Ladies and gentlemen, thank you for standing by. Welcome, thank you for joining The Conference of The Q1 2023 Financial Results and Earnings Call of HomeToGo. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Sebastian Grabert. Please go ahead.
Thank you very much. Good afternoon, dear analysts and investors, and welcome to HomeToGo's first quarter 2023 earnings call. My name is Sebastian Grabert, Director of Investor Relations and Corporate Finance. With me today is our CFO, Steffen Schneider, who will present our highlights of the first quarter and then walk you through the financials. 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 over to you, Steffen. Please go ahead. Steffen, the floor is yours.
Thanks, Sebastian, and welcome everyone, and thank you for joining our call today. After an outstanding 2022, I have the pleasure of reporting an excellent first quarter of 2023, with accelerating momentum and high visibility for the financial year 2023. For Q1 2023, we experienced impressive growth in customer demand, resulting in our highest-ever quarterly booking revenues, leading to a record high booking revenues backlog. This is all against the backdrop of a challenging macroeconomic environment, which is again demonstrating the resilience of our business model. In more detail, booking revenues grew by 50% year-over-year to our best quarter ever of EUR 65.3 million. At the end of Q1 2023, our booking revenues backlog stood at an exceptional EUR 69.5 million, 80% growth versus this time last year.
Furthermore, our Q1 on-site business performed remarkably well, growing its Booking Revenues by 44% year-over-year to EUR 32 million, alongside a further increase in Booking Revenues Onsite Share of 58%. In addition to the very positive top-line numbers, we made further progress on our strategic pillars. First, our CPA take rate reached 10.6%, hitting the double-digit percentage range for the first time in a full- quarter. Second, our subscription and services business showed a stellar performance, advancing to its highest first quarter ever of EUR 5.9 million in IFRS revenues, growing at 84% year-over-year. Third, our strategic focus on repeat Booking Revenues saw a strong increase across all markets, growing higher than overall Booking Revenues growth. In addition, we substantially improved marketing efficiency.
This led to an enhanced profitability level, improving Adjusted EBITDA margin by roughly 5% points compared to the previous year period. Our efficiency improvements become even clearer when looking at sales and marketing expenses in relation to Booking Revenues, which we will show later in the presentation. All in all, we are continuing HomeToGo's growth story while improving our profitability. Based on this excellent start to 2023, plus our record Booking Revenues Backlog, we reiterate our full confidence for the fiscal year 2023 guidance to reach double-digit IFRS revenues growth of 13%-19% year-over-year and Adjusted EBITDA breakeven. Let's take a look at our core metrics on slide three, which again emphasize that Q1 was an exceptional start of the year.
Booking revenues grew at a very strong rate of 50% year-over-year to EUR 65.3 million, driven by strong CPA bookings. Over a two-year horizon, we more than doubled our Q1 booking revenues, demonstrating the robust customer demand for alternative accommodation. As a general reminder, most of the CPA booking revenues will be recognized as IFRS revenues later in 2023 when check-ins have happened. The organic growth rate for Q1 was 22%. Q1 2023 on-site booking revenues grew 44% year-over-year or tripled versus the first quarter of 2021, reflecting our substantial progress on shifting our marketplace business towards on-site. This is also evident in a further increased booking revenue Onsite Share to 58%, growing 3% points compared to Q1 2022.
In the DACH region, our most advanced, we substantially expanded our Onsite Share to 85%, growing by 13% points year-over-year. Due to the already mentioned traditional high share of early bookings in the beginning of the year, IFRS revenues grew robustly, however, not as strongly as booking revenues, increasing by 16% year-over-year to EUR 22 million. The main portion of the large CPA booking revenues backlog will be recognized as IFRS revenues during the upcoming summer travel high season months of July through September. The strong growth of booking revenues is also reflected when looking at our profitability. Absolute Adjusted EBITDA amounted to minus EUR 25 million for the first quarter of 2023, even EUR 2 million higher than in the first quarter of 2022. As you can see, we always have the Q1-Q3 seasonality.
The CPA economics were very attractive in Q1. Therefore, we intentionally invested to generate more Booking Revenues. We are fully confident to sequentially improve profitability over the course of the year to reach Adjusted EBITDA breakeven in 2023. To emphasize as a reminder, while full costs associated with the record Booking Revenues Backlog have already been accounted for, the associated IFRS revenues will be recognized later in the year. On a relative basis, we have already improved the Adjusted EBITDA margin by 5% points compared to the previous year period. Notably, we improved marketing efficiency and had strong contributions from our subscription and services business, where we saw organic growth year-over-year of almost 50%. Let's take a closer look on slide four at the breakdown of our booking and IFRS revenues on a quarterly basis.
