eDreams ODIGEO Q3 FY26 Financial Results: Subscription Powerhouse Accelerating Toward €270M Cash EBITDA Target
Presented by CFO David de la Elizaga
David de la Elizaga, CFO of eDreams ODIGEO, presented the company’s Q3 FY26 results (nine months ending 31 December 2025), outlining a business undergoing a structural transition — but from a position of operational strength.
Strong Underlying Profitability
Adjusted EBITDA increased 74% year-on-year to €138.4 million, demonstrating the resilience of the core business. This metric excludes the temporary cash timing impact resulting from the shift from annual upfront Prime subscriptions to annual subscriptions paid in monthly instalments.
Cash EBITDA reached €126.7 million (+2% YoY), despite:
Investments in new products and geographies
Temporary instability in Ryanair content
Subscription payment timing effects
Importantly, profitability per transaction improved:
Cash Marginal Profit rose to €207.8 million (+3%)
Cash Marginal Profit Margin expanded to 42%
Cash EBITDA margin improved to 26%
This signals increasing operating leverage as the Prime member base matures.
Prime Membership: The Core Growth Engine
Prime subscribers reached 7.7 million (+13% YoY), increasing to 7.8 million in January. Management reaffirmed the FY26 target of 7.9 million members.
Prime-related revenue now represents 75% of Cash Revenue Margin, confirming the structural shift from transactional OTA to subscription-led travel platform.
Higher customer lifetime value and improved loyalty metrics (+10% increase in NPS) further support the long-term model.
Strategic Transition: Short-Term Cash Timing, Long-Term Value Creation
The move to annual subscriptions paid monthly causes a temporary “one-time unwind” in cash metrics. However, the cash remains contractually secured and is collected over 12 months rather than upfront.
This shift expands total addressable market, accelerates subscriber growth and diversifies revenue streams.
By FY30, management targets:
13+ million Prime members
€270+ million Cash EBITDA
1.5–2.0 million net adds annually (FY28–FY30)
Cash EBITDA margin dip to ~15% in FY27 (investment year)
Margin recovery to 23% by FY30
By FY30, 66% of volume will be diversified away from core European flight exposure.
Valuation Disconnect
At current share prices, the company trades at:
4.4x FY26 Cash EBITDA
4.0x Adjusted EBITDA
This compares with:
~8.3x Global OTA average
~11.0x B2C subscription average
Management believes the market significantly undervalues the structural improvement in business quality and long-term cash generation.
Capital Allocation & Shareholder Returns
eDreams reinforces confidence through aggressive capital return:
€23M shares repurchased this quarter
€100M buyback commitment through September 2027
12M shares already amortised (9.4% of share capital)
~24% of market capitalization pending repurchase at current prices
This implies an exceptional yield profile rarely seen in growth-phase companies.
Investment Thesis
eDreams ODIGEO is transitioning into a high-margin, recurring revenue travel subscription leader.
Despite temporary cash timing headwinds, operational profitability, subscription growth and strategic diversification remain intact.
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