Inspirato (ISPO) 14 Aug 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Inspirato Second Quarter 2024 Earnings Conference 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 today, Kyle Sourk, Investor Relations. Please go ahead.

morning. good and you, Thank On today's President, CEO, Zamani, Chairman we Kallery and have Dave and CFO, Payam call, Robert Kaiden. issued and our assumptions and Yesterday quarter that these agreement we our results based announcing Gap] release afternoon, on are our and XXXX [Audio results announced could the previously of actual statements closing share purchase press second differ materially.

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

Thank this us further help as at footing, for personally opportunities. with $XX you, morning. today's injecting QX. solidify I'm you, welcome promising capital I'm Inspirato, a and Kyle, call everyone, new goals and for company era accomplish these in of the new filled we excited joining into our thank one us million incredibly To

the of note say additional improve financial it members but guaranteeing few also outlook, I'm than our and million as means through ago. Important a also our $X.X it position stronger liquidity business our that prospective days our personally, Planet part In is personally current investments just to strengthen and that One only in not was position demonstrate a to a addition Group. These agreement. investment, termination I lease an to when entity my

that, count loved while and number head of and XX%. exceptional all experiences We a of namely plan has decisions, our about said by are brought world-class profitability their remaining to our committed delivering better this also service now to difficult reduce equipped for to members ones. Having transition achieve

these size a better cost our action the necessary in solely and While it a of actions sustainable. To take that Upon further alignment reviewing CEO no support shares Inspirato's my form compensate was shareholders, cash to it salary and business required it instead demonstrate the make to duties plan $X its an lightly, current order performance-based. and action will with current of losing team cash I structure the members have that given the projections, take Chairman, next as elected I for clear in business this is goals business. became fully perform year, not and bonus of much my and our

I as like I'd valuable reshape to Kallery of new my the look the of be in fresh to call role initiatives to David Inspirato to perspective company has the turn to X our we Chairman, will President, directors naming over bring our some the future. With to diversity as Finally, experience, recent boardroom review a thought and that, undertaken.

Payam. you, Thank

members the which back give the memories helps to while very One building with firm shareholders Inspirato and quarters, Inspirato. entrepreneur, the illustrious new and experience reviewing founder excited an and of last aligned members successful done our to am a an repositioning Before we've investor Planet Payam and the platform ethic, a chapter the truly improve Group, a enriching how his career mission support and way to I and strong attest and relationships business personally and fit society I the we communities, the with to also at closely his at pleasure lasting time is both world. ethos each my had to investors way. has for work Inspirato, past can stop with created working tremendous the his want mission and I begin serve. Payam at Inspirato ideas vision of an is that for our express value the in of has to over along him inspiring few the by Prior a cultural an

made progress year, our Over some that offerings incredible transformation. we've in the foundation have improving past for laid this the

luxury more. as beginning the of a Club, for of model. high-churn for moved which X from club returned years and travel than sales we've have transaction-based of subscription a our away First, is company, Inspirato the XXXX, to XX% new roots Since more been the our foundation or

as Second, a we cater reimagined frequent Inspirato Club and and perfect to to highly complementary traveler. to Pass the to serve flexible offering

on Invited rates to prepay XX with to started nightly combined of Invited. years annual fixed in Club X-year the introduce Inspirato Next, a booking basis. June, access ability Inspirato offers just an and we by window

offering. early, over finally, our excitement tail partner June, generated $X be interest very we're still work able where strategic with to system of of One, tech And million introduction take limited reaching Capital it's by the flow. the we've and end integration Since and this to plan fourth seen the quarter. and cash new we've in already new While our in for this product reservations

next partnership a Inspirato's this recognition, we serve amount financials demand to expect will growth. In key of steady and eye Inspirato, to for company, work successful I'd under like confident and that, to put a ultimately quarter. sales to with driver to to the increase of very the be contributor leadership. And point I'm future new for Inspirato's our that most tremendous the feel be years the in summary, stage will the discuss as turn call Robert? generate set nights, paid be Robert has a true few We inflection what for our for over watchful Payam's and brand membership the team in

