Q3 2023 Despegar.com Corp Earnings Call
Good afternoon, and welcome to death skirt third quarter 2023 earnings call. My name is Andre and I will be your operator for today's call.
On our call today, all participants will be in a listen only mode. There will be an opportunity for you to ask questions at the end of todays presentation.
This conference call is being recorded.
Now I would like to turn the call over to Mr. Luca Pfeifer Investor Relations. Please go ahead.
Okay.
Good morning, everyone and thanks for joining us today.
In addition to reporting financial results in accordance with U S. Generally accepted accounting principles, we discuss certain non-GAAP financial measures and operating metrics, including foreign exchange neutral calculations that this should definitely read the definitions of these measures and metrics included in our press release to ensure that they understand them non-GAAP.
Financial measures and operating metrics should not be considered in isolation or substitute for or superior to GAAP financial measures and all provided as supplemental information only.
Before we begin our prepared remarks. Please allow me to remind you that certain statements made during the course of the discussion may constitute forward looking information, 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.
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.
For a 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, Dan Mannes, coking, who will provide an overview of desperate guys third quarter performance as well as an update on our strategic initiatives.
Amit Singh, our newly appointed CFO will then discuss the quarter's financial results in more detail and our annual guidance.
Rich <unk> will end, our prepared remarks with a wrap up before opening the call for your questions.
Please go ahead.
Thank you Luca and thank you everyone for joining this call before delving into our financial performance for the quarter I would like to extend a warm welcome to what <unk> seen our newly appointed Chief Financial Officer, as we kick off this earning call Amit we're thrilled to have.
The on board.
Shifting our focus to the results were very excited to share yet another quarter of strong revenue growth and profitability.
Revenues for the quarter were 878 million.
A new record for the company I will presenting and industry, leading growth rate of 22% year over year.
43% year over year in constant currency.
This growth was completely organic driven by strong commercial execution and supported by robust demand trends, primarily in our core markets of Mexico and Brazil.
Italy gross bookings for the quarter were up solid at 25% year over year.
44% year over year in constant currency.
This strong top line growth and improving revenue mix combined with our ongoing initiatives to gain additional operational efficiencies.
<unk> operating leverage and resulted in adjusted EBITDA of $24 $7 million in the quarter, an impressive 106% increase year over year.
We set our sights on the final weeks of the year, our optimism remains high.
Our strong financial performance, particularly with regards to revenue and EBITDA reflects the culmination of several factors.
Our consistently effective commercial execution, leading to record organic growth the markets robust demand trends.
Our improving product mix and operating leverage.
Well, we have been achieving in these areas each quarter.
Testament to our team's dedication and our commitment to delivering strong shareholder returns.
Going ahead, we remain very optimistic about our growth prospects in the coming quarters and years.
Our strategic focus on <unk>, <unk> and <unk> to seek tenants combined with our distinct competitive edge and technological prowess remains central to our continued success.
So let's review the various strategic initiatives that we've been successfully executing on.
First some context. This payout is still in the early innings of capturing more of the past Underpenetrated Latin American travel market.
Providing us with a great deal of upside in the coming years.
Based on recent Euromonitor estimates the retail total traveler market stands at approximately $150 billion.
We have an almost equal split between the online and the offline segments.
We believe our market will expand at double digit rates in the years to come.
In the current year, despite is poised to generate more than $5 billion in gross bookings.
Significant 85% Tobey originating it actually from our B to C channel.
While we believe we have a strong competitive advantage and significant long term growth opportunities.
Our <unk> channel, while currently representing only 7%.
Our overall bookings stops into the equally massive offline market.
It's growing at more than twice the rate of our B to C. Kennan.
We continue to efficiently penetrate this area offer that Thomas travel market by further leveraging our industry leading technology platform.
Specifically, our beat to be offering enables the offline travel agencies to directly access our market leading inventory through our best in class technology solutions.
In addition to our strong beat to be growth.
We continue to expand our b to B to C channel, which represents 8% of our bookings.
These white label solution provides our business partners.
Effective easily deployable tool that allows them to leverage this platform to provide complete and affordable trips to their client base.
