Good afternoon, ladies and gentlemen, and welcome to our Q3 2022 earnings call. With me today is our CFO, Steffen Schneider, who will walk you through our Q3 financials and talk you through our upgraded full year 2022 earnings call. Today, we will keep it rather short in this session, as we will have a larger business and strategy update later on in our capital markets day. Please note, as always, this call is being recorded and webcast live on our IR website and will be later available as a replay. Steffen, I will now hand it over to you. Please go ahead. The floor is yours.
Thank you, Jan, and a warm welcome to all of you from my side as well. Thank you for joining our call today. It's my pleasure to share that we have had another record quarter at HomeToGo. Let me first remind you of our overall strategic ambition. Our vision to make incredible homes easily accessible to everyone is enabling us to play a bigger and bigger role for both travelers and our supply partners. We set the foundation to continue our strong growth in the future. We again delivered another quarter of strong financial performance. All of this is a testament to the agility and talent across our HomeToGo team, whom I would like to hereby thank once again for their incredible dedication to building an experience both for our travelers as well as for our supply partners.
Let me share some of the key highlights of our third quarter 2022. First, we observed stellar financial performance, including record high IFRS revenues, a growth of 60% year-over-year to almost EUR 70 million, amid a strong like-for-like growth and positive consolidation effects, mainly from our acquisition of e-domizil, as well as further decreasing cancellations, which are still above pre-pandemic levels. In addition, we saw a strong growth in booking revenues during the quarter on the back of a very strong last-minute business and a new all-time high in booking revenues for July for any given month. Second, profitability as measured by Adjusted EBITDA came in at more than EUR 24 million on a slightly improved margin of 34.7%. Also a best ever profitability that HomeToGo has achieved so far.
I'm also pleased to share that we observed a strong improvement in net income compared to the previous year to more than EUR 12 million, compared to a loss of more than EUR 102 million in last year Q3 when we had to bear significant costs from the de-SPAC transaction. Third, subscription and services grew at an outstanding 246% during Q3 compared to last year, including a strong performance by one of our HomeToGo solutions, SaaS solutions, Smoobu, and also helped by the recent acquisition of SECRA. Last but not least, we are raising our financial year 2022 outlook to reflect the strong growth performance we have observed year to date and our general confidence for the year to go.
We are now expecting IFRS revenue growth of 48%-54% to EUR 141 million-EUR 146 million and an adjusted EBITDA of EUR -20 million to EUR -25 million, which represents a margin of -14% to -18%. As a reminder, in last year, we had a margin of -22%. Let us now dive into the details of our financial performance during Q3. Q3 was another quarter with remarkable financial performance. Booking revenues grew at an exceptionally strong rate of 53% year-over-year to EUR 42.5 million, reaching a new monthly all-time high in July on the back of outstanding last-minute business.
This is particularly noteworthy as we typically would expect a calmer period of bookings with the start of the second half of the year until the end of the year when people shortly after the Christmas break start booking again for the following year. On-site booking revenues grew 29% year-over-year or a surge of more than 280% year-over-three-years from 2019, reflecting our strategic progress on shifting our business to on-site. During Q3, the share of on-site relative to booking revenues decreased compared to prior year periods and with an exceptionally strong click-out business. IFRS revenues grew at a stellar 60% compared to the prior year, resulting in a new record high in IFRS revenues during Q3 of almost EUR 70 million.
This growth was driven by a strong consumer demand and accelerating subscription services business and further decreasing cancellations, but they are still above pre-pandemic levels. In addition to a very strong growth momentum, we recorded a new all-time high in terms of Adjusted EBITDA with more than EUR 24 million. I would like to again emphasize that we were able to significantly improve net income compared to last year from EUR -102 million to more than EUR 12 million in Q3 last year. As we discussed our top line performance on the slide before, let me just quickly highlight a few additional details here. GBV grew by 48% quarter-over-year to a large extent from a strong North American business.
Subscription and services booking revenues also contributed with a growth of 246% year-over-year to EUR 4.9 million, reflecting a strong like-for-like growth based on the performance of Smoobu as well as positive consolidation impact from Wegcar. IFRS revenues grew by 60%, as already shown in the previous slide. Across all categories, the on-site business grew by around 300% compared to the same period in 2019. Looking at the nine months as a whole, we saw a similar development among our key top-line metrics as we did during the last quarters. GBV is up 12% year-over-year. Our core KPI booking revenues expanded by 30% year-over-year. Finally, IFRS revenues advanced by an exceptionally strong 71% year-over-year, with on-site IFRS revenues growing by even 140% year-over-year.