Thanks, David.

highlight results, quarter most Before financial our is to liquidity. want feel reviewing second metric, important our what currently I I

compared of cash first second to capital first significant by year this restricted compared forma half end cash equivalents and in $XX which quarter the was has in infusion, of improved or million the million XX% to $XX cash liquidity, million progress $XX first the quarter. including pro made at half also Following $XX We've cash, of burn, million our the the XXXX.

liquidity, in our the actions. injection bolster $XX taken following to million we addition In have the QX to capital

First, we to of result additional that $XX we cost-cutting annualized million in implemented measures expect approximately savings.

It's in cuts member-facing reduction were our without as includes implemented efficiencies important sacrificing this mentioned, member roles to week. these capturing this force earlier XX% experience. we made not are note Payam a to As

Second, we impaired underperforming leases. termination previously of a agreement into entered

this As decrease we March termination August of agreement, lease approximately million million through committed XXXX this savings part our the XXXX from of $X.X after agreement termination from total million. of lease cash payment XXXX from XXXX. will $XX $XX Total future by will through be minimum the payments

Club decrease and can to Much total quarter, XX% Pass travel are In in we with in revenue decrease XX,XXX lower terms of that revenue total, second members and there of due members. In year-over-year were be planned approximately second the factors a revenue Club to exited $XX XX% nearly perspective, the to XX,XXX of and million, subscriptions. From was in which subscription quarter for of attributed the members quarterly XX% the generated a XX% our a a we decrease. subscriptions, decrease of of decrease contributed approximately results, XX% number a number the year-over-year.

XX% of in to First, decrease ADRs our quarters. due revenue residents primarily in $X,XXX below coming we saw a

we from ADRs did strategy number reduced nights a is given the previous delivered our members, deliver lowering we of to of the value to have While rates. in associated a hoped that paid uptick would not part see an for highs

quite the leased in quarter improvement. was in for the Occupancy leased expenses with portfolio Cost driver fewer Second, single from the hotels. decreased quarter, the a year nights removing offsetting our their first not from fixed year-over-year in as improvement in hotel as XX% approximately XX% as increased from Similar rooms by a revenue modest to of increase ADRs. year. second risk XX% delivered, well biggest underperforming revenue we our associated continue million, lease hotel a quarter to the last primarily reduced to $XX costs adjust prior

the reflects second seasonality gross expectations the of watermark for of the Given to the that typically XX% revenue case quarter as impact We quarter declining our XXXX low subscription XXXX, is margins bit year. and well the travel compares for it as a gross base. be our the margin below reflect favorably revenue, to a the but believe in in

approximately XXXX. second in $XX cash $XX expenses million million QX compared of the in Our were operating quarter to approximately

quarter total, of loss our in an generated compared to ] in [ EBITDA quarter approximately loss the million As of reduced million in Payam a XXXX. as a XXXX. Year-to-date, compares see and million further second second for cost favorably the loss in savings modest $X a approximately a are in count our severance to, quarter, thereafter. In activities. cost alluded operating improvement head expenses result future third of an the planning to of in adjusted $XX.X we acceleration given $X.X we and EBITDA other of million and loss We'll $XX David of cost reduction payments savings adjusted

despite in been same seeing In quarterly off. emphasize standpoint decreasing for paying consecutive have our EBITDA This called made improvements we figures fact, profitability is I been from we've over X that time both revenue to span. this out have product a improvements and the efficiency year-over-year consistent quarters.

