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Mondee Reports Second Quarter 2024 Results and Announces Comprehensive Long-Term Refinancing of its Capital Structure
Source: Nasdaq GlobeNewswire / 14 Aug 2024 07:00:01 America/New_York
- Net Revenues of $58.3M, up 3% from prior-year quarter, on Gross Bookings of $678M
- Adjusted EBITDA3 of $6.1M, up 38% from the prior-year quarter
- Take Rate of 8.6%, up 20 basis points from the prior-year quarter
- Refinancing of term loan and extension of preferred equityAUSTIN, Texas, Aug. 14, 2024 (GLOBE NEWSWIRE) -- Mondee Holdings, Inc. (Nasdaq: MOND) (“Mondee” or the “Company”), a leading travel marketplace and artificial intelligence (AI) technology company, today announced financial results for the three-month period ended June 30, 2024.
“Mondee delivered a strong second quarter, with net revenue, take rate, and adjusted EBITDA up year over year—the latter by 38%. Our non-air component surged to 47% of net revenue and take rate grew 20 basis points to 8.6%,” said Founder, Chairman, and CEO Prasad Gundumogula.
“We are also successfully refinancing our term loan and preferred equity, securing favorable terms that position Mondee for long-term growth. This new capital structure is expected to fuel our expansion, improve profitability, and solidify our AI leadership in travel,” Gundumogula continued.
“We delivered net revenue of $58 million—up 3% year over year, or 11.5% adjusted for acquisitions and disposals—and maintained healthy adjusted EBITDA. Our much-anticipated refinancing is expected to provide Mondee with financial flexibility, and additional working capital, enabling the Company to resume and accelerate its growth trajectory,” said CFO Jesus Portillo.
Second Quarter Financial Highlights
- Gross bookings of $678.0 million for the quarter, approximately in line with the second quarter of 2023 (“Q2 23”). Our strategy of rapid growth in non-air and platform-driven international air expansion led to a strong 57% transaction growth with reduced average transaction price. This resulted in lower revenue growth and higher adjusted EBITDA.
- Net revenues of $58.3 million for the quarter, an increase of 3% compared to $56.8 million in Q2 23. Delays in completing the refinancing caused a reduction in FinTech credit limits and working capital, materially limiting net revenue growth.
- Net Loss of $25.5 million for the quarter, including $19.1 million of non-cash and/or non-recurring items, such as $3.7 million of depreciation and amortization, $1.0 million of PIKed interest, $12.0 million of stock-based compensation, and $2.3 million amortization of loan origination fees, among others.
- Adjusted EBITDA of $6.1 million for the quarter, an increase of 38% compared to $4.4 million in Q2 23.
- Operating cash flow used of $7.6 million for the quarter, compared to cash used of $2.4 million in Q2 23. In this quarter, the Company used over $10 million of cash reserves as working capital to offset for credit limit reductions by certain FinTech partners in the face of delays in refinancing of its term loan. The Company anticipates some of these credit limits to be reinstated as the refinancing is being completed. Year-to-date, both operating cash flow and free cash flow were positive, $11.1 million and $3.3 million, respectively.
Financial Summary and Operating Results 1,2
For the three months ended June 30, Year-Over-Year Change 2024 2023 % Transactions 1,133,997 721,464 412,533 57% Gross Bookings $677,957 $679,244 $(1,287) —% Net Revenues $58,326 $56,771 $1,555 3% Net Loss $(25,512) $(14,608) $(10,904) 75% Loss per share (EPS) $(0.36) $(0.22) $(0.14) 63% Adjusted EBITDA3 $6,111 $4,438 $1,673 38% Adjusted Loss per Share3 $(0.17) $(0.09) $(0.08) 92% Net cash used in operating activities $(7,599) $(2,427) $(5,172) (213)% For the six months ended June 30, Year-Over-Year Change 2024 2023 % Transactions 2,209,434 1,386,637 822,797 59% Gross Bookings $1,386,033 $1,347,323 $38,710 3% Net Revenues $116,347 $106,700 $9,647 9% Net Loss $(44,970) $(27,523) $(17,447) 63% Loss per share (EPS) $(0.66) $(0.43) $(0.23) 54% Adjusted EBITDA3 $11,167 $8,595 $2,572 30% Adjusted Loss per Share3 $(0.32) $(0.18) $(0.14) 74% Net cash from (used in) operating activities $11,062 $(12,406) $23,468 (189)% 1 In $ thousands, except for Transactions and Loss per Share.
