Q1 2027 eDreams ODIGEO, S.A. Earnings Call Transcript
Key Points
- Prime membership grew 8% year-over-year to 8.1 million, with 173,000 net adds in Q1, aligning with the company's strategic plan.
- Cash EBITDA of EUR23 million and Adjusted EBITDA of EUR28.9 million exceeded sell-side consensus, despite being a peak investment quarter.
- Prime now generates 77% of cash revenue margin and 90% of cash marginal profit, underscoring the strength and predictability of the subscription model.
- Recurring subscription revenue grew 5% year-over-year, demonstrating the success of the monthly installment strategy and diversification into new products and geographies.
- Cash position improved to EUR73 million (net of overdrafts), up from EUR51.3 million a year ago, with net financial debt reduced by EUR14.6 million.
- Capital returns are robust: EUR38 million of the EUR100 million buyback executed, with 15 million shares canceled in the past year and authorization to cancel up to 9 million more.
- New geographies (rest of world) grew 5% in revenue margin, now representing 27% of total, and rail in Spain already accounts for a double-digit share of new Prime members.
- The company reaffirmed FY 2027 guidance of 8.5 million Prime members and EUR167 million Adjusted EBITDA, with a clear path to positive Cash EBITDA growth from Q4.
- Long-term roadmap targets 13 million Prime members and over EUR270 million Cash EBITDA by FY 2030, a 33% CAGR from FY 2027, with a track record of meeting previous plans.
- AI and technology investments are driving efficiency, allowing the company to scale with less headcount growth, as evidenced by fixed costs rising only EUR0.2 million.
- Cash EBITDA declined to EUR23 million from EUR39 million in the prior year, primarily due to deliberate investments in new geographies and products.
- Total revenue margin fell 4% year-over-year to EUR165.5 million, driven by a 19% reduction in non-Prime revenue as the company deprioritizes transactional business.
- Variable costs increased 13% year-over-year to EUR110.4 million, reflecting higher acquisition spend in new markets and products, which pressured margins.
- Prime revenue margin growth was only 1% in the quarter, despite a 5% rise in recurring subscription revenue, due to the impact of intermittent Ryanair content access.
- Net income dropped to EUR0.2 million from EUR13.6 million in the prior year, reflecting the same investment-driven cost increases.
- The company faces an unusually high comparison base in H1 FY 2026 for net adds, which may limit near-term growth visibility.
- Average basket value is slightly down (low single digits) due to mix shift toward rail, which has lower ticket prices than flights.
- The investment phase is expected to continue, with Cash EBITDA margins bottoming out in Q3 FY 2027 before recovering, indicating prolonged margin pressure.
- Intermittent access to Ryanair content remains a headwind, though the company has de-risked its plan, it still impacts revenue comparisons.
- Leverage is expected to peak during the investment phase, though the company is comfortable with it, but it may concern some investors.
Good afternoon, everyone, and thank you for joining us today. Sorry for the minor delay, we have a technical issue, to review our financial and operational results for the first quarter of fiscal year 2027, covering the three-month period ending June 30, 2026. I am David de la Roz, Director of Investor Relations. Before we begin, I would like to remind you that all supporting materials, including today's presentation and our resource report, are fully available on the Investor Relations section of our website. I now pass you to our CEO, Dana Dunne, who will take you through the first part of today's presentation.
Thank you, David. Good afternoon, everyone, and thank you for joining us today. We have a compelling agenda today. It is structured around the following key areas. First, I am going to provide a high-level overview of our first quarter FY27 performance, where we continue to deliver to plan and ahead of market expectations. Second, our CFO, Christoph Dieterle, will take you through a detailed view of our financial results for the quarter.
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