Makemytrip Limited Announces Fiscal 2022 Second Quarter Financial & Operating Results

MAKEMYTRIP LIMITED ANNOUNCES FISCAL 2022 SECOND QUARTER RESULTS

Financial Highlights for Fiscal 2022 Second Quarter

• Gross Bookings in 2Q22 reached $734.1 million versus $213.0 million in 2Q21 and $286.7 million in 1Q22.
• Revenue was $67.5 million for 2Q22 versus $21.1 million for 2Q21 and $32.8 million in 1Q22.
• Air Ticketing Revenue improved to $21.3 million in 2Q22 versus $10.9 million in 2Q21 and $14.7 million in 1Q22. Adjusted Margin(2) for Air Ticketing increased to $38.6 million in 2Q22 versus $11.9 million in 2Q21 and $19.2 million in 1Q22.
• Hotels and Packages Revenue improved to $33.5 million in 2Q22 versus $4.4 million in 2Q21 and $11.4 million in 1Q22. Adjusted Margin(2) for Hotels and Packages increased to $35.5 million in 2Q22 versus $5.5 million in 2Q21 and $12.3 million in 1Q22.
• Bus Ticketing Revenue improved to $8.4 million in 2Q22 versus $2.7 million in 2Q21 and $4.2 million in 1Q22. Adjusted Margin(2) for Bus Ticketing increased to $7.9 million in 2Q22 versus $2.5 million in 2Q21 and $3.9 million in 1Q22.
• Other Revenue improved to $4.3 million in 2Q22 versus $3.1 million in 2Q21 and $2.5 million in 1Q22. Adjusted Margin(2) for Others increased to $4.4 million in 2Q22 versus $3.1 million in 2Q21 and $2.5 million in 1Q22.
• Results from Operating Activities was a loss of $8.0 million in 2Q22 versus a loss of $26.1 million in 2Q21 and $19.5 million in 1Q22, reflecting an improvement of $18.1 million YoY and $11.5 million QoQ.
• Adjusted Operating Profit(2) was $6.6 million in 2Q22 versus Adjusted Operating Loss(2) of $12.9 million in 2Q21 and $8.6 million in 1Q22, reflecting an improvement of $19.5 million YoY and $15.2 million QoQ.

Gurugram, India and New York, October 26, 2021 - MakeMyTrip Limited (NASDAQ: MMYT), India's leading online travel company, today announced its unaudited interim financial and operating results for its fiscal second quarter ended September 30, 2021.

"MakeMyTrip continued to lead and be instrumental in the recovery of travel in India as the country's new daily reported COVID-19 infections have declined significantly since May 2021, aided by over one billion vaccine doses that have been administered so far. The results of the reported fiscal quarter clearly showcases the durable strength of its multiple brands, driven by its relentless focus on serving its customers with the best possible experience for their travel booking needs." said Deep Kalra, Group Executive Chairman. "Entering the peak festive season in India, we are optimistic about the expected ongoing recovery of travel demand in the quarters to come and will continue to leverage our highly variable and more efficient fixed cost structure to maintain our leading position in the travel market in India."

Impact of the COVID-19 Pandemic

The impact of the global COVID-19 pandemic has severely impacted travel demand in terms of affecting consumers' sentiment and their willingness to travel, which has caused airlines and hotels in India and around the world to operate at significantly reduced service levels throughout much of calendar year 2020 and the first six months of calendar year 2021. The COVID-19 pandemic also resulted in significant weakness in the macroeconomic environment and heightened volatility in financial markets. Although, our business started to recover gradually in the second and third quarters of fiscal year 2021 following the lifting of India's nationwide lockdown in end May 2020, India witnessed a rapid resurgence of daily recorded case counts towards the end of the fourth quarter of fiscal year 2021, resulting in a second wave of COVID-19. The resulting economic conditions caused by the lockdowns and travel restriction orders imposed by several state governments in India from April 2021, some of which are still ongoing, resulted in a significant negative impact on revenue for all our reportable segments in the quarter ended September 30, 2021. Although such restrictions have continued for the greater part of the previous quarter, the gradual lifting of travel restrictions in India (including the increase in domestic airline capacity) as a result of increase in the number of vaccinated people, has resulted in improved results across our operating segments mainly as a result of an increase in domestic travel, resulting in revenue increasing by more than 100% during the current quarter compared with the previous quarter ended June 30, 2021. We continued to focus on optimizing our costs by leveraging our highly variable and more efficient fixed cost structure during the quarter ended September 30, 2021.