2 2Q 2024 Net Loss included $19.1 million of non-cash and/or non-recurring items, such as $3.7 million of depreciation and amortization, $1.0 million of PIKed interest, $12.0 million of stock-based compensation and related payroll expense, and $2.3 million amortization of loan origination fees, and $0.1 million change in fair value of earn-out liabilities, among others.
3 Refer to section entitled “Use of Non-GAAP Measures” for a reconciliation of non-GAAP financial measures.Second Quarter 2024 Business Highlights and Subsequent Events
- Long-Term Refinancing. The Company announced today a comprehensive refinancing of its capital structure with TCW and funds affiliated with Morgan Stanley Investment Management, that is expected to extend its term loan to June 30, 2028, and its preferred equity to December 31, 2028. The extended timing for the term loan beyond August 31, 2025 and the preferred equity beyond September 30, 2026, are both subject to securing a $15 million letter of credit that the Company anticipates finalizing shortly and which would provide additional working capital.
Revised 2024 Financial Outlook
Our fiscal year 2024 guidance, as a result of the impact of working capital and FinTech credit limit constraints caused by delays in completing the refinancing, is adjusted as follows:
- Net revenues of approximately $240 million to $250 million, representing an increase of 10% versus 2023 net revenues, measured at the midpoint.
- Adjusted EBITDA of approximately $25 million to $30 million, representing an increase of 42% versus 2023 Adjusted EBITDA, measured at the midpoint.
Conference Call Information
Mondee will host a conference call Wednesday, August 14th at 5:30 a.m. (PT) / 7:30 a.m. (CT) / 8:30 a.m. (ET) to discuss its financial results with the investment community. A live webcast of the event will be available on the Mondee Investor Relations website at http://investors.mondee.com. A live dial-in is available domestically at (833) 470-1428 and internationally at +1 (404) 975-4839, passcode 985518.
A replay will be available on Mondee’s Investor Relations website and an audio replay will be available domestically at (866) 813-9403 or internationally at +1 (929) 458-6194, passcode 968920, until midnight (ET) September 4, 2024.
About Mondee Holdings, Inc. and Subsidiaries
Established in 2011, Mondee is a leading travel marketplace and artificial intelligence (“AI”) technology company with its headquarters based in Austin, Texas. The company operates 22 offices across the United States and Canada and has core operations in Brazil, Mexico, India, Thailand, and Greece. Mondee is driving change in the leisure and corporate travel sectors through its broad array of innovative solutions. Available both as an app and through the web, the company’s platform processes over 50 million daily searches and generates a substantial transactional volume annually. Mondee Marketplace includes access to Abhi, the most powerful and only fully-integrated AI travel planning assistant in the market. Mondee’s network and marketplace include approximately 65,000 travel experts, 500+ airlines, and over one million hotels and vacation rentals, 30,000 rental car pickup locations, and 50+ cruise lines. The company also offers packaged solutions and ancillary offerings that serve our global distribution. On July 19, 2022, Mondee became publicly traded on the Nasdaq under the ticker symbol MOND. For further information, visit: www.mondee.com.Forward-Looking Statements:
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by words such as: “believe,” “could,” “may,” “expect,” “intend,” “potential,” “plan,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the Company’s future growth, performance, business prospects and opportunities, strategies, expectations, future plans and intentions or other future events. Such forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.Management believes that these forward-looking statements are reasonable as and when made. However, the Company cautions you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, the ability to implement business plans and forecasts, the outcome of any legal proceedings that may be instituted against the Company or others and any definitive agreements with respect thereto, the ability of the Company to grow and manage growth profitably, retain management and key employees, and maintain relationships with our distribution network and suppliers, the ability of the Company to maintain compliance with Nasdaq’s listing standards, the expected changes to the Company’s capital structure, and other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Report of Form 10-Q for the three months ended March 31, 2024 filed with the U.S. Securities and Exchange Commission (the “SEC”), and in the Company’s subsequent filings with the SEC. There may be additional risks that the Company does not presently know of or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements.
Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Except as required by law, Mondee undertakes no obligation to update publicly any forward-looking statements for any reason.
MONDEE HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except par value) (unaudited)June 30,
2024December 31,
2023Assets Current assets Cash and cash equivalents $ 23,337 $ 27,994 Restricted cash and short-term investments 8,951 7,993 Accounts receivable, net of allowance 94,347 116,632 Contract assets, net of allowance 15,459 13,228 Amounts receivable from related parties, current portion 59 — Prepaid expenses and other current assets 6,732 7,250 Total current assets 148,885 173,097 Property and equipment, net 23,831 17,311 Goodwill 82,758 88,056 Intangible assets, net 92,288 102,029 Amounts receivable from related parties, excluding current portion — 43 Operating lease right-of-use assets 4,024 3,232 Deferred income taxes 752 752 Other non-current assets 10,266 7,871 TOTAL ASSETS $ 362,804 $ 392,391 Liabilities, Redeemable Preferred Stock and Stockholders’ Deficit Current liabilities Accounts payable $ 121,838 $ 114,989 Amounts payable to related parties 41 42 Government loans, current portion 20 66 Accrued expenses and other current liabilities 25,853 25,115 Earn-out liability, net, current portion 4,013 4,843 Deferred revenue, current portion 5,213 5,686 Long-term debt, current portion 5,182 10,828 Total current liabilities 162,160 161,569 Deferred income taxes 8,473 12,334 Note payable to related party 203 201 Government loans, excluding current portion 127 142 Warrant liability 102 137 Earn-out liability, net, excluding current portion 2,116 4,322 Long-term debt, excluding current portion 164,104 150,679 Deferred revenue, excluding current portion 10,490 11,797 Operating lease liabilities, excluding current portion 2,825 2,561 Other long-term liabilities 8,088 8,073 Total liabilities 358,688 351,815 Redeemable preferred stock Series A preferred stock - $0.0001 par value 115,734 105,804 Stockholders’ deficit Common stock – $0.0001 par value 9 8 Treasury Stock (32,088 ) (32,088 ) Additional paid-in capital 312,770 306,326 Accumulated other comprehensive (losses) gains (6,267 ) 1,598 Accumulated deficit (386,042 ) (341,072 ) Total stockholders’ deficit (111,618 ) (65,228 ) TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT $ 362,804 $ 392,391 MONDEE HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except weighted-average shares and net loss per share data) (unaudited)Three Months Ended
June 30,Six Months Ended
June 30,2024 2023 2024 2023 Revenues, net $ 58,326 $ 56,771 $ 116,347 $ 106,700 Operating expenses Sales and marketing expenses 38,107 40,060 78,374 77,505 Personnel expenses, including stock-based compensation of $10,922, $4,467, $16,168, and $6,623, respectively 22,072 12,359 35,288 19,825 General and administrative expenses, including non-employee stock-based compensation of $590, $337, $645, and $742, respectively 4,020 5,227 9,805 9,721 Information technology expenses 268 1,376 2,337 2,299 Provision for credit losses, net 349 (34 ) (54 ) (701 ) Depreciation and amortization 3,653 3,803 9,216 7,189 Restructuring expense, net 158 (168 ) (131 ) 1,361 Total operating expenses 68,627 62,623 134,835 117,199 Loss from operations (10,301 ) (5,852 ) (18,488 ) (10,499 ) Other (expense) income Interest income 200 290 369 637 Interest expense (12,818 ) (8,415 ) (22,750 ) (16,632 ) Changes in fair value of warrant liability (7 ) 393 35 372 Other (expense) income, net (2,590 ) 984 (3,495 ) 1,306 Total other expense, net (15,215 ) (6,748 ) (25,841 ) (14,317 ) Loss before income taxes (25,516 ) (12,600 ) (44,329 ) (24,816 ) Benefit (provision) for income taxes 4 (2,008 ) (641 ) (2,707 ) Net loss (25,512 ) (14,608 ) (44,970 ) (27,523 ) Cumulative dividends allocated to preferred stockholders (3,937 ) (2,686 ) (7,742 ) (5,164 ) Net loss attributable to common stockholders $ (29,449 ) $ (17,294 ) $ (52,712 ) $ (32,687 ) Net loss attributable per share to common stockholders Basic and diluted $ (0.36 ) $ (0.22 ) $ (0.66 ) $ (0.43 ) Weighted-average shares used to compute net loss attributable per share to common stockholders Basic and diluted 80,722,160 77,197,805 79,595,320 76,774,455 MONDEE HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands) (unaudited)Six Months Ended
