VCSA - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Vacasa Second Quarter 2021 Earnings Call. [Operator Instructions]. Ryan Domyancic, Investor Relations, you may begin your conference.

Ryan Domyancic

Good afternoon, everyone, and thanks for joining us today for Vacasa's Second Quarter 2022 Earnings Call. I'm pleased to be joined today by CEO, Matt Roberts; and CFO, Jamie Cohen.

me few let details. begin, we cover administrative a Before as that live broadcast This information only is of this call contains of speaks today's redistribution broadcast, prohibited. and

IR and have expectations, beliefs, commonly press will performance. include future that from release are various to letter that those objectives, call by made statements actual release estimates, We and shareholder materially statements. Comments referenced our letter may speakers. this a as on We at contain cause anticipated. to results that financial projections, posted statements Such be the plans, events, referred and during forward-looking section you factors and our investors.vacasa.com targets, could in those differ strategies, of website about conditions, caution shareholder press conference our

these forward-looking statements SEC. For and release and our with Factors letter please and risks in filings section additional the the uncertainties, information Risk today statements earlier press read concerning in forward-looking we issued shareholder section and the the

hand our measures call considered During of our this should measures to a shareholder be to letter. These financial over non-GAAP in and discuss including may Matt? measures. in and financial release the GAAP addition to Roberts. are results, a and for the be now non-GAAP non-GAAP our like And I'd reconciliation to regarding substitute results Matt be measures, certain our results directly intended Information comparable financial to not GAAP found most GAAP call, press non-GAAP we results. will

Matthew Roberts

for everyone, thank you afternoon, us. and Good joining

impact guidance the the we revenue second high as first strong traveler in exceeded demand and EBITDA with half ranges. pleased We the our both record performance Also, are end of our environment experienced adjusted quarter continued to could the you, Like how over business. to of past macroeconomic the we've been the any of months changes few paying our understand close attention to year all has date.

prioritizing still date bookings quarter are that and demonstrate our consumers our second results travel future strong to offerings. Our

believe cost the during the benefits had flexibility it our pressures of impact of our one financial uncertainty. economic of side, discernible on is business no We many provides model periods during inflationary On quarter. second the business

model business income revenue home doesn't valuable and homeowners. gained vacation vacation commission from service homes. homeowners a by fees collecting rely rental on earned our It our supply the our guests. on generates performing by a availability Our leasing taking to We by of

servicing rental offset Our value focused proposition marketing owning reservations asset-light our the optimize help our vacation is enjoy benefits on cost allows the homeowners with income of striving and to cost rental cost ownership. a operating model earning primary homes, basis and home on to to of This the variable demand. income, while vacation flex us business

vacation an accommodation A on the chose short-term is industry better nearly a found focus downturn. it other home of that XX% options. offered broader of survey rentals economic beneficial rental category to travel value within Our during that also the than travelers recent stayed in because

a per markets closely homes on our platform remain bedroom also than expensive basis. vacation We less and our on largest found several look at of hotels that

out guests costs. lower versus Additionally, home overall can which or in vacation option have of significantly travel homes eating of both sharing friends, dining with the even

providing a homes more footprint, destinations. diversified in than to destinations, have we national Finally, and managing XXX drive travelers

a over positive operating positioned months. cash on well inventory, structure, business budgets our given our We last and Within believe date, travel focus broad and selection six-bedroom six-bedroom travelers' cost ranging model, vacation helping To XX from set of variable been resilient vertical, needs. these markets, we more offer we are to meet home a against the the markets, asset-light backdrop. home a diverse flow have of condo an demand economic uncertain business and

