The following table shows operating expenses on a consolidated basis, post-intersegment eliminations between Despegar’s travel and financial services businesses.
Despegar reported net financial expenses of $12.5 million in 4Q22, compared to $3.8 million in 4Q21. The YoY increase was primarily due to FX losses and higher financing costs associated with the factoring of receivables in Brazil, as a
result of higher interest rates, and partially offset by interest income gains.
The Company reported an Income Tax expense of $5.7 million in 4Q22, compared to an expense of $7.5 million in 4Q21. The effective tax rate in 4Q22 was 61%, compared to 58% in 4Q21.
The increase in the effective tax rate was mainly driven by: i) an increase in valuation allowance of deferred tax assets primarily in the US and Mexico, due to a recoverability analysis for the upcoming years; ii) a decrease in the
unrecognized tax benefits; and iii) a decrease in non-deductible expenses.
Total Adjusted EBITDA in 4Q22 was $12.5 million, 39% above the $9.0 million reported in 4Q21.
The majority of Despegar’s excess cash balance is held in U.S. dollars in the United States and the United Kingdom. Foreign currency exposure is minimized by managing natural hedges, netting the Company’s current assets and current
liabilities in similarly denominated foreign currencies, and by managing short term loans and investments for hedging purposes.
Cash and cash equivalents, including restricted cash, at December 31, 2022, was $245.0 million. During the quarter, Cash and cash equivalents decreased $ 18.0 million, mainly due to a change in working capital dynamics. Aggregate Net
Operational Short-term Obligations were $209.5 million, decreasing 6.0% on a QoQ basis.
Despegar used $17.8 million in Cash from operating activities during 4Q22, mainly due to working capital changes in line with an increase in credit card receivables, predominantly in the Brazilian market. This compares with cash generation of
$1.9 million in 4Q21 and cash generation of $15.3 million in 4Q19.
Despegar’s financial services segment consists of point-of-sale installment loans, Buy Now Pay Later (“BNPL”) services, which enable the Company’s customers as well as customers of third-party merchants to make online purchases and pay off
interest bearing debt in installments, and fraud prevention services.
Despegar’s financial services business maintained its conservative approach to loan origination throughout 4Q22 given still challenging market conditions in Brazil. In line with the declining trend observed throughout the third quarter TPV
reached $15.1 million down 13% YoY. Throughout the 4Q we continued to price risk adequately as the spread between Take Rate and projected losses remain positive. For the quarter, the financial segment reported a Total Adjusted EBITDA of
negative $4.1 million compared to a negative Total Adjusted EBITDA of $3.0 million in 4Q21.
As of July 1, 2018, as a result of a three-year cumulative inflation rate greater than 100% and following the guidance of ASC 830, the U.S. dollar became the functional currency of the Company’s Argentine subsidiary. This change in functional
currency is recognized prospectively in the Company's financial statements. As a result, the impact of any change in currency exchange rate on the Company’s balance sheet accounts is reported in the net financial income/(expense) line of the
income statement instead of other comprehensive income.
4Q22 Earnings Conference Call
When:
|
|
10:00 a.m. Eastern time, March 16, 2023
|
|
|
|
Who:
|
|
Mr. Damián Scokin, Chief Executive Officer
|
|
|
Mr. Alberto López-Gaffney, Chief Financial Officer
|
|
|
Mr. Luca Pfeifer, Investor Relations
|
|
|
|
Dial-in:
|
|
+1-404-975-4839 (U.S. domestic); +1-929-526-1599 (International)
|
|
|
|
Access Code: 159148
|
Pre-Register: You may pre-register at any time: click here. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator.
Webcast: CLICK HERE
Definitions and concepts
Aggregate Net Operational Short-term Obligations: consists of travel accounts payable plus related party payables and accounts payable and accrued expenses, minus trade accounts receivable net of credit expected loss and related party
receivables.
Average Selling Price (“ASP”): reflects Gross Bookings divided by the total number of Transactions.
