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Despegar.com, Corp.  (DESP -6.20%)
Q4 2018 Earnings Conference Call
March 07, 2019, 8:00 a.m. ET


Prepared Remarks:


Good morning, and welcome to Despegar Fourth Quarter 2018 Earnings Conference Call. A slide presentation is accompanying today's webcast and is available on the Investors section of the company's website, www.investor.despegar.com. There will be an opportunity for you to ask questions at the end of today's presentation. This conference call is being recorded. As a reminder, all participants will be in listen-only mode.

Now, I'll turn the call over to Mr. Javier Kelly, Investor Relations. Please go ahead.

Javier Kelly -- Investor Relations

Good morning, everyone, and thanks for joining us today for a discussion of our fourth and full year 2018 results. In addition, to reporting financial results in accordance with US generally accepted accounting principles, we'll discuss certain non-GAAP financial measures and operating metric including foreign exchange neutral presentations. Investors should read the definition of these measures and metrics, including our press release carefully to ensure that they understand them. Non-GAAP financial measures and operating metrics should not be considered in isolation or substitute for or superior to GAAP financial measures and are provided as supplementary information only.

Before we begin our formal remarks, allow me to remind you that certain statements made during the course of the discussion may constitute forward-looking statements which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to materially differ, including factors that may be beyond the company's control. For a description of these risks, please refer to our filings with the SEC and our press release.

Speaking on today's call, CEO, Damian Scokin, who will provide an overview of the fourth quarter and update you on our strategic priorities, and also Alberto Lopez Gaffney, our CFO, who will also discuss the quarter financials and our outlook for the year. After that, we'll open the call for your questions. Damian, please go ahead.

Damian Scokin -- Chief Executive Officer

Thank you, Javier. Good morning, everyone, and thank you for joining us. We appreciate your participation in our quarterly and year end conference call.

We continued to execute on our strategic priorities of leading with innovation, operating with excellence and driving higher margin packages, hotels and other products. We are also seeing the benefit of our investment in brand building to attract new customers and gain market share, and our continuous improvement in customer service initiatives, which also leads to increases in repeat purchase rate.

A key driver of our strategy is identifying new sources of growth, bring them organic or through acquisitions. Importantly, our strong cash position provides us the opportunity to move when the right opportunity at the right price comes along.

Now, let me provide a few comments about the quarter's results. We have built an omni-channel infrastructure to ensure our customers to have a great booking experience, no matter what platform they chose to use. Additionally, we continued to invest in the travel shopping experience and see a positive response from our customers in the form of improved customer satisfaction scores. While last year was challenging in many front, we have made significant commercial and operational progress. Stronger and agile execution of our strategic plan is helping us address continued macro and foreign exchange pressures.

As a result, we saw gross bookings increased 28% on an FX-neutral basis. Excluding Argentina, that experience at 51% FX devaluation in the year, transactions and room nights were up 18% and 33% year-over-year. We are strengthening our relationships with major hotel owners and vendors and gaining better access to inventory. We already have well established a good relationships with vendors. And in addition, to seen our inventory increase, we are optimizing the participation of our key hotels supplier with our top 100 hotels in Latin America, increasing by 270 basis points, their share of total LatAm hotel gross bookings.

As we continue to establish a closer relationship with our clients, mobile access in general and specifically our mobile app usage becomes critical to our strategy. We probably mentioned that mobile continues to gain traction, up 34% in Q4 and accounting for 36% of total transactions.

Most important, our strategy to gain market share to further strengthen our leading position is working. We increased market share a 130 basis points in Air despite an extremely challenging and volatile environment, which include softness in two of our largest market and overall construction in Latin America. We accomplish these through various initiatives, which include lowering air and customer fees earlier in the year, investing in technology and consumer insights and putting the right products in sight(ph)of the right customers at the right time.

As we continue building our leading position, we are focused on finding the right balance between growth and profitability. As you heard from us before, prioritizing the growth opportunities we see in Latin America, we lowered fees to reinforce our leading market position and increase our market share. Although this hurt our profitability. Despite 2018 turn out to be significantly different on the macro and F X front than what we thought at this time last year. Adjusted EBITDA increased by $9 million, excluding Argentina. Total adjusted EBITDA was down 58%, primarily due to the 51% currency devaluation. Also impacting EBITDA were the initiatives we have undertaken to drive market share gains, along with continued investments in technological development to enhance our product platform and services.

