Mondee Holdings, Inc. (NASDAQ:MOND) Q4 2022 Earnings Call Transcript

Jim Dullum: Yes, I mean, our EBIDA margin for the year of ’22 was 10%, and based on our guidance, we’re looking at 18% for 2023. So of course the dynamic there is that we have a certain amount of overheads. So once the revenue, the net revenue increases and those overheads are covered, the impact on the bottom-line is disproportionately higher. So this is the dynamic that is going on in our EBITDA. And of course, it also depends the source of the net revenue. We have already mentioned a bigger percentages coming from higher margin product like hotels and more importantly ancillaries like FinTech and other solutions. Orinter — it’s the beginning. That’s another element of the equation, it’s the beginning of our acquisition strategy for ’23.

So of course, every time that we add an acquisition, we will be likely adjusting depending on the size of the acquisition. Our guidance, I mean, we already mentioned, the Orinter numbers, when we close the transaction a few weeks ago, which was in the region of $9 million of EBITDA, in the first year or so, as you know, it’s customary to proceed with integration. So we wanted to be very conservative with any synergies that I realized in the following few quarters. But we are excited about the acquisition. It is improving the take rate. We — this year we had an average take rate of 7.2%, 7.7% in the last quarter. So you see, they are an upward trend even without the acquisitions, but given the fact that our acquisitions are mostly expanding not only geography, but also product into hotels, another higher margin product.

We see also the M&A strategy complimenting, the increase in the take rate in the foreseeable future.

Darren Aftahi: Great. Thanks guys. Appreciate it.

Operator: Thank you. Our next question is from the line of Tom White of DA Davidson. Tom, please go ahead now.

Tom White: Great. Thanks for taking my question. Good morning, guys. Just a couple quickies on the outlook, and then I had a follow-up. So just on the revenue growth guidance, can you just remind us or call out kind of the organic versus any inorganic impact? That’s one. And then two, Dan, maybe any color you can give us on how to think about the conversion of EBITDA and the free cash flow in ’23, how that might look?

Dan Figenshu: Sure. Thanks Tom. On the inorganic versus organic growth and guidance. Right now we’re just providing a combined guidance of the $230 million to $240 million. As Orestes mentioned, we’ll get to know Orinter and other acquisitions better as time goes on, and we want it to be fairly conservative with our approach here. As we learn more about them, they learn more about us and as we go through our integration. And so as a result, we’re not going to be reporting those separately. We are one Mondee going forward, and that’s how we are looking at it. So hopefully that answers your question.

Orestes Fintiklis: Yes. And to give you a bit of color, I mean, you can reverse engineer from the announcement we made, right? I mean, we didn’t provide the detailed breakdown, but from the announcement numbers, you can reverse engineer about $20 million coming from that acquisition in the net revenue. So the bulk of the increase from $159 million to $230 million to $240 million is organic, right? So there is a component there, of course, that is the acquisition. But like Dan mentioned, I mean, the way we integrate these companies, we take their contract, we take their distribution, and we plug it into our tech enabled ecosystem. So after a few months, it’s difficult to differentiate the — where the revenues are coming from. So we’re providing combined guidance and we are updating, of course, as we go along and add more targets to our strategy.