UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15b-16 OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the month of
May
2018
Commission File Number 001-38209
DESPEGAR.COM, CORP.
(Exact name of registrant as specified in
its charter)
British Virgin Islands
(Jurisdiction of incorporation or
organization)
Juana Manso 999
Ciudad Autónoma de Buenos Aires, Argentina
C1107CBR
(
Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F ____
X
___ Form 40-F _______
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes _______ No ___
X
____
If “Yes” is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): Not applicable.
Despegar.com
Announces 1Q18 Year-over-Year Growth of 21% in Gross Bookings and 22% in
Revenues
BUENOS AIRES, Argentina--(BUSINESS WIRE)--May 10, 2018--Despegar.com,
Corp. (NYSE:DESP), (“Despegar” or the “Company”) a leading online travel
company in Latin America, today announced unaudited results for the
first quarter ended March 31, 2018. Financial results are expressed in
U.S. dollars and are presented in accordance with U.S. generally
accepted accounting principles.
First Quarter 2018 Key Highlights
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Transactions up 18% year-over-year
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Gross bookings up 21% year-over-year
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Revenue up 22% year-over-year
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Packages, Hotels and Other Travel Products accounted for 59% of total
revenue in 1Q18, up 570 basis points from first quarter 2017
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Number of mobile transactions up 37% year-over-year, accounting for
31% of total transactions in 1Q18
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Over 41 million cumulative mobile APP downloads as of March 31, 2018,
up 35% year-over-year
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Adjusted EBITDA increased 10% year-over-year
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Operating cash flow of $14.2 million in 1Q18, compared to $18.0
million in 1Q17
Message from CEO
“First quarter 2018 results were solid, with gross bookings up 21%
year-on-year. Importantly, we continue to make progress on our key
strategic initiatives with revenues from higher margin Packages, Hotels
& Other Travel Products increasing 35% over the same period in the prior
year. In the Air segment, we continue to gain market share even as the
industry has returned to a normalized growth rate and competitive
intensity has increased across the region,” commented Damian Scokin,
Chief Executive Officer.
As we look to the current year, we will be prioritizing growth and
making the necessary investments to continue positioning the Company for
long term growth. At the same time, we are cognizant of the need to
balance growth investments with profitability; understanding there could
be a short-term impact to margins. Along with brand building and growth,
we remain focused on three areas: 1) enhancing the customer experience,
2) continued shift towards higher margin Packages, Hotels & Other Travel
Products and 3) driving mobile transactions. We are encouraged by the
growth opportunities ahead for us and we have a strong and dedicated
team in place to execute on our vision.” concluded, Mr. Scokin.”
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Operating and Financial Metrics Highlights
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(In millions, except as noted)
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1Q18
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Pro Forma
1Q17
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Adj.
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1Q17
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% Chg
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Operating metrics
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Number of transactions
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2.5
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2.1
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2.1
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18%
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Gross bookings
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$1,231.5
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$1,019.1
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$1,019.1
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21%
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Mix of mobile transactions
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31%
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27%
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27%
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Financial metrics
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Revenues
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$148.6
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$121.7
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($3.3)
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$125.0
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22%
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Air
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60.9
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56.8
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1.1
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55.7
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7%
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Packages, Hotels & Other Travel Products
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87.7
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64.9
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(4.4)
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69.3
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35%
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Net income
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16.4
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12.1
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(3.3)
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15.4
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35%
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Adjusted EBITDA
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27.3
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24.8
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(3.3)
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28.1
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10%
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Note: For comparison purposes, the Company has presented
Pro-forma 1Q17 figures which include the adjustments required under
the new revenue recognition standards adopted since the start of
2018. The YoY % change calculated against the adjusted figures.
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Overview of First Quarter 2018 Results
Operating Metrics
Transactions increased 18% to 2.5 million in the first quarter of 2018
from 2.1 million in 1Q17, while gross bookings rose 21% to $1,231.5
million in 1Q18, from $1,019.1 million in the year-ago period.
Macroeconomic conditions remained generally favorable across the
countries in which Despegar operates, although growing at a slower pace
when compared with first half of 2017.
The Company’s business is organized into two segments: (1) Air, which
consists of the sale of airline tickets, and (2) Packages, Hotels and
Other Travel Products, which consists of travel packages (the bundling
of two or more products together), as well as stand-alone sales of
accommodations (including hotels and vacation rentals), car rentals, bus
tickets, cruise tickets, travel insurance and destination services.
Despegar’s strategy to drive growth in higher-margin Packages, Hotels
and Other Travel Products segment maintains momentum, reaching 46% of
transactions up from 41% in 1Q17. The share of Air transactions was 54%
in 1Q18 compared with 59% in the first quarter of 2017. The average
selling price (“ASP”) in 1Q18 increased 2% year-over-year to $490 per
transaction, reflecting continued product mix shift to higher ASP
packages and higher supplier price increases within similar product
segments. Brazil remains the largest market by transactions for
Despegar, accounting for 40% of total transactions, up 14%
year-over-year in 1Q18. Transactions increased 21% year-over-year in
Argentina and 29% year-over-year in Mexico in the first quarter of 2018.