Foreign Exchange (“FX”) Neutral: calculated by using the average monthly exchange rate of each month of the quarter and applying it to the corresponding months in the current year, so as to calculate what the results would have been
had exchange rates remained constant. These calculations do not include any other macroeconomic effects such as local currency inflation effects.
Gross Bookings: Gross Bookings is an operating measure that represents the aggregate purchase price of all travel products booked by the Company’s customers through its platform during a given period. The Company generates
substantially all of its revenue from commissions and other incentive payments paid by its suppliers and service fees paid by its customers for transactions through its platform, and, as a result, the Company monitors Gross Bookings as an
important indicator of its ability to generate revenue.
In this presentation the Company has also recast previously reported segment financial information for the quarters ended December 31, 2021 to reflect its new reportable segments. The segment change has no impact on the Company’s historical
consolidated financial results.
Seasonality: Despegar’s financial results experience fluctuations due to seasonal variations in demand for travel services. Despegar’s most significant market, Brazil, and much of South America where Despegar operates, are located in the
southern hemisphere where summer runs from December 1 to February 28 and winter runs from June 1 to August 31. Despegar’s most significant market in the Northern hemisphere is Mexico where summer runs from June 1 to August 31 and winter runs
from December 1 to February 28. Accordingly, traditional leisure travel bookings in the Southern hemisphere are generally the highest in the third and fourth quarters of the year as travelers plan and book their winter and summer holiday
travel. The number of bookings typically decreases in the first quarter of the year. In the Northern hemisphere, bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday
travel. The seasonal revenue impact is exacerbated with respect to income by the nature of variable cost of revenue and direct S&M costs, which are typically realized in closer alignment to booking volumes, and the more stable nature of
fixed costs.
Total Adjusted EBITDA: is calculated as net income/(loss) exclusive of financial income/(expense), income tax, depreciation and amortization, impairment charges, stock-based compensation expense, restructuring charges and acquisition
transaction costs.
Total Revenue: The Company reports its revenue on a net basis for the majority of its transactions, deducting cancellations and amounts collected as sales taxes. The Company presents its revenue on a gross basis for some transactions when it
pre-purchases flight seats. These transactions have been limited to date. Despegar derives substantially all of its revenue from commissions and incentive fees paid by its travel suppliers and service fees paid by the travelers for transactions
through its platform. To a lesser extent, Despegar also derives revenue from advertising, its installment loans and Buy Now Pay Later offered through the company’s fintech platform Koin and other sources (i.e. destination services, loyalty and
interest revenue). For more additional information regarding Despegar’s revenue recognition policy, please refer to “Summary of significant accounting policies” note of Despegar’s Financial Statements.
Total Revenue Margin: calculated as revenue divided by Gross Bookings.
TPV: means Total Purchase Volume, and is equivalent to the volume processed by the BNPL financing solution during a specific period of time. Reporting Business Segments: In 2022, in connection with a new strategy by management to expand the
financial services business, the relevance of this business to the consolidated results of operations of the Company has increased significantly. In addition to the Company’s plans for expanding the financial services business outside of
Brazil, the Company is incorporating into the business other service offerings, such as fraud identification, analysis and credit scoring for the Company’s travel business and other merchants, as well as providing technology/IT services to the
Company’s travel business and other merchants. As a consequence the Company’s business is organized into the following segments: (1) Air, which primarily consists of facilitation services for the sale of airline tickets on a stand-alone basis
and excludes airline tickets that are packaged with other non-airline flight products, (2) Packages, Hotels and Other Travel Products, which primarily consists of facilitation services for the sale of travel packages (which can include airline
tickets and hotel rooms), as well as stand-alone sales of hotel rooms (including vacation rentals), car rentals, bus tickets, cruise tickets, travel insurance and destination services. Both segments also include sale of advertisements and, to a
lesser extent, incentives earned from suppliers and interest revenue, and (3) one financial services segment, which consists of point of sale installment loans and buy now pay later services that allow customers to make purchases and pay off
the interest bearing debt in installments.
