Q3 2020 Earnings Call

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You May proceed sir.

Greetings and welcome everyone to make my trip limit its fiscal Twentytwenty third quarter earnings call I would like to remind everyone that certain statements made on today's call are considered forward looking statements in the meeting of the Safe Harbor provisions.

I was private Securities Litigation Reform Act 1995.

Statements are not guarantees of future performance.

Okay inherit uncertainties and actual results may differ materially any forward looking information relayed on this call speaks only as of the states. The company undertakes no obligation to update the information like changed circumstances.

Additional information concerning these statements are contained in the risk factors and forward looking statements actually the company's airports.

20, a file with the FCC on July 20, Threerd 2019.

So these filings are available from the FCC from the company's Investor Relations.

Hey, I'm joined by do you, Colorado make my trips founder Rajesh, Magow cofounder and Macabre Arts group CFO.

Now I'd like to trying to Colbert a deep to begin today's discussion.

Thanks, John and welcome everyone to our third quarter earnings calls for fiscal year Twentytwenty.

I'd like to begin by shedding some highlights from our government's recent budget announcement, which laid out initiatives to support long term development and growth for the domestic travel industry.

Then I'd like to provide an update of our operating environment, which remained a headwind in Q.

Lastly, I'd like to highlight that business accomplishments from the fiscal third quarter, even as we faced challenges that for mainly beyond our control.

Earlier this month, the finance Minister of India announce the annual budget for fiscal year 2021.

We were happy to hear various initiatives to support long term growth of domestic travel and tourism.

This included about 100 more airports by 2024 aimed at enabling greater regional domestic air connectivity under the Hood on congrats.

The expansion will help to accommodate the rapid expansion of the country's domestic fleet capacity, which is expected to double the 1200, playing in the next four to five yes.

The budget has also indicated the government's billing that does on as many as 150 high speed trains to connect keep tourist destination, yeah public private partnerships.

Furthermore, the Ministry of culture is expected to receive considerable financial resources to develop numerous museums.

He archaeological sites across India at the same time, the Ministry will also be tossed with establishing that means Jude attitudes and conservation to better position about countries, Richard cultural heritage and for the Boosterism gold in the longer.

These stores are focused proposals in the budget out in addition to the reduction of the goods and services stack. So GST rates on hotels across India, which was effective last October.

While we are excited to get up the various government Denise here just to drive sustained domestic tourism growth shopped I'm convinced continues.

The IMF had recently reduced India as GDP growth for cost, 4.8% for the current fiscal year and what do you didn't deceleration from the 6.8% growth achieved in the last fiscal year.

In fact, north in the current fiscal is likely to be the lowest in over a decade foreign debt.

If inflation as measured by sea <unk> has been increasing throughout the year on stood at 7.4% for December four recent dog B. I estimates. In addition, the country's consumer confidence also reached a six year low.

As weak macro conditions had been impacting overall consumer sentiment also with the current fiscal year and lower discretionary spending.

The good news however is that the IMF does anticipate the current fiscal years economic slowdown to be temporary and expect growth.

We actually read in the next two years aided by monetary and fiscal stimulus. In addition to subdued oil prices.

On another positive nor was the domestic AD industry in the fourth call for the fiscal year was impacted by law suits capacity you to shut down of jet areas, we saw or de acceleration of market growth after nearly 6% in Q3.

We remain hopeful that the gradual rebounded growth will continue in the coming forth as.

Furthermore, we are pleased that despite weak demand conditions I make my trip group not only outpaced market growth, but also accelerated the growth in Standalone Hotel room nights and continued to achieve strong growth in other underpenetrated online travel segments during the fourth.

That's the same time, we were also able to further reduce operating losses by driving greater marketing and promotional spend efficiencies.

Another key development in this current quarter has been the outbreak off the novel grow Nobody does which is impacting travel in various parts of the war.

We are hopeful that with the significant measures being taken globally.

The impact.

At this outbreak could be sharp live for the entire global travel industry.

