MakeMyTrip Ltd

NASDAQ:MMYT

Earnings Call Transcript 2019-Q3

[Operator]

Good day, ladies and gentlemen, and welcome to the MakeMyTrip Limited Fiscal 2019 Q3 Earnings Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today’s conference, Vice President of Investor Relations, Jonathan Huang. You may begin.

[Jonathan Huang, Vice President of Investor Relations]

Thank you. Happy New Year and welcome to MakeMyTrip Limited’s Fiscal 2019 third quarter earnings call. I would like to remind everyone that certain statements made on today’s call are considered forward-looking statements within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance, and by their nature, are subject to inherent uncertainties and actual results may differ materially.

Any forward-looking information related on this call speaks only as of the state, and the company undertakes no obligation to update information to reflect changed circumstances. Additional information concerning these statements are contained in the risk factors and forward-looking statements section of the company’s annual report on Form 20-F filed with the SEC on June 20, 2018. Copies of these filings are available from the SEC or from the company’s Investor Relations department.

I’m joined today by Deep Kalra, MakeMyTrip’s Founder, Chairman and Group CEO; Rajesh Magow, Co-Founder and CEO India; as well as Mohit Kabra, MakeMyTrip Group’s CFO. And now, I would like to turn the call over to Deep to start today’s discussion of our quarterly results.

[Deep Kalra]

Thanks, Jon, and welcome, everyone, to our third quarter earnings call for fiscal 2019. I’d like to begin by wishing all our listeners a happy and prosperous 2019. During the last reported quarter, we continued to deliver on our twin objectives for the current fiscal year, which is to improve top line growth while reducing bottom line losses. We continue our relentless focus on delivering superior end-to-end experience for our customers. It’s this unwavering focus on customers that has allowed The MakeMyTrip Group to strengthen its market share across all key travel segments quarter-after-quarter.

I would now like to share some long-term macro growth drivers, which the group is well placed to leverage for driving growth opportunities in 2019 and beyond. A recent fiscal report has forecasted that the number of smartphone users in India will reach 829 million by 2022 up from today’s estimated 450 million users. Considering that mobile bookings account for almost two thirds of our transactions, we believe we have significant new customer acquisition opportunities ahead of us.

The Indian economy also continues to benefit with the stabilization of long-term reforms like demonetization, GST implementation, that is the goods and service tax, and focus on driving digital transactions. As a result, GDP growth is expected to be approximately 7.5% in calendar 2019, making India one of the fastest-growing large economies globally. The overall demand for travel is also expected to remain robust as India is on track to become the third largest aviation market by 2022. Even with forecasted high growth rates, industry experts believe that the Indian aviation sector still remains relatively untapped.

India now has over 100 operational airports with scheduled flights, and this is projected to grow to over 200 airports over the next 20 years. While India’s domestic air market continues to deliver double-digit growth for last several quarters, the outbound air travelers growth projections are even more robust in the future. Additionally, accommodation and industry past bookings are largely distributed offline today and remain a long-term growth driver for our business going forward. We believe that The MakeMyTrip Group is well positioned to innovate to make it super convenient for all segments of Indian travelers to book online across our platforms.

I’d now like to discuss our progress and achievements during this past holiday season. In Q3, we deployed various customer acquisition initiatives. We have creative and targeted campaigns, coupled with strong customer value propositions across all our brands to expand our reach. As a result, we saw about 30% year-on-year growth in overall searches as well as unique visitors across our various platforms and brands. Our customer base also grew by about 29% year-on-year to over 37 million transacted customers till date.

In Q3, our customer retention programs evolved to be more meaningful and rewarding for users. I am pleased to share we now have close to 1 million enrollments in our MakeMyTrip Black program and over 57,000 in our subscription-based MakeMyTrip Double Black loyalty program since inception. During the quarter, we launched a new variant of the Double Black program and have seen accelerated rate of enrollments as a result of the program changes. More encouraging is the fact that the quarter-on-quarter transactions per customer across both programs continued to rise, and the overall repeat rate from these cohorts on the average are more than double of those of nonmembers.

For Goibibo users, our go rewards program now has over 1.6 million registered users while contributing and earning to make the platform experience even better. In fact, over 200,000 active daily enrolled users are contributing with user-generated reviews and Q&A sessions, which are relied upon by other shoppers. Furthermore, we are leveraging this program to crowd source accurate information and content and elicit additional highly differentiated, rich data often not provided by the hoteliers. Users are also sharing new travel attractions and activities near their own hometowns to provide other users more relevant data as they shop for hotels.

