Despegar.com (DESP) Q3 2024 earnings summary

Executive summary

• Achieved record Adjusted EBITDA of $48 million, up 94% year-over-year, and revenue of $194 million, up 9% year-over-year as reported and 53% FX neutral, driven by strong demand, commercial execution, and robust B2B and package sales.

• Take rate reached a record 14.6%, with gross bookings at $1.3 billion and strong performance in Argentina and B2B segments.

• Signed a transformative 10-year lodging outsourcing agreement with Expedia, effective January 2025, improving net asset position and amortizing a $125 million liability.

• Launched and expanded SOFIA, the AI travel assistant, now offered as a SaaS product, with the first licensing deal signed with Karisma Hotels & Resorts.

• Loyalty program membership grew over 50% year-over-year to 30 million, with app-based transactions reaching a record 50.5% of total.

Financial highlights

• Adjusted EBITDA rose 94% year-over-year to $48 million, with margin at a record 24.8%, up 1,089 bps year-over-year.

• Adjusted net income surged 309% year-over-year to $36.1 million; adjusted EPS rose to $0.34 from $0.01.

• Gross margin improved to 73.8%, the highest since IPO, with gross profit up 19% year-over-year to $143.1 million.

• Operating cash flow was $26.6 million, up from $12.7 million in the prior quarter; cash balance grew to $220 million.

• Gross bookings (FX neutral) rose 35% year-over-year to $1.3 billion; as reported, declined 4% year-over-year due to FX headwinds.

Outlook and guidance

• Maintains full-year revenue guidance of at least $760 million, representing at least 8% year-over-year growth, despite FX impacts.

• Raised adjusted EBITDA forecast to at least $170 million, a 47% year-over-year increase.

• Expects continued margin expansion and strong Q4 performance, with FX headwinds factored into guidance.