This article first appeared on GuruFocus .
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Revenue Growth:Demonstrated growth on both top line and bottom line year-on-year despite geopolitical disruptions.
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SG&A Expenses:Increased spend on SG&A in the first three quarters, tapering off by Q4.
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Operating Leverage:Strong operating leverage and margin expansion observed in January and February year-on-year.
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Monthly Transacting Buyers:Significant year-on-year growth in the number of monthly transacting buyers.
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Luxury Segment Focus:Strategic focus on the luxury end of the market, with the development of the AI-first tool, Voya.
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Classic Vacations Acquisition:Integration process underway, expected to complete by the end of Q3.
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Q1 Outlook:Anticipated recovery and improvement in Q1 compared to Q4 and the same period last year.
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Release Date: May 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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TBO Tek Ltd ( NSE:TBOTEK ) demonstrated growth in both top line and bottom line despite geopolitical tensions, particularly in key markets like the Middle East and Israel.
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The company saw a sharp recovery in business following positive geopolitical developments, such as the ceasefire in the Middle East.
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Investments in market development activities have started to pay off, with a significant increase in the number of monthly transacting buyers.
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The focus on the luxury segment has proven beneficial, as it is more resilient to geopolitical and economic fluctuations.
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The integration of Classic Vacations is progressing well, with expectations of completing the process by the end of the calendar year, which should enhance growth in the North American market.
Negative Points
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The Middle East and Israel, significant source markets for TBO Tek Ltd ( NSE:TBOTEK ), were severely impacted by geopolitical tensions, affecting overall business performance.
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March was a complete washout due to the war, impacting the full quarter's operating leverage and margin expansion.
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Cash flow from operations and free cash flow were negative, attributed to timing issues and geopolitical tensions affecting trade receivables.
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The company faces challenges in maintaining growth momentum in the Latin American market due to currency volatility and economic headwinds.
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There is uncertainty regarding the recovery of key markets like the Middle East, which continues to operate below pre-war levels.
Q & A Highlights
Q: Can you explain the strong performance in hotels and ancillary growth despite geopolitical shocks and elevated fuel prices? A: Gaurav Bhatnagar, Whole-Time Director: The strong performance is attributed to market development investments and onboarding new travel agents, which started to pay off by Q4. The resilience of the premium and luxury segments also contributed, as they are less impacted by geopolitical events and inflation.
Q: With SG&A growth tapering down, should we expect the EBITDA to GTV ratio to improve starting FY27? A: Gaurav Bhatnagar, Whole-Time Director: Yes, as SG&A growth tapers down and the hotels business, which is higher-margin, grows faster than the Air GTV, margins should expand.
Q: Cash flow from operations has been negative this year. Can we expect cash flows to return to normal levels in FY27? A: Vikas Jain, Chief Financial Officer: We are working towards returning to normal cash flow levels. The negative movement this year was primarily due to timing issues, which are being resolved.
Q: How should we think about the growth and take rates for Classic Vacations? A: Gaurav Bhatnagar, Whole-Time Director: We anticipate significant growth in the North America business, including Classic Vacations. The integration process is ongoing, and we expect operating leverage to improve, contributing to bottom-line growth.
Q: What impact has AI had on your business, and are there any significant trends from suppliers or buyers? A: Gaurav Bhatnagar, Whole-Time Director: While there is a lot of conversation around AI, we haven't seen any substantial changes in business models from suppliers or buyers. The focus remains on internal productivity improvements rather than significant shifts in business operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