Transactions: The number of transactions for a period is an operating measure that represents the total number of customer orders completed on Despegar’s platforms in such period. The number of transactions is an important metric
because it is an indicator of the level of engagement with the Company’s customers and the scale of its business from period to period. However, unlike Gross Bookings, the number of transactions is independent of the average selling price of
each transaction, which can be influenced by fluctuations in currency exchange rates among other factors.
About Despegar.com
Despegar is the leading online travel company in Latin America. For over two decades, it has revolutionized the tourism industry through technology. Despegar today is a consolidated group that, in addition to the Despegar and Decolar brands,
also includes Best Day, Viajes Falabella, Koin, the Company's fintech business, Viajanet and Stays. With its continuous commitment to the development of the sector, Despegar has become one of the most relevant companies in the region able to
offer a tailor-made experience for more than 29 million customers.
Despegar operates in 20 countries in the region, accompanying Latin Americans from the moment they dream of traveling until they share their memories. With the purpose of improving people's lives and transforming the shopping experience, it
has developed alternative payment methods and financing, democratizing access to consumption and bringing Latin Americans closer to their next travel experience. Despegar is traded on the New York Stock Exchange (NYSE: DESP). For more
information, please visit www.despegar.com.
About This Press Release
This press release does not contain sufficient information to constitute a complete set of interim financial statements in accordance with U.S. GAAP. The financial information is this earnings release has not been audited.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We base these forward-looking statements
on our current beliefs, expectations and projections about future events and financial trends affecting our business and our market. Many important factors could cause our actual results to differ substantially from those anticipated in our
forward-looking statements. Forward-looking statements are not guarantees of future performance. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or to revise any
forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release.
The words “believe,” “may,” “should,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “will,” “expect” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our
possible or assumed future results of operations, business strategies, capital expenditures, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of
competition. In particular, the COVID-19 pandemic, and governments’ extraordinary measures to limit the spread of the virus, are disrupting the global economy and the travel industry, and consequently adversely affecting our business, results
of operation and cash flows and, as conditions are uncertain and changing rapidly, it is difficult to predict the full extent of the impact that the pandemic will have or when travel will resume at pre-pandemic levels. Considering these
limitations, you should not make any investment decision in reliance on forward-looking statements contained in this press release.
-- Financial Tables Follow --
Unaudited Consolidated Statements of Operations for the three-month periods ended December 31, 2022 and 2021 (in thousands of U.S. dollars, except as otherwise indicated)
|
|
4Q22
|
|
4Q21
|
|
% Chg
|
Total Revenue |
|
145,542
|
|
|
124,556
|
|
|
17
|
%
|
Cost of revenue |
|
44,897
|
|
|
53,765
|
|
|
(16
|
%)
|
Gross profit |
|
100,645
|
|
|
70,791
|
|
|
42
|
%
|
Operating expenses |
|
|
|
|
|
|
Selling and marketing |
|
46,245
|
|
|
34,582
|
|
|
34
|
%
|
General and administrative (1) |
|
26,092
|
|
|
18,689
|
|
|
40
|
%
|
Technology and product development
|
|
25,015
|
|
|
19,508
|
|
|
28
|
%
|
Total operating expenses |
|
97,352
|
|
|
72,779
|
|
|
34
|
%
|
|
|
|
|
|
|
|
Loss from equity investments |
|
(192
|
)
|
|
343
|
|
|
n.m.
|
|
Operating income / (loss) |
|
3,101
|
|
|
(1,645
|
)
|
|
n.m.
|
|
Financial result, net |
|
(12,543
|
)
|
|
(3,809
|
)
|
|
n.m.
|
|
Net loss before income taxes |
|
(9,442
|
)
|
|
(5,454
|
)
|
|
n.m.
|
|
Income tax benefit |
|
5,717
|
|
|
7,545
|
|
|
(24
|
%)
|
Net loss |
|
(15,159
|
)
|
|
(12,999
|
)
|
|
n.m.
|
|
Net income attributable to non controlling interest |
|
-
|
|
|
526
|
|
|
n.m.
|
|
Net loss attributable to Despegar.com, Corp |
|
(15,159
|
)
|
|
(12,473
|
)
|
|
n.m.
