Q4 2023 Mondee Holdings Inc Earnings Call
Operator: Ladies and gentlemen, the Mondi Forte Corsa 2023 earnings conference call will begin shortly. If you would like to submit a question at any time, please press star one on your telephone keypad. Thank you.
Ladies and gentlemen, thank you for standing by the Monday fourth quarter 2020 earnings conference call will begin shortly.
If you would like to register a question at any time. Please press star one on your telephone keypad. Thank you.
Operator: Good day and welcome to the Monday fourth quarter 2023 earnings conference call. Please note this event is being recorded. I'd now like to turn the conference call over to Jeff Houston, Senior Vice President. Jeff, please go ahead.
[music].
Good day and welcome to the Monday fourth quarter 2020 earnings Conference call.
Please note this event is being recorded.
Ill turn the call conference call over to Jeff Houston, Senior Vice President and Jeff. Please go ahead.
Jeff Houston: Thank you, Elliot. And good morning to everyone. Welcome to Monty's fourth quarter and full year 2023 conference call. With me today is Founder, Chairman, and CEO Prasad Gundumogula and Chief Financial Officer Jesus Portillo. Executive Vice Chairman, Orestes Fintiklis, and Chief Operating Officer Jim Dullum will present our preliminary, unaudited results and be available for questions.
Thank you Elliot and good morning to everyone and welcome to <unk> fourth quarter and full year 2023 conference call with me today is founder Chairman and CEO Prasad <unk> and Chief Financial Officer <unk> <unk>.
<unk> Vice Chairman Arista is contiguous.
Chief operating officer, Jim Don.
We'll present, our preliminary unaudited results and be available for questions and answers before we begin I'd like to remind everyone that this call may contain forward looking statements, including statements about revenue growth of our business, our management and governance governance plans and other non historical statements as further described in our press release.
Jeff Houston: Before we begin, I'd like to remind everyone that this call may contain forward-looking statements, including statements about revenue growth for our business, our management and governance plans, and other non-historical statements as further described in our press release. These forward-looking statements are subject to certain risks, uncertainties, and assumptions, including those related to Mondy's growth, the evolution of our industry, our product development, and success; Management Performance and General Economic and Business Conditions. I would also like to point out that the fourth quarter and full year 2023 results are preliminary and subject to final audit. We undertake no obligation to revise any statements to reflect changes that occur after this call.
These forward looking statements are subject to certain risks uncertainties and assumptions, including those related to modest growth.
Pollution of our industry, our product development and success.
Our management performance and general economic and business conditions.
I would also like to point out that the fourth quarter and full year 2023 results are preliminary and subject to final audit. We undertake no obligation to revise any statements to reflect changes that occur. After this call descriptions of these and other risks that could cause actual results to have a material difference from these forward looking statements are discussed in our reports.
Jeff Houston: Descriptions of these and other risks that could cause actual results to have a material difference from these forward-looking statements are discussed in our reports filed with the Securities and Exchange Commission and in our earnings press release that was issued this morning. Forward-looking statements are based on expectations that involve risk and uncertainties that could cause actual results to differ materially. Listeners are cautioned not to place undue reliance on any forward-looking statements.
<unk> filed with the Securities and Exchange Commission and in our earnings press release that was issued this morning forward looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially listeners are cautioned not to place undue reliance on any forward looking statements. During the call. We also refer.
Jeff Houston: During the call, we will also refer to non-GAAP financial measures. Reconciliations of the most comparable GAAP measures are also available in the press release, which is available at investors.mondi.com. With that, it's my pleasure to turn the call over to Prasad. Thank you, Jeff.
Q2, non-GAAP financial measures reconciliations of the most comparable GAAP measures are also available in the press release, which is available at investors that money dot com with that it's my pleasure to turn the call over to preside.
Yes.
Prasad Gundumogula: Good morning, good afternoon, and good evening everyone, and welcome to Monday's fourth quarter and full year 2023 earnings call to discuss our results and significant developments. We are pleased to report that Net Revenues and Adjusted Bidder for 2023 surpassed full-year guidance for Q4 and full-year 2023, the highest on record in the 13-year history of Montreal for both meds. 2023 gross bookings of 2.6 billion grew 19%, and net revenues of $222.3 million grew 39%. 2023 adjusted EBITDA was $21 million, another record and almost double 2022's level.
Good morning, good afternoon, and good evening, everyone and welcome to <unk> fourth quarter and full year 2000.
<unk> call to discuss our results and significant developments.
We are pleased to report that net revenues and adjusted EBITDA, but <unk> set a best full year guidance with Q4 and full year 2023, the highest on record in that didn't hit yet it's pretty off warranty for both metrics.
2023 but also bookings of $2 6 billion grew 19%.
Net revenues of 240 to one 3 million grew with Patheon and medicine.
But it only three adjusted EBITDA was $21 million.
And in that regard and almost double 2022 11.
Prasad Gundumogula: This strong year-over-year growth was fueled by product and geographic expansion of our marketplace, industry-leading technology advancements, and sustained leisure travel demand. This translated into Gross Bookings Growth and Take Rate Expansion, which has doubled since pre-pandemic levels to 8.7% in 2023, up from 7.4% in 2021. In the fourth quarter, take rate was nearly 10 pence.
This strong year over year growth was fuelled by product and geographic expansion, all Florida marketplace industry, leading technology advancements.
<unk> sustained neither travel demand.
This translated into gross bookings growth and take rate expansion, which has doubled since pre pandemic levels to eight 7% in 2023 up from seven 4% in 2022.
In the fourth quarter take rate was nearly 10%.
Prasad Gundumogula: Looking into the future, we are focused on achieving the following near and long-term goals: Enhanced Profitability and Free Cash Flow. We will achieve this through sustained transaction volume growth, take rate improvements, and implementing cost control measures. Xpand Travel Marketplace. Our marketplace is growing in terms of geography, products such as packages, hotels, events, and activities, as well as new EDA distribution pathways. Indicatively, Mondy's entire business pre-pandemic was air only.
