ISPO - Earnings call transcript Q4 2024

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Operator

Good day, and thank you for standing by. Welcome to the Inspirato Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]. After the speaker's presentation, there'll be a question and answer session. [Operator Instructions]. the being that advised be conference recorded. is Please turn over Sourk, to would Relations. now speaker conference to like Kyle I your the for Investor today, Please go ahead.

Kyle Sourk

morning. Experience management, including and Accounting Officer, have Michael Good Chan]; and Ashley Chief call, and Collins Jessica Zamani; Chief Arthur; of Payam [ CFO, Chairman members other [ today's On Officer, CEO, we ].

XXXX guidance. we our fourth full year announcing our 'XX quarter as release results press issued well Yesterday afternoon, as and

are comments differ forward-looking These a reminder, today's As and could of based are results assumptions materially. statements. on some statements actual

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

Payam Zamani

today's and Thank for really excited of for a everyone. number I'm Paul, good reasons. morning, you, call

including been over you success. past we our our long-term Inspirato's us up in to public how goals And for X lasting a by XXXX company. key efforts company, will foundation, for for our vision First, second, QX refined strongest get months and results our QX results evidenced with share that for have will what strengthening the the be history set the as

year are the flow in our plan with moment, milestones These and deliver hear free In to profitability cash producing profitability efforts are XXXX. our you indicate important how we results. along in that will desired a achieve full about QX, positive

started. getting just we're But

elevating made We progress, and real are sustainable, more brand. the lies great have And a we profitable the ahead. growth into sought journey. after Inspirato an Driving at opportunity multiyear while even of beginning

to portfolio brand, position and base. potential, We're in a and that well-recognized are loyal homes operating in is world-class The great make we a a this large of in member good strong news incredible by engaged a market happen. backed

XX,XXX opportunity the By are including member show untapped undeniable around that serve is the fit We a far our our but potential our Inspirato. domestic globe estimate, households and of substantial mission the profile, engage over them, greater. And millions market. them clear, is and value of them there find members,

we're synonymous about right is and We're It drive true is to long-term seamless attracting about elevating who bold brand platform to highly personalized our making be the happen, create a We're members growth. not just retaining our success. ] intelligent will short-term It investments. this enhancing luxury. make and [ experience. To with

leadership team Technology Marketing with hires and recent our strengthened Chief of We've Officer. SVP

and our our predictive our based feel, rebrand, look launched and more interface We be to modernizing website on we member habits. sophisticated revamping are have user a and intuitive and travel

the now investing we same the biggest At and and dollars have impact. that initiatives our focused We the time, into in time seats, improving right our the efficiencies. have right operating we're will on people are

[indiscernible] margin. As this Michael and gross to cost shortly, expected will discuss drive is focus structure profitability. in

more strengths our an refreshing Of our we XXXX, same to so [indiscernible] time standardizing to that enjoys world-class, And ensure experience course, room decor know members. than optimistic every and about the us. future is high-quality there's of travel they while greatest and our and brings portfolio one our I'm why training [indiscernible] are of In of improve. to investing and in member our me every with our much of half we're many iconic homes There's always we service home opportunity in embrace.

] the to not excites is community about the their about we're expectations. me their deliver, are we Inspirato [ When That incredible also within exceeding only we is we do what stay consistently decision but building. most end the the business. of future At connection the this reinforcing day, deepen everything to a of

On financial which working signs over strategy play first and the want months. to XXXX of continue XX out will results, note, highlight next our that the some are I that to is to XX the

We ranges. of the year finished original million, loss revenue our million with and EBITDA within total adjusted $XXX $X.X both guidance of

year-over-year, While a revenue XXXX was profitable down and we fourth improved million, ended quarter. by with nearly EBITDA $XX million $XX

cash net the company. Even more public for exciting, a first QX, as moment. numbers will million generated in in Michael $X.X dive a we Inspirato from into activities these in operating deeper

on serve our remains our a our Looking in way profitability focus that ahead strengthens to members. achieving full year to XXXX, ability

in expect fourth in million our $XXX revenue, be which annualized with and and profitable to million $XXX consistent is quarter between revenue. XXXX We deliver

as And But category. and beyond defines is the probably that reason the why right why here's The [indiscernible] and market shouldn't is that Inspirato. travel growing it's the policy this a true experiences there's it brand itself numbers, luxury future. be vast leadership. has No and established no company for