Additionally, users are uploading their profile pictures to add more credibility on our platform, driving higher click-through rates and greater social connections. Lastly, our enrolled users are able to earn even more credits by leveraging their social networks to inform others of our innovative go rewards program. I’m happy to share that the program is driving very high engagement rates, and we are seeing materially higher transactions per contributing customer over non-contributors.

Now, I would like to move to discuss our continued tech investments, which are aimed at making users’ search results more relevant and improving their positive experience. During Q3, our team made more enhancements to MakeMyTrip’s AI-based chatbot called Myra. Today, Myra is available across all our platforms and is capable of handling over half of all customer use cases for post-sales support. The bot’s coverage has expanded across all our lines of businesses and all major queries like date changes and cancellations. Our latest improvements has led to a tremendous reduction in users writing to us via email, which would have otherwise required a large number of manual replies.

At Goibibo, our chatbot, Gia, has evolved further to handle over 10% of all bookings on Goibibo. Gia has also been upgraded to handle nearly half of all post-sales questions asked. Customers have indicated to us that they prefer using the chatbot for querying upcoming travel information, cancellation of trips booked or downloading their e-tickets. More importantly, the big users of Gia have grown appreciably over the last few months, proving that AI-powered chatbots with timely human assistance is a great way to delight our customers, and we’ll continue to invest in this area to offer a superior experience going forward.

Lastly, I’m pleased to share our foray into providing booking of local activities and experiences for our customers during the past quarter. With this launch, we want to enable users to plan weekend getaways, receive exciting dining offers, get an adrenaline shot of adventure and explore attractions within their home or destination cities. We believe this new business vertical will help us acquire incremental users and enhance usage frequency and stickiness on both the MakeMyTrip and Goibibo apps. Today, over 1,000 activities and experiences are offered across 30 cities to our customers over mobile apps.

With that, I’d like to turn the call over to Rajesh.

[Rajesh Magow, Co-Founder and Chief Executive Officer India]

Thanks, Deep, and happy New Year, everyone. I would like to begin by sharing a summary of business performance highlights in the third quarter of fiscal 2019, which we believe were in line with our twin objectives, as mentioned by Deep.

I’m pleased to report that The MakeMyTrip Group recorded gross bookings of over $1.4 billion, representing year-on-year constant currency growth of nearly 32%. Adjusted revenue grew over 31% year-on-year on constant currency basis and was largely in line with the gross bookings growth.

During the past quarter, with the unstinted support of over 50,000 hotel partners, we also logged our highest-ever quarterly room nights with over 6.8 million stayed room nights in our standalone hotels business. This is a growth of 27% on a year-on-year basis. We are pleased with the continued acceleration in hotel room nights growth over the last few quarters, in line with our call-out during the beginning of the fiscal year.

In our air ticketing business, over 10.1 million flight segments were flown by our customers during the past quarter. The number of air ticketing segments grew by over 19% year-on-year. At the same time, outbound flight segments growth was very robust as we continued to provide seamless booking experience to make it convenient to influence customers to book online on our platforms. Our bus ticketing business also witnessed very strong growth momentum with over 16 million tickets traveled for the fiscal third quarter, representing more than 58% year-on-year increase. Lastly, our packages business continue to make valuable contribution to help record hotels and packages in excess of 53% for the quarter.

Now I would like to share some highlights from our strategically important online standalone hotels business. In Q3, we continue to expand the selection for our customers to beyond 60,000 properties bookable within India, which includes 10,300 budget-focused GoStays accommodations and over 14,500 alternative accommodations like guesthouses, homestays and hostels.

As for our international outbound travelers, we also offer over 500,000 bookable properties, which includes directly contracted hotels in about 20 destinations where Indians like to travel. Equally important, we have also managed to provide bookings across the majority of those domestic-listed properties, highlighting the strength of our customer breadth and reach. From a user experience perspective, while we continue to release many new features across all our mobile platforms, we also introduced a new MakeMyTrip desktop site to deliver an even better experience to cater to high-value premium, domestic and international hotel customers who still continue to book on desktop.