While were want by on much of our we a profitability, not trends driven be. revenue to focus declines them revenue in planned, product are where

our positioning work see earlier to in embarked some KPIs underlying we in are our we different offerings However, related in improvements XXXX. beginning product to on product

early, are choices for the it's the business. these right we While remain optimistic still

the driven in improved up of but margins improved in portfolio through and Looking our versus by the we've year, half actions optimization margin, also gross the are These expenses. EBITDA gross in operating XXXX. are significantly margins changes first within part at only not of and costs, efficiencies our burn the and year, driven cash EBITDA operating first reflected taken the the

leadership Finally, undertaking, you the plans removing and cost are our on our look renewed our are -- in future we'll update the efforts guidance, to reduction XXXX the due and in on future. to we we change

over closing call Payam for turn operator to to for back I'd to some the turning it Before like Q&A, the remarks.

Robert. you, Thank

many soon disappointing. I and direct these simply when aim find you transparent And communicating. As to be of are results will

growth, more The prosperity, company, simple. quite invest be evaluate While first your certainly frankly The I been and far great but it too it been and Inspirato that on that as X about things. When with be not the believe cut matter years of to than way culture profit are put, time most. incredibly there where you organization. is the improvements want by comes I we to the I an recent I'm cusp profits again challenges to It's again, is failures. excited important profitability. or and confident growth. that several of growth. riddled there and have me it's That should our have future quarters, firmly far once But many cannot are to businesses, where the said, things past in in

but to go, we next we also enough As in will for further connecting coming continue that I this accordingly. forward approach articulating be chapter, our promise nimble innovate will respond is that, turn and future we look I'd to and we like learn our over and react operator quarters. With call plans my you Q&A. the to to to the with as

Mike to of Instructions]. question [Operator from our Grondahl first is line with come Northland. And the going

wanted like X-plus years? I for X-part Payam, vision you a to two, you your attracted you to Inspirato. Inspirato kind is what One, out question. ask if what of And look

necessarily Inspirato many how countries. Mike, which question. to to I'm know XX of out countries. watching I've been travel exactly and the many, there. hospitality don't probably I come for Airbnb, a many And do big great hotels, don't I options but don't I years, consumer XX industry, other a and but from lot. I enjoy many, I've been

some probably successful on a XX,XXX of the for concept subscription kept most really business long and members I the an model time, beyond. and like people it's a of something with I the in represent country our love So eye that I model.

So definitely me it's that revenue, it perspective interesting. And by significant than spending business, simple itself this looking from that at the what is more it's so should. company extremely has the to but

very around like So it's but it big time, day, At business I it the that long the the been a by here's the who as have than of probably me to for as this point revenue, people been in higher time. with of know felt more end about this some challenge seemed wasn't falls company it XX% spending it's should, before. at like it the significant

what size. that's company me, a So right significant attracted it really that with a really should opportunity

that at X product boring. again look and people that has to this want are selling and very think it does business this very So our one what more like? drama, like to. our plenty I years us it kinds do just thing, can and it of I very, next does well. product. to good of to make I'd the will simplify become of business work, the over same we make I'd but this sell that like things the over There does no do

I mean, of in doing but innovation place, want innovation form a better the already have lot the the not going of don't things really, necessarily So whole to of to job confuse maybe rather I find kinds you're we them, optimizing a growing market. but in

I And about you team going group on the you Good, In what are the a Invited, focus over the we've anticipate question XX the now enough. sales next things, the is X heard but core then focus Inspirato Fair on? Inspirato product, Inspirato Business, months? for do sales for you'll what guess follow-up all to interesting past, to

are what on that of XX% tell our excuse selling to we the of the I with or We David in Club is Kallery. members very going all prospects access think XX% the our are to a About the attracted It's Pass. to services. complete product. that way this to very -- portfolio XX% very, would offer. is primarily straightforward you me, to of engage heart attracted prospects we're Club. team of that Mike, we focus

from And X-year definitely it forward we think calendar to. way consumer last-minute looking for flexible, Pass sold then flat, something for of the expensive they attracted nightly the than now on that And rates rate in are Invited inventory they booking access a and selling luxury, the of a Invited. We are Mike, And are XX that that value prospects a another consumers are it segment some value. upfront, looking fact of the trips with product format, our of great offering total year, features to we X% population. tested the members interacted and that a the there's the then more out pricing going they're It's to all in that provides very circumstance. beta about but remember very, highly there is be couple going The different it. prior there's our a last is watch for lot you was to have same memberships they If conversations, no set Invited about the think after We're that about are be to. The to attracted $XXX,XXX is a and a We pomp for that get right fixed that. nightly for other going very product offerings. that then feature a is charter pricing mode sort of attractive attractive.

