UP - Earnings call transcript Q2 2021 | Wheels Up Experience Inc.

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Operator

Hello, everyone. And welcome to the Wheels Up Second Quarter 2021 Earnings Call. My name is Bethany, and I’ll be coordinating your call today. [Operator Instructions] I will now hand the call over to your host Keith Ferguson, Investor Relations to begin, Keith over to you.

Keith Ferguson

Thank you. Wheels quarter to call. earnings again welcome Up’s XXXX second conference And today, release the press issued our Earlier a for announcing we financial results period. copy website at the well be with tables wheelsup.com/investors. on of a found Relations release can today’s Investor The our presentation supporting as as to slide the refer our disclaimer. Please with Today’s forecast estimates presentation based future of current forward-looking our statements events. contains on and These materially. results may statements differ should be considered estimates only and actual

Chairman non-GAAP as financial we tables Chief will Officer, and Kenny? and within of refer outlined measures by turn And presentation. and call, financial Reconciliations found the to I’d today’s appendix non-GAAP During GAAP of Executive of like the non-GAAP to measures definitions are Dichter. our release financial to Kenny guidelines. SEC over to call today’s with, our measures earnings financial the to

Kenny Dichter

of And Thank today. you, Keith. to thanks for us joining you all

Up on share out can XX, excited find to our We Up Day the XXXX, materials Analyst check are with April our page. Investor from Wheels you. Please you Wheels which story

We that XX-plus will marketplace is disruption today. our the aviation private next presentation of Wheels bringing industry, with original parts in the my phase years platform. on of Building on touch Up

connect time will a down operators. growing global marketplace which total with addressable over larger much efficiently Our open the supply, yields improve will third-party for aircraft drive access, through increase demand costs, aperture market and

cars has underutilized on Airbnb yields has similar in to value is improving assets and strategy Our in and homes. Uber extracted done how

year-over-year. record and $XXX Let setting quarterly second in over the me earnings XXX% revenue quarter, this morning’s release. We share of million reported over from some the highlights a up in

which year-over-year. First half million, is almost up XX% was revenue under just $XXX

in year-over-year exceeds XX,XXX grew and almost XX% total. Our Active Members now

than in were in year-over-year Our anyone rebounded up the the quickly more almost XX,XXX XXX% Live Private expected. industry aviation Flight has quarter. over to Legs

a beginnings business We leisure travel. and return unprecedented of are demand for the travel international for seeing and

and opportunity our partner with current share. is conditions further key are market as cohort fleet, We relationships provide bold aviation, drivers increase and we’re develop great Our performance. customer brand, to of market and our benefits technology is new building strong strategy and combination private diversify important. our exclusive our cultivate the to defining innovative the purchasing matters, to where a increase believe behavior consumers We being our moment this critically to in market view

for the recognize As moment back. strategic trust to their pulling business, tireless more confidence in we decision like a work like growth their members and of invest customers. even and and us us. made This the a in have of some our team to our result, conviction industry hardworking participants take I’d gives to while our to forward. push for support our customers also to thank loyal I’d are

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our now Guaranteed we use other represent how at Programs, nearly algorithms explain and These up learning from we of over make what commitments GRPs. supply year aircraft GRPs to improved operators me secure of managing allow to Now, from year. capacity, supply call have This of asset-light that forecasting. beginning the to enhance deployed forecasting to third-party the one-third our through the Rate are allows plans it. improved We us long-term and short demand this machine advanced our zero

to expanded customers members These use base. hours not times have Up when owners owners are and airplanes managed charter aircraft We number aircraft Wheels the flying. our from at for available of these their us allow

continue the industry. will the supply unlock to latent in We

reduce ability the to enhance further time learning repositioning drive right to the will right plane our use machine to at place in and right We find the utility hours.

management additional flight demand. our platform for and products asset-light lift creating our are support services aircraft to drive to We

a aircraft managed provides component of key Our supply. business

develop world-class over key time areas efficiency, to of areas in costs in horizon. capital, We infrastructure includes investments deliver importantly, that strong investing That are drive shareholder experiences significant on ground. accelerating value strategy a reduce margins had will will and human and this over and business a air longer long-term. that expected the create advantage most the and generate we Wheels the first-mover in and Up technology, that We has substantial believe the

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more minutes. You hear few in a that about will

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over marketplace introduce the turn Amazon. the to of member the Marketplace to newest is Chairman want Officer. is us. With of force Hegde, previously was now great Greeley partnered of Vinayak us for Airbnb, is Greg it. nature Airbnb. and will our is introduced having by when call and Vinayak doing to and senior Vinayak technology initiatives, and this Advisor, product I’m Amazon Vinayak with was you that Board Marketplace things power I Vinayak Groupon joined our already the we to a Vinayak. including He our to works at Chief C-suite that, a executive going us for May. and of all up, our Next responsible

Vinayak Hegde

you, Kenny, of Thank great with speak and to all you.