I will make my trip, we believe our domestic business should remain fairly insulated. However, we started seeing higher than normal cancellations in our outbound business do you do died outbreak.

Bookings for destinations in southeast Asia have begun to see cancellations greater than normal and outbound travel to these destinations is likely to be factored in the shopped on.

Now I'd like to shed a few bites and the progress made during the fiscal third quarter.

On a life to date transacted basis, we for the white enough leads to more than 46 million customers.

Given that India has been largely an off line population of travel because our team continued to drive greater brand awareness via both online and traditional media campaigns, while optimizing for greater returns on marketing spend.

As a result direct traffic on Oh, Dear brands make my trip and why people confuse took on for more than half the traffic, which is you did for though by the Betty I should've transactions. They can lead to our mobile app and insights.

During Q3, we also achieved quarterly overall, which includes a 70% across our entire platform by leveraging our loyalty and retention programs.

I'll make my trip Black program now has over 1.1 million enrollees and we have across more than 139000 enrollees within the bead make my trip W. Black membership program.

These programs have been successful in meaningfully increasing make my trip transacting base over the year similar Leaguewide People's loyalty program Gold award as well, what 2.3 million hi, geared users helping to continuously improve our platform.

I'd also like to shed a quick update on our corporate travel strategy, which continues to see very strong girls.

During the quarter all my based program continued to gain traction has more than 750, midsize culprits and almost 4000 Esa knees, another just stuck to our platform.

Oh, My based product and experience also continued to improve for registered users. For example, corporates can now track potential savings by the employee users can also seamlessly book multi city flight, both domestic and international across desktop and mobile apps as for our tech enabled managed.

I was solution for large corporate I went to travel we continue to win large corporate accounts, including taught out Yaggi insurance and Thermo Fisher scientific during the bus sport.

Lastly, we see strong opportunities for product innovation expansion over the medium and long term in the travel market.

Wrapping these opportunities can allow me my trip to continue to grow and expand our market leading position.

I believe that separating the roles of group's CEO and executive Chairman will allow us to focus more on long term strategic opportunities within and outside India, while maintaining our market leading position in our existing businesses.

Consequently, I'm very pleased to announce that drive dish Margo make my trips co founder and Chief Executive Officer, Delphi, India business has been elevated to the role of group CEO.

The last six years right dish has been credited with navigating I can get business through varied competitive dynamics and championing the growth of five diversified revenue streams.

He has successfully integrated died people group and help to capitalize on significant synergies across the brands and Pete.

The board and I have a most confidence in Raj issues capabilities in its elevated rolled that drives the next phase of growth for the girl through three strong brands make my trip why be borne Greg bus in this role he will continue to work closely with me.

In conclusion. This transition will also allow me to the board well Diamond focus to strategic initiatives will make my trip with includes product innovation and expansion geographic growth business model innovation and corporate do away.

With that I'd like to turn the call all worked at the new groups seal.

[laughter], Thanks, Steve and greetings everyone.

I'm pleased that even during the Peter do if we can do my sentiment.

I've been able to deliver a good quarter good decent growth in domestic whatever I would learn who doesn't flight.

Less than the bus booking business by lower domestic flights business continued to deliver design numbers.

We had also been successful in achieving better efficiencies in customer acquisition costs before do that's amazing on his promotion spend which has led to a meaningful reduction in not adjusted operating losses.

Now I would like to shed some key highlights from our most recent operating there's a.

They didn't know it will shed more color on a quarterly financial result.

In fiscal Q3, the make went to group achieved record quarterly gross bookings over $1.7 billion, a constant currency growth of nearly 19%.

This represents nearly $4.9 billion in gross bookings and constant currency growth of over 21% for the nine month, so fiscal twentytwenty.

Our Q3 adjusted revenue also do you shouldn't you quarterly high of $206.7 million.

The nine months of this fiscal year. The adjusted revenue reached $586.2 million the constant currency growth off what was 16% year on you know.

