Despegar.com Corp. (NYSE: DESP) reported Q1 EPS of ($0.47), $0.19 worse than the analyst estimate of ($0.28). Revenue for the quarter came in at $51.9 million versus the consensus estimate of $54.47 million.

First Quarter 2021 Key Financial and Operating Highlights
(For definitions, see page 14)

• Impacted by the quarter spike in COVID-19 pandemic, Gross Bookings declined 8% quarter-over-quarter (QoQ) to $369.2 million, 53% year-over-year (YoY) and 68% in comparison with 1Q19, a pre-pandemic period1. Excluding Brazil and Argentina, Gross Bookings would have increased 11% QoQ.
• Transactions decreased 2% QoQ. Excluding Brazil, Transactions grew 12% sequentially. Transactions declined 40% (YoY) and 54% when compared to 1Q19.
• Room Nights decreased 9% QoQ, 49% YoY and 64% when compared to 1Q19. Mobile accounted for 50% of Transactions in 1Q21, up 584 bps YoY.
• As Reported Revenues were $51.9 million, representing declines of 3% QoQ, 32% YoY and 61% when compared to 1Q19. Excluding the impact of extraordinary cancellations, Revenues would have declined 4% sequentially to $56.1 million, and 37% YoY.
• Selling and marketing expenses decreased 52% YoY, in line with the decline in Gross Bookings in the period. Sequentially, Selling and marketing expenses increased 17% mainly due to an increase in marketing-direct expenses and personnel expenses, but was down 62% when compared to 1Q19.
• Excluding the effect of the Best Day and Koin acquisitions, Structural Costs declined 30% YoY, reflecting measures implemented throughout 2020, and increased 3% QoQ to $29.9 million reflecting primarily payroll FX impact particularly in Argentina.
• Adjusted EBITDA as reported in 1Q21 was a loss of $20.0 million reflecting the second wave of the COVID-19 pandemic, particularly in Brazil and Argentina. This compares to losses of $19.3 million in 4Q20 and of $13.9 million in 1Q20, and income of $15.2 million in 1Q19. Excluding Extraordinary Charges, Adjusted EBITDA was a loss of $14.1 million in 1Q21 compared to losses of $9.3 million in 4Q20 and $1.4 million in 1Q20, and income $15.2 million in 1Q19.
• Use of cash, cash equivalents and restricted cash of $24.7 million in 1Q21, which includes a positive contribution of $6.9 million in operating working capital. This compares to use of cash, cash equivalents and restricted cash of $35.4 million in 4Q20, $87.7 million in 1Q20 and $36.1 million in 1Q19.
• Solid balance sheet - Cash and cash equivalents of $325.7 million at quarter end, including $16.3 million in restricted cash.

Message from the CEO

Commenting on the Company’s performance, Damian Scokin, CEO stated, “As anticipated, this past quarter we observed a sequential slowdown in the recovery trend that started in 2Q20, due to the impact of the second wave of COVID-19 on overall travel, and particularly in Brazil and Argentina.

In this choppy market environment, our geographic diversification efforts are having the desired results. A healthy performance in Mexico with sequential low double digit growth in Gross Bookings partially offset the declines in Brazil and Argentina. Countries in the Andean Region including Colombia and Chile also delivered sequential improvement.

Our strategy to prioritize profitability until there is more visibility of the recovery of the travel industry, is reflected in the improvement of our revenue margin as we achieved our highest take rate since 2016. Moreover, we ended the quarter with nearly $326 million in cash and equivalents.

We expect the stagnation in the recovery trend to continue at least throughout 2Q21. However, we are confident that travel demand will pick up as observed in other geographies as we enter the South American spring/summer seasons and the COVID-19 vaccination rollout accelerates.

In the meantime, we remain focused on further strengthening our competitive advantages, including: i) making steady progress on the integration of Best Day, ii) expanding the reach of our payment platform in Brazil, and iii) broadening our relationships with our travel partners, while incorporating the product mix of the acquired companies is reflected in the higher share of non-air revenues in the quarter. We believe that our position as a leaner and more geographically diversified company and a profit maximization strategy will enable us to emerge from the COVID-19 pandemic in a solid position to meet the resultant pick-up in travel demand.”

For earnings history and earnings-related data on Despegar.com Corp. (DESP) click here.