largely The Groupon my the which demand growth. liquidity color development to My supply. intuitive makes demand the and systems the specifically ideal Growth architecture, the the Greg develop of platform limited was by automation area a place, were start to changing furthermore, business learning there bring to algorithms dynamic all personalization, creating I revenue I out of aviation maintain conditions for in match and processes optimize and brightest included the easy on supply, happens disparate focused prior both, in recruiting which and software be things with with marketplace. an My impression transact. we knocking fragmented for in used built customers marketplace the new included anything that real marketplaces, Airbnb, minds led responsibilities on and machine customer to pricing, and data marketplace really to looking at reached best it react time, to Let a providing management in interface me. also highest and isn’t Private value mix life, technology each background, to also quickly systems, out us challenge like turn responsibilities supply. when greater customers that and wasn’t bringing their enabled to competitive power processes and to systems to of and experience. user activating. processes in needed I for simple little a disruption today. the These of analog drove systems intrigued highest Amazon. in the me where an the optimize platform to world opportunity innovative standards

generator a to logical services building the adjacencies. expand marketplace the an optionality of becoming reinforcing and of demand All quest for the is high-value first the a attractive provide to to We opportunities are platform. great with much this customers, creates into on that marketplace believe our step strength create benefits larger We platform. partner our examples to events, more more demand

data has predict of us that the in faster a provided encouraging. platform are way, at levels, attractive to That’s an strategy customers to spending in reflects efficiently service a at of Our pace. more data our run. our for existing us customers’ acquire our diversifying aircraft long deterministic The even right in type cohorts more our shows of allows us more It continue extremely fleet which that the newest customer and to demand allows supplies lot turn to behavior needs. spend a

our We brand. is paid at the This demand Amazon without are of by behavior flight of reflects Prime fact particularly encouraged that vast shop our the customer us, comes to to strength members Amazon. the and how similar very media majority directly any

algorithms where and not on is aircraft availability, There operators, schedules. on executed Our optimize there trip little make industry and transportation, Flight is vetting, come of and maintenance services when. industry schedules very labor-intensive is entire much those international is easy There visibility There’s be real no ground for aircraft with the the and time to optimized. together crew or seamless trip then, dynamic is that it of Today, catering or to customers. notice. interface the schedules, analog, of need user pricing like to background support. processes are And technology insight that provides safety complicated.

have utilize to of going lot drive a to we there are We things to technology are And do. automation.

me the technology roadmap for about product Wheels see and tell you how I Up. Let

a much actual to There a time destinations, for have in including are highlighted of or the out functions, just make and will that stages. think that flights experience tell possible. the XX% go-to-market; can tool multipliers its better the The user for flight week the preferences. platform, effortlessly roadmap. be room are app by their overall our flight as step Avianis goal I of are is interface to our significant enable flight you app short When and operations; the ensuring flight Up assets Up experience; you Wheels integrated to early in come. building that think to service Wheels right and to about components: automate preferences, all to features its flights efficient. customer was no above back tenure, a and better I and app. the visibility seamlessly based customer and with service-oriented Amazon management more specific architecture About excited enhancements booking, the and the features direction on machine of better our We’ll booked from where our for new ERP four the my flights and still day, to right shared manage system personalizing alerts our prices different teams During otherwise increasingly force Wheels marketplace. more today optimization that systems as I’m the customer-facing of with I supply travel rolling enhance the is and The is learning sets over allow Up the on proceeds which compare is technology our improvement. set for office year is search procuring align through a up next that Once the and customers our

to before others. supply Our us improve given demand tools demand advanced schedule anticipate forecasting have and notice

improve our expect which the that applicable search and critical strategy. full efficiency is their aircraft, deployment give locations We availability. from day. the analyst detailed view our It’ll to further through we Uber-like aircraft evolve Avianis, their all of us system engine will high-fidelity of on enabler This a global the of

a more third-party working drive fleet. to Mountain within deployment, but and the transaction of are greatest fleets brains core and operators. fleets, enhancements platform, further exponentially the onto our important scheduling, In converted fleet both for are essential than flight own It Company provides our Our so-called settlement, of operating the the we analytics system. is efficiently. conversion our also We home-based learned operations lot system opportunities Avianis, drive Aviation Aviation Avianis which across a from is blaze that ERP commercially a to Floating the tracking, which to component asset-right our flight path Mountain milestone. June, behind to to and a complex wider the fleet efficiency other crew an features are flight the is host much or utility our management quickly and

an platform into to partner We reduce level optimization our our learning to flights individually can machine our will for our aircraft will and provide to operations. dynamically by scheduling and building incorporate benefit improve of maximize fleets fleet and at leg a intelligently across economics owned We will be and flights. yield maintenance availability optimally aspects and us improve crews Driving help managed This unit both fleets. empty customers. immense timing

I harness their has saying, foundation been to similarities see lot a me that, today, at life cycles. for a by with With involved conclude demand earlier me with the Let marketplaces back more we with value strong stages the to it lot generation of let other shareholders. I Wheels have Kenny. an incredible Up turn have that of

Kenny Dichter

Vinayak. you, Thank

accomplished short our has team lot a Our in history.

brand the create next We and a believe the have and built us high-value to for diverse a management team, have and which has experienced take strong an vision level, platform I marketplace foundation, as our we to customers.

now turn to run financials. our CFO, over our Eric me Jacobs, Let it to through

Eric Jacobs

It’s first to public group Thank Wheels to our Up great represent you, earnings Kenny. company this quarterly during call.