Looking into the future we are focused on achieving the following near and long term goals.
Enhanced profitability and free cash flow.
We will achieve this through sustained transactional volume growth take rate improvements and implementing cost control measures.
Expand travel marketplace.
The marketplace is growing in terms of geography predict such as packages hotels events and activities.
<unk> new distribution partners indeed.
Indicating really one reason that business pre pandemic was the add on this.
Prasad Gundumogula: Whereas for 2023, air only represented 57%, while hotel, packages, fintech, and others represented 43%. In terms of origination geography, during 2023, Mondi expanded within North America and into South America. Maintain technological leadership in EAI. Monty remains committed to being a leader in the travel industry, AI. Our significant investments in Abbey, the first AI-powered travel platform launched in mid-2023, have established a strong foundation. We are continuing to innovate and push the boundaries of AI in travel.
We had asked but couldn't be 23, eight only represented only 57% while hotel packages fintech another represented 43%.
In terms of origin nation geography during 2023, Mondi expanded within North America and into South America.
Maintain technological leadership in EMEA.
<unk> remains committed to being a leader in the travel industry.
Our significant investments in Abbvie. The Firstly airport travel platform launched in mid 2023 have established a strong foundation, we are continuing to innovate and push the boundaries of intrepid.
James W. S. Dullum: Moreover, as Jesus will detail later, the company is focusing on optimizing its capital structure in the coming months with a new long-term loan facility. As an initial step, we have extended the maturity of our current term loan to March 31, 2025. I now turn the floor over to Jim Dullum, Mondish's Chief Operating Officer, who will discuss market trends and Mondish marketplace expansion. Jim Ortiu.
Moreover, as the tools will detail later the company is focusing on optimizing its capital structure in the coming months with a new long term loan facility.
Initial step we have extended the maturity of our current term loan due March 31 2025.
I'll now turn the floor over to Jim Deller, <unk>, Chief operating officer, who will discuss market trends and monovisc marketplace expansion.
Jim will appeal.
James W. S. Dullum: Thanks, Prasad. Good day, everyone. Turning to our market outlook and external drivers for our gross bookings growth, for the industry overall, 2023 was a very mixed bag of robust post-pandemic recovery, but also headwinds from regional armed conflicts and a great deal of economic uncertainty. It is worth emphasizing that Mondy's business model flourishes in such conditions of volatility. On the demand side, travelers seeking cost-effective options align nicely with Mondy's offer.
Thanks Prasad.
Good day everyone.
Turning to our market outlook and external drivers to our gross bookings growth.
For the industry overall 2023 was a very mixed bag of robust post pandemic recovery.
But also headwinds from regional arm conflicts and a great deal of economic uncertainty.
It is worth emphasizing that <unk> business model flourishes in such conditions or volatility.
On the demand side.
Travelers seeking cost effective options aligned nicely with monday's offerings.
James W. S. Dullum: On the supply side, uncertain economic conditions lead to more potential excess capacity, motivating suppliers to offer better deals through opaque channels like Monday. This enables us to target our marketing to specific consumer groups while providing travelers with enhanced, customized itineraries.
On the supply side uncertain economic conditions lead to more potential excess capacity.
Motivating suppliers to offer better deals through opaque channels like Monty.
This enables us to target our marketing to specific consumer groups, while providing travelers with enhanced customized itineraries.
James W. S. Dullum: Trends that are perfectly suited to Mondy's AI capabilities and leadership. Furthermore... A substantial majority of our business caters to international leisure travel, which continues to benefit from recovery and growth in certain markets like Latin America, China, and the Middle East. Looking more to our own business, we continue enhancing our marketplace, where Mondi is steadily increasing its market share within the 1.1 trillion assisted-affiliated travel market through focus on adding content and Distribution Expansion. In terms of content diversification, you may recall pre-pandemic, as Prasad mentioned, Mondi was almost exclusively offering discounts on airfare. In 2023, EIR only met revenues accounted for 57%, while packages were now up to 21%. Hotel only, at 11%.
Trends that are perfectly suited to model these AI capabilities and leadership.
Furthermore, the substantial majority of our business caters to international leisure travel, which continues to benefit from recovery and growth in certain markets like Latin America, China, and the Middle East.
Looking more to our own business, we continue enhancing our marketplace.
We're mondi is steadily increasing its market share within the $1 one trillion assisted affiliated travel market through.
Through focus on adding content.
And distribution expansion.
In terms of content diversification.
You may recall pre pandemic preceded mentioned Monday was almost exclusively offering discounted airfares.
In 2023 are only met revenues accounted for 57%.
<unk> packages, we're now up to 21%.
Hotel only at.
At 11%.
Orestes Fintiklis: Fintech at 6%, and the other category, including SAS, insurance, ground transportation, and other ancillaries, was at 5%. These adjacent products and markets not only significantly expand Mondy's Total Addressable Market, or TAM, but also contribute to the impressive rise in our take rate. Moving on to distribution expansion, we leveraged our AI technology platform to continue growing our robust marketplace of 65,000 travel experts and new-era distribution partners, such as local community and social media influencers, and to provide their travelers with access to personalized content and localized experiences. As we interact with these cohorts, we continuously gain valuable feedback, allowing us to refine our platform, our monetization, and our content localization strategy in the area of B2B partnerships beyond our expert-led distribution.
<unk> at 6%.
And the other category, including SaaS insurance ground transportation and other ancillary was at 5%.
These adjacent products and markets not only significantly expand <unk> total addressable market or Tam.
But also contribute to the impressive rise in our take rate.
Moving on to distribution expansion, we leveraged our AI technology platform to continue growing our robust marketplace of 65000 travel experts and new era distribution partners, such as local community and social media Influencers.
And to provide their travelers with access to personalized content and localized experiences.
