Financial Data and Key Metrics Changes - Total revenues for Q3 2024 grew 14% year-on-year to $333 million, accelerating from 3% growth in Q1 and 5% in Q2 [25] - Membership revenue rose 17% year-on-year to $107 million, while in-house revenues increased by 5% and other revenues grew by 22% [25] - Adjusted EBITDA for Q3 was $48 million, up 38% year-on-year, with margins increasing approximately 250 basis points year-over-year [28] - Net income was positive in the quarter, improving from a loss of $49 million in Q3 2023 [17] Business Line Data and Key Metrics Changes - Membership demand continued to grow, with 4,000 new members added, bringing the total to approximately 208,000 globally [12] - In-house revenues saw a slight year-on-year growth of 5%, with like-for-like sales growth in the UK, Europe, and the rest of the world, while North America lagged slightly [14][27] - House level contribution increased by $9 million or 17% year-on-year, with house level margins up approximately 150 basis points to 28% [26] Market Data and Key Metrics Changes - Like-for-like in-house revenues for the quarter improved slightly year-on-year, contrasting with flat growth in Q2 [27] - Europe and the rest of the world experienced the strongest like-for-like growth, followed by the UK, while the Americas saw a slight decline [27] Company Strategy and Development Direction - The company continues to focus on growing and enhancing membership and operational excellence to deliver greater profitability [11] - A strategic review was initiated to enhance shareholder value, with a third-party consortium offering $9 per share, which the Board is currently evaluating [8][9] - The company is investing in back-of-house operations and technology, including a new cloud-based ERP system to improve efficiency and scalability [30][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a choppy revenue environment but emphasized strong membership revenue as a stabilizing factor [16][40] - The company is tempering expectations for in-house and other revenue due to weaker demand trends observed in late 2024 [38] - Despite challenges, management remains optimistic about membership loyalty and growth, which are foundational to the business [40] Other Important Information - The company ended the quarter with $147 million in cash and cash equivalents and $686 million in net debt, with a net debt to adjusted EBITDA ratio of 5 times [36] - The company has revised its total revenue guidance to approximately $1.2 billion, down from a previous range of $1.2 billion to $1.25 billion [38] Q&A Session Summary Question: Can you discuss the guidance change and the $21 million reduction in EBITDA? - Management indicated that about half of the guidance change is due to one-time factors and does not expect to recur [47][51] Question: What were the notable differences in like-for-like sales by region? - Management noted a slowdown in the UK and US in October, with a bounce back in November, while Europe remained consistent [53] Question: Can you elaborate on the strategy behind the opening of Mews House? - The company is pleased with the success of Soho Mews House and is considering similar elevated houses in New York and Ibiza [54][56] Question: What is the timeline for clarity on the strategic alternatives? - Management refrained from commenting on the specifics of the offer and timeline for the review [61] Question: Have you seen an uptick in bookings post-election? - Management reported a positive trend in bookings for Q1 2025, particularly in Bodrum, indicating a recovery in demand [64] Question: Will 2025 be an investment year due to ERP initiatives? - Management confirmed that 2025 will involve continued investment in ERP, with expectations for improved efficiencies and flow-through thereafter [72][74]

Earnings Performance - Soho House reported break-even quarterly earnings per share, compared to the Zacks Consensus Estimate of a loss of $0.01 and a loss of $0.22 per share a year ago [1] - The quarterly report represents an earnings surprise of 100% [2] - Over the last four quarters, the company has surpassed consensus EPS estimates once [3] Revenue Performance - Soho House posted revenues of $333.37 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0.37% [3] - Year-ago revenues were $300.96 million [3] - The company has topped consensus revenue estimates two times over the last four quarters [3] Stock Performance - Soho House shares have lost about 31% since the beginning of the year, compared to the S&P 500's gain of 23.1% [5] Earnings Outlook - The current consensus EPS estimate is $0.03 on $329.45 million in revenues for the coming quarter and -$0.38 on $1.23 billion in revenues for the current fiscal year [9] - The estimate revisions trend for Soho House is favorable, translating into a Zacks Rank 2 (Buy) [8] Industry Context - Soho House belongs to the Zacks Internet - Software industry, which is currently in the top 13% of the 250 plus Zacks industries [10] - The top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [10] Peer Comparison - Penguin Solutions, Inc (PENG) is expected to post quarterly earnings of $0.40 per share, representing a year-over-year change of +66.7% [11] - The consensus EPS estimate for Penguin Solutions has been revised 25.8% lower over the last 30 days [11] - Penguin Solutions' revenues are expected to be $317 million, up 15.6% from the year-ago quarter [12]