Kenny noted, the revenue quarter, million with we’re We very year. generated up our first As XXX% the the record year-over-year. and of in half start pleased of in strong $XXX tailwinds the

down management; the categories: context across aircraft overview I’d about of comment our providing and flight; model, broken the main other. four which revenue I As second quarter, is to of so membership; do like in

grew Let This revenue XX% me membership which visible largely revenue, year-over-year. is start highly recurring. with and

for XX%-plus Members. mark, we strong member net core the with We more In make most XX,XXX the rate pleased crossed Active core our XX,XXX growing finishing have XXX with our members of than quarter members. to membership added Active were XX% These the second retention year-over-year. Given new Members revenue. up quarter, members

except over roughly year this members to that members core add will connect a of connect X we we’ve ratio more members I added core more lower-priced While versus X. than by time,

has whether classes that across as offering That to manage the Our non-member. stress don’t and customer, one our guaranteed of core with we any want or type and is clearly all that I pricing said, member particularly cap resonating for has availability increased pricing supply asset industry market, business is tightened.

a our customers total driver or is needs. Our and is all key Like Costco, specific revenue. serve to goal their address member of Amazon the relationship

actively not the customers are yet other working We’re members. open to aperture up who to attract

flight the It Now, next XX% category, top-line. contributor revenue. revenue to this up year-over-year. was is largest I’ll up quarter, move and sequentially revenue the Flight our to XXX%

Day, to Legs revenue Legs were Flight Analyst our year-over-year. Flight during the we XX% think multiply way is said the Flight. Live best quarter XXX% Live per Live revenue I As to model up first flight by from sequentially and And

and Live to mentioned, cabin for business the is it and the aircraft pickup quarter. Kenny we beginnings averaged in strong international and of for up site, X% by demand length Flight Legs class and As see $XX,XXX This driven the continue Flight stage of travel. leisure primarily revenue mix was year-over-year.

as the past lengths within We were up generally U.S., have flight customers frequently. said COVID traveled but further in stage during that less

a Given is that to the economy reopening, we’re starting trend. more see return to normal

length in quarter. is was patterns a traditional with travel pre-COVID As stage second Mountain XX% rising It higher a year-over-year year-over-year driven the interest average of larger down separate over On launched driven over recently customer note, of quarter. consistent the a after continued first mix cabin which popular we’re flying, in and seeing acquisition more service our in offering, by our highly is Aviation. result, XX% transcontinental by primarily now

say our customers. resonating strategic about and us initiatives are how with heard You’ve our recent excited how they are we

data. wallet highlight in annualized revenue, half our which believe survey inclusive aviation, customers our less give to data half fleet spending their $XX,XXX which to the of total on business XXXX new $XX,XXX address of with lot me customers’ continue our than first based those are membership spending spent should us some of to you share value. core past members And bode more are us, needs. wants and private Even In membership an offering believe as to this. average Let more who annualized. available average their on is than first and of during prior lifetime there’s for joined historical core well Today, over execute a we have spend and XX% business than and cohorts, members slightly more the our expanding we of XXXX, pre-COVID, the year we better, future and customer points

receive upfront block who renew over are recognized who purchased significantly the gain future typically over buy blocks this blocks and cash period. at close In following have members for intentions. core terms members fly of core future the XX% into prepaid of visibility prepaid We when our and has increased customers’ Revenues These rate a months they clients. year percentage the flying XX% to visibility, typically deposits to XX historically.

incurred which revenue is which aircraft For Aircraft flights. monthly from on the and asset, strong in is up strategic tax management our blocks category as we use year-over-year, recurring management their of revenue, our margin. service entered recharge excise a and customers. considering generated quarter can federal Aircraft of owner quarter, of small leading role million, ahead schedule costs management our prepaid us aircraft management as largely our When allows Jets. of XX% management. Gama to leverage aircraft as in Private scale the Delta The amount to for the our sold we resumption business fees XXXX, we We well an capabilities key pass-through a of is with is were matter. recovery the a $XXX acquisitions showing management into through the actual to fourth blocks demand of next strategically that plays asset-light us aircraft

we’re As through advantageous that part are to a legacy calling us. not typical process, contracts commercially some of integration

that to obtain are calculated to more arrangements from fee create hourly alternative willing or of access usage. aircraft charter to tradeoffs management time time flexibility fees for lower monthly make to may and well-suited marketplace. hours They for also certain We’re to incentives our aircraft offer

roughly to of sequentially expect over remainder should you revenue result, a the As year. management aircraft the flattish from be

and operations base let or me Switching the Our our earned a missions fleet. total FBO, software, and summarize our maintenance, revenue percentage of categories small quickly revenue of asset-light defense. supply, is sales three aircraft including fixed from special other to revenue represents