Turning to page four. Over the past year we have been able to solidify and grow both, total transactions and gross bookings. Our attractive value proposition, our ability to reach new customers and to retain and serve existing customers on and offline has been the driving factor behind the growth and market share gains, we have delivered. This also creates a unique position in the Latin American online travel industry. These distinguishing attribute provided the foundation to further strengthen our position in a currently challenged market.

As you can see on this chart, total transactions were up 11% in the quarter, with Air transactions increasing faster than packages, hotels and other travel products. This is largely due to the contribution of Argentina to the mix, which is experiencing a shift toward lower-margin product as a result of the continued industry contraction and FX volatility.

However, excluding Argentina packages, hotels and other travel products grew by 24% year-on-year, above 15% increase explained in Air transactions, with total transactions up 18%. We are also seeing further success in delivering on our key strategies. We leveraged our strength where we had the greatest growth opportunities. To that end, we remain focused on driving sales of higher margin packages, hotels and other products. And in Q4, stand-alone packages increased 38% year-on-year, remaining our fastest growing products.

On an FX neutral basis, gross bookings rose 28% year-on-year, a similar rate of growth as in the third quarter. As reported, gross bookings were down 4%, impacted by the macro disruption in Argentina. This, however, was significantly better than the low teen contraction experienced by the travel industry in Latin America in the same period. Excluding Argentina, as reported, gross bookings increased 16%. For the full year, gross bookings were up 6% on a reported basis and 29% on an FX neutral basis.

The better performance on a reported basis for the full year versus the fourth quarter reflects stronger currency at the start of the year. As a reminder, our international business has increased flexibility to transfer the devaluation effect to local currency terms in periods of devaluation, vis-a-vis domestic supplier. However, such flexibility is limited by the negative impact of macro disruptions on local consumers disposable income.

Moving to ASP. The average selling price or ASP was $451 per transaction, up 15% on an FX neutral basis. Continued FX weakness and mix shift from international to domestic travel, mainly in Argentina are impacting this year-on-year reported growth rate. This is also offsetting the successful mix shift to higher ASP packages.

Now turning to page five. Moving on to a discussion of some of the latest business development initiatives. One of the key components of our strategic plan is driving product and service innovation. Innovation continues to be our lifeline(ph)and sets us apart from the other players in the region. Our goal is to differentiate ourself through value, quality of service, a customized product offering and appealing financing alternatives. Our operating trends are reflecting of this. We are strategically investing in the most promising opportunities.

Let me now talk about the few. One that we are most excited about was our fourth quarter launch of our proprietary business, including Tour Operations and allotment or cupos. Briefly, the two operations consist of offering customers at package that includes a charter flight, accommodations and transportation. We believe that Despegar is uniquely equipped to manage inventory risk based on our understanding of tariff pattern follow our two decades of experience across different macro cycles and by offering these packages to a high demand area at peak travel season. This is a seasonal service, as a reminder, it is summer in South America right now, at the moment we are only offering these services from Argentina to different destinations in the Brazilian coast(ph).

We're also pleased with the early result, a total of 110 charter have flown with a load factor of 99%. In the case of Cupos, where we serve a block of plane seats or hotel nights at more attractive rates to offer our customers. Risk is mitigated as there is cutoff date when we can return their reserve fees, room back to supplier and no risk or penalty. I have already discussed this activity we are having with cross selling and increasing stand-alone packages. But it is worth mentioning again as it is a key initiative for us.

Call centres are an attractive opportunity for us, as they provide another platform for customers to book travel. It is also an opportunity to onboard new client. We are very pleased with customer response as call centers gross bookings from our seven key market increased 124% sequentially in the quarter. And our key benefit, ASPs are significantly higher than online booking.

We are also encouraged by the success of our technology upgrade, further enhancing the traveling experience. A good example of this is the success we are seeing in our mobile app. Consumers are still downloading at very high levels, increasing 27% year-on-year in this quarter. As a result, our cumulative downloads totaled 49 million by year-end.

Most importantly, transactions of higher margin stand-alone packages sold via the mobile app almost doubled year-on-year. As you can also see on this slide, we continue to add features to our mobile app to enhance the customer experience. We are pleased with the success of our recent product and service launches, which we believe deliver the type of added benefit many consumers are seeking. Despite our success to date, we see even more opportunity to interact with not only our existing customers, but also to attract new consumers.