Some of our biggest b to B to C. Clients include major players in the banking retail and travel industry in the region.
During the quarter, we on boarded two new wide level clients and expanded the geographic scope of three existing clients.
As a result.
We served a total of 77 white label clients within Latin America.
In summary, we continue successfully executing against our ambitious b to C. B to B and B to B to C targets to solidify our position as the leading travel technology company in the region.
Given our success to date, we're also in the opportunity to expand our b to B and B to B to C footprint beyond Latam in the future.
Our business to business and business to business to consumer solutions operating a global travel market, which you monitor quarterly estimate to be around <unk>, two trillion and growing strongly.
As a leading travel technology company in Latin America, We believe our bookings volume suggests we're currently held a commanding position in the region's highly fragmented travel Mike.
Ample opportunity to further extend and strengthen our leadership.
Our current and projected above market revenue growth rate despite gas position as the number one travel brand in Latam.
And strong growth in downloads and usage of our apps all indicate that we are gaining meaningful market share. These along with our strong competitive position versus both regional and global travel companies as well as our culture of leading through technology make.
US confident that we can continue taking market share and therefore grow our revenues above the overall market growth rate for the foreseeable future.
In addition to the strong organic growth that we expect to generate in the years ahead. We believe we can continue effectively consolidated the Latin American travel market through additional acquisitions.
Our goal on these front remains the same selectively acquire companies that expand our travel platform with additional value enhancing capabilities and products.
Improved access to growing geographic market.
All with the aim of further solidifying our organic growth profile longer term.
It is important to note.
That you can expect us to remain disciplined with regards to the implied valuation of whether we pay for an acquisition.
We have a long list of potential targets and also have a strong balance sheet that position us well to quickly capitalize on opportunities when a target company meet all our strict criteria.
As a prominent technology company in Latin America, we are committed to continuous innovation.
Particularly in cutting edge domains that generative AI and large language models.
As we highlighted in our most recent earnings call, we proudly introduce a beta version of our AI trip planner to a select group of customers in Argentina.
This innovative tool empowers customers to engage directly with our denotative AI textbooks to quickly create customized and attracting talent solutions. The initial results.
Of the beta test have been promising as customers were able to very quickly and effectively address their travel related lease.
Our technology strategy centers on our steadfast commitment to leveraging generative AI to further strengthen our technology prowess and cause further solidify our position as a market leader in the region.
We also use our technology expertise to continually enhance our customer experience and user interface by regularly introducing new features that enable fast frictionless.
Frictionless and seamless travelers certainties and transactions.
Alignment with our commitment to an exceptional customer experience, we are rolling out the integration of whatsapp, enabling customers to F. Three shouldnt make travel related inquiries and seamlessly book additional service and experiences directly to these integrated chat feature.
For those of you who don't know Whatsapp is the most widely used communication platforms in Latin America.
The popularity of our apps across our multi brand portfolio continues to rise and language our App first approach.
This result in a record breaking two sexual level across all our brands.
While our installed base reached almost 13 million devices.
That makes our apps among the most downloaded travel apps in Latin America in fact consol.
Consolidated base.
Based transactions have reached an all time high accounting for just over 40% of our total transactions and an impressive year over increase of.
558 basis points.
This surge in transactions.
<unk> brings us closer to our customers through increased engagement, but significantly reduces gastro were acquisition costs, while enabling us to remain at June so our customers evolving travel needs.
Our best in class Technology platform is also a significant competitive advantage for our b to b to C business and its unmatched flexibility allows us to provide daily.
Taylor made platform solutions.
Through our business partners, while also enabling them to easy scaled the platform in line with demand levels, our b to b clients on the other hand.
Our platform is a technologically advanced and cost effective way to access our blast.
Non ad inventory, providing their offline customers with compelling complete an affordable travel options.
Their business is also supportive.
By our market leading brands.
Our strong brand stands as one of our most significant competitive advantages underpinning our success throughout Latin America.
We take immense pride in maintaining an undisputed leadership position in unaided brand awareness across the region, so pricing, both local and global competitors.
But the spreads are strong brand presence enabled us to achieve much more than just market visibility PD.