We also achieved a new record of nearly 8.2 million room night in our Standalone online hotels business during Q3.

Yes, it presents a yard on.

You had on your growth of over 21% and a reacceleration in volume growth from the previous two quarters. The de acceleration was led by strong remote stronger bernardez and alternative accommodations growth as well as the acceleration of growth within our domestic hotels business.

Oh I'm currently we sharply focused on marketing and promotional spend to drive greater operational efficiencies.

From a supply standpoint, we expanded our selection to over 72000 recommendation properties.

Well get a little bit in India, which include which included 19000 alternative accommodation properties.

During Q3.

Hi platform continue to drive more business Dawson supply partners is more than three quarters off our lifted or does the Steve active bookings from a platform underscoring the value added to never been partner, who distribute to our platform. During this peak travel quarter on an ongoing investments in alternative accommodations continued.

As we focus on driving awareness of this fast growing segment.

Oh My goodness, the marketing campaign on both social another high disappeared traditional media channels. Furthermore, we see an opportunity in Barton I would state governments and tourism board to promote local and community based traveling I just let's step the airport no did stay tourism Board XOMA deposition and took on group.

For more talking I'm still trying to to broaden out each across India Encouragingly, we have seen very strong bookings and room nights growth from travelers, so far and he will keep investing to drive further adoption, while our differentiated product experience for because it was.

That's what I'm traveling.

And what did we now offer over 500000 international properties well that you didn't housing have been directly contracted on all platforms I'm pleased to share their delivered another strong room nights and bookings were looking out a wonder does business, despite flattish growth and not in overall Oakland traveled from India. In addition.

Focus on marketing spend optimizations continued to improve the unit economics of the fast growth segment.

Holidays business had also seen them on this revival of growth during the quarter.

This was led by shopper targeting of new went bust <unk> customers and they did organizational to order into element teams like pilgrimage honeymoons adventure cruises and million in travel I'm pleased to see revived growth to our legacy packages rotor as these drug products out of often the first.

Touch points with future online self sub Lucas.

Now I would like to show some highlights from our ongoing product enhancements.

Helping to deliver a best in Las Vegas mixed feelings really not domestic whatever's going on internally recommendations business, we rolled out a new more by listing speech domain could fostered an easier for me my trip shoppers domain. The best collection, possibly the also went live with a new graduates so its function, which Bronx users with it.

Limit questions to that doesn't ever been such as soon.

As for brand globally people, you embedded in new contextual bags, but didn't know funnel to assist shoppers in finding what does that best suits that needs as far out alternative accommodation.

Businesses. These events I realize an apartment step to drive greater visibility and discovery ability as a viable alternative to traditional okay.

We also launched already quite stealing share do what alternative accommodations supported by a money back out into two uses.

As far out internationally. This product you further expanded relationship would see trip to offer out among customers and even why this election on for the locations. In fact, we now have over 250000 hotels integrated and and and plan.

[music] meaningfully increase that mix overseas are done business source for future going forward.

No I would like to share an update on another keep a lot of our growth strategy, which is our superior for sales support.

The ongoing investments in multiple say six opposed to support continued to help us drive leverage as our business scales celebrating me my true our trip assist future has been scaled up to cater to order domestic flight because the features can provide timely and relevant notifications to.

To help users reach the proper chicken conquer Audrey luggage bears effortlessly.

They persist as they once were able to help customers.

Three but she is Ed put me this before taking their flight my scaling up I don't think do change feature to support over 30 Airlines. The also managed to reduce costs into context by international flight because meaningfully we introduced a new like chart feature directly connects potentially customers with alternative accommodations.

Just to make their shopping process easier and provided they too bad it leaders all concerns sportsbook even faster.

In Q3, I Chalkboards, yeah, I'd been enhance for anyone but did experience by leveraging the latest advancements in artificial intelligence and the natural language processing.

Yeah, I did mode forces use cases.

Our international flight product for example, you I couldn't help answer questions like flight status.

