HomeToGo SE

XETRA:HTG

Earnings Call Transcript 2024-Q1

[Operator]

Ladies and gentlemen, welcome to the Q1 2024 earnings conference call. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions]At this time, it's my pleasure to hand over to Sebastian Grabert. Please go ahead, sir.

[Sebastian Grabert, executive]

Good morning, dear analysts and investors, and welcome to HomeToGo's First Quarter 2024 Earnings Call. My name is Sebastian Grabert, Director of Investor Relations and Corporate Finance. With me today is our Co-Founder and CEO, Patrick Andrae; and our CFO, Steffen Schneider, who will present our financial highlights of the first quarter 2024.As you might have noticed, we published the Q1 press release last night instead of this morning. Although this was not intended to happen, we understand that some of you appreciated the post-market dissemination. We will take that feedback into account for future releases. As always, this call is being recorded and will be made available later today on our Investor Relations website.With this, I would like to hand it over to you, Patrick, for an update on the business. Please go ahead. The floor is yours.

[Patrick Andrae, executive]

Thank you Sebastian. Dear analysts and investors, thank you so much for joining us and for your continued support. I'm especially excited to welcome you today as we share the results of our first quarter of the year. So far, 2024 has already been a year of significant milestones for HomeToGo. This year, we are celebrating 10 years of delivering on our vision to make incredible homes easily accessible to everyone.So 10 years of expert matchmaking between supply and demand, 10 years of fast growing repeat demand and growing to more than 15 million offers of thousands of trusted partners. And 10 years of delivering an industry-leading business model that has evolved to an AI-powered B2C marketplace that today, on top, includes a strong B2B software and service solution business HomeToGo_PRO.During the past 10 years, we have really built a leading European technology company to make the global vacation rental industry better. The growth of the vacation rental industry since pre-pandemic has been staggering. No longer do travelers opt hotels as their first choice of recommendation. They want places they feel like home, with the same amenities they are used to, space to travel in groups, and more privacy to enjoy their vacations in peace. They choose vacation rentals.In the short-term rental market, our business model is driving growth that exceeds our peers across strong advances in our product innovations, building repeat demand supply growth, and developing leading professional solutions for the industry, our business has grown fast. In fact, HomeToGo today is the fastest-growing public vacation rental player.So looking at our growth since the pre-pandemic year of 2019, already back then a peak year for travel globally, we have boosted IFRS revenues more than 200%. Looking at an equally weighted average of key peers that's significantly above the average growth rate of 69% for the past 5 years. And in quarter 1 of our 10th year, so this year, we are proud to have continued this strong and industry-leading growth. In Q1, our IFRS revenues grew a staggering 66% year-over-year to EUR 36.4 million. Our peer set at 14 year-over-year growth on average. On an organic level, that's roughly 2x the organic growth year-over-year of an average of our peers.Later our CFO, Steffen, will give a more detailed view on our strong financial results for quarter 1, including, for sure, a deep dive on the new B2C marketplace and B2B HomeToGo_PRO segment reporting. But let me now first give you an update on the core piece of our business that drives the strong demand, our product.This past year has been one of rapid innovation globally. The recent advancement of generative AI have already propelled personalization in terms of travel inspiration, search, and booking and the potential for future innovation is immense. We have already been working with AI since the early days of the company, evolving our platform significantly to adopt to new and changing travel behavior. We haven't just embraced AI because it's trendy. We have always been committed to building tools, including machine learning algorithms that will drastically improve how travelers can find and book their perfect vacation rental.So looking ahead, we are laser-focused on a product vision for the HomeToGo marketplace to make it fully AI-powered. With AI, we aim to further inspire and attract [indiscernible], which translates into more repeat demand. And in addition, we plan to innovate new solutions for our newly introduced B2B software and service segment, HomeToGo_PRO.But let's take a look at the progress on our vision so far. Our extensive history with AI already gives us a competitive edge in our market to adapt to travelers' needs with unprecedented agility and insight. We believe we are leading the vacation rental market when it comes to AI. We are developing and iterating on its plan, getting it to market, and not waiting for fancy, expensive product launches shows, not only absent of AI innovation from some players, to share our tangible progress with you all.Since the early days of the company, our built in-house renting and machine learning algorithms help our users find the best accommodations for the individual needs with unmatched efficiency. Plus, we've been leveraging machine learning to increase image attractiveness and quality for years and using in-house automated bidding tools to capture demand efficiently.On our product vision towards fully AI-powered marketplace, we have already developed a central AI application that we internally call AI [ Autobarn ] as knot to our German roots. This gateway unifies all product use cases for AI while strategically remaining LLM agnostic. So we look for the best LLM and solutions for our specific needs and at an uncompromised approach to data serenity and protection when it comes to AI.In 2023, we were proud to be the first vacation rental focused marketplace to test