Mondee announces comprehensive long-term refinancing of its capital structure

“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”). 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.

Second Quarter 2024 Business Highlights and Subsequent Events

• Long-Term Refinancing. The company announced 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

Company’s 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.