MakeMyTrip Limited (Nasdaq: MMYT), India’s leading online travel company, today announced its unaudited financial and operating results for its fiscal quarter ended December 31, 2015.
Financial Highlights for Fiscal 2016 Third Quarter
Gross Bookings reached $455.2 million in 3Q16, representing a YoY increase of 15.6%. Hotels and Packages gross bookings increased by 30.5% YoY in 3Q16.
Transactions for Hotels and packages increased by 148.2% YoY in 3Q16.
Revenue less service costs increased 9.7% YoY to $36.3 million in 3Q16. Hotels and packages contribution increased to 48.5% in 3Q16 versus 45.0% in 3Q15.
“In the third fiscal quarter of 2016, MakeMyTrip delivered exceptional transaction growth, particularly on mobile devices in standalone hotel bookings, said Deep Kalra, Group CEO, who added: “Shortly after the end of the quarter, we announced a $180m investment from Ctrip. We have much in common with Ctrip and expect the relationship to be mutually beneficial, as we share knowledge and advice on how to remain the leading OTA in a competitive, hyper-growth market.”
Fiscal 2016 Third Quarter Financial Results
Revenue. We generated revenue of $82.0 million in the quarter ended December 31, 2015, an increase of 8.3% (an increase of 15.6% in constant currency) over revenue of $75.7 million in the quarter ended December 31, 2014.
Air Ticketing. Revenue from our air ticketing business decreased by 14.9% (9.2% in constant currency) to $17.0 million in the quarter ended December 31, 2015 from $20.0 million in the quarter ended December 31, 2014. Our revenue less service costs decreased by 6.3% (0.1% inconstant currency) to $17.0 million in the quarter ended December 31, 2015 from $18.1 million in the quarter ended December 31, 2014. This was primarily due to a decrease in net revenue margin (defined as revenue less service cost as a percentage of gross bookings) from 6.0% in the quarter ended December 31, 2014 to 5.5% in the quarter ended December 31, 2015, partially offset by an increase in gross bookings of 3.2% (9.8% in constant currency) and a 34.6% increase in the number of transactions year over year.
Hotels and Packages. Our revenue from our hotels and packages business increased by 16.2% (24.0% in constant currency) to $63.4 million in the quarter ended December 31, 2015, from $54.6 million in the quarter ended December 31, 2014. Our revenue less service costs increased by 12.2% (18.3% in constant currency) to $17.7 million in the quarter ended December 31, 2015 from $15.8 million in the quarter ended December 31, 2014. This was due to an increase of 148.2% in the number of transactions and an increase in gross bookings of 22.6% (30.5% in constant currency) year over year, partially offset by decrease in net revenue margin from 13.4% in the quarter ended December 31, 2014 to 12.3% in the quarter ended December 31, 2015. The decline in net revenue margin in the quarter ended December 31, 2015 was mainly due to discounts offered in the Indian online domestic hotels segment to drive transaction growth.
Other Revenue. Our other revenue increased to $1.6 million in the quarter ended December 31, 2015 from $1.2 million in the quarter ended December 31, 2014, primarily due to an increase in facilitation fees on travel insurance.
Total Revenue less Service Costs. Our total revenue less service costs increased by 3.5% (9.7% in constant currency) to $36.3 million in the quarter ended December 31, 2015 from $35.1 million in the quarter ended December 31, 2014, primarily as a result of a 12.2% (18.3% in constant currency) increase in our hotels and packages revenue less service costs.
Results from Operating Activities. As a result of the foregoing factors, our results from operating activities was a loss of $17.1 million in the quarter ended December 31, 2015 as compared to a loss of $2.9 million in the quarter ended December 31, 2014. Excluding the effects of our employee share-based compensation costs and amortization of acquisition related intangibles for the both quarters ended December 31, 2014 and 2015 and merger and acquisitions related expenses for the quarter ended December 31,2014, we would have recorded an operating loss of $13.5 million in the quarter ended December 31, 2015 as compared with an operating profit of $1.5 million in the quarter ended December 31, 2014.
Net Finance Income (Cost). Our net finance cost was $1.5 million in the quarter ended December 31, 2015 as compared to net finance cost of $0.7 million in the quarter ended December 31, 2014, primarily due to higher interest income earned on the term deposits placed with the banks in the quarter ended December 31, 2014.
Diluted Earnings (Loss) per share. Diluted loss per share was $0.47 for the quarter ended December 31, 2015 as compared to diluted loss per share of $0.09 in the quarter ended December 31, 2014. After adjusting for employee share-based compensation costs, amortization of acquisition related intangibles, net change in value of financial liability related to business combination, share of loss of equity-accounted investees and income tax (benefit) expense for both the quarter ended December 31, 2014 and 2015, merger and acquisitions related expenses for the quarter ended December 31, 2014; as mentioned in the preceding paragraph, diluted loss per share would have been $0.36 in the quarter ended December 31, 2015, compared to diluted earnings per share of $0.01 in the quarter ended December 31, 2014.
Fiscal Year 2015-16 Outlook
We are pleased with the robust transaction growth delivered in Q3. In Q4, we would leverage our strong balance sheet to significantly accelerate marketing investments in the key India Standalone hotels category to drive further online penetration while leveraging the growing population of smartphone users to grow our market share in this segment. We are therefore initiating an upward increase in our transaction guidance for the rest of fiscal year 2016 as follows:
• India standalone transaction growth of 325%—375%, up from 175%—200%, previously;
• Hotels and Packages transaction growth, excluding ETB, of 175%—200%, up from 100%—110% previously.
We are also narrowing the FY2016 constant currency revenue growth guidance to 10% to 12%.
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