Despegar.com Corp

available in the investor section of the company's website, investor.desparate.com. There will be an opportunity for you to ask questions at the end of today's presentation. This conference call is being recorded. As a reminder, all participants will be in listen-only mode. Now I would like to turn the call over to Ms. Natalia Nirenberg, Investor Relations. Please go ahead.

Good morning, everyone, and thanks for joining us today for a discussion of our third quarter 2021 report. In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, we discussed certain non-dub financial measures from operating metrics, including exporting exchange user calculations. Investors should read the definition of these measures and metrics included in our spreadsheet carefully to ensure that they understand them. financial measures and operating metrics should not be considered in isolation as substitutes for or superior to the financial measures and are provided as supplemental information only. Before we begin, our prepared remarks allow me to remind you that certain statements may, during the course of the discussion, may constitute a co-evolution statement, which are based on management's correct expectations and beliefs, and are subject to a number of risks and uncertainties that do cause actual results to not be readily felt, including factors that may be beyond the company's control. This includes, but are not limited to, expectations and assumptions related to the impact of the COVID-19 pandemic and the integration and performance of the businesses we apply, including the stay-at-home. For the description of this list, please refer to our filing with the Securities and Exchange Commission and our press release. Speaking on today's call is our CEO, Damián Skokin, who will provide an overview of the third quarter and update you on our strategic priorities. Alberto López-Hazmi, our CFO, will then discuss the quarter's financial results. After that, we open the call to your questions. Damián, please go ahead.

Thank you, Natalia, and good morning, everyone. Thank you for joining us and for your interest in the SPI. Our third quarter results demonstrates that the strategic initiatives undertaken since the start of the pandemic and their successful execution are delivering improved margins when compared to 2019. Our performance this quarter underscores the future earnings power of the company. I'd like to touch on some highlights. We have strong recovery across most of our markets, mainly driven by increased demand for domestic travel. International tourism is just starting to pick up as many countries begin opening their borders to fully vaccinated tourists. Thus, our international transactions increased 120% sequentially, coming from very low levels. As a result, we reported sequential increases of 34% in gross booking and 44% in transactions. This was driven by, first of all, capturing the peak up in Brazil, Argentina, and Chile, countries that were impacted in the prior quarter with the second wave of the virus. Second, another strong quarter in Colombia, where we observed significant pent-up demand. Mexico was the standout in the prior quarter, but had a weaker performance in July and August. and some of best day stores could not open due to the restrictions that impacted some futuristic destinations. In a positive tone, our Mexican operations began to recover in September. This has continued into October. Our geographic diversification has allowed us to talk to growth across the region as market recovers. We continue to closely monitor the key levers of the company, namely price, marketing expenses, and installments. After improvement in our management revenue toolkit, we have been able to report stronger takeaways than pre-pandemic, reaching 3.7% as reported and 13.7% excluding extraordinary cancellations. Similar to past quarters, our take rate benefited from the investment we have made in technology and analytics, which allowed us to price more accurately. improving algorithms to capture more profitable transactions, and the positive impact from Best Day, which has a higher pay grade, were also key contributors. At the same time, on a quarter-on-quarter basis, revenue growth was more than doubled increase in cost of revenues. Lastly, operating expenses increased only 3% sequentially, even as the investments in selling and marketing during the quarter were 36% up sequentially and in line with the increase in gross bookings. Our business leverages the actions taken last year to improve profitability. This has allowed us to be very close to achieving adjusted EBITDA by given when excluding extraordinary challenges. even with gross bookings at only 56% on the third quarter of 2018 level. Importantly, for the month of September, we achieved positive adjusted EBITDA, excluding extraordinary charges. This was an important milestone for us. We remain well capitalized with a healthy cash position of 276 million dollars. turning to slide four for a discussion on a few of our key markets. As various geographies have reopened post-pandemic, consumers have shifted some spend towards travel and entertainment. Along these lines, Brazil and Colombia posted the highest level of gross booking since the start of the pandemic. With most states in Brazil lifting restrictions in July, cross-bookings in the quarter were up 126% sequentially and ASPs up 33% in the same period. By mid-September, several countries lifted restrictions allowing fully vaccinated Brazilians to travel overseas. Furthermore, as of November the 8th, fully vaccinated Brazilians are now allowed to travel to the U.S. showing proof of full vaccination. In Mexico, although borders remained open for flights, activities in main cities were particularly restricted to control an increase in COVID cases. These restrictions affected best-day offline source performance in July and August. On a positive note, cross-bookings have been increasing month over month since August, and international travel was stable on a sequential basis. Regarding the rest of LATAM, North Worthy, Colombia, was 32% above the third quarter of 2019, pre-pandemic levels, reflected pent-up demand as travel restrictions were lifted earlier in the year. In Argentina, we observed a sequential 150% increase in gross bookings. Finally, in Chile, gross bookings nearly doubled sequentially, and the significant growth trend continued into October. As we entered the fourth quarter, October continued with this positive trend across the region. Just to summarize, our geographic diversification has been key in providing a more consistent overall performance for the company. Turning to slide five, we have two really strong initiatives that we continue to deliver on and that I will discuss today. First, our loyalty program has been widely accepted, and we have reached the one million member milestone. Today, a support of SPI is available in Brazil, Argentina, and Mexico. In this regard, we recently signed an agreement to launch a co-branded credit card in Mexico in partnership with Index and Mastercard. Also, capitalizing on increased travel demand, we launched our first offline marketing campaign since 2020. time to travel again and can be seen across all media in Latin America. In Brazil, we have been offering more financing options to customers. We have further deepened penetration in the colar, accounting for 6.5% of all transactions in the third week of October, with a record total purchase volume. Additionally, 5.5% of the collateral transactions in October were paid to PIX, which results in much lower cost of revenue for the collateral, given that these transactions are processed internally. We also completed implementation of risk-based pricing in the travel vertical, which allows us to match the interest rate chart to the risk profile of different customers. On Coin's B2B business, we continue expanding the number of merchants in the e-commerce sector, to which we now provide alternative means for customers to pay via Boleto Parcelar, a buy-now-pay-later payment solution. We now have 30 merchants signed up. We also have four new merchants in payment control, bringing the total number of merchants to 10 year-to-date. Notably, Coin's total purchase value for the quarter tripled sequentially. As we look ahead, we expect to be adding more industries to our two verticals in the very near future. We see a very attractive potential for coin services, buy now, pay later, and fraud prevention, which have a total addressable market of between $15 and $20 billion in Latin America. I will now turn the call over to Alberto to discuss this quarter's financial results.