During 1Q18, the number of transactions via mobile rose 37%
year-over-year, with 31% of all transactions completed on the mobile
platform, up from 27% in 1Q17. As of March 31, 2018, Despegar’s mobile
applications had over 41 million cumulative downloads.
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Key Operating Metrics
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(In millions, except as noted)
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1Q18
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1Q17
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% Chg
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$
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% of total
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$
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% of total
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Gross Bookings
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$1,231.5
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$1,019.1
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21%
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Average selling price (ASP) (in $)
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$490
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$479
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2%
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Number of Transactions by Segment & Total
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Air
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1.4
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54%
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1.2
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59%
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9%
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Packages, Hotels & Other Travel Products
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1.2
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46%
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0.9
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41%
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30%
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Total Number of Transactions
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2.5
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100%
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2.1
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100%
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18%
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Revenue
Commencing with first quarter 2018 results, Despegar adopted Accounting
Standards Update 2014-09. Under the new revenue recognition standard,
the Company is now recognizing revenue from transactions once its
performance obligation has been satisfied. Consequently, and for
comparative purposes, the Company is presenting in this report Pro-forma
1Q17 figures adjusted to reflect the revenue recognition criteria
adopted starting 1Q18. See “New Revenue Recognition Standard” on page 6
for more detail.
During the first quarter of 2018, total revenue increased 22% to $148.6
million, from pro forma $121.7 million in 1Q17, reflecting solid growth
in Packages, Hotels & Other Travel Products. Total revenue margin
increased 13 basis points year-on-year, to 12.1% in 1Q18, driven by the
ongoing shift to higher-margin Packages, Hotels and Other Travel
Products which offset the planned selective reduction in Air customer
fees implemented in 3Q17 and continued to date.
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Air
segment revenue was $60.9 million in 1Q18, increasing 7%
year-over-year from pro forma $56.8 million in the year-ago period.
Transactions were up 9% year-on-year resulting in market share gains
in the air segment despite increased competition and slower overall
market growth. Volume growth was partially offset by a 2% decrease in
average revenue per transaction resulting from the Company’s strategy
of selectively lowering air customer fees in several markets in 1Q18
to drive market share gains and provide additional cross-selling
opportunities.
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Packages, Hotels & Other Travel Products
segment revenue
increased 35% in 1Q18 to $87.7 million, from pro forma $64.9 million
in 1Q17, as a result of increases of 30% in the number of transactions
and 4% in revenue per transaction, driven mainly by a higher revenue
margin, reflecting a growing share of higher-margin packages. The
Packages, Hotels and Other Travel Products segment accounted for 59%
of total revenue in 1Q18, up from 53% in the same period of the prior
year.
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Revenue Breakdown
1
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1Q18
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Pro Forma 1Q17
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Adj.
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1Q17
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% Chg
2
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$
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% of total
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$
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% of total
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$
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% of total
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$
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% of total
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Revenue by business segment
(in $Ms)
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Air
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60.9
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41%
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56.8
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47%
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1.1
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(32%)
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55.7
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45%
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7%
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Packages, Hotels & Other Travel Products
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87.7
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59%
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64.9
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53%
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(4.4)
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132%
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69.3
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55%
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35%
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Total revenue
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$148.6
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100%
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$121.7
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100%
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($3.3)
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100%
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$125.0
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100%
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22%
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Revenue per transaction
(in $)
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Air
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44.7
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45.6
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0.8
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44.7
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(2%)
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Packages, Hotels & Other Travel Products
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76.2
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73.5
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(5.0)
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78.4
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4%
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Total revenue per transaction
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$59.1
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$57.2
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($1.3)
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$58.7
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3%
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Total revenue margin
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12.1%
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11.9%
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12.3%
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+13 bps
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1.
Net of sales tax
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2.
For comparison purposes, the Company has
presented Pro-forma 1Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
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Cost of Revenue and Gross Profit
Cost of revenue
, which primarily consists of credit card
processing fees, bank fees related to customer financing installment
plans offered and fulfillment center expenses, rose 40% to $43.6 million
in 1Q18 from $31.1 million in the first quarter of 2017. As a percentage
of revenue, cost of revenue increased by 378 basis points to 29.4% from
25.6% in 1Q17, mainly reflecting a higher mix of transactions using
installments and higher costs from customer financing installment plans,
a marketing tool that the company utilizes to drive conversion.
Additionally, while the credit card fee rate remained stable, credit
card merchant fee expense increased reflecting a higher mix of
transactions where the Company was the credit card merchant of record
rather than the airline supplier which allowed Despegar to offer more
attractive customer financing options.
