Inspirato (ISPO) Q1 2025 Earnings Call May 08, 2025 01:00 PM ET Speaker0 Greetings, and welcome to Inspirato's First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. A question and answer session will follow management's prepared remarks. It is now my pleasure to introduce your host, Beta Milanian, senior vice president of marketing. Beta, you may begin. Speaker1 Thank you, operator, and hello, everyone. Welcome to Inspirato's first quarter twenty ...

Inspirato Incorporated (ISPO) came out with quarterly earnings of $0.12 per share, beating the Zacks Consensus Estimate of a loss of $0.36 per share. This compares to loss of $1.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 133.33%. A quarter ago, it was expected that this company would post a loss of $1.09 per share when it actually produced a loss of $0.21, delivering a surprise of 80.73%.Over the last four quarters, th ...

[Q1 2025 Performance Overview](index=1&type=section&id=Q1%202025%20Performance%20Overview) [Q1 2025 Highlights](index=1&type=section&id=Q1%202025%20Highlights) Inspirato achieved its most profitable quarter with **$1.6 million net income** and **$5.6 million Adjusted EBITDA**, driven by strong operational efficiency Q1 2025 Key Performance Indicators | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Net Income | $1.6 million | - | | Adjusted EBITDA | $5.6 million | +38% ($1.5M) | | Gross Margin | 39% | - | | Cash Operating Expenses | - | Declined $7.6M (26%) | | Occupancy | 73% | - | | Average Daily Rate (ADR) | $1,915 | +16% | - This was the **second consecutive quarter of positive Adjusted EBITDA**, generating **over $7.5 million** in the trailing six months[4](index=4&type=chunk) - As of March 31, 2025, the company had approximately **11,600 active memberships**, reflecting a focus on high-quality, recurring revenue[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes strong Q1 results to disciplined transformation, emphasizing operational efficiency and technology investments - The company's strategic focus is on **operational efficiency, brand elevation, and delivering an enhanced member experience**[3](index=3&type=chunk) - Inspirato is making **foundational technology investments** to build a platform for reaching, targeting, and converting **high-value travelers at scale**[3](index=3&type=chunk) - The long-term goal is to transform Inspirato into a **leading property technology company** supported by a curated portfolio of high-quality homes[3](index=3&type=chunk) [2025 Guidance](index=2&type=section&id=2025%20Guidance) Inspirato reiterated its full-year 2025 guidance, projecting revenue between **$235 million and $255 million** and Adjusted EBITDA between **$0 and $5 million** Full Year 2025 Guidance | Metric | 2025 Forecast | | :--- | :--- | | Revenue | $235M - $255M | | Adjusted EBITDA | $0M - $5M | | Cash Operating Expenses | $80M - $90M | - The anticipated year-over-year improvement in Adjusted EBITDA is expected to be driven by a **300 basis point expansion in gross margins** and other operational efficiencies[7](index=7&type=chunk) [Financial & Operational Metrics](index=2&type=section&id=Financial%20%26%20Operational%20Metrics) Q1 2025 saw total revenue decrease **17.9%** to **$65.9 million**, with a **39% gross margin** and declines in nights delivered and active memberships Revenue and Gross Margin (Q1 2025 vs Q1 2024, in millions) | | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Travel Revenue | $41.7 | $49.7 | (16.0)% | | Subscription Revenue | $20.9 | $28.1 | (25.6)% | | **Total Revenue** | **$65.9** | **$80.2** | **(17.9)%** | | **Gross Margin** | **$25.5** | **$31.7** | **(19.5)%** | | **Gross Margin (%)** | **39%** | **40%** | **(1) pp** | Operational Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Nights Delivered | 29,100 | 41,300 | | Total Occupancy | 73% | 78% | | Total ADR | $1,915 | $1,655 | Active Memberships (as of March 31) | Membership Type | 2025 | 2024 | | :--- | :--- | :--- | | Club | 10,200 | 10,900 | | Pass | 1,300 | 2,100 | | **Total** | **11,600** | **13,000** | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenue was **$65.9 million**, resulting in a net income of **$1.6 million** and basic EPS of **$0.14** Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | Revenue | $65,889 | $80,245 | | Gross margin | $25,545 | $31,721 | | Income before income taxes | $1,659 | $2,393 | | **Net income** | **$1,622** | **$2,249** | | Net income attributable to Inspirato Inc. | $1,622 | $1,263 | | Basic net income per Class A share | $0.14 | $0.35 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$270.1 million**, total liabilities **$395.3 million**, and cash **$16.4 million** Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $16,445 | $21,845 | | Total current assets | $55,091 | $58,383 | | **Total assets** | **$270,130** | **$273,885** | | **Liabilities & Equity** | | | | Total current liabilities | $200,074 | $211,856 | | **Total liabilities** | **$395,285** | **$403,737** | | **Total equity (deficit)** | **($125,155)** | **($129,852)** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 operating activities used **$6.6 million** cash, with a net decrease of **$5.5 million** in total cash and equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | Net cash used in operating activities | $(6,627) | $(7,202) | | Net cash used in investing activities | $(915) | $(1,502) | | Net cash provided by (used in) financing activities | $2,000 | $(276) | | **Net decrease in cash, cash equivalents and restricted cash** | **$(5,542)** | **$(8,980)** | | Cash, cash equivalents and restricted cash – end of year | $29,463 | $33,286 | [Non-GAAP Financial Measures and Key Metrics](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Key%20Metrics) [Reconciliation of Net Income to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Q1 2025 GAAP net income of **$1.6 million** reconciled to **$5.6 million** Adjusted EBITDA, with margin improving from **5.1% to 8.5%** Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | Net income and comprehensive income | $1,622 | $2,249 | | Adjustments (Interest, Tax, D&A, etc.) | $3,981 | $1,824 | | **Adjusted EBITDA** | **$5,603** | **$4,073** | | **Adjusted EBITDA Margin** | **8.5%** | **5.1%** | [Reconciliation of Free Cash Flow](index=10&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Q1 2025 Free Cash Flow was negative **$7.5 million**, an improvement from negative **$8.7 million** in the prior year Reconciliation of Free Cash Flow (in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | Net cash used in operating activities | $(6,627) | $(7,202) | | Development of internal-use software | $(863) | $(1,266) | | Purchase of property and equipment | $(52) | $(236) | | **Free Cash Flow** | **$(7,542)** | **$(8,704)** | [Definitions of Non-GAAP Measures and Key Metrics](index=4&type=section&id=Definitions%20of%20Non-GAAP%20Measures%20and%20Key%20Metrics) The company defines non-GAAP measures like Adjusted EBITDA and Free Cash Flow, alongside key operational metrics such as Active Memberships and ADR - **Adjusted EBITDA is defined as net income less interest expense, income tax, depreciation and amortization, equity‑based compensation, and gain on fair value instruments**[14](index=14&type=chunk) - **Free Cash Flow is defined as net cash used in operating activities less purchases of property and equipment and development of internal-use software**[16](index=16&type=chunk) - **Active Memberships are used to assess market penetration and are a key driver of revenue**[19](index=19&type=chunk) [Company Information and Forward-Looking Statements](index=11&type=section&id=Company%20Information%20and%20Forward-Looking%20Statements) [About Inspirato](index=11&type=section&id=About%20Inspirato) Inspirato is a luxury vacation club and property technology company offering members access to curated luxury travel experiences - Inspirato (Nasdaq: ISPO) is a **luxury vacation club and property technology company** that provides access to a portfolio of curated vacation options[33](index=33&type=chunk) [Forward-Looking Statements](index=11&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to substantial risks and uncertainties, with no obligation for future updates - The press release contains **forward-looking statements** regarding future financial performance, strategic initiatives, and operational results, which are **not guarantees of future performance**[34](index=34&type=chunk) - **Numerous risks and uncertainties** could cause **actual results to differ**, including the ability to service debt, comply with Nasdaq listing standards, adapt to consumer preferences, and compete effectively[34](index=34&type=chunk)[37](index=37&type=chunk) - The company **disclaims any obligation to publicly release revisions** to any forward-looking statements, except as required by law[39](index=39&type=chunk)

Improved Gross Margins and Operational Efficiencies Drive Most Profitable Quarter in Company HistoryDENVER, May 07, 2025 (GLOBE NEWSWIRE) -- Inspirato Incorporated (“Inspirato” or the “Company”) (Nasdaq: ISPO), the premier luxury vacation club and property technology company, today reported results for the first quarter (“Q1 2025”) ended March 31, 2025. The Company delivered its most profitable quarter since going public, driven by strengthening gross margins and optimizing operational efficiencies. The Com ...

