Despegar.com Corp

Good morning and welcome to Despargar's second quarter 2023 earnings call. A slide presentation is accompanying today's webcast and is available in the investor section of the company's website, www.investor.despargar.com. There will be an opportunity for you to ask questions via telephone at the end of today's presentation. Please note that you can also submit your questions online at any time during the call by using the Q&A function of the webcast platform. Simply type your question in the box and click Submit Question. This conference call is being recorded. And as a reminder, all participants will be in a listen-only mode. Now I'd like to turn the call over to Mr. Luca Pfeiffer, Investor Relations. Please go ahead.

Good morning, everyone, and thanks for joining us today. In addition to reporting unaudited financial results in accordance with U.S. generally accepted accounting principles, we discussed certain non-GAAP financial measures and operating metrics, including foreign exchange and neutral calculations. Investors should read the definitions of these measures and metrics included in our press release carefully to ensure that they understand them. Non-GAAP financial measures and operating metrics should not be considered in isolation as substitutes for or superior to GAAP financial measures and are provided as a supplemental information only. Before we begin our prepared remarks, please turn to slide two and allow me to remind you that certain statements made during the course of the discussion may constitute forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to materially differ, including factors that may be beyond the company's control. These include but are not limited to expectations and assumptions related to the integration and performance of the businesses we acquire, including Best Day, Stace, Via Hanet, and Coin. For description of these risks, please refer to our filings with the U.S. Securities and Exchange Commission and our press release. Speaking on today's call is our CEO, Damian Skokin, who will provide an overview of Despegar's second quarter performance, as well as an update on our strategic initiatives. I will then discuss the quarter's financial results in more detail. After which, Damian will end our prepared remarks and provide an update on our annual guidance. We will then open the call for your questions. Damian will begin his remarks on slide three. Damian, please go ahead.

Thanks, Luca, and good day, everyone. Thank you for joining our results call and for your interest in Despegada. As the quarter's excellent results show, our strategy to drive earnings power continues gaining traction. In addition to the ongoing recovery in travel demand, our improving product mix and higher ASPs drove a 23% increase in revenues, which reached yet another quarterly record of $165 million. Keep in mind that we achieved this in our seasonally weakest quarter. We also maintained our cost discipline during the quarter. OPEX decreased 18 basis points as a percentage of gross bookings when excluding one-time impacts and was even lower on a reported basis as we benefit from the reversal of the tax provisions that we explained in the morning's earnings release. The quarter's top line growth coupled with our underlying operational leverage drove adjusted EBITDA 71% higher to just over 20 million when excluding one-time impacts. That's the highest second quarter EBITDA that we generated since the company's IPO. Further, Coin continues progressing well towards the breakeven point, improving 3.9 million year-over-year and posting only a negative $600,000 of EBITDA in the quarter, as our take rate versus expected losses margin continues to expand. With respect to our many strategic initiatives, we are deepening our omnichannel strategy by employing generative AI and also deploying our successful asset line and tech-enabled offline strategy in new markets. I'll explain both later in our presentation. On this slide, we show the steady progress we have been making across our core strategic initiatives to improve profitability and further diversify our revenue streams. Starting with revenue diversification, higher margin travel packages continue to grow, reaching 33% of our gross bookings in the second quarter. That's an almost 600 basing points increase versus last year. and has been a key component in our non-air revenue, reaching 62% of total revenues. And as we continue to grow in Brazil and Mexico, these massive markets now account for 60% of our gross bookings. Moving to omnichannel in the middle of the slide, we continue to effectively leverage our B2B channels in combination with our wide-label solutions to increase our market penetration, generating 15% of our gross bookings in the quarter. Compared to last year's quarter, that was also roughly 600 basis point increase. In addition, we continue to leverage our technology platform for our app-first approach, which helps drive customer growth and loyalty while also giving us the opportunity to further cross-sell additional travel products to our clients. As shown on this slide, our portfolio of branded apps accounted for nearly 38% of our online B2C transactions in the quarter. At the bottom of the slide, we can see how we continue strengthening the customer relationship with our brand. Today, we have nearly 17 million loyalty program members, while points redemptions doubled over the last year, reaching 8%. Our net promoter score also continues rising as we recover from the impact the pandemic had on customers' travel plans. We are nearing our pre-pandemic score, but we don't plan to stop there. The brand loyalty that customer centricity fosters remain an integral part of our strategy. That, I will turn the call over to Luca for a more detailed review of our second quarter performance.