|
|
|
|
|
|
|
|
|
(1) Starting 2Q22, the Company reclassified for each of the periods shown bad debt related to Koin and Despegar from General and
Administrative expenses to Cost of Revenue to more accurately reflect Despegar´s cost structure. |
Key Financial & Operating Trended Metrics (in thousands of U.S. dollars, except as otherwise indicated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q21
|
|
2Q21
|
|
3Q21
|
|
4Q21
|
|
1Q22
|
|
2Q22
|
|
3Q22
|
|
4Q22
|
FINANCIAL RESULTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
|
$51,850
|
|
|
$63,069
|
|
|
$83,368
|
|
|
$124,556
|
|
|
$112,414
|
|
|
$134,421
|
|
|
$145,596
|
|
|
$145,542
|
|
Cost of revenue |
|
30,092
|
|
|
38,429
|
|
|
37,953
|
|
|
53,765
|
|
|
42,558
|
|
|
45,149
|
|
|
50,305
|
|
|
44,897
|
|
Gross profit |
|
21,758
|
|
|
24,640
|
|
|
45,415
|
|
|
70,791
|
|
|
69,856
|
|
|
89,272
|
|
|
95,291
|
|
|
100,645
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
15,382
|
|
|
19,188
|
|
|
26,138
|
|
|
34,582
|
|
|
30,517
|
|
|
42,214
|
|
|
46,174
|
|
|
46,245
|
|
General and administrative |
|
20,148
|
|
|
22,696
|
|
|
22,162
|
|
|
18,689
|
|
|
23,523
|
|
|
27,037
|
|
|
24,873
|
|
|
26,092
|
|
Technology and product development |
|
17,460
|
|
|
18,344
|
|
|
19,432
|
|
|
19,508
|
|
|
20,735
|
|
|
21,407
|
|
|
22,834
|
|
|
25,015
|
|
Impairment of long-lived assets |
|
5,106
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total operating expenses |
|
58,096
|
|
|
60,228
|
|
|
67,732
|
|
|
72,779
|
|
|
74,775
|
|
|
90,658
|
|
|
93,881
|
|
|
97,352
|
|
(Loss) / Gain from equity investments |
|
376
|
|
|
(348
|
)
|
|
(29
|
)
|
|
343
|
|
|
117
|
|
|
16
|
|
|
(105
|
)
|
|
(192
|
)
|
Operating (loss) / Income |
|
(35,962
|
)
|
|
(35,936
|
)
|
|
(22,346
|
)
|
|
(1,645
|
)
|
|
(4,802
|
)
|
|
(1,370
|
)
|
|
1,305
|
|
|
3,101
|
|
Financial result, net |
|
(1,309
|
)
|
|
(1,835
|
)
|
|
(3,254
|
)
|
|
(3,809
|
)
|
|
(7,023
|
)
|
|
(10,529
|
)
|
|
(15,359
|
)
|
|
(12,543
|
)
|
Loss before income taxes |
|
(37,271
|
)
|
|
(37,771
|
)
|
|
(25,600
|
)
|
|
(5,454
|
)
|
|
(11,825
|
)
|
|
(11,899
|
)
|
|
(14,054
|
)
|
|
(9,442
|
)
|
Income tax (benefit) / expenses |
|
292
|
|
|
(6,413
|
)
|
|
(1,654
|
)
|
|
7,545
|
|
|
19,093
|
|
|
1,266
|
|
|
(4,767
|
)
|
|
5,717
|
|
Net loss |
|
(37,563
|
)
|
|
(31,358
|
)
|
|
(23,946
|
)
|
|
(12,999
|
)
|
|
(30,918
|
)
|
|
(13,165
|
)
|
|
(9,287
|
)
|
|
(15,159
|
)
|
Net income attributable to non controlling interest |
|
$180
|
|
|
$258
|
|
|
$273
|
|
|
$526
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Despegar.com, Corp |
|
(37,383
|
)
|
|
(31,100
|
)
|
|
(23,673
|
)
|
|
(12,473
|
)
|
|
(30,918
|
)
|
|
(13,165
|
)
|
|
(9,287
|
)
|
|
(15,159
|
)
|
Total Adjusted EBITDA |
|
($20,024
|
)
|
|
($22,256
|
)
|
|
($10,346
|
)
|
|
$9,002
|
|
|
$6,787
|
|
|
$10,594
|
|
|
$12,015
|
|
|
$12,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
($37,563
|
)
|
|
($31,358
|
)
|
|
($23,946
|
)
|
|
($12,999
|
)
|
|
($30,918
|
)
|
|
($13,165
|
)
|
|
($9,287
|
)
|
|
($15,159
|
)
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expense, net |
|
1,309
|
|
|
1,835
|
|
|
3,254
|
|
|
3,809
|
|
|
7,023
|
|
|
10,529
|
|
|
15,359
|
|
|
12,543
|
|
Income tax expense |
|
292
|
|
|
(6,413