We also launched more features like Last Booked Hotel and displaying similar hotel to make it more personalized for our customers. In addition, we have reworked the booking flow within our flights funnel to drive cross-sell opportunities for hotels and introduce new filters on the app to reduce search times. By leveraging our robust hotel extranet, our customers can also put in special requests prior to check-in or give hoteliers opportunities to respond in real time to any customer feedback.

Lastly, as we’ve mentioned earlier, our hotels product also has the capability to sell experiences within hotels as an one-click add-on, giving us the ability to cross-sell more to users. As for users of our Goibibo platform, we launched Hotels Collection to attract distinct customer segments like business travelers, students and solo women travelers. We’ve also further ramped up third-party quality checks to ensure consistency at GoStays properties and implemented better content, including high-quality images, at each property, resulting in higher conversions.

During the quarter, we’ve implemented vernacular communications with our suppliers to drive higher engagement and strengthen our business partnerships. We also released product features across all platforms to make the selection and booking experience of alternative accommodations better, which resulted in good traction on room nights growth in this segment. A newly launched widget, for instance, allows searches by a group with large number of guests on the app.

From a host perspective, we have improved the extranet app to drive better usability, as well as introduced a calendar sync feature with Google Calendar to allow one-click booking – blocking and unblocking of inventories. Going forward, we plan on further showcasing the value, use cases and amenities offered at these types of properties to drive further awareness to travelers and drive continuous improvements to the extranet for our hosts to drive better adoption and participation.

Now I would like to share a few more details on our domestic air ticketing business. In fiscal Q3, we continued to see the moderation in growth of the domestic air market relative to several quarters of high growth rates in the recent past. I’m pleased to share that despite the headwinds in the domestic air market, we’ve been able to deliver higher-than-market growth rate, resulting in market share gains.

In addition, we are focused on driving up growth in international flights as online penetration continues to be low in this segment. During the quarter, our international flight customers were provided with free or low-cost multiple payment options for their long-haul, high-value ticket purchases, aiding in conversions. We have also introduced the ability for customers to book multiple cities and flight legs all in one session. Customers also have the ability to choose from various airline combinations available during the same search session, giving them the best flight combination possible for their international flights. Additionally, we’ve also enhanced our back end to make the experience and speed of ticket cancellation and refunds even better and faster for our users.

Let me move on to share our Q3 achievements in the redBus business now. I’m pleased to share that in Q3, our redBus business hit a new peak of tickets booked and traveled in any single day in the brand history. During the quarter, our team expanded our customer reach into the South Indian bus market by launching a new mass media campaign which has resulted in new customer acquisitions from the region. We have also launched new value-added services like travel insurance to help customers cover bus cancellations or bus changes.

Before I turn the call over to Mohit, I would like to share that the payments landscape in India is evolving rapidly and for the better. With the directive from our government, we believe digitization of payments will bring online more e-commerce customers. We have also been working on upgrading our digital payments platform to build new capabilities, leveraging universal payments interface, or UPI, to serve our customers with new payment options. As I briefly mentioned earlier, we are also piloting various equal monthly installment plans and extending credit to travelers via third-party financial institutions to help facilitate large conversion value purchases. We are highly encouraged by the early results and believe this feature should help more customers be able to realize their travel and holiday aspirations going forward.

Now let me hand it over to Mohit, who will share more details of the quarter.

[Mohit Kabra, Group Chief Financial Officer]

Thanks, Rajesh. Hello, everyone, and wish you a very happy 2019. As mentioned by Deep and Rajesh, we are glad to report the explanation in adjusted revenue growth in the 30s, aided by acceleration in standalone hotel room night growth to the high 20s in the current quarter. This comes around with reduction in adjusted operating losses to $22.2 million in the third quarter of this fiscal year. This is in line with our plans and strategic direction called out at the beginning of the year.

I am pleased to report that total adjusted revenue growth in constant currency terms, which stood at 25% for Q1 and 25.3% for Q2, has accelerated to 31.4% in Q3, which is the first quarter of the second half of this fiscal year. This was the result of an acceleration in adjusted revenue growth across all our lines of businesses.

Adjusted revenue growth in constant currency for the air ticketing business stood at 32.2% while it was 43.4% in the bus ticketing business. The hotels and packages business also saw adjusted revenue growth in constant currency accelerating to 26% compared to 19.8% in Q1 and 17.7% in Q2. The total adjusted revenue growth of 31.4% also came along with robust 37.2% growth in unit volumes and 31.9% constant currency growth in gross bookings across our businesses.