Terminal information cancellation in different queries, much faster and more effortlessly there no human call. Operator Lastly, we also expanded you guys road to help boycott customers with poor sales quantities, which is much faster and more convenient then using the call center. Similarly, our English business on certain degree.

Richard its customer support platform with suppliers to directly connect customers and operators for foster resolution off any issues.

Furthermore, we improved the current pinto not apps by adding more relevant did including nearby landmarks and GPS coordinates to help pinpoint precise bus pickup and drop off locations. Our team also improved assigning experience for mobile web users and also agree to listen I position.

Now I would like to discuss highlights from our flight business, which continued to outpace overall market growth to expand our domestic getting market share to about 27% in December.

As far out international flights business I'm pleased to share their during Q3, good continue to be very healthy even as overall market for old ones like remain flattish on a year on year basis.

Lastly, our bus business continued to grow value with nearly a 32% in Greece indicates or year over year, driven by the strength of the brand and our continued efforts to enhance.

With that experience, let me know handed over to my quick who will share more financial details of the corridor.

Hi tradition, and I know everybody.

The pieces for the during Q3, because the 200 million dollar Mike Stone.

Earlier disturbing, but it is certainly when you stood at $206.7 million, representing a 13.4% Butte on your growth in constant going into dumped.

It would be it element to Carlo that our transaction growth was much stronger than the revenue growth.

Talking about transactions growth, we saw in a little exploration unexpected lines. This was the result of an overall the bone in domestic volumes growth facility anybody to this traditional domestic capacity, even our Barnes group continued to be strong. Although it has seen some impact of the beacons you must have given the deep talking about.

In his part of the color.

Maybe not eating business segments grew 15.3% year on year, Oh from 13.5% growth you first of all the couldn't you. Similarly, Standalone Hotel room night grew 21.1% here on your Oh from about 30% growth achieved during the first off of this fiscal year the bus ticketing business.

I need to grew strongly at 31.6 person and almost in line with the first of all the fiscal year.

I'm also pleased to follow what other food like meaningfully customer acquisition and Mobotap engagement with the pent up with 11 services has allowed us to go out reintegrating transactions by <unk> people are saying I know you're on your basis and cloud bookings bioburden introducing person on the you don't get a bit.

Let me know share some Q3 financial highlights by business segment, beginning with your ticketing business.

Right the domestic industry or the market grew at about 6%.

The reported quarter compared to about people tend to be first off of this discussion our domestic computing segment growth at nearly 13% far outpaced the market school.

We continue to gain share in the international Air ticketing business as the mid segment growth of nearly 27% where the market for bone figured wasn't a few flat on a year on year basis.

Overall.

The getting sick when is the growth of 15.3 person also resulted in here yesterday to getting revenue growth of 15.3 person and the modest 20 basis points reduction in net revenue margin was offset by but does this selling phases. As it was then talking blooming mix all internationally.

How many hotels and packages business you saw in his leadership, a little room night growth during the quarter did 20.7% year on year room night growth was partly offset by your drop off 1.2% of 130 basis points in margins, resulting in just certainly new growth.

9.8% in constant currency don't know margin drop and be Standalone hotels business was in line with up lung and was more than offsetting gains by a reduction of marketing it's almost newsprint.

The key highlights in this segment have been the de acceleration of room night growth to about 19% in domestic hotels and the continued strong growth at about 48% internationally with it.

Lastly, a bus ticketing units grew by 32% with nearly 21.3 million bus tickets travel during the quarter. This business also generated over $20.8 million in or just sort of in new during the quarter agree with all well were 36% year on year in constant currency films.

During the reported quarter apart from its solutions segments and room night growth. We would also be able to significantly reduce auto just heard operating losses, which came in at about $11 million compared to a loss of $22.2 million during the same quarter over the last fiscal year and $19.3 million into.

Previous quarter.

The reduction losses like became part of continued focus on driving incremental efficiency gains in marketing and since most of the spend particularly in the but didn't segment upwards.