As we interact with these cohorts, we continuously gained valuable feedback, allowing us to refine our platform, our monetization and our content localization strategies.
In the area of <unk> partnerships.
Beyond our expert led distribution, our BD or business to enterprise partnerships have witnessed in net revenue surge year over year.
Orestes Fintiklis: Our B2E, or business to enterprise, partnerships have witnessed a net revenue surge year over year. As a reminder, Mondeek targets enterprises and membership organizations by providing its unique technology platform and inventory access to these closed user groups. I now turn it over to Orestes Fintiklis, Mondy's Executive Vice Chairman, to discuss our widening technological leadership and focus on increased profitability in cash flows. Orestes, Thank you, Jim. And good morning, everyone.
As a reminder, mondi targets enterprises and membership organizations by providing its unique technology platform and inventory access to these closed user groups.
I'll now turn it over to arrest the 'twenty cliffs Monday's executive Vice chairman to discuss our widening technological leadership and focus on increased profitability and cash flows.
Arrestees.
Thank you Jim and good morning, everyone.
Orestes Fintiklis: As Jim mentioned, we have been widening our technological product lead and further integrating AI. Mondi remains a leader in travel innovation through pioneering AI solutions like ABI, our unique platform that combines expert-trained generative AI with conversational interfaces and comprehensive booking and itinerary management. Upon its launch in the summer of 2023, AVI will establish itself as the first fully integrated AI travel assistant. This groundbreaking technology can explore trip ideas, take real-time traveler input, create itineraries, book travel, manage itinerary changes, and even generate customized travel guides for both travel experts and their clients.
As Jim mentioned, we have been widening widening our technological product lead and.
And further API integration.
<unk> remains a leader in travel information through pioneering AI solutions like Avi.
Our unique platform that combines expert trained generated of AI with conversational interfaces and comprehensive booking and it management.
Opponents to launch in the summer of 2023 obvious stoppage itself as the first fully integrated AI travel assistant this groundbreaking technology kind of exploratory by DFS take real time traveling food create itineraries booked travel manage itinerary changes and even generate.
Customized private guys port both private experts and their clients by introducing Abbvie mondi created a new category.
Orestes Fintiklis: By introducing Abbe, Mondi created a new category. Going forward, we remain committed to not only enhancing the capabilities of our proprietary large-language model, LLM, which continuously learns from our unique travel expert data and millions of daily searches, but also to pushing the boundaries of the entire travel industry. We will unveil more details about these advancements in the coming quarters. Turning to our heightened focus on profitability and cash flow generation, Mondi is not merely disrupting the travel market; it is achieving this while maintaining and enhancing strong profitability. Committed to long-term shareholder value, we are redoubling our efforts to boost adjusted EBITDA and free cash flow in 2024. Year over year, the company has nearly doubled its reported EBITDA from $12 million in 2022 to $21 million in 2023. During the past year, we also completed five acquisitions. Going forward, we are focusing on realizing further organic growth and synergy through seamless integration and lucrative cross-selling. I now give the floor to Jesus, our CFO, on this day of his birthday for a review of Monday's financial performance analysis. That's yours? Thank you, Orestes, and hello, everyone.
Ford work, we remain committed to not only enhancing the capabilities of our proprietary large language model LLM, which.
Tenuously learns from our unique travel expert data and millions of daily searches, but also pushing the boundaries of the anti RSV.
We will unveil more details about these advancements in the coming quarters.
Turning to our heightened focus on profitability.
And cash flow generation.
<unk> is not merely distracting the travel market. It is achieving these while maintaining and enhancing strong profitability.
Mid to long term shareholder value, we are redoubling, our efforts to boost adjusted EBITDA and free cash flow in 2024.
Year over year. The company has nearly doubling to reported EBITDA from $12 million in 2000 $22 million to $21 million in 2023.
During the past year. We also completed five acquisitions going forward, we are focusing on realizing further organic growth and synergies through seamless integration and lucrative cross selling opportunities.
I'll now give the floor to his who's our CFO on this day of his birthday for a review of monies.
And outlook.
Sure.
Thank you, Mr <unk> and Hello, everyone.
Jesus Portillo: As I go over our Q4 and 2023 results, I would like to point out that all growth rates for 2023 are on a year-over-year basis unless otherwise indicated, and the results are subject to final review by our audience. Let me please start with our financial highlights. We continue to generate strong performance throughout this fourth quarter, producing record quarterly and annual net revenue and adjusted EBIT, evidence that our efforts for sustained growth and improved profitability are producing results. Our gross bookings were $619 million in this quarter, up 24%. This growth was driven by a 56% increase in the number of transplants.
As I go over our Q4 and 2023 results I'd like to point out the old growth rate for 2023 are on a year over year basis, unless otherwise indicated and the results are subject to final review by our auditors.
Leanne, please start with our financial highlights.
To generate strong performance throughout this fourth quarter, producing record quarterly and annual net revenue and adjusted EBITDA maybe.
Thank you Dan our efforts for sustained growth and improved profitability are producing results.
Our gross bookings were $619 million in this quarter up 24%.
This growth was driven by a 56% increase in the number of transactions.
Jesus Portillo: For the full year 2023, gross bookings of $2.6 billion grew 19%, and our net revenue increased 78% to reach 61 million. This growth in net revenue is the result of higher growth bookings combined with our continued improvement in technology. Our take rate of 9.9% was ahead of our expectations and up 44%. As with prior quarters, this improvement in the tech rate was driven mostly by the growth of higher-margin products and the diversification of revenue streams, including fintech and ancillary. Full year 2023 net revenues of $222 million grew 39%, while take rate of 8.7% grew 17%. Turning now to expenses, our operating expenses increased 49% compared to our net revenue growth of 78%. However, sales and marketing, as a percentage of net revenue, decreased from 75% to 62%.
For the full year 2023, gross bookings of $2 6 billion grew 19%.
Our net revenue increased 78% to reach 61 million.
This growth in net revenue is the result of higher growth bookings combined with our continued improvement in take rate.