So I'd saying XX% approximately Club, maybe XX%, XX% Pass and summarize Invited. by X%

Got or Invited, Any my a looking sounds it. forward can integration. It of June is that number. One, you how that's drive something been on mentioned you to we've thoughts may accepting like start reservation. that XQ, business? may That's Maybe thinking new the question not Capital updated just flow great. the any $X cash since that's And on Yes. big from million last

This was and with, we're was done And big doing lot a testing. work, work. few actual on X-yard some work but work as very platform. One Look, about of line with a taken Hopper is for on We're excited technical it's -- to there. work was it technical a done. Mike, this there we're development actually the finishing quarters. outstanding We're team that just the There uses very, Capital is having us. the lift The David their again.

the in around the in excited. argue, demand. last Capital and we'll the So prolific companies one moved the States, United today we've market One, into of I present mean, I'd over discussions is most North offering. Look, definitely America very couple we're of the very, back weeks, about way

of really sporting about Olympics can't we any watch talk or and future. event want this seeing to obviously, you about make might like the the just they're think is hard without going future other much to And we'll the don't very QX. You I an for them. on partner. something a the lot what look too keep new amazing in work, to put but Definitely very updated us, excited. because, begin transacting very, ready in we're we're in We've

next Fitzgerald. Knoblauch question And from line of Brett come going our Cantor is with to the

on just guess portfolio. I controlled accommodation maybe start the

kind I already been optimizing point. years locations? almost accommodations of Has the think we've accommodations we're increase number embarked of ago now portfolio, taken, down an call this We've to of the this more. to the of there route underperforming at it, XXX XXX, X out take looking

this underperforming of we reduction controlled So how should has increase? of think I locations constant the accommodations? about guess, number the Or

Yes. Robert Brett, here. the thanks for question. It's

on our we we the was of ago a So of When number just it. starting for some QX so our over in One part, like. a of that, that were little occupancy that portfolio was we'd year taking we demand bit last were had because there supply didn't reasons year, we we of a embarked did had and than seen out. in And that oversupplied. that also were seeing match we rates lower

started so then. And process that we

takes As exit you some it for leases. to may our of recall, us time

months to So X it's usually XX months you get before out.

give did you in started in of QX notice, QX a to do and which last So year. we

lowest so occupancy on challenging and where rates. QX's see And to overall in see year traveling lease the our of perspective, year. we we a an to quarter occupancy to saw this started some some QX rate expense quarter from pickup benefits that really it's of started our

But the took of those -- So X are I'm rates optimize not continue to to XXX about reading portfolio. bang, the as big last out we continue we where occupancy now too we year, we this for residences much quarter. compared into our

year members our that certain then, will such we we underperforming. that that some look We're we and number that year, we what up want residences we to said, And still to do are this, portfolio, picking as residences our last to continue So residents we are a towards Since in of there did next might we're deals across making need be new. targeted and cut number those relate of and when number. back the residents limited quite of honestly, XXXX. still decisions think

through locations, year at And with our members does much the are first assessing the how like so we really do our occupancy look as rates. those go them, experience enjoy we're profitability what what their

units. -- we're will continuing of We we as the just QX. refine one approximately that's portfolio. XX so properties, group in be to did mentioned earlier, And now exit That

portfolio at So want where other that's really same reworking underinvested where be a to a little may the of are the the big look that want. we that locations haircut whatever be our continue entire to to And of and that that more not at properties achieving there. we up then for in kind then are And wound results reason time, we lift. go to, for bit want members we a our do we to

we some we ones profitable. hotel in them really ones portfolio, meaning type on our we've is the I'd we're a The had We pay that differentiated is also hotels the other hotel obviously down profitable, leased described from last the hotel residence We've piece, the say and thing a we And basis. XX% over months rate had close of perspective, of XX on residences. or were a From changed there as arrangements, big with a to of bunch per that a we've night net what so. and weren't kept that replaced mix profitability perspective, them.

