Thank you, Jennifer. Good morning, everyone. Welcome to Yatra's fiscal third quarter 2022 financial results for the period ended December 31, 2021. I am pleased to be joined on the call today by Yatra's CEO and Co-Founder, Dhruv Shringi. The following discussion, including responses to your questions, reflects management's views as of today, April 1, 2022. We don't undertake any obligation to update or revise the information.

Before we begin our formal remarks, allow me to remind you that certain statements made on today's call may constitute forward-looking statements, which are based on management's current expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially. These include expectations and assumptions related to the impact of COVID-19 pandemic and the ongoing conflict in Ukraine. For a description of these risks, please refer to our filings with the SEC and our press release.

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

Dhruv Shringi - Co-Founder & Chief Executive Officer

Thank you, Manish, and good morning, everyone. Thank you for joining us this morning. Before I discuss the results, I would like to discuss what we believe will be a major milestone in Yatra's evolution. As we shared with you last week, we are continuing to work with bankers and lawyers in India to explore our options for an India IPO. To that end, as we shared earlier, we took the first step in the process with the filing of the Draft Red Herring Prospectus with SEBI, which is the main market regulator in India. Our brand is and continues to resonate positively in India with travelers and our corporate travel business continues to recover strongly.

We believe this would translate into a successful IPO that could significantly enhance Yatra's strategic flexibility and act as a catalyst to improve shareholder value going forward. Benefits of this listing, which would support Yatra's ongoing strategy and value creation opportunities include access to an additional pool of capital including retail and institutional investors in India who are already familiar with Yatra's business and brand, but who are currently restricted from participating in the U.S. markets. Providing a liquid stock that can be used for M&A in India, further capital to strengthen the balance sheet and provide working capital to accelerate growth in both corporate travel and freight business, additional sell-side research coverage amongst others.

Yatra will begin management road shows in India towards the end of April, early part of May, and we believe we should be in a position to complete the offering by the back end of summer of 2022. Now coming onto our December quarter results; adjusted revenue for the quarter ended December 31, 2021, came in at INR1,044.9 million, which is approximately $14 million. This was up 33% Q-o-Q and 72% year-over-year. We witnessed a strong recovery in travel in the December quarter as leisure travel picked up heading into the critical holiday season. Air passengers booked were up 40% year-over-year in the December quarter and up 41% sequentially.

Our hotel room nights were up more than 72% year-over-year, and about 18% sequentially. Business travel also came back strongly on the back of lower case counts in the early part of the third quarter. I'm happy to share that this was the highest reported quarterly adjusted revenue for Yatra since the onset of COVID-19 in March 2020. Adjusted EBITDA also improved by 89% Q-o-Q to INR44 million or approximately $600,000 for the quarter. Despite the investments that we continue to make in the nascent but rapidly growing logistics and freight business, as of September 30, 2021, the balance of cash and cash equivalent and term deposits on our balance sheet was INR1.534 billion.

The change in our cash position versus last quarter is largely on account of increase in working capital on account of the recovery in the Corporate business. On a U.S. dollar basis, adjusted revenue for the quarter was $14 million and adjusted EBITDA was about $591,000, which was up 89% sequentially showing the leverage in our business model. We ended the quarter with a strong balance sheet and a cash balance of approximately $21 million. As I mentioned above, the change in the cash position is largely on account of change in working capital due to recovery of the Corporate business.

Please note that while there was some disruption on account of Omicron in December, there was further impact, which we felt in the month of June, sorry, in the month of January. But having said that, recovery has been rapid in both leisure and business travel in Feb and March. And I'm pleased to say that we are back to a better than November levels exiting March 2021. Business travel impact where we are the market leaders is trending to exceed 75% of pre-COVID volumes in March 2022, levels not seen since Feb 2020 and we remain optimistic that it should get back to close to pre-COVID volumes in the June '22 quarter.

While the competitive intensity has risen moderately since the last quarter, overall competitive levels remain benign on the hotels front and our brand continues to resonate positively with Indian travelers. Just like business travel, Omicron negatively impacted volumes in January, but Feb onwards we've seen strong recovery happening, and March has been even stronger. And overall, industry volumes for travel, for domestic air travel in large, exceeded 83% of pre-COVID volumes. So, we are seeing strong recovery happening from March leading into the key summer travel months of April, May, June across both leisure and business travel platforms.