The extent of the effects of the COVID-19 pandemic on our business, results of operations, cash flows and growth prospects remain uncertain and would be dependent on future developments. These include, but are not limited to, the severity, extent and duration of the pandemic, its impact on the travel industries and consumer spending, rates of vaccination and the effectiveness of vaccinations against various mutations or variants of the COVID-19 pandemic. While many countries including India have made progress in vaccinating their residents against COVID-19, the challenging logistics of distributing vaccines, efficacy of the vaccines against new mutations or variants of the virus and other factors may contribute to delays in economic recovery.

Fiscal 2022 Second Quarter Financial Results

Revenue. We generated revenue of $67.5 million in the quarter ended September 30, 2021, an increase of 220.5% (219.6% in constant currency(1)) over revenue of $21.1 million in the quarter ended September 30, 2020, primarily as a result of an increase of 95.9% (95.3% in constant currency) in our Revenue - air ticketing, an increase of 663.7% (660.5% in constant currency) in our Revenue - hotels and packages, an increase of 216.2% (216.7% in constant currency) in our Revenue - bus ticketing, and an increase of 36.2% (35.9% in constant currency) in our Revenue - others, each as further described below. The increase in revenue was primarily due to the recovery in domestic travel demand attributable to the comparatively lighter travel restrictions imposed by certain state governments due to the second wave of COVID-19 in India in the quarter ended September 30, 2021, which were less extensive compared to travel restrictions for the quarter ended September 30, 2020.

The table below summarizes our segment profitability in terms of revenue and Adjusted Margin in each segment. For more information, see "Information About Reportable Segments" in our condensed consolidated interim financial statements included elsewhere in this release. Also see "About Key Performance Indicators and Non-IFRS Measures" elsewhere in this release.

										For the three months ended September 30
				Air ticketing			Hotels and packages			Bus ticketing				Others*
		2020		2021		2020		2021		2020		2021		2020			2021
											(Amounts in USD thousands)
Revenue as per IFRS				10,873			21,304			4,388			33,513			2,652			8,386				3,139			4,276
Add: Customer inducement costs																							-
recorded as a reduction of revenue			1,051			17,282			1,549			9,897			146			282						241
Less: Service cost*				6			24			397			7,939			296			746				9	*		73	*
Adjusted Margin(2)				11,918			38,562			5,540			35,471			2,502			7,922				3,130			4,444
__________________

• Certain loyalty program costs amounting to nil have been excluded from service cost for the three months ended September 30, 2021 (three months ended September 30, 2020: $0.002 million) relating to "Others".

Air Ticketing. Revenue from our air ticketing business increased by 95.9% (95.3% in constant currency) to $21.3 million in the quarter ended September 30, 2021 from $10.9 million in the quarter ended September 30, 2020. Adjusted Margin from our air ticketing business increased by 223.6% (222.3% in constant currency) to $38.6 million in the quarter ended

September 30, 2021, from $11.9 million in the quarter ended September 30, 2020. Adjusted Margin - air ticketing includes customer inducement costs of $17.3 million in the quarter ended September 30, 2021 and $1.1 million in the quarter ended September 30, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin are intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue. The increase in Revenue - air ticketing and Adjusted Margin - air ticketing was due to an increase in gross bookings of 200.3% (199.1% in constant currency) primarily driven by a 159.9% increase in the number of air ticketing flight segments year over year, primarily due to the recovery in domestic travel demand attributable to the comparatively lighter travel restrictions imposed by certain state governments due to the second wave of COVID-19 in India in the quarter ended September 30, 2021, which were less extensive compared to travel restrictions for the quarter ended September 30, 2020. Further, our Adjusted Margin % (defined as Adjusted Margin as a percentage of gross bookings) was 8.6% in the quarter ended September 30, 2021 compared to 8.0% in the quarter ended September 30, 2020. The increase in Adjusted Margin % was due to incremental incentives from our air ticketing suppliers to drive travel growth in the quarter ended September 30, 2021.