I will now turn the call to Alberto to discuss the financial results for the quarter.

Alberto Lopez Gaffney -- Chief Financial Officer

Thank you, Damian, and good morning, everyone. Let's take a deeper look at our operations on a regional basis on slide six. We are pleased to report above industry FX neutral gross booking expansion and market share gains across all key markets. In Brazil, our largest market accounting 41% of transactions, we achieved a 12% year-on-year increase in transactions and 32% in FX neutral gross bookings.

As reported, gross bookings were up 13% of the mix shift from domestic to international travel, along with growth in higher margin packages, partially offset the 15% currency depreciation.

In Argentina, we continue to expand our market share despite the industry contraction. Thanks to initiatives we have undertaken, we achieved these even as transactions were down -- were down 12% reflecting a challenging macro backdrop.

FX neutral gross bookings in the country were up 26% year-on-year and ASP's were in line with inflation. However, with the mix shift to domestic travel driven by the 51% peso devaluation, we did not manage to offset the impact from the currency depreciation.

Across the rest of Latin America, we achieved growth of 29% in transactions and 27% in FX neutral gross bookings. We're particularly pleased with above industry growth in transactions in two of our more competitive markets. Transactions in Mexico rose 10% year-on-year, while Colombia posted accelerated growth of 61%. This solid performance reflects successful execution of our strategy to grow sales of higher margin packages, hotels and international air travel in these markets. On a reported basis, ASPs across the rest of LatAm declined 6%, reflecting currency depreciation in the region. However, gross bookings increased 21%.

Turning now to the financial results on slide seven. FX neutral revenues were up 9% year-on-year in the quarter despite market contraction, as we continued to successfully execute our growth strategy. Importantly, in addition to gaining market share, we continued to make progress on our goal of increasing the share of higher margin products. Packages, hotels and other transactions accounted for 62% of total revenue this quarter, compared with 54% in fourth quarter 2017. As reported revenues declined 13% in the quarter to $133 million.

Factors contributing to this decline include, as in the prior quarter revenues were significantly impacted by the FX translation effect, resulting mainly from the sharp peso devaluation in Argentina, and to a lesser extent from currency depreciation in Brazil.

Revenues were also affected by the planned reductions in Air customer fees and discounts in package transactions, implemented early in the year that are helping us achieve further share gains in a soft demand environment.

The weaker customer demand also contributed to a decline in supplier bonuses this quarter. Last, another important factor impacting revenues was the continued mix shift from international to lower price domestic destinations. This was mainly the case in Argentina, given the sharp peso devaluation, which resulted in a drop of over 720 basis points in the share of international transactions. At a consolidated level, we experienced a slight mix shift of 11 basis points from international to lower margin domestic transactions.

Taken together, these factors resulted in a 65 basis point year-on-year contraction in revenue margin to 11% in the quarter. More specifically, revenues per transactions went down 11% for packages, hotels and other travel products segment and 32% in the Air segment.

Turning to slide eight, our initiatives supporting cross selling and share gains across our key markets, along with enhanced customer service resulted in a 12% year-on-year decline in FX neutral gross profit to $99 million in the quarter. In addition to our investments in lower air fees and customer fees concerned packages, this quarter we also stepped up the availability and duration of instalment plans in Argentina after a reduction in third quarter of '18, following the steep hikes in interest rates.

We did this mainly due to our Black Friday and Cyber Monday industry events, which resulted in significant increase in revenues. This quarter we also had a higher mix of transactions where Despegar was the credit card merchant of record instead of the airline suppliers, allowing us to offer more attractive customer financing options.

Of note, being merchant of record has a negative impact on our cost of revenue. We also incurred a higher fulfillment cost as we seek to further income, customer satisfaction and drive net promoter scores. Cost reduction is an area we will continue to focus on in the coming year.

By contrast, marketing expense declined 7% year-on-year, but increased 180 basis points as a percentage of revenues. As lower ASPs more than offset the benefit from regional currency devaluation on costs, lower marketing investments and higher efficiencies. However, when measured per transaction, we achieved savings of 16% in this category.

Moving down the P&L on slide nine. Our strategy to prioritize top line growth and drive further share gains together with macro disruption impacted profitability in the quarter.