We us rental optimization, listing advanced quarter turn platform I made vacation we progress the a peers our markets we leading manager months choice truly proposition in the our distribution for America's the of combines more than through our to that our broad before the our to rental differentiated generate to and financial homeowners as with of for operate. results Jamie management yield value in thousands some Vrbo review and, aim in other engine. to every income creates extended guidance. is over than demand. We homeowners proprietary let's XXX Airbnb, rental across guest position and the few pricing We home the The vacation Now we turn, homeowners, channels listing second maximize plus call during review welcoming by of dynamic new making focus Vacasa. technology manage visibility distributed North to more Booking.com, believe which past

remain leverage homes under We XX% dynamic for increase data on both price that progress We quarter management internal sets for a to external home second and algorithms made developed real-time our in and to additions during analyze individual also a the XXXX. home night. substantial by track during internally determine customized pricing about given on each

quarters, homeowners, up approach, sales value economics representatives which to account The Xx the value approach individual prior the stronger to of direct a which stable, majority individual strong sign sales Similar Our trailing home to a CAC for basis. where target our acquisition with remaining individual lifetime target remained additions. of remains continues local cost above predominantly the lifetime is above on customer range us our model our has of our range. with XX-month lands combined to Xx

half In its throughout sales add sales we we as beginning the additional with size, XXXX, back targeted current reaching XXXX for executives quarter, We that set continue filling to second to the hires the the size out maintain at of force the needed. intend of year.

or were XX approach In fluctuate in while approach, portfolios. maintaining open portfolios inventory. second bringing high-quality the our markets, scale we The a fit density markets its squarely program basis. of the new quarter, nature, either unlock to we on evaluating look add disciplined framework. differentiated On into portfolio that across by came We thin the second on portfolios, number active quarter, that portfolio quarter-to-quarter opportunities to to to build our a for tends

presence two than with vacation the portfolio XXX-plus a tenured and available approach market about difficult were is The the property one the retirement had Florida for are each immediately meaningful portfolios more in as a When more this we years. establish a XX and to there's operators, has it Vacasa became for establish owners unit leading smaller Florida large add individual Being of of through market a a in example, approach. that market age, in homes. the owned rental X,XXX For companies the position. leading to there presence able market-leading both vacation management quickly relatively locally couple a Panhandle rental market with two

platform. that will offers also have perspective, have job local also new a We that opportunity extended allows retained the their effort, fashion very individual this the experience the and broader supported led homeowners XX powerful We in that more a for The prior individual which executing be unlocks valuation markets playbook deep new of our program a portfolio and described XXX informed Vacasa and than one employee addition to programs. for our every profitably to our encapsulates local employees strategic disciplined knowledge is that we enter a by us unlock strategy prior sales come with times. and market know approach. portfolio portfolio and substantial our and nature this to by of importantly, the by framework I trust. from targets a growth each deploy From it just The situation the company

rental to our recent to updates local in want covering which some enables for experience business, homeowners, our our of technology the and and time vacation spend drives market I improve operations, scale. guests to Finally, linchpin a platform, us efficiencies helps

business. enterprise-grade as pricing the products algorithms, clean complement to tools internally the opposed six systems internally with built addition and as and months. industry that require introduced, we've and systems like over These functions to past tool, general the proprietary are also telephony name we've for tools our sales used implemented to developed a our and In integrate inspection specific homeowner and our growing are businesses to number such a few, that more just the purpose-built many app, of our

immense homes our to long-term an thousands basis. millions support of of on can annual adding scale our crucial and hundreds ambitions vacation sold managing tools new facilitating success. nights approach of individual of of is these The tens of and platform Importantly, homes long-term our to

home us In will addition from the new the a to representatives over data to sales how to relationship the boarding. customer the allows enters the funnel our second eventually number process increasing in also we new of help sales more at contract point streamline during collect and system past CRM launched signing tool on quarter. lead a The management every year,

insights identify tactics, making working to leadership newly they team now into different further there, what this turn trading can refine ultimately sales can data From pain effective. actions sales sales and collected analyze those more to representatives and Our points. our is

right we work immediate function owner right channel a rental vacation multiple greater team the insight sales as expect SMS in about our to displayed or scales at into a leaders also We've one us funnel streamlining the enables While the guests teams single our now reservations as and experience productivity, and all tie force, while also with ability the don't message, and to time. have change manage in the an owners. improves which received information It implemented those new operations. a owners communication information the in through effectively communication message enabling partner platform to years leaders in our sales sources our houses step We've management the that phone our to customized with to location. allows call, ahead. with platform to directly interact such a This environment it a system, guest

new been more to able questions to with which their homeowners With ways communicate has support place, teams offer operational efficiencies. and guests the and more resulted system quickly, in resolve in our we've

perspective. business capital than team homes facets of continue scale to turn to these allow well market platform. I'm In superior confident us business, deep growth and in experience against the all customer add to well homes invest leading in technology from opportunity our closing, efficiently million supports in vacation which and and ability continue us Our United positioning our more positioned the our X our provide service to is model for technologies, States. to an the execute business across of overall can industry continued

