Despegar.com (DESP) 15 Aug 242024 Q2 Earnings call transcript

Good morning, and welcome to Despegar's First (sic) [ Second ] Quarter 2024 Earnings Conference Call. My name is Krista, and I will be your operator for today's call. [Operator Instructions] And please note that today's webcast is being recorded. [Operator Instructions] Now, I would like to turn the call over to Mr. Luca Pfeifer, Investor Relations. ahead. go please Luca,

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

financial in unaudited the we In carefully metrics, read non-GAAP measures Investors reporting of neutral results foreign superior will and accordance exchange including not understand certain the principles, to addition to information should accounting financial substitute measures with and financial calculations. included operating accepted U.S. discuss our these definitions measures release and press Non-GAAP and as measures in financial only. isolation, to metrics GAAP them. be should are metrics for supplemental in or ensure that they as considered generally operating provided

These constitute Before current a that we made of number and during and that we limited please allow our may are including risks remarks, course beyond beliefs to the the certain statements, and on based materially related businesses me forward-looking assumptions to expectations are performance to which uncertainties management's statements of integration prepared control. differ, but results remind to that subject and the cause of you discussion be may expectations begin actual the and include, the are acquired. factors could company's to, not

to description release. Commission our For please and with risks, of Securities a and the U.S. these filings press refer Exchange our

CEO, Speaking as initiatives. an well as Scokin, on our overview who strategic call second is growth quarter performance, Damian of update today's our will Despegar's provide an many on

AI-powered of SOFIA. Travel discuss Gonzalo BXB will Chief travel will Estebarena, our our CTO, our efforts. an developments Mackinnon, Sebastian our on of assistance, recent you by Next, Partners provide with Followed update who

ahead. detailed our open financial After our with wrap-up prepared CFO, that, for go will Damian we more review the of quarter's end Singh, results. call please before Finally, remarks a questions. Damian, will the follow with Amit a

and day, you, Thank everyone. good Luca,

year. of We the with throughout are the the second performance the business pleased quarter of

believe quarter. In than during foreign Our X% impacted exchange by gross higher billion, the year-on-year robust constant gross XX% by industry-leading bookings by $X.X increased currency, which much globally. expected a bookings is we grew our headwinds to year-over-year,

remained focusing we continued commercial throughout higher-margin quarter sales. the Our execution package solid, as on

this We as points XX%. of front, with progress basis gross continue year-on-year making expanding bookings percentage to XXX significant a on packages

combined a sales, us rate in profitable the of package on growth, strong enabled our to with focus take Our quarter. achieve XX.X%

higher-margin this our improving, weak As top-line we product revenues second saw million, the year-on-year. accounting expected seasonally XX% quarter. headwinds. Total exchange accelerate $XXX XX% mix than in in to continued of the revenues with sales grew for non-Air much to we accomplished growth higher foreign and Despite quarter,

selling our EBITDA Grande revenues by had investments, Importantly, to when quarter the XX% XX% for incremental adjusting in adjusted the from second do Sul, $XX a severe flooding resulted temporary in Also our of particularly impact growth Brazil. Despite industry-leading Rio marketing, FX robust Air impact, million significant delivered note, year-over-year. growth the in increased of a year-on-year. by we in which cancellations in and quarter, up rate

growth a benefit adjusting of in this benefit, XX% year-over-year. the EBITDA $X.X of reminder, second last adjusted EBITDA the quarter million. year's was When one-time adjusted included As XXXX for second of quarter a

income adjusted income last to increasing of year. ever, quarter net highest the Additionally, the million, $XX.X second an impressive quarter XXX% adjusted income year-over-year, our quarterly adjusted by the for was net in net $X.X compared million of

hotel packages $X.X our during in the Mexico, and demand second Turning strongest higher total in to reached Consumer segments, market, and business our and billion. of quarter was our marketing a was bookings sales. BXC key concentrated Brazil

to customers, key travel options, with finance credit. which have are to differentiator and a We through of as regards maintain American Latin limited edge their competitive strong continue our compelling market-leading portfolio product and our offerings, sourcing, a payment many

brand a She's new brand our artist people is Dream, Shakira. also our connecting new partnership across Choose, with more and This of Travel, at please Latin visit exciting are reinforces particularly focus details a experiences. within memorable which To theme in the on through We Despegar extending inspiring the with recognized on region, this, America. website see of our our www.despegar.com. key strengthening proud feature leadership partnership campaign, globally and

During and segments our BXB quarter, business significant white drivers our growth. the label of remained