In general, we are very satisfied with the performance of both of these distinct revenue streams. I want to again emphasize our subscription and services business, which has developed excellently in recent years and was the main IFRS revenues contributor in the first quarter of 2023. In terms of Booking Revenues, the subscription and services business more than tripled within one year. On top of that, we have seen nice growth of our marketplace model on a yearly comparison, both in terms of Booking Revenues as well as IFRS revenues. The CPA business, both on-site and off-site, performed strongly during the last quarter, thanks to to both a strong on-site and a U.S. off-site business. Slide five highlights the exceptional growth of CPA bookings, leading to record high Booking Revenues Backlog of EUR 69.5 million.
This already proven strong demand is an important profitability building block to reach Adjusted EBITDA breakeven in 2023. These booking revenues in the backlog will translate to IFRS revenues during the remainder of 2023. Here's a helpful view of the seasonal distribution of our booking revenue backlog and the pattern of revenue recognition over the course of the year. As you can see, the majority of our booking revenues backlog will be recognized as IFRS revenues during Q3 from July to September when most travelers will be on holiday. You can see that despite the growth in our business, the share of Q3 IFRS recognition has been quite stable over the recent years and stands at approximately 60% of the overall backlog. On the next slide, we see an ongoing favorable trend in on-site booking revenues and the corresponding Onsite Share.
As a reminder, the Onsite Share is the part of the overall Booking Revenues on the marketplace, which stem from bookings directly taking place on our platform and therefore offers higher Take Rates to our group. Onsite is also important for repeat business, i.e. travelers booking for the second or third time at significantly lower cost. It's worth highlighting the tremendous increase in the Onsite Share throughout the last two years with an exceptionally high Onsite Share in our DACH market, rising significantly by 13% points year-over-year. Taking a closer look at our Onsite business. On the bottom of the slide, you find the geographical breakdown of the Onsite Booking Revenues and the Onsite Share on a quarterly basis.
In addition to the exceptional 85% Onsite Share in DACH, as of Q1 2023 our European on-site business in general shows a continuous improvement in both metrics. While the absolute amount of on-site Booking Revenues has increased by 36%, the relative share has dropped due to a very high growth in our US off-site business. Going on to our Take Rate on page nine. The CPA Take Rate increased from 9.4% in Q1 2022 to 10.6% in Q1 2023, an increase of 1.2% points year-over-year, and therefore reaching double-digit percentage rates for the first time in HomeToGo's history in the full- quarter. Basket size has increased, mainly driven by a higher share of U.S. business with its traditional higher basket sizes driven by higher ADRs. Length of stay has been relatively stable throughout the regions.
You recall our emphasis on repeat business at our Capital Markets Day as well as during our financial year 2023 outlook and the importance for profitability. As a reminder, there are substantially lower marketing costs, roughly 87% less required from existing customers compared to new users. On page 10, on the left-hand side, we illustrate how the repeat Booking Revenues continued to grow tremendously with a CAGR of 84% over the last three years. By increasing the amount of repeat Booking Revenues, we directly benefit from a higher margin. When looking at the marketing and sales costs to Booking Revenues ratio, we show significant improvement in our marketing efficiency. We've intentionally added this additional view of Booking Revenues instead of IFRS revenues, giving marketing and sales costs directly correlate to when we are driving Booking Revenues. As you can see, this ratio also fluctuates.
However, the long-term trend is showing continued improvement in efficiency. The key message to take away from this slide is that both higher repeat Booking Revenues from existing customers as well as an improved marketing efficiency contribute directly to a higher profitability, which you will see during the course of the year. Let's take a closer look at this progress and profitability on the next slide. Taking a look at the development in our cost ratios that drove group-level profitability in relation to IFRS revenues, we observe that gross profit margin improved by almost 2% points, now standing at more than 95%. The main savings were driven by reduced server hosting costs. Please note that, as always, the cost positions are adjusted so that the resulting figure is the Adjusted EBITDA.
Most notably is the substantial improvement in sales and marketing cost ratio by 15.3% points year-over-year. Please note that we here, as always, adjust the cost for expenses for share-based compensation, depreciation and amortization, as well as one-off items in order to arrive at the Adjusted EBITDA. The message from this slide and the previous slide stays the same. The favorable development on our marketing efficiency is leading to a higher profitability. With respect to our product and development cost margin, the deterioration is explained by an increase in personnel costs, mainly due to the expanded consolidation scope through the acquisition of our subsidiaries, SECRA and e-domizil, which are now fully consolidated in Q1 2023 compared to Q1 2022. Expenses for licenses and personnel costs have gone up due to the general business expansion of the HomeToGo group.
