MOND - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the Mondee Second Quarter 2024 Earnings Conference Call. Please note this event is being recorded. I will now like to turn the conference call over to Jeff Houston, Senior Vice President. Jeff, please go ahead.

Jeff Houston

Thank you, Kayla, and good morning to everyone. Quarter Call. Second Mondee's to XXXX Conference Welcome James With Prasad Jesus Gundumogula; is our Operating Portillo; and CEO, Founder, Chairman Officer, Chief and and Vice Orestes me Chairman, today Executive Fintiklis; W. Chief Financial Officer, Dullum, questions answers. for be and present who our will and available results

these are contain undertake to of Descriptions and Before could begin, any our management in no obligation subject reports to Exchange are governance in and and plans issued certain growth, industry, results performance difference risks statements release and our may management that business, and press discussed to to this reflect non-historical and to Including including statements this call. Securities described forward-looking the statements was that morning. that this our conditions. We from the our remind our we statements in Commission, statements statements. occur assumptions, of forward-looking after earnings everyone these further uncertainties to actual that with other about release. These of other success, press general our development economic as like material a risks, call cause I'd forward-looking business our changes those revenue, have Mondee's growth our revise and and and related product evolution filed

reliance to Forward-looking forward-looking statements any results are that materially. differ are place on actual based on cause Listeners undue expectations not that uncertainties involve risks statements. could and cautioned to

investors.mondee.com. With is Reconciliations pleasure the are available release, call also During the available which press this refer measures Prasad. that, GAAP to my call, most in comparable financial it we turn non-GAAP at of also to over to the measures. is

Prasad Gundumogula

Mondee's and Earnings afternoon, evening, everyone, Second to our significant developments. morning, and Good discuss good welcome Jeff. and you, results Quarter Thank Call good to

strong later with adjusted We second are in XX% take revenue, and by pleased report growth EBITDA, rate net quarter year-over-year. a to very

the will favorable sectors. company equity announced a term loan preferred and that our also terms We of position at for much-anticipated refinancing long-term

reflecting impact our increased we our positive mix the product take Looking more to rate, by non-air. are which encouraged of closely, into improved XX.X%, XX bps expanding

XXXX, EBITDA, in QX XX% increased adjusted our for During Mondee's in net along platform-driven and non-air our revenue penetration. XX% market growth to continued with from in positions revenue us expansion QX mix share global transactions, market well XXXX. net

We are confident markets ongoing international acquired faster growth will sustained our of that revenue contribute to the and businesses integration increases. of the

We company are structure the sector. capital for refinancing favorable our terms with position that long-term

on and to longer preferred resources results now flow to loan our AI innovation the cash both outlook. execute plan. These to With underpinning profitability plans I travel. are to and trends Mondee expected financial Dullum, term to the its and the free equity, having the revenue, lead Officer, transformative flexibility and Operating duration business Mondee's anticipates while James turn initiatives who will over in W. some discuss continuing floor Chief and increase

James W. Dullum

Prasad, day, everyone. you, good and Thank

Let's start travel trends with some market growth drivers. remains for intact. Long-term

QX, and such softening affecting to we the see travel XXXX. Furthermore, of certain in flooding disruptive America experienced continue However, South Middle the industry regions by into expect East conflict. LATAM as of end did this quarter, the second the events re-escalating we catastrophic in beginnings and

being lodging rates. of regional demand in vestiges decline a from in few last and remain accompanied the airfares overall a the recovery, of moderation markets While the reduction is stronger by

include their an In direct as potential on their keys distribution of expected in product connections. to consumers. increase and expanding programs we more pressure differentiation, this addition, to more bargain income under service-related economic growth. In packaging Meanwhile, expect light suppliers supplier-driven this, placed global emphasis as to and targeted and spurring be such NDC continue higher who're to buyer inflation hunting, are emphasizing already conditions are

conditions of BXB significantly remainder While AI deployment short-term these overall marketplace emerging impact and a expansion this we platforms. have favor market softness the Mondee's on may of believe the the year, our