Specifically, our BXB label year-over-year, expansion X% of while white grew year-over-year. gross bookings XX% saw remarkable emerging operations

on recent the to commercial relationships. over we in the we growth continue addition In BXB quarters observed trends, focusing have segment, expanding our strong our

already as the you and with well particularly are of our the therefore, results the its Mackinnon business, we as on more are form onboarding BXB Later label recently proud future of growth in potential. whose Sebastian of in details the discuss call, achieved white have partnerships, We underway. programs new provide X will performance

I to at order our how loyalty Despegar, priorities key Pasaporte retention Next, and our our customer-centric expand program, provides in rates. to end, repeat value remains To discuss in approach Despegar. one to drive superior would loyalty invest Customer we continue customers. to and of our customer like that

For our by program year-on-year members. million XX.X XX% the quarter, grew to

are of Pasaporte approximately by as seen points, loyalty Furthermore, customers our an program points in our members. now continues As activity, grow. ever value transactions result, of a to redemption XX% made which increasing proportion

program early year-on-year, for needs, of loyalty the a engagement repeat to the program's encourage of Pasaporte customers discounts, can our purchase, The future earn fosters sense X.X total rewarding choose our with significant special XX.X% and also travel that incentivizes Moreover, reflects During customers. redeemed Despegar continuously deep on exclusive overall improving range commitment points Members the program enhance growth customer only to a access long-term experience. satisfaction. By increased of rewards reaching redemptions loyalty, to points relationships ability every and our and quarter, build provides enjoy promotions, of by not we and be which our travel. business for the considerable their but to Despegar This to customers offering value experience. benefits by percentage transactions. their

Despegar our solidifying offerings personalized of travel. tailor relevant better rewarding, more us we provide experience a and by position This into behaviors, trusted in user as each interaction our enhances Pasaporte is with and number that the insight Despegar further allowing members preferences services. valuable partner to gain ensuring and increases, As customer

loyalty, mobile to Despegar, discussed unmatched heart to opportunities. demonstrating our is high continues is our occasions, particular XX% and of be to tool XX for offerings our a specific previous new also cross-selling which of customers. A focus customer lies With rates, to all-time driving inventory hotel downloads expertise for combine app year-on-year to leading increasing a key preferences value American provide million, repeat the Despegar. significant growth. and tailoring We app, regional technology best-in-class As our our on at innovation while platform, air suppliers, and the Latin

Despegar the to to customers and Additionally, our booking now transactions personalized enhance with our mobile total average and customers to in experience drives which app. Engagement continuously the mobile satisfaction that and fosters unique is app on to turn the needs customers customers of a and offers by explore level providing best exclusive tremendous and recommendations, testifying cross-selling repeat preferences but designed of higher of only search convenient of transactions, innovating user range more represent possible intuitive offers app ensure improving Latin opportunities wide receive that around to American value a leading experience. higher loyalty, platform, to our app our and products, services and our through the seamless value travelers. This engagement and navigation, mobile to further encourages also high XX% specifically cater not service, user-friendliness tickling. usage. attribute By our we

advances SOFIA. our addition to making AI travel continue assistant, significant In enhancing with we our app,

customer back to our our only in the experience discuss SOFIA and BXC but our launched deploy SOFIA travel after-sales we recall, well stay user the will as cross-selling as within last services. the and customer as gain in will BXB services, strengthen in our more more you rise mode. Later as competitive this through insights into well this not at efficiency, technology tailored our of forefront offering, solution increase quarter, As bridge significant March preferences, in operational and engagement also Gonzalo personalized and the with call, increase to behavior opportunities, technology vision

like to few over Before turning to in milestones a briefly would significant and I discuss Sebastian, the developments the quarter. call more

operations, our alliance our a strategic business Group, the First, global travel of division objective company. and core Iberostar a Spain-based formed focus the tourism have to with WorldXMeet, streamline we the with more on

that WorldXMeet Experience. BD has brand of acquired the Management under operating part business, our As transaction, DMC Destination Company, or

The entered have for agreement and the Despegar returns We into also greater under will provision the effective in reflects for Republic. a focus was XX, operate shareholders. the a technology July which services where divestment partner highest preferred and generates it WorldXMeet our capital Dominican on deploying long-term as the destination to Mexican Riviera and of a

business. total X,XXX to transaction, of XXX transitioned this the owner almost our of the part As employees new have of

are stocks. The benchmarks that announce Russell to pleased inclusion widely the among XX, earned used most Indexes. are June we Indexes Stock cap small the Despegar Second, on in Russell for

