Yatra Online Inc (YTRA) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to Yatra's Third Quarter 2018 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Manish Hemrajani. Please go ahead.

Thank you, Nicole. Good morning, everyone. Thank you for joining our call today. Welcome to Yatra's fiscal third quarter 2018 financial results for the period ended December 31, 2017. I'm pleased to be joined on the call today by Yatra's CEO and Co-Founder Dhruv Shringi; and our CFO Alok Vaish.

The following discussion, including responses to your questions, reflect management's views as of today, January 30, 2018. We do not undertake any obligation to update or revise the information.

As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to company filings with the SEC for information about factors which could cause our actual results to differ materially from these forward-looking statements. Additional information concerning these statements is contained in the Risk Factors section of the company's annual report on Form 20-F filed with the SEC on June 30, 2017. Copies of this and other filings are available from the SEC or on the Investor Relations section of our website. Our results discussed today include the impact of Air Travel Bureau, in which we acquired a majority stake on August 4, 2017.

With that, let me turn the call over to Dhruv.

Thank you, Manish. Q3 has been a very exciting quarter for us. Following up on our strong results in the second quarter, we registered yet another quarter of solid performance with 25.6% year-over-year growth on our key Revenue Less Service Cost metric. Gross booking growth during the quarter was 44.8%. Our adjusted EBITDA loss came in at INR 388.3 million or approximately $6 million for the quarter. Marketing cost as a percentage of Revenue Less Service Cost was at 52.6% as we continued to optimize our marketing expense and operate at lower levels of brand marketing initiatives without compromising on our growth. This trend continues to demonstrate the strength and high top-of-mind recall of the Yatra brand.

The travel industry in India is witnessing a period of sustained growth and we are very excited to be a leader in the sector.

Now onto some additional data points that reflect the strength of our business during the quarter. Our growth this quarter was broad-based with all our offerings experiencing strong consumer adoption. Revenue from our Air Ticketing business grew 46% in the third quarter, largely driven by gross booking growth of 47.8% and the positive impact of consolidation of Air Travel Bureau. Our air business outpaced overall market growth of 17.8% by 1.74x as we continued to take market share in both domestic and international air travel.

We also witnessed an increase in our air passenger yield as the business mix moved in favor of international flights which currently are under-penetrated online as compared to domestic flights. Over the last year or 2, the growth in the aviation sector has been faster in Tier 2 and Tier 3 markets than the metros, and the new UDAN scheme launched by the government, which subsidizes air travel from Tier 2 and Tier 3 markets, will drive further growth in the sector.

Our Hotels and Packages business growth rate further accelerated this quarter with Revenue Less Service Cost growth of 46.8% year-over-year, aided by gross booking growth of 29.4%, standalone hotel room nights book growth of 37.8% and expansion in day rates to 12.5% in the December quarter versus 11.1% for the same quarter last year.

We are starting to see early signs of acceleration in market share gain on the hotel front given our recent brand positioning, our largest hotel inventory and the cross-sell initiatives as well as the anniversarying of the impact of demonetization.

We continue to be the leading platform for domestic hotels and home sales in India as we added another 10,000 properties on our platform in the quarter, taking our total inventory to a market-leading 83,000 properties. We remain focused on building out our hotel inventory and expanding our supply lead over competition.

Let me now talk about our corporate travel business where we are now firmly entrenched as the market leader. Corporate travel opportunity in India in our mind is the more exciting and larger opportunity in travel in front of us and is projected to grow at over 12% per annum through 2020, making India the fastest-growing corporate travel market in the world according to KPMG research. I would like to spend a few minutes to explain why we are so excited about the corporate travel opportunity.

In an emerging market like India, where disposable income is limited, business travel is generally the first form of travel undertaken by consumers. As such, by being the leader in business travel, we believe that we are well positioned to capture some of the most attractive consumers in India as they make their first online travel purchase.