|
)
|
|
(1,654
|
)
|
|
7,545
|
|
|
19,093
|
|
|
1,266
|
|
|
(4,767
|
)
|
|
5,717
|
|
Depreciation expense |
|
1,569
|
|
|
1,401
|
|
|
2,451
|
|
|
1,497
|
|
|
1,672
|
|
|
1,699
|
|
|
2,144
|
|
|
1,504
|
|
Amortization of intangible assets |
|
7,095
|
|
|
6,827
|
|
|
6,457
|
|
|
6,909
|
|
|
6,584
|
|
|
6,937
|
|
|
6,871
|
|
|
8,593
|
|
Share-based compensation expense |
|
2,149
|
|
|
5,444
|
|
|
3,092
|
|
|
2,241
|
|
|
3,333
|
|
|
3,328
|
|
|
1,305
|
|
|
(673
|
)
|
Impairment charges |
|
5,106
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
Restructuring charges |
|
19
|
|
|
8
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
Acquisition transaction costs |
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
390
|
|
|
–
|
|
Total Adjusted EBITDA |
|
($20,024
|
)
|
|
($22,256
|
)
|
|
($10,346
|
)
|
|
$9,002
|
|
|
$6,787
|
|
|
$10,594
|
|
|
$12,015
|
|
|
$12,525
|
|
1. In thousands
|
2. Starting 2Q22, the Company reclassified bad debt related to Koin and Despegar from General and Administrative expenses to Cost of Revenue to more accurately reflect Despegar´s cost
structure.
|
Unaudited Consolidated Balance Sheet as of December 31, 2022 and September 30, 2022 (in thousands of U.S. dollars, except as otherwise indicated)
|
|
As of December 31, 2022
|
|
As of September 30, 2022
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
219,167
|
|
|
222,682
|
|
Restricted cash |
|
25,879
|
|
|
40,397
|
|
Trade accounts receivable, net of credit expected loss |
|
147,806
|
|
|
121,171
|
|
Loan receivables, net |
|
15,385
|
|
|
15,042
|
|
Related party receivable |
|
10,676
|
|
|
16,603
|
|
Other current assets and prepaid expenses |
|
46,193
|
|
|
37,075
|
|
Total current assets |
|
465,106
|
|
|
452,970
|
|
Non-current assets |
|
|
|
|
Other assets and prepaid expenses |
|
69,784
|
|
|
77,619
|
|
Loan receivables, net |
|
1,185
|
|
|
1,349
|
|
Lease right-of-use assets |
|
22,428
|
|
|
23,278
|
|
Property and equipment net |
|
15,532
|
|
|
16,802
|
|
Intangible assets net |
|
91,500
|
|
|
91,109
|
|
Goodwill |
|
138,637
|
|
|
134,512
|
|
Total non-current assets |
|
339,066
|
|
|
344,669
|
|
TOTAL ASSETS |
|
804,172
|
|
|
797,639
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued expenses |
|
58,024
|
|
|
51,926
|
|
Travel suppliers payable |
|
287,834
|
|
|
282,354
|
|
Related party payable |
|
37,472
|
|
|
41,395
|
|
Short-term debt |
|
29,931
|
|
|
25,373
|
|
Deferred Revenue |
|
23,348
|
|
|
21,059
|
|
Other liabilities |
|
113,794
|
|
|
85,522
|
|
Contingent liabilities |
|
7,982
|
|
|
16,714
|
|
Lease Liabilities |
|
6,081
|
|
|
6,174
|
|
Total current liabilities |
|
564,466
|
|
|
530,517
|
|
Non-current liabilities |
|
|
|
|
Other liabilities |
|
20,845
|
|
|
39,842
|
|
Contingent liabilities |
|
30,593
|
|
|
24,589
|
|
Long term debt |
|
5,119
|
|
|
8,023
|
|
Lease liabilities |
|
17,151
|
|
|
17,747
|
|
Related party liability |
|
125,000
|
|
|
125,004
|
|
Total non-current liabilities |
|
198,708
|
|
|
215,205
|
|
TOTAL LIABILITIES |
|
763,174
|
|
|
745,722
|
|
|
|
|
|
|
Series A non-convertible preferred shares |
|
121,449
|
|
|
114,354
|
|
Series B convertible preferred shares |
|
46,700
|
|
|
46,700
|
|
Mezzanine Equity |
|
168,149
|
|
|