Indexes milestone Russell fast-growing leverage Stock Joining is Latin significant to market. and as we to America's our technology travel local strength, scale, platform, the expertise brand top-tier continue for a consolidate Despegar

steps a GRI our This on how full the and as which first double business incorporating well of our underscore affect sustainability our the commitment these SASB applied evaluate assess XX. approach, XXXX responsible on the enhance we to society line dedication time broader actions Standards, actions and ongoing These with which ESG performance. have materiality our to impact report standards, as practices. Lastly, in our ESG we Standards, published the report June adopting marks environment, our financial

look opportunities achievements. I the Partner accomplished company a see for in turn to to ability positioning updating our to industry-leading confidence first the growing opportunities and in our continuing in exceptional great expand continue now the sustained of We on the Sebastian, Travel BXB on over year, Chief long-term providing you deal call to half many forward our to and value our We growth. business. and will our our all shareholders, customers our ahead, have bolstering

today. context. I information you, to you important this background pleased Damian. is would am be provide on to like here BXB an I some as business Despegar's with Thank

gained agencies approach across well the through the developed packages include entire main major through approximately or content BXB sales. players Through technology from of and consolidators. as than and to inventory, beyond than million among generate activities Restel, clients avenues. One region. sold airlines, that accommodations, is by as significant this platform by Latin almost more OTAs, as it Hotelbeds, with we XXX reach have other the revenue. With we years. Since of inventory channels, X XXX market-leading America Our from strategically now others. tailored our and travel X.X Notably, and such offline Currently, to monetize X,XXX further to hotel are online XX% BXB Ctrip more Online last over agencies, Travel to includes X revenue global traction offering XXX% our which XXXX, and BXB business has our that these comes our API Agencies, rates Expedia, exclusive travel and providing segment connectivity travel our

tap platform, launch than solutions, have and XX,XXX HTML BXB This for our small This levered offline packages, more enables is of more we travel ideal our and year. flights by generated half vast Additionally, Despegar purchase are Latin one-stop-shop technological drive Latin back-office fragmented API solution us. America. and and remaining growth. The agencies along within offline to through to than support an competitors our best-in-class has XX% medium the this customer market scale, technological medium-sized and to travel small revenue during of second and America. This sourcing market, the of our theirs, Despegar us strategy, commercial the favorable set the consolidate few additionally agencies capabilities region's conditions offers which through into will service. In significantly leading developed flights BXB leverage for with revenue solutions in hotels,

see to opportunities forward, recently Moving HTML as we Argentina, material Chile, and segment our Peru. this service we Ecuador, in growth expanded

more BXB increasing As adaptable years. vision in that our result. Since gross XX% technology second our in of X last year. the been business this BXB goes industry-leading. have XXXX, and With inventory, a booking the result we our current has beyond well of But BXB unique top-line our quarter our tripled than growth

opportunity the achieve believe substantial penetration and see we and Given in Latin deepen America's can our these results mid-term. We travel the over market. to we encouraging near growth very

A are the we experience app. best-in-class Mastercard, the This industry. to or growth points this and within loyalty this seeking In can methods, customers thereby customer technology our addition experience, years. partners their global recovery technology benefits. Through of API enables have long-term experienced as of our Livelo, to a and to such in brand and further the the the platform, foster with a growth, excited the that our has industry. Capitalizing more we been label exceptional customers business testament label the primarily gross BXB strengthen label partnership, partnership or excited amplified payment label leading of usage by our the our years, partners products the white enjoy to to ecosystem, BBVA, Liverpool travel them to of their extensive operations. accumulating proprietary their signed In own quality our we quadrupled attribute loyalty increase on significant our by customer's Despegar enhance program. begin the exclusive opportunity, and of white more platform partners' are bookings white ride-hailing Mexico. In to offerings, white operations about value significantly scalability ability offering last solutions are white recently travel outside country, keep redeeming over loyalty their the has X than XX label and we driven business, the of popular engage HTML customer travel and of our recent the particularly

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retail We with Elektra, signed conglomerate. white also financing promising label agreement service another Mexico's and

its throughout total of might points a know, X,XXX Mexico operates you across of As Elektra brands. of sales portfolios

in our technical to and expertise technology this of installed stores. which Elektra aqueous partnership, platform provide new kiosk, operate be the we will Elektra's part will As

We them our in to at deepening with are inventory partners' future. new and forward partnership are the customers our poised provide price state-of-the-art travel to competitive with looking

recently Another strategy development that Chile. notable our label and in Scotiabank label forged is BXB a we with recent under white growth partnership white

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us. technology loyalty labeling additional partnerships, of expect as we our for products customer and well will Scotiabank streams success the increase white that generate leading revenue Given past for as them

Lastly, communicated continue Damian we expand in beyond Latin the working to as reach past, Despegar's America.

business In fact, we in are in active discussions with new several partners prospective geographies.