Now I'll second call Jamie? and to turn review over quarter guidance to in results detail. the our Jamie

Jamie Cohen

Thanks, Matt.

to look in platform. $XXX combination quarter reached results, year-over-year quarter. expense review second value, our financial nights by stock-based up quarter, at new driven sold quarter the unless Gross and it's recall properties I'll and noted on year-over-year. second be operating our in Also, and affect sold XX% the and business find XX% April second value and will $X.X reached acquisition be which we comparing addition Gross costs, night you the excluding can value year-over-year. metrics, the in XX% Difficulty] the these quarter, metrics booking to of I isolation. in [Technical line, year-over-year, difficult growth As the completed Vacation booking revenue per XXXX, otherwise, strong two key of increase the there second impact gross our results of combination Turnkey to to shareholder in relative outlined relationship million Nights our up compensation which the the first rates is is reached referencing the Rentals with that of sold between we a up second both either Remember, per sold XXXX, quarter, and business primarily booking the press strategic night letter. which X, our release the of does of

rents year-over-year by million and we optimize guest driven we sold trade-off second strong was the to for demand. of Our quarter, commission of income. Revenue, between range homeowners $XXX price the the million, and in and up proprietary booking with constantly consists occupancy the of pricing nights maximizing primarily to the generate collect $XXX and per fees which above algorithms $XXX from night gross goal the sold on are guidance value evaluating guests of XX% million homeware our mix our

booking our a were of to as leverage our and force. second sales technology as Sales engineering year Technology teams XX% we've for expenses homeowner-focused the in quarter. of XX% greater and the by up of was drive expense XX% and value. year-over-year infrastructure. partners, and to XX% compared year-over-year and the revenue quarter, our Operations to decreased with expenses to increase and up year-over-year, the paid turn, gross sequentially expenses hiring grew were larger support of ago and value. turning revenue marketing booking and growth and, development sales spend Now distribution operating driven in leverage year-over-year gross larger Cost advertising is as expenses to were expenses and second we slight expenses. to percentage support also operations due our nearly portion seasonally our force support higher Sales fees unchanged. XX% with year-over-year, development a marketing of administrative scale to in of due the revenue software stronger due the due growth fixed sequential On expenses increasing product basis, a the General to leads were up business. our largely more significantly higher to of and grown

In evaluating consideration a boarded resulting on second quarter XX we a on EBITDA service $XX range boarded to majority professional to upside increased On on to expenses the our resulting purchase revenue its a portfolios nonrecurring target. the $XX by second contributes cost. of second for price unit, million, remains relative we negative total basis, are on gross relative basis, our to higher in that now in million tended guidance The and profitability with the but due to Adjusted we last a and negative quarter, and performing was bulk million. our revenue connected booking of traded. second equally, line quarter, the units are $X was paid average that the $XX general aggregate, the portfolio stronger-than-expected that In the was million. value. focus higher year higher quarter also for the administrative multiple a and publicly of $X valuation sequential including to items, be We portfolio created per fees. due ahead in relative Model of had costs to higher million of guidance the in

quarters Given expect our opportunities XXXX the second on of first half. substantial I the in we portfolios deploy two found year, relative XXXX to spend of would through spend the planned new half the first less to

XX-month quarters. flow our we the our So nature of some to cash have operating on generated positive last variability basis quarter flow in cash due business, the for operating consecutive has seasonal a given six

We well cash million $XXX For XX, funded flow our that the we June restricted and capital we believe fully $XXX had was cash and $XX million, ending XX months remain and XXXX, operating of capitalized million. cash, equivalents, with expenditures cash. of

million of borrowing million sustained million opportunities We current due on cash growth and us. expenditure We flow, under capacity $XXX balances of capital us also to requirements with cash to ability revolver, consistent positive $XXX the have credit. that our a difference $X to allow execute of generate operating letters our ahead outstanding minimal believe