Gross Profit
increased 16% year-on-year to $104.9 million in 1Q18.
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Cost of Revenue and Gross Profit
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(In millions, except as noted)
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1Q18
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Pro Forma
1Q17
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Adj.
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1Q17
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% Chg
1
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Revenue
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$148.6
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$121.7
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($3.3)
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$125.0
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22%
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Cost of Revenue
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$43.6
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$31.1
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$31.1
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40%
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% of revenues
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29.4%
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25.6%
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24.9%
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+378 bps
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Gross Profit
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104.9
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90.5
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(3.3)
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93.9
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16%
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Gross Profit Margin
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70.6%
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74.4%
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75.1%
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(378) bps
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1.
For comparison purposes, the Company has
presented Pro-forma 1Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
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Operating Expenses
Total operating expenses
in 1Q18 rose 17% to $81.5 million, from
$69.8 million in the comparable period a year ago, mainly reflecting
higher selling and marketing expenses. As a percentage of revenue, total
operating expenses declined 252 basis points to 54.9%, from 57.4% in
1Q18. The 482 basis point year-over-year decline in general and
administrative expenses as a percentage of revenue, more than offset
increases of 202 basis points in selling and marketing expenses and 28
basis points in technology and product development expenses.
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Selling and marketing expenses
of $46.4 million increased 31%
as compared to 1Q17. As a percentage of revenue, selling and marketing
expenses in 1Q18 were 31.2% compared to 29.2% in the same period of
the prior year. The Company continues to make investments to build
brand awareness and drive market share growth in an increasingly
competitive landscape.
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General and administrative (G&A) expenses
decreased
16%
year-over-year to $15.9 million, from $18.9 million in the first
quarter of 2017, resulting from currency depreciation in Argentina
during the period, lower bonus accrual, and a decrease in bad debt
expense. Consequently, G&A as a percentage of revenues declined 482
basis points to 10.7% in 1Q18 from 15.5% in the first quarter of 2017.
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Technology and product development expenses
increased 25%
year-over-year to $19.2 million in 1Q18, compared to $15.4 million in
1Q17 as a result of increased technology headcount. As a percentage of
revenue, technology and product expenses increased by 28 basis points
during the quarter to 12.9%.
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Operating Expenses
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(In millions, except as noted)
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1Q18
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Pro Forma
1Q17
|
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1Q17
|
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% Chg
1
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Selling and marketing
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$46.4
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$35.5
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$35.5
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31%
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% of revenues
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31.2%
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29.2%
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28.4%
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+202 bps
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General and administrative
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$15.9
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$18.9
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$18.9
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(16%)
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% of revenues
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10.7%
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15.5%
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15.1%
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(482) bps
|
Technology and product development
|
|
|
|
$19.2
|
|
|
|
$15.4
|
|
|
|
|
$15.4
|
|
|
|
25%
|
% of revenues
|
|
|
|
12.9%
|
|
|
|
12.7%
|
|
|
|
|
12.3%
|
|
|
|
+28 bps
|
Total operating expenses
|
|
|
|
$81.5
|
|
|
|
$69.8
|
|
|
|
|
$69.8
|
|
|
|
17%
|
Total operating expenses as a % of revenues
|
|
|
|
54.9%
|
|
|
|
57.4%
|
|
|
|
|
55.9%
|
|
|
|
(252) bps
|
1.
For comparison purposes, the Company has
presented Pro-forma 1Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
|
|
Financial Income/Expenses
In the first quarter of 2018, the Company reported a net financial
expense of $2.8 million compared to $6.2 million in 1Q17. The decrease
was primarily due to lower foreign exchange losses from currency
fluctuations and higher interest income from invested cash balances.
Savings were partially offset by higher credit card receivable factoring
expenses in Brazil as a result of the increase in gross bookings and
customer use of installments.
Income Taxes
The company reported an income tax expense of $4.2 million in 1Q18,
compared to $2.4 million in 1Q17 pro-forma. The effective tax rate in
1Q18 was 21%, compared to 17% in 1Q17 pro-forma. The higher rate in 1Q18
was primarily driven by our improving profitability and the depletion of
tax loss carryforwards in certain countries.
Adjusted EBITDA & Margin
Adjusted EBITDA increased 10% to $27.3 million in 1Q18 from pro forma
$24.8 million in the first quarter of 2017, with the margin contracting
198 basis points to 18.4% from 20.3% in the prior year period. The
reduction in margin is primarily related to investments in marketing and
installment options to grow the top line.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Reconciliation & Adjusted EBITDA Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except as noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q18
|
|
|
|
Pro Forma
1Q17
|
|
|
|
Adj.