Post our acquisition of Air Travel Bureau, the combined entity of Yatra and Air Travel Bureau now has the potential to access a captive consumer base of about 4.2 million people who are employed in the over 700 large- and medium-scale enterprise customers that the entity services. Assuming an average family size of 4 in India, the employees of the organizations that the combined entity will service will translate into approximately 17 million consumers to whom leisure travel services can be cross-sold.

Air Travel Bureau for the moment continues to operate as an independent entity and we expect further growth and improved operating leverage once the business is integrated more deeply post completion of the allowed period for the current management. We believe that there is an opportunity to cross-sell Yatra's hotel inventory to the 700 existing Yatra and ATB-combined customers and also the opportunity to implement Yatra's sales booking platform across the Air Travel Bureau customer base.

Switching gears to mobile now. Mobile traffic continues to garner the largest share of our overall traffic with 77% of our traffic during the quarter coming from mobile devices. We expect to see this trend accelerate further in the coming quarters as the cost of mobile data in India continues to drop sharply, thereby significantly expanding the market.

I'm pleased to announce that our organic mobile app downloads now crossed the 12.7 million mark as we added over 1.7 million new installs in the quarter. Additionally, I would also like to point out that our apps had the highest approval rating amongst our competitive peer set on the Play Store. We continue to focus more on the quality of our downloads versus the quantity as is evident by the gross bookings for download for us which continue to lead our peers by a wide margin.

To summarize, we delivered Revenue Less Service Cost growth of 45.6% for the third quarter with growth being broad-based across all our product lines and lines of business. Our adjusted EBITDA loss came in at INR 388.3 million or approximately $6 million. We think that on the back of our high brand recall and deep distribution network across India and now our leadership position in corporate travel, we are well positioned to strongly capitalize on the macroeconomic tailwinds.

I'm now going to hand it over to Alok to walk you through the details of our financial performance for the quarter. Alok?

Thank you, Dhruv. Good morning, everyone. As Dhruv mentioned in his opening remarks, we're obviously very pleased with the performance during the quarter ended December 30, 2017. Before we dig deeper in the financial results, I want to highlight that our results for the current quarter include the financial and operating results of Air Travel Bureau Ltd. or ATB. If you recall, we acquired a majority stake in ATB on August 4, 2017, so this was the first full quarter of their consolidation results -- (inaudible) results.

On the key financial highlights for the quarter, on an overall basis, our Revenue Less Service Cost grew by 46% year-over-year to INR 1.96 billion. Gross air passengers booked for 2.31 million, representing year-over-year growth of 31% with a favorable mix towards international travel. Standalone hotel room nights booked were 504,000, representing an increase of 38% year-over-year. Revenue from our Air Ticketing business increased by 46% to INR 1.37 billion in the current quarter. This growth was driven by an increase in gross bookings by 48% to INR 20 billion in the current quarter. Our net revenue margins improved from 6.3% in the sequentially prior quarter to 6.7% in the current quarter while it declined marginally from 6.8% in the year-ago quarter, mainly due to consolidation of ATB business, since corporate business has slightly lower net revenue margin but significantly better economics due to absence of marketing and sales and promotion expenses compared to the B2C business.

On Hotels and Packages, our Revenue Less Service Cost for this segment was up 47% year-over-year to INR 437 million in the current quarter. This growth was due to an increase in Hotels and Packages gross bookings of 29% and continued growth in standalone hotels on the back of largest online hotel inventory in the country. We also benefited from an improvement in our Hotels and Packages net revenue margins of 12.5% during the current quarter versus 11.1% in the year-ago quarter. The increase in net revenue margin is due to higher margins as negotiated from suppliers primarily from our standalone hotels business.

Other revenue grew by 38%, almost 39% to INR 150 million from INR 108 million in the prior year quarter.

Moving on to expenses. Marketing and sales promotion expenses increased by 66% to INR 1 billion in the current quarter primarily on account of increases due to brand marketing campaigns in print media, consumer promotions and loyalty incentive programs. Marketing and sales promotion expenses as a percentage of Revenue Less Service Cost increased to 52.6% in the current quarter from 46.2% during the year-ago corresponding quarter.