To execute tailored marketing campaigns for the local partners further our massive customer database gives us a deep understanding of local and emerging consumer preferences, which also makes us the preferred partner to secure exclusive deals with hotels.
Airlines across the region.
We believe these deals often can be matched by our competitors and they underscore our unique ability to cater to the specific needs of Latin America the virus consumers.
The head of our operation lies with our local Knowhow and underground savings teams, who understand the diverse preferences of our consumers.
Maintain a solid foundation of long standing relationships with suppliers across the region.
This is a substantial competitive moat.
Thanks to these relationships our comprehensive hotel inventory remains the largest in the region.
Beyond our expanding hotel offerings, our vacation rental spectacles represent an exciting avenue for growth.
In the last nine months alone. This particular business line has surged by an impressive 45% in terms of inventory.
Significant strides recently, expanding our cloud platform to feature more than 750000 properties by the end of this quarter versus just 400000 at the same time last year.
We're not stopping there during the third quarter, we joined forces with <unk>, which will significantly expand our vacation rentals inventory by years end, we anticipate offering.
1 million units in total.
Further solidifying our position in the market and enhancing the variety and choice of accommodations available to our customers.
Finally, it's worth noting that local airlines have been consistently expanding their capacity in Latin America.
This is in response to robust demand patterns and high load factors that persist.
It was particularly significant is that.
The majority of this additional capacity is being allocated to international routes.
This route cater to both travel within Latin America as journeys from the region to the United States and Europe.
This trend is indeed favorable for us.
Actually international trips typically command higher average ticket prices. Furthermore, it broadens our opportunities when it comes to selling higher margin hotel accommodations in package transactions.
Looking ahead, we expect sustained growth in international travel based on current trends and the growth we have been observing in domestic travel.
Before I hand, the call over to Amit, who will go over the specifics of our quarterly financial results I'd like to take a moment to discuss the key elements of our strategy that have been instrumental in driving sustained revenue growth diversifying our revenue streams and improving our profitability.
As I highlighted at the beginning of the call we continue to execute well in our primary markets, Brazil and Mexico.
Gross bookings in these combined markets reached 61% of total gross bookings and grew 40% year over year, reaching a total of $845 million further our strategy to drive higher margin packaged titles continuous yielding excellent results.
With total packages as a percentage of gross bookings, increasing a strong four percentage points year on year to 30% of gross bookings.
We expect to maintain this positive growth trajectory for the remaining of the year and in the coming years.
As I noted earlier, our b to B pieces is a cornerstone of our growth strategy growing almost twice the rate of our <unk> business.
Reaching 15% of our total gross bookings.
This clearly demonstrates the strength of our technology prowess brand and distribution strategy that are enabling us to further penetrate Latin American travel market, while keeping the opportunity to expand globally wide open.
Transactions via our <unk> retail record high accounting for more than 40% of all transactions in this quarter as I noted before we also continue making significant progress in strengthening customer relationships with our brands at present, we both nearly.
<unk> 20 million loyalty program members and over the past year points redemptions have doubled to 10% notably.
Our solid net promoter score NPS continuous rising in line with our ambition to be the most trusted and valued traveler brands.
Brand loyalty, that's called digitally cultivated and strengthening our customer centric approach remains a vital component of our growth strategy.
With that I will pass the call to Amit for a more comprehensive review of our third quarter performance.
Thank you Danielle.
I'm really glad to be here and thank you everyone for joining our call today I would like to start by thanking the board and demand for giving me the opportunity to join the company as executive team.
It is my privilege to join <unk> at this time in its lifecycle. When the company has established itself as a leading travel technology company in Latin America and has many opportunities to continue growing far above industry rates in the coming years.
In addition, I see tremendous opportunities to further improve the company's margins and cash conversion and to help investors better understand the massive investment opportunity in the company.
Now to discuss this quarter's results.
The strengthening revenue trends that drove our business in the first half of the year continued in the third quarter.
Our accelerating momentum can be attributed to the effectiveness of our growth strategy and to the strong demand trends, we are witnessing across Latin America.
Particularly in Brazil, and Mexico are two largest markets.
As a result, we reported $1 4 billion in gross bookings and achieved an all time quarterly high for revenue, which total $178 million.
