Yahoo Finance Inspirato Inc (ISPO) Q1 2024 Earnings Call Transcript Highlights: A Turnaround Quarter with ...
Total Revenue: $80 million, a 12% decrease year-over-year.
Subscription Revenue: Decreased 23% year-over-year.
Travel Revenue: Decreased 10% year-over-year.
Adjusted EBITDA: Positive $4.1 million, improved by more than $7 million from a loss of $3.1 million the previous year.
Gross Margin: Expanded to 40% from 35% in Q1 of the previous year.
Net Income: Achieved profitability on an EBITDA and net income basis for the first time in over three years.
Operating Expenses: $29 million or 36% of revenue, down from $36 million or 39% of revenue last year.
Cash Burn: Improved to $9 million from over $20 million in Q1 of the previous year.
End-of-Quarter Cash: $33 million, down from $42 million at year-end.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Inspirato Inc (NASDAQ:ISPO) achieved profitability for the first time in more than three years, with positive EBITDA and net income in Q1.
The company has successfully increased paid residence nights and overall travel revenue per member, indicating a more engaged and active member base.
Inspirato Inc (NASDAQ:ISPO) has made significant operational improvements, leading to a $50 million reduction in operating expenses, which positions the company for sustainable growth.
The introduction of Flex trips has improved the economics of the Pass product, making it more appealing to last-minute travelers and enhancing overall portfolio health.
Inspirato Inc (NASDAQ:ISPO) has maintained a strong focus on member engagement and retention, shifting towards multi-year memberships which are expected to stabilize the subscriber base.
Negative Points
Total revenue in Q1 decreased by 12% year over year, with a notable decline in both subscription and travel revenue.
The number of Pass subscriptions decreased by approximately 350 from the end of 2023, reflecting some churn as the product adjustments may not suit all members.
Despite efforts to improve member engagement, bookings per member have been flat to slightly down, indicating challenges in driving increased usage among members.
Inspirato Inc (NASDAQ:ISPO) experienced a decrease in cash from $42 million at year-end 2023 to $33 million at the end of Q1, highlighting ongoing cash burn issues.
The company anticipates some softness in bookings impacting Q2 travel, which could affect financial performance in the upcoming quarter.
Q & A Highlights
Q: What do you think is the upper bound on resident occupancy rates? A: Robert Kaiden, CFO of Inspirato Inc, expressed satisfaction with reaching 80% occupancy this quarter. He noted that while there is a balance to maintain availability for members and optimize occupancy rates, there could be a few percentage points of improvement possible, considering unavoidable vacancies due to maintenance and unexpected events.
Q: How has the introduction of Flex trips altered the economics of the Pass program? A: CEO Eric Grosse highlighted the positive impact of Flex trips, noting that 25% of trips booked since the introduction have been Flex trips, with 80% of those bookings made for stays within 60 days. This shift has helped manage the company's portfolio more effectively, making the Pass program more economically viable and better aligned with member needs.
Q: Can you provide an update on the partnership with Capital One and its impact on your inventory and guidance? A: Eric Grosse, CEO, shared that technical integrations with Capital One are on track, with inventory expected to be available in the latter half of the year. This partnership is anticipated to be a significant demand driver from 2025 onwards, although initial volumes in 2024 will be modest as per the current guidance.
Q: What are your top priorities for the rest of the year, particularly concerning operational improvements and cash management? A: Eric Grosse outlined key priorities including achieving operational breakeven, improving cash balances, enhancing member engagement, and driving occupancy. Efforts are also focused on optimizing cost structures, particularly through lease management, to strengthen the companys financial outlook and balance sheet.
Q: What measures are being taken to improve bookings and member engagement this year? A: The CEO mentioned several strategies to boost bookings, such as reducing average daily rates (ADRs), launching a semi-annual sale to increase occupancy, and expanding the rewards program to incentivize frequent travel among members. These initiatives aim to enhance revenue per room and member engagement.
Q: How are controlled accommodations and gross margins expected to trend for the rest of the year? A: CFO Robert Kaiden explained that controlled accommodations would continue to decline slightly due to the phased termination of leases. Gross margins are expected to fluctuate with seasonal revenue changes, with improvements anticipated as revenue increases and the portfolio is optimized further.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