Mondee marketplace. the to Turning

During capitalized working through year-over-year. capital This previously. in platform, constraints our higher mentioned international growth transactions the XX% could not increase a delivering had on expansion for it QX, been we have been

of continue as growth values. and transaction lower international growth rate in by non-air in was bookings expanding and platform. rapid in gross lower-priced gross average marketplace transactions the strong with products EBITDA. The plan higher effect producing overcame accompanied year-over-year in flat strategy net international markets markets our bookings, Our our adjusted take in solid revenue do pricing growth global through on international primarily transactions deployment a in to by driven of our This penetration markets. We of increase result

the We continued AI around travel progress marketplace our expanding profitability, make boosting maintaining during leadership. initiatives to second in quarter and

features our the significantly enhance expanding existing is as and the Our and penetration options. across offerings of combinations This while improved new Slide current area appeal to we well the enhance markets new expected our growing is ongoing business of as and and streamline sales product performance accelerate enhancement, in infrastructure structure, further content, content to our Mondee's sales slide, focus you adding our base. on cost packages know, #X. In continue transaction as and

connection customer hotel as cover In enhanced net airline revenue. Further we fintech several engagement, with take later, pipeline. major content, supplier Jesus progress NDC chains highlights with our expect our in such of to connect tools the include and programs, to connections, direct addition, use content immediate as other projects and the connections further expansion of our rate will ramp in up increase and

planning America platform is summary, rate over as of hotel rate this By on of hotel With more hotel specific improved traffic take rate take a and these look example in our seeing as market the development far the features from way, with moving more year, pricing business and in year. In to XX% rest and the NDC connections so product our and place, the of increase continue in deployment our North well we execution. we're as conversions. into improvement we're the take material

market for initiatives improvement Our Mondee's revenue efficiency. process tools automation-led further include appeal, AI cost AI in management and of implementation focus with product further enhanced operations, greater expansion

be and as that will position services are full no we advantage fintech addition, our of to capacity-constrained. longer tools In take positioned all

expansion All of outlook. our to call and by this with rapid initiatives put Mondee's a of growth despite to for are line financial market or softness. I over profitability our the Mondee's further expected end this path operational now goals Jesus, the year for squarely historic and CFO, review Jesus? of efficiency in our pass performance will business

Jesus Portillo

you, Thank everyone. hello, and Jim,

our QX I a As rates like to that point otherwise all I on would to indicated. go basis unless are growth out results, year-over-year

highlights. with start me our financial Let

EBITDA generate performance and quarter, we this strong a margin. continued During to EBITDA net around revenue,

strategy, offering product been to diversify improves internationally has air, our take in which to our expand of marketplaces continue our existing core part and focus grow markets. beyond As rate,

of This and we lower revenue that in we a usual price. At of this and our because time, business moderated lower resulted to continue flat product growth required our international capital to transaction diversify half in constraints, gross accelerating refinancing working During delayed bookings, transactions our expansion. average We of adjusted air that grow. improved capital increase offering XX% the first working the the a carry led growth year, EBITDA. to same existing than and net

line with Our $XXX this quarter, year. last were gross bookings in in million

divestiture last for Our acquisitions net net revenue After and revenue $XX year, X%. adjusting million of of XX.X%. grew increased

rate basis check Our X.X% of was up points. XX

worth growth refinancing take highest packaged mostly which fully the by in delay rate. that is of improvement resulting take in higher-margin quarters, prior was this fintech As credit our ability lower utilize driven hotel and carries products. It rate the to the our impacted mentioning in with our revenue, limits,

fully with be to resolved this expect We refinancing. our

Turning to expenses.

terms $XX margin million from Our depreciation million, it compensation performance category, drivers of and spend EBITDA improving net to while and absolute amortization revenue loan in of $X.X optimization and loss increased noncash GAAP as our $XX.X to BXC increased peaked among as amortization, interest, million to profitability. On and a $XX.X such million million. basis, XX% declined items of of keep improve Adjusted in operating was revenue. XX% from XX% included million $X.X largest $X.X also this of as and/or percentage XX.X% which EBITDA in nonrecurring to improvement fees, be expense origination net a stock-based marketing The continue million others. reductions to our prioritize efficiencies down $X million by main and AI-driven $X.X we sales and from X% continue of our marketing, for X.X% management of business. Adjusted was