Our take rate of nine 9% was ahead of our expectations and up 44%.
As with prior quarters. This improvement in take rate was driven mostly by the growth of higher margin products and the diversification of revenue streams, including Fintech and ancillary services.
Full year 2023, net revenues of $222 million grew 39% while take rate of eight 7% grew 17%.
Turning now to expenses, our operating expenses increased 49%.
Compared to our net revenue growth of 78%.
Sales and marketing as a percentage of net revenue decreased from 75% to 62%.
Jesus Portillo: The main reasons for this improvement are the AI-driven optimization of marketing credits to our B2B distribution network, as well as reductions in performance marketing spend in our B2C business. As a result of our strong net revenue growth and our efficiencies in sales and marketing, Adjusted Dividend grew 338% from $2 million to $7 million. Adjusted dividend margin was also up 146% and reached 11.4% in this quarter as we continue to put more emphasis on operating efficiencies and profitability. For the full year, adjusted EBITDA was $21 million, up 77%, with an adjusted EBITDA margin of 9.5%. On a gap basis, our net loss was $13 million, which included $11 million of non-cash and or non-recording items, including $3 million of stock-based compensation, $3 million of intangible asset amortization, and $3 million of change in fair value of acquisition earners, among others. For the full year, Gartner's loss was $60 million.
The main reasons for this improvement are the AI driven optimization of marketing credits towards <unk> distribution network as well as reductions in performance marketing spend in our <unk> business.
As a result of our strong net revenue growth and our efficiencies in sales and marketing adjusted EBITDA grew 338% from 2 million to $7 million.
Adjusted EBITDA margin was also up 146% and reached 11, 4% in this quarter as we continue to put more emphasis on operating efficiencies and profitability.
For the full year, adjusted EBITDA was $21 million up 77% with an adjusted EBITDA margin of nine 5%.
On a GAAP basis, our net loss was $13 million, which included $11 million of noncash or nonrecurring items.
Including $3 million of our stock based compensation.
$3 million of intangible asset amortization and.
And $3 million of changing fair value of acquisition earn outs among others.
For the full year GAAP net loss was $60 million.
Jesus Portillo: A year-over-year improvement of 30 million. Looking now at our balance sheet, at the end of this quarter, we have $34 million in cash and cash equivalents and 162 million total deaths, compared to $48 million and $155 million, respectively, at the end of September 2020. The reduction in cash reserves was primarily due to debt service and changes in net working capital in line with revenue growth.
A year over year improvement of $30 million.
Looking now at our balance sheet at the end of this quarter, we had $34 million in cash and cash equivalents and $162 million of total debt compared.
Compared to $48 million and $155 million, respectively. At the end of September 2023.
The reduction in casualty centers was probably due to debt service and changes in net working capital in line with revenue growth.
Jesus Portillo: We are advancing on the refinance of our term loan to increase duration and improve terms. We expect this to optimize our capital structure, adding value to our shareholding. In the meantime, we have executed an amendment with our current lenders, extending the existing loans maturity to March 31st, 2025. During the quarter, the company raised $11.3 million in preferred stock, $10 million of which was used to repurchase monthly common shares as part of our inaugural share buyback program.
We are advancing on the refinance of our term loan to increase duration and improved terms.
We expect these to optimize our capital structure, adding value to our shareholders in.
In the meantime, we have executed an amendment with our current lenders extending the existing loans maturity to March 31.
2025.
During the quarter the company raised $11 3 million in preferred stock 10 million of which was used to repurchase <unk> common shares as part of our in our share buyback program.
Okay.
Jesus Portillo: In terms of cash flow, operating cash flow was negative $10.6 million compared to a negative $9.9 million in Q4 of 2020. For the full year, operating cash flow was negative $24 million, compared to negative 3.6 million in 2020. This lower cash flow was primarily driven by a higher interest payment of $5.7 million, mainly due to the conversion from PIC to cash interest, a change in networking capital of $6.3 million, and payments related to the LBF divestiture of $7.7 million.
In terms of cash flow operating cash flow was negative $10 6 million compared to a negative $9 8 million in Q4 of 2022.
For the full year operating cash flow was negative $24 million.
Compared to negative $10 6 million in 2022.
The lower cash flow was primarily driven by higher interest payments of $5 7 million, mainly due to compression from big to cash interest a change in net working capital of $6 3 million.
And payments related to the <unk> divestiture of seven 7 million.
Jesus Portillo: Adjusting for these, operating cash flow would have improved by 6.3 million year over year. Turning now to our 2024 guidance, we are forecasting net revenues of $250 to $255 million, representing growth of 14% versus 2023 expected net revenue, measured at the midpoint. An Adjusted EBITDA of $30 to $35 million, representing growth of 24% versus 2023 expected Adjusted EBITDA, measured at the median. In closing, we're excited about our year-end results and the momentum in the business. Let me now turn it back to Jeff for Q&A. Thanks, Jeff.
Adjusting for these operating cash flow would have improved by $6 3 million year over year.
Turning now towards 2020 for guidance.
Forecasting net revenues of $250 million to $255 million representing.
Representing growth of 14% versus 2023 expected net revenues measure at the midpoint.
And adjusted EBITDA of 30% to $35 million, representing growth of 24% versus 2023 expected adjusted EBITDA measured at the midpoint.
In closing.
Excited about our year end results and the momentum in the business let.
Let me now turn it back to Jeff for Q&A, Jeff.
Jeff Houston: Hey, thanks Jesus. Elliot, we are ready for questions now. Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally.
Hey, Thanks cases, Elliot we are ready for questions now.
Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad.
I would like to withdraw your question. Please press star followed by one <unk> ask your question. Please ensure your devices and muted locally.
Operator: The first question comes from Darren Aftahi with Roth. Your line is open, please go ahead. Hi, this is Dylan on behalf of Darren.
First question comes from Darren <unk> with Roth. Your line is open. Please go ahead.
