Inspirato (ISPO) 8 May 242024 Q1 Earnings call transcript

Good day, and welcome to the Inspirato First Quarter 2024 Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Mr. Kyle Sourk, Investor Relations. ahead. go Please

results good Eric and we today's we website quarter call, our Relations the Thank of page and morning. CFO, CEO, our XXXX first our Grosse release investor.inspirato.com. afternoon, available Robert have on press Investor you, at announcing On is Kaiden. issued Yesterday

potential are a and for to based assumptions, and and but you could strategy everyone results market Actual differ our refer filings them. to, expectations SEC plans more future obligation operating no we Before of position detailed on comments to opportunities. limited we remind These our begin, business are We not today's materially. discussion financial growth position, statements and we of market guidance and update results some and risks. that forward-looking prospects statements, including, of assume additional

prepared or discuss In measures, considered of comparable operating These in CEO, management measures non-GAAP With over Grosse. to our should I'll the our which are in included turn isolation measures Reconciliations a earnings that, our addition, call, to these GAAP. be company's during in evaluating financial measures are directly results the performance. GAAP as Eric most the call not substitute for the with accordance release. will useful in

XXXX. Thanks, to to today's and Kyle, discuss On strong and excited our good call, our start I'm morning, everyone. results first quarter

years. generated our profits read X delivered can the net in metric against we've release, in which is press an on basis. both more profitability QX period EBITDA we time you first As This a income marks in than either and

the of plan. results work the throughout in are line results the third organization to QX our Our represent delivering and with testament quarter consecutive hard a

commitment. and trust our our community. my and ones, just that remarks with loved credibility trust results for I us we're shareholders families their last QX members investment We and quarter, As deliver believe committed also building memorable mentioned to experiences to demonstrate our as in broader

our spent heightened efficiencies, profitability. focus on and execution we meaningful QX driving reflect efforts quarters step sustained While several a articulating and our results these operating time, take do towards

QX, questions well In centered our ourselves our profitability conjunction began products. around portfolio, like, products ask reap membership of benefits and the a our When we with are and work reimaging stand-alone we satisfaction basis do functioning our align also another on our X they goals. in with core to

drivers Night more a down QX, Some like In was same lowering give increasing ADRs value ADR And our actions straightforward our year-over-year member to on more to over frame. per Residence our of residents paid of the the basis. were X members. time

marked a the fact, peak. a time [ paid highest In first niches when total was since as ] an our [indiscernible] quarter of delivered the of travel delivered absolute XXXX, percent leisure level

a lot Pass, took reimagining like actions, work. Other Inspirato of

this impressive, XX to improve expectations. up value. Flex our in been spoiled. So of Flex Since was have and far, cases, frequent for key a out set reservations days. its reservations the of Flex members' trips past books We for In past XX% Trip trips in beginning would mid-February, for significant otherwise traveler of inventory have some Even is more make trips have with change to and with more close than way lived flexible than that trips. serves to XXX the all One Flex more more made stage results to of a path we approximately last-minute trips. introduction goal have the within book appealing launch been XX% ability positioning traveler.

in XXX the for Pass compared approximately we our expected, we down and our of subscriptions, of expectations. had line they haven't been X,XXX these everyone. At have changes XXXX quarter, past While with welcomed end approximately as been many the to by year-end members,

Importantly, Pass have great member steady, which reservations we're offering and Pass member value. per delivered Pass nights held means Pass per

fits profitable in our all, from also in call. that MICE we last now overall. and approaching the portfolio more [ sustainable, we're is delivered, our mix better XX% Pass alluded much XX% in Pass with portfolio. levels ] to down and more healthy of All profitable our travel nights total in a represented

With also to only not sales, respect longer-term We're with to current focus on contracts multiyear member prospects. these club membership, extensions we new but efforts selling continue to on for stickier focusing members.