Now to guidance. turning

and the billion. We accounted to are has XX% revenue. to third month range full-year value expect seasonally the third-quarter of to range to million revenue to revenue of and booking gross a XX% $X.XXX year $X.XXX and strongest be billion $XXX of our guidance million raising historically $XXX quarter July been in our has of for

currently high confirmed our pacing With We only second confident August, we percentage less quarter, quarter we booking into it's at of And complete our high point, which the in and while guidance. third have a the August, strongest fourth our also month we our given is against are into August July visibility expected expectations. year. this are visibility of have well

for levels XXXX, gross back fiscal and the sold the a per guidance but slight half takes year second from above the sold combination remains that levels. XXXX, reached Our value night booking in assumes pre-pandemic of record meaningfully nights of step

in our negative adjusted adjusted broader full-year to of adjusted reaching profitability. especially guidance million $XX range of growth focus on even. profitability, investor EBITDA million break and the balancing million increased a range raising importance $XX the and to EBITDA We to understand EBITDA are to We environment macroeconomic be $X and expect third-quarter the given of

full various out outlined XXXX $XX initial EBITDA in flow EBITDA is back in instead to in projections have of letting discretionary higher past, of through midpoint raising the full So performance are adjusted year million adjusted The $X the rather EBITDA nearly XXXX. our quarter we for our than guidance adjusted than accelerate July which now negative year. as we are negative and $XX is investments, second guidance we the our million, our reinvesting that done million

that, made lines. are We of and reaching full Operator, with up please our over year. open profitability And also reiterating the for year the incredibly guidance team entire will adjusted past XXXX. has your take We're EBITDA of the I progress Matt proud the questions.

Operator

Instructions]. [Operator

comes question first Anmuth JPMorgan. with from Your Doug

Douglas Anmuth

behave on macros think had could the just said But you property a about business fill more discernible hoping in Matt, they're no talk they're environment? the open was XQ. more or a little macro how or the you are more owners property anything would impact anything you bit I nights to to I that renting know in out suggest you seeing to that? like tougher And looking room

Matthew Roberts

but is seen Good It's platform, in big a coming homes already to like out show Yes. homeowners are owners you meaningful To There up definitely benefit it to think are of mentioned. the softer benefit see that and could be we haven't reason. logical on tailwind. always a up for motivations on a terms and opening we environment in new definitely just their we'd homes a date, agree question. platform availability, more different the the another individual rent to that approach, as yet

Douglas Anmuth

longer-term but piece. big shifts kind know -- not big anything of Again, percentage of type business, I space? around know a I it's and just not it's a Okay, of any extended the

Matthew Roberts

on. the percentage about, of today. small terms percentage It's in that's we Yes. pretty as No major change talked

the quarterly achieve an we available our There's availability of to through. nothing percentage larger on in about continue you a that. walked of business up -- to extended making We're progress good stay. last set associated talked to things with which a We call that, to update complexity on. we lot in invest the major for

Operator

Your Company. the next with question McTernan & Bernard of comes Needham line from

Bernard McTernan

if be you time converting visibility process leads the supply? might portfolio It additions. the actual of how just into into and your into the line, process, come helpful go to talk the through them Maybe can process,

Matthew Roberts

have of corporate had that of it great managers. Well, that great too, sales terms development we a much strategy it's of into more a development a We portfolios, team, growth. but quarter actually business ones, some will, full in overall you team playbook dedicated Sure. and adding fit like But squarely we our XX based. very process, for relationship a if run

there different portfolios the we and So because of is interest what stages their rationale, or of strategic of individual our owners. build is pipeline are those a would businesses. at relationships really with owners It's that lumpy in the selling different a fit bit terms operators

is thing We So be more done folks that approach. but main choice. it a are over times, over lumpy, for those built we money it homeowners. we can logical we've We run interested, when the relationships their consistent a such make XXX are time

provide employment for their team. opportunities also We

great a somebody folks we're retiring. , fit who the from for example for So an their that's the looking business for exit were

much long-term if general than but approach the individual very we be. you much would focused run like and it approach a it's sales the that's So pipeline, maybe more relationship will,