161,054
|
|
|
|
|
|
|
SHAREHOLDERS’ DEFICIT |
|
|
|
|
Common stock |
|
287,553
|
|
|
285,014
|
|
Additional paid-in capital |
|
323,705
|
|
|
334,518
|
|
Other reserves |
|
(728
|
)
|
|
(728
|
)
|
Accumulated other comprehensive loss |
|
(16,091
|
)
|
|
(21,509
|
)
|
Accumulated losses |
|
(643,323
|
)
|
|
(628,165
|
)
|
Treasury Stock |
|
(78,267
|
)
|
|
(78,267
|
)
|
Total Shareholders' Deficit Attributable to Despegar.com Corp |
|
(127,151
|
)
|
|
(109,137
|
)
|
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT |
|
804,172
|
|
|
797,639
|
|
Unaudited Statements of Cash Flows for the three-month periods ended December 31, 2022 and 2021 (in thousands of U.S. dollars, except as otherwise indicated)
|
|
3 months ended December 31,
|
|
|
2022
|
|
2021
|
Cash flows from operating activities |
|
|
|
|
Net loss |
|
($15,159
|
)
|
|
($12,999
|
)
|
Adjustments to reconcile net income / (loss) to net cash flows from operating
activities: |
|
|
|
|
Net income attributable to redeemable non-controlling interest |
|
–
|
|
|
$526
|
|
Unrealized foreign currency translation income / (losses) |
|
$1,536
|
|
|
($997
|
)
|
Depreciation expense |
|
$1,504
|
|
|
$1,497
|
|
Amortization expenses |
|
$8,593
|
|
|
$6,909
|
|
Disposals of property and equipment |
|
–
|
|
|
($1,016
|
)
|
Earnout |
|
($290
|
)
|
|
($925
|
)
|
Indemnity |
|
$290
|
|
|
$925
|
|
Loss from equity investments |
|
$192
|
|
|
($343
|
)
|
Stock based compensation expense |
|
($673
|
)
|
|
$2,241
|
|
Amortization of lease right-of-use assets |
|
$919
|
|
|
$1,318
|
|
Interest and penalties |
|
$884
|
|
|
$561
|
|
Income taxes |
|
$1,969
|
|
|
$2,028
|
|
Allowance for credit expected losses |
|
$3,510
|
|
|
$2,910
|
|
Provision for contingencies |
|
$10,827
|
|
|
$2,655
|
|
Changes in assets and liabilities net of non-cash transactions: |
|
|
|
|
Increase in trade accounts receivable, net of credit expected loss |
|
($28,889
|
)
|
|
($43,855
|
)
|
Increase in Loans receivables |
|
($2,131
|
)
|
|
($5,508
|
)
|
Decrease / (increase) in related party receivables |
|
$5,934
|
|
|
($8,227
|
)
|
Increase in other assets and prepaid expenses |
|
($122
|
)
|
|
($7,498
|
)
|
Increase in accounts payables and accrued expenses |
|
$5,144
|
|
|
$12,779
|
|
(Decrease) / increase in travel suppliers payables |
|
($25
|
)
|
|
$39,322
|
|
Increase in other liabilities |
|
$4,380
|
|
|
$5,115
|
|
(Decrease) / increase in contingent liabilities |
|
($13,611
|
)
|
|
$159
|
|
(Decrease) / increase in related party liabilities |
|
($4,040
|
)
|
|
$4,360
|
|
Decrease in leases liability |
|
($481
|
)
|
|
($1,345
|
)
|
Increase in deferred revenue |
|
$1,987
|
|
|
$1,389
|
|
Net cash flows (used in) / provided by operating activities |
|
(17,752
|
)
|
|
1,981
|
|
Cash flows from investing activities: |
|
|
|
|
Increase in Loan Receivables |
|
($2,195
|
)
|
|
($1,731
|
)
|
Collection on Loan Receivables |
|
$2,082
|
|
|
$291
|
|
Acquisition of property and equipment |
|
($534
|
)
|
|
($802
|
)
|
Increase of intangible assets including internal-use software and website development |
|
($8,266
|
)
|
|
($5,893
|
)
|
Cash flows from financing activities: |
|
|
|
|
Net (decrease) / increase of short term debt |
|
($2,082
|
)
|
|
$11,412
|