and launch in an AI product for travelers with our AI Mode. Now available both on the HomeToGo app and web. As a revolutionary mode for searching vacation rentals, AI Mode has benefited travelers who are looking for a more curated experience. AI Mode brings a personal touch to help them find the uniquely ideal vacation rental easier and faster than anywhere else.On top, at the end of last year, we launched additional AI products, now in beta, to solve key pain points for travelers. For instance, HomeToGo's smart AI reviews tap into the power of generative AI to summarize reviews from trusted guests and smart AI offer summary highlights the feature that matter most to travelers, ultimately enabling traveler to make fast informed booking decisions and that in a personalized way. In the AI landscape, there are winners with innovators and enhancers and losers who will vanish due to AI. We are very proud to be an AI innovator and enhancer at the same time. So we look forward to next week when we will release an additional more detailed product update with what's next in our extensive history with AI.On top, just in time for the upcoming business summer travel season, we have introduced 2 new and 1 updated add-on feature. We have efficiently launched a partnership with Komoot, the world's leading auto app exclusively on the HomeToGo app. This partnership offers adventurous travelers with world class outdoor route planning and navigation tools for the destination for free, all within the vacation rental post-booking journey within our app. With our unparalleled selection in rural areas, this empowers our guests even more to discover stunning hiking and parking routes around their rentals.In addition, travelers can now compensate for carbon emissions associated with their vacation rental space via tailor-made product solutions from our partners at SQUAKE, an end-to-end climate tech solution for sustainable travel. Originally launched in selected markets, this is now in beta, available across all HomeToGo markets.And lastly, my personal favorite, German travelers can now protect their vacation rental getaways with a revolutionary weather guarantee. So ever booked a vacation home to enjoy sun at the Baltic Sea, only to be disappointed by wet, stormy, typical, unfortunately, German weather. With WeatherPromise, we are the first vacation rental marketplace to now offer travelers a full refund for the vacation rental if it rains. Yes, it's true, really. Stay for free with HomeToGo if it rains. And all of these key product additions to our marketplace makes it even easier for travelers to return to HomeToGo for a delightful end-to-end trip planning this summer and at more value to their stay when booking with HomeToGo.Before I hand over to Steffen, I'm happy to give you the first view of our new segment reporting, which aims to provide the market with higher transparency in our business operations and financial updates. The new segment reporting has a view on both the HomeToGo marketplace, our B2C platform as well as HomeToGo_PRO. We introduced HomeToGo_PRO at our last Capital Market's Day in December. As a reminder, it's our new B2B brand and business segment that includes all our B2B Software and Service Solutions, a key growth focus for the company. Our HomeToGo marketplace is at the core. It's our B2C business that encompasses more than 15 million offers globally. And as of quarter 1 2024, had an IFRS revenue share of around 70%. If we take a GBV view of the full year 2023, that's EUR 1.43 billion in GBV.Now looking at HomeToGo_PRO, we have our Software and Service Solutions including subscription for the whole travel market. This has a special focus on Software-as-a-Service for the supply side application rentals. HomeToGo_PRO's key brand, Smoobu, has achieved and maintained preferred and premier partner status from both Airbnb and Booking. And Zika is also a premier connectivity partner of Booking. HomeToGo_PRO is a key growth focus for us and has shown strong momentum already. As of the end of quarter 1 2024, we have nearly 60,000 paid accounts using PRO services, that's more than 200,000 in inventory. It already makes up more than 30% of our IFRS revenue share, equating to an even more impressive over EUR 2 billion for the full year '23 in what we call enabled GBV. So meaning travelers that were enabled through the HomeToGo_PRO Solution based on data provided by our partners that work with us.Before I hand over to Steffen, more last recast of what is making up our HomeToGo_PRO segment. HomeToGo_PRO is our powerful B2B business segment with Software and Service Solutions, including subscription for the whole travel market, where we are aiming to provide the best solution to everyone that wants to create a successful vacation rental business. With key and high-performing brands like Smoobu under HomeToGo_PRO, we also have a special focus on SaaS from the supply side for vacation rentals. With these services, HomeToGo_PRO solves the main pain points for vacation rental suppliers and provides new technology solutions to grow their business.And finally, with HomeToGo Doppelganger as part of HomeToGo_PRO, we offer our suite of fast, scalable, and innovative software and redistribution solutions such as white label and API products. This allows alternative travel and tourism websites to seamlessly connect with HomeToGo and is in use by industry-leading players such as TUI, HolidayCheck, HolidayPirates and more. Today, already more than 20 key brands use HomeToGo Doppelganger. So for example, if you go to tui.com and want to search for vacation rentals, you will find a HomeToGo product there. Or if you visit most local TUI offline travel agencies and ask for vacation rentals, HomeToGo technology is used by the travel agent to find and book the right vacation home for you.To conclude, we are really looking forward to further growing HomeToGo_PRO to provide solutions that can propel the entire travel industry.And with that, I would like to hand over to Steffen, our CFO, for a closer look at our Q1 financials and the new segment reporting. Thank you.