that and member core, the base our our initiatives solidify long of to refine unique and identify the over view offerings appreciate building longer-term run. to community. further is as members important to blocks that members and travel love which goal elements Our are Inspirato the our We grow

must That term, base double we our our it's down member short the reinvigorate to said, product that and apparent offerings. efforts in

put that a profitability sustainable, standpoint we path work cost in near-term I'm While firm believer our have and the lasting a growth. our structure from goal, success lies driving achieved profitable in to

first our increased to reengage drive them Inspirato calls, previous our and entrench members to on of further true travel members as outlined is I've objective the As community.

is successful While members, amount subscription of increasing more community. apparent in these which to churn count, the our active more and engaged of revenue sign travel -- a is have member, efforts we've in which of idle per led a also been

more detail. to beyond. increase and aligned believe improve with which to well of in to our I'd product over that over expect long run. and offerings, can discuss continuing investments us combination member like portfolio to retention And that, in Robert and XXXX our to we the profitable Next, call growth position I turn we will more turn will Robert? results further refine a engaged more a the base attention our to the

Thanks, Eric.

pleased first behavior. expanding solid profitability, report margins I'm our highlighted you gross by quarter and travel to mentioned, results, As

million million million. we are between million between and expenses million of of total such, a $XXX As loss of range our XXXX $XX and a reaffirming cash adjusted million revenue; gain EBITDA $X guidance and to of $XXX operating $XXX $XXX

revenue million, of $XX total a generated XX% we year-over-year. quarter, first the decrease In

our decreased we XX% XX% revenue XX,XXX close with well In Subscription subscriptions. revenue line to internal subscriptions. year-over-year the largely total active and XX,XXX the quarter expectations. exited as Importantly, in due Eric that subscriptions in QX total, decrease Pass was once in members decrease as with again referenced, an

revenue year-over-year, due behavior. Travel in as to to the members largely travel decreased decrease opposed XX%

points to are In I like travel data that fact, to related there would several highlight.

nights QX. First, as in due to to delivered our launch our ADRs, has Inspirato to levels percent decision well success standup proactively paid we of functionality as and haven't our improved Rewards X XX% in returned team lower past nights member years, total seen delivered a as

our of our paid our identical year, having residences fewer a number nights nearly successful to members. have Second, in resin despite to last been in we member traveling have inventory. we Compared

Good Inspirato While in associated still for each of we're there these these due Business, and is by encouraged an early figures NICE Inspirato uplift for trends. with the to

favorites. Third, be our and Inspirato continue travel only member experiences to bespoke custom

last excursions, X X nearly our golf [indiscernible] out planned sold For all we example, launched XXXX and for just all that month, within days.

are upon metrics bookings softness QX while track, many see in we the of to continuing travel in some Finally, delivered we QX impacting travel.

calendar our of as the As have year such, of QX. of building our positive we some continue on remainder trends in for the we build the upon eye how

residents Occupancy flat to ADRs. XX% total XX% while ago down Rounding had also with the our maintaining year XX% XX%. XX% improved leased out a ago, ADRs in discussion, compared compared rooms a occupancy nearly we travel to hotel year to

only Moving first member associated align expenses our lease where the our Year-over-year, is expense optimization whereas realignment, were better nights but lease realized XX% approximately decreased to terms our and portfolio lease with effectiveness to in revenue. leased and properties flexibility in at portfolio renegotiating marks quarter total down our the terminating our with QX we This cost XX%. efforts. base significant of of available approximately our savings fixed way. indication by expensive the not agreements, costs along also an

and savings XX% expect we the a in from improvement to quarter the played coming the in captured year. XX% of majority of expanding as in vast QX While last a gross the in margin part quarters, further were revenue first percent large QX in

excluding marketing, $XX or total This compensation which were in tech XX% In G&A, million year. combination stock-based cash expenses, revenue expenses of and of depreciation, and favorably terms a of approximately sales last and revenue. of expenses XX% operating and to operations is or million development, compares $XX of QX

as generated an loss In an $X.X improvement more of EBITDA $X million EBITDA compared $X.X adjusted previously, and adjusted to of positive than year ago, total, million. mentioned a we of million