|
|
|
|
1Q17
|
|
|
|
% Chg
1
|
Net income/ (loss)
|
$16.4
|
|
|
|
$12.1
|
|
|
|
($3.3)
|
|
|
|
$15.4
|
|
|
|
35%
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expense, net
|
2.8
|
|
|
|
6.2
|
|
|
|
|
|
|
|
6.2
|
|
|
|
(54%)
|
Income tax expense
|
4.2
|
|
|
|
2.4
|
|
|
|
(0.1)
|
|
|
|
2.5
|
|
|
|
75%
|
Depreciation expense
|
0.9
|
|
|
|
1.3
|
|
|
|
-
|
|
|
|
1.3
|
|
|
|
(36%)
|
Amortization of intangible assets
|
2.0
|
|
|
|
1.5
|
|
|
|
-
|
|
|
|
1.5
|
|
|
|
33%
|
Share-based compensation expense
|
1.0
|
|
|
|
1.2
|
|
|
|
-
|
|
|
|
1.2
|
|
|
|
(16%)
|
Adjusted EBITDA
|
$27.3
|
|
|
|
$24.8
|
|
|
|
($3.3)
|
|
|
|
$28.1
|
|
|
|
10%
|
Adjusted EBITDA Margin
|
18.4%
|
|
|
|
20.3%
|
|
|
|
|
|
|
|
22.5%
|
|
|
|
(198) bps
|
1.
For comparison purposes, the Company has
presented Pro-forma 1Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
|
|
Balance Sheet and Cash Flow
Unrestricted cash and cash equivalents at March 31, 2018 were $382.3
million, compared to $371.0 million at December 31, 2017, reflecting
cash flow generated during the three-months ended March 31, 2018.
Despegar generated positive cash flow from operating activities of $14.2
million compared to $18.0 million in 1Q17. This reduction was mainly due
to an increase in VAT credits, other tax credits related to a technology
incentive program and an increase in prepaid expenses to suppliers.
During the first quarter of 2018, the Company’s capital expenditures
were $6.1 million compared to $4.9 million during 1Q17. Funds were
primarily used for software and website development. Increase in
restricted cash reflects an increase in IATA collateral requirements due
to growing air ticket volumes and an increased mix of air transactions
in which the Company was the credit card merchant of record.
Additionally, the Company drew down local credit lines for hedging
purposes.
New Revenue Recognition Standard
Commencing with first quarter 2018 results, Despegar adopted Accounting
Standards Update 2014-09. Under the new revenue recognition standard,
companies are permitted to recognize revenue from transactions once
their performance obligation has been satisfied. As an intermediary
between customers and travel suppliers, Despegar’s performance
obligation is concluded at the completion of the transaction on
Despegar’s platform at the time of booking.
The Company currently estimates that this change in revenue recognition
timing will impact its annual 2018 revenue by approximately 2%, although
the quarterly impact may be more significant. For example, a meaningful
amount of travel is typically booked in the fourth quarter each year and
is completed in the first quarter of the following year. Under the new
revenue recognition standard, this revenue will be recognized in the
fourth quarter at booking rather than in the first quarter of the
following year at check-out, as it was under the previous revenue
recognition standard.
1Q18 Earnings Conference Call
|
|
When:
|
|
|
|
8:00 a.m. Eastern time, May 10, 2018
|
|
|
|
|
|
Who:
|
|
|
|
Mr. Damián Scokin, Chief Executive Officer
|
|
|
|
|
Mr. Michael Doyle, Chief Financial Officer
|
|
|
|
|
Ms. Ines Lanusse, Investor Relations Officer
|
|
|
|
|
|
Dial-in:
|
|
|
|
1-866-270-1533 (U.S. domestic); 1-647-788-3415 (international)
|
|
|
|
|
|
Webcast:
|
|
|
|
CLICK HERE
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
This announcement includes certain references to Adjusted EBITDA and
non-GAAP financial measures. The Company defines:
Adjusted EBITDA
is defined as net income/(loss) exclusive of
financial income/(expense), income tax, depreciation, amortization and
share-based compensation expense.
Free cash flow
is defined as cashflow from operating activities
less capital expenditures including capitalized software.
Adjusted EBITDA and Free cash flow are not measures recognized under
U.S. GAAP. Accordingly, readers are cautioned not to place undue
reliance on this information and should note that these measures as
calculated by the Company, may differ materially from similarly titled
measures reported by other companies, including its competitors.
Adjusted EBITDA margin refers to Adjusted EBITDA as defined above
divided by revenue.
Definitions and concepts
Average Selling Price (ASP):
reflects gross bookings divided by
the total number of transactions.
Gross Bookings:
Gross bookings is an operating measure that
represents the aggregate purchase price of all travel products booked by
the Company’s customers through its platform during a given period. The
Company generates substantially all of its revenue from commissions and
other incentive payments paid by its suppliers and service fees paid by
its customers for transactions through its platform, and, as a result,
it monitors gross bookings as an important indicator of its ability to
generate revenue.