Now let me share highlights of our key business segments. In the H&P segment, adjusted revenue in constant currency growth accelerated to 26% year-over-year, aided by acceleration in room nights growth, which stood at 25.5%. The room nights growth was driven by improvement in standalone room nights growth, which stood at 27.1% year-over-year. As a result of the increasing mix of standalone hotels, which have lower average selling price compared to packages, the growth in hotels and packages gross bookings at 21.1% lagged the 25.5% growth in H&P room nights while the margins were better at 23.7% compared to 22.8% in the same quarter last year.

Let me now share some details of the air ticketing business, where our growth continues to outpace the market growth. In Q3, our air ticketing segment’s comp increased to over 10.1 million compared to 8.5 million in Q3 of the previous fiscal year, representing a growth of over 19%. The quarter’s adjusted revenue of over $60.7 million was higher than the $50.9 million reported in prior year’s Q3 and reflected 32.2% growth on a year-on-year basis in constant currency terms.

During this past quarter, our bus ticketing business also continued to grow robustly. Ticket unit growth stood at 58.3% with over 16 million bus tickets traveled during the quarter. The business achieved over $190 million in gross bookings and over $15 million in adjusted revenue during the quarter. In Q3, the adjusted revenue from other businesses stood at about $8.6 million, majority of which was driven by facilitation fee for travel insurance and ancillary revenue from our alliance and affiliate partnerships.

Moving on to operating expenses. Marketing and promotional expenses at $146.7 million stood at about 10.4% of our gross bookings compared to 10.8% in the previous quarter and 11.2% in the same quarter last year. As a result of improved efficiencies in operating expenses and improvement in marketing and promotional expenses in particular, our adjusted operating losses were lower at about $22 million or 1.6% of gross bookings compared to 2% of gross bookings in the previous quarter and 2.86% of gross bookings in the same quarter last year.

With this, I’d like to thank you all for joining the call, and open up the call for Q&A. Operator, please?

[Operator]

Thank you. [Operator Instructions] And our first question comes from Shyam Patil with SIG. You may proceed.

[Brendan McGoldrick, SIG]

Hi, this is Brendan on for Shyam. We just had two quick ones. Just on the competitive landscape, I know marketing and commercial expense coming down as a percentage of gross bookings. But can you just talk about sort of what you’re seeing in terms of the competitive landscape? Any changes? And then just on the outbound flights business, can you just talk a little bit more about your strategy there and sort of how you see that business shaping up over the next couple of years?

[Deep Kalra]

Yes. Hi, Brendan. I’ll take the first one. This is Deep. So the first part, I think by line of business is the right way to look at competition. So on the air space, both domestic air and international air, we continue to see competition from erstwhile competitors, Yatra and Cleartrip. In addition to that, Paytm, which is our super app or multiservice app, is also now quite an active player on the domestic air space, not so much on the international. We also see some new players. Expedia, of course, as an international player. And we see some new players also were emerged in that area.

When it comes to the hotel space, there is, I would say, lesser competition from erstwhile players. Definitely not Cleartrip. We see Yatra in the market for domestic bookings. We also see increasing competition from Booking.com and Expedia both in the local market and, of course, in the inbound market.

As you would know and you would have seen in the last few quarters, we’ve been talking about so we are now selling OYO. OYO Rooms is now more of a hotel chain. And by virtue of them being a budget hotel chain, we’ve been partnering them and selling them, but they also have a strong direct business. So that is largely the competitive landscape. Now of late, we have seen Paytm just enter on the hotel space as well, the business. But if you – if I take you back to the market shares, you would see that the market share, both for air and for hotel, has been growing. So we believe we continue to grow significantly faster than the market and indeed faster than even the online market.

So in air, the overall air market grew at about 12.7%. This last quarter, we grew at about 18.5%. If you look at the hotel segment, data is a little harder to get, but we believe that the total penetration now on the hotel market is in the low teens, high double digits. Kind of 12% to 13% of all hotel bookings are made online, and we account for about half of that.

[Rajesh Magow, Co-Founder and Chief Executive Officer India]

And maybe the second question, this is Rajesh here, on your outbound flights question, if I may just share my thoughts on that. So the first important point there is that the online penetration as compared to the domestic flight segment is quite low. So therefore, we believe that the shift from offline to online will continue to happen and will gain momentum, more so when more and more people are coming online, more and more digital payment options are emerging, including the credit option, as I kind of mentioned in my script as well, and the fact that the disposable income is growing.