[Steffen Schneider, executive]

Thank you, Patrick. Good morning, and thank you all for joining us today. It is my pleasure to summarize our key financial highlights for the first quarter 2024. First, we have seen a solid start to the year with both strong growth in booking revenues as well as IFRS revenues. From a purely organic perspective, this growth has been supported by an early Easter holiday season as well as the successful rollout of new services.Second, the closing of the acquisitions in January this year has led to a first-time consolidation effect resulting in extraordinary growth on top line and improved margin levels. Our new segment reporting, which we introduced today, allows for more transparency and will bring helpful clarity to our underlying financial KPIs.Third, we see continued margin improvement driven by further progress on our marketing efficiency alongside the build-out on the onsite take rate. Our HomeToGo_PRO segment is already adjusted EBITDA positive. This gives us comfort in reaching our concerned targets for 2024, both on the top and the bottom line.And fourth, after the closed acquisitions and related payouts of the purchase prices during Q1 as well as typical seasonal related high marketing expenses, we still possess a significant cash amount in our book by the end of Q1 of more than EUR 90 million gross cash. This comfortable financial health will enable us to reach our ambitious targets, especially combined with our booking revenues backlog of almost EUR 77 million.Moving over to the new segmentation of our HomeToGo marketplace, B2C business and HomeToGo_PRO B2B business. I would like to take the opportunity to explain to you again the reasoning behind it. We first and foremost decided to take this step in order to increase the transparency in our reporting, but we also have strong advantages for our internal theory. By introducing the segmentation, we improved the alignment between how we steer operations to reach our KPIs, how we allocate resources most efficiently, using a customer-focused view, and this results in a better measurement of the underlying performance, which we can then report to you in a more transparent fashion.We are convinced that it will ultimately help us to increase shareholder value and with that to reach our overarching objective. In effect, the marketplace reporting segment comprises and translates mostly in the formerly reported revenue activities of CPA onsite, CPA offsite, and CPC. Booking onsite reflects our onsite product that is one of the core strategic pillars of the marketplace. This will remain an individually reported revenue stream together with the related performance indicator onsite take rate. It is largely comparable to former CPA onsite.The onsite share as part of the marketplace represents the share of travelers that completed their booking journey entirely on the marketplace itself. CPA offsite and CPC will be aggregated as advertising going forward. With respect to HomeToGo_PRO, it's more than subscription and services and the volume-based service offering of the group. While subscription is mainly driven by our SaaS company, Smoobu, and is now presented as a separate revenue activity, volume-based aggregates and reflects the whole volume-based service offering of HomeToGo_PRO to all host property managers and other third-parties, which in the past was partially reported as CPA onsite and comprises, for example, the atraveo business. This is defined as a usage fee, mainly bookings based.The partial reclassification of volume-based services under HomeToGo_PRO illustrates best the economic and strategic steering of those revenue sources. Furthermore, it highlights the business of the HomeToGo_PRO segment that is being served on the HomeToGo marketplace. These transactions are being reported as intersegment in the consolidated financial statements.This slide serves as an additional illustration of the changes we will apply as a result of the new segment reporting from a contract type view to a customer-focused view. It is based on Q1 '24 IFRS revenues and excludes intersegment revenues for simplicity reasons. We will provide that detail later. Besides the split of booking and IFRS revenues, we will also provide adjusted EBITDA for these 2 segments on a regular basis. To facilitate an easy transition for you, dear analysts and investors, we have also included an [indiscernible] view, in that we provide here with the old reporting style. Please note that we have now intercompany consolidation between the segments. In Q1 '24, it was EUR 0.8 million IFRS revenues to reflect volume-based HomeToGo_PRO services, which were transacted on the marketplace segment.We will dive deeper into Q1 24 results following the new segmentation logic in the following slides. Looking at the key financials of the first quarter for the HomeToGo Group. In a nutshell, we have seen strong growth on our top line, which came along with a substantial improvement of the adjusted EBITDA margin. In more detail, booking revenues reached a new all-time high value of EUR 83.4 million, growing 28% year-on-year. This development was primarily driven by our booking onsite business, which grew by 42% year-on-year as well as by a record high onsite take rate of 12.8% and increased by over 170 basis points compared to the same period 1 year ago. Our booking revenue backlog at the end of Q1 also grew solidly by 10% year-on-year to a new record figure of almost EUR 77 million.And we reached a record high for any first quarter of EUR 36.4 million, growing by 66% year-on-year. This extraordinary high growth was driven by both segments, HomeToGo Marketplace and HomeToGo_PRO and partially relates to the first-time consolidation of our latest acquisitions in January 2024 as well as an