fleet about aircraft. first-party leased of owned have and XXX We a

We using all second-party XXXX our words, trips. and XX% approximately XXXX third-party right customer, roughly fleets. generally decrease ultimately fleet or which goal improve was right positioned across aircraft. In our the A efficiency to Mountain approach also of fleets other to reduce costs to Aviation, acquisition our pricing. with from fleet us of to The we’ll was have is the levels mix time XXX and in the XX%. to sales to fleets to a asset-light hourly considered XX% To place third-party are to aircraft, provider at aircraft. utility primarily legs a to use of a plane access asset-light The try year fleet closer that versus eliminate and repositioning the asset-light our XX% take Year-to-date, third-party to provider. a owned managed and last due right of manage and will and optimize utilize up over managed third-party wholesale aircraft holistic and better as we scheduling leased our showed that was to

now related supply immune commercial industry Let me have as side costs to industries. industry. like airfare turn to impacting are all third-party constraints travel parks up and labor large, Also, are shipping cost pilot gone and aviation hotels, other We the relates many well business. related and it many as our to tightened maintenance of costs specifically an at our Commodity increasing and cost to the fuel, pressures prices, as and not industries. flight costs are for

expand find network our supply the leveraging and to significant enhancements software of come. and tools are scale to with We

of slightly our margin, these have the half. rapid definitely of to will While lot we hardworking team second our we customers, our for the our contribution some first entire credit near-term acceleration Also, And across on for that. deserves pressure absorbed in deliver to constraints. able demand, year the expect a down been the the manage Company versus through not given half strong which to flat be commitment of we’ve easy,

In addition, marketing. we in to invest continue and sales

the experiencing. sales signature more reps and soon are safely also hiring engage was can our our sales versus of were that we Up Events that the to marketing We period and we host last revenue last expense restart Wheels address X% Year-to-date, with same account are managers regional number We membership of and virtual events events demand year. all year. growing so strong hope and in X% expand a base. can we

and app. real-time scheduling efficiencies, are We us Our dashboard, development supply technology the of to are Kenny previously mobile forward to both streamline our key highlighted. And we’re investments which driving to optimization discussed marketplace. help making operational and Vinayak looking will the enhancements Avianis’ for we and commercialization

across Going flight software in forward, to spending With we expect to EBITDA. particularly regard to areas. sales and our operations, on technology, including increase the service efficiencies capitalized and organization, increased generate customer marketing our

the million adjusted compared quarter last Our improved $X.X year. to EBITDA in

ahead we term, that are our While year schedule in have adjusted EBITDA growth. value long-term lower revenue we’re to are margins lifetime member very traded almost in a growth, success. and contribution short of our strategically Core this important retention to achieve

this go the to extra are ensure striving possible we’re miles to customers best our So, getting environment. in the experience

requires While potential. investments in in additional this margin the still business, our believe we long-term

Turning CapEx was the demonstrating million $XX.X revenue, of half With of software. to lower half our capitalized which first was capital of capital X% we’re business. intensiveness more of approximately in CapEx at expenditures. than XXXX,

able to growth to our fleet. only reported, owned minimal the leverage Legs own XXX% Flight the additions increase leased including our capacity, and we strong utilize better year-over-year in list achieve Live asset-light to We’re with

a a liquidity. other Now, $XXX of payoff of million. proceeds of of the This to debt. I’ll stronger we our all $XXX financing of if the proceeds ample our debt all much of related cash Today, portion to off our and we from merger We and and to used tap to wanted prior Aspirational. included those market. closing gross are $XXX million aircraft-related cash pay acquisitions. we in Wheels our received end, position of quarter all debt after cash notes with our believe shortly outstanding At then liquidity, million briefly we capitalization review quarter, Up After equivalents had our

projections business our conversations guidance XXXX. we and of last to outlook fund securitize our to year any started for initial ability the will full our now aircraft, for and year turn help with opportunistic When $XXX I With if Aspirational, in our financial to revenue million XXXX. were owned for we acquisitions. need

discussed first we’ve call, over with on strength billion the of year. $X.X into first the have the through year-to-date half quarter earlier quarter strong revenue we demand in in June. flight of As continued the seen The second the very

half, in to Given of we the expect $X.XX be now revenue first range billion XXXX $X.X the strength in to billion. the

those of For net have we’re year long-term between With projections. for expect crossing reviewed who Aspirational our And almost revenue to S-X only a eight will a ahead initial loss, threshold $XXX billion the GAAP the to filing, we $X in we existence. loss regard revenue XXXX. $XXX to net report be years of of million our million GAAP

not the pressures, not we near-term inflationary cap raise are chosen from rates to While have to date. we immune

We’re investments you product in adjusted range million EBITDA of year. to for together, operations, also service. $XX negative all put customer we be it and the increasing in million When a to technology, development expect negative $XX

to be $XX the this We year and expect demand. to support will growth million $XX million spending CapEx

for the lead we carried tax income a near by capitalized substantially indefinitely. may end that in Specifically, spending anticipate the software demand. year, the development. of of headquarters, our that in And purposes for an investments remainder which CapEx of may an is New also forward the we of Year-to-date, number strong increase we CapEx be From completed related will operating perspective, income losses for to tax includes be we small term our will roughly our technology-related will expect generate add year. the in software technology year. the capitalized to half net York And given aircraft,

like would to I count. touch briefly share Now on

can closed. of awards, that The part the shares it XXth, warrants slide the earnout of You got Aspirational as is the table table our acceleration the we’ve see capitalization is closing outlines deck, reflects and that $XX the and with date of which the our in of equity as July appendix of a at merger. merger inclusive $XX.XX. certain $XX.XX also at And $XX.XX, of