remember While EBITDA and for cash long that what subject this in to nice of business our the is revenue, flow from the free is milestone a company, perspective. is a beginning is accomplish seasonality it adjusted to we important run. also It to merely the hope

other travel quarters. EBITDA of In experienced to and QX, relative solid due levels delivered we to the amount of revenue

million $XX burn We to even travel also which compared last next period a million in In of and to over cash QX, year. our in booked. is $X QX further summer winter just improved

cash with less and We expect cash EBITDA first and our stronger free performance flow burn lower to compared quarter. the revenue in

quarter million In at we cash, terms exited $XX compared to $XX year-end. with of million the

several a options filter underway while our have liquidity We potential on operational to and liquidity. explore initiatives have overall financing focus we keen our

their want hard We've to operator progress to plan. continued continue turn members Q&A. the our excited I'm like shown continued Finally, to over past long-term I meaningful it With our thank work I'd the to that, support. and the and executing year, our employees for for over for

Fitzgerald. Cantor come will from Instructions] the line [Operator of question Knoblauch with Our Brett first

quarter, . guess bound in was on we seen the the you resins year-over-year maybe occupancy very upper not occupancy, a what -- if while. just what quite rate? do Congrats up with start is think could resident to on good I

for our want that pleased travel. make question. of members want a quarter. available for balance want XX% our it's to same obviously at we've occupancy the Brent, sure Thanks optimize getting We Yes, rates. really to this who to want achieve. all here. There's we And time, to to Robert got we residents the our we're with

our broken -- points we few world ideal always points there's think But weeks never that fill there's top in going more There's like maintenance this. more we'd be we've an you're an ideal could circumstance. do keep probably that in. there's able get a in properties than to Obviously, in got percentage percentage that go to few probably a that to I to shape.

do less Do I you guess, where could XX%, was, was think percentage to get deemphasize delivered total you think nights resins lieu continuing XX%, quarter. hotels to as And residencies. I you're of I to percentage Awesome. a in XX% would I expect then, a go? XX%, that's up that assume of guess that from first it XX%.

Yes.

and of heart I have types sure to that our accommodations to are traveling accomplish really we members, smaller there at we're they people good to residence want locations fairly where we're of residence travel they're because a some Clearly, a travel for just in a to they what make them that group. our the giving luxury need want think is what we in. with larger to need, not folks is do the or want to the trying geographies residence a but it's or balance. urban who we What that people and X travel X versus practical some they have locations

I think fairly directionally, right. is balance the So

I who paid between our percentage accomplish think our where in through X the the we improving. trying designed for or get to occupancy of sure is are who the to quarter mix traveler occupancy you've passes increased that of that factors, flexible overall rightsize portfolio that occupancy including seen to is our this that close and some and And a things that we've wants the wants paid trying combination off-season inventory. of making that of past

so of occupancy. that, we've percentage been to, able with increase And portfolio, the smaller paid by a

talked the altered past, trips Flex the introduction test? you guys in on of think the has about unprofitable. past How I economics being

And of put advantage Sure. really This and we're we're more opportunities. they're with encouraged that is for Brett. changes happy by past the last-minute Thanks, in place Eric. how really members, we've taking

So been XX booked XX% of made example, changes of and Flex within as XX% days. we Flex have an been those stayed have trips, since trips the trips

a manage us pass holders of more flexible trips, So portfolio sort our which as last-minute we're overall whole. our more -- moving spontaneous our of helps towards basically

with That seeing. we're are that's we're trends, So churn. some very we overall pleased seeing what encouraging and said,

think originally a We factors, in really everyone signed that's last-minute by that I And couple a are was past the of was previously and holders, decrease mainly desiring of really and number not trip. pass that had up and but driven seeing for expecting was expected.