Bernard McTernan

them these guys third of you party? messaging or building from the technology you Yes. And a color and other CRM Are to Understood. why? follow-up mention any tech. that on are pieces And and a technology licensing on yourself

have buying very is and best-in-class in are our The thing items resources the I'd and about really our scale really into industry, and It's that that in both best-of-class we Twilio also the these of our Salesforce technologies to larger actually, say we vacation We and the companies tools those our the platform enterprise-grade respected dollars build are to use So that sum Salesforce. management ourselves companies platform. -- that need can proprietary don't parts invest many nice of to where sold the many invest Twilio these we is creates solutions able of have the ambitions, -- systems becomes have there CRM it platform tens to the like of communications ability systems to build we That's many incredible that but The as functionality millions building sense platform into our can our the makes the tying specific chosen can to and our solutions them system. overall vertical and and enterprise-grade, of of that give very solutions, integration Vacation capital buy millions are homes, best year. everything. in Rentals and scale well, proprietary rental thousands where proprietary use. of and in to nights those of hundreds chosen the and system companies -- in -- versus

Operator

next question of comes Eric line with from the Sachs. Sheridan Goldman Your

Eric Sheridan

you're there Airbnb anything in amplifying out Maybe from update broader OTAs? looking platforms, across and And how across to marketing terms the acting is of your different on call transaction listings. industry, ROI channels some way about are and listings the of the thinking any two

Matthew Roberts

mean I the of channels different user demographic their has to bases. relative own No. each their

we APIs do discernible to for actually listings, that that would our all I publicly to actively of us pictures, for part them second do there I and manage that don't daily conversion down Was overall to and I make that is we to would continue And missed? have so not what I channel the conversion to and basis. still do ability that there. think the we basis between get the optimize we is a the of that homeowners. to us by refine We're optimization most But on say direct terms listings, work. what points that's just sure best copy, to improvement conversion for that call opportunity of anywhere the the in that done out to to close We of the a to et cetera, content, can the tailor ability will do hard that anything to call out.

Eric Sheridan

of optimization optimization? actions in curious do of see most terms compelling sort to lean efforts, into those sort of the increase want you as to you what Just

Matthew Roberts

not things it's it's interesting an I the fill now. right we're large that there's because individual gap that Well, -- trying mentioned, to it's and

Our performance the of each is great channels. across

basis basis on day-in and So it's those improvement the is points we really where a grinding get out opportunity. day-out

Operator

from Grondahl of line Securities. Mike Your with the Northland comes next question

Unidentified Analyst

is on [indiscernible] your their many how Roughly, how Mike. in of And is for mature ramping have do This reps sales today? expectations? you they prior as productivity secondly, terms

Matthew Roberts

Yes.

great -- So and to the in do. we the had -- year were reps quarter, absolute our we by and We our target the quarter. sales quarter in for for second in our year net adding -- because had planned planned target which reps to had end June, for front-load added -- a target we reached number number our sales added planned we additions the doing We that. number successful double-digit to the of the get we our

that. is So the size the of of half the year real back in the focus for maintaining us

on net but be course, back continue reps, we're to et in size. roughly the sales this Of cetera, adding filling we'll basis, between management, performance staying

over last sales productive the As sales the enhancement of we'll the tenure the are to is the improvement the and compounded where for focus then have really far overall that headed newer implemented year as of approach. opportunities what And with going just as because reps. system salespeople as of the the in. comes productivity coupled force us and lot that a a for gives really individual forward new you that, not CRM getting just about us that lift sales is tenure, lot And reps we that's we size

in there's a productivity So get . people you'll natural that just enhancement a mature as

Unidentified Analyst

that you'd are regions specific And or it. then are locations Got that to outperforming? call like out any there

Matthew Roberts

It's nothing provide data. have there's basis. to don't the all a out international really I that and a data or on ZIP block, the regional call the code footprint more down regional perspective. at in obviously city would on level really we Obviously, we company No, national a but

