Despegar.com (DESP) Q2 2024 earnings summary

Executive summary

• Revenue grew 12% year-over-year to $185M, with constant currency revenue up 46% and a 13.8% take rate, driven by strong package sales and robust demand in Brazil and Mexico.

• Adjusted EBITDA reached $37M, up 22% year-over-year (82% excluding a prior one-time benefit), with margin up to 19.8%.

• Adjusted net income hit $30.2M, up 397% year-over-year; reported net income fell due to a prior-year tax benefit.

• Gross bookings grew 4% year-over-year to $1.3B, or 37% in constant currency, despite significant FX headwinds and flooding in Brazil.

• Divestment of the DMC/BDexperience business and new strategic alliance with World2Meet to focus on core operations, with 600 employees transitioned.

Financial highlights

• Gross bookings: $1.3B (+4% reported, +37% constant currency year-over-year).

• Revenue: $185M (+12% year-over-year, +46% constant currency); take rate improved to 13.8%.

• Adjusted EBITDA: $37M (+22% year-over-year, +82% excluding prior one-time benefit); margin up to 19.8%.

• Operating cash flow: $12.7M (down from $28.9M year-over-year, due to working capital timing); cash balance: $204M (down $39M year-over-year, due to working capital, dividends, and factoring expenses).

• B2B and White Label gross bookings up 43% and 7% year-over-year, now 18% of total gross bookings.

Outlook and guidance

• FY24 revenue guidance lowered to at least $760M (8% year-over-year growth), down from $820M, reflecting FX headwinds and DMC divestiture.

• FY24 adjusted EBITDA guidance raised to at least $160M (39-40% year-over-year growth), up from $155M, due to strong cost efficiencies.

• Expect continued strong constant currency growth and operating leverage.