Conference call scheduled for Thursday, May 8 at 1:00 PM ET / 11:00 AM MTDENVER, May 05, 2025 (GLOBE NEWSWIRE) -- Inspirato Incorporated (“Inspirato” or the “Company”) (Nasdaq: ISPO), the premier luxury vacation club and property technology company, today announced plans to release financial and operating results for the quarter ended March 31, 2025, after market close on Wednesday, May 7, 2025. The Company will host a conference call the following day on Thursday, May 8 at 1:00 PM ET (11:00 AM MT) to discu ...

Core Insights - Inspirato Incorporated has partnered with Clean the World to enhance its sustainability efforts through a structured recycling program for bath amenities [1][2] - The initiative aims to reduce waste by recycling plastic amenity bottles and partially used soap bars, contributing to environmental responsibility [2][3] - This partnership aligns Inspirato's domestic operations with global environmental standards, reinforcing its commitment to responsible travel [3] Company Overview - Inspirato (NASDAQ:ISPO) is a luxury vacation club offering exclusive access to curated vacation options, including luxury homes and five-star accommodations [5] - The company focuses on delivering high service quality and value to its discerning customers [5] Partner Overview - Clean the World is a leader in sustainability within the hospitality industry, dedicated to reducing waste and providing hygiene products to communities in need [6] - The organization collects and recycles discarded soap and plastic amenities to prevent landfill waste [6]

Core Insights - Inspirato Incorporated has renewed and expanded its strategic partnerships with Andaz Maui at Wailea Resort and Fairmont Kea Lani, enhancing exclusive member access to newly renovated oceanfront private residences [1][5] - Fairmont Kea Lani has undergone an extensive transformation, offering redesigned suites and villas, along with elevated guest experiences that reflect the spirit of Aloha [2][3] - Inspirato's partnership with Andaz Maui has deepened due to strong demand, providing members with access to exclusive accommodations, including a notable 4-bedroom, 4,700-square-foot oceanfront villa [3][4] Company Overview - Inspirato is a members-only luxury vacation club that offers exclusive access to a curated portfolio of vacation options, ensuring service, certainty, and value for discerning customers [6] - The company is committed to supporting Maui's recovery and rebuilding efforts, emphasizing responsible tourism [5] Partner Insights - Andaz, part of the Hyatt portfolio, is known for its immersive hospitality experiences that blend contemporary luxury with cultural authenticity [7] - Fairmont, under Accor, is recognized for its iconic properties and exceptional hospitality, offering timeless elegance and unforgettable experiences [8]

Core Insights - Inspirato Incorporated has launched its 2026 Inspirato Only Experience offerings, which include a curated collection of luxury travel experiences designed for discerning travelers [1][3] - The 2026 collection features exclusive itineraries such as the Arctic Expedition and luxury safaris in Africa, emphasizing unique access and thoughtful details [3][8] 2026 Experiences Highlights - The 2026 collection allows members to explore unique destinations, with high demand noted for marquee trips shortly after their launch [3] - Inspirato's offerings include private dinners, local engagement, and exclusive programming tailored to each destination, ensuring memorable experiences [4] Membership and Access - Inspirato's experiences are exclusively available to members, providing access to once-in-a-lifetime travel opportunities [5][6] - The company promotes its membership options as a way to join a community of explorers seeking luxury and curated travel experiences [5] Travel Offerings - The 2026 travel lineup includes luxury cruises through stunning waterways, exclusive safaris in Africa, and VIP access to elite sporting events [8] - Members can enjoy unique experiences such as island-hopping in Bali and premium seating at events like the Australian Open [8]