SEC X-K reconciliations, data. as the operating appendices filings, Super our well that financial be Lastly, other A, as please and important aware metrics provide such and certain the as quarterly

back Before want you your to let the I we so to turn call. the can call listening quarterly to turn With first thank our of back me that, take to conference for call I each operator, questions. the operator, earnings the

Operator

question [Operator line Sheila Instructions] first your comes The from open. is from Sheila, Kahyaoglu Jefferies.

Sheila Kahyaoglu

quarter, us any level of Maybe XX% Hi. Good color about business normalized for And strong. morning, And of talked I think also time. the first on the about so connect going out year-over-year. much could grew give ask very how a you guys. about your the Can And gate congratulations XXk membership thank growth members you of about to and Kind XXk core? spend. from annualized you between spend? you

Kenny Dichter

work just the forward membership. and we are. where opportunity Sheila, Overall, on really very and being here have the feel great we connect about in segmentation for would thanks do good on coming that for thanks of question. that lot a I a to say it’s a good things way business, and

amped Jacobs, to spend. detail to our like CFO. there. Of hand that course, we the Eric Eric to up I’m get going And

Eric Jacobs

Thanks, Sheila. I appreciate it.

have spend the as all exciting. connect, And seen in also its of trans-con as I whether that’s, think getting is get cohort, super to remarks, historically. per The they’re product well drive is as new this -- would helping has as you the about And -- said, or they really allowing, the and lifetime in that as privileges we [Technical Difficulty] what it people business we about that and we’re cap what value, we’ve on. member. business performing high starting than net better terms fly. membership. add is that’s not for which have. but rates priced really all and time, in or really travel customers, talked What because seeing That’s core scheduling are core traditional member, we traditional with really really of the dynamically travel with business I just particularly we be certainty we’re So, as at resonating moment worth seeing member, our happening we essentially this in said is to really member leisure coming by that to kind if agnostic it’s is The to membership about even said my

Sheila Kahyaoglu

that’s one That’s great. on if And the maybe more then, guidance okay.

Your in the XX% the growth XXXX half. guidance second seems to first versus imply XX% half growth

just What drives being that conservative So, are you there? deceleration?

Kenny Dichter

half. So, back to in we’re if we essentially you with look -- saw the hopefully conservative, of right at half we now, consistent back terms be want look, it’s the half first being saying, relatively guidance,

So, back much were if to could conservative. now, we to the comps for well business be tighter half year, and just But that right that international come want back in and bode given of us. continues the the

Operator

Bellisario Michael, next comes your line The Baird. question open. from from is Michael

Michael Bellisario

Good Thanks. morning, everyone.

you question help relates understand sponsored increase, the see demand. you you quickly you golf how or that Can just mentioned? do bookings members sort have as marketing signups about a promotion, to tournament and/or new of some guys do you us thinking First event

Kenny Dichter

Chief partners this think to we Again, immediately Seattle. get activity. ago, we’re saw you group, people brand like something have influx iconic at bigger, spent we would relates activity an Vinayak, global and event kick Yes. Sales. out say, demand over say us like started we of it getting I opportunities American or the scale interest as spike that, Airbnb, coming you announced in with their Amazon course, Global months on an in Vinayak definitely to million I The at time I’m of see in about great people area. with you some a an partnership partner I would with an And that of Match do that there, Turner in. and even lead came to something as looking ambassador, in and and a with a Express, drew when and in it joined it’s couple the out three Platinum networks, just going whether who’s over the you

Vinayak? So,

Vinayak Hegde

you, by Thank at we the book. Kenny. thing rates. look And helping. very is is, mean, member actually how quickly time burn That’s actually at key they we I a that strength to our become the look are the we results. from how platform of people And the encouraged

We amount who blocks. of significant have use people

actually trying us. our is much encouraging our events, people become to based addition on than for we And then, in also before, see So, seasonality. product who very is are it’s which what faster members here

Michael Bellisario

Eric. I’m to over kick to going And it

I bullet think a he’s got here.

Eric Jacobs

Yes.

last that I one. think said that Vinayak interesting is point

to flies looked between when If you they is the And joins nice member see. which that has need fly. seen when generally decreased, is a someone had become what historically, to we’ve and recently timeframe a people

Michael Bellisario

of M&A then, what you’re uses understand I is that and just but potential you today? the in on mentioned about And terms priority where your and thinking acquisitions, know the you list cash. today? balance us Can sheet help of

Kenny Dichter

unique say, look, would I in Yes. we’re very position.

the first being private space You first-mover about private in company advantage space. public the history jet talk the of in jet and

the having I of million kick we the very public lot that moves So, ammunition, mean just different and on we and evaluate have a $XXX in we the available tires unique position, everywhere. table the being but

be We’re on partnerships. to focusing it for going to kick I’m maybe follow-up over that. an aggregating asset-right to Eric big on in way, bullet a supply going And