Hotels and Packages. Revenue from our hotels and packages business increased by 663.7% (660.5% in constant currency) to $33.5 million in the quarter ended September 30, 2021, from $4.4 million in the quarter ended September 30, 2020. Our Adjusted Margin - hotels and packages increased by 540.3% (542.1% in constant currency) to $35.5 million in the quarter ended September 30, 2021 from $5.5 million in the quarter ended September 30, 2020. Adjusted Margin - hotels and packages includes customer inducement costs of $9.9 million in the quarter ended September 30, 2021 and $1.6 million in the quarter ended September 30, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin are intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue. The increase in Revenue - hotels and packages and Adjusted Margin - hotels and packages was due to an increase in gross bookings by 488.3% (485.8% in constant currency) primarily driven by a 377.4% increase in the number of hotel-room nights year over year, primarily due to the recovery in domestic travel demand attributable to the comparatively lighter travel restrictions imposed by certain state governments due to the second wave of COVID-19 in India in the quarter ended September 30, 2021, which were less extensive compared to travel restrictions for the quarter ended September 30, 2020. Our Adjusted Margin % in the quarter ended September 30, 2021 was 18.4% as compared to 16.9% in the quarter ended September 30, 2020. The low margin in the quarter ended September 30, 2020 was primarily due to margin reductions for certain categories of hotels to support the service providers post the first wave of COVID-19 pandemic and an increase in proportion of high-end room nights wherein the margins are lower.

Bus Ticketing. Revenue from our bus ticketing business increased by 216.2% (216.7% in constant currency) to $8.4 million in the quarter ended September 30, 2021, from $2.7 million in the quarter ended September 30, 2020. Adjusted Margin from our bus ticketing business increased by 216.6% (217.1% in constant currency) to $7.9 million in the quarter ended September 30, 2021 from $2.5 million in the quarter ended September 30, 2020. Adjusted Margin - bus ticketing includes customer inducement costs of $0.3 million in the quarter ended September 30, 2021 and $0.1 million in the quarter ended September 30, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin are intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue. The increase in Revenue - bus ticketing and Adjusted Margin - bus ticketing was due to an increase in gross bookings by 200.7% (199.6% in constant currency) driven by 191.6% increase in the number of bus tickets travelled year over year, primarily due to the recovery in domestic travel demand attributable to the comparatively lighter travel restrictions imposed by certain state governments due to the second wave of COVID-19 in India in the quarter ended September 30, 2021, which were less extensive compared to travel restrictions for the quarter ended September 30, 2020. Our Adjusted Margin % in the quarter ended September 30, 2021 was 8.5% as compared to 8.1% in the quarter ended September 30, 2020.

Other Revenue. Other revenue increased by 36.2% (35.9% in constant currency) to $4.3 million in the quarter ended September 30, 2021, from $3.1 million in the quarter ended September 30, 2020. Our Adjusted Margin - others has increased to $4.4 million in the quarter ended September 30, 2021 from $3.1 million in the quarter ended September 30, 2020. The increase in Revenue - others and Adjusted Margin - others was primarily due to higher advertising revenue and other ancillary revenues in the quarter ended September 30, 2021, due to the recovery in domestic travel demand attributable to the comparatively lighter travel restrictions imposed by certain state governments due to the second wave of COVID-19 in India in the quarter ended September 30, 2021, which were less extensive compared to travel restrictions for the quarter ended September 30, 2020. Adjusted Margin - others includes customer inducement costs of $0.2 million in the quarter ended September 30, 2021 and nil in the quarter ended September 30, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin are intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue.