On the hotel front as well, we signed a strategic partnership with Flipkart and Cleartrip, who will now source domestic hotel content from Yatra. We believe that the incremental volume that we drive through this partnership will not only be accretive from an EBITDA perspective, but will also help us strengthen our relationship with our existing hotel partners and lead to a better long-term value creation. India's mass vaccination program has truly been remarkable. And as of this week, over 825 million people or 60% of the population have been fully vaccinated and close to a billion people have received at least one dose.

As a result, India opened up for international travel on a full schedule from March 27 onwards. We are seeing good early traction on the international travel front as borders continue to open up globally. Because of these positive signals and the traction we are gaining in our additional initiatives, we believe we can expect to see a quarter that meets or exceeds our pre-COVID levels sometime this calendar year. Let me now give you an update on our freight business. As we look towards digitizing the logistics space, our corporate travel relationships with both airlines and enterprise executive management, together with our technology capabilities, give us a significant head start.

We have rapidly scaled up this business over the past few months. And we believe this business longer term has the potential to be even larger than our Corporate Travel business. We expect 2022 to be a year of rapid expansion for this business. And we believe that we should be able to achieve revenues of $4 million to $5 million from this business in fiscal year 2023. Following the successful Indian IPO, I believe we'll be in a position to accelerate growth in freight, which is receiving renewed interest across the globe because of the freight and logistics challenges that people are facing.

We are optimistic about Yatra's continued growth and recovery based on the trends that we are witnessing and believe that our well-recognized brand and healthy balance sheet puts us in a strong position to capitalize as the recovery continues to gain momentum. While we are not completely out of the woods, I'm optimistic that based on recent trends, the worst of the pandemic is now behind us. And the levels of vaccination in India has lowered case count to a level low enough to encourage strong recovery in travel, both business and leisure, as we have seen in the months of Feb and March.

We believe the opportunity ahead for Yatra is massive. We believe Indian Internet travel will hit an inflection point in the coming years as we get past COVID. We believe corporate travel where we are the leaders will also recover quickly. In addition, the efforts made during the pandemic to improve operational efficiency will lead to significantly higher levels of profitability and cash flow. I want to thank our shareholders once again who stood by Yatra through these trying times. I'm hopeful and honestly believe it's only a matter of time before our patience and understanding are rewarded.

With that, let me hand it back to Manish. Manish?

Manish Hemrajani - Vice President, Corporate Development and Investor Relations

Jennifer, can you please open up the call for Q&A.? Thank you.

Question & Answers

Operator

Yes. [Operator Instructions] And we'll go first to Scott Buck with H.C. Wainwright.

Scott Buck - H.C. Wainwright & Co. - Analyst

Hi, good morning guys. Thank you for taking my questions. First one for me, I'm curious if you're seeing some of the benefits of the market share gains you've made on the corporate side or the new contracts you've signed on the corporate side during COVID, now that recovery or activity levels are starting to come back or is it still too early for that?

Dhruv Shringi - Co-Founder & Chief Executive Officer

I think we're beginning to see early signs of that, Scott. Firstly, as I mentioned, we've seen corporate travel volumes touch about 75% of pre-COVID levels from the month of March. It's relatively early to comment on it, but there have been days in the month of March where volume has exceeded - our daily volume has exceeded our pre-COVID levels. So from that perspective, I'm quite hopeful that as we go into April, May, June and as corporations reset their budgets, we should end up seeing a very strong recovery happening in corporate travel for us on the back of not just recovery of our existing customers, but also on account of the new wins.

Scott Buck - H.C. Wainwright & Co. - Analyst

Great. That's helpful. As travel activity picks up, both corporate and leisure, are you guys staffed appropriately or do you have to do a significant amount of hiring, rehiring, customer service folks or whoever else to meet the higher levels of demand?

Dhruv Shringi - Co-Founder & Chief Executive Officer

So, we've done some hiring in the last few months as demand has picked up, and this hiring has been largely on the corporate travel side of things. On the consumer front, we spent the last two years focusing a lot on back-end automation. So our incremental headcount expansion to take care of the increased volume has been negligible. On the corporate travel side, there continues to be - there continue to be areas where customers still want to speak to someone, especially when it comes to international travel, where the regulations around COVID and COVID-related restrictions still continue to exist. So on that front, we are adding some headcount. But the headcount, which is coming in is coming in typically at the frontline level, and the frontline staff would average somewhere close to about $500 to $600 a month. So it's not an [Indecipherable] headcount, which is being added. Yes.

Scott Buck - H.C. Wainwright & Co. - Analyst

That's really good color. And similarly, it looks like marketing - sales and marketing expense was the highest level in two years. Are you comfortable with this level of marketing sales promotion or do you think there's more required as activity starts to pick up?