Number of Transactions:
The number of transactions for a period
is an operating measure that represents the total number of customer
orders completed on our platform in such period. The number of
transactions is an important metric because it is an indicator of the
level of engagement with the Company’s customers and the scale of its
business from period to period but, unlike gross bookings, the number of
transactions is independent of the average selling price of each
transaction, which can be influenced by fluctuations in currency
exchange rates among other factors.
Revenue:
The Company reports its revenue on a net basis,
deducting cancellations and amounts that it collects as sales taxes.
Despegar derives substantially all of its revenue from commissions and
other incentive payments paid by its suppliers and service fees paid by
its customers for transactions through its platform. To a lesser extent,
Despegar also derives revenue from the sale of third-party
advertisements on its websites and from certain suppliers when their
brands appears in the Company advertisements in mass media.
Revenue Margin:
calculated as revenue divided by gross bookings.
Seasonality
: Despegar’s financial results experience fluctuations
due to seasonal variations in demand for travel services. Bookings for
vacation and leisure travel are generally higher during the fourth
quarter, although to date and prior to the revenue recognition change
beginning in the first quarter of 2018, the Company has recognized more
revenue associated with those bookings in the first quarter of each
year. Latin American travelers, particularly leisure travelers, who are
Despegar’s primary customers, tend to travel most frequently at the end
of the fourth quarter and during the first quarter of each year.
About Despegar.com
Despegar is the leading online travel company in Latin America.
Operating across 20 countries, Despegar provides a broad suite of travel
products, including airline tickets, travel packages, hotel bookings and
other travel products to over 17 million customers. With a mission “to
make travel possible”, the Company’s one-stop marketplace enables
millions of users to find, compare, plan and easily purchase travel
services and products. Through Despegar’s websites and leading mobile
apps, it offers products from over 300 airlines, more than 450,000
accommodation options, as well as approximately 1,000 car rental
agencies and approximately 240 destination services suppliers with more
than 7,700 activities throughout Latin America. The Company owns and
operates two well-recognized brands, Despegar, its global brand, and
Decolar, its Brazilian brand. Despegar is traded on the New York Stock
Exchange (NYSE: DESP). For more information, please visit
www.despegar.com
.
Forward-Looking Statements
This press release may include forward-looking statements. We base these
forward-looking statements on our current beliefs, expectations and
projections about future events and financial trends affecting our
business and our market. Many important factors could cause our actual
results to differ substantially from those anticipated in our
forward-looking statements. Forward-looking statements are not
guarantees of future performance. Forward-looking statements speak only
as of the date they are made, and we undertake no obligation to update
publicly or to revise any forward-looking statements.
-- Financial Tables Follow --
Unaudited Consolidated Statements of Operations for the Three- Month
Periods ended March 31, 2018
(in thousands U.S. dollars, except as
noted)
|
|
|
|
1Q18
|
|
|
|
Pro Forma
1Q17
|
|
|
|
1Q17
|
|
|
|
% Chg
2
|
Revenue
|
|
|
|
$148,593
|
|
|
|
$121,678
|
|
|
|
$124,999
|
|
|
|
22%
|
Cost of revenue
|
|
|
|
43,646
|
|
|
|
31,140
|
|
|
|
31,140
|
|
|
|
40%
|
Gross profit
|
|
|
|
104,947
|
|
|
|
90,538
|
|
|
|
93,859
|
|
|
|
16%
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
|
46,410
|
|
|
|
35,546
|
|
|
|
35,546
|
|
|
|
31%
|
General and administrative
|
|
|
|
15,888
|
|
|
|
18,869
|
|
|
|
18,869
|
|
|
|
(16%)
|
Technology and product development
|
|
|
|
19,225
|
|
|
|
15,408
|
|
|
|
15,408
|
|
|
|
25%
|
Total operating expenses
|
|
|
|
81,523
|
|
|
|
69,823
|
|
|
|
69,823
|
|
|
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
23,424
|
|
|
|
20,715
|
|
|
|
24,036
|
|
|
|
13%
|
Net financial income (expense)
|
|
|
|
(2,831)
|
|
|
|
(6,156)
|
|
|
|
(6,156)
|
|
|
|
(54%)
|
Net income before income taxes
|
|
|
|
20,593
|
|
|
|
14,559
|
|
|
|
17,880
|
|
|
|
41%
|
Income tax expense
|
|
|
|
4,235
|
|
|
|
2,418
|
|
|
|
2,486
|
|
|
|
75%
|
Net income
|
|
|
|
16,358
|
|
|
|
12,141
|
|
|
|
15,394
|
|
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS (in $)
|
|
|
|
0.24
|
|
|
|
0.21
|
|
|
|
0.26
|
|
|
|
14%
|
Diluted EPS (in $)
|
|
|
|
0.24
|
|
|
|
0.21
|
|
|
|
0.26
|
|
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic shares weighted average
1
|
|
|
|
69,106
|
|
|
|
58,518
|
|
|
|
58,518
|
|
|
|
|
Diluted shares weighted average
1
|
|
|
|
69,116
|
|
|
|
58,609
|
|
|
|
58,609
|
|
|
|
|
As a % of Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
29.4%
|
|
|
|
25.6%
|
|
|
|
24.9%
|
|
|
|
+378 bps
|
Gross profit
|
|
|
|
70.6%
|
|
|
|
74.4%
|
|
|
|
75.1%
|
|
|
|
(378) bps
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
|
31.2%
|
|
|
|
29.2%
|
|
|
|
28.4%
|
|
|
|
+202 bps
|
General and administrative
|
|
|
|
10.7%
|
|
|
|
15.5%
|
|
|
|
15.1%
|
|
|
|
(482) bps
|
Technology and product development
|
|
|
|
12.9%
|
|
|
|
12.7%
|
|
|
|
12.3%
|
|
|
|
+28 bps
|
Total operating expenses
|
|
|
|
54.9%
|
|
|
|
57.4%
|
|
|
|
55.9%
|
|
|
|
(252) bps
|
Operating income
|
|
|
|
15.8%
|
|
|
|
17.0%
|
|
|
|
19.2%
|
|
|
|
(126) bps
|
Net income before income taxes
|
|
|
|
13.9%
|
|
|
|
12.0%
|
|
|
|
14.3%
|
|
|
|
+189 bps
|
Net income
|
|
|
|
11.0%
|
|
|
|
10.0%
|
|
|
|
12.3%
|
|
|
|
+103 bps
|
1.