Our personnel expenses increased by 70% to INR 720 million in the current quarter from INR 423 million in the 3 months ended December 31, 2016. This increase was primarily on account of consolidation of ATB and also an increase in employee share-based payment expense of INR -- to INR 132 million in the current quarter from INR 30 million in the prior year quarter. Excluding the employee share-based payment expense, our personnel expense growth would have been 49% for the current quarter, including the impact of ATB acquisition.

Our other expenses increased by 47% to INR 770 million in the current quarter from INR 523 million in the prior year quarter. As a result of the higher marketing expense, our adjusted EBITDA was a loss of INR 388 million in the current quarter.

As of December 31, 2017, the balance of cash and cash equivalents and term deposits on our balance sheet was INR 3.86 billion or approximately $60 million, 6-0, as compared to INR 4.56 billion as of March 31, 2017. We remain bullish on the Indian macroenvironment, the growth in air and hotel industry and our strong presence both as a consumer brand and as a platform that we provide to our various B2C, B2E and B2B2C customers. We are thus maintaining our fiscal year '18 guidance of 35% to 40% growth in Revenue Less Service Cost. This concludes our prepared remarks. We can now open up for Q&A. Thank you.

(Operator Instructions) We'll take our first question from Jed Kelly from Oppenheimer.

Can you just talk about, once ATB is integrated, what type of revenue and expense synergies can we expect? And then, can you -- as you've learned more about ATB since you've acquired the company, can you give us an early outlook regarding revenue growth and profitability for fiscal year '19?

Yes. Let me take the first part of that. This is Dhruv. Hi, thank you for your question. With regards to ATB, from a synergy point of view, we see a strong potential in terms of driving incremental cross-sell of the hotel product to the ATB customers. The initial conversations we've had with some of their customer base does show a keen interest on their part to adopt the Yatra hotel platform and the hotel services that we provide, so I think that's a low-hanging fruit for us. And the other one which is there is also the adoption of the technology platform. Given that a large number of these organizations have seen our current customers successfully adopt that platform and derive the benefits of that. We've seen high degree of interest come through from the ATB customer base as well. So I think these are 2 low-hanging opportunities that we see, and on the back of, obviously, adoption of the technology platform would come the cross-sell to the direct consumer base as well. So there's a favorable PC revenue synergy coming through in the midterm. On the cost side as well, at this point in time, there is some overlap, which is there, but that's not the significant part. That's not the key reason for the acquisition. The key reason for the acquisition is largely on the revenue side in terms of getting this captive consumer base to which we can roll out our hotel product, to whom we can then cross-sell our technology platform, and to their employees we can market our consumer products. So that's the key rationale for it, and I think there's a significant amount of upside that we should be able to capture in the near term on that.

With regard to growth guidance for fiscal '19, we still haven't put that out yet. We probably will be doing that with the next quarter's results. But clearly, the business on the B2E side continued to do well and they have much better economics on the bottom line than what you see on the B2C side given the absence of sales and marketing expenses. And we are seeing similar trends on the ATB business as we see on our corporate business as well. So those businesses will continue to have positive contributions compared to some of the other businesses which will continue to see some investments on the B2C side.

That's helpful. And then, sales and marketing continues to grow faster than revenue. Can you guys give us an update on the overall competitive environment, the level of discounting going on?

Sure. So on the competitive landscape, Jed, the market continues to be fairly competitive. While we have seen some softening of it but it's not very significant at the moment, so the trends continue to be more competitive. And what we do expect, however, is that we would expect that over the course of the next few quarters, a certain degree of softening of that competitive environment. We've seen some players, without naming them specifically, we've seen some players be a bit more rational. Others continue to be aggressive, but at least that first sign of rationality seems to be coming through into the market.

And then, just one more for me. Your hotel commissions continue to tick up nicely year-over-year. How long are these agreements for? And do you think this is the normal commission rate going forward?