early Easter break. The adjusted EBITDA amounted to minus EUR 21.2 million in the first quarter 2024, which reflects an improvement of 15% year-on-year and in absolute terms. The Q1 group adjusted EBITDA margin of minus 58.3% is fully in line with the underlying seasonality of the business and represents an improvement of 55 percentage points on a yearly comparison, largely due to a substantially higher marketing efficiency.Free cash flow developed in line with expectations and totaled minus EUR 22.4 million in the first 3 months of the year. This decrease of 11.3% compared to the previous year period was mainly caused due to a large VAT payment resulting from an acquired company, which had no P&L effect as the respective provision was booked. In addition, it reflects the higher seasonal working capital needs.Let's take a closer look at the top line and adjusted EBITDA for our 2 segments. On the Marketplace segment, the booking onsite business more than tripled its IFRS revenues growing by 241% year-over-year. Both IFRS revenues and booking revenues were besides strong organic growth, especially on IFRS revenues driven by early Easter and also supported by the first-time consolidation of the recent acquisitions of Kurz Mal Weg and Kurzurlaub that were closed in the beginning of January 2024. As a result, the booking onsite business within the Marketplace segment has recorded an outstanding 39% year-on-year growth in booking revenues alongside a substantial increase in the number of bookings by 53% year-over-year.Advertising business line also contributed to the overall very satisfying growth trajectory, growing by 28% year-over-year in IFRS revenues. In terms of profitability, the Marketplace segment also increased in absolute as well as relative terms, which was driven by a mix of the first-time consolidation of the accretive acquisitions as well as further improvement in marketing efficiency. Our HomeToGo_PRO segment experienced a continued strong growth momentum, increasing its IFRS revenues by 35% year-over-year to EUR 12 million, while corresponding booking revenues increased by 30% to EUR 23 million. Both our subscription as well as volume-based business activities contributed strongly to this growth with 25% and 31%, respectively.The segment now accounts for 32% of HomeToGo's group total IFRS revenues in Q1 '24. In terms of profitability, the HomeToGo_PRO segment delivered yet again a strong contribution to the overall improvement of adjusted EBITDA, also turning positive and increasing by around EUR 2 million on a year-over-year comparison to Q1 '24 adjusted EBITDA of positive EUR 1.1 million.Turning our view back on the group level and taking a look at how the booking revenue trend has evolved. You know the slide. As already mentioned during our fiscal year '23 call at the end of March, we have witnessed a competitive start into the first weeks of the year, which was followed by a return to unprecedented heights, significantly surpassing the figures of previous years, as you can see on the left-hand side. So despite the headwinds in the market, we have performed well.Today, I'm pleased to report that this trend has continued throughout the month of April and early May. Our booking revenues backlog was built out further to an all-time high of around EUR 77 million. This outstanding result is even more remarkable as last year's backlog was still including the Easter business.For some context on our regional booking revenues distribution as well as basket size development, driven by the latest acquisitions, both businesses are mostly concentrated in the DACH region. Our share of booking revenues from DACH has consequently increased from 55% during the first quarter of last year to 62% during the first quarter of 2024. Despite the acquisition-related shift, the North American business grew in absolute terms and the share held up well as a result of our continued strength in the North American market, driven by attractive commercials.Let us have a look at the development of the basket size, highlighted at the bottom of the slide. Overall basket size was reduced by 29% year-over-year, which was mainly driven by the mix effect due to the first-time consolidation of Kurz Mal Weg and Kurzurlaub that are focused on thematic short trips. The addition of shorter business with shorter length of stay reduces the overall basket size, especially in the DACH region, while the ADR stays constant. The basket size, excluding the effect from those acquisitions, stable on a year-over-year comparison as is the case in North America.Commenting on the evolution of the onsite take rate on the next slide. The onsite take rate increased year-over-year from 11.2% in the first quarter of 2023 to 12.8% in the first quarter of 2024. The expansion of 1.7 percentage points yet again marks an all-time high. As in previous quarters, the increase in the onsite take rate was fueled by negotiating higher take rates of new partners as well as increasing take rates of existing partners, underlining the competition between partners for traffic and bookings.Looking at the development in our cost ratios that drove group level profitability in relation to IFRS revenues. We observed that gross profit margin improved by almost 2 percentage points in Q1 '24 year-over-year, now standing at 97%. The main reason for the improvement was due to a decrease in amortization expenses as a result of the end of the amortization effect of e-domizil's booking revenue backlog. The amortization schedule lasted for a period of 1 year following the acquisition date in April 2022 and ended in March 2023.As already mentioned, we have made further progress on our leading contributor for the expansion of our profitability, our marketing efficiency. The marketing and sales