During the quarter Gordon marketing and promotion expense as a percent. There's a gross bookings you stood at 8.9% of gross bookings compared to 10.4 person doing the same quarter last year.

By building about and then two basis points of if you shouldn't see not marketing it seems almost newsprint. We've also heard automotive suppliers participated in the improved economics by reducing our variable incentives as is reflected in the 50 basis points of reduction in our blended a distinctive in your margins and no 100 basis.

Points of reduction in the margins from a hotels and packages business.

As a result up on everything back their position in amortization expenses are just turned a bit Dolores stood at about $6.2 million compared to about $19 million in the same quarter last year and 14 at a half million dollars in the previous reported quarter.

But did I like to thank all of two for joining and open up the called book you any.

Operator please.

[noise] I wanted to ask a question do you want to press star one on your telephone.

That's all your question please press <unk>.

Please standby polycom Tata Q last year.

[noise] and our first question comes from Sachin Salgaonkar you May proceed.

[noise] and comedy relationship, but type numbers I have two questions.

First question is predominantly on the kind of analysis and impact.

Showcases last few quarters.

Are you guys did not have too much of an impact on that despite a jet Airways.

Being our dad and predominantly that goes on the back off international added picking up.

Now given that international had has been impacted from I don't know Videsh I, just wonder could actually I understand from your how should we look guide.

The growth going forward.

And you know deep, though I clearly I agree with your job opening remarks in terms, how far you were mentioning that.

There's not much impact domestically from current Nevada Spike.

You know places like Canada, which I sort of Touristy places I get to come back there. So just wanted to go I understand your thoughts on that.

Second question is on competition in the market or there's a lot of British off slate.

And then they get it was hired associated with the where youre at the company laying off people.

And various other takes her just wondered actually I understand from your how should we look at the competition.

I'm tired of again, you know wanted to revisit you ended up close to EBITDA breakeven guidance you guys spoke about parent that on people part comes back.

How far how do we away from you know I picked up particularly.

Okay. Thanks.

Yeah, right. So it will take it into say more does much in thing starts. So I guess on the Corona light is what we've been seeing large fleet I know its impact on our phone, but I'll bond across the spectrum actually outbound flight standalone outbound packages as well as I've been Standalone hotels and as you would expect most of it is offline used.

Words from India, which is namely into southeast Asia.

And of course, so you know plummeting when we get for China. So both impact actually doesn't impact on like I called out the cancellation rate is higher than what it typically was as would be expected on the booking there has also come down so China, Hong Kong and Mccall are the most all kind of a heat and impacted.

But if we look at even southeast Asian markets like China, No, Saudi like Singapore, like Ireland, Malaysia, and even to some degree Vietnam in Cambodia would just smaller markets for us there's definitely been an impact.

And it's it's hard to right now completely effect, we obviously measuring your don't know you know real time basis, because somebody this is definitely some part of this is all together cancellation and then again in cancellation of course, I think I'm. Most a large hotel chains are lodge reputed hotels as well as.

Oh, the airlines wherever they are advisories, they're all understanding that so there's no.

They lost so net loss to customer, but obviously, they inconveniences to be out and though servicing team is under a lot of pressure et cetera. So that however to your point on catalog. While you know there, but three suspected cases of which don't do have been actually cleared we have actually not seen a significant no impact there.

It's again hard to say what would have been the exactly right number cancellations have been data fuel, but I wouldn't call them material Bill. So I think Indians are still continuing to travel in fact, a you know we had some unavoidable trips ourselves and we know this dog airports blue flights full domestically of course on wants business routes I think.

It is not much of an impact right now that we're seeing so again the situation is fairly fluid I think it's really hard to say that this is what's gonna stay or this is what's going to remain but as of now I think domestic is largely insulated and that was my call that I had made.

Okay, Alright, and in terms of their domestic international makes any color on that.

International is a you know I guess, a euro bad is roughly about a 20% of our business.

