Earnings call transcript Q1 2023

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Operator

Good afternoon and thank you for standing by. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vacasa First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. you. Thank Instructions] [Operator

Relations. Investor Domyancic, Ryan

You may your conference. begin

Ryan Domyancic

CFO, afternoon, Vacasa' First and be today Greyber for I'm thanks for today joined and Rob CEO, us joining by Cohen. Quarter to Good pleased everyone, Jamie XXXX Call. Earnings

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

the by IR that We speakers. section our have letter posted investors.vacasa.com referenced a website will on be our shareholder at of

Comments referred that made objectives, could cause call estimates, to beliefs, conference various factors include and in differ contain statements expectations, our may caution targets, during this forward-looking events, statements shareholder conditions that to Such future results anticipated. projections, letter are actual those statements. and about commonly financial those plans, from We as performance.

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

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

Rob Greyber

have and in June. our to we've last pleased months. busiest all the getting joining we results. from the first organization you our and positioning be to in for homeowners with made to during market discuss Across March, thank spoke business quarter peak our Vacasa our latest today we everyone, financial the summer afternoon, has on I'm discuss guests Since off and central deliver focused operations ready progress team teams, through for at been to which local Vacasa Good our you kicks season, for been us.

and we and to of energized team these done impressed local our with opportunities each helps the time local so leadership about in-market am And improve Over by past our their and colleagues. for also where the in can guests and teams time commitment speaking truly Vacasa several several months, the ahead. owners and Vacasa. I in to the with us understand taken members visit three We've what's far. Spending markets, markets these meeting homeowners opportunities of and teams, have firsthand with I visits our inspired ahead field

functions, shared year support previously ahead, developing four we to right unlocking customer I years. against worthlessly the in drive will potential executing for approach prioritizing profitable local sales future on business execution markets of the and position in product are technology in the priorities these and and As priorities We the our focused sustainable needs service offerings. individual profitable improving include which growth you, that long-term growth, with us believe

but team, is right are satisfied right we and is I am believe focus the the our I not things. yet nor path, our on on

staffing and the increasing our anticipation in customer throughout under execution and on support During made quarter, in markets we XXXX, stronger demand functions. improving we of first local gains were Recall local the homes our management. markets

to not our each as leadership have senior operations with the structural fourth quickly splitting actions levels dedicated in enabling third adjust changed we we as sales We fourth more beginning environment demand traveler did during quarter, staffing local have groups, took liked. team. for would and separate and national teams teams quarters, the the into As us

best practices to number reservations and of a align in to with regions. processes each new period better implemented staffing share also We field across

headcount level better in during contributed market our actions From adjustments stronger as demand, the with match these levels in quarter approach The to our and exiting made combination first I'm January. effects staffing first outperformance resulted that the summer we these cost of can we EBITDA these that Vacasa resulting further seasonally maintain we adjusted quarter. on months. our that the structure cautiously improvements and optimistic learnings,

optimize We individual add continue approach. to platform refine sales and homes how to our we to the

productivity more our On highest encouragingly, the progress there I is to hand, the past one be March over believe represented per and year, made. rep

churn, comes experience levels to off elevated about we years. to the hand, as primarily the other homeowner record On homeowner two industry is believe which levels we concerns continue of of due income

this spoke churn monitoring rate we are since increased hasn't the closely, We last and March. in

the look very that year also very demand that and points are third-party clear bookings experiencing than that at our we As from it's we others a in different in a declines are ago. cover firms environment we were data industry,

year. manage the what their balance We broader the their expectations and for effort homeowners experiencing are actively of an we the our communicating address to to industry in and concerns are

Given in to our continued for appropriate it's levels, churn issue we steps. focused believe back normalized when are expect the on taking predict the are expectations and we declines difficult we but bookings, to to year-over-year return what

team homeowners how caring We for is technology executing and is also priorities. well detailed their against which The near-term recently into more launched its HomeCare home. provides the both dashboard, Vacasa long-term insight

that clean goes status average caring directly a guest, owner their to we the when including now by tickets work behind-the-scenes the home, score last inspection tool, of into the the and mobile checklists through conveying app. of was are the for home maintenance clean, the much clean With

their do into the believe provide we and to tool will We this mind peace of maintain properties. transparency work