June 30,2024 2023 Cash flows from operating activities Net loss $ (44,970 ) $ (27,523 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortization 9,216 7,189 Deferred taxes 427 62 Provision for credit losses, net (54 ) (701 ) Stock-based compensation 16,813 7,365 Non-cash lease expense and lease impairment charges 914 457 Amortization of loan origination fees 4,183 4,126 Payment in kind interest expense 6,498 2,807 Gain on termination of lease (458 ) (337 ) Unrealized (gain) loss on foreign currency exchange derivatives (570 ) 129 Change in the estimated fair value of earn-out consideration and warrants 1,262 329 Payment of earn-out consideration in excess of acquisition date fair value (1,873 ) — Changes in operating assets and liabilities: Accounts receivable 12,189 (20,468 ) Amounts receivable from related parties (16 ) — Contract assets (4,871 ) (8,795 ) Prepaid expenses and other current assets 787 494 Other non-current assets (419 ) (377 ) Amounts payable to related parties — 25 Accounts payable 13,280 24,667 Accrued expenses and other liabilities 1,357 (262 ) Deferred revenue (1,780 ) (985 ) Operating lease liabilities (853 ) (608 ) Net cash provided by (used in) operating activities 11,062 (12,406 ) Cash flows from investing activities Capital expenditures (7,785 ) (4,474 ) Cash paid for acquisitions, net of cash acquired (139 ) (21,919 ) Purchase of restricted short term investments — (231 ) Net cash used in investing activities (7,924 ) (26,624 ) Cash flows from financing activities Repayment of debt (1,900 ) (2,063 ) Payment of preferred stock offering costs (28 ) — Loan origination fee for long term debt (79 ) (615 ) Payments of tax on vested restricted stock units (793 ) — Proceeds from common stock issued in connection with employee stock purchase plan 84 — Payment of earn-out consideration up to acquisition date fair value (2,460 ) — Payment of deferred consideration for Interep acquisition (120 ) — Payment of offering costs — (3,672 ) Proceeds from long term debt — 15,000 Net cash (used in) provided by financing activities (5,296 ) 8,650 Effect of exchange rate changes on cash, cash equivalents, and restricted cash (1,523 ) 528 Net decrease in cash, cash equivalents, and restricted cash (3,681 ) (29,852 ) Cash, cash equivalents, and restricted cash at beginning of period 34,666 78,841 Cash, cash equivalents and restricted cash at end of period $ 30,985 $ 48,989 Operating Metrics
This press release also includes certain operating metrics that the Company believes are useful in providing additional information in assessing the overall performance of Mondee’s business.Transactions are defined as the number of travel reservations that were processed on Mondee’s platform during the period. A single transaction could include an airline ticket, a hotel or hospitality accommodation, and any number of ancillaries offered on the platform. Gross bookings are defined as the total dollar value, generally inclusive of taxes and fees, of all travel reservations through our platform between a third-party seller or service provider and the traveler, net of cancellations. Take rate is defined as revenues as a percentage of gross bookings. Mondee generates revenue from service fees earned on these transactions and, accordingly its revenue increases or decreases based on the increase or decrease in either or both the number or value of transactions Mondee processes. Revenue will increase as a result of the expansion in Mondee's distribution platform and/or as a result of an increase in service fees from higher value services offered on the platform.