Financial Performance - Total revenues for Q3 2024 reached $333.4 million, representing a 13.6% year-over-year growth from Q3 2023[3]. - Adjusted EBITDA for Q3 2024 was $48.3 million, up $13.2 million from Q3 2023, with an adjusted EBITDA margin of 14%[3][5]. - Net income for the 13 weeks ended September 29, 2024, was $718, a significant improvement from a net loss of $(48,433) in the same period last year[20]. - Total revenues increased to $333,368, up 14% from $293,387 in the prior year[27]. - Adjusted EBITDA rose to $48,281, reflecting a 38% increase compared to $35,055 in the previous year[20]. - Operating income for the quarter was $37,884, compared to a loss of $(27,386) in the prior year[24]. - The company recognized $14 million in impairment losses on long-lived assets, primarily related to Soho Works North America[20]. - General and administrative expenses increased by 12% to $39,672, compared to $35,564 in the previous year[24]. Membership Growth - Membership revenues increased to $107.4 million, a 16.7% rise year-over-year, accounting for 32.2% of total revenues[3]. - Total members grew to 267,494, up 4.8% year-over-year, with Soho House members increasing to 208,078, a 13% year-over-year growth[3][6]. - The membership waitlist remains at approximately 111,000, indicating strong demand[3]. - The number of active users on the SH app increased to 212,993, up from 187,759 year-over-year[6]. Revenue Breakdown - In-House revenues increased to $120,658, up 5% from $115,223 in the previous year[27]. - Other revenues reached $105,316, a 22% increase compared to $86,115 in the same period last year[27]. - Membership revenues for the fiscal year were $272,809,000, unchanged from previous reports, indicating stable membership performance[41]. - In-house revenues increased to $427,209,000 after adjustments, showing a growth of 0.1%[41]. Financial Adjustments and Misstatements - The Company identified misstatements resulting in an understatement of net loss of $5 million in Fiscal 2022 and $7 million in Fiscal 2023, with additional impacts in Q1 and Q2 2024[31]. - Misstatements related to Soho Home sale transactions led to an understatement of net income by $2 million in Fiscal 2022 and less than $1 million in Fiscal 2023[32]. - The Company recognized an overstatement of Other revenues by $6 million in Q3 2023 and Fiscal 2023 due to incorrect revenue recognition practices[32]. - Adjustments to the income tax expense resulted in an overstatement of $4 million in Q1 2024 and $5 million in Q2 2024, cumulatively impacting net income by $9 million[32]. - The Company has determined that the misstatements did not result in material misstatements for previously presented financial statements but will impact the consolidated financial statements for the 52-week period ending December 29, 2024[34]. Operational Improvements - The company is implementing a new ERP system to enhance internal controls and support strategic growth initiatives[29]. - The ongoing remediation plan includes enhancing accounting staff skills and increasing the number of personnel in the finance department, particularly in the Americas[37]. - The Company will continue to engage with external consultants to strengthen internal controls and processes[37]. Market Expansion - As of September 29, 2024, Soho House & Co operates 45 Soho Houses and 8 Soho Works globally, indicating ongoing market expansion[48]. - The company emphasizes its unique position as the only company to have scaled a private membership network with a global presence since its inception in 1995[48]. - The company has a diverse portfolio that includes various hospitality and lifestyle brands, enhancing its market reach and member engagement[48].

Core Insights - Soho House & Co (SHCO) closed the last trading session at $5.34, reflecting a gain of 1.9% over the past four weeks [1] - Wall Street analysts have set a mean price target of $6.90 for the stock, indicating a potential upside of 29.2% from the current price [1]

Core Viewpoint - Soho House & Co (SHCO) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Financial Expectations - The upcoming earnings report is expected to show a quarterly loss of $0.01 per share, reflecting a year-over-year improvement of +95.5%. Revenues are projected to reach $334.62 million, marking an 11.2% increase from the previous year [3]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Soho House is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -200%, suggesting a bearish sentiment among analysts regarding the company's earnings prospects [10]. - The stock currently holds a Zacks Rank of 3, complicating predictions of an earnings beat [11]. Historical Performance - In the last reported quarter, Soho House was expected to post a loss of $0.11 per share but actually reported a loss of $0.17, resulting in a surprise of -54.55%. The company has not surpassed consensus EPS estimates in any of the last four quarters [12][13]. Conclusion - Soho House does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors when evaluating the stock ahead of its earnings release [16].

Financial Data and Key Metrics Changes - Membership revenues increased by 16% year-on-year to $104 million, and total revenues grew by 6% year-on-year to $305 million [6][9][12] - Adjusted EBITDA grew by $2 million year-on-year to $33 million, with house-level contribution up 12% year-on-year [5][10][12] - The company ended the quarter with $154 million in cash and cash equivalents, and net debt decreased to $665 million, with a net debt to adjusted EBITDA ratio of five times [11] Business Line Data and Key Metrics Changes - In-house revenues were up 2% year-on-year, showing improvement in footfall and spend per visit [6][9] - House-level margins increased by approximately 100 basis points to 27%, despite the impact of new house openings [9][10] - Other revenues decreased by 1% year-on-year, primarily due to initial impacts from new locations [9] Market Data and Key Metrics Changes - Membership demand remains strong, with a global waitlist of 111,000 and total membership reaching 204,000 [4][5] - The company reported consistent trends across major geographic regions, including the Americas, UK, and Europe [16] Company Strategy and Development Direction - The company plans to open new locations in Madrid, Milan, Barcelona, and Tokyo, enhancing membership demand [5][12] - Focus on operational excellence and member experience, including improved service and dining options [6][7] - Strategic initiatives have led to a 12% increase in house-level contribution, despite short-term impacts from new openings [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued membership growth and improved financial performance, raising year-end membership guidance to over 212,000 [12] - The company acknowledged ongoing challenges in the entertainment industry but noted improvements in member spend and satisfaction [20][23] Other Important Information - The company plans to hold an Investor Day in New York on December 5, 2024, to discuss long-term growth and profitability [13] - The company has initiated a $50 million share repurchase program, repurchasing $5 million of shares in the quarter [11] Q&A Session Summary Question: Insights on house revenue improvement by region - Management noted strong membership demand and improved footfall trends across all major geographies, with no significant regional variance [15][16] Question: Preliminary planning for 2025 membership count growth - Management indicated it is too early to provide guidance for 2025, with more details to be shared at the