cost ratio of 114%, improved by 41 percentage points compared to the prior year period, given an improvement in our marketing efficiency and positive contributions from recently acquired subsidiaries. Our booking revenues from repeat customers grew by 31% in the first quarter of 2024 compared to the previous year period and more than tenfold over the last 5 years.In terms of the product and development cost margin, despite a small acquisition-related increase in absolute terms, we have improved the margin by almost 9 percentage points driven by economies of scale. We also managed to improve our efficiency in terms of G&A expenses, improving the ratio by 4.1 percentage points in Q1 '24 compared to the same period in '23. The improvement is driven by lower expenses for third-party services as well as economies of scale. As a result, overall profitability in terms of adjusted EBITDA margin improved substantially by 55 percentage points on a quarterly level compared to the previous year period.As always, we adjust the cost for expenses for equity settled share-based compensation, depreciation, amortization and other one-off items in order to carve out the operational performance of our business and arrive at the adjusted EBITDA. As already indicated at our last earnings call, the closing of the acquisitions were in January this year with the respective cash payout. In addition, we have our seasonal cash outflow as we invest in Q1 into new bookings as reflected in the strong backlog.Looking at our cash position on Slide 22, we continue to have a comfortable balance sheet with gross cash of EUR 91 million. This includes the investment of EUR 26 million in the known money market funds. Deducting interest-bearing debt of EUR 18 billion and restricted cash of EUR 0.3 million, brings our net cash position at the end of March to EUR 73 million. Overall, our cash position decreased by EUR 49 million during the first quarter of 2024.The negative operating cash flow is the result of the seasonality in our business model, building up a backlog of close to EUR 77 million, while the main expenses for performance marketing for continued customer acquisition and retention investments are typically incurred in the first quarter. The main cash inflows from the IFRS revenues generated with those expenses typically fall in the third quarter and the fourth quarter following the summer travel high season month of July through September.Furthermore, the operating cash flow includes net payments received for traveler advanced payments in the amount of EUR 6 million stemming from collection services for the respective host. As part of the recent acquisitions, tax accruals for VAT were acquired by the group, resulting in net operating cash outflow of more than EUR 3 million. Cash flow from investing activities amounted to minus EUR 26 million and is largely explained by the minus EUR 24.5 million cash outflow for the payment of the purchase price for the recent acquisitions of subsidiaries. The cash flow from financing activities amounted to minus EUR 1.7 million and includes repayment of borrowings in the amount of EUR 1 million.Moving on to our share buyback program, which is also responsible for EUR 0.5 million of the financing cash flow, which we started in September 2023. The increase -- to increase the efficiency of the ongoing program, we have successfully completed a EUR 2.5 million tender offer in April as an integral part of the overall up to EUR 10 million buyback program. To date, we were able to buy back almost 1.9 million of shares, which we continue to hold as treasury shares.One of the topics we are frequently asked about share-based compensation, which we adjust in our adjusted EBITDA. Our underlying share-based payment programs are mainly equity settled. On this slide, we show the potential effect it has on dilution and on the number of shares outstanding in general. Upfront, the value of all, including legacy VSOP, prior IPO program, vested share-based compensation is below EUR 4 million despite being accounted for at higher values and easily covered by existing treasury shares. The respective total amount of shares we would currently need is below 2 million shares.Go in more detail. On the left-hand side, we see a more detailed simulation on the total needed shares for all vested equity incentive programs in the HomeToGo group in relation to a simulated share price. As you can see, 525,000 shares are needed for the legacy VSOP program, or VSOP, as we call it. As a reminder, this program was settled as part of the IPO for price per share of EUR 10. In addition, there are 1.4 million shares needed for vested restricted share units, or RSUs, shares needed for the complete settlement of the claims from the old VSOP and the RSUs do not change with the share price. The shares for settlement of vested virtual share options or VSOs, however, increased with the share price. For example, an increase of the HomeToGo share price to EUR 4 would lead to an additional 1.2 million shares required to settle vested VSO claims. As you can see on the right-hand side, we have a comfortable position of treasury shares to settle all claims from vested share-based compensation.Before I close, let's look again at our outlook for the financial year 2024, which we introduced at the end of March. We confirm today that we continue to strive for growth rate of more than 30% for booking revenues and for more than 35% for IFRS revenues. We are also aiming for a significant increase of the adjusted EBITDA in 2024 compared to the financial year 2023 and look to expand our leading profitability KPI to more than EUR 10 million during financial year 2024.And with that, I thank you for your attention today, and we will now open the floor for your questions.