platform, a that international We company. BXB Despegar in we are competing both significantly the to lay presentation, are years, inventory, and flexible growth expansion. To prices conclude partners and of will our technology technology confident Despegar's and proposition my foundations competitive our part convinced both America value high-level our competing that today's within all solutions travel beyond global coming the positioning are our for a global Latin contribute and to as

for Gonzalo assistant, update AI SOFIA. to travel an revolutionary over Now on our

and everyone. you, Sebastian, Thank hello

pleased recent with of assistant SOFIA, share our to Before updates I made AI customer the am that we you with engagement to diving details to continues into rise. the

increased daily while quarter, last share users using interaction an the the doubled. to Xx, of after conversations who returned continue During initial SOFIA by

conversations combined As number customer a feedback enhance us travel which with increase choice. knowledge to enabling responses of a assistant, SOFIA continuously loop of SOFIA queries. The needs her service are offering number refine to we of becoming SOFIA's more travel score address in companion customers differentiated addressed growing and providing to the growing making we capabilities, appropriate, a and AI for our enables our base

I believe the enhancements are ones. significant discuss to significant we X quarter, the Today, I to introduced would most that like During SOFIA. several

conversational integrated to is can frequent provide customer data, First, address from of also with human-like traveler frequently reservation ultimately after-sales most for checking SOFIA's after-sales inquiries adequately and and including contextualized all into to questions information SOFIA and Despegar specific objective access web enhancement this customer of assistance. and previous the human questions without asked capabilities. support current support personalized answers reservations SOFIA resolve now needs, objective we a questions to cancellation and ranging the for information. The

The costs other is to support. reduce customer to course, objective, related of

sales to conversational of a new particular Second, conversation hotel opportunities. with questions commercial engaging in creating accurately our technology, opportunities new to we cross-selling alternatives at implementation a travelers through this The flow SOFIA quarter, the ultimately and particular what be a assistive more human mimics focus capabilities narrow good and this sale. rate helping rather maximize them a and for goal in do enabled typical developed path, on more to the from AI steer conversation, intent. agents chat our of, tend incorporating has precise, options. This channels, to The with our to down answering which follow customer conversion the natural enhance best SOFIA adequate which relevant, is provide solutions, to of solution differentiates the than selection example, of

important in memory. quarter is that this we Another attribute refined

customers now travel multiple forgotten significantly itself customer, Our the part having also SOFIA more from ability devices conversation with the since the previously no gives input conversation. across of it a speeding of to and reduces as have impression the longer planning they traveler used. continue SOFIA previous This a can gives on the conversion. improving present up human-like, repetitive It

further planning weather which given suggestions Lastly, and Pasaporte, with Maps SOFIA, coupons, a travel provide areas do currently process, now booking Despegar's encompasses Despegar on integrations improving on a features, the summary, SOFIA model the keeps SOFIA options. through ultimately language our content. available ChatGPT as to such adding what Google recommendations, general we tailored payment such and have well fully and for as example, expanded own of trip any are is exciting experience. In powers base, program SOFIA's destination, as booking features, loyalty engagement enhancements trends, customer engagement a These customer's knowledge result. or, as restaurant combination and many knowledge, as of enrich with increase Also, at that

Now, moving on agent. BXC from our AI

excited plans SOFIA's also our ambitious within relationships. to capabilities are to expand We BXB our announce

seamless to operations. integration for making enable tool of is partners, of indispensable goal Our the into SOFIA their it an platforms our BXB

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ensures commitment innovation improvement forefront but Our unparalleled environments. support remains and the also in in only to and technology, continuous that BXB of SOFIA BXC, at efficiency providing not

turning I to development. share the to like Now, call before would last Amit, exciting one

revolutionize leveraging Beyond SOFIA's client-facing are to capabilities, our we generative AI service. also customer

our pinpoint We our areas generative our on for comprehensive primarily each analyzing analyzing manager. avenue with exciting interactions involves of experience. One connect This provide solutions identify their us allows refinement our personalized clients to are insights focuses gaps XXX% service agents. AI, customer and conversations agents, empathy customers. feedback overall with the self-serving interactions enhance customer actionable service feedback our of agent offerings. and better and sales agents management, improvement now to helping using and service to customer This aiming optimize By to between regarding improving analysis

us Additionally, and be training this opportunities may top-performing to customized those agents to enables underperforming. who analysis provide identify

are only review call the overall after-sales. in satisfaction. I our technology we now efficiencies BXC differentiate These leverage turn further us, continue also second about customer over capabilities, and standpoint, commercial improved We quarter Amit, performance, meaningfully but will as to driving of who enhancing our that excited have a to the lie bolster improvements performance. business to SOFIA's we BXB opportunities while ahead are very ourselves. From not