the for to million $XXX timing preferred compared capital to XX, beyond at the working cash capital. Operating term the and our and this are the cash letter a Looking flow million the subject sheet. to both June our the million, company XX, finalizing to XXXX equity end equivalents $XX announced and of cash provide refinancing with as Stanley in capital extend December of XX, quarter, the the structure Morgan is term of and partners to quarter, total of fintech offset this and refinancing in working our with a we that credit reductions At used negative $XX million over million loan. for funds shortly XXXX, million equity affiliated additional beyond negative $XX loan anticipates that to in preferred which limit credit $X.X million balance cash TCW of today certain XXXX. The at of end by December XXXX. We face respectively, million term we $XX XX, loan extended to expected in $XXX reserves of debt securing could compared and QX and was XXXX. delays XXXX, August September comprehensive of had $X.X In quarter the

is Year-to-date, million, were both million of some and refinancing flow get $XX.X to respectively. credit cash as working are free completed. limits $X.X operating being positive, the reinstated We cash these flow and

our now XXXX Turning guidance. to

revenue XX% EBITDA we increase the be limitation $XX XX% of at to versus measured an $XXX increase midpoint, $XXX and XXXX million, million, XXXX, representing now a to our between between versus $XX As net we of adjusted representing be midpoint. an million consequence of the forecast and million measured the described, to at

Let back it Jeff me now Jeff? Q&A. for to turn

Jeff Houston

for Operator, Jesus. we're ready Thank Q&A now. you. Thanks, Kayla,

Operator

Our question Northland Grondahl comes Michael from [ first Operator from Instructions] Securities.

Mike Grondahl

to up that just priorities over on could roughly, how If priorities, reinvigorate does kind you? for working And refinancing. think much you And capital Two be questions I go are of that congratulations growth? would those on spending free your to two, related it the capital One, helpful. what that. working

Jeff Houston

questions. your you morning. for much Mike, Yes, Thank good so

addressing question. your first So,

In we add. will much we'll to working terms as obviously, So, right? capital, mentioned have XX million script, a in of the how be that LOC,

of expect million that in, be another cash, us help coming capital. million terms of $XX working our will total revamp a We will in $X that

the affected priorities in of rate past take this I all during we point, the has growth, solutions probably think most while of most used mix. And, drive that fintech the were our of to of terms obviously, portion doing our the it's that highest will been covers because In months that these be few at refinancing. it product

Mike Grondahl

I And know, you're seems be penetrating might don't space? know, good more detail Jim, hotel-only having a little pretty don't it there like maybe, helpful. the I success

James W. Dullum

Mike, the I appreciate question.

are pure It's not in. expertise acquired. in of also we've We mean, picked packaging that more success having penetration. hotel I Remember, there, the with which up some expertise of some we've real companies some good just hotel. there's bring

get packaged we higher around is product, the as to So, non-air a carries product, that of take rate. which lot

So, up. picking we're that

so mentioned and significantly year other chains in emphasizing a the certain with direct more we itself; I we've in couple as are of hotel connections that, the agreements have the thing we've pipeline of previously, come. year added And done our hotel far will The program. the end program we've is hotels. We've we that been before with the major this improving think

why but North All far year. seen nice hotel the improvement that product the presentation of you've not take pricing rate, so those rate the in this we the the saw is our things significantly which take just and of help American

Operator

Brett Cantor Co. question next & Our comes Fitzgerald Knoblauch, from

Thomas Senske

earnings how are for how assistance. And been I us virtual Brett. call, also first, has AI-related the coming we there? ABI, traction Infinity an This mentioned guess, is internally, for that idea the if could how been specifically Senske on I you many through products? Thomas guess, know progress last More has I transactions give then guess, of I

Prasad Gundumogula

business. good us some is our for providing of traction have although be ABI than the numbers interactions seem So, great and to to transactions, less X%

sales the on project, in AI working this management the also the Infinity CRM have in to However, have are our Infinity provided center and project we we feedback is icing our and our mentioned, to that revenue which model, us functions. are version that marketing, includes time, we being of on same as second doing knowledge for all internal our platforms operations and you train operations through deploy employment placed the currently call our improving QX. At delivering our take to product, which

very at has deploy we our and marketing our business by more where onto cost our sets already we expense marketing presented and deployed function sales able which we reduce X% reduce of our improve of where by our to function. Infinity, expenses our take per results efficient transaction to we rate having all some are sales revenue an our management reduce that So, of and expect either good and operations or

currently under QX, is in and hoping of and planning very Infinity to to are of So, by it QX from are it. by our we we good deployment complete reap function business results and end beginning