[Operator]

[Operator Instructions] Our first question comes from Silvia Cuneo with Deutsche Bank.

[Silvia Cuneo, analyst]

My first question is on the HomeToGo Marketplace segment, where the number of bookings for the onsite business increased by over 60% year-on-year, partly thanks from acquisitions. So I wanted to ask if you could please comment about the underlying demand for travel, perhaps by region compared to the end of last year that seem the big soft in Q4. Is demand improving? And what does the booking backlog tell you about the upcoming peak summer season?Then secondly, if I could ask about the new disclosure, good to see the adjusted EBITDA of the segment separately. And in the release, you mentioned the adjusted EBITDA of the HomeToGo_PRO segment should remain relatively steady through the year. Does it mean in terms of margin percentage terms or for 2024?And then just final quick question. In the slide on the AI product, we noticed that you mentioned an AI product update on the 22nd of May. What shall we expect?

[Steffen Schneider, executive]

Thank you, Silvia. I will answer your first 2 questions and Patrick will answer the AI question. So in terms of the number of bookings, as you rightly say, the number of bookings is -- went up, supported by the acquisitions because of the short trip holidays from Kurz Mal Weg and Kurzurlaub. So as I mentioned, the ADRs of these books are pretty comparable to our legacy business. However, the length of stay is significantly shorter. So while our length of stay is more towards 7 days. So the old legacy business, it's all our business. Is this more the -- what somewhat calls nicely, the 57-hour holidays, and that reflects pretty much that.And what we have seen in the bookings in Q1, but also what we see in the backlog is that it's a healthy development across the acquired business as well as the legacy business. We have that specialty and it helps us on the IFRS revenue side with the early Easter. So we have more check-ins already in March as people traveled towards the Easter holidays. And therefore, IFRS revenues are a bit higher, which helped us also on the adjusted EBITDA. But the counter effect is, of course, that the backlog is a little bit lower because all these check-ins has already been reflected in the IFRS revenues. But all in all, we look very comfortable into the future. And everything we see is going according to plan.With regards to the adjusted EBITDA of the PRO segment, you are right. It is a pretty stable business. There will be, of course, also fluctuations. So you should not just take Q1 x4, but it's a much more stable business compared to the Marketplace business, where we have the very typical seasonality of negative EBITDA in Q1 and very high positive EBITDA in Q3.