the ability we way, the target every [indiscernible] foundation, reach have standard day something me lead to expertise the and extraordinary. We truly hospitality a the that's and what drives audience effectively me as should Inspirato what well setting possible. for be as to That's to as build vision the brought and the

course months [indiscernible]. work to at we Inspirato, In my the X necessary initial did

we and Now this efficiencies. will leading into and operational world-class luxury scalable on the will double our built be we [indiscernible] tirelessly we focus begins. A, endeavor. we a X-pronged reshaping reach. our a luxury experiences. aspect experience build a our focus to company experiences approach: and highly travel of the effective Inspirato This technology on will digital luxury vastly marketing B, multiyear a platform, on and To will goals, effort never-ending have a our company services achieve turn C,

have and XXXX. what decades out well, is have achieve. excited with right marketing progress road right for pioneers we of this one the We're in know be I what believe performance-based set I've I the as what more is the the to and will the we in to talent sharing This done you Internet. on we deliver strategy about make as ahead

thank to members I our thrilled and to Michael, to their incredible hard is soon forward their dedication and want Thank over results. and first about I for I'm look for support. turning again what connecting And and to you. continued ahead, our quarter trust work our team share

Michael Arthur

the really last like I'd in comments reflected performance, to Payam. like Thanks, efforts going to quarter especially progress a our financial of we've to team's pleased year-over-year EBITDA consecutive approximately million This delivered decisions. quarter. which echo positive $X our performance and improvement our also I'm year-over-year made your to of I'd fourth pleased public. improvement, see marks We in our strategic the highlight. the reinforcing of since QX, the in EBITDA and quarter million best $X I'm fourth impact

year, full improvement adjusted year-over-year loss EBITDA. XX% the For of EBIT $X.X our or represents million million $XX a

a In fourth $X improvement cash of flow last in addition, approximately year. a positive generated quarter, million $XX we million free the compared to

this $X payments includes terminations As lease onetime of to of leases. a related nonrecurring underperforming million reminder,

these flow payments, would cash an for be quarter. free million Excluding on roughly the adjusted basis $X normalized

million. increased expenses. ranges the and the XX% ended burn our the with And ended revenue, We guidance within $XX full EBITDA lastly, position previously or cash reduced and our beating $XX quarter-over-quarter we XXXX by cash provided year, operating of for million by year cash and

XXXX. year before results context provide me sharing the additional for full quarter fourth and let outlook on our Now

a improvement on a quarterly structure. First, by rebalanced our annual basis gross EBITDA more improved cost and margin driven both was efficient and

revenue million XX% For and termination impairment QX in the or by fourth to or XX% gross our lease quarter, of which margin $XX to grew million compared dollars, adjusted we $XX excludes and XXXX. asset XX% revenue

For improvement continue expansion to revenue as of and the we was in our by portfolio optimization XX% gross a XXXX. margin revenue from year, XX% in lower the fourth also million gross quarter significant expanded to full full cost margin benefit compared or The in revenue to efforts. the we of year of driven $XX

Fourth growth. of lease XX% driven In compared primarily of of lower reduction structure was cost efficient $XX is QX more QX, XXXX revenue costs aligned within in $XX we to XX% reflecting by fixed quarter revenue. with expenses, approximately and a million, achieved a cost improvement operating million, which revenue a cost

well the from levels a guidance XXXX initial $XXX cash For in our reduction. year, came million, million, XX% full a improvement operating substantial at $XXX of and expenses below

have aligning made our current nonpayroll spend. significant levels, of rationalization expenses and in with progress reductions We revenue including payroll

to in see further towards move coming improvements expect in XXXX. quarters, We rate helping us run the more sustainable a

by and sustained profitability Payam As year, XX% the XX% reported and -- for This In trends, decrease million, been believe total QX, was decreased should $XX of QX is mentioned, to focused $XXX revenue we once million. we come full we achieved. the for revenue year-over-year. total on very growth revenue year represents the have similar margins year-over-year profits,

reduce Each strategic revenue of a our base. Pass of number result were annual to quarterly the deliberate and declines decisions