These agreements typically are annual agreements. And looking at the current supply/demand scenario in the country where hotel occupancy is still a shade, we feel, under 60%, we think there is some upside on these numbers over the course of the next 12 to 18 months. Also these numbers are aided by the fact that the mix continues to move in favor of standalone hotels where the margin typically continues to be higher than those of packages. So our sense is that we will see this trend of improvement -- gradual improvement continue to be there for the next, at least, couple of years.

(Operator Instructions) We'll move to our next question from Matthew Brooks at Macquarie.

I was wondering, are you able to break out your net revenue growth by, sort of, the separate segments that you talked to, so B2C, B2B and maybe in that B2B part, talk about the contribution from ATB?

No. We don't break that out on the different parts of the businesses. So in the channels, we'd break it out over the products which is air and H&P versus the channels. And I guess until such time we integrate ATB and that becomes a larger part of the business than what the B2E business today is on a standalone basis, we're not looking at breaking out the channel breakdown on the various products, something which we will review over the next year or so. And then, once we decide to break that out, obviously you'll see those numbers at that point in time. But as of now, we continue to break it out only by product category, which is what pretty much all the competition does as well.

Okay. As a second question then, can you talk a little bit more about sort of the economics of the hotel business? So you added like 10,000 new hotels. Did they come out to the same kind of commission rates as old hotels? And is there, sort of, like a maturity curve when you add new cities -- or new hotels and new cities to the platform that it takes a couple of years before bookings per hotel tend to mature? Can you talk a little bit about that?

Sure. Hi, Matt, this is Dhruv. In terms of the economics around these hotels, typically what we do end up seeing here is that the margins and take rates on these hotels is higher than the average that we operate on, and that's because these are now forming a larger part of the long tail. And given that they, on a standalone basis, don't have the distribution wherewithal, they are willing to be more active and be willing to [part] higher take rates to get that incremental distribution that Yatra provides them. So from a distribution and per-unit-earning point of view, they are better off. However, to your point, that from an economies of scale point of view, I think we are today at about 75% of the market coverage. For us, the market coverage lies closer to 120,000. We don't see this economies come through at this point, but yes, I would agree with you that at some point, in the near future, we will begin to see some slowdown happening on the incremental [year-end] economics. We haven't reached there yet, but my sense is that at some point, by the end of 2018, we will get to that stage. For the moment, we continue to add inventory and we continue to see good traction. What we have also seen as each hyper local area sees better density of supply, the online conversion also typically tends to improve for each of those hyper local areas. So that trend gives us the confidence to invest at the moment behind adding more supply in some of the hyper local areas where we think we could still get incremental value-add.

Right. And I guess as a follow-on to that, you mentioned the competitive dynamics haven't changed a lot, but for these newer hotels that you're adding, are you adding in areas where there's also less competition, so less discounting to, sort of, make the economics worse? Or is it, the competitive discounting occurs across the whole country?

No, that's absolutely right. Your first observation was absolutely spot on. The incremental supply that we add now typically tends to be less competitive from the landscape point of view because it's supply which is usually unique to us or is only available on a very limited online footprint. So that does help the economics from a customer acquisition point of view of this incremental supply.

And are these hotels the kind that are typically going to add more OTAs as well? Or once they have one OTA that's providing good-enough service, it provides a small barrier to entry to people who try to follow you?

Yes. I think what we've seen in terms of user behavior out here is that this is the segment which is not very technology-savvy. They're recently moving on to technology adoption, and once they become comfortable with one user interface and one (inaudible) or extranet for loading their rates and inventory, we think it's highly unlikely that they will add multiple suppliers onto their platform because there is a steep learning curve for them as well in terms of getting more and more familiar with managing multiple platforms. And given that most of these seem to be either on a proprietor-driven or have a skeletal staff in terms of support infrastructure, we think there is a definite first-mover advantage out here of getting them hooked onto your platform.

(Operator Instructions) We have a question from Andrew Carreon from University of Notre Dame.

My question is on the share-based payment expense and what you would expect to be a normal annual dilution rate coming from that share-based payment expense.