handling I this really really have what's off folks that for those how bit. see whole joined product that capacity the falling a So a of can't us more and whole. residential very of terms of our we for is we're Pass overall are portfolio important role a But again, broader health for as the is economic in little how is good enough taking overall across very, Flex the important launched And of advantage plays emphasize a inventory a since designing much trips strong members our a as network. product. excess to are

now It's on in growth. is goal quarters to in do when sight and just that and think ultimately could the when subscribers, maybe to you churn you plateau Well guess, talked return be been and part profitable churn any the to that return? visibility growth. row. I for I expect of of getting have we a subscriber reverse several sustainable big growth is end a into your to guys might about And equation

to we've driver member alluded member With of really Club, doing focusing what really, what respect of terms that really Sure, we're is retention. seen we're sure. the behind seeing to some Pass. This around to and in respect on again. engagement long-term I of trends And some declines, Eric with is the

So focused that -- members, new on well. means but as of multiyear for in and sort deemphasizing relationships only practice for of not existing multiyear more month-to-month kind members memberships

the quarters. our we've are members changing efficiency, of and changed foundation, put has We're cost the year also growing. solidifying operational our the course dynamic several XXXX in how really has leveraging -- last -- a we've that over that around So structure is and really place improvements the being also been

XXXX help $XX generated, us will to XXXX, but for to of million the growth, that going Inspirato. year. we into expect year not only as and we've OpEx for that which successful in sustainable of You'll efficiencies we growth. And do Inspirato positioning really be to return recall whole lot believe towards that end switch growth can that there's next in dynamic to returning beyond really to for a platforms a start to really about it's -- that this and really profitable of And

a very been once there's inventory long-term managing to a that XXXX experiences that runway make us One to have pretty confident more delivering to we respect members speaking, Capital high-end mid- for right, ahead the us long in healthy of that with and premium our is residential things of a lot for there's get of amazing growth source And us. Partnerships of do fundamentals beyond. great we broadly growth.

you into down see and on rolled where quite on could to it were controlled that do we gross trending assuming should rest the year you go likely question I'm from accommodations, gross modeling about a talk Maybe lot which margins. for And well? the leases a significantly, similarly, if tie of controlled guess here expect accommodations as guess, and finally off. I you where of -- margin can I

Robert again. Yes. question. It's Thanks for the

to So with pickup terminations generally. was between many yes, XXX going accommodations reduction we're margin XXX it said some We've take been in really for about the and our of controlled days happy. talking quarters And gross as we've with now. past, a time

XX% with this we happy the got to we're quarter. so And

continue of that's, between to see because the the and the the XXX a and kind We of numbers. in overall decline in controlled XXX May quarter-over-quarter started were time rest back they will we frame. this days, year And again, off rolling accommodations and June slight

the of also a starting now, got of the to had some we've more ones are but some we've shorter roll off to off, rolled have that go. long that So ones few

be big little this for really quarter bit there'll of but So a was it. improvement, the

margin we've as then the is revenue now cost of in you cost biggest the And terms really we fairly revenue. revenue. impact is a before, in seasonality our with as the of gross of know, with about the talked point, around margin, be the historically perspective. low to in And leases, line of impacted quarter gross revenue fixed low a have going the QX from terms is year

into see up improved would have lower we'll in so some expect as we margins QX, and start pick we seasonality there And margins see rolling then well. to to and gross QX,

pick hope that continue be be start drive XXXX, as on longer improve margins continuing optimize then portfolio we really in the we able our we to to keep And term, to to to up have, our our margins. we'll well as -- to and revenue able

Awesome. me. question for maybe And last then X just

just just that's One. those an in if have the Just for your process, be guidance embedded Can that will on And Capital update members where all? in you on talk if able us And are to to? access give yet? the we been when year at maybe not, able inventory about they