Hi, This is Dylan on for Darren Thanks for taking my questions I wanted to sort of start with the <unk>.
Unknown Attendee: Thanks for taking my questions. I wanted to sort of start with the increase in intake rate. It's gone up quite steadily, and it seems like it's going to keep going that way. Could you sort of talk about what percentage of transactions, whether you define that as a transaction or a user, are actually taking advantage of sort of multiple products, whether that be air or hotel with other sort of FinTech or ancillary services?
Increase in take rate.
Gone up quite steadily and it seems like it's going to keep going that way could you sort of talk about what percentage of transactions, whether it be defined as a transaction or a user are actually taking advantage of sort of multiple products, whether that the air or hotel with others.
Sort of in tech or ancillary services.
Jesus Portillo: Yeah, I mean, maybe looking at the percentages that Jim mentioned before, in terms of our revenue streams, you saw that around right now 20% of those revenues come from packages, right? Those obviously come with a higher rate. And that might give you maybe an idea of, you know. I don't know if that addresses your answer, but usually those will come with a higher percent, and that represents around 20% of our revenue.
Yes.
Maybe looking at the percentages that Jim mentioned before in terms of our revenue streams right you saw that.
Right now 20% of those revenues come from packages.
Obviously come with a higher take rate.
And that might give you maybe an idea of.
No.
No I don't think that address your answer, but usually those will come with a higher percentage. That's purpose is around 20% of our revenues.
Jesus Portillo: But so do you sort of expect the trend line in gross revenue per transaction to continue to go down, but that's offset by more transactions and higher take rates? Yeah, I mean, in this case, transactions grow faster than gross booking because we saw an increase in short-haul flights. We don't see that materially increasing in 2024. So I think that any improvements in tech rate will definitely come from the continued diversification of our revenue stream but not necessarily be seen as a change in terms of growth between transactions and growth. Got it. I appreciate it.
So do you sort of expect the trend line in gross revenue per transaction to continue.
But that's offset by more transactions and a higher take rate.
Yes.
The.
In this case transactions grow faster than gross booking because we saw an increase in short haul flights right.
We don't see that materially increasing in 2024.
So I think that.
And improvements in take rate will definitely come from the continued diversification of our revenue stream.
But not necessarily seen.
A change in terms of growth.
Between transaction and group bookings.
Got it appreciate it and if I could ask one more.
On the social slash AI Influencer side.
Unknown Attendee: And if I could ask one more on the social slash AI influencer side, is there anything you can quantify on how big of a driver that's been towards the increase in transactions or maybe even just maybe initial visitors to some of your sites? Yes, I mean, we mentioned before that we have added a few thousand of these new era distribution, which includes not only social media but also localized influencers of communities. So we also mentioned that we are in the process of launching and developing a more exciting AI power platform. So in the meantime, what we're doing, we're taking the feedback of these new cohorts in not only optimizing and refining the monetization model but also incorporating their needs and feedback into the enhanced version of the platform that we're working on. That's an exciting development. We'll be providing more details in the next few quarters. I appreciate it. I'll pass this time. We now turn to Nick Jones with Citizens GMP.
Is there anything you can quantify on how big of a driver of that spend towards the increase in transactions or just maybe even just the initial visitors to suddenly your sites.
Yes, I mean, we mentioned it before that we have added a few thousand of these new era.
Distributions, which includes not only social media, but also localized.
Influenza.
Our communities are right. So we also mentioned that.
We are in the process of launching and developing a more exciting AI powered platform. So in the meantime, what we're doing we're taking the feedback.
These new cohorts.
In not only optimizing and refining the monetization model.
But also incorporating their needs and feedback into the enhanced version of the platform that we're working and that's an exciting development will be providing more details in the next few quarters.
Okay I appreciate it I'll pass it on.
Thank you.
We now turn to your next churns with citizens GMP.
Nicholas Freeman Jones: The line is open. Please go ahead. Great, thanks for taking the questions. I guess, as we think about 2024 guidance, as kind of the midpoint of net revenue, if we assume kind of a flat take rate, I guess that that kind of suggests no growth in gross revenue for 2024. I think there's some expectations that the take rate will expand due to mix. Orestes, as you pointed out, does that maybe suggest that gross revenue might actually be down year over year in 2024? No, I mean, I think, you know, your question in terms of a tech rate. We definitely, long-term, we continue to see evolution of this, and as we always mention, we expect that to be mid-teens. In the short term, we might see some fluctuations. Some of these, as I said before, the recent increase in short-haul flights, take rates on those usually are a little bit smaller. So that's probably why, you know, in terms of the 2024 model, you might be having that question. So the short answer is... I guess the answer... I don't know.
Your line is open. Please go ahead.
Great. Thanks for taking the questions I guess.
Think about 2020 forward guidance.
Kind of the mid point of net revenue, if we assume kind of flat take rate I guess that that kind of suggest no growth on gross revenue for <unk>.
So far I think there is some expectation that take rate will expand due to mix or estimate as you pointed out that does that maybe suggest that gross revenue might actually be down year over year or 24.
No I mean, I think to your.
Question in terms of the take rate.
We we definitely long term, we continue to see evolution of this and as we've always mentioned, we expect that to be mid teens.
In the short term, we might see maybe some fluctuations some of these as I said before the recent increase in short haul flight take rate on those usually are little bit smaller.
So that's pretty wide in terms of the 2024 model you might be having that question.
So the short answer I guess.
Okay.
We're not necessarily seeing.
Jesus Portillo: We're not necessarily projecting a reduction in growth, right? I mean, we're being conservative because that's driven not only by our own growth but also by the market. And as you know, there is, in the market, a general expectation of some softening. But to Jesus' point, the take rate in the medium term is very likely to continue growing. But in the very short term, you may see some fluctuations from this dynamic that Jesus mentioned. The technology, for example, is now widely used within short-haul flights in Asia, right?