This equates to a year over year revenue growth of 22%, which we believe is industry leading globally.
Our revenue growth rate in constant currency, the even more robust up 43% year over year.
Our take rate also remained healthy at 12, 9%, reflecting our unwavering focus on profitable growth.
I'm, particularly pleased with the outstanding 106% year over year increase in our adjusted EBITDA, which reached $24 7 million for the quarter.
This substantial improvement in profitability can be attributed to our underlying operating leverage in three key factors.
First the very strong growth trend in our bookings revenues and product mix.
Enhanced efficiencies at our fulfillment center operations, primarily driven by productivity improvements and third greater efficiencies with regard to general and administrative expenses, along with efficiency gains related to our technology and content costs now, let's dive deeper into the markets, where we operate to.
A better understanding of our improving performance.
Continue driving better results in our Brazilian operation with year over year bookings growth, reaching 44% on an as reported basis and 34% in constant currency.
<unk> and total gross bookings of $561 million.
A record since the company's initial public offering back in 2017.
These outstanding results are due to three primary factors first our strong commercial execution and continuously improving competitive dynamics in the market also leading to higher average selling prices versus last year.
Our success at offering attractive vacation packages to our customers continues to bear fruit and third continued growth in our higher ticket international travel.
Moving to our second most important market Mexico. It has also played a pivotal role in our exceptional results.
Gross bookings experienced significant year over year growth of 32%, while growing 11% on a constant currency basis.
This positive trend has been primarily driven by our strategic decision to invest in profitable growth in this key market, including focusing on margin accretive package sales.
Turning to the rest of Latin America, we observed at 8% year over year improvement in gross bookings and a 66% increase in constant currency.
This increase was helped by Argentina when demand was strong. Additionally, the demand for international trips in Chile remains strong.
It's important to highlight the exceptional performance of our <unk> offering to provide some context. Our approach involves leveraging our technology platform to facilitate the connection of small and medium size offline travel agencies with our ecosystem.
Notably this specific business vertical has demonstrated a remarkable growth rate, surpassing our <unk> growth more than twofold.
We are genuinely excited about the robust growth trend in this area. Our focus remains on empowering our partner agencies to access <unk> extensive inventory of both air and non air travel offerings in a cost effective manner.
This in turn allows these offline travel agencies to present their customers with an enticing array of affordable travel option.
Importantly, the customer relationships and personalized approach enables them to sell a greater proportion of higher margin travel packaging.
As we set our sights on the fourth quarter and the year ahead, we see strong travel trends across the region.
All lines have consistently deploying more international capacity, which also bodes well for our performance outlook.
With this in mind, we are optimistic about the growth opportunities. We are seeing currently in the fourth quarter and about what we expect in the coming years, given our ability to effectively capitalize on the secular growth in Latam travel market.
Looking at our cash flow during the third quarter, we generated $34 million in operating cash flow, which compares to positive 10 million in the same quarter last year.
Capex totaled $11 million in the third quarter.
During the quarter, we also paid $8 million in dividends to our preferred A&P shareholders.
Despite our capex investments investments in the business and preferred dividend payments, our total cash position increased $11 $7 million since the closing of second quarter 2023.
We therefore finished the quarter with a strong cash position of $255 7 million.
Giving us the financial flexibility to continue investing in growth initiatives, such as technology product development and additional build out of our travel ecosystem, while also selectively pursuing potential mergers and acquisitions to further consolidate our leadership position in the region.
Now to discuss our updated financial guidance.
Based on our consistently strong execution throughout the year and particularly in the third quarter in combination with a healthy demand environment. We are raising the lower end of our revenue and EBITDA guidance range at which as a reminder, stood at $640 million to $700 million for revenue and $80 million to 100.
Million.
For adjusted EBITDA.
We now expect our full year 2023 revenues to be in the range of $6 $70 million to $700 million.
And our full year adjusted EBITDA to be in the range of 90 million to $100 million.
Also we remain quite confident in maintaining a very strong topline growth profile and an even stronger adjusted EBITDA growth profile in the coming years.
Now back over to the EMEA, who would like to summarize the quarter before we open the call for your questions. Thank you.