So the current share-based payment expense is towards an award that was done in 2016. And I think the bulk of that payment hit has already come to the P&L over the last 4 quarters or so given the accelerated accounting for that. We will see a lower numbers coming in the subsequent quarter. I think we've seen that trend over the last 3 or 4 quarters where that number continues to come down every quarter. On a go-forward basis, on a more rational basis, I guess, the overall option pool, I guess, would be at the top end at about 2% of the overall share base, but we would expect the actual accounting hit of that to be lower than that compared to what the total potential pool will be.

Great. And maybe one more question. On the other operating expenses, the commission expense, would you mind just clarifying for me how that exactly is tied to your gross booking volume?

So on the B2B2C business, where we work with a large network of mom-and-pop travel agency, about 17,000 of those travel agents, so every time they book a ticket with us on our platform to sell to their walk-in customer, we give a commission to them for making the booking through us. So that's the part of commission that comes from that part of the business in the B2B2C side. And hence, as that volume will grow, you will see increase in that expense as well. But clearly, on an overall basis, the B2B2C business will see relatively lower growth rates than what you would see on the B2C and the B2E part. So you will not see substantial increase in [net] commission expense going forward.

And we'll take our next question from Emily DiNovo of Cowen and Company.

I was wondering if you could give us an update on the free cash flow outlook for the year. And also, could you kind of give us an idea how we should be thinking about the fiscal fourth quarter and any general trends that you're seeing there?

So we, obviously, are consuming cash as opposed to generating free cash flow given the losses that [we're in.] So you will have loss from operating activities, which in the current year we've seen adjusted EBITDA loss of about close to 15-odd million, and we still have Q4 to go on that. On top of that, you would have our debt repayment and interest expenses, which will amount for over a period of 2 years and then some CapEx on top of that. So we will be consuming cash. So I don't anticipate us generating any free cash flow over the next couple of quarters or so until we hit breakeven point, at which point I think you might want -- you might see some bit of cash flow coming through. And what was the second question?

So in terms of outlook from a business point of view, right? The business outlook continues to be strong. I'm sure you've seen the kind of growth that we have behind us and this is the second quarter of this kind of growth rate that we are maintaining. So we feel quite bullish about the overall macroenvironment and our position within that environment. And to just add a couple more points to Alok's comment on the cash flow. While there is cash which is being consumed, we are also seeing more efficiency on the working capital and you can see that play through in terms of our working capital and debt levels coming down from where they were in the previous quarters. So we are actually seeing improvement in terms of working capital which is releasing some cash flow for us as well. So our total cash consumption for this fiscal year, we think, would be close to $35 million to $40 million which will be a combination of our operating loss, some working capital and some CapEx which we end up incurring.

And we'll take our next question from Shaleen Kumar at UBS.

Dhruv, 1 question from you. How are you seeing the competitive intensity right now in the hotel business?

Shaleen, we have seen some rationalization of that. Though I wouldn't -- actually, let me rephrase that. We've seen softening of it, I wouldn't call it rationalization. But we've seen some softening of intensity. We are also, to our advantage, being aided by the fact that we now have a fair bit of unique supply and that unique supply is able to get us incremental volume without needing to deploy anywhere close to the kind of discounting and couponing we've seen in the market. So it's a combination of both of those factors: a slight softening of the intensity and then the incremental supply and differentiated supply that we built up that's enabling us to grow.

Okay. And is there still some disruption from -- in the air segment from Paytm? Or do you think that also has come down?

We've definitely seen some softening of that. Whatever disruption was there, firstly, was on the domestic air supply, and we've seen the suppliers themselves, the airlines themselves also taking note of that and stepping in at some points. So we think the air market should continue to be a rational market in the mid to long term. We don't see that to be something which will get disruptive. On the international side, we haven't really seen Paytm being a meaningful player there. As we've highlighted in the past, and as you're also aware, there continue to be restrictions around the amount of cash that can be in the wallet, and those limits I don't think are substantial enough to enable frequent international travel purchase.