[Patrick Andrae, executive]

Great. Patrick here. So on your AI question, obviously, with the update, I don't want to preempt what we want to show in our update. So you have to stay a little bit attuned for that. But actually, what we will obviously showcase there is further development, AI development ahead of the summer travel season and also the progress in our vision towards fully AI powered Marketplace and what that means. Yes. So what are the next steps that we will follow, how we envision parts of the product to change along that and how we will call these things in the future, yes. But if I would tell more, then I would already preempt that today.

[Operator]

Our next question comes from Bharath Nagaraj with Cantor Fitzgerald.

[Bharath Nagaraj, analyst]

Just 2 questions for me. Vacasa, the property manager in the U.S. has I think -- has a layoff round as well following a decline in gross booking value. Just wondering how that affects you? Is that like kind of positive for you given what you said about competition for traffic among property managers? Maybe I'll go one by one. I'll start there.

[Patrick Andrae, executive]

Thank you for the question. So obviously, we don't comment on market participants, in particular, in this case, on a partner that might have a difficult faith on the business side there as the reports sound. But like the thing for us, we usually with the HomeToGo marketplace and the large amount of inventory that we have in there. So in a general -- on a general note, it's always like that we have inventory that generally like can replace other partners, inventory, and so on. And these inventories and performance on the marketplace is also all the time like being basically just shown by our renting algorithms. That you know we're working with machine learning, understanding what is the right property, what people pay for getting a booking from us and so on and so on. So there's always a fair kind of competition in the marketplace within.So we would not expect anything to happen from this specific layoff round. But if there should be, yes, obviously, this would be reflected in our marketplace automatically. And we don't expect actually like any upside from us when a partner struggles. We usually try to help them overcome these situations and have so also in the past throughout, from a global kind of perspective.

[Bharath Nagaraj, analyst]

The other question I have, Patrick, also is on like, I guess, one of your peers as well who are entering into the experiences kind of business as well. Is that something that you've considered in the past or considering in the future? Sorry.

[Patrick Andrae, executive]

So you mean creating houses for a lot of money that only a fraction of people can visit and make this your front door experience?

[Bharath Nagaraj, analyst]

Yes. And other activities as well, I guess, like they have this new experiences kind of like option.

[Patrick Andrae, executive]

Yes. I think they had it already -- you're referring to Airbnb. They had it obviously already prior corona. Also hard to comment on that. But I think like the it now comes back because there might be new growth areas that need to be like untapped. And for us, we won't move into experiences as a core product, but we see, obviously, experiences as an addition when people can book on HomeToGo.So we also have this partnership with GetYourGuide, for instance, and are looking always into how we can make basically someone that booked with HomeToGo give them additional opportunities like we also saw today with the official launch again of the Komoot partnership where you get a free map from Komoot, if you book with HomeToGo for your destination or with a WeatherPromise like insurance where you can basically ensure yourself against bad weather, which is very revolutionary in the space. So we more have a general look on these kind of additional topics that we can offer to our customers. But we won't, in the near future, build out our own experience business, rather do this together with strong partners.

[Bharath Nagaraj, analyst]

And the weather promise is certainly a very good addition as well. Am I guessing right in saying that you obviously won't have any liabilities for your business mostly in integration with some of the business with WeatherPromise?

[Patrick Andrae, executive]

Yes, exactly. So that's a partner that takes the liability, exactly.

[Operator]

[Operator Instructions] Our next question comes from Christian Salis with Hauck Aufhauser Investment Banking.

[Christian Salis, analyst]

I've got 3, please. So the first one is again on the AI topic. So thanks for providing this update on your initiatives and the pipeline. Could you maybe talk a little bit about how this already affected your KPIs positively maybe in Q1? So like higher conversion maybe, for example.And secondly, second question on the take rate expansion to 12.8%. So probably, you won't share a specific number, but could you provide an indication how much the take rate would have increased without the acquisitions in Q1? And also, could you provide an indication how the offsite take rate has developed in Q1?And then finally, could you please talk a little bit about the regional development in the U.S. and Europe, apart from the acquisitions? And how did the share of repeat customers develop in Q1, please?