A lot of the people are looking to actually fly out for their holiday. And by virtue of all of these factors, actually all the projections, the industry expert projections are also projecting the current outbound traveler number of, say, around 25 million to grow to about 50 million in the next few years.

So the macros look good, and we believe that we, on our growth platforms, are very well-poised to tap into this opportunity and grow our share. We already have a higher growth rate albeit at a lower base on outbound flight segment, but we believe that we will continue to keep kind of making all the interesting product-level changes, the supply side innovations, and be able to just keep the momentum of the growth going on in our platforms as well.

[Brendan McGoldrick, SIG]

Great. Thank you, both.

[Operator]

And our next question comes from Sachin Salgaonkar with Bank of America. You may proceed.

[Sachin Salgaonkar, Bank of America]

Hi, thank you for the opportunity. I have a few questions. Number one, just wanted to understand in terms of any breakeven target which you guys have talked in the past. I think you guys talked about eight quarters after the ibibo acquisition where you guys should be close to a breakeven. Any updates on that? Are we still comfortable in terms of achieving that? That’s the first question. Second question is again a related one. Last few quarters, the focus was more on a rationalization wherein you guys were curtailing discounts. Is that more or less period behind us? And going forward, could we see the growth accelerating? And thirdly, as you know, obviously, there are a lot of chatter in the market about Jet Airways and how it is struggling. It would be great to understand how you guys look at that from a potential impact to, a, well, the industry and, b, to you guys.

[Mohit Kabra, Group Chief Financial Officer]

Hey, Sachin. Mohit here. And I’ll take the first two and Deep and Rajesh will help. And so when it comes to – and pretty much, the first two are kind linked. If you look at it, the whole rational post the merger was to kind of start rationalizing promotions and expense, particularly in the hotels category and more so in the budget segment, which is what pretty much kind of played out pretty well over the last, I would say, eight quarters, seven to eight quarters.

And we believe we’ll continue on that path till the time we’d like to break even and whether it takes another three quarters or four. But probably, directionally, this is the area we’re kind of penetrating. And if you’d look at it over the last few quarters, even in the beginning of the fiscal year, we had mentioned that we should see growth accelerating in the second half of the year, and that’s what I was calling out that we have seen an acceleration come through in the first quarter of the second half with revenue growth overall kind of, again, getting back into the 30s. If you look at the standalone hotel room night growth, that has also accelerated from the 17%, 18% and 21%, 22% in the last two quarters to about 27%-odd in the third quarter.

And we therefore believe that a large part of the acceleration should kind of continue with the rationalization largely behind us. But are we completely done with that? Probably not. And as we kind of keep going on that path for the next few quarters, we should probably be getting into EBITDA breakeven. If you look at it in terms of cash operating losses currently, even this quarter it’s kind of less than $20 million. So we have covered a lot of ground over the last, I would say, six to seven quarters.

[Rajesh Magow, Co-Founder and Chief Executive Officer India]

Okay, coming to, Sachin, for the Jet Airways, and if you have a follow-up, we’ll be happy to take that, so the first point on Jet Airways is that news – I mean, a lot of the news is already out with you. Always, you kind of see every day pretty much, I mean, the development that happens on the Jet Airways. So that’s, I guess, known to everyone. So the Jet Airways is trying to raise funds, and they’re trying to look at many options. And the last update was that the Etihad might be able to come to the rescue, et cetera. But just from our point of view, we’ve been able to continue to just monitor the situation very, very closely, work also very, very closely, and been able to limit our exposure per se in terms of any outstanding from them and so on. So that part is – we are kind of comfortably placed.

In terms of the thought-back they would be able to come out of the situation. Obviously, I think it is better for the whole ecosystem that they come out of the situation. And it seems like, I mean, at least from the last update that we had it from them and every now and then that we keep getting the update from them, that they seem to believe that they are confident to be able to find a solution in the next few weeks. So we are obviously working the space very carefully and – but on the ground kind of continue to keep working because on the ground, there are no operations kind of disrupted and the flights are flying.

They might be changing the schedules here and there, but a large part of their operations are still running and running well.