Operator

Instructions]. [Operator

Kelly from Oppenheimer. Your question next comes with Jed

Jed Kelly

I may. if Two

you I force. you've lot sales building your force a know know to back going experience had teams. And out Matt, of sales Just

when out in? the Just to appreciate like you of do about sort question have And figured property force some -- then strategies do I kind -- potentially And improving of another gain compression lose my year. more you But around around of RevPAR? the next happens and manager? you productivity [Technical you of say large a second to share what what's your sales EBITDA a reiterating we if 'XX, talk slowdown positive Difficulty] there see guidance guys EBITDA can is, your is for you sort positive

Matthew Roberts

first things that basic don't Well, There's well. executing team that take one? one, the of are team number Sure. why and handle let I'll against Jamie incredibly sales second a pretty I development the our is

of reps. number had we've to sales terms In -- training, a new quite board a few on of

but a -- incredibly in over those still we're and XX last the proposition broadly our the interested a process, and competitive is compelling you really very industry, So refinement value team the is taking, months, our of six sales et in sell understanding develop Specific we're of proud sales leadership sharing value sales of necessarily comfortable with team that that getting those it's but progress particular, help that Salesforce get cetera, starting in objection I'm handy where this handling, we're to just team reps really way. in with to leadership on homeowners. even going more tactics And then because the from communicating our sharing data role-playing, not in come how boost to the proposition to months et a they've to sales to really cetera. precise made the prospective

I over far to 'XX Jamie? downturn, As as and why just turn don't in we how that a handle general,

Jamie Cohen

Sure.

seen our that's a good to higher has traveler value, gross our value view into. first is night rear the which third and gross quarter higher of We've now the have revenue in the any which also XX% guidance. at month of we third booking platform of rate, value better feel per July just So on demand. we August given our all, of realize of ability I'd We homes guidance, booking the in us driven to we haven't quarter XX% downturn about booking sold. which quarter seen a the strength half second mentioned gross and lot And year, the really in back line year. also sight largest our is great reiterate,

about So that though limited into comments point. visibility XXXX, to back nothing the have we make half do there's But the bit feeling off. good we and have. fourth tough bit a the concerning a that's even really quarter, at with it's we further this -- information the that

the we category we bit of EBITDA. A the a are positive of sales really our homeowners but little little guidance control, really instead confident need vacation not dine-out, business they some well it alternative estate. of might things, you reduction rentals bit free over accommodations touched environment, a adjusted potentially say easier travelers know bit, out we choose meet bit friends bit homes a a of and that given because this of churn From more, couple perspective, might of demand a to share the income need gets to up make just the dine-in can obviously, cost-effective. on and there see a XX% homeowners be homeowner of us terms from with perspective, fewer a as or more more manage bit real acquisition Matt mention In a is might We can little availability macro they that of value, think hotels positioned. but

capital one, revenue. order earn In don't model, terms commit specifically, to in of the business we

generate is guests. commission our earn on model revenue Our we owners a the fees business and to collect for from rental

and of is consumer from cost XX% technology that our rest, have support, degree is investments our discretionary in which operations cost largely to second owners. And and those can where we and homes So model lease expenses to that variable or then are structure, demand. then what are not sales our revenue the accelerating on the we're we of leading choose And or not. into

So at strong with business model our really disposal. levers

-- is also positive And we positioned operating So we're means for last quarters XX-month I'd the remind had that do and just the well. flow portfolio really spend trailing cash six which all of discretionary. we've you,

we the at environment. that depending our have lever another So overall disposal that's on

and the that So good but what from resilient and I trends have, perspective, overall we'll feeling that right is we really seeing feel the structure great an happens really given environment see now. business strong

Operator

no Roberts closing are Matt questions. back remarks. turn call to CEO, the like further I'd for There to

Matthew Roberts

for all again, results the wanted just in day today. they team entrusting our us possible thank homeowners Well, these with seek. out. I And with And are that that the homes our for of to out day and our thank their to and type joining making in you us generation field in income and offices

catching to again quarter. forward you Look everybody. with next up thanks, So

Operator

This concludes conference call. today's

may You disconnect. now

Vacasa (VCSA) 11 Aug 222022 Q2 Earnings call transcript