The following is a summary of the Despegar.com, Corp. (DESP) Q3 2024 Earnings Call Transcript:
Financial Performance:
Q3 gross bookings dropped slightly to $1.3 billion due to FX headwinds, but grew 35% in constant currency year-over-year.
Revenue increased 9% year-over-year to $194 million; FX-neutral revenue growth was 53%.
Gross profit margin reached 74%, the strongest since IPO with adjusted EBITDA up 94% to $48 million, and adjusted net income rose 309% to $36 million.Adjusted earnings per share increased to $0.34 from $0.1 year-over-year.
Business Progress:
Launched AI-powered travel assistant 'SOFIA' with enhanced capabilities, including after-sales support and as a SaaS product.
Signed a new 10-year lodging outsourcing agreement with Expedia, effective from January 2025, to optimize lodging supply and expand hotel inventory outside Latin America.
Achieved significant growth in the loyalty program, reaching 30 million members, with 12% of all transactions using loyalty points.
Mobile app downloads increased by 47%, with transactions via the app accounting for about 51% of total bookings.
Opportunities:
The agreement with Expedia is expected to bring more competitive sourcing from different global regions, and enhancing B2B business.
Growth in SOFIA as a SaaS offering presents new revenue streams and market expansion beyond Despegar's own platform.
Expansion of B2B segment now accounts for 19% of total gross bookings, driven by new white label partnerships and technology solutions.
Risks:
Continued FX volatility impacting revenue and profitability, particularly in key markets like Mexico and Brazil.
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