[Patrick Andrae, executive]

So Christian, I'll take the first question on AI, not surprisingly, quality. So how does it affect our KPIs, right? Like so in the first place, we elaborated a little bit on that also on the ITB, they had different parts of AI that we can leverage. Obviously, one is internally, yes, that you might anyway not see. So how we can make our processes better and so on and so on, and we make great strides there.On the other side, it's around what we have been already doing, yes. So for instance, like I mentioned before, like machine learning on the ranking side or machine learning on making pictures that are understanding the content of our properties better and providing better tools with that. And that is something that where you with better models can always like leverage even more, either on the cost side, but also in terms of better results and that usually lead also to higher conversions or better KPIs.So to give you an example, like with the AI summaries of reviews that we tested or the AI summaries of descriptions, we saw a nice uplift in terms of conversion and so also revenue per user through these like kind of very helpful tools for the user experience. So that you can imagine, right? You don't have to scroll through 20, 30, 40, 50, 100 reviews, but get already a quick glimpse on what is important, and so it helps you with decision-making on the property. And the quicker you can make a decision, obviously, that helps also with conversion.And it's the last part of more, you could say, inspirational parts like the AI mode where we also gather customers that prior may have done this inspirational part on Google or on another website. So basically, earlier in the funnel gets the customer to the website with, as a consequence, is also like getting people to the HomeToGo product that might not have used it in that step of their travel journey or their booking journey before, which also increases for us certain KPIs, yes.But as we pointed out before, so for us, we look on every step of the booking journey to see what we can do and also internally with our processes with AI. And you will also hear more of these, especially around how we envision that for the future even further next week when we reveal a few of these additional topics in the AI update.

[Steffen Schneider, executive]

All right. Hello, Christian, on your question on the take rate. So we will not split out in detail, but if you take the increase in take rate compared Q1 '23 to Q1 '24, about 2/3 of that increase of 1.7 percentage points comes from the organic improvement. And the other 1/3 comes from the acquisition -- acquired businesses. So -- and that is also what we see on our offsite take rate. Basically, as we described before, it's the competition on the marketplace. We are the -- our partners compete for more traffic, and that helps us to increase the respective take rate. So that is working out quite nicely.You then asked about the repeat business. As I mentioned, repeat, booking revenues have increased by 31%. And when we look at that on a more regional basis, we see the strongest growth in rest of Europe. And that is basically what we have seen in many instances before was the onsite business, et cetera. So when we always start the product in DACH then see that it works in DACH and then the rest of Europe follows and then followed by North America. And that's also what we see in the repeat business. The strongest growth in repeat business is in rest of Europe, but the other regions performing well as well. Overall, regional split, as mentioned, the -- due to the acquisition effect and given that the Kurzurlaub business is only a DACH business. The share of DACH has increased from 55% to 62%, although we have growth on absolute terms in the other regions as well. In particular, in North America, as before, we continue our strategy to really look for attractive contributions coming from the respective partners and that continues to work out well.I hope we got now all your questions. If we missed anything, then please speak up.

[Christian Salis, analyst]

I have maybe one follow-up question on the -- a little bit nitty-gritty. On the IFRS revenue in the Marketplace segment, the booking onsite has increased by EUR 9 million. So this was obviously also significantly driven by the acquisition. So could you confirm that also the -- that without the acquisition, the 3.7 million number from last year would have increased to double digits year-over-year?

[Steffen Schneider, executive]

You are -- sorry, again, you are at the Marketplace, IFRS revenues, you said?

[Christian Salis, analyst]

Yes. For the booking -- onsite bookings.

[Steffen Schneider, executive]

Yes. The organic -- that's what Patrick already said at the very beginning in his part that our organic growth was like more than -- almost double what the average IFRS growth rate or U.S. GAAP growth rate of our big free U.S. competitors is. So that was a very nice organic growth we have seen there. That, again, of course, as I mentioned, was supported by an early Easter holiday. But then, again, that's also the case for every other travel company in the world.

[Operator]

Ladies and gentlemen, this was our last question. I hand back to Sebastian Grabert for any closing remarks.

[Sebastian Grabert, executive]

Many thanks, dear analysts and investors. Thank you for your attention and questions. Should there be more questions, please feel free to contact us. We wish you a great day, and hope to see you soon. Bye-bye.

[Operator]

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.