Rejecting a reduction in the in the Cros right I mean, we're being conservative because thats driven not only by our own growth, but also by the market and as you know that is in the market.
General expectation of some softening, but to <unk> point, the take rate in the medium term.
Very likely to continue growing.
Growing but in the in the very short term Youre, saying you may see some fluctuations from these dynamic but because it was mentioned we have our technology. For example, we use now widely within short haul flights in Asia right. So if you have a big growth within those components of our mix then it doesn't necessarily mean that the take rate will follow a linear.
Orestes Fintiklis: So if you have big growth within those components of our mix, then it doesn't necessarily mean that the take rate will follow linear growth quarter over quarter. Something else maybe I need to add to that: also, when you compare to 2023, remember that we still have six months of our LBF business, B2C, right? So, you know, maybe on a year-over-year basis, it would also be relevant to discount that when you think about the growth of closed bookings in 2023. Okay, so I guess just to be clear, I guess for 24, it sounds like the expectation is gross revenue will grow, which suggests take rate compression next year versus this year, and this is driven by flights.
Growth.
Quarter over quarter, something else, maybe need to add to that also when you compare to 2023 remember that we still have six months of.
Our lbs business B to C right, so maybe on a year over year basis.
So relevant to discount that when you think about the growth of the gross bookings in 'twenty four.
Okay. So I guess just to be clear I guess for 24. It sounds like the expectation is gross revenue will grow at suggest take rate compression.
Next year versus this year and this is driven by flight.
Orestes Fintiklis: Yes, I mean, you know, we definitely see the Q, our Q4 take rate, as you saw, was higher than we anticipated, 9.9. On a yearly basis of 8.7, that's what we see our take rate going into 2024. As I said before, the guidance that we provide in terms of revenues when you apply that still shows growth in gross bookings, but you also need to discount the gross bookings in 2023 coming out of our LBF business. Yeah, I would add that compression is a kind of a strong word here.
Yes, I mean, we see definitely the Q, our Q4 <unk>.
As you saw was even higher than we anticipated a nine 9% on.
The yearly basis of eight seven that's what we see.
Our take rate going into 2024.
I said before to the guidance that we're providing in terms of revenues. When you apply that still shows the growth in gross bookings, but you also need to discount the gross bookings in 2023 coming out of.
Our lbs business.
Yes, I would add that compression is that is it.
Kind of a strong work here right, so what I'm, saying is that.
Jesus Portillo: Right. So what I'm saying is that, you know, it will continue to grow in the medium term, but you may have a few quarters that are not 9.9%. Right. So, as simple as that.
It will continue to grow in there in the medium term, but you may have a few quarters that is not nine 9% right. So as simple as that.
Got it got it.
Nicholas Freeman Jones: Got it. And then I guess just to follow up on gross revenue per transaction. Where should we expect that to kind of trough or balance out? Could there still be downward pressure?
And then I guess, it's a follow up on gross revenue per transaction.
Oh.
Where should we expect that to kind of trough or balance out.
Could there still be a downward pressure.
Nicholas Freeman Jones: Through 24 and kind of higher, I guess, how do we think about the mix of transaction growth versus gross revenue per transaction? That's kind of the key inputs to gross revenue for 2024. Yeah, there are two components to it, right?
There are 24 and kind of higher kind of I guess, how do we think about the mix of transaction growth versus gross revenue per transaction thats kind of the key inputs the gross revenue.
For FY 'twenty four.
Yes, there are two components to it right. The first one is there is a reduction in their fabs in general right, which is beyond our control in 2020 three even though the market was expecting a reduction in debt for most of the year you didn't see that dynamic right. So depending on how the airlines.
Orestes Fintiklis: The first one is the reduction in airfares in general, which is beyond our control. In 2023, even though the market was expecting a reduction in airfares, for most of the year, you didn't see that dynamic, right? So depending on how the airlines and supply and demand shape up, you may see, you know, a reduction in airfares, which, like Jim explained, may translate into less gross volume, but from one perspective, a softened market means enhanced economics, right?
The supply and the demand shape you may see.
A reduction in the air fares, which like Jim explained that may translate into less gross gross volume, but from modeling perspective, as a soft end market means and hottest economics right. So that's the first element of the equation, which is beyond our control and it's more of a prediction about future supply in the mining industry.
Orestes Fintiklis: So that's the first element of the equation, which is beyond our control and is more of a prediction about future supply and demand in the air industry. The second element, which is the one that we have mentioned, is that we are seeing growth in the use of our technology in certain parts of the world, which are more short-haul flights, right? That one is a dynamic that we have identified and is the one for which we can give an estimate.
Second element, which is the one that we have mentioned that we are seeing growth of the use of our technology in certain parts of the world, which are more short haul flights right that one is it is a dynamic that we have identified and is the one for which we can give you an estimate and given the strong growth of that business values make that.
Nicholas Freeman Jones: And given the strong growth of that business, that is what may affect them in the next few quarters to show lower dollar amounts, right? It's not that we're making less profit, it's not that we are, you know, the business is fundamentally changing; it's that we have this very strong growth from short-haul flights in geographies like Asia, for example. Got it. Thanks, guys. We now turn to Brett Knoblauch with Cantor Fitzgerald. Your line is open, please go ahead.
That is made what effect in the next few quarters to show.
On a per booking basis lower dollar amounts right is not that we are making less profit is not that we are.
Yes.
Fundamentally changing is that that will have this very strong growth.
From short haul flights in geographies like Asia for example.
Got it got it.
We now turn to Brett Knoblauch with Cantor Fitzgerald. Your line is open. Please go ahead.
Brett Anthony Knoblauch: Hi guys, thanks for taking my question. I guess maybe you could help, you know, break out for 2024? Yeah, I mean, as we've mentioned in prior calls, usually, you know, we, it's hard for us to look at that on a separate basis because we integrate platforms and bookings and alike. You're going to see again on our 10k, a table that is going to provide you with a pro forma growth of our companies as if we had made the acquisitions as of January 2022. In that case, you're going to see that the growth is consistent, you know, you could call it maybe organic growth is consistent with the prior quarter, so close to 20%.