Thomas Senske

seen And strong mentioned transactions, this. have in you may. overall with this international hotel weakness consumer see contributing wondering, Very more, know see I quarter, there to And a just if one spend? And start visibility we into when XXXX? weakness visibility coupled only. I contributing short-haul to then any ARPT I was a we again? decreased and growth international can expanding And pressure into continued strong you XXXX on towards last is to skew ARPT. and mentioned bit you encouraging in I guess, obviously, continued growth into the more travel just see any this just a into

James W. Dullum

to Jim. recover moderate It's would through see I year. we expect start Thomas. the rest average of Thanks, rate Yes, transaction Yes. here the think look, and to that

tends more they somewhat to for as the mix moderate we regional priced favor. our the our right. The in recovered even international in to transactions. to You're it we back the air travel should to few which haul down that in will continue fares and hotel been start though expand they internationally lower next that, does as short influence first, global even has see will markets see biggest be will more in expansion recovered, That expectations quarters, and rates back come that

would moderating price that. the now then into transaction average recover I So, is fall rate the on fall, put we go as and probably see stabilize we ticket year the next timing, to

XX% by time taking into So, the is in transaction our is average maintaining year, share. year. XX% we we and good in it our the revenue per Last also are revenue by answer the to and grew expanding ticket mid-XXs. But per ticket a this is trend at market tech high, same between that XX% inroads it and business paying the revenues this

ticket mid-XXs. expect the expecting continue transaction year have to XX to XX grow this we and to revenue XX between per So, year the and to following in we're in XXXX, into

Orestes Fintiklis

I the even economics. was working demand to working But for there have the QX, like provide And of also better the not is since suppliers in in able consumer softening the market because for for to were capture an point, it. the advantageous though more this the hand We more Mondee is model this important capital is and to to and didn't one desire The here. to simply business capitalize because capital QX bargains typically we on add to constraints. would fully perspective there

we look the XXXX model. we of to of as year be the So, and end market of of refinancing, following to dynamic, which typical able that should the business favorable our the is advantage in take such softness times towards completion

Operator

Darren Aftahi The comes from from ROTH. next question

Unknown Analyst

Darren. This is for on [Indiscernible]

Jim how bit little for about XQ what some fintech financing about. you talking of driven the with then the there? secured like that a portion until the of expectations And lower least a talk the was is guidance, softness in revised from seems at much could of XQ? it of are in First, Like that some versus

James W. Dullum

Yes.

XX% point, as down say by our is would revenue is fintech well our of working had of probably as that around because driven XX%, that at we some opportunities pass So, the restraints. to I this let capital

Orestes Fintiklis

entire the just not it but QX credit time of the because these to It's almost a financing, limits. securing open it's impacted then that's takes matter

QX on to it expect we impact this QX. So, be and

Unknown Analyst

sort when some lower, markets markets these the of guess, of the those I offerings where going And the of, all of things more of ancillaries? other a those do are the Or then add? and looking follow-up, expanding established some same, I'm as you as talking you're sort all to markets? are have some into rates your are

Orestes Fintiklis

of is opportunities. one Yes. That precisely the

is are market time, less is this share the And market favorable you working also best because at share, was the this capturing So, mentioned, requires strategy most the point the few which revenue, in to this quarters share. we with times, limited the capital. just transaction in very that market the last here of right? So, trended capture low-priced

And with of the a deals constraints attach better carries easiest back take could then ancillary attach not which have. as we fintech, can on revenues it higher trended rate. but that ancillaries, attach, attach to of one the we negotiate and just product is So, the the hotel better we at then that, take the advantage other that

the price without with the precisely And in transactions. higher and to in -- is now full that of growth strategy. not capability you transaction the the additional this high reasons of revenue gross at is this the mentioned, that much it's the dynamic seeing EBITDA volume, each particle So, are lower time, margins. you one point even because of that one And capacity attaches volume significant

