MakeMyTrip Q3 net revenue climbs 31%, loss shrinks

MakeMyTrip Q3 net revenue climbs 31%, loss shrinks
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MakeMyTrip Ltd, the country's largest online travel services provider, reported higher revenue and a narrower loss for the third quarter of the financial year 2018-19 thanks to significant growth in its main business verticals.

Adjusted revenue for the quarter ended December 2018 surged 31.4% in constant currency terms to $179.9 million from $151.40 million a year earlier, the Nasdaq-listed company said in a filing with the US Securities and Exchange Commission.

The company evaluates its financial performance based on adjusted revenue as per International Financial Reporting Standards. Adjusted revenue is calculated after adding back promotion expenses in the nature of customer discount, customer inducement or acquisition costs and the cost of loyalty programmes, the filing showed.

Adjusted operating loss shrank to $22.19 million from $33.91 million. This includes operating activities excluding employee share-based compensation costs and amortisation of acquisition-related intangibles.

Adjusted net loss, which takes into account share-based compensation costs of employees, income tax and other things, narrowed to $14.83 million from $30.47 million.

“Our focused execution during the quarter has allowed us to gain further market share, re-accelerate the year-on-year growth rate in total gross bookings, adjusted revenue, standalone hotel room nights and drive greater marketing and promotional spend efficiencies to further narrow our operating losses,” said Deep Kalra, group chairman and group chief executive officer at MakeMyTrip.

The company’s adjusted revenue from the air ticketing business increased 32% in constant currency to $60.76 million from $50.92 million a year earlier. Revenue from the hotels and packages business, by far the biggest contributor to its total revenue, climbed 26% to $95.45 million from $83.86 million a year earlier.

Adjusted revenue from the bus ticketing segment showed a significant 43% rise in constant currency to $15.07 million from $11.58 million a year earlier. Revenue from this vertical was earlier clubbed with small businesses.

MakeMyTrip, which competes with the likes of Yatra and Cleartrip, has adopted a new method since April 2018 to calculate revenue whereby it counts upfront customer acquisition costs, cash incentives and the cost of select loyalty programmes as a reduction in revenue. Earlier, the company used to count these heads as marketing and promotional costs.

Consequently, the new method of treating these costs reflected in the overall marketing and sales promotional expenses, which halved to $49.69 million from $108.97 million the previous year.