Thanks, everyone. Gonzalo, day, and good

in and growth robust demonstrate were and consistently revenue positive results quarter second a Our profitability. terms of trend

terms we the headwinds to healthy. Throughout due we levels of total our be where quarter believe a was a second million, in at growth very region strengthened in XX%, foreign key XX% our the constant is industry-leading growing the year-over-year When fluctuations, to quarter, Mexico, revenue than which across $XXX growth at much continue saw FX currency our globally. excluding Brazil exchange we affected robust level which For the reported results. in and revenues higher year-over-year, mainly quarter, expectations, markets, demand

country, Brazil, performance a Now detailed at let's our our more with the look most by starting important market. take

transactions XX% healthy prior do X% quarter. the demand strong growth these which numbers on year-over-year. during to Grande approximately in floods discussed in X% growth the Rio very despite achieved by continue We trends in occasions, strong to As exemplified Sul, in which we Brazil see our Brazil, affected transactions, increased of

prices, On at gross by second currency in to on market, contributing year-over-year largely gross selling Mexico, to for X.X% revenue improving FX bookings. growth partially by a growth year-over-year selling X.X% mix transactions, average million. was bookings, X% a basis basis constant The as-reported increased prices see growth lower the our with as-reported our $XXX, packages $XXX most grew relevant headwinds. average the decreased we in basis, to travel $XXX due primarily Turning most XX% on which million offset to constant quarter, Mexico's driven year-over-year to expanding by XX%. When an increased robust they bookings looking to gross an higher by that margin international or currency. This an

the gross largest air booking contributor growth domestic growth on being second in the market quarter. to to our share addition in air our in travel, we also improving with packages, focused the In

Latin the Turning of rest America. to

for by $XXX affected Our average bookings pressures selling and to gross in to due the prices quarter, year-over-year FX primarily XX% declined Chile. that million Argentina

XX% year-over-year this area in neutral FX business. by our an bookings increased basis, of on gross However,

As increasing part focusing efforts our non-air profitability, commercial ongoing our on revenue. of we drive continue to efforts

non-air our are reached million. we grew $XXX as points revenue, our of year-over-year, or with of a revenue that In bookings line bookings. of total basis So this XXX by gross pleased total reaching XX% XX% percent packages strategy,

basis was in into that revenue. XX% strong rate and $XXX accelerating which XX.X% translated consolidated contributed growth This noted, million FX XX% top-line to the neutral take at an a drove year-over-year, Damian As significantly stronger even year-over-year. of on

headwinds year-over-year in increasing specifically in carefully mindful expenses. second the structure, XX% consider we FX selling pertains of the remain to as continue and technology overall incrementally growth cost invest quarter, we general administrative marketing and and it to expenses, our and Although, in

XX% we quarter, million, of year-over-year, the EBITDA $XX a adjusted by with XX.X% For achieved up margin. an EBITDA adjusted

As benefit, Damian When year-over-year. XX% $X.X adjusted growth of million. for remarks, included EBITDA in also his last Damian EBITDA a would adjusting been growth to pointed one-time adjusted opening explained income, year's benefit this net million year-over-year for $XX.X from year. the adjusted period XXX% $X.X last during our quarter, which reached in impressive increasing million net income of the have same year-over-year

adjusted our comparison non-recurring net reminder, from Despegar's a excludes with expenses income largely As GAAP peers. net facilitate income to

Regarding generated that the our million during XXXX. operating cash quarter to flow compared in of the million generated cash $XX.X in quarter, we $XX.X we cash second of

the While campaigns working change in quarter similar in in quarter. $X remained related some CapEx flow constant affected sale was at a during capital, expenditure XXXX, approximately temporary million, mostly the cash the in to to by operating largely specific decline

working the capital to factoring in quarter, of year, dividends anticipate We change in balance a cash overall temporary last the our balance $XXX million with in trends extraordinary with The cash expenses. described total reported before, of observed line as this prior the years. For in as we expectations, the well cash decline same year. in second line half rebuilding was in quarter $XXX cash for balance preferred given million shareholders, versus

now to Turning allocation. capital

white organic our American BXB, Latin drive label this prioritize investments in region. BXC, and businesses in leading growth We cement position our continue region beyond to to and

loyalty, our the us to in for and solidify coming invest technology incrementally in and to growth industry-leading marketing, further plans help have long-term. we sales before, the discussed quarters As

with trajectory. We analytical also continue provides and our efficiency potential either a flexibility and maintain managing generating capital cash markets. also position increase disciplined of synergies, on growth our with regional by to position consider while assessing financing targets target, costs. beyond analyze our the to cost our we objective focus to home reach M&A or approach opportunities revenue strong When our a enhancing meaningful A liabilities expanding strengthening a proactively

about Now to the outlook our year. talk for

to Our in as business continues flood-related temporary discussed despite some Brazil, before. strongly, headwinds perform

than performing our the the at business areas of fact, our expectation better are beginning of In several year. much