Hi, guys. Thanks for taking my question I guess, maybe could you help.
Breakout for 2024.
Growth from inorganic means from the buyback.
Slide the acquisitions you did in 2023 and how much that's contributing to your 'twenty guidance.
Kevin.
Yes, I mean, as we've mentioned in prior calls usually we talk for us to look at that and that's a pretty basis, because we integrate platforms and bookings and alike youre going to see you again on our 10-K, a table that's going to provide.
Provide you with.
Pro forma growth of.
Our companies as if we had it made the acquisitions of January 2022, and decade, Youre going to see that the growth is consistent with.
You could call maybe organic growth is consistent with the prior quarter, so close to 20%.
Jesus Portillo: And right now, the way we think about our growth in 2024 is 100% organic. You know, at this point, I think that thinking about growth of companies acquired, you know, some of the largest ones at the beginning of 2023 does not make a lot of sense. And then on, I guess, just just profitability and looking at your cash position. I guess, what should we be expecting from the operating cash flow for this year? I know you guys don't guide to it.
And right now the way, we think about our growth in 2024, it's 100% organic at this point I think that thinking of growth of.
Companies acquired some of the largest one at the beginning of 2023, it doesn't make a lot of sense.
Got it and then on I guess, just just profitability and looking at your cash position.
Yeah, I guess, what should we be expecting from the operating cash flow for this year I know you guys don't guide.
Brett Anthony Knoblauch: But that, I guess, the cash balance continues to dwindle. And what are you guys thinking there in terms of maybe reducing the interest burden? I know you guys talked about refinancing, but your term loan debt and extent of maturity are out.
But that I guess cash balance continues to dwindle down.
What are you guys thinking there in terms of maybe reducing the interest burden I know you guys talked about refinancing.
Your term loan debt and extend maturities out.
Jesus Portillo: But how should we be expecting, maybe just the cash, you know, the company to perform this year? Yeah, I think that, first of all, you need to consider that in 2023, we had the divestiture of LBF, which incurred close to $8 million of extraordinary cash payments that will not happen anymore. We had an increase, or you know, change in net working capital of more than $6 million. When you look at our growth of close to 40% right now, the growth is, you know, it's still strong, but not at that level.
But how should we be expecting maybe just.
Cash.
Companies one of this year.
Yes, I think that.
Yeah first of all you need to consider in 2023, we had the divestiture of lbs.
Incur close to $8 million of extraordinary cash payments.
That will not be anymore.
We had an increase or change in networking capital of more than $6 million.
When you look at our growth of close to 40% right now the growth is still strong but not to that level. So we don't think we'll need so marcia.
Jesus Portillo: So we don't think we'll need so much cash to support our networking capital. And last but not least, you mentioned it before, right, we're working on this refinancing, and we're aiming to actually obtain better terms and better economics that will allow us to..., you know, have to reduce the payment of our debt. Yeah, and to add to that, I mean, if you were going to adjust for the interest debt service, that outcome would have been a positive number, right? And there are two ways to reduce that burden. The first one is to reduce the actual interest rate, right? And then the second one is to convert a portion of the service to PIC, so that now almost the entire term loan debt service is in cash, right? So there are two levels in that regard.
Cash to support our networking capital and last but not least you mentioned it before right. We're working on these refinancings.
And we're aiming to actually obtain better terms and better economics that will allow us to.
You have to reduce the payment of our interest.
Yes.
And to add to that.
If you are going to adjust for the internet that salaries.
The outcome would have been a positive number.
There are two ways.
Reviews that that burdened the first one is to reduce the actual interest rate right and then the second one is to convert a portion.
Of the salaries to peak, which now almost one month of Empire.
Our term loan debt service easing cost right. So there are two levels in batteries and then of course, the second element of equation.
Orestes Fintiklis: And then, of course, the second element of the equation is the operating cash flow increase before debt service, which if you take the 21 million EBITDA for 23 and you project the guidance for 24, it changes fundamentally the net effect on the positive cash flow. Perfect. Thank you. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad now.
The operating cash flow increase before that salaries, which.
If you take the $21 million EBITDA $4 23, and you project the guidance $4 24.
It changes fundamentally the net effect on that on the positive cash flows.
Okay.
Perfect. Thank you.
Cool.
As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad now.
Operator: We now turn to Mike Grondahl with Northland Security. Your line is open, please go ahead. Hey, thanks. Um, guys, how would you guys handicap the launch of Abby? and kind of what was the rough marketing spend on kind of promoting that during the year, and what do you think it'll be in 24? Yes, so we mentioned before in Q3 that when we launched the ABI, we earmarked a fairly large amount that we have spent the bulk of that on, you know, for 23. And we also mentioned that we moved forward a figure of 4-5 million into the next year, right? So that's how I would quantify it.
Ill now turn to Mike Grondahl with Northland Securities. Your line is open. Please go ahead.
Hey, thanks.
Guys, how would you handicap the launch of Abbey.
And kind of what was the rough marketing spend on kind of promoting that during the year and what do you think it'll be in 'twenty four.
Okay.
Yes, so so we mentioned before.
In Q3 that when we launched.
We launched.
B that we got to market fairly Dr. Ramon.
We have spanned.
The bulk of that.
Four.
For 'twenty three and we also mentioned that we would move forward.
<unk> got a $45 million into the next year right. So that's that's how I.
I would quantify also bear in mind, what I said before in the first question that we are working on a new version of.
Orestes Fintiklis: Also, bear in mind what I said earlier in the first question, that we are working on a new version of the AI, right? So we will be cautious because we believe that it is going to be much more suitable and address the specific needs and feedback that we got from this new year of distribution. So in the first few quarters, we're going to be a bit more cautious on the marketing spend there, as it's much more efficient to launch, you know, incur enhanced marketing expenses when you have a newer and more efficient and more suitable technology launched, right? So Orestes, I sort of heard 4 to 5 million, probably later in 24. Did you give a number for 23?