Thanks, Amit I'd like to share a few key takeaways from our third quarter review.
Our most recent results have proven to be exceptional once again.
The consistent and successful execution of our strategic initiatives and our unwavering commitment to achieving profitable growth.
Notably our revenue mix continued improving well results in Brazil, and Mexico were all standing property in this regard to new record highs.
Our progress is most evident in adjusted EBITDA.
Our strongest third quarter EBITDA since the IPO.
As we approach the end of the year, we are encouraged by still robust surge in travel demand.
Longer term.
We anticipate that the strong secular tailwind.
Drive our success will persist.
However, we are not resting on our Lawrence.
Similarly, finding new ways to better capitalize on these tailwind as well as further strengthening our competitive mode.
We are therefore committed to leading with innovation to continually enhance our technological capabilities and offer the best user experience.
To freely.
Leveraging our technology platform and our local market expertise.
In Norway to enforcing our strong relationships with travel partners.
These strategic measures will further propel our top line growth, while we continue increasing operational efficiencies to drive additional earnings power.
What's equally important is our focus on carefully reinvesting these efficiencies back into the business, which we believe is the most effective way to sustainably drive shareholders' value.
This approach will enable us to foster sustained organic growth diversify our offering.
And further solidify our position as an industry leader.
In summary, we're poised to finish the fiscal year on a high note. Thanks to strong execution on our proven growth strategies and sustained demand growth.
We remain focused on continuous improvement.
Aiming to maximize our potential while delivering superior value to our customers and stakeholders for the foreseeable future.
With that let's open the call for questions.
Thank you at this time, we will open the floor for your questions to ask a question. Please press star one on your telephone keypad to remove yourself from the queue. You May Press Star One again as a reminder, you may also submit your questions online by using the Q&A function of the webcast platform.
We will take our first question from many NIMBY caught at B Riley Securities.
Good evening, everyone. Congrats on a good quarter a few questions for me.
Maybe one high level, so Damian I think.
When we started out in 2023, you talked about.
Recurring international is kind of one of the drivers.
Now that we are in November where do you see international recovery do you think there is still legs.
From her.
And then on mobile App.
<unk>.
It's great to see that 40% of your bookings are coming through.
A 40 person transactions on mobile App does it mean.
Getting higher mix of direct traffic.
So then when should we expect that to kind of even some.
On the marketing line.
Okay.
Hi, Thanks for your question.
In terms of international traffic to US we mentioned it.
It has been recovering but still below 2018 levels. Our estimates for the quarter were in between minus 10, and minus 15% when compared to pre pandemic levels.
As per the mobile app.
Yes, we are.
Focusing on increasing the share of organic or non paid traffic, but also the profitability levels that we are achieving also allow us to invest heavily in acquiring traffic.
Very good returns so the increased penetration in nap is a good news.
We do not necessarily reflect the much larger penetration or not paid traffic.
And are you seeing good repeat behavior or people, who don't know that I'm coming back.
With higher frequency can you just comment on that.
We track not only app transactions, our app downloads, but we also track engagement and the beauty of the App is that it.
Bailey effective tool.
To keep customers coming back so, yes, we're seeing that effect.
Okay.
One question for Amit.
Welcome.
To just figure out earnings.
You spoke about operational efficiencies.
<unk>.
Can you give us some more color on the kind of things that you've been able to do to kind of achieve.
Achieve these.
Sure. Thank you and have it it's good.
Yes.
I'm glad to be here.
To your point on operational efficiencies I mean, it's it's truly if you look at year over year, we have increased not just our.
Top line, but our overall EBITDA margin significantly increasing it by close to 6% and we expect that trend to continue going forward and if youre looking at operational efficiencies per se literally in every line item through our P&L. Obviously, we have a focus on take rate and all of that but below that when you.
Look at the expenses that we have in sales and marketing tech and content and G&A.
Hey, guys I think we lost you there.
Okay.
Okay.
Hey, Joe.
Hello can you hear us.
Yes, we can.
Yes.
Lost audio.
Oh, sorry.
Sorry about that I think we lost the audio low there, but just to I don't know where I got cut off to give you. Some ideas. They are making as part of your question. We are making very strong progress on driving operating efficiencies as you saw that our adjusted EBITDA margin has increased.