divest million further the of operations at is even $XXX this factors out and be our all However, material was these growth to are stronger us currently our million. the lower significantly coming FX year an more this $XXX year the our Moreover, it to headwinds decided expectation revenues business, to our DMC believe turning streamline for account, which start than to a contributor we from year. robust at important to least in years. Taking at into for we revenue for have guidance least the

to expect we reported coming the growth in current quarters in currency terms, We our very accelerate to a levels. materially trend years maintain revenue coming solid from expect the in growth do and constant

our to million our million, levels. year very confident expectation of in into hedge In guidance, raising be addition to full therefore, we to despite which our lowering at EBITDA EBITDA adjusted continuous investing at now guidance our significant least in time, solidification enough same our adjusted revenue revenue helps FX year before. growth our We at while very expect us operating continues full $XXX of structure, previous the company volatility. We, drive cost initiatives. against constant structure flexibility $XXX feel least Moreover, also versus operating currency growth our incrementally the profile, leverage, we believe have from developed

adjusted guidance growth believe EBITDA Our implies we which updated almost globally. year-over-year of is XX%, industry-leading

Our robust technology us to travel constant currency leader. profile a vision of revenue becoming long-term firmly keeps a committed global growth

brands, and combined while platform, commercial to will driving with form consolidation operational technology market continue market-leading leverage. tailored Our expertise, strategies, of the strategy backbone our best-in-class our

for ability the to trends Damian in long-term few the remarks. remain the about confident back Despegar, for to growth the and that potential a optimistic on capitalize are positive closing underpin call over travel secular We our industry. I'll turn now

showing our robust, industry-leading constant top-line sales quarter our Thank investments second profit and To acceleration results were growth currency you, incremental recent Amit. terms, in of despite conclude, growth, trends reported strong marketing. and a in sequential

in trends our growth business. solid underlying see to continue We

leadership, We our also will our pillar And a is growth which continue partnership Despegar's which remains excellence. technology strategy, regional to platform of supported be our industry-leading through brand brand and further by key Shakira. strengthened focus maintain commercial customer-centric with our

in successes our substantial recent signing to new value competitive our partners available range technology prices further through with to label brands leading platform. of business provide demonstrate pillar, leading products growth ability agreements via BXB our our Regarding at to a customers wide their travel our white

We potential within are beyond. business particularly excited Latin about America the both and of specific growth segment, this

to steadfast, our our innovation continuous in Importantly, our AI improvements remains by travel as SOFIA. evidenced assistant, commitment

generative the of the through excited We bringing of Despegar future, our driving AI. also level of operating are to partners efficiencies while in possibility next about BXB also the implementation continuously the SOFIA within

driving Lastly, robust our continued nurturing package key success high-performing program. direct the our strategic traffic through objectives our be app, continue revenue, expanding and of to loyalty

remain look second we of with our let's to the of at open for year, aim floor the the questions. we delivering to our affordable customers position to that, prices, experiences in the unmatched travel leadership committed solidifying further ahead half market. Within As the

with Riley. [Operator first Khan comes Instructions] question from Your Naved B.

you've So, then on one the which increasing I first Amit, takedown, this all can so, maybe through some of the the just the top-line kind can EBITDA help within of think have a a have business, us few the the you've pieces? pieces? but and have questions, you see, then you about the this you guide, raised guidance. taken of the different which impact just EBITDA, Because top-line and maybe of of these flooding, impact down good divestiture guide, to maybe maybe walk relative -- us of you FX just headwinds, is

Sure.

at lowered mentioned, EBITDA our the time same as you top-line raised but yes, So, guidance. guidance, we our have

and So, has start the top-line with puts and the negatives. let The few a first. -- me top-line puts takes, positives and

more in towards in our strongly. continues of that for it, the beginning would of likely we side, example right as benefit doing the expected the the Argentina, than being, mentioning, on remarks, the we First, be quarter, second quarters, was the underlying than and prepared see the expected we this business better are benefit hopefully the several areas, is end it continue. beginning mentioned better extremely be the is what doing to I now core we performance year. One would in we'll in positive at the And which perform now year, of at to as currently and of coming

for headwinds million, then at full headwinds, impact mentioned, the which for is like, for Mexican $XX if But time, and positive we decision a side. us then drive real, the of divested positive say, $XX based on moved with believe let's the you synergies part currency peso, May. across have like very revenue estimate other the calculation DMC, especially WorldXMeet, divestment, point, as million part, FX. regions. FX see long-term also And alliance formed we against core This mentioned, an we same the us has which and how believe the the full on created to value our that's we year. At in Brazilian And we company. in, the third the Chile significant numbers year So, FX around from this versus very countries various for we has -- June we this and