Adjusted EBITDA declined 58% year-on-year, with a margin of almost 11% compared to nearly 22% a year-ago.

Importantly, excluding our online operations, adjusted EBITDA increased by $9 million year-on-year in the quarter, and by $15 million for the full year. We also reported negative operating cash flow of $5 million this quarter, compared with cash flow generation of $25 million a year-ago. This was mainly due to higher inventories and cash advances to travel suppliers, reflected our new seasonal proprietary business and lower growth in supplier payables, given slower sales growth.

During the quarter we also made capital investments of $9 million in technology, hardwork and office expansion. We also purchased 600,500 shares in the fourth quarter '18 for a total cost of $10 million. In total, we repurchased 1.5 million shares during 2018 at a total cost of $26 million.

Summing up, let's move to page 10. In closing, we are very pleased with our result this quarter and in the full year with respect to seen significant progress with our strategic initiatives. By contrast, our financial results were impacted by overall contraction in the travel industry, as well as micro and FX volatility and initiatives we undertook to drive share gain.

As we look to the current year, we see our results following the macro environment. Our continuing weaker trends early in the year and improving in the second half. This is mainly driven by the combination of our focus to continue gaining market share across the region, while finding the right balance between growth and profitability.

We are expecting Brazil and the rest of LatAm to be our growth drivers in 2019. Based on economists consensus and our view, Argentina's economy is expected to hit bottom in first half '19 and gradually begin improving toward the second half of the year.

In Brazil, the consensus and our view is that, the macro to slowly continue the recovering trend and accelerate as the year advances. Against these backdrop, we are expecting sequential margin improvement to track the economic outlook.

Although, we expect some macro challenges again in 2019, we will continue to do what we do best. With our decades experience operating in the region, combined with our deep understanding of and focus on our customers, we have a distinct competitive advantage. We will continue to opportunistically build on our leading position and expand our product and service offerings.

We remain focused on driving long-term shareholder value by delivering balanced top and bottom line growth, while invested in differentiated capabilities to expand our competitive advantage. Our strategy is to further build our market share, improve customer service and drive long-term profitable growth.

As I reflect on the progress that we've made against our strategic plan and initiatives we have under way for 2019 and beyond, I'm confident and excited about the future of this company. The Latin American travel market is large and under-penetrated via online booking. We are very well positioned to succeed.

This concludes our prepared remarks. We will now take your questions. Operator, please open the line for questions.

Questions and Answers:


Yes, thank you. We will now begin the question-and-answer session. (Operator Instructions) And the first question comes from Eric Sheridan with UBS.

Eric Sheridan -- UBS -- Analyst

Thanks for taking the question, and thanks for all the details. Guys, I want to dig in a little bit on gross margin, came in weaker than we thought in Q4. So two part question. Wanted to understand a little bit of how much of that was product mix versus maybe a new normal of lower gross margins going forward? And how we should think about temporary impact on that versus a more permanent impact on that? And the second part would be asset(ph)product mix, how should we think about the mix between packages and Air, and how it might evolve as you go through 2019? What are you seeing from consumers versus competitors in terms of how that product mix might evolved? Thanks so much.

Alberto Lopez Gaffney -- Chief Financial Officer

And. Hi, Eric. Good morning. Alberto Lopez Gaffney speaking here. How are you doing?

Eric Sheridan -- UBS -- Analyst

Great. Thank you.

Alberto Lopez Gaffney -- Chief Financial Officer

So Eric, in addressing your question, we certainly -- I think we have been implemented a strategy in order to make the most of the macro disruption that have taken place in the region. And we -- from that perspective, we believe that the strategy has been working and continues to work from the perspective that we have been gaining market share, and particularly in those regions of different say, in countries particularly Argentina, OK, where our competitors are much weaker. So from that perspective, clearly, we have invested significantly, and when it comes to those investments, particularly when it comes to the impact on the P&L.

So certainly the take rates, gross margin, etcetera, they have been affected. We do not -- we believe that as the economies start to recover, particularly Argentina and secondly the Brazil, and then we can discuss about how we see the pace of that recovery. Okay. We will be in a position to recover margins so -- addressing your first question, one of the points of the questions like, is this a new norm? We do not think this as a new norm. Okay.