Eric Jacobs

Yes.

like that we where balance that debt, paid for we sheet, business, we So, look, our stand. our it’s have a to balance off think sheet. our sit. important strong That’s where We demonstrate very have we we customers to very we strong

Michael Bellisario

it. Textron guys Got just update on any And the you recently? one that there, announced follow-up partnership

Kenny Dichter

Yes.

believe Scott, that this at Look going some and there. VTOL what emerges their is in relationship And most great as be technology on our a proud great It’s part VTOL unbelievable for we the think Donnelly is again, that right Textron we’ve that with the year technology his very And of us, on an enable that were a fleet. we make over action there. eVTOL to there’s of for recent we’re Textron end where engineering, with We able a lot partner chosen possibly And over partner. Mitch to announcement to we relationship, Helicopter, platform to a going big moving team partner. stand deal. down announcement a Bell fourth do. we we where made and long-term with They are have the The of can Scott Textron was quarter them. our a --

Michael Bellisario

Thank Helpful. it. Got you.

Operator

from Prestopino Gary Barrington from comes Gary, line open. your question next is The Research.

Gary Prestopino

Hey. of series Good morning all. A questions.

you sequentially all, how of improved member First Eric, on and your maybe comment much retention year-over-year? could

Eric Jacobs

Yes.

also are are with down member -- over over back spenders year, that that Analyst Day, said about said, that guess, It’s us historically core XX%. Kenny our And retention XX%. at our I renewing at we as fly it or core now. was as XX% our last and membership So, people

during So, six strong months. past this retention we’ve seen very

Gary Prestopino

right? sheet other couple then, about And the end on envelope, net the after that is Okay. of questions of your quarter, Is cash here. of post Kind $XXX million. back the your transaction, the balance Q,

Eric Jacobs

less we In burn. some it’s think, July, that. a I little had than

bigger little the terms give less you And it’s So, in minute the spending that. two. see or -- summer you a -- about But, burn I’ll in in number than months. of bit

Kenny Dichter

people very I have or blocks healthy retention is Eric provided excited just at the if again, to members excited, about retaining XX%. from burn, biggest spend that overall we’re question, that that members perspective is, is our look us. Yes. customers, it’s stated for down our numbers our we’re important putting on we’re to over And a would stand. you us good business, a What the say biggest that very

So, their seeing us, again, very burning and we’re good is people that’s hours it. replacing replenishing and then And off. for what healthy,

than block more have We buyers had. ever we’ve

Eric Jacobs

posted on XXth. website, sheet you So, deck million June that at see our our you’ll if accompany pro balance XX look presentation, page as forma $XXX in summary to Gary, of roughly we

Kenny Dichter

debt-free an in way. have talking, should And be the again, just member to what space -- assets, double ability to click and unique come opportunity back he on mentioned to our Eric’s the our very

Gary Prestopino

great. wanted that’s I to that sure I think just just I make No, clarified. got

And to year. revenue the question the my as has looks prepaid next the that amount talking not these I revenue used. that a and deferred people was time paid when deferred end that here. reflection down for leads of blocks, you’re So, It prepaid recall, like have of been blocks from -- is that flight the about of

prepaid comment So, normally you that block that, the pretty that were that happen... quarter? considering Does you the said purchases in could strong on

Kenny Dichter

Sure, Gary. Yes.

where year, down, to revenue you come sort summer Day typically the then, $XXX Last excise there’s uptick. I’ll quarter. -- of back flights during back, And again, the months come our as tax we our with a usually, refer end will blocks once coming year, the large Analyst up. picks down So, million to flying the we talked deferred a federal had about them and of seasonality have the I in blocks over think at

So you this not to up. do that’s -- federal has been well, historically, of year. And come excise -- say, expect I of this quarter tax be year, blocks deferred revenue we million to because year-over-year, having a at don’t look, $XXX of end if it’ll want situation, the up end the the

Gary Prestopino

may. you if increasing the cetera? your was by That’s Okay. negative there like you’re transaction, to $XX technology, just of EBITDA on did be wanted. people, It I’ve I in of all I explanation adjusted to when investments explained looks a couple got million. et delta $XX million relative a fact more your the the that Can guidance that

Kenny Dichter

of give that a or would this care I I’ll of Kenny and this say decision to two and that. member. a is We -- here. being product made Hegde on the call Vinayak take you let Eric decision a was bullet is

great influx of We’re seeing a demand.

way really the it. investment the going good in of him then, beginning on team play focused together, that lifetime is take that’s of think caring bringing and focus on putting top in -- member, that that. on to to technology the top-line how that Vinayak, committed a want Seattle of was we a is value And the team because all member on and you we see We’re the today, making

that We’re Eric, give how bundled. long you And we came bit game he numbers the up a more here. little can detail a playing on with

Eric Jacobs

Kenny. Thanks, Sure.

as I the pressures as absorbed supply as constraints aviation affecting and well the are So, we’ve cost probably earlier, discussed that other industries.