Operator

Securities. And Instructions] from next our comes [Operator Nick question from JMP Jon Citizen

Unknown Analyst

Tim here for on It's man. Nick this

talk in or marketing? a bit questions. terms couple little our out Can what channels. called of within for intensity the [Indiscernible] like seeing a of the of I have about competitive Just you're taking dynamic editors your you me. lot appreciate just kind you A

forward plans any to to And Just the you change from point your your landscape see how guys' petite half? moving have second strategy wanted in do view? of

James W. Dullum

Jim. it's Nick,

Let start. me

transaction Orestes is of the strongly deployment on believe has the that strategy platform of which gives in and fully those penetrated we're think capitalize taking increase, allows the the to our the improve First both to share in wallet. market. the into transactions differentiation as also capitalize of as in we continue we We're just grow markets us the more a of AI us deployment current things, share, very great now position the working we great right? And think as that, on more is market. taking market described, in lead Again, positioned to all, What we certainly we base do international, market. to but this space,

we a headwinds with grow. We strong knocking a issue market. the capital forward this we position from of everything So, have this had constrained of little taking in we took out advantage we're stand position of pretty jazzed about think And park. this of advantage We're could. bit we everything to But in that us platform. the going we

Sometimes the for to and softness continue to it. deploy is Mondee strategy actually great

Unknown Analyst

the Just please. could, one which guys the in of a due year working terms have looking guidance about you kind of stability of airfares back and of to of of your guidance, half kind you're some of called actions know should fares. talked kind in softness more out of XXXX, to drive capital. down we And impact if the of from I your on capacity, kind taking help reduce out the taking and airlines lot into kind of the kind proactive seeing

end Any expecting of tenant terms the on Are are any Or to what of there? you kind that? half guys the improvement? of guide how of thinking of the airfare kind softness? you about guys In change the year, back color

Jeff Houston

point is great a your one. Tim,

the their for capacity, You're the they airlines. during demand in first what capacity is, was factors see in of didn't keeping the with which the year. absolutely half increase, strength load the general, increase the good not slightly reduced right. actually or of did Airlines And demand, certainly

all some of the such on they because of compete the constraints still face service in issues, of even they them. continue to However, the there service because have work coming With on. out for routes those struggle to that still that coal that, they issues remain

as distribution targeted will be pricing to use strategy think more they We a So, strongly. going using appear channels forward. they

general next to them. maybe little soft of see a are continue to expect different this using several some now, through that year, causing of economics into to be be the little back one is we little remainder the customer Price we going Right a So, a early fares We globally in would of bit them to off. year. think air of levers. sentiment of bit inflation prices

in they as So, that, price. far look I some trying because price decisions think decisions to airlines forward, make some so create that at the they're softness it make some

So, hopefully we general of on little a sort we probably stabilization picking but it think movement in here would trend we that's the next downwards still early starts see year. airfares, of that before the up that expect. part bit slightly a of But

Prasad Gundumogula

We market a very are expand very changes from opportunities there the into and these platform To that certain closely. being to are looking market, global markets strongly. performing

certain we that receiving the using other a growing and we that and business of product time, platform the vehicle the as mix us our So, expand are our segments optimize really managing and platforms the using the transactions same other plans. areas markets into in for our and to softness are with the have of grow to to expected it. At

price, great fit in opportunities very airline well although a So, being some softness see a that environment. there of the the stress the and we we in and inventory market, but on little marketplace, its that is

our are that So, to quarters. on in results next are And going we working plans. see in the few we hopefully,

Operator

remarks. Jeff conclude I question-and-answer This will and the session, over for final does back Houston any to hand

Jeff Houston

with everyone to or replay and quarter it any questions to Kayla, a in would transcript, or you, tuned thanks our schedule don't was call second the like the learn you about call, for if earnings us. Thank hesitate Mondee. who to more Please whether XXXX live, have

information can can us or at you send investors.mindee.com is website, IR you. an e-mail our get which Thank You on more ir@mondee.com.

Operator

conference call. a Have nice conclude That does day. earnings Mondee's

disconnect now may from the call. You

Mondee (MOND) 14 Aug 242024 Q2 Earnings call transcript