Correct. Correct. Yes, I agree. So Dhruv, if I look at your numbers, they are pretty impressive in terms of the growth aspects. Only worry I have over here that if I look at the absolute spend of the marketing and if I believe that most of the marketing is geared towards hotel segment and if I compare with it incremental revenue -- net revenue that we are getting, I mean again, the ratio becomes skewed that, again, it feels like there is a bit of a discounting also going on from your side. So how should we see that when your -- this marketing spend can shrink and your (inaudible) of net revenue can keep on increasing?

So that is a fair observation, Shaleen, for the domestic hotels and that too for the consumer direct part. What we have seen is that the incremental business that we get from the corporate side, that continues to have positive bottom line. And on the consumer side, there is some degree of couponing and investment that we continue to do in terms of marketing and sales promotion to maintain a certain amount of market share for the key hotels that we have on our platform. As I mentioned for the longer tail, we don't need to do that much, but for the supplier, which is overlapping with competition, there we do have to be, to a certain extent, active in the market. So it's a combination of all of these factors which will play out. We are very excited at the moment about the opportunity to cross-sell our hotel platform to the ATB customer base. I think that's a very unique opportunity that's available today only to Yatra. So I think that should help us in the coming years and coming few quarters as we move on to deeper integration of the ATB business post 1st of April, give us some degree of upside on the cost of acquisition of hotels.

So I guess ATB signed up with the Bollywood ambassador. We had a big marketing campaign on that and that will translate across all products as opposed to just hotel business. So you will see the marketing expenditure go up on that account but I don't think it would be fair to allocate all of that to the hotel business.

Agreed, agreed. Fair point. So is there a budget that we allocate for the marketing spend? Or how do we, like -- or we see the demand or the (inaudible) -- and we react to that?

Obviously, Shaleen, there is a budget which is allocated to this, and there is also a tolerance range which is defined in terms of how much are we willing to invest to be able to get to the kind of growth rate that we want. But we typically tend to stay within that tolerance range. I think it will be a bit premature on my part to share the tolerance range on a call, but nevertheless that is something which is of prime importance to us. We want to be aggressive but we also want to be aggressive we feel within the realm of being rational. We don't want to get to a situation where you're just spending and couponing for the sake of couponing. We want to make sure that there is enough visibility based on the consumer's past buying pattern and trends to be able to look at a breakeven on that customer in a 12-month period.

Got you, got you. So for us to model, should we continue that current ratio of plus -- of current marketing expense to revenue 4 5% should be there for a midterm, near to midterm?

That's right. I think even if you look at our numbers today at 52.5% -- or 52.6%, this is significantly lower, where the rest of the market has operated [or tread]. I'm sure you're seeing some of our peers have been operating at 100-plus percent. So to that extent, I feel this is a number which is a fairly rational number for a market which is still witnessing very healthy growth and has lot of upside potential. So we wouldn't want to curtail it significantly beyond these levels. We think this is the right number give or take a few percentage points for the stage of life cycle that we are in from the macro point of view as well.

All right, all right. Okay. And then last, if you can answer and if you like to answer, you have -- like so far OYO and -- I'm not sure whether Treebo and others are also present, but if you can share what percentage of booking or revenue do you get from those chains.

No. I don't think we can call that out separately, Shaleen.

And we'll take our next question from Jon Hickman at Ladenburg Thalmann.

Could you tell us or give us a little more color on what is happening with the government in India with these regional airports and getting their push to get more air travel? Is that underway or is that still like on the come?

No, I think that's pretty actively underway. In fact, we had 2 other large airlines also sign up with the government to participate in this program. One of them is Indigo which is the market leader out here and the other is Jet Airways. So we've seen some of the bigger boys also now come into the fray and participate with the government in terms of bidding for the slots from some of these Tier 2, Tier 3 airports. So that process now seems to be firmly underway, and we do anticipate that over the course of the next year, as more and more smaller aircrafts come into the country, the connectivity and the supply on these routes will go up pretty significantly. See, one of the challenges with these routes is that some of these airports today have smaller runways, runways which are not conducive to have 737s and Airbus A320s line. So you need the ATRs for these runways, and that should be happening. Some of the airlines have already got them. Others have placed large orders for them and should see supply coming through in the second half of 2018. So this process is now firmly underway.