do date pricing annually. cap we raised to not We and raise typically have rate

the drive $XX million series we’re experiences $XX of enhance and includes new capabilities. operations through that annualized additional OpEx customer on existing It to investing and And and million in a and service recruitment In some investing scheduling basis and retention in our year, in of to terms availability, aircraft initiatives this of in investments, supply. pilots our pilots. delivery will also enhance an optimization, third-party of

technology in annualized And also an efficiencies. marketplace. We’re to on incremental million this year basis the investing increased and an generate $XX that’s long-term

Kenny Dichter

microphone Vinayak and one know is Airbnb the want add-on. and your this I here. to I close to put Amazon your give heart Vinayak, that’s

been I to this think has and running run it. committed we’re play

Vinayak Hegde

serves to a but call the that I that called what going me from with. to what match built, will people long-term. is to terms actually of maintenance, and When technology, that’s companies. I few mean, the is allow of I Kenny. be days -- reminds technology the But thing efficiencies the you’re run for scheduling, that get Amazon. and of mean, And us it in nobody going the trip And long the of us help can lot out built the actually going my there Thanks, end planning, is, have also early to. actually Yes. us plumbing is software in here. in investment, up undifferentiated very actually takes pays stuff lot differentiate built of attention Aircraft this to result is we other it a to efficiencies at

available here software excited there’s aviation I’m that’s for the at actual thing look space, allows other about is, in very where run. software differentiate if and the things that proprietary what the investment that put happens you private And here you like can It actually why has no And So, the us. in investment the buy to to long allows that’s company. the ourselves custom-built together. this be us

Gary Prestopino

be aircraft industry engine, technology you to while the question, I improves is would get it this be important think couple it’s operations, And a this that us of you take developed give once helpful. going going where And the how your you if to integrated term. have longer Okay. long to just how employ could market, the the with very mean, I I’m this platform, market? developing able to in here, thing I to as to search in global to actually would platform you bullets is this are on ask the because

Vinayak Hegde

you. Thank

So, do the in what stages. here, is -- So, we going way to launch is think this bang we this about no we’re there’s right? big

us What we do doing we changes ripping we building we when it bang. big and a be apart call are the actually to a architecture, which make going not is service-oriented that I are very monolith can what to is need fast. there very, allows So,

already stages. our time. we’ll we Mountain migrated in see features integrated of And start Avianis period for you’re you, told improvements come But, our over fleet. I going a Avianis, to getting As Aviation

an As of example, into Aviation we care once Avianis. automatic fleet integrated take can for we Avianis, capabilities optimization Mountain

is true there optimization more, going to and same the to more be with is add going The website. we incremental is come. As that

As improve search, we can actually automate front we the more and improve which would conversion. of more end,

stuff many bang we are actually So, along. go a Doing we it’s big as board very continually where other is places that optimizing and improving done the across a in I’ve playbook risky.

oriented time. the be will no first service one a migrating So, at There’s and then architecture, start clear timeline. things actually

are to We coming it’s going after actually be speak. And the as other. changes we one making

Gary Prestopino

out That’s Thank the helpful. all getting Okay. of very you. your public the have. Company again That’s box. for quarter and I first Congratulations

Kenny Dichter

Thank you.

Operator

of line Chen open. Cowen. The comes final is Oliver question your from Oliver,

Oliver Chen

training would you sets Machine and drive pursuing the also are well. customer what’s of lifestyle that nature as What as impact very to the experiential important, about Hi. love and see customer competency on over is as lifetime brand the membership, what Wheels really and much. organization, hanging ML how that in and you lower learning where And have across you’re Kenny, that I think the you Up. might value Thank your is data a a customer interaction Thank fruit, it the departments? most experience? core take at evolving the other you.

Kenny Dichter

lifestyle And the I’m take Vinayak the doing I’ll going what on then, first Aspirational elements piece. side. up brand we’re and to the Vinayak, the have pick of

Vinayak Hegde

business. I mean, many very took can when Kenny. aviation were apply look machine I you places the so at where and there I you, when mean, few the to private Thank aspects I of learning job,

with the learning. is, One end. do and That’s back can plane the simpler right we ones start at Let play use where you [ph] machine optimization me the scheduling. time? right How fleet the at

Rate the secure already the going now if inventory about do can conviction right of predict think much to demand mean, this us where have to I get. able better can class that this prediction, cabin production Guaranteed of is we are actually allows GRP, and are do one reasons Programs you demand we we to we we Second, we by do now that than before.