revenue is in the should But Brazil, is We employees. finally, $X a that a X,XXX confidentiality haven't month on come which slightly event, but $XX year impact DMC about the temporary already given talked specifically exact DMC around Obviously, per and we in months some basis or million to negative to the you seeing so, it last and specifically back are completely full of of normal to the there, impact operations. the But has XXX next we flooding should our south we the the few the million revenue. the amount. be dollar over back haven't -- our over give on normal represents idea. And of of then employee as mentioned, lower, we deal,

our and believe So, beginning decision we from flooding go short-term FX company headwinds helps expected which right and the of sorry, all strengthen what the the the we divesture, is -- from the at core on constant the doing DMC and but at the then year, better than which we for forward. And the FX is removing currency our have ahead. impact growth going the time, further business,

Just to add...

follow-up... to Jump

year, we talk income. obviously, and margins and of conversion we improve cash margins to year-over-year, have continued have net through generation overall the -- to the our question as Just about part, earlier, EBITDA our gone your we

just income you we last combined. more year, years than the of first half If several this see the have net

been I of the positively the say that are FX are drive year, same surprised Copa time, We've we very first half to on have if the us just but is progress we strong But We progress talked might in more. been continues or We top sales you heavily the to not company So, front. continue much these counter investing make line, has the our by the top beginning driving progress with from And about Shakira, would our from to and on the giving despite that the raise in very the that and of our year. impact top the ability are the during helping brand is EBITDA, EBITDA very América. made at and the the expectation the guidance seen was line headwinds. And marketing. temporary that have impact us about advertisements, the what campaigns, flexibility able partnership to the versus on our FX talked -- in line business. from -- impact from at we efficiencies what invest

lot further our of America we and Latin region a across doing and things So, are the across to solidify beyond. potentially brand

making -- those efficiencies investments, and quarter-over-quarter. also at all same but strong very delivering the operating While time

was just that the of margin, sort part the maybe on on of piece a of So, story. maybe it the --

So, I was marketing on a sales noticed basis, year-on-year second lower. revenue that quarter percentage in higher actually and quarter first as

What's is increases about Or So, was the to How and that? in sales the it -- I think might right the variable? are there Leverage more subsequent come was and fixed about mostly sales way something think off and marketing? that quarter? costs? one-off should

was it quarter it, a related we like mentioned, a those But it. as in then type to in second it mean, for campaigns expense building but that and upfront quarters, signed second few goes quarter, had, Shakira I some it. around let's of partnership call No, upfront, are we we

of time. So, investments right? not would More, sustained period what incremental, investment long are but over more these like of I a think

So, and years. in regions positioning drive further the us and our brand work these the solidify us coming help in it line top our that with can incremental Shakira investments are help more areas where believe we

So, maybe that. on just

So, basis, elevated have likely and be about of sales year-on-year back marketing the because right? think if on I a to to half, these, in

don't mean, an margin EBITDA these course, of to, items line idea. guide our you at we quarter-by-quarter, adjusted similar, gives I but sort Yes, of

the you idea this level, at not because the full If the sales marketing. give coming that an we for planning just make in you of implied quarters, and we year, are that margins margin look that the should planning and are maintain in to investments around to

about as to we have in content. plans we We talked invest -- past, invest have the in plans have in and tech incrementally to

plans loyalty have our program. We to invest in

us even investing we areas, driving we're efficiencies, these strong but or company years. in which very a for So, we operating position an coming continue positions position in the sure all make want our in to that better hopefully,

And Understood. application. good

Andrew question Stanley. next the Your comes from with Morgan Ruben line of

X%. much for country question detail bit floods, the for in level, at despite and presentation. the on up the neutral but XX%, very up Thanks the a looking the that's and curious to bookings, I'm Mexico understand just the FX Brazil

you're currency effects? demand, the and these going about give headwinds. kind a talked could sense FX the X if what's related, from of on would thinking impact translation So, perhaps how help outbound countries weaker Both helpful. on about amid FX demand be wondering, you've I'm of the you the markets between

is not Andrew, the of are Thanks in demand hitting transaction seeing basically very your below of is moment. FX for much ASPs What that is We're at question. we Damian. on seeing our terms evolution an this expectations. impact

each has the we is versus it. domestic intrinsics of have relevance That's just of different the ASPs, the Brazil because underlying with of effect on of this Mexico markets a demand So, geographies. remains that of basically do different transitory impact and and why strong. And basically, the more to perspective that's the the international in

in take On BXB, that you kind the that as haven't are of different, similar, a the core, it. ground of that need like what what looking be discussions countries in outside or on what items talked necessarily you active the call you to to Okay. And presence Sebastian these new curious I'd the kind geographies. maybe here. of Got you're expand about on being advantage might sales capabilities understand in? other LatAm, are in force areas are discussions had