On the administrative cost position, we see a similar development as in the product development and operations function for personnel expenses, leading to a slight decline of the corresponding cost ratio. Overall profitability in terms of Adjusted EBITDA margin improved by almost 5% points compared to the previous year level, which underlines our full confidence to reach Adjusted EBITDA break even in 2023. Looking at our cash position on slide 12, we continue to have a very strong balance sheet with a gross cash of EUR 140 million, of which EUR 0.8 million are restricted. This brings the liquidity to EUR 139.2 million, including the investment of EUR 50 million into a money market fund. Deducting interest bearing debt of EUR 7.4 million brings the net cash position as per end of March 2023 to EUR 132 million.
Our very solid liquidity position is a key differentiator in an increasingly challenging environment for growth companies characterized by higher interest rates. In terms of cash flow during the first quarter, the overall cash burn during Q1 was mainly driven by operating cash outflow of EUR 90 million from seasonally related increased marketing expenditures and another EUR 1 million for investing cash flow. The financing cash flow had a minor outflow of EUR 1 million driven by repayments of borrowings. To conclude, based on an exceptional start to 2023, we are fully on track to achieve Adjusted EBITDA break even in 2023. We are pleased to reiterate our 2023 guidance and to briefly recap. We expect Booking Revenues to increase by 13%-25% to EUR 185 million-EUR 205 million. Looking more at the upper end at this point in time.
We guide IFRS revenues to grow in the range between 13% and 19% year-over-year to EUR 165 million-EUR 175 million. We target for an improvement of the on-site booking revenue share by 2% points to 56%-61%. With this, we are fully confident to reach Adjusted EBITDA break even in 2023. As always, to give you more visibility on what lies ahead. Looking into the current trading year- to- date, slide 15 shows the intact growth momentum in terms of monthly booking revenues being on a substantially higher level than previous years' periods. We have benefited from a very strong start to the year in terms of monthly booking revenues due to the traditional early booker in DACH and the Netherlands as well as the U.S. This trend has continued in April..
Our Booking Revenues Backlog as of the end of April was even higher with more than EUR 75 million. Looking at Q2 2023 IFRS revenue, we expect a similar year-on-year growth rate as in Q1 2023 and an improved Adjusted EBITDA margin compared to Q2 2022. To summarize the performance of the first quarter 2023, we experienced an exceptional first quarter with highest ever Booking Revenues, a record Booking Revenues Backlog, stellar year-over-year growth in subscription and services, and a first time double-digit quarter CPA Take Rate. Our substantially improved marketing efficiency alongside with our continuously growing repeat Booking Revenues led to an overall improved profitability. We reiterate with full confidence our guidance to achieve Adjusted EBITDA break even in 2023. With that, I thank you for your attention and will happily take any questions you may have.
Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question comes from Silvia Cuneo from Deutsche Bank. Please go ahead.
Thank you. Good afternoon, everyone, and thanks for taking my questions. First, on the revenue growth that seems to have partly benefited from a lower cancellation rate in the quarter, can you please remind us of typical cancellation rates before the pandemic and whether the Q1 rate at 15% is indicative for the rest of the year? Second question on current trading and typical seasonality. Thanks for sharing the incremental data on slide 15 and the commentary around the Q2 growth. Just wanted to ask, based on the current Booking Revenues Backlog growth that seemed to be ahead of revenue, could that be the case that revenue growth can accelerate from Q3? Final question on the CPA Take Rate that reached a new record and double-digit levels in Q1. Can you comment about your ability to further raise the Take Rate?
How much of the growth so far came from higher on-site sale versus perhaps higher prices to existing partners? Thank you.
Hi, Julia. thanks for your question. The cancellation rate continues to go down, and we are almost at the pre-pandemic levels. The exact comparison is a little bit difficult to compare, and the reason for that being that some of the, let's say, cancellation risk-sharing has changed. The kind of comparison is not like for like. But we are almost, I would say, on the level in terms of cancellation. Basically, COVID is over. It's no longer a major driver. We have the usual business going forward.
On the second question, What we have to keep in mind is that when last year, when we had the acquisition of e-domizil, we started consolidating it as of 1st of April. With that came also an order book. We have to depreciate that order book on a linear basis over 12 months. We had now in Q1 2023 the final depreciation of that order book. Therefore, if we take the backlog as of April 2023, compared to April 2022, which already included then the backlog from e-domizil, the year-over-year comparison was more like 30%. We look very positively into the IFRS revenue guidance.
At this point in time, we don't want to change anything to the guidance, but rather see how the year progresses. I'm very confident about that. With regards to the CPA take rate, so that has an improvement on a higher Onsite Share in general. We have our, let's say, usual, economics improvement year-over-year. What we have also seen this year is a rather attractive offsite CPA take rate. This higher offsite CPA take rate was also one of the reasons why we had a relatively high CPA share and a rather lower CPC share, as the CPA economics were just more attractive. That also led to a higher Booking Revenues Backlog.
Thank you, Steffen.