Secondly, with regards to outlook and our lead for the very last -- the reasons for the contraction that I've been peripherally I have already addressed. But when it comes to outlook, given the disruption that actually took place during 2018, the year that we finalized already. I think it's important as we start comparing and projecting and delivering the outlook of this company to think about the business less so on an year-on-year, let's say, Q4 versus Q4 the prior year and more on a sequential basis. Okay. Because the structure of the industry have adjusted materially.

As such, we believe that there were two key drivers, particularly Brazil that today is clearly our top market has started to recover by the end of 2018 and already in -- first quarter of '19 and we expect that that recover. Okay. We'll continue slowly in the trend throughout 2019.

In the case of Argentina -- In the case of Argentina, clearly, I think we are going through the toughest time in the country. I think all the macro economic metrics point to that, and also that is what we are seeing from the actual trade and the volumes and the level of activity we are experiencing. So, clearly, Argentina is expected to hit bottom in this first half of '19.

All in all, we expect that -- that there will be a sequential or a margin improvement/bottoming to track this economic outlook. Okay. And then we will continue adjust, let's say, the mix of investment to gain market share in order to also look for recovery of margins and increases in profitability. So that is how we are actually seeing. And I hope by this I addressed you guys.

Now, going into what is the impact and how we are -- and why that margins have contracted. Okay. Clearly, as you look into the contraction year-on-year, like the Q4 '17 vis-a-vis Q4 '18. And over there you see a gap of 100 basis points in the take rate. So when it comes to take rate, a relevant portion of that gap actually is explained by our fees. Fees we're charging to our clients. And that goes, mostly in Air, but -- and then less than half of that goes to lodging. So that is how we actually see the revenue, the take rate contraction year-on-year from 12% to around 11%.

As you go into the gross margin. Clearly the driver there is twofold. But most importantly, the real driver -- the most relevant driver becomes the cost on instalments. As you know, rates in the region, but most particularly in Argentina have gone up tremendously. That's why, as you might recall, in the third quarter of this -- past 2018, we actually -- we took our food from the better when it comes to financing -- financing our clients. Financially went up again in the fourth quarter as rates came down. That is what we believe should be an improvement going forward, because the current rate that we have in the 50s in local currency, we believe that we are normalization of the economy and that's our outlook. Again, clearly, the macro should end up evolving as per our review and most importantly, as per economies consensus, that would be another source of gross margin recovery.

Last, what you see margins is lower volumes. And lower volumes not only affect, let's say, below once you get into fixed cost, but also affects what is the type of backends that you are actually getting from our suppliers. Because overall volumes are coming down (inaudible) activity. To complement this question of like, what are the drivers for these margin contraction, then you go into the mix shift. And then when it comes to mix, in this past quarter, overall, we continued to see the trend toward domestic traveling vis-a-vis international traveling. As you know, ASPs are materially more attractive when it comes to international business than the domestic business. Some geographies as they were actually in the past year look year-on-year were actually kind of bottoming, let's say, Brazil, and in Brazil international travel got stronger, but in most of the other geographies with FX devaluation on the (inaudible) region and particularly Argentina where the shift was from international to domestic.

I'll pause for a minute, because I realize this has been a long answer. And see if you have any further follow-ups?

Eric Sheridan -- UBS -- Analyst

No. That's great. Thank you so much.


Thank you. And the next question comes from Edward Yruma(ph)of KeyBanc Capital Markets.

Edward Yruma -- KeyBanc Capital Markets. -- Analyst

Hey, good morning, guys. And thanks for taking my questions. I guess, first is just a follow-up to the first question. So with Brazil showing signs or plan to see signs of macro improvement, are you starting to see the Brazilian tourists again more international travel or they are still focused on local? And then second, obviously some very favorable commentary on your initial attempt to tours. How do we think about your ability to scale the tour business, is this a longer term project or can you ramp it pretty quickly based on demand? Thank you.

Damian Scokin -- Chief Executive Officer

Hi. This is Damian. How are you? For the first part of the question, yes, we see some improvements in the Brazilian demand vis-a-vis fourth quarter and an initial return to a more international travel mix. Again, early indications, but they are nice, there is a nice break of the trend that we saw in Brazil in the past, so that's positive. As per the second part of your question, the scalability of our tour operations, we are very happy with the initial results of this effort and in terms of the percentage of bookings that that operation represents of the overall bookings of Despegar is a very tiny portion of it. So the size -- the space for growth we see as very significant.