|
Increase in long-term debt |
|
$555
|
|
|
$88
|
|
Decrease in long-term debt |
|
($1
|
)
|
|
($1,564
|
)
|
Payment of dividends to stockholders |
|
($504
|
)
|
|
($504
|
)
|
Exercise of stock-based awards |
|
–
|
|
|
$201
|
|
Collect on debenture issuance by securitization program |
|
$4,016
|
|
|
–
|
|
Net cash flows provided by financing activities |
|
1,984
|
|
|
9,633
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
$6,648
|
|
|
($449
|
)
|
Net decrease in cash and cash equivalents |
|
($18,033
|
)
|
|
$3,030
|
|
Cash and cash equivalents as of beginning of the year |
|
$263,079
|
|
|
$276,192
|
|
Cash and cash equivalents as of end of the period |
|
$245,046
|
|
|
$279,223
|
|
Use of Non-GAAP Financial Measures
This earnings release includes certain references to Total Adjusted EBITDA, a non-GAAP financial measure. For the year ended December 31, 2020, Despegar changed the calculation of Total Adjusted EBITDA reported to the chief operating decision
maker to exclude restructuring charges and acquisition costs. The Company defines:
Total Adjusted EBITDA as net income/(loss) exclusive of financial income/(expense), income tax, depreciation and amortization, impairment charges, stock-based compensation expense, restructuring charges and acquisition transaction
costs.
Adjusted EBITDA is not a measure recognized under U.S. GAAP. Accordingly, readers are cautioned not to place undue reliance on this information and should note that these measures as calculated by the Company, differ materially from similarly
titled measures reported by other companies, including its competitors.
To supplement its consolidated financial statements presented in accordance with U.S. GAAP, the Company presents foreign exchange (“FX”) neutral measures.
This non-GAAP measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP
measure is not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S.
GAAP. This non-GAAP financial measure should only be used to evaluate our results of operations in conjunction with the most comparable U.S. GAAP financial measures.
On page 5 of this earnings release the company shows FX neutral measures to the most directly comparable GAAP measure. The Company believes that comparing FX neutral measures to the most directly comparable GAAP measure provides investors an
overall understanding of our current financial performance and its prospects for the future. Specifically, we believe this non-GAAP measure provides useful information to both management and investors by excluding the foreign currency exchange
rate impact that may not be indicative of our core operating results and business outlook.
The FX neutral measures were calculated by using the average monthly exchange rates for each month during 2021 and applying them to the corresponding months in 2022, so as to calculate what results would have been had exchange rates remained
stable from one year to the next. The table below excludes intercompany allocation FX effects. Finally, this measure does not include any other macroeconomic effect such as local currency inflation effects, the impact on impairment calculations
or any price adjustment to compensate for local currency inflation or devaluations.