of In America. within opportunities. of Yes, an still spite are America, to see HTML we expand, are seeing solution growth, we now, to Latin for we our running huge because opportunity example, Latin different not markets a only lot the in

our actual new launched Argentina, Peru, those doesn't just require We markets. technology expanding Chile, And to Ecuador. have that some investments. It's

is consolidate that of regards off on the how we agencies that's in very small America. relevant Latin So the and

to in but expand we huge opportunities So America, globally. these to to expand opportunities still also see markets, Latin

solution customers, So that. with with also is we really in it's labels because already will and expand sense we conversations with potential that platform expand API are and unique performing can but in where the some platform, the with we white the very this new good,

but in to We only ones. And competitive have small Latin a to a solutions are not noticing labels, that very adaptable and is flexible mid big white gives we America, and here advantage not also huge technology also that that globally. only but

the like white label solution, opportunities solutions businesses, with HTML it, a X platform. with So not we think the with with the with API have I and

comes question Cowen. TD next from the with Seed Jacob Your line of

is It's This Kevin. Jacob. for

prior going the share was can expect divestment EBITDA what the to under the agreement? to of the forward DMC, revenue On and contribution alliance divestment what you and

Sorry, I repeating your Do missed just question? the initial part. mind you

yes. Yes,

you On the the divestment? was can and what prior of EBITDA the to divestment revenue contribution DMC, share the

for we confidentiality Yes. I per we're to employees our overall business. can't dollar metrics, DMC, given the we to this, of provide revenue like amount out mean, why the the contribution trying unfortunately, And related provide was X,XXX the the agreement slightly to that WorldXMeet employee DMC. with from of compared business, exact XXX nature The rest of given that of lower part revenue were it's have the that's DMC. of employees

overall August. of Xst impact. of revenue from the So the full hopefully, some you year transfer DMC happens idea this gives Obviously, of

much is that year, that until December. from impact only the So part, the part August for of

company on impact the DMC again, terms EBITDA lower say In than I of margins were margins. slightly margins business, EBITDA that the our probably would overall

to potential alliance. of plus slightly business, growth of margins for a this expectation this growth we lot had for very company, that through the its we within this alliance or business -- high potential a lower the grow the with the with have level the were same new rest the was at of DMC has for believe Despegar levels business. as the But WorldXMeet -- a the rest So we than believe us, didn't we this

you it. break employees may, of Got versus could other new transitioning if how EBITDA I cost from another raise, efficiencies, those XX% to And on if that much the the the question, is owner out?

are I the Yes, would this at look wouldn't efficiencies we I cost the driving. not much you and we if are are doing in very of in all doing incremental the line that what outside sales is from, even transition. are what in our investments, content, say, marketing, employee items. primarily efficiencies say, we we sales G&A, mean, driving and strong of from from and the much across I not

driven in DMC, significant but of line not the more So very the the items. from of from a sort divestment efficiencies various impact there's being positive all

time the Cantor And one that Fitzgerald. Knoblauch we line more have for comes question. And with from Brett of question

record divestiture? margins. model? given much in a How of going gross line the how do in And you see thinking line, gross forward, that Maybe terms looks just this margin should quarter the about we like the expansion be particularly it additional on item was

structure very our if there, to and be mean, we I we Yes, and sales hope efficiencies as artificial cost our levels, wouldn't forward I from guide the talking gross we also XX%. us cost you might move of benefit. part. cost we profit, as sales, don't intelligence earlier, intelligence is to Gonzalo but of able much us continuing are artificial to drive it parts now, efficiencies drive more helping small more there. Again, already And our at efficiencies. has the we -- in drive to on that of into materially divestiture and is Yes. look was of help again, necessarily utilize about as it put more or throughout utilization pre-pandemic But going down then various of

the some guys bit. year, by about I should of one I the for guess, that operating half Do Perfect. year, looks capital in just half year, And given first especially on year. could impacted the you half it like the cash $XX you more second add expect the down did if good year operating dynamics? of of back flow, the how working back cash expect This was last through we to flow quarter unwind? a million the

that X impact positive quarter some of impact all and flow X, I specifically will then year, if campaigns sale stronger look quarter timing-related Yes. the from or have trends generally, it the the we at quarter you to X. half, QX. which in is is significantly to mean, generator in this over there much a half X, some generally more launched cash movement, year, the stronger operating first forward And some quarter given us second the for going compared and call especially

the turn will conference back closing over any I Scokin now, comments. to And Mr. for

Hi.

for and call. very talking to look Thank next Just much. your in thank Bye. to our interest forward Despegar, you you earnings to we in again everybody wanted

you conference participation. you for And disconnect. this your concludes today's And may Thank call. now