Edward Yruma -- KeyBanc Capital Markets. -- Analyst

Great. Thank you very much.


Thank you. And the next question comes from Kevin Kopelman with Cowen and Company.

Emily Elizabeth DiNovo -- Cowen and Company -- Analyst

Hi, good morning. This is Emily on for Kevin. I was wondering if you could give us an update on the competitive situation in Latin American online travel, including both the local and the global players? Thanks.

Damian Scokin -- Chief Executive Officer

Sure. Hi, Emily. In general, during the last quarter we saw local competition kind of pulling back on some of their investments and their growth, that's particularly true in Argentina and to a lesser extent in Mexico and Brazil. As per the global OTA's, as you know, they do not disclose their numbers by geographic region, but when you track traffic, market investments and visitors and another indications we track, we see different behaviors by market. I would say, not significant changes in most of Latin American market, except Mexico and Brazil, where some particular players have increased their marketing expenditures and now that's not. In general, a balanced quarter in terms of competition.

Emily Elizabeth DiNovo -- Cowen and Company -- Analyst

Okay, thank you.


Thank you. And the next question comes from Brian Nowak with Morgan Stanley.

Alex Wong -- Morgan Stanley -- Analyst

Hi. This is actually Alex Wong on for Brian. Two questions. First, I appreciate all the commentary on the strategy around omni-channel and continuing to invest in the traveler experience. Perhaps maybe would it be possible to help us size as the new initiatives and how much you spent on that investments in 2018? As you look into 2019, what do you see as kind of the one or two key investments you'll be making as you continue to build that strategy?

And then second question around some of the consumer fees and discounts and packages. Can you maybe help us understand just where you are in that progress? And how you see that progressing in 2019?

Damian Scokin -- Chief Executive Officer

Okay. On the first piece, initiatives for 2018 and investments we've made on those. Without getting into the specific of different investments, I will just mention perhaps these three largest one, which is increasing our presence in terms of omni-channel, we are very confident about the prospects of our call center operations, not only in terms of additional bookings, but on bookings targeted to higher ASP products and we are -- we are at a very early stage there. So that's one of the key initiatives. The other one is, as we spoke before, two operations, we believe that's an area where Despegar has significant growth prospects, given it's -- the region footprint and the volume gives us a good advantage in terms of hedging our risk across many markets. And finally, one initiative that we have not talked so much is mobile, the share of our mobile bookings has increased significantly, this is, as you all know, extremely important form a standpoint in terms of customer loyalty, acquisition costs and the type of satisfaction that our mobile experience provides to our customers. So that's a fair initiative that's going to be critical for us in 2019.

The second part of your question, Alex, if I recall correctly was regarding consumer fees, what's the prospects of that. I would say that, overall, as Alberto mentioned before, the way in which we've been balancing growth and profitability over the last quarter according to market conditions has been to reduce consumer fees, particularly on the Air side in order to take advantage of the market conditions and gain market share. That as we alway said in the part will vary according to market evolution. So far we believe that strategy is still valued and we've been aggressive also during this quarter in order to sustain high growth rates.

We are confident from our macro forecast that the market will go on a rebound on the second half of the year and that we expect to give us the opportunity to give -- to return to higher fee levels, but again, this will all depend on the market evolution. I hope this answers your questions?

Alex Wong -- Morgan Stanley -- Analyst

That's helpful. Thanks, Damian.


Thank you. (Operator Instructions) Alright, as there are no more questions at the present time, I would like to return the floor to Damian fo any closing comments.

Damian Scokin -- Chief Executive Officer

Thank you, operator. I would like to thank all of you for joining the call today. As usual, if you have any further questions, please do not hesitate to contact any of us and we'll be happy to follow up. Thanks very much. And we are all looking forward to seeing you on our next call. Bye.


Bye. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Duration: 45 minutes

Call participants:

Javier Kelly -- Investor Relations

Damian Scokin -- Chief Executive Officer

Alberto Lopez Gaffney -- Chief Financial Officer

Eric Sheridan -- UBS -- Analyst

Edward Yruma -- KeyBanc Capital Markets. -- Analyst

Emily Elizabeth DiNovo -- Cowen and Company -- Analyst

Alex Wong -- Morgan Stanley -- Analyst

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