The year-over-three-year numbers are all around the 300% area. Looking at the basket size, as always when it comes to basket size, there's a regional difference between the traditionally bigger market basket sizes in North America and the rather smaller basket sizes in Europe. Overall, basket size increased due to a higher relative share of the North American business. Looking at the markets in more detail, North American markets basket size continuously increased and reached in September 2022 an all-time high of more than EUR 2,000 for the 12-month rolling average, or even EUR 2,400 if we just look at the month of September 2022. As usual, the length of stay is very stable in the U.S. throughout the entire year. Therefore, the main driver was the ADR exceeding the EUR 300 mark. This picture is consistent throughout the market.
Looking at Europe, this Q3 was below the level of Q2 with basket sizes of EUR 900 compared to EUR 950 in Q2. This decrease was driven by both smaller decreases in ADR and length of stay resulting from international destinations, while the domestic market was very stable. Looking at other European markets, the Dutch market was mostly stable. In contrast to last year, where the basket size increase was strong in Q4, this was driven by the ADR in the destination of France. This year it was relatively flat. Other European markets show entirely different seasonalities, as they usually do. All the observed booking trends are in line with their respective 2021 performance. Looking at the take rate.
Average take rate continued on its positive trajectory, averaging at 9.7% in Q3 and year to date at 9.4%, +0.2 percentage points ahead of last year's Q3 based on an overall strong take rate development. The Q3 take rate development is also a reflection of the before mentioned higher share of U.S. business, which comes traditionally with a lower take rate due to a lower on-site share. The relatively high volatility in the other take rate is a reflection of the crossover from peak season to shoulder season, which can lead to exaggerations on both ends of the spectrum. Very high and also a little bit lower. The relatively high share of CPA off-site and CPC booking revenues in Q3, as we have seen before, compared to the first half, is also reflected in the on-site share.
Nevertheless, our overall year-to-date on-site share increased to 52% compared to 43% in the first nine months of 2021. Looking just at Europe, we increased our on-site share to 61% year to date compared to 60% in 2021. In the US, we continue to make progress with on-site share increasing by 8 percentage points to 17% in terms of booking revenue share compared to the same period last year. On-site bookings increased by 45% to almost 600,000, underlining the overall progress of this strategic priority. Let's now turn to profitability. Q3 continued on the positive trajectory seen throughout the year.
Profitability in both absolute as well as relative terms is at a record highest quarter ever, achieving EUR 24 million in terms of Adjusted EBITDA, resulting in a year-over-year growth of 60% in absolute terms and a margin improvement of 0.1 percentage points. We also want to emphasize that net income came in with more than EUR 12 million during the quarter, a year-over-year improvement of almost EUR 115 million due to strong operational performance and amid the absence of one of these SPAC-related cost items which were included in Q3 2021. Let me briefly use this opportunity to comment also on our year-to-date performance.
Adjusted EBITDA after 9 months stands at -EUR 4.6 million, which implies a margin of -3.6%, an improvement of 19 percentage points or EUR 12 million compared to 2021. Let me now give you a little bit more color on the cost line items development that drove the group level profitability. Gross margin improved by 0.2 percentage points year-over-year in Q3 2022, mainly due to the increased business volume. Our sales and marketing cost ratio increased slightly by 70 basis points year-over-year, driven by an increase in new customer acquisition via paid marketing channels to capture the full demand opportunity of last-minute bookings. The cost ratio and product development also improved year-over-year by 0.6 percentage points due to increasing economies of scale.
Last but not least, G&A declined by 1 percentage point compared to the previous year period due to higher costs as a public company for the full quarter. Turning now to our cash-related items. As of the end of September, we recorded a positive net working capital of EUR 7.3 million, mainly as a result of the realization of IFRS revenues during the summer peak travel season and the corresponding increase in receivables. The net working capital would have been even more positive if it would have included receivables from existing booking revenues. Technically, they only become receivables upon realization of IFRS revenues after check-in. Nevertheless, by the end of Q3, we had more than EUR 24 million.
Looking at our cash position, in Q3, our cash position decreased to EUR 167 million on the back of outflows in the amount of EUR 20 million for traveler advance payments collected as part of payment services for homeowners, as well as negative free cash flow resulting from an increase in net working capital as mentioned on the previous slide. This development is expected to reverse during Q4, when we expect the bulk of receivables to be paid. Following the end of negative interest rates, we moved EUR 50 million from the money market funds to the current bank account. Overall, our cash position remains very strong and allows us to invest through the cycles. Let's now turn to the outlook as the last section of our presentation.