Pass strategic Pass our a product mix well aligned more and response model, overall strategy Club to its prioritize to While objectives. with fit refine business a members. In long-term remains structure business balanced in a product role the with previous better was defined our of our and not

emphasizing sales strategic a included This XXXX. new shift away Pass from in

Active As of end of Cloud Active X,XXX subscriptions approximately subscriptions. and Pass had XX,XXX QX, we

relatively flat perspective, XXXX. travel Total consistent the of was from year occupancy have our for a seen travel to we From patterns compared members. XX%

XXXX nights to optimizing to with our occupancy Pass. experienced mentioned. previously opposed we focus an XX% have in in as mix Paid occupancy improved compared driving to lease XXXX, XX% gross and on increased However, portfolio, our delivered improved pay as margins

up the $XX ended by XXXX, flow balance a $X compared million decrease our million QX. approximately This free XXXX. capital. million quarter to of cash, we in $XX In $XX positive raise with in in cash includes from $X and million $X.X total, In million million cash decreased

improved Excluding years, burn decrease the in million true financing for a year operating revenue. cash million in $XX our despite activities both $XX

a towards It's and have growth. strategic the decisions past trajectory the over profitable on clear year footing with put better a made that stronger us sustainable

improved strategy operating focusing business. the driven have by and performance across with by disciplines in our expense XXXX We

intend We execution have in XXXX upon and core members. drive continuous improvement excited build in the XXXX. heading seen our creativity serve We to momentum how in we about are our and

ahead the we brand Our our growth the investments organization on to in the efficiency key make focus areas with profitable elevating the members experience balancing when across Inspirato year increased and are with traveling sure have for us. future with goal is our

profitability, to to in standpoint, $X to year expect an to million. path $XX adjusted take million a XX% as With invest forward EBITDA expect of operating evidenced improvement we the approximately between XXXX. step this, next $X cash million, compared range full to From to $XX our by our expense we of

you updating to associated We're the year. consistent decreased past the revenue we're throughout revenue. forward and expected progress, with decrease that, be further is about with subscription our questions. between happy and to primarily $XXX quarter Similar fourth we to annualized take our look revenue million to total revenue. $XXX with Meanwhile, the XXXX, And million, Operator? any is excited

Operator

Instructions]. [Operator

Grondahl The will of Capital. for Land first be today from coming line of question North Mike the

Mike Grondahl

a of to investment kind it's One, maybe inflection do terms marketing you to think sales that? going we changes of programs question. get dollars take to member X-part of count. kind member to about think and current type what How of of and Kind in in an should

Payam Zamani

is you. Mike, So for This Payam. thank you Thank the question.

that on more a focused our meaning we expectation, as have gone more this I members, say, U-shaped that think Pass is of members. down, our I of and deliberately club number would have

that headwind. course, of with dealt have, We

our will our sales the But they have just then you now of growing we as an force. almost of idea, we double to And by end March. give actually the double store be or sales size are

to are the wider club. in we the our rebuilding able as be to interested to attempt that audience ability offering is grow reach We our

we soon. is we ensuring going members. is signing is -- but But think something that we should the probably that away. the It's not mind inflection that, one in that expect maybe fairly happen quarters I talking to of growing it's that after that -- up away, that thing, but a are that quarters about, away. thing X member point So you're will X And base couple other far right keep the

in we growth is are our the base in very revenue in much on. growth something would So focused membership that result

end that in years situation don't a as we we in been up with last had the year, So the situation. past X.X we've membership

Mike Grondahl

hear I members Pass did Club? XX,XXX Got X,XXX And and right, it. it

Michael Arthur

in a in in Yes, expect -- of we're that but still bit Pass as This mix to forward alluded see terms XXXX is the we'll healthier that right. to Michael. getting you decline have both of we we going And little Club.