In thousands
|
|
2.
For comparison purposes, the Company has
presented Pro-forma 1Q17 figures which include the adjustments
required under the new revenue recognition standards adopted since
the start of 2018. The YoY % change calculated against the adjusted
figures.
|
|
Key Financial & Operating Trended Metrics
(in thousands U.S.
dollars, except as noted)
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
1Q17
|
|
|
|
2Q17
|
|
|
|
3Q17
|
|
|
|
4Q17
|
|
|
|
|
1Q18
|
FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$124,999
|
|
|
|
$123,462
|
|
|
|
$131,468
|
|
|
|
$144,011
|
|
|
|
|
$148,593
|
Revenue Recognition Adjustment
|
|
|
|
($3,321)
|
|
|
|
($59)
|
|
|
|
$1,310
|
|
|
|
$7,578
|
|
|
|
|
|
Cost of revenue
|
|
|
|
31,140
|
|
|
|
35,087
|
|
|
|
37,869
|
|
|
|
38,383
|
|
|
|
|
43,646
|
Gross profit
|
|
|
|
90,538
|
|
|
|
88,316
|
|
|
|
94,909
|
|
|
|
113,206
|
|
|
|
|
104,947
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
|
35,546
|
|
|
|
43,289
|
|
|
|
41,097
|
|
|
|
46,356
|
|
|
|
|
46,410
|
General and administrative
|
|
|
|
18,869
|
|
|
|
18,618
|
|
|
|
15,318
|
|
|
|
19,821
|
|
|
|
|
15,888
|
Technology and product development
|
|
|
|
15,408
|
|
|
|
17,644
|
|
|
|
18,907
|
|
|
|
19,349
|
|
|
|
|
19,225
|
Total operating expenses
|
|
|
|
69,823
|
|
|
|
79,551
|
|
|
|
75,322
|
|
|
|
85,526
|
|
|
|
|
81,523
|
Operating income
|
|
|
|
20,715
|
|
|
|
8,765
|
|
|
|
19,587
|
|
|
|
27,680
|
|
|
|
|
23,424
|
Net financial income (expense)
|
|
|
|
(6,156)
|
|
|
|
(1,611)
|
|
|
|
(2,880)
|
|
|
|
(6,232)
|
|
|
|
|
(2,831)
|
Net income before income taxes
|
|
|
|
14,559
|
|
|
|
7,154
|
|
|
|
16,707
|
|
|
|
21,448
|
|
|
|
|
20,593
|
Adj. Net Income tax expense
|
|
|
|
2,418
|
|
|
|
4,254
|
|
|
|
4,373
|
|
|
|
2,617
|
|
|
|
|
4,235
|
Net income /(loss)
|
|
|
|
12,141
|
|
|
|
2,900
|
|
|
|
12,334
|
|
|
|
18,831
|
|
|
|
|
16,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY METRICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross bookings
|
|
|
|
$1,019,102
|
|
|
|
$1,061,026
|
|
|
|
$1,116,022
|
|
|
|
$1,258,398
|
|
|
|
|
$1,231,497
|
- YoY growth
|
|
|
|
54%
|
|
|
|
40%
|
|
|
|
32%
|
|
|
|
26%
|
|
|
|
|
21%
|
Number of transactions
|
|
|
|
2,129
|
|
|
|
2,210
|
|
|
|
2,298
|
|
|
|
2,419
|
|
|
|
|
2,514
|
- YoY growth
|
|
|
|
30%
|
|
|
|
30%
|
|
|
|
25%
|
|
|
|
19%
|
|
|
|
|
18%
|
Air
|
|
|
|
1,246
|
|
|
|
1,324
|
|
|
|
1,328
|
|
|
|
1,386
|
|
|
|
|
1,362
|
- YoY growth
|
|
|
|
34%
|
|
|
|
31%
|
|
|
|
22%
|
|
|
|
13%
|
|
|
|
|
9%
|
Packages, Hotels & Other Travel Products
|
|
|
|
883
|
|
|
|
886
|
|
|
|
970
|
|
|
|
1,033
|
|
|
|
|
1,152
|
- YoY growth
|
|
|
|
25%
|
|
|
|
27%
|
|
|
|
29%
|
|
|
|
28%
|
|
|
|
|
30%
|
Revenue per transaction
|
|
|
|
$57.2
|
|
|
|
$55.8
|
|
|
|
$57.8
|
|
|
|
$62.7
|
|
|
|
|
$59.1
|
- YoY growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3%
|
Air
|
|
|
|
$45.6
|
|
|
|
$45.2
|
|
|
|
$44.3
|
|
|
|
$47.7
|
|
|
|
|
$44.7
|
- YoY growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2%)
|
Packages, Hotels & Other Travel Products
|
|
|
|
$73.5
|
|
|
|
$71.7
|
|
|
|
$76.2
|
|
|
|
$82.7
|
|
|
|
|
$76.2
|