We to our for of we of existing as teams solutions and to integrated of enduring increase ease new product local improve field use refine competitive advantage. our they in also the and create custom these release tools crucial It's invest care functionality efficiency scale that and to types their homes. continue to leverage

to June new X, Financial endeavors. Jamie succeeding who from stepping effective announced Bruce will as Officer that Finally, today our that we will be Vacasa join Schuman Cohen, pursue role Chief down

with divisional responsibilities. P&L experience, Vacasa at and of next serving I'm where financial executive welcome leadership excited XX years to XX Intel, Vacasa with nearly as joins his CFO the over years Bruce team month. included to roles including Bruce a

the publicly traded Vacasa's Vacasa smooth has responsibilities and its through Vacasa operations ensure Over lead combination a two solutions of integrating including Jamie's business leading becoming of contributions to to Vacasa. for helped TurnKey's lasting resulted with some transition to XXXX, consult formative will extremely remain financial Vacasa October more with a the company. in I'm available X, past years, grateful Bruce. Jamie Jamie which milestones, TPG corporation, until to based

results to first call outlook. quarter over Jamie? review our and Jamie latest With that, I'll the turn to

Jamie Cohen

Rob. Thanks,

operating impact latest I'll our first ahead XXXX, referencing review excluding in quarter Unless and our of first restructuring find I'll outlined guidance. shareholder adjusted spend results the time stock-based quarter I where financial Then expense to First, revenue otherwise, noted results, reviewing will business. can line, quarter combination the and comparing the EBITDA be some our be our costs the trends you letter. in of finished compensation, and business of the first costs, which I'll

per up with were the per year-over-year, gross million, night quarter, X% combination Night $XXX quarter, the down the decline the $X.X reached of consecutive is sold X% first booking in addition million to night sold year-over-year value driven $XXX growth. sold quarters by night first the For following value, first which quarter, the primarily of X% up homes year-over-year the and gross reached new booking sold of the increase in year-over-year. and value XX platform. first booking Gross

past per booking night year-over-year quarters, from in trend Over sold. growth reduction value about gross the Remember, gross in first strong with of higher booking the to and in normalizes off look the highs at sold average year-over-year of sold is growth and the difficult either sold, isolation. in and homes This it's the relationship talked gross quarter, home between the years. of past decline there nights value few we've in night value the in continued the industry average the booking couple night a than as quarter, the per record per

we optimize algorithms sold and income. Our and which night with the revenue year-over-year and fees are between price the collect per booking optimizing first million. in nights guests consists commission for we of up from was million on primarily rents and gross trade-off the above mix sold the of to generate the X% $XXX guidance homeowner $XXX management our evaluating our of homeowners quarter, goal and value occupancy $XXX million constantly the to Revenue, team of

and As weather severe we with experience more we ski our patterns market, our call to quarter noted in in earnings quarter in be during our which guidance. us variability booking led continue cautious first March, fourth to

from benefit XX% same consistent revenue growing state turning $XX in of to in revenue revenue year revenue the expense when the million excluding was expenses. first same XX% was last support Cost the Operations year-over-year. XX% credit. versus quarter quarter, the X% period of Now first last period in of and the of with year, future

these consist year-over-year demand recall, we operations. progress resources lines customer making two these better The local to in You'll market create more match local expense favorable and the trend initial our costs. lines of market cost are support represents primarily both efficient to with

in to We quarter, achieved largely in January. the operating our expense lines year-over-year first took reduction the due place three across workforce leverage that

the the EBITDA Specifically, X% in million the market combined on X%. marketing declined was Sales first quarter. faster expense and last our basis, Adjusted declined in development local call. resulted earnings expense versus than and year-over-year and to on $XX efficiency our administrative operations expectations a drive expense [beat] Higher general technology for and with the expected, we set revenue, X%. declined ability negative