This yes, about pretty And excited Eric. is Capital One. we're

we a they've it our very, for technical we're last make off And the the consistent to sort the and modest consistent of back year. of now, it demand speak, that integration. we've of enthusiasm about right on And teams we for And is can begin and start in do been what's expect literally relationship half guidance But things expect on are been big we I back Inspirato be will couple level year. very and continuing partner happening And track sort to this be that that of we've we hope to us kick a the half And of quarters. of driver but in up with beyond. over terrific we expect relatively and volumes XXXX, as to available given. us. it test as ramp inventory in clear, do XXXX work the to in this that's think

on it be residents bookings? going going that shorter-term hotels? more. for will -- that Or is has inventory or that dates . maybe there, to will is so that been inventory to that that booked the X will on approaching platform, more more the be approaching those go And yet be skewed -- it sorry, just Is

the based, our and of be the itself creating product members. going residence not for ensure to that any to it's existing we Yes, have and -- designs really challenges we're fences our into experiences

really the aren't view Inspirato as Travel of Inspirato this Inspirato is a travel experience the for we So people differentiated which really time. folks experience, to that great members the -- give way taste first when

way So standpoint, the is to we're a overall to that we're sure making are at doing that doing time, respect great I experience. that a what from resident's optimize with occupancy same in our and very getting responsible portfolio think members our a

question, next the Securities. our One with moment come Grondahl from that will of Northland for and Mike line

Mike. is on This Logan for

you provide X additional the your some off, for about the going congrats Could the quarter. of guys on you're and commentary rest feeling First forward? top priorities how year

I'm just you didn't sorry, repeating you I question. hear do just mind the Can it? Logan,

Yes, yes, course. of

on the provide top additional priorities feeling? congrats quarter. the how you of of some First the and Can about you're guys for rest your commentary X year

operational our is referring -- the quarter for breakeven sort and the first operational our view step. making first foremost, we and for if priorities priorities, So sort you're to of -- as And of towards necessary year. hard that something pushing to us we're get the that improvements our capital we're this and a cash and that

component balance that from our a is another the made it well. ago, improved further. as improvements we want burn cash but is where our cash, of with around our think to respect was improve year a I that on And were $XX significantly still to first we where million, quarter significant although basis, for year-over-year we've

disclosed travel direction. basically of nights we semiannual and and in in our to We're we're drive a member. activity and terms occupancy that sort around improving occupancy more And of base. been is positive per moving more a a levels want member that attacking lot how sale drive recently across to We our continue of that driving more there's engagement comment that we're So levels.

also, really our operating we're more And alluded infrastructure, with efficiencies in particular to, Robert as continuing leases. drive our cost across to then

effective the So very, our balance that we're of that and members, and that position do possibilities sort actively see a these and are work good financial we all that believe stronger be very sheet what we efforts company a to said, for outlook. avenues and thing, may stronger exist across constituencies. help shareholders will looking through for would But understand

Perfect.

Just better And have you what for during X measures guys the question. additional drive future last taking What that? in doing to this year? be bookings will been we

Yes.

Logan. is Thanks, this Eric So again.

been little we we improved, So a X drive that seeing that's of And been but kind to there's look bookings a we down. that we've are in sort sort member, flattish we're bit encouraged at that's direction of a per member to activity of the revenue a that And to per on lot backward-looking on bit taken -- little want. standpoint metric. of of basically if that

in semiannual last is ADRs we being second, overall more particularly sale around how other by are can then First just stimulate at sort down. demand, and taking -- ways Friday. we our those through aggressive of looking we that And our which closed

travel like last of to fall, And terrific. there's One say more then X/X thing those big program been a me, we launched excuse just our bit little initiatives, in about status, highest too, X/X that is year. rewards other XX% frequently. rewards or a since encouraging which are our have that those push And more of to members to members than some our members great already of members our have already is that's

excuse that and that do engaged travel it. really members there and So are Inspirato cohort me, or good of travel of value suggests with members us that really frequently

spread now base. enthusiasm of is just to across member kind a portion our wider Our of objective that

the would further call no closing management back showing questions time. the any queue in over I'm turn like for at now to I to this remarks.

that We for We the for in quarter. want bearing issues, don't enthusiasm we with underlie to our Thanks and but for had apologize communication Terrific. returning profitability technical some start. to us. this delay the

for questions the staying for in we quarters the and So look and to ahead. the you in thank touch forward engagement, much very

today's participating. program. for concludes This all Thank you

disconnect. now may You