Almost 600 basis points year over year in <unk>.
Cost of revenue was even better.
And you should expect us to keep driving these efficiencies going forward in multiple in all the line items in our P&L. If you look at our sales and marketing expense. If you look at our G&A expense. If you look at our tech and content expense.
We have internally, obviously identified a ton of efficiency that we can generate and all of those.
And we will keep driving going forward. The goal is to drive EBITDA margins to our long term targets that we provided and we expect to achieve those targets shortly.
Much before what we had previously guided to.
Great. Thank you.
We'll move to our next question from Andrew Ruben at Morgan Stanley.
Hi, Thanks, very much for the question echoing Matt congratulations on the quarter I'd be curious first if you could provide an update on the competitive backdrop in Brazil are specifically in light of one of your larger competitors filing for bankruptcy protection I'm curious what kind of opportunities that affords for desk bag or any notable changes in the market.
Structure on the back of that would be very curious to start. Thank you.
Hi, Bill.
Thanks for your question.
I'd just reiterate.
The fact that doing it in last two to three weeks of Q3.
A large competitor in the CE Walter through my files for bankruptcy.
Basically that was a bunch of schemes that have been currently the trailer market significantly over the last couple.
A couple of years.
And we.
We either by selling because that they were not able to.
That has two impacts one is something you'll start to see it in my.
<unk> in Q3 versus in Australia in Q4, and so we are starting to gain share in the refinish end market, but also the competitive dynamic of having such a new rationale player in the market.
<unk> dramatically so we expect that.
Situation to continue providing ample room for growth.
Of our brands in Brazil.
Okay.
Okay great.
It makes a lot of sense.
And then just honing in on another topic, you mentioned the opportunity to expand the <unk> footprint beyond Latam I'm curious, how you think about that opportunity and maybe within the framing of what part of your at kind of Tech stack competitive advantages do you think are specific to the region versus what had the opera.
Do you need to be exported to other parts of the world.
Yes.
Keep in mind as a background that he is the acquisition of <unk>, we've been heavily investing in developing our b to b technological platform.
<unk>.
We see our four months both in between.
White labels that we can we can see arena and we compete with some of the largest.
<unk> software companies, even in that arena.
Our telephony platform.
Borrowing in beta mode, that's why <unk> been gaining such a significant number of clients over the last few years.
And even we've been approaching it for us.
Seven companies outside the Latin American space.
We haven't put any focus on that.
So certainly we feel that based on our learning platform and our capabilities in terms of strong inventory.
Growth can be extremely efficient for the company.
Okay.
Great very interesting I appreciate the color.
And we'll move to our next question from Jacob <unk> at Cowen.
Alright, Thanks for taking my question and then for Kevin.
Can you provide an update on the store openings that you mentioned in the last call in Brazil, and Argentina are those plans still on track.
Okay.
Yeah. Thank you for the question, yes. It is.
So we're on track and we're making progress accordingly to retell, our target of <unk>, Argentina and in Brazil.
This is this is amit just to add to what <unk> was saying.
While all of the store openings and all remain on track just wanted to highlight again, our broader strategy there.
We're using the tapping into two abitibi and separately to the store strategy into the offline market and the broader goal.
Is controlling equally further enable the transition of the faster transition of the offline to online and we're seeing very strong success of course to our stores and also to are going to be challenged.
Okay.
Great and I was wondering now that you are integrated with per BOE are ya.
Considering taking part in vacation rentals search on Google.
Can you repeat the question you will somehow cutoff.
Yes are you considering taking part in the vacation rental search option Google.
The releases recently, it's a free option.
Yes.
So we look at all the traffic channels.
I was proud of and we use them.
Based on the return on investment and we certainly are.
Looking into that.
In a nutshell social traffic.
Alright. Thanks.
Next we'll move to <unk> at Citi.
Thank you.
Greg.
Questions on the results I got a couple of questions first one just wondering it's literally the transaction growth in Brazil.
Yes.
That comes from the fact that you know that there is an increase of course.
Hi, Joe.
Yes.