Now turning outlook. to the

quarterly industry still years. to are not we off booking As two record issuing the emerging guidance, we explicit the are as patterns in March, given indicated we comes adjusting

in Rob bookings recently, curve. of alluded, seeing some part the softening have close-in renewed been especially booking the we As

result, of decline full half But double-digit earn percentage directionally, of revenue single-digit to are full the of the our currently majority year-over-year. growth revenue we in a first reiterating to the guidance year a expect year XXXX high we year. As low

our once peak year we earnings We a provide second informed call into expect during are well of view quarter more full to revenue season.

during EBITDA, profitability adjusted with local full we For adjusted in costs market pleased progress made continue strive we quarter year EBITDA and for first controlling are XXXX. the to the in

quarter, with be near EBITDA prior consistent second breakeven, expect years. the For we adjusted to

help at privilege call, the a transformational conclude public into earnings extend watch last team want vacation to rental Vacasas' Vacasa. and growth guide and the during Directors redefine I Rob, the of alongside to It's continue Board the an to and entire to excited Vacasa been thank Vacasa I absolute I'm period to work of category. entry you oversea to my market. As them a management

Operator, I the line. take Rob that, open please up questions. With and your will

Operator

Patterson the Justin Your KeyBanc. Instructions] line [Operator with first comes of question from

Jacob Armstrong

in growth XXXX, Could is vacation differently, If traditional on percentage for you are on rental versus markets I [cost] in headwinds? This markets said XXXX? the Jacob supply of performance stable churn contrast experience versus percentage facing Justin. compare what what are rapid

Jamie Cohen

Sure.

seeing which we've split, is of that of perspective, based look, at. churn board. So of in that We terms by largely is third-party in Vacation industry kind believe declines we driven the as that the we've said this in income, pretty market seen a much on a whole look we believe segment across the homeowner the from that Rental terms data the it

markets So patterns call market markets. that for out there's ski to booking from are I versus perspective, that going different Obviously, wouldn't specifically. any occur seasonal summer

overly churn side don't speaking, focus I as gross we're that booking dynamics. booking occupancy both per sold. just the or out call well the night And side, generally on on would similar we seeing But value as

one might We impact plus because in We at or our look to have pricing will have there, ability there's a overall with constant right? minus occupancy. which in order on maximize trade-off optimize another to an homeowner income, combination those really the

Operator

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

Unidentified Analyst

I This bookings I XQ? even for call, wondering last-minute just this trend if into you is previous on mentioned declining. has continued wondering into just was was Owen the that and on XQ Mike. were

Rob Greyber

the question. Yes. Thanks for

what the we First there's It's we've And requires And curves and of but to been bookings been it's macro say. some that of and obviously of reservation. backdrop, couple a that's early to out that think certainly things: -- is demands, typically all, far a see higher hard of booking We -- be in this from consumer been price. demand it's the supply, in us changing. the combination volatility. drive changing able optimizing to

last-minute less bookings seeing we're generally of changes think I in come dynamic in. of this less more the seeing we're just other bookings those close-in as of and how

prior less guide years. has So been been little difficult is just it predictable it result makes build booking of the a bit that the overall. it's to than in this And

think to strength. this environment across a owners of into leaning we're minds. think demand. it's several the I we're record the industry ability to their in it So ensure revenue years is sort We earn function coming It's and occurring our off of our forefront consumer of and at putting this of

Unidentified Analyst

Great. anything to out And the then is call front? there on international

Rob Greyber

I in coming domestic think call we think -- markets. the nothing our but Vacation demand the primarily U.S. from in that. the is No, and I so. to overseas, And of out shape see of don't primarily do in business We terms Rental

Operator

Instructions] There turn questions are for no you closing at the [Operator Rob to remarks. Mr. I call time. further back this Greyber,

Rob Greyber

who us to their for to working much wanted this all just make very homes thank joining us moment colleagues are to entrusting our at who say I all Vacasa owners us to to guests Thanks hard a with to make with you today. happen. take the memories so our for

she's you you very Jamie We forward thank with to next finally, Vacasa, look And for for speaking quarter. done much. to everything

Operator

you This conference call. concludes attending. today's Thank for

may disconnect. You now

Vacasa (VCSA) 9 May 232023 Q1 Earnings call transcript