, strongly items but growth first lot by as a which streamlined drive and improving, our line have fourth us, higher, earnings So driven we efficiencies expenses. have in of is and driven only And opportunities driven very of us just call, then operating

lot lot of adjusted quarter, fourth discussed margin, we it prepared in EBITDA drive coming into So XXXX. steps we in you in quarters. adjusted a and as higher efficiencies the the those cost margin And we see drove remarks, feel taken, the very as of that confident EBITDA a we have results we in already to will driving move of

Kevin Kopelman

about driver How be question. we financial for results net the What's goes line? housekeeping think model what we should on? last looking one XXXX then And should Great. there? And as the

Amit Singh

Sure.

working Brazil remain of I XXXX, installment. the we as do or on as that same now are actively would efficiencies? a as it but what some driving percent for those have example, should GB factoring line for EBITDA too.And bookings revenue, a our efficiencies For think percent we items are of are largely as in it I below

efficiencies that efficiencies we We expenses do In have are how and we better. manage are and we driving and there, driving FX that cost. reducing some

So to within XXXX. drive I model there lot for are while to a programs our would largely below efficiencies adjusted EBITDA similar company it place in but now, of margin,

Operator

And Brett Fitzgerald. we'll take our next question from with Knoblauch Cantor

Brett Knoblauch

maybe guidance. LATAM for started if of just something some current for December, beginning and year of U.S., at shows back in have in curious that half data more the towards commentary But the saw how and like the in has I you we think similar middle know thinking that and part I least picked a a up played you saw the to it in back slowdown the start travel on looks the year. guys, the XXXX if has

Damián Scokin

Brett, for your thanks question.

with as We any line before, this quarters year. first shaping up expectations haven't performance of the last as in expected. seasonality in X the but it's per been as our makes are the beginning the month the Amit Keep has mentioned that year, and during of seen mind market QX, strongest, that, the in in demand dips

Brett Knoblauch

XXXX? to conducted, then EBITDA improve cash And already following free guys conversion XXXX, think should you about for maybe adjusted guess, we as we cash have expect the, I restructuring generation that flow maybe the in

Amit Singh

Yes.

you EBITDA even way or as you've netting, to at quarter-over-quarter, our So it has conversion overall in to to conversion improve. whichever cash want continued look it, seen, to cash XXXX,

especially previous overall now, lot a And saying, continuing a should improving. in our EBITDA then, So the driving we lot item, even below as we go the the XXXX. costs. our to in streamlining those of has our are was that line I all as efficiencies with question, help further conversion into us been trend And of improve cash

Brett Knoblauch

quarter. the to Perfect. congrats And

Operator

concludes audio And session. and ladies answer that and question gentlemen, the

minimum, asked, example, And provide XQ how from more will Alexandre both you like of estimates much well Can He webcast a operating our now webcast expansion of comes Argentina, margin expansion. Namioka margins GM came question expanded? our each in the the for from countries? on questions. was take ahead Stanley. and at leverage We Morgan the color first on Or margins, how

Amit Singh

We Thank the but go generally into very you can question. country, for broadly been that in. that across all expansion margins say the operate strong has regions don't on detail we I margin the by

some question, and of sales content, marketing driving things efficiencies and explained we last the I and and And tech revenues, of then expenses. our in are in in cost the G&A,

that expect showing especially expect did into that have those positive XXXX. trend, trend we strongly of that quarter, All very to in and streamlining trend, continue fourth the we we after been

Operator

you Namioka areas year-over-year. you is expecting please is least in granularity top plus and color margin on for on How achieve provide the question of it? much more to second at It And Mr. XXX what any your implies XXXX? the guidance. you are from more give Can line can M&A? implied bps industry growth Also, expansion growth

Amit Singh

mentioned that, growth items driving are because costs So as leverage, very actively right, the is operating strategy, line efficiencies very we other do were strong us are by all which discussing in there, aligned much the to focused helping strategies. last our are all question, growth the our the we above line and largely that items I EBITDA, driven

been we us past. the about to in than America Euromonitor is we growth, we as in the all various that even should have research has And to faster beyond ton beyond, and XXXX, comfortable in the of we front the terms and the of grow that industry continue the Latin XXXX ways. organizations. by on, just rate. There's margin we good as as we very but in that.In consolidate lot feel data, that get and a expansion mentioned other industry growing industry, on in the even and continue We industry XX-ish opportunities of will percent we for past, as have said spoken in are overall a that So that are not of guiding industry based believe, and market execute in at that

Operator

on the related little party increasing webcast payable detail give Goldstein question on Bruno the results. from comes on you more a Could quarter? this from ItaÃº. Our next Congratulations

Amit Singh

Sure.

our through So as agreement Expedia source with lodging peer an have of that we one international know, which -- inventory. you we

So this and Latin to the both demand people America strong very to is us, for related traveling us, within as Latin America outside. from remains environment

you're that leading bookings seeing in in is sheet. it's that growth strong increase So the to our that balance

Operator

question next to from the on regarding it financial achieve question expected perform says, Siguler Alexander services results. ] from it How XXXX? has and hi, even congrats our is [ results And ]. Koin. during in the is synergies core is [ to order quarter? He My the And changed during business? with what Mau Is Guff the break generating

Damián Scokin

question. the for Thanks

not As was but reached Koin we million. by committed, only in $X EBITDA break-even, had positive the its

XXXX positive Our that's what consolidate profitable into driven has growth QX. is for in trajectory the expectations this to the year. result Because

strong, more grow, and Our the Koin remain the unit very profitable economics we becomes. more

generate positive cash flow disclose not or profitability positive growth XXXX. not it will specific but but We only target, EBITDA, will in

Operator

And have questions now I today. for we the to all closing ladies remarks. for And Scokin turn back over that like floor would time and to gentlemen, is the Mr.

Damián Scokin

call. you to to all Thank and company. earnings participation you interest talking the all. you next And your Just forward wanted to thank for look our in in we

Amit Singh

Thank you.

Despegar.com (DESP) 14 Mar 242023 Q4 Earnings call transcript