On the second one. Second thing that they just announced, I think they opened up some others, some 60, 70 small regional airports which earlier were not connected, while the airports were lying dormant. But I guess in the second round, they're going to open up in a much larger way. So you will see that the whole regional connectivity scheme continue to ramp up as more and more airlines participate. And a lot of the small regional traffic, which was earlier commuting on the trains will actually move onto these. And some of these are also linked by helicopters, not just pure airplanes, but I guess, just expanding the overall air market is a good thing.

What was that number? How many? 60 to 70?

I think so. I was just checking on that. I think, overall, there were 109 locations but some of them were existing locations. I think the new number of airports was somewhere around 70-odd airports is what I remember. I'll just check on that and come back.

Okay. And then, do you have any comments on -- or any intelligence on -- with the distribution, [Norwith's] distribution of shares to its limited partners? Do you have any intelligence on like what kind of selling pressure there still might be from that distribution?

I think it's hard for us to comment on that. What we -- the limited information we have is that this is part of their standard process where they've done this distribution to their LP but that's pretty much all the information that we have.

(Operator Instructions) And we have a follow-up question from Jed Kelly with Oppenheimer.

On the other operating expense item, there was a pretty nice uptick quarter-to-quarter. How much of those expenses are onetime in nature and non-reoccurring?

I think a large part of their increase would be on account of ATB acquisition, given it was not in the last year's quarter. So that's where you've probably seen the uptick.

Okay. But none of those are just onetime for consulting fees or part of the acquisition that won't reoccur again?

There will be some bit of legal and professional which might be onetime given the whole GST regime, et cetera, but those would not be very large numbers. Most of this would be, I think, recurring expenses.

And then, I guess, one last one for me. You maintained your revenue guidance of 35% to 40%. So that implies about a 10 point deceleration into the fourth quarter. Is there anything to call out there, specifically?

I think that growth rate is for a full year basis. And given that the ATB acquisition only came in from August, so we only have 8 months of ATB coming into those numbers as opposed to full year numbers and that's the reason why that growth rate would look lower than what we should deliver in the quarter.

(Operator Instructions) Gentlemen, it appears we have no further questions in the queue. If you would like to make any closing remarks.

Yes. Thank you, Nicole. I will turn the call over to Dhruv for closing remarks.

Sure, Manish, thanks. I just want to quickly reiterate that we strongly believe that the differentiated multichannel approach that we've adopted is the right approach to adopt for an emerging market like India where the per capita income lags that of emerging economies. Our approach, as you can see, is allowing us to acquire customers that source in a more cost-effective manner as they undertake their business travel and then have multiple touch points with them resulting in strong cross-sell between B2E and B2C platforms. Our innovative eCash loyalty program, which we started back in 2014 further encourages and incentivizes this cross-sell. We continue to introduce new innovative features and products as seen by a recent launch of a self-booking platform for small- and medium-scale enterprises. This platform provides them with comprehensive and convenient travel solutions on a self-book model. This easy-to-use online platform includes a range of enhanced features which automates the booking and fulfillment process for small- and medium-scale enterprises. The travel industry in India, as we've mentioned earlier, is seeing a strong macro tailwind. The aviation sector continues to be very buoyant. It's being aided by the UDAN scheme which has been launched and reinforced by the government. So the macro tailwinds continue to be very strong. And on the back of this macro tailwind, our multichannel approach and the strong leadership position that we have on the corporate travel side, we think we are very well positioned to be able to capitalize on this growth for many quarters to come. So I want to thank all of you for your time today, and we look forward to interacting with you in the near future.

And once again, ladies and gentlemen, that concludes today's conference. We appreciate your participation today.