The next question comes from Volker Bosse of Baader Bank. Please go ahead.
Yeah, hello. Volker Bosse, Baader Bank. Thanks for taking my question. I would like to have three. First is on Booking Revenues. Booking Revenues increased by +50%. How much of acquisitions or anorganic growth has been included here? Would have been the growth excluding SECRA, basically? Second question on the average booking value is increased by 11% year-over-year. Is it fair to assume that this is basically driven by higher price inflation, so price increases, which led to the higher average booking value? Last but not least, last and final one would be on any changes in consumer booking behavior, which you see. We are in uncertain times with macro uncertainties, et cetera.
Do you see more nearshore location bookings, or do you see higher demand for cancellation options or maybe how the installation went down? Yeah, any trends you might see which reflect a hint in regards to uncertainties which the consumers are currently facing? Thank you.
Hi, Volker. Sure. When we look at the organic business, then at the overall group level. The Booking Revenues organic growth would have been 22%. When we look at the subscription and services basis, as you made the reference to SECRA, there, the organic growth would have been 50%. With regards to the price increases and the ADR, we basically, in terms of length of stay, we don't see any major movement, people all over the regions more or less stay the same length of stay, -1% in one region and +1% in another region. Basically stable.
When we look at the ADRs, they have basically increased all over the regions with the highest increase in North America. As we know, the North American ADRs tend to be the highest anyway. That's why the North American basket sizes are always the highest one, and therefore, having a higher share of North America business is also leading to higher overall basket size. In terms of consumer preferences, what we see is that the actual consumer seems to spend the same amount of money per trip as they used to spend before. That sounds a little bit counter-intuitive to what I just said.
The kind of what we see is that consumers seem to have the same kind of budget and are just downgrading a little bit in terms of a hotel business. I make the comparison to used to book a four-star hotel and now would go for a three-star hotel because prices have increased. The budget has been staying more or less the same. In terms of cancellation, as already mentioned in regards to Silvia's question, cancellation and cancellation policies is really not much of a topic anymore. Neither talking to the partners nor talking with the travelers, cancellation policy is a big topic as it used to be like two years ago.
Okay. Thank you very much for interesting. Thank you. All the best. Thank you.
The next question comes from Wolfgang Specht from Berenberg. Please go ahead.
Yes, hello. Good afternoon. sorry, I missed the first part of the call, and did not get the part with repeat bookings. Steffen, you mentioned a share of the overall bookings coming from repeat bookings. Maybe you can elaborate a little bit on that one, profitability, fresh customer versus existing customers and how the rate of repeat bookings is developing? Then a second question on inventory. Can you give us an indication if the amount of inventory is still increasing, and if so, at what rate? Or are the current, let's say, growth figures largely based on a better utilization of the existing or historic inventory? Thanks a lot.
Hi, Wolfgang. Sure. On the repeat booking business, we have shown that I just forgot the slide, but can mention that in a sec. The repeat Booking Revenues have also increased. We have shown that over the last two years, they have increased by 84%. Also this year, the growth of repeat Booking Revenues has increased faster than the overall increase. The didn't go into detail in terms of what the respective share is, but it is basically the same story as before, that we have the highest share of repeat booking business in our most advanced market, which is the DACH market. That is all going into the right direction.
The profitability level is also the same as before, so that 87% less, which we had before. You find the details on slide 10 in the presentation. With regards to the inventory, as you know, inventory, you know, fluctuates up and down a little bit. We have progress. I wouldn't make so much the point of in the absolute amount of inventory, but actually the kind of inventory we have, and there we have some attractive inventory in place. Some of that, I fortunately when I would have the opportunity to show you some pictures, you would immediately know that this kind of inventory gets booked the minute it's on the platform.
That, of course, makes it much easier. I rather have, like, 10 new inventory on the platform, which gets booked immediately than having 100, which are maybe less attractive. All in all, it's going really well on the inventory front.
Okay. Thanks a lot. That sounds like a self-fueling market. If you, if you can show a good utilization of the existing inventory, your, your sales people have an easier job to attract new inventory.
Of course. I mean, it's exactly the kind of success stories which our sales people are then using when meeting new potential partners and to basically demonstrate them how working together with HomeToGo and how having, you know, inventory on our platform is actually significantly improving their utilization, which again, is for many of our partners, a good argument to get more customers on their product.
Okay. Thanks a lot.
As a reminder, anyone who wishes to ask a question may press star followed by one at this time. It seems like there are no further questions at this time. I hand back to Steffen Schneider for closing comments.
Thank you everyone for listening in and for your questions. In case you have any further questions, please feel free to reach out to Sebastian or myself. Very much looking forward to it. As always, the replay will become available on our investor relations website. With that, thank you very much and have a nice day.
Many thanks. See you soon.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.