After strong and profitable growth in the third quarter of 2022 and the strong operational and financial performance here to date, we again raise our full year guidance. We are now expecting IFRS revenues growth of 48%-54% to EUR 141 million-EUR 146 million. Adjusted EBITDA is expected to be in the range of EUR -20 million to EUR -25 million, corresponding to a margin of -14% to -18%, which represents an improvement of 5 percentage points at the midpoint of our guidance and is a significant improvement compared to the 2021 Adjusted EBITDA margin. This outlook demonstrates our overall confidence regarding our financial and operational performance, as well as the positive market backdrop for alternative accommodations to continue for the rest of the year.
With a closer look at 2023, we expect the travel industry to recover to pre-COVID levels as the pandemic further recedes, while at the same time, we are mindful of remaining uncertainties in the face of the overall macroeconomic development and general consumer price inflation. While the vertical for alternative accommodation will not be able to fully isolate itself from these macroeconomic developments, we are confident that our industry will once again prove to be resilient, just as it did during the COVID pandemic. We have observed that vacation rentals continue to be the traveler's preferred choice for several clear reasons. New use cases for longer trips with the rise of remote work, cost-effective accommodation options with the benefit of tailored amenities such as kitchens, et cetera, and the ability to travel and split homes with groups of friends.
Several results from broker research and consultancies support our view and show that travelers' upcoming holiday plans remain strong and largely unchanged. Let me close this presentation by looking at our current trading. In contrast to Q3, the start of Q4 was more in line with seasonal patterns. Nevertheless, we have already today a good basis for 2023, with a backlog of booking revenues of almost EUR 19 million by the end of October, a value we had last year by the end of December. Just looking at the current data as of yesterday, we have even increased that backlog by another EUR 1.6 million just in the few days in November. All in all, we look very optimistic and positive into the future in reaching our big goal of adjusted EBITDA breakeven in 2023.
With this, I open it up to Q&A.
Our first question today comes from Silvia Cuneo of Deutsche Bank.
Thank you. Good afternoon, everyone. Thanks for taking my questions. The first one is on outlook. On the back of the raised guidance, can you please remind us of how much visibility you have at this time of the year on the last quarter, and how much December is important so that there might be room for potential surprise? Second question on the U.S. business. You've increased share there, and there is higher basket size and share of next year bookings in this market. Can you maybe share some extra color about where the share of on-site can get to for the rest of the year, the booking plans for next year, and maybe the outlook for ADRs? Is it possible to expect continued growth given inflation trends?
Finally, maybe on the take rate, even though probably you will talk about it more later at the CMD, just wanted to ask about the Q3 year-on-year improvement that was just 20 basis points. Can you help us understand the different moving parts and what is implied in your outlook for Q4? Thank you.
Sure. Thanks for the questions, Silvia. Looking at Q4. As you know, Q4 is in general not a main travel season for us, except when people then before the year-end start traveling. Our focus really is building up a backlog for next year. Really CPA bookings, which will then be realized as IFRS bookings in 2023. Nevertheless, we have seen it in last year's quarter when we had a relatively strong Q4 based on a strong CPC. It could be that there is a surprise. As you know us by now, we play it cautious and have not included any surprise in our upgraded guidance.
Looking at what we see in the North American market, I would expect that ADR continue to grow in the next year based on consumer price inflation. Also looking at the US market and increasing our on-site share. This is a big focus of ours and the colleagues and we will address that in more detail at CMD a little bit later on. Building up a good partner base of on-site partners is making good progress, so I would expect the US to have a higher on-site share in the next year.
Looking at your last question on the take rate, as you can see, on the chart, the take rate, in particular in the first half of the quarter was really driven by the take rate, other, that was very high. There a lot of volume was realized, and that was what's driving the increase in the take rate. Going forward, our CPA take rate is relatively stable. On-site take rate is stable and we're expecting that to continue.
Thank you.
As a reminder, press star one to ask a question. Our next question comes from Volker Bosse of Baader Bank.
Yeah. Congratulations on the great figures. Volker Bosse of Baader Bank. Thanks for taking my question. I would like to start also with the take rate. Could you remind us what is the take rate expectation for the full year or guidance? I think it was 8% last time. Now we are at 9.4% year to date. Wouldn't it be fair to also give a bit more color in regards to take rate while you upgraded sales and earnings guidance? Can you confirm take rate or what's going to happen here? The second question would be also on the guidance regarding your adjusted EBITDA. You had after nine months -EUR 4.6 million negative EBITDA.
You guide for 20-25 negative EBITDA for the full year, it means EUR -15 million to EUR -20 million negative EBITDA in the fourth quarter. If I look at chart four of your presentation, over the last two years, you never had a weaker EBITDA than EUR -8 million. Why are you so overly pessimistic regarding the fourth quarter? Wouldn't it be fair to give a bit more color also on the fourth quarter guide and sort of to give you a bit better or higher guidance at least? I really did not get it, what you baked in here in order to come to your guidance. Finally, perhaps there's also one for the later session at the capital markets day. However, I mean, -14%-18% negative EBITDA margin in 2022 is the guidance.