Oh and off that a you know the impact would be anywhere in the range of high teens going into even mid twentys off that so right. Now we would say you know middle single digit kind of impact, but but again very hard to say how much of this actually that definitely <unk>. How much of this is a union altogether cancellation, a lot of people that out but there were leisure.

Trips have also swapped and so you know we've also found quite a few people now looking forward on a destination wherever it goes purely a discretionary trip a holiday and people looking a lot multifamily at Oh, you know centrally shop people looking at.

So now also eastern Europe and people look in middle East et cetera. So we're seeing a whole range oak I know people Oh, you're not changing decision altogether, which I think this nation altogether or what's the job well in advance so that as best as an estimate we I'd be able to give us the stage.

Ladies and gentlemen.

Sorry, just to just to add one more comment on your domestic Oh, you know air them on could say that you mentioned.

Yes, there has been that that has been under pressure for the last couple of quarters and you know you've got lot of support from Doggone business. Good.

But Ah you know about what's also true is that the the capacity actually has come back in the domestic markets. So we are back to the.

Same level of capacity as it was though you had been down.

And and so there is definitely no hope to see and do you had already seen some signs off.

The company in the domestic aftermarket again and as you know what historically put on the overall car degree grow what Oh, we have always been growing at least to do X off the guy to grow. It. So so I think that support the IODEX kind of coming back and likely to improve.

As you know we will keep watching the space on the international side as we've mentioned.

Yeah. Thank you know just going to your second question on oil. So you know from my point of view.

You know wheel continues to be the strong, but no into but just segment ER and yes. So you know they've been kind of going to somebody consolidation Oh phase if I make waldock oh, good because of the because of the window feedback that they've been getting it from the market they would probably.

We would ever graduated from their own point, well on business different gear Tetra.

But you know from our point of view or this apply a <unk> rationalization that there have been probably trying to do oh somewhat a is not necessarily an impact because ah you know the size the sheer size of the supply is good enough and then there are other alternatives on our platform.

As you know into budget segments. So.

I think of ER and the other aspect of that could be.

There are gave from their point of view would also be booking on rationalizing sales promotion, which is only you know better for though the overall ecosystem. So so from Oh point of view.

No no real no real negative impact of that it's actually.

Well what was overall for the ecosystem and so it's a it's only positive if there's more focus on quality et cetera.

So that's the baby look okay, I'm going to hand, it over to more.

Question.

Hi, This is Jim so like we've been seeing even considering the a you know the seasonality there is involved in the indeed yeah.

Ecosystem and onto another just changing competitive dynamics that we keep seeing like you know onto William engine, and you know they disappeared and Taposh I have generally been unum sitting there do want to get into a range of plus or minus $10 million no as a EBITDA range and I think probably this is the quarterly.

We are at least kind of you know getting to that kind of a range of numbers or didn't ever done off level. So it's kind of been window. You know, there's a minus $10 million today. So I think we feel good to be over there.

Well, let you can kind of you're not only that onboard and number.

I think we kind of you know or they may not that I schools.

And so long as be the main reason we didn't is no. These are good kind of talked about I think we'll be kind of you know.

Reasonably fine with that and would want to then kind of start focusing more and more on in are driving growth.

Early in the indeed, colannino businesses, but also into the agreement. The line. So somebody says that you have loans over the last few quarters.

Okay somewhat a if I got picked right. So you know one short as you might enjoy from minus 10 took less than.

For a long time in foreseeable future you know before it becomes positive.

All right at least for the immediate future for the next you know a few quarters at least the Israeli would kind of you don't want to bring it up you know a or b or so that'd be can turned up you know consolidated he had on and then I'm sure. We'll have opportunities to turned up you know are to learn photo gardens in due course, okay.

Okay got it thank you.

Our next question.

Once again, ladies and gentlemen, if you like to ask questions at this time sorry.

And we don't have any further questions that Q.

Now I Kinda talk I never said, Josh along.

Thank you dementia and thank you everyone for joining our earnings call today, we look forward to speaking with each and every one of your very soon thanks again bye bye.

Okay. Thank you everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

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