Use of Non-GAAP Measures
In addition to disclosing financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release and the accompanying tables include the following non-GAAP measures: adjusted EBITDA, adjusted net loss, and adjusted net loss per share.Adjusted EBITDA is defined as net loss before 1) interest expense, net; 2) benefit (provision) for income taxes; 3) depreciation and amortization; 4) stock-based compensation expense; and 5) certain other expenses. The most directly comparable GAAP measure is net loss.
Adjusted net loss is defined as net loss before 1) stock-based compensation and related payroll tax expense; 2) amortization of intangibles; 3) income tax benefit (provision); and 4) and certain other expenses. The most directly comparable GAAP measure is net loss.
Adjusted net loss per share is defined as adjusted net loss plus cumulative dividends allocated to preferred stockholders divided by the average number of basic or diluted (whichever is applicable) shares of common stock outstanding during the period.
Mondee believes these non-GAAP financial measures provide investors and other users of this financial information consistency and comparability with its past financial performance and facilitates period-to-period comparisons of its results of operations. With respect to adjusted EBITDA and adjusted net loss, Mondee believes these non-GAAP financial measures are useful in evaluating the Company’s profitability relative to the amount of revenue generated, excluding the impact of stock-based compensation expense and certain other expenses and/or non-cash expenses. Mondee also believes non-GAAP financial measures are useful in evaluating its operating performance compared to that of other companies in its industry, as these metrics eliminate the effects of stock-based compensation, which may vary for reasons unrelated to overall operating performance.
Mondee uses these non-GAAP financial measures in conjunction with traditional GAAP measures as part of its overall assessment of the Company’s performance, including the preparation of its annual operating budget and quarterly forecasts, and to evaluate the effectiveness of its business strategies. Mondee’s definition may differ from the definitions used by other companies and therefore, comparability may be limited. In addition, other companies may not publish this or similar metrics. Thus, Mondee’s non-GAAP financial measures should be considered in addition to, not as a substitute for, nor superior to or in isolation from, measures prepared in accordance with GAAP.
The following tables provides key metrics and a detailed reconciliation (unaudited) of adjusted EBITDA:
($ in thousands) KEY METRICS Q2 24 Q1 24 Q2 23 Transactions 1,133,997 1,075,437 721,464 Take rate 8.6% 8.2% 8.4% Gross bookings $677,957 $708,076 $679,244 Net revenues $58,326 $58,021 $56,771 YoY Growth 2.7% 16.2% 24.3% QoQ Growth 0.5% (6.6)% 13.7% ADJUSTED EBITDA RECONCILIATION Q2 24 Q1 24 Q2 23 Net income (loss) $(25,512) $(19,458) $(14,608) Interest expense (net) 12,618 9,763 8,125 Stock-based compensation expense 11,512 5,307 4,804 Payroll tax expense related to stock-based compensation 479 — 86 Depreciation & amortization 3,653 5,563 3,803 Restructuring expense 158 (289) (168) Changes in fair value of Warrant liability 7 (42) (393) Benefit (provision) for income taxes (4) 645 2,008 M&A costs 15 618 365 Financing and refinancing related costs 9 625 139 US divestiture and transition service expense — 240 — Foreign currency losses (gains) 2,612 665 (984) Change in fair value of acquisition earn-out liability 58 1,239 530 Certain other expenses 506 180 731 Adjusted EBITDA1 $6,111 $5,056 $4,438 Adjusted EBITDA margin 10.5% 8.7% 7.8% 1Adjusted EBITDA has been conformed to the current period presentation for period over period comparability.
