What happened
Week to date, shares of Mondee Holdings (NASDAQ: MOND) were down 8.5% through Thursday's market close, according to data provided by S&P Global Market Intelligence.
It's been an action-packed summer for this travel tech company. After launching a new travel platform powered by artificial intelligence (AI) in July, Mondee announced this month the acquisition of Skypass, a leading travel marketplace based in Dallas, Texas.
But the reason the stock fell this week can be linked to a wider loss on the bottom line for the second quarter.
So what
Mondee is having no problem growing the top line. Revenue more than doubled over the year-ago quarter, reaching $708 million. The top line was boosted by a take rate of 8%, compared to 7.2% last year.
But the adjusted net loss of $4.7 million, or $0.05 per share, was larger than the year-ago loss of $2.9 million, or $0.03. Overall, this isn't that bad for a small company in the early stages of investing in potentially disruptive travel technology.
On top of investments in AI travel technology, Mondee is driving growth through acquisitions, where it is expanding its reach to younger travelers and social media influencers. Management expects the new AI travel platform to accelerate revenue growth in 2024. The company raised its full-year guidance for revenue growth.
However, this growth will bring additional costs in the near term that will pressure profitability. Management lowered the full-year guidance for adjusted EBITDA margin to 11% from the previous 18%. This can be traced back to one-time personnel and marketing costs that are expected to total $20 million through the rest of the year.
Now what
The acquisition of Skypass further extends Mondee's addressable market in international corporate travel and will broaden the company's local, regional, and global content, such as airfare, hotels, and cars.
Wall Street is sensitive to companies' bottom-line performance right now, given the uncertainty in the economy. Mondee has a promising future, but investors will need to see improving profitability before the stock can take off.
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