Dhruv Shringi - Co-Founder & Chief Executive Officer

I think on the marketing and sales promotion front on this maybe slightly higher than this as we go into the April, May, June quarter, would be there, but then again, it should stabilize in this quarter subsequent to that. April, May, June is leading into the peak summer month. And I think given the kind of revenge travel that we are seeing and the demand uptake, it'll make sense for us to spend a little bit more on marketing, but it won't be significantly more. It should be more than made up by the increased revenue that we would generate from that. So whatever incremental marketing spend that you would see, you would still see it being accretive to the bottom line.

Scott Buck - H.C. Wainwright & Co. - Analyst

Great. That's helpful. And then last one for me, you kind of touched on it, but given that the last two years have been a little bit unordinary, can you remind us what seasonality looks like in a more normalized environment?

Dhruv Shringi - Co-Founder & Chief Executive Officer

Sure. So, the two peak seasons for us are the months of April, May, June, and October, November, December. Those are the two peak periods. And then Jan, Feb, March would be that - in terms of sequencing, April, May, June would be the highest; October, November, December would be the second highest quarter; Jan, Feb, March would be the third highest; and July, August, September would be the leanest.

Scott Buck - H.C. Wainwright & Co. - Analyst

Okay, perfect. I appreciate all the additional color guys. Thank you so much and congrats on the quarter.

Dhruv Shringi - Co-Founder & Chief Executive Officer

Not at all. Thank you. Thanks, Scott.

Operator

We will go next to Anja Soderstrom with Sidoti.

Anja Soderstrom - Sidoti & Co. - Analyst

Hi, thank you for taking my questions. So I'm just curious about the freight business. How is that progressing? And have you seen any surprises there? Is it better or slower than you expected?

Dhruv Shringi - Co-Founder & Chief Executive Officer

So the freight business continues to recover and in fact grow quite strongly. There was a slight disruption for the freight business in the month of January on account of Omicron, and maybe in the last couple of weeks of December when flights got disrupted, but with international travel opening up and international flights coming back on scheduled and moving away from the bubble agreements, we are seeing a lot more capacity come on stream for international air freight. And I think that's a great avenue and area for growth for us. So from the freight perspective, we are quite excited right now seeing the international travel and international air freight open up. So that gives us a real incremental avenue for growing our freight business in the coming months.

Anja Soderstrom - Sidoti & Co. - Analyst

Thank you. And on a pre-COVID level, roughly how much of your revenue were derived from international travel?

Dhruv Shringi - Co-Founder & Chief Executive Officer

So pre-COVID about 30% of our revenue was coming from 30% to 35% of our revenue depending on the quarter was coming from international travel.

Anja Soderstrom - Sidoti & Co. - Analyst

Okay. Thank you. And I think you mentioned before that you didn't expect the Corporate business travel to come back fully to pre-COVID levels. But now you're saying that you think it might come back this year to pre-COVID levels. So how do you - how has that changed?

Dhruv Shringi - Co-Founder & Chief Executive Officer

So what has happened is, through a combination of new customer wins and recovery on our existing customers, we are seeing our corporate travel volumes come back very strongly. As I mentioned, I think there's also some kind of, when we are talking to our customers, we are figuring out what I might call zoom fatigue. A number of our customers now want to be in front of their customers. They want to be in front of their other team members and meet people physically.

So we are seeing a lot of pent-up demand for corporate travel at this point in time. And that pent-up demand is leading to a strong recovery in our corporate travel volumes. So this is what's happening on an existing customer basis. And then in addition to that, we are seeing new customer wins also coming through and as we go into the new financial year, so India follows an April to March financial year - as we go into a new financial year company set up new budgets, spends go up again. So we would expect to see travel come back very strongly in the April, May, June quarter.

Anja Soderstrom - Sidoti & Co. - Analyst

Okay. And to the extent you have one new customers are they from more in-house that go on to outsourcing, or is it, are you winning those from competitors?

Dhruv Shringi - Co-Founder & Chief Executive Officer

We are largely winning them from competitors and we are also winning, the win is happening on the back of technology adoption. So like we've spoken in the past as more and more companies get used to working in a hybrid environment, they've realized they can't do a lot of their business processes manually. And as they move towards automating their business processes, including travel and expense management, we are the market leaders in an automated solution for business travel. We are seeing strong interest towards our products and services.

