BRITISH VIRGIN ISLANDS - Despegar.com, Corp. (NYSE:DESP), a prominent travel technology company in Latin America, has teamed up with Nubank (NYSE:NU), a leading digital banking platform, to integrate NuPay into Despegar's travel services. This partnership is set to enhance the payment experience for users by offering a new payment option on the Despegar platform.
The collaboration is expected to provide strategic advantages for both Despegar and Nubank. Despegar will gain access to Nubank's extensive customer base of 95.5 million in Brazil, significantly expanding its market reach. Conversely, Nubank's customers will now have access to a broad range of travel services through Despegar, along with increased spending limits and a variety of payment options, including both debit and credit.
This initiative is anticipated to streamline the payment process, potentially increasing Despegar's conversion rates and offering greater convenience to users of both companies. By leveraging Nubank's customer base and Despegar's travel services, the partnership aims to deliver enhanced value to customers and create new opportunities for user experience improvements.
Despegar has been a transformative force in Latin America's tourism sector for over 20 years, developing alternative payment and financing methods to democratize access to travel. The company operates in 19 countries within the region, aiming to accompany Latin American consumers throughout their travel journey.
The information regarding the partnership between Despegar and Nubank is based on a press release statement. Despegar's common shares are publicly traded on the New York Stock Exchange. For further details, interested parties may refer to Despegar's Investor Relations website.
In other recent news, Despegar.com, a prominent travel technology company, has announced a 10-year Lodging Outsourcing Agreement with Expedia (NASDAQ:EXPE) Group. The agreement, which will begin in 2025, is designed to optimize Despegar's lodging supply and facilitate long-term growth. In addition to this strategic partnership, Despegar.com also reported a 46% year-over-year revenue growth rate for Q1 2024, with revenues reaching $185 million. Adjusted EBITDA and net income showed significant increases, with adjusted EBITDA up 22% to $37 million and adjusted net income soaring by 397% to $30.2 million. Despite these positive results, the company revised its 2024 revenue guidance downward to an 8% increase due to factors such as foreign exchange and pricing challenges. In light of these developments, TD Cowen has raised its price target on Despegar.com's stock to $12.00, maintaining a Buy rating. These are the recent developments from Despegar.com.
InvestingPro Insights
Despegar.com's partnership with Nubank aligns well with its growth strategy and financial performance. According to InvestingPro data, Despegar's revenue grew by 20.34% in the last twelve months as of Q2 2023, reaching $740.52 million. This growth trajectory is expected to continue, with an InvestingPro Tip indicating that net income is projected to increase this year.
The collaboration with Nubank could further boost Despegar's impressive gross profit margins, which stand at 69.53% for the same period. This high margin reflects the company's efficiency in its core operations and could be enhanced by the increased market reach and potential for higher conversion rates through the Nubank partnership.
Despite not being profitable over the last twelve months, analysts predict that Despegar will turn a profit this year, as noted in another InvestingPro Tip. This positive outlook, combined with the company's strong revenue growth and strategic partnerships, suggests a promising future for Despegar in the Latin American travel market.
For investors seeking a deeper understanding of Despegar's financial health and growth prospects, InvestingPro offers 5 additional tips and a comprehensive set of financial metrics. These insights can provide valuable context for evaluating the potential impact of partnerships like the one with Nubank on Despegar's long-term performance.
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