The AI right, so we will be cautious because.
Because we believe that is going to be much more.
Suitable in addressing the specific needs and feedback that we got from Disney oriented distribution. So in the first few quarters.
Going to be a bit more cautious.
On the marketing spend there.
It is much more efficient.
To launch.
Yes.
Our enhanced marketing expenses, when you have a newer and more efficient and more suitable technology launched right.
Got it so arrest is I sort of heard $4 million to $5 million, probably later in 'twenty. Four did you give a number for 'twenty three.
Orestes Fintiklis: Twenty-three, Mike, spend was around, you know, three to four million dollars that were spent on the lawn. Got it. What would you guys describe as sort of how you're incentivizing the travel agents today? I know in quarters past, in years past, there's been some discounting, and I'll call it couponing. What is the sort of strategy to push and motivate agents in 24? Hey, Mike, it's Jim.
23.
Mike, It's Ben was around $3 million to $4 million.
That was spent on the on the launch.
Got it.
What would you guys describe is sort of.
How youre, sending the travel agents today.
I know in quarters past in years past.
Theres been some discounting in I'll call. It couponing, what is sort of the strategy to push and motivate agents in 'twenty four.
Hey, Mike It's Jim.
James W. S. Dullum: I think one of the things that we're benefiting from going into 24 is the deployment of our AI and all of the data analytics that come off of that. We've been able to target the different segments of our distribution a lot more efficiently and target them with programs where we can better manage the, if you'll call it, discounting, the incentives that are deployed. And we're getting much better results from that. So I think as we go through 24, what you will see is a continued increase in efficiency in that marketing spend. And it's gonna be almost segment by segment.
I think one of the things that we're benefiting from going into 'twenty. Four is the deployment of our AI in all of the data analytics that come off of that.
We've been able to a lot more efficiently.
Target different segments of our distribution.
And target them with programs that where we can better manage the if you recall at discounting the incentives that are deployed and we're getting much better results from that.
So I think as we as we go through 'twenty four what you will see is a continued increase in efficiency.
That marketing spend and its going to be almost segment by segment, so rather than broader just.
Orestes Fintiklis: So rather than a broader approach of just putting out one big program with a set of incentives or discounts against the market generally, or even a particular O and D mix, you'll see us be a lot more clinical or surgical in how that's done. And the nature of the programs that we'll launch, that's not something that we necessarily disclose because, clearly, that's part of a competitive advantage, right? This is how we work with our distribution network and how we make it most efficient. But just presume that it will continue to get more efficient. Yeah, and just to add to that, I mean, we mentioned a few quarters ago that we're working on implementing AI not just on the front end but on many other aspects of our business, right?
Putting out one one big program.
With a set of incentives or discounts against the market generally are even particularly particular OMB mix.
Youll see us be a lot more.
Clinical or surgical in how that's done and the nature of the.
The nature of the programs that will launch.
That's something that we necessarily disclose because clearly that's part of competitive advantage right is how we work with our.
Our distribution network and how we make our most effective but just presume that it will continue to get more efficient.
Yes, and just to add to that.
We mention.
Sorry to interrupt you Mike mentioned.
A few quarters ago that we are working on implementing AI and not just on the front end, but on many other aspects of our business right. This is this is a perfect example, on how AI can improve their marketing spend and we've seen that already in the index for the last quarter. It dropped from 75% to 62% of the net revenue.
Orestes Fintiklis: This is a perfect example of how AI can improve marketing spend, and we've seen that already in that for the last quarter, it dropped from, you know, 75% to 62% of net revenue. But how can less spend have a more positive outcome, and this is precisely because of customization, right? So, in the absence of technology, you give the same incentives to everybody, while certain user cohorts may value a different type of incentive or may do the business without getting the incentive, right?
But how we've been less spend you can have a more positive outcome and this is precisely because of customization right. So in the absence of technology, you'll give them the same incentives to everybody wireless test and consumer acceptance user cohorts may value of different type of incentive or may produce the business without.
Getting the incentive right. So this is this is a big part of how AI.
Orestes Fintiklis: So this is a big part of how AI can also influence elements of the business like marketing. Got it. And hey, lastly, do you have a rough date on when you're going to file the 10K? Yeah, right now.
Can influence.
Elements of the business like marketing.
Got it and lastly, do you have a rough date on when Youre going to file the 10-K.
Yes, right now I mean, we are closing the audit.
Jesus Portillo: I mean, we're closing the audit. As we speak, the line for us is tomorrow, working towards that day. So far, that's our objective.
Speak the line for Us is tomorrow.
We're working towards that date.
So far.
Jesus Portillo: Got it. Okay. Thank you. This concludes our Q&A. I want to hand it back to Jeff Houston for final remarks. Hey, thanks, Elliot. And thank you to everyone who tuned in for our fourth quarter 2023 earnings call, whether it was live on the call, the replay, or the transcript. If you do have any questions or would like to learn more about Mondy, don't hesitate to schedule a call with us. You can get more information on our IR site, which is investors.mondy.com, or send an email to us at ir@mondy.com.
Our objective.
Got it okay.
<unk>.
Sure.
This concludes our Q&A I'll now hand back to Jeff Houston for final remarks.
Thanks, Elliot and thank you to everyone, who tuned in for our fourth quarter 2023 earnings call whether it was live on the call a replay of the transcript. If you do have any questions or would like to learn more about Monday.
Don't hesitate to schedule a call with US you can get more information on our IR site, which is investors <unk> dot com or send an email to us at IR at <unk> Dot com. Thank you.
Jeff Houston: Thank you. Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines, www.thevenusproject.com
Yeah.
Ladies and gentlemen, today's call is now concluded wed like to thank you for your participation you may now disconnect your lines.
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