Mike Grondahl

the in And Great. XX? are it. a then question areas just going X for you is next to are Payam, key one focus Got what or be that

Payam Zamani

That remarks, that order that cur million. over overhead rent. end course, by items us, of towards necessary of X arrived you in know, the my for we expenses, as I $XX I are here, to Those the Sure. was mentioned our our when

And efficient we're that efficiencies now organization We we be highly any can growth. sure as an that operational as as that, for a we machine, think efficient on focused about organization want make foundation as building is is [indiscernible]. to prepare

difficult will are on a the is we an take sense, in have that competency. this built this part core So as we focused a with of and highly area right operational infrastructure, but ensuring efficiencies time, of,

our or choose portfolio. second portfolio luxury our that something we of And very luxury kinds remove thing the homes service to we the that is, we homes from whether our promise and because it members The that comes to a we us is that home and core on to come focused delivering to our the are represent of bring on.

that to a of the of that aspect in, will hopefully, more result the commitment a brand All luxury service. of has

one third, can idea I'm of frankly, marketing the is but third a excited building mean is our the right significant more infrastructure, this some have impact is a as about of The making scalable enabled. become so I rebounding and long-term that and company, I these, think that digital one technology, -- one it we, the the -- all

organizations of way in you advantage every up own could still, we we marketing well. the little of company, in, in expect be to school opportunity that to dollar and It years take enough I spend learned XX-some-odd come that back market dollars frankly, company is how grow of for spent does opened pioneered a a from I when marketing. is spent. ago, a that And measure as lot don't to I and massive a able Today, that marketing a that we very digital that on thought spend and something we very there

we're confidence bring this to going core So that company. to

marketing highly So ready audience get for dollars marketing the able we are able vastly digital dollars, profitable be Inspirato of to way grow we reach the in a to spend growth. to and as

Mike Grondahl

years? it. And see in or call we Got to we seasonality 'XX. then seen work EBITDA prior quarterly we've the going out maybe through Are any revenue to as

Michael Arthur

the Mike, same is in this Yes, I Michael. years. with as would seasonality expect prior

heavy So time. have break for big QX a for we but destinations quarter also spring us that's is us, March a really in key as ski is big like always

both EBITDA. the travel us summer big a QX, in And perspective. also a on is then and So really -- QX really quarter quarter period revenue big big for total from a

aside as fall there's bit on revenue this of can episodic experiences, quarters expect variances when falling some those And experiences, different experiences year-over-year. prior Where versus more into that's expect do we we little that And those seasonality versus but I put level -- primarily on can sometimes into be more we the there year, a depending timing QX. around QX when that, of same from years. some

Operator

line the of Capital [ Angus be ]. will from Ramel And question coming our of Sao next Diana

Unknown Analyst

us operations. to just lease side. targeting, Could of think reduction from million in $XX for you there? some plan million $XX million guys regards maybe was presentation, that it from savings on cost you program, especially a in annualized from line kind forward, progress with going guys in August, terms and with $XX the about cost million back plans $XX prior in the the In of also talked payroll, I Are you tracking update leases,

Michael Arthur

-- million million. have you million, to execute we originally we laid Yes, was on identified of on the thank all already We August, [indiscernible] and actions out cost primarily question. Romel], in our $XX back and [ $XX $XX for we savings. as goal

We basis, on guidance, get about of And cost that that EBITDA termination part all our in contributed work million large significant is loss. of kind million. savings after get or got of have reflected. not the a out alone the we million. as incremental There's it. an are we underperforming Again, So one, contract the annualized of lease to you was that $XX to improvement of $X to $XX that had, named

We're that. that portfolio to efficiencies drive reduce, lease that operational then really to costs, driving and million between on $X professional savings diligent somewhere $X software continue things continued we efficiencies, to still addition the continuing mode continuing in of there's in And that, And overhead we're to in be personnel to would opportunity fees, then million a to costs optimize in bucket. drive but of that portfolio. corporate just not both like like things services in and in

heard in actually our remarks, a think to has we we the quite reiterate, again, us but already in as our But across and there's opportunity efficient in or bit action you've of organization. $XX for continue get been identified prepared still guidance, million that to

Unknown Analyst

Congratulations in the on progress quarter. the

Operator

today's that conclude CEO, Q&A Thank ahead, Payam to go session. and like call does ahead you. back I And would please. to the turn Zamani. Go over

Payam Zamani

much. thank appreciate today. you it. Thank call I you this who so joined time. Appreciate to all your really those And

from been heard of about really in we're with Take with again just have us, has we you are you've we months excited progress about months a QX. care. ahead really X and in growth and us, long share and to or that our results you excited As X.X the made, meet

Operator

conclude call. joining program. for Thank today's today's does you This conference

may disconnect. You all

Inspirato (ISPO) 25 Feb 252024 Q4 Earnings call transcript