You are having a very hard time hearing you. If you don't mind, just picking up a little bit I appreciate it. Thank you.
Sure sure.
Okay.
Okay.
Can you hear me better now.
Yes, much better yes, okay perfect. Okay. So just a couple of questions. The first one.
I wanted to understand a little bit with transaction.
Kris in Brazil.
I mean, you guys offshore new products, new services new destinations.
Simply I mean of course, you're gaining market share.
The capacity increase but I just wanted to dig a little bit deeper in terms of the service some product level that you offer in Brazil was the first question second one I just wanted to understand now if there is room to potentially revise the medium term guidance.
And then I'll.
A follow up on all my questions.
Got it in terms of the growth in Brazil.
We measure of pure organic growth and we have not introduced any additional products or services the shaft.
Growth on top of the natural growth of the market because that means we're getting jr.
Hey, Baby limited freight bill the demise of a wildcard competitive everybody.
Our organic growth trajectory.
In Brazil, nothing has come back.
And I will.
And to your question on medium term guidance.
Obviously as you are seeing a trend.
Since the time the company provided medium term guidance in a year or so ago the trends have been extremely positive.
Relative to that guidance.
When we come on the fourth quarter earnings call. Early next year, we can provide a little bit more color, but broadly what I can say right. Now is you should expect us to grow above market growth rate in the coming months given.
Not just in Brazil, but across Latin America.
The strengthened position that we have established a leading position we have established.
And then just on bookings and revenue like we were discussing earlier there is still a ton of opportunities for operational efficiencies.
You should continue expecting us on topline to grow above market, but then for EBITDA growth to be faster than topline growth in the coming years.
Hey come on are as I mentioned earlier as we come on the fourth quarter earnings call, we will be able to provide a little bit more concrete guidance, but we feel very good about the coming years.
Okay.
One last one.
Income tax this quarter can you just clarify what happened.
When we look at the last quarter I had a big.
Tax credit.
Quarter was pretty robust almost 100% EBT. So just want to understand what's happening there. Thank you.
It's largely related to the profit.
In a few entities, which were very solid, especially in Argentina that lead to lead to a little higher tax there and also we had exhausted the Nols that we had in Argentina and in the prior quarter So high.
<unk> largely related to very strong.
Bookings strength that we're seeing in a few entities, particularly in Argentina.
Very clear thank you.
Okay.
We do have a couple of questions from our web.
Cost I would like to go first to Alexandra <unk> from singular.
Question is how did coin perform in the quarter was it what was its EBITDA.
Sure.
Korean business again in line with the other guidance is that we had provided previously coin.
<unk> continues to do much better than the median income sort of guidance that we have provided in the past.
Where the margins for the overall business continued to accelerate very strongly this quarter.
Very close to.
Flatline EBIT down and we expect.
Lately negative this quarter, we expect.
Flattish EBITDA next quarter, and then in the coming years.
2024, and beyond we should expect positive EBITDA contribution from from <unk>.
And our next question comes from Andrew carry on with MF value capital.
He says Hello, congratulations on the very strong results could you give an update on coin and how the team is using the opportunity to scale in the coming years, particularly as interest rates potentially fall is there still an opportunity to scale this product outside the best poker platform.
Yes. Thank.
Thank you Andrew for your question as we've been reiterating over the last few quarters.
So fighting the prevailing market called the timber.
Follow a strategy of preserving the quality of our portfolio.
Yeah.
The situation in European credit market improves and we're seeing some.
Indications.
Currently in Iran.
<unk> certainly increased the growth rate by always being very closer to the quality.
Our portfolio, so certainly we see it.
The opportunity in the future by the way we'll act on that we prudently I would say.
Okay.
Okay.
And as a reminder, if you would like to ask a question. Please press star one on your telephone keypad will pause just a moment.
Yeah.
And there appear to be no further questions at this time I would like to turn the floor back over to Mr. <unk> for any closing remarks.
I guess I want to thank all of you for your interest in this regard and your participation on this call.
Looking forward to seeing you on our next call to discuss our fourth quarter results. Thank you very much.
This does conclude today's conference call. Thank you for your participation you may now disconnect.
Please wait the conference will begin shortly.
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