Anja Soderstrom - Sidoti & Co. - Analyst

Thank you. And then just a last one. You have a good cash position and you're looking to strengthening the balance sheet with this India listing. What are your capital allocation priorities at this point?

Dhruv Shringi - Co-Founder & Chief Executive Officer

Sure. So the capital allocation priorities would be one area would be deploying more capital behind growing the freight and the Corporate Travel business. The other would be a certain amount of incremental spends on consumer marketing as the market recovers, and we see a lot of revenge travel happening in the domestic Indian market. So these would be two key areas. And then the third behind that would be a little bit of spend on the tech side of things, as we expand our product portfolio on the corporate travel side.

Anja Soderstrom - Sidoti & Co. - Analyst

Okay, thank you. That was all for me.

Dhruv Shringi - Co-Founder & Chief Executive Officer

Sure. Thank you.

Operator

We'll go next to Lisa Thompson with Zacks Investment Research.

Lisa Thompson - Zacks Small Cap Research - Analyst

Hi. I was wondering if you could talk a little bit about what you see maybe your cash breakeven level is as far as what revenues given your new corporate structure with all the new automation versus pre-COVID?

Dhruv Shringi - Co-Founder & Chief Executive Officer

Sure. So at an operating level, we think cash breakeven should happen between $18 million to $20 million a quarter of revenue should mean cash flow breakeven for us at an operating level.

Lisa Thompson - Zacks Small Cap Research - Analyst

Okay, great. And you made a comment that you thought you could get to pre-COVID levels by the end of this year. And if I look back to 2019, you're doing $36 million quarters. Do you think that's going to happen this year?

Dhruv Shringi - Co-Founder & Chief Executive Officer

So 2019, our exit quarter. So if I look at the full year 2019, our exit quarter was, I think, about $23 million in terms of revenue. So that's the number that we think we should be able to get to in the very near term, at least get to the $23 million number. And if I look at our full year number, full year, we did about $80 million on current exchange rates. So exchange rate has also moved about 20% in dollar terms from 2019 till now. But in current exchange rate terms, we would have done $80 million for the full year of fiscal '20, which is roughly $20 million a quarter. So we think we are on track in the coming fiscal year to do better than that.

Lisa Thompson - Zacks Small Cap Research - Analyst

Great. Thank you. That's all my questions.

Dhruv Shringi - Co-Founder & Chief Executive Officer

Sure. Thank you.

Operator

[Operator Instructions] We'll go next to Jeff Van Rhee with Craig-Hallum.

Jeff Van Rhee - Craig-Hallum Capital Group LLC - Analyst

Great. Hey guys. Thanks for taking my question. Just wanted to follow up on the last question around margins. I think you had previously given some thoughts of what your EBITDA margin or EBITDA dollars would be around $90 million. Maybe the better question at this point is just what is - take it one step further beyond the breakeven question, if you get to $100 million in revenue, what kind of EBITDA do you think you could throw off?

I guess what I'm trying to understand is you've got more capital potentially coming in the door through the Indian IPO. And are you pivoting back more to a growth mode as opposed to maybe what I would describe as a more of a balanced mode? I think you had given some pretty aggressive EBITDA margins you thought you could hit. Just what do you think of $100 million?

Dhruv Shringi - Co-Founder & Chief Executive Officer

Yeah, I still think, Jeff, that at $100 million, we should be between a 15% to 20% kind of margin levels. I don't see any reason why we should not be able to get to those margins in a more normalized environment because we've seen very strong uptake happening on corporate travel. We are also seeing companies adopting a lot more technology than they've done in the past. So the relative servicing cost has gone down quite meaningfully compared to where it was in the pre-COVID kind of era. So I still believe, and I'm confident, that we should be able to deliver a 15% to 20% kind of operating margin as we get to a $100 million number.

Jeff Van Rhee - Craig-Hallum Capital Group LLC - Analyst

Okay, great. Thanks for taking my questions. Congrats.

Dhruv Shringi - Co-Founder & Chief Executive Officer

Not at all. Yeah, thank you.

Manish Hemrajani - Vice President, Corporate Development and Investor Relations

Hi Jennifer. Any further questions in the line?

Operator

At this time, there are no further questions.

Manish Hemrajani - Vice President, Corporate Development and Investor Relations

All right, great. Thanks, everyone, for joining the call today. And as always, we are available for follow-ups. Dhruv, anything to add?

Dhruv Shringi - Co-Founder & Chief Executive Officer

No. Thank you everyone. Stay safe, thank you.

Operator

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Q3 2022

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