The following table reconciles net loss to Adjusted EBITDA for the six months ended June 30, 2024 and 2023, respectively:
Six Months Ended
June 30,($ in thousands) 2024 2023 Net loss $ (44,970 ) $ (27,523 ) Interest expense, (net) 22,381 15,995 Stock-based compensation and related payroll tax expense 17,298 7,451 Depreciation and amortization 9,216 7,189 Restructuring expense, net (131 ) 1,361 (Benefit) provision for income taxes 641 2,707 Changes in fair value of warrant liabilities (35 ) (372 ) Changes in fair value of earn-out liabilities 1,297 701 Acquisition and integration related costs 633 644 Financing and refinancing related costs 634 545 Certain other expenses 926 1,203 Foreign currency losses (gains) 3,277 (1,306 ) Adjusted EBITDA1 $ 11,167 $ 8,595 1Adjusted EBITDA has been conformed to the current period presentation for period over period comparability.
The following table (unaudited) reconciles net loss to Adjusted Net Loss for the three and six months ended June 30, 2024 and 2023, respectively:
Adjusted Net Loss
Three Months Ended
June 30,Six Months Ended
June 30,($ in thousands) 2024 2023 2024 2023 Net loss $ (25,512 ) $ (14,608 ) $ (44,970 ) $ (27,523 ) Stock-based compensation and related payroll tax expense 11,991 4,804 17,298 7,451 Amortization of intangibles 2,742 2,329 5,851 4,290 Benefit (provision) for income taxes (4 ) 2,008 641 2,707 Certain other expenses1 753 1,204 3,324 4,082 Adjusted net loss $ (10,030 ) $ (4,263 ) $ (17,856 ) $ (8,993 ) 1 Includes changes in fair value of earn-out liabilities, change in fair value of warrant liabilities, restructuring expense, acquisition and integration related costs, and certain other expenses.
The following table reconciles net loss per share to Adjusted Net Loss per share for the three and six months ended June 30, 2024 and 2023, respectively:
Adjusted Net Loss Per Share
Three Months Ended
June 30,Six Months Ended
June 30,$ in thousands, except loss per share 2024 2023 2024 2023 Net loss $ (25,512 ) $ (14,608 ) $ (44,970 ) $ (27,523 ) Cumulative dividends allocated to preferred stockholders (3,937 ) (2,686 ) (7,742 ) (5,164 ) Net loss attributable to common stockholders, basic and diluted $ (29,449 ) $ (17,294 ) $ (52,712 ) $ (32,687 ) Weighted average shares outstanding, basic and diluted 80,722,160 77,197,805 79,595,320 76,774,455 Basic and diluted net loss per share $ (0.36 ) $ (0.22 ) $ (0.66 ) $ (0.43 ) Adjusted net loss $ (10,030 ) $ (4,263 ) (17,856 ) $ (8,993 ) Cumulative dividends allocated to preferred stockholders (3,937 ) (2,686 ) (7,742 ) (5,164 ) Adjusted net loss attributable to common stockholders, basic and diluted $ (13,967 ) $ (6,949 ) $ (25,598 ) $ (14,157 ) Weighted average shares outstanding, basic and diluted 80,722,160 77,197,805 79,595,320 76,774,455 Adjusted net loss per share $ (0.17 ) $ (0.09 ) $ (0.32 ) $ (0.18 ) For Further Information, Contact:
Public Relations
pr@mondee.comInvestor Relations
ir@mondee.com