[Sachin Salgaonkar, Bank of America]

Rajesh, this is helpful. So couple of small follow-ups generally from me. One is Mohit here talked about standalone hotels growth accelerating at 27%. If you look at the revenue growth more or less, we’re talking about a 14% growth. Do we see that accelerating going forward also? And second question is, clearly the sense I got is maybe up to four to five quarters, around that, you guys will be close to EBITDA breakeven. But is it fair to assume that after that EBITDA breakeven the EBITDA margin start accelerating further up? Or more or less we could be stagnant at the EBITDA level for some time?

[Mohit Kabra, Group Chief Financial Officer]

Sachin, if you – first thing on the hotels and packages revenue growth, while probably the dollar revenue growth is about 14% but it’s better to kind of look at it in constant currency because it’s all INR and, therefore currency fluctuation. And if you look at constant currency growth, that’s close to about 26%.

And we’ve been calling out that we have largely been kind of – the mix as I’ve called out, has been accelerating in favor of hotels. And therefore, it is likely that the hotels growth is going to be leading that number as well. So therefore, I think the growth overall is kind of coming in line, whether in terms of room night growth or revenue growth, and that isn’t an issue per se and this is more a presentation issue in terms of dollars versus the local currency.

In terms of the acceleration in EBITDA as and when we get to the breakeven level, as I said, this is probably something we are talking about at least about a year down the line, and I’m sure we’ll kind of continue giving more and more color as we keep getting there. So hopefully, in the next few quarters, we should be able to share more color on how do we kind of take it over from there.

[Sachin Salgaonkar, Bank of America]

Okay, alright. Thanks.

[Operator]

And our next question comes from Kevin Campbell Kopelman with Cowen and Company. You may proceed.

[Kevin Campbell Kopelman, Cowen and Company]

Hi, thanks a lot. I am just going to ask you an update on revenue take rates or commission rates. It looks like they were stable – relatively stable on air and up a little bit in the hotel and down in bus, could you talk about the key drivers in each category and how you see those playing out over the next couple of quarters? Thanks.

[Mohit Kabra, Group Chief Financial Officer]

Yes, sure. If you look air take rates have been reasonably stable compared to the last couple of quarters and we don’t really kind of see a significant change directionally over the next few quarters and few years. We do believe that air take rates will come down gradually, and this is going to happen on multiple counts. But we also believe that in terms of a corresponding change, we will have payment gateway costs also kind of coming down. And therefore, at a net level probably it should not hurt us in a big way even in the next few years.

When it comes to hotels and packages, while there is a year-on-year kind of a slight increase, but probably more driven by the changing mix in favor of hotels in the overall segment rather than anything else. So it’s not really they’re from a supply side point of view. We have increased margins. We have only been actually taking the overall margins in the hotel segment down by about 0.5 percentage point to 1 percentage point over the last quarter or pretty much on a quarter-on-quarter basis.

We are trying to kind of see that we gradually over the next few years get back probably more in the range of about 18% to 20% rather than the 20%-plus range. But I guess this will happen more gradually in over the next few years. So otherwise, the overall take rates have been reasonably stable. And the relief that we kind of are talking about of are taking down margins over the next few years, again it’s predominantly kind of linked to our overall rationalization of the marketing and promotional expense because, as you called out, it is largely the suppliers who kind of participate with incremental performance-linked incentives so as to drive higher occupancy rates for them.

So this is more a volume driver for them and we believe that over a period of time, as our promotional expense keep going down, we should be able to kind of pass on that benefit to the suppliers.

On the bus side, pretty much the retail margins kind of continue to remain stable. It’s just a little bit of incremental mix coming in from the B2B side, considering the investments that we have done in the recent past in that area that the overall weighted margins kind of have come down slightly over the last quarter. But otherwise, the margins remained stable even in the bus segment.

[Kevin Campbell Kopelman, Cowen and Company]

Great, thanks very much.

[Operator]

Thank you. Ladies and gentlemen, this concludes our Q&A portion of today’s call. I would to turn the call back over to your host, Jonathan Huang, you may be begin.

[Jonathan Huang, Vice President of Investor Relations]

Thank you. I want to thank everybody for joining our call this morning, and we certainly look forward to speaking with you throughout the rest of this quarter. And once again, thank you for joining our call.

[Operator]

Ladies and gentlemen, thank you for attending today’s conference, this does conclude the program, and you may all disconnect. Everyone have a great day.