I sort Search So, use lot. how learning. result, work can propensity of helps a propensity a actually optimize Prediction search us machine we that for to sales understanding with from work we results, be attract to continue example. used our will our platform, maintenance. so give to Machine team for actually can can learning very customer. actually the predicting you with simple a

for our of maintenance. one coming is planes say, Let’s

maintenance could utilized one our and So, this place, more. are unscheduled could same get the take prediction actually it and say could and We the done maintenance part fail are sky more our in add pretty the predictive soon. so on planes

is back what the what is using the much every machine platform. end, and Kenny? exciting can end which about very learning, front of start So, we this working pretty aspect

Kenny Dichter

as Vinayak. lifestyle world-class building intended relates aspiration it And a Oliver, brand. on to our Thanks,

for have the First be standalone side, liquor Patrón, somebody of Applbaum over those Greeley and outcome on, on an last largest a like to Amazon who brand Vinayak develop seven having help marketing the Prime, unbelievable Lee sale who years we Greg six, the Bacardi. engineered

their working on part We’re that that because LVMH chose -- in and of global DNA. large Ravi brand lifestyle we Aspirational

Broad. our Dahnke Catterton. L You’ve got on Scott is Ravi and his over team in now

about look business its looked customers, frequent that and its the class, of all have the and first at Bastian thing for programming done status flyers. class We and great course, ingredients. its with -- its Ed And I Delta’s I

out people, there and all to Serena have we the Obviously, ingredients, are. be the hard a really like flying that with private way Ciara, athlete. and flyers. We think is who’s anybody billion partnered what others have that Russell makings think that Tom brand. Nike wired we’re and And says private the that and they’re to Williams winners world, the X.X embody Brady, exercising an we Oliver, up all the all we great So, and

everybody making Up we brand. create we from area has want flying that wearing And where is running like growth Stephanie private. them. party. great and to So if place job for with Wheels you’re sure invited sweatshirt our wheel the that a That’s aspirational a to feel again, brand the kind again, done can if this we status of want that the a in away on you’re that feels who’s Chung, everybody one

a big of as inclusion, piece that So, well.

Oliver Chen

in as presentation how opportunities tightness duration? Thank would you. And might versus love Eric, demand supply mentioned your I and the How on you the biggest the And thoughts dynamic? would supply. of scale tightness characterize continue convenience you. which supply well as on asset-right, supply availability? as you as you as what’s which and And and customer return aspects scale. And Thank capital, categories you balance in well.

Eric Jacobs

Sure. Thanks, Oliver.

of part is a supply. So, business, that third-party great the the second-part first-party have a business we our and

in get most shift you’re our situations in changing some the ability And the as them so, due in adapt we of ability very ways And to industry. seeing to into is supply than not is broader terms are different across tight to position just simple. dynamics the economy. The to to

normally, across get Just FBOs, to the you so the it ability flight at labor making the would -- it’s moving. fuel whether sooner you than get can board, turned

can think than the think We something it’s tightness creates with not supply But, most. don’t we’re So, something that. deal that the better across us, I think is of whole we We -- seeing systemic. board. it’s for industry that’s that

of think time, a To can -- we aircraft longer there the that we In the in first-party, we what long-term. asset-light. us do third-party. term, we the for half But strike probably is it aircraft will for balance make of and as to year, key said mean? management And take balance terms that back sure business second-party have more between right the I couple earlier, just over is does

the have we differentiator. a to again using ability Our they’re when their give can something access them so once that aircraft, them not utilize is is owners us to

Oliver Chen

Thank Thank you. of the across we’re in this And facing you lots change are last seeing uncontrollable and and versus you what the Delta can environment with what dynamic with variant and environment what control question world? the on your you. uncertainty, and data

Kenny Dichter

closely. Delta monitoring I variant, obviously, that situation we’re the think

become think for essential that in cases demand. people. you’re certain has aviation private the that think And I in seeing I

at. the this think gets retention experiences group and on that once we I where airplanes on we’re what do, story actually they the numbers, the tell

those Scott’s job We’re safe at the works passage. continuing up a partnered on closely here. with to proud our And of we’re him. Dr. setting And Scott doing protocols. press great to be Gottlieb with the face crisis us

other a to say on pilots and been can uniquely the issue. where ground. we’re vaccines positioned. But this world forward mitigation We’ve protocols Looking and I thank would maintenance and I operating just solve who guys medicine -- our are our

since day crisis I XXXX. we’re a was this seeing of been said, March And in of at have its We lot like onset demand. of every operating sort

do Company it working at needs America. came to of while to the protocols things Up big our to And of Feeding as relates do was its would Up the different all that I safe. of the doing we’re Because say, We’re with we everybody keep brand, Wheels that and around I believe out Wheels one good. good, COVID, established development

So, started. million that getting been by over just Up, meals XX and we’re Wheels have inspired

Oliver Chen

Thank you. Best regards.

Kenny Dichter

you. Thank

Operator

further We no have questions today.

to So, closing I’ll back for the call remarks. hand Kenny Dichter

Kenny Dichter

today better everyone, to very for the and thank appreciate you Bethany, much our our thanks, business And for long-term taking hosting. Yes. it. time joining and I our vision, strategy. understand us

building our believe investments large firmly brand. that an underutilized to optimize are operations, of iconic addressable and We fragmented And growing leader to and chain forward shareholder look undisputed position technology-enabled create I it supported a by we innovative you. in all market. Wheels product the the to a the years this all will is customer the in you. technology, also Thank going and with and we’re making up And come. we connect with and are service supply of development, Up marketplace to journey trusted values We in significant as continuing industry. the believe

Operator

you joining. This concludes today’s for Thank conference call.

now You lines. may your disconnect

Wheels Up Experience (UP) 13 Aug 212021 Q2 Earnings call transcript