- YoY growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4%
|
ASPs
|
|
|
|
$479
|
|
|
|
$480
|
|
|
|
$486
|
|
|
|
$520
|
|
|
|
|
$490
|
- YoY growth
|
|
|
|
18%
|
|
|
|
8%
|
|
|
|
6%
|
|
|
|
6%
|
|
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/ (loss)
|
|
|
|
$12,141
|
|
|
|
$2,900
|
|
|
|
$12,334
|
|
|
|
$18,831
|
|
|
|
|
$16,358
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expense, net
|
|
|
|
6,156
|
|
|
|
1,611
|
|
|
|
2,880
|
|
|
|
6,232
|
|
|
|
|
2,831
|
Income tax expense
|
|
|
|
2,418
|
|
|
|
4,254
|
|
|
|
4,373
|
|
|
|
2,617
|
|
|
|
|
4,235
|
Depreciation expense
|
|
|
|
1,343
|
|
|
|
1,362
|
|
|
|
1,337
|
|
|
|
1,033
|
|
|
|
|
859
|
Amortization of intangible assets
|
|
|
|
1,517
|
|
|
|
2,039
|
|
|
|
2,454
|
|
|
|
2,741
|
|
|
|
|
2,018
|
Share-based compensation expense
|
|
|
|
1,176
|
|
|
|
930
|
|
|
|
959
|
|
|
|
1,224
|
|
|
|
|
983
|
Adjusted EBITDA
|
|
|
|
$24,751
|
|
|
|
$13,096
|
|
|
|
$24,337
|
|
|
|
$32,678
|
|
|
|
|
$27,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidated Balance Sheets as of March 31, 2018
(in thousands U.S. dollars, except as noted)
|
As of March 31, 2018
|
|
As of December 31, 2017
|
ASSETS
|
|
|
|
Current assets
|
|
|
|
Cash and cash equivalents
|
$382,301
|
|
$371,013
|
Restricted cash and cash equivalents
|
$33,048
|
|
$29,764
|
Accounts receivable, net of allowances
|
$228,377
|
|
$198,273
|
Related party receivable
|
6,077
|
|
5,253
|
Other current assets and prepaid expenses
|
37,819
|
|
29,405
|
Total current assets
|
687,622
|
|
633,708
|
Non-current assets
|
|
|
|
Other Assets
|
5,241
|
|
4,658
|
Restricted cash and cash equivalents
|
10,000
|
|
10,000
|
Property and equipment net
|
18,166
|
|
16,171
|
Intangible assets, net
|
36,026
|
|
35,424
|
Goodwill
|
39,192
|
|
38,733
|
Total non-current assets
|
108,625
|
|
104,986
|
TOTAL ASSETS
|
796,247
|
|
738,694
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
|
|
|
Current liabilities
|
|
|
|
Accounts payable and accrued expenses
|
54,637
|
|
45,609
|
Travel suppliers payable
|
175,656
|
|
174,817
|
Related party payable
|
94,921
|
|
84,364
|
Loans and other financial liabilities
|
15,492
|
|
8,220
|
Deferred Revenue
|
1,882
|
|
30,113
|
Other liabilities
|
36,671
|
|
39,751
|
Contingent liabilities
|
4,930
|
|
4,732
|
Total current liabilities
|
384,189
|
|
387,606
|
Non-current liabilities
|
|
|
|
Other liabilities
|
6,260
|
|
1,015
|
Contingent liabilities
|
7,241
|
|
7,115
|
Related party liability
|
125,000
|
|
125,000
|
Total non-current liabilities
|
138,501
|
|
133,130
|
TOTAL LIABILITIES
|
522,690
|
|
520,736
|
|
|
|
|
SHAREHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
Common stock
|
253,535
|
|
253,535
|
Additional paid-in capital
|
317,427
|
|
316,444
|
Other reserves
|
(728)
|
|
(728)
|
Accumulated other comprehensive income
|
16,728
|
|
16,323
|
Accumulated losses
|
(313,405)
|
|
(367,616)
|
Total Shareholders' Equity Attributable / (Deficit) to Despegar.com
Corp
|
273,557
|
|
217,958
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
796,247
|
|
738,694
|
|
|
|
|
Unaudited Statements of Cash Flows for the three-month period ended