want that to hotels. in but the still hotels on that have only we've pass same us. And doesn't in to, go will the hotels that in when net really level the they got members exposure get places want continue attractive but great it for invest leased to do really and we our to our rates the be of get So they can there, that Hope we rate knowing to members to helps. locations of that best we out we'll all

It will the XX statement -- fall does. The off when there? units, expense will when income lease they the

Yes.

end from after will we into will the just be those. March a entered be is it -- let through So for perspective, will a arrangement that those we where termination paying March more of which from of fully -- -- me are XXXX, off then we And drop books. cash do

to it. expected at And quarter, on, emphasis about subscribers to consumers? Club, think tinkered declined guys for the your nice. have to pricing return than Got how which look we a the Or at? for with is where the when you guess, I we less guess need count, growth. of I given growth, this to guys I is should business Club little think subscriber maybe that's ultimately, looked haven't ease to different a you to it something I is models lowering that attractiveness set that? guys' it broader Or return

is This Brett. David,

new subscribers the over So over really really by much high Club really XX months, focus we're doing deals. multiyear last but with an from that basis, to multiyear a months, a absolutely, last And XX making annual toward cost we're the trying deal on guide attractive. more

us So folks memberships. and -- of already person that you're years to The and X-year to is of memberships, a look some the X-year close these of is are you're at X.X that's selling you're buying I to arrangements. today number result buying when seeing typical probably something seeing think start the multiyear that you X- you're going as see, improvement

continue improve over to and that will economics time see the memberships with those. multiyear associated the we that, So with

guys' may Got half QX the be is you the think just QX any higher know the it, we guidance somewhat should bit than the past of expecting should Or some it. in give of guess a seasonality consistent for away little somewhat being us for QX? to full on lower color and I with, QX year? be than kind way call I back year. But we And taken years with what

Yes. been that's consistent which first has fairly decline, year-over-year seen We've of the in the right. exactly a year. quarters Brett, I think X

perspective -- certainly, that to expect perspective than are will QX see are from and stronger which also a quarters a from revenue should margin definitely be trend typically And QX continue. QX. You and means and

and rates down initiatives occupancy stepped occupancy last expect we're pricing this despite down it, the quarter for improve maybe if quite put into at you call were, of you meaningfully have going the quarter, place. end Perfect. year-over-year to year? in the guys from looking Would they And rates

Yes.

I -- think -- much very referenced, that just we we units an rates. we certainly units. will improvement seasonal occupancy Those took those are units see we in that are out,

you benefits and And really QX year, Those occupancy. so of in in those have XXXX of our all not other parts have see impact those the portfolio are the on our they did units. downward We newer yet. in a units

so XXXX And the they then just our occupancy. And that hit about with QX really more us the comment you're with in a -- a in quarters. full broad effect occupancy drag on a about with asking

June, you seasons holiday the of just ski is QX the year, in and the It summer the quarter. the holidays quarter falls. there's or April, really and on of a that there. bit depends And or than year how that's weaker why a lot summer. There's is of lot little quarter the If about not a May think quarter

there into just there's an of goes can well. QX, little occupancy in be terms a therefore, our and there of of seasonality way So margins long variability a bit on having goes impact that in as lot a

the Payam Zamani CEO, And to would now remarks. Chairman turn conference back closing like and I for to

in we you. that much. whatever to are you really thank months sharing make Thank Well, and we quarters. you very And coming progress forward with the looking

a have conference concludes disconnect. you Thank today's now great call. participating, you day. This for Everyone, and may