Financial Condition and Capital Requirements - The company has existing debt and may require additional capital in the future, which might not be available on acceptable terms, potentially harming its financial condition [104]. - The company must maintain a minimum liquidity balance of $10 million under its Master Services Agreement with Capital One, and failure to do so could adversely affect its business [106]. - The company may not have sufficient cash flow to service its existing and potential future debt obligations, which could limit its operational flexibility [105]. - The company agreed to pay a termination fee of $6.6 million under a Lease Termination Surrender Agreement, with payments scheduled from August 2024 to March 2025 [118]. - As of December 31, 2024, the aggregate principal amount of the Note outstanding is $27.6 million, carried at fair value [269]. - A hypothetical 10% increase or decrease in interest rates would have a $1.1 million impact on the carrying value of debt [269]. Internal Control and Financial Reporting - The company restated its Condensed Consolidated Financial Statements for the quarterly periods ended March 31, 2022, and June 30, 2022, due to material weaknesses in internal control over financial reporting, which may have negatively impacted investor confidence [115]. - The company has identified material weaknesses in its internal control over financial reporting, which could result in challenges related to the accuracy of financial data used for decision-making [114]. Tax Liabilities and Compliance - The company is subject to various tax laws and regulations, which could lead to additional tax liabilities and affect its financial condition [123]. - The company currently collects and remits applicable sales taxes in jurisdictions where it has determined a taxable presence, but there is uncertainty regarding future tax obligations which could lead to substantial liabilities [128]. - Ongoing costs associated with compliance with indirect tax requirements in various markets could materially adversely affect the company's financial condition and results of operations [129]. Intellectual Property Risks - The company faces risks related to intellectual property, including potential litigation that could divert resources and adversely affect its business [130]. - The company has applied for patent rights for certain technology aspects, but successful claims against its intellectual property could result in significant monetary liabilities [132]. - The company utilizes third-party open-source software, which poses risks if the terms of licenses are not complied with, potentially leading to increased costs or operational restrictions [133]. Cybersecurity and Data Protection - Cybersecurity risks are heightened due to increasing sophistication of cyberattacks, particularly as the company serves high-income individuals, making it an attractive target [137]. - The company has experienced security incidents primarily through phishing attempts, which were addressed, but any future incidents could harm its reputation and financial results [139]. - Compliance with evolving privacy and data protection laws, such as the GDPR and CCPA, is critical, as noncompliance could result in significant penalties and operational disruptions [142][144]. - Enhanced security measures are being implemented, but the company acknowledges that these may not fully eliminate risks associated with cybersecurity incidents [150]. Market and Currency Risks - Operating expenditures denominated in foreign currencies for the year ended December 31, 2024, were approximately $25.2 million, primarily in Mexican Pesos and Euros [270]. - A hypothetical 10% increase or decrease in the value of the U.S. dollar relative to the Mexican Peso and Euro would impact the Consolidated Financial Statements by $2.5 million [270]. - The company is exposed to equity risk related to stock price fluctuations, which can affect stock-based compensation expenses [271]. Related Party Transactions - The company has entered into related party transactions that may expose it to conflicts of interest and operational inefficiencies [121]. Nasdaq Delisting Risks - The company may face significant negative consequences if its securities are delisted from Nasdaq, including reduced trading activity and limited analyst coverage [113].

Core Insights - Inspirato Incorporated achieved a 2024 Net Promoter Score (NPS) of 71, indicating strong customer satisfaction and loyalty [1][2] - The NPS for vacation homes is 70, while curated experiences received an NPS of 80, reflecting high member appreciation for luxury travel services [2] - The European portfolio was the highest performing region, with a perfect NPS score in Mykonos and over 85 in Italy [3] Company Performance - Inspirato's commitment to luxury travel is underscored by consistently high NPS scores, demonstrating member recognition of service excellence [3] - Six members-only Experiences received perfect scores, including prestigious events like The Masters, Wimbledon, and the Kentucky Derby [3] - Experience-related travel has been a rapidly growing segment, with plans to host over 25 Experiences globally in 2025, including diverse offerings such as an expedition cruise in Alaska and a wellness retreat [3] Company Overview - Inspirato operates as a members-only luxury vacation club, providing exclusive access to curated vacation options [4] - The portfolio includes luxury vacation homes, five-star hotel accommodations, and custom travel experiences, designed to meet the demands of discerning customers [4]