For next year, you wanna be breakeven. Could you perhaps please create a brief bridge between the negative margin this year and breakeven, where does the improvements come from? Thanks.
Thank you, Volker. Your questions on what we expect for the take rate. You're correct. We are significantly above the take rate guidance we had. We were making a much bigger progress on our on-site business, and we expect that the take rate will continue on that level. We also expect that to continue in the next year. We will talk about that also as part of our CMD later on. Your second question was with regards to the guidance and the implied negative EBITDA. You know, you're fully correct. Why is the EBITDA where we have guided it?
We are currently building up backlog, as I mentioned, and this is a key building block to reach profitability in 2023. As you know, every booking revenue we are already getting in the books this year will have the respective marketing cost associated with it, while the IFRS realization is in next year. You could say it comes with a revenue of 100% margin if we have the cost in 2022 and the realization of revenues in 2023. We just want to have the flexibility and the firepower in order to make use of that opportunity, because we had a really good first nine months of the year.
If we get the opportunity to get more bookings at attractive cost, we will make use of it. That's the reason for the EBITDA guidance. You were asking then about how to get to breakeven next year if we have a midpoint negative EBITDA of -16%. Again, I would like to ask you to wait for the CMD because there both Patrick will give you an overall picture, but also the colleagues from the marketing side will show you in particular how we increase our marketing efficiency, in particular by increasing our repeat share. I would ask you to just wait another 90 minutes and then walk you through.
I will present my part at the end, and if there are still questions, please ask again. I'm happy to answer them in more detail then.
No, that's fair. I will wait. However, for clarification, the 8% take rate, is it still a guidance or just an indication?
No. It's an old guidance.
Oh, it's outdated.
Yeah, yeah, it's outdated. This is just an old guidance we had. When I said I expected the take rate to be flat, I was talking about the year-to-date take rate.
Okay. Thank you. Got it. Thank you very much. Looking forward to continuing later. Thanks.
Thank you, Volker.
Once again, if you would like to ask a question, it is star one. We have a question from Simon Bentlage of Discovery Capital.
Yeah. Hi, Steffen. I'm just wondering, we just touched upon the EBITDA guidance, but also your revenue guidance implies, I think, negative growth even in Q4. Maybe just remind me, was there any special effects or what's the reason why you're so cautious here as well? Then, also on the marketing spend that you're currently doing right now, in order to fill the bookings for next year, can you speak a little bit about how the conversion is currently running? You know, is it unchanged from Q2 into Q3? Just giving us a little bit of confidence in terms of, you know, how successful these spendings are going to be. The last question would be on cash flow.
Would be glad to hear your thoughts on how the Q4 cash flow is expected from your side?
Thank you, Simon. On the revenue side, in Q4, there are usually relatively little travel activity. In terms of realized CPA bookings, that's mainly coming then around the Christmas time, New Year's time, et cetera. What would have already an IFRS revenue impact this year would be a higher share of CPC, like we had it in Q4 2021, when that was relatively high. We also had in Q4 2021 quite a lot. In Q4 2021, we were breaking through some bonus goals and therefore got some additional bonuses realized. That could also happen this year. Looking at the CPC, we just wanted to play it cautiously, given that the CPC take rate went a little bit down.
Since then, it has grown up again. As I mentioned, our focus really is in building up CPA bookings, which we then have a check-in date with in 2023, and this is really driving both the relatively high marketing expense, as already discussed at the question from Volker. This also then has an impact on the relatively lower IFRS revenue impact in Q4 2022. It's effectively really our steering of the business, building up backlog for realization in 2023. You were asking about the marketing conversion. That is doing well. When we just look at the CPA to CPA, then we are significantly above last year.
We are significantly above last year in terms of backlog, both, of course, including the acquisitions, but also on a like-for-like basis, if we just look at the HomeToGo. That is really confirming our strategy that we are spending the money well in order to have this booking backlog further grown and then to have it realized in 2023. Regarding your last question on cash flow. Usually in Q4, we are not expecting any special effects, so receivables will flow back and therefore we look rather positive at the cash flow development.
Great. Thank you, Steffen.
As there are no further questions, I'd like to hand the call back for any additional or closing remarks.
Yeah. Thank you for dialing in. We are now doing some final preps for our CMD, where we would love to see as many as possible of you. Yeah, we'll be back at 3:00 P.M., hopefully you will join. Thank you, and bye-bye.