March 31, 2018 and 2017
(in thousands U.S. dollars, except as noted)
|
|
|
|
3 months ended March 31,
|
|
|
|
|
2018
|
|
|
|
2017
|
Cash flows from operating activities
|
|
|
|
|
Net income
|
|
|
|
$16,358
|
|
|
|
$15,394
|
Adjustments to reconcile net income to net cash flow from operating
activities
|
Unrealized foreign currency translation losses
|
|
|
|
367
|
|
|
|
658
|
Depreciation expense
|
|
|
|
859
|
|
|
|
1,343
|
Amortization of intangible assets
|
|
|
|
2,018
|
|
|
|
1,517
|
Stock based compensation expense
|
|
|
|
983
|
|
|
|
1,176
|
Interest and penalties
|
|
|
|
257
|
|
|
|
450
|
Income taxes
|
|
|
|
2,865
|
|
|
|
1,172
|
Allowance for doubtful accounts
|
|
|
|
643
|
|
|
|
568
|
Provision / (recovery) for contingencies
|
|
|
|
515
|
|
|
|
477
|
Changes in assets and liabilities, net of non-cash transactions
|
(Increase) / Decrease in accounts receivable, net of allowances
|
|
|
|
(17,767)
|
|
|
|
(13,145)
|
(Increase) / Decrease in related party receivables
|
|
|
|
(825)
|
|
|
|
(1,264)
|
(Increase) / Decrease in other assets and prepaid expenses
|
|
|
|
(10,320)
|
|
|
|
2,573
|
Increase / (Decrease) in accounts payable and accrued expenses
|
|
|
|
9,597
|
|
|
|
8,098
|
Increase / (Decrease) in travel suppliers payable
|
|
|
|
4,034
|
|
|
|
(6,231)
|
Increase / (Decrease) in other liabilities
|
|
|
|
(4,627)
|
|
|
|
(1,006)
|
Increase / (Decrease) in contingencies
|
|
|
|
(603)
|
|
|
|
(485)
|
Increase / (Decrease) in related party liabilities
|
|
|
|
10,542
|
|
|
|
12,072
|
Increase / (Decrease) in deferred revenue
|
|
|
|
(662)
|
|
|
|
(5,381)
|
Net cash flows provided by / (used in) operating activities
|
|
|
|
14,234
|
|
|
|
17,986
|
Cash flows from investing activities
|
|
|
|
|
Payments for short-term investments
|
|
|
|
–
|
|
|
|
–
|
Acquisition of property and equipment
|
|
|
|
(3,413)
|
|
|
|
(2,152)
|
Increase of intangible assets including internal-use software and
website development
|
|
|
|
(2,645)
|
|
|
|
(2,776)
|
(Increase) / Decrease in restricted cash and cash equivalents
|
|
|
|
(2,834)
|
|
|
|
(2,717)
|
Net cash (used in) /provided by investing activities
|
|
|
|
(8,892)
|
|
|
|
(7,645)
|
Cash flows from financing activities
|
|
|
|
|
Increase / (Decrease) in loans and other financial liabilities
|
|
|
|
7,019
|
|
|
|
1,358
|
Net cash (used in) / provided by financing activities
|
|
|
|
7,019
|
|
|
|
1,358
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(1,073)
|
|
|
|
615
|
Net increase / (decrease) in cash and cash equivalents
|
|
|
|
11,288
|
|
|
|
12,314
|
Cash and cash equivalents as of beginning of the period
|
|
|
|
371,013
|
|
|
|
75,968
|
Cash and cash equivalents as of end of the period
|
|
|
|
382,301
|
|
|
|
88,282
|
|
|
|
|
|
|
|
|
|
CONTACT:
Investor Relations
Ines Lanusse,
(+5411)
4894 3582
Investor Relations Officer
investorelations@despegar.com
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DESPEGAR.COM, CORP.
By: /s/ MICHAEL DOYLE
Name: Michael Doyle
Title: Chief Financial
Officer
Date: May 10, 2018
Despegar com (NYSE:DESP)
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