Other Income. Other income was $0.4 million in the quarter ended September 30, 2021 which remained at a similar level of $0.4 million in the quarter ended September 30, 2020.

Personnel Expenses. Personnel expenses increased by 17.5% to $29.8 million in the quarter ended September 30, 2021 from $25.4 million in the quarter ended September 30, 2020. This was primarily due to annual wage increases effected from April 2021 and higher share-based compensation costs in the quarter ended September 30, 2021.

Marketing and sales promotion expenses. Marketing and sales promotion expenses increased by 405.4% to $11.6 million in the quarter ended September 30, 2021 from $2.3 million in the quarter ended September 30, 2020. The increase in marketing and sales promotion expenses reflected the increase in variable costs and discretionary marketing and sales promotion spends such as events and brand building due to the recovery in domestic travel demand attributable to the comparatively lighter travel restrictions imposed by certain state governments due to the second wave of COVID-19 in India in the quarter ended September 30, 2021, which were less extensive compared to travel restrictions for the quarter ended September 30, 2020.

Additionally, we incurred customer inducement costs recorded as a reduction of revenue and certain loyalty program costs of $27.7 million in the quarter ended September 30, 2021 and $2.7 million in the quarter ended September 30, 2020. The details are as follows:

For the three months ended

September 30

	2020			2021
		(Amounts in USD thousands)
Marketing and sales promotion expenses as per IFRS			2,294		11,593
Customer inducement costs recorded as a reduction of revenue			2,746		27,702
Certain loyalty program costs related to Others revenue			2		-

Other Operating Expenses. Other operating expenses increased by 77.7% to $18.3 million in the quarter ended September 30, 2021 from $10.3 million in the quarter ended September 30, 2020, primarily due to an increase in payment gateway charges and outsourcing fees as a result of increased travel bookings due to the recovery in domestic travel demand attributable to the comparatively lighter travel restrictions imposed by certain state governments due to the second wave of COVID-19 in India in the quarter ended September 30, 2021, which were less extensive compared to travel restrictions for the quarter ended September 30, 2020. Other operating expenses for the quarter ended September 30, 2021 also includes $0.6 million of merger and acquisition related expenses comprising legal and professional expenses and other expenses associated with the sale of our equity investment in an unlisted entity.

Depreciation and Amortization. Our depreciation and amortization expenses were $7.4 million in the quarter ended September 30, 2021 in comparison to $8.9 million in the quarter ended September 30, 2020. This decrease was primarily due to an increase in fully amortized assets in the quarter ended September 30, 2021.

Results from Operating Activities. As a result of the foregoing factors, our results from operating activities were a loss of $8.0 million in the quarter ended September 30, 2021 as compared to a loss of $26.1 million in the quarter ended September 30, 2020. Our Adjusted Operating Profit was $6.6 million in the quarter ended September 30, 2021 as compared to an Adjusted Operating Loss of $12.9 million in the quarter ended September 30, 2020. For a description of the components and calculation of "Adjusted Operating Profit (Loss)" and a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure "Results from operating activities", see - "About Key Performance Indicators and Non-IFRS Measures" elsewhere in this release.

Net Finance Cost (Income). Our net finance cost was $0.6 million in the quarter ended September 30, 2021 as compared to net finance income of $4.8 million in the quarter ended September 30, 2020, primarily due to the interest expense on financial liabilities measured at amortized cost relating to convertible notes in the quarter ended September 30, 2021 and higher net foreign exchange gain in quarter ended September 30, 2020.

Loss for the period. As a result of the foregoing factors, our loss for the quarter ended September 30, 2021 was $8.0 million as compared to a loss of $21.2 million in the quarter ended September 30, 2020. Our Adjusted Net Profit was $9.7 million in the quarter ended September 30, 2021, as compared to Adjusted Net Loss of $7.8 million in the quarter ended September 30, 2020. For a description of the components and calculation of "Adjusted Net Profit (Loss)" and a reconciliation of this non- IFRS measure to the most directly comparable IFRS measure "Profit (loss) for the period", see - "About Key Performance Indicators and Non-IFRS Measures" elsewhere in this release.

Diluted Loss per share. Diluted loss per share was $0.07 for the quarter ended September 30, 2021 as compared to diluted loss per share of $0.20 in the quarter ended September 30, 2020. Our Adjusted Diluted Earnings per share was $0.09 in the quarter ended September 30, 2021, as compared to Adjusted Diluted Loss per share of $0.07 in the quarter ended September 30, 2020. For a description of the components and calculation of "Adjusted Diluted Earnings (Loss) per Share" and a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure "diluted earnings (loss) per share", see - "About Key Performance Indicators and Non-IFRS Measures" elsewhere in this release.

Liquidity. As at September 30, 2021, the balance of cash and cash equivalents and term deposits on our balance sheet was $489.0 million. In addition, we have existing credit facilities of approximately $134.0 million, which includes a $70.0 million facility from an affiliate of our largest shareholder with the remaining amount from various commercial banks. As of September 30, 2021, these facilities remained undrawn.

Notes:

1. Constant currency refers to our financial results assuming constant foreign exchange rates for the current fiscal period based on the rates in effect during the comparable period in the prior fiscal year.
2. This is a non-IFRS measure. For more information, see "About Key Performance Indicators and Non-IFRS Measures" elsewhere in this release. IFRS refers to International Financial Reporting Standards as issued by the International Accounting Standards Board. In addition, reconciliations of non-IFRS measures to IFRS financial measures, and operating results are included at the end of this release.

Share Repurchase

On November 6, 2012, our Board of Directors authorized the Company to purchase outstanding ordinary shares, par value $0.0005 per share, of the Company. On January 22, 2016, our Board of Directors authorized the Company to increase the share repurchase plan to an amount aggregating up to $150 million at a price per ordinary share not exceeding $21.50 until November 30, 2021 and on October 26, 2021, our Board of Directors authorized the Company to further extend the term of this share repurchase plan until November 30, 2023. There were no repurchases pursuant to the share repurchase plan during the second quarter of fiscal 2022. As of September 30, 2021, we had remaining authority to repurchase up to approximately $136.0 million of our outstanding ordinary shares.

Conference Call

MakeMyTrip will host a live Zoom webinar to discuss the Company's results for the quarter ended September 30, 2021 beginning at 7:30 am EDT or 5:00 pm IST on October 26, 2021. To participate one can visit http://investors.makemytrip.com or use the following the link https://makemytrip.zoom.us/webinar/register/WN_RN5N2ofTQnuYHi5H296kJw to register for the live event.

Registered participants will receive a confirmation email containing the Zoom access link and alternative phone dial-in details.

A replay of the event will be available on the company's Investor Relations website approximately two hours after the conclusion of the live event.

About Key Performance Indicators and Non-IFRS Measures

We evaluate our financial performance in each of our reportable segments based on our key performance indicator, Adjusted Margin, a segment profitability measure, which represents IFRS revenue after adding back customer inducement costs in the nature of customer incentives, customer acquisition costs and loyalty program costs which are reported as a reduction of revenue, and deducting the cost of acquisition of services primarily relating to sales to customers where the company acts as the principal. The presentation of these segment profitability measures and key performance indicators is not meant to be considered in isolation or as a substitute for our consolidated financial results prepared in accordance with IFRS as issued by the IASB. Our Adjusted Margin and Adjusted Margin % may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

As certain parts of our revenues are recognized on a "net" basis when we are acting as an agent, and other parts of our revenue are recognized on a "gross" basis when we are acting as the principal, we evaluate our financial performance in each of our reportable segments based on Adjusted Margin, which is a segment profitability measure, as we believe that Adjusted Margin reflects the value addition of the travel services that we provide to our customers. Income from packages, including income on airline tickets sold to customers as a part of tours and packages is accounted for on a gross basis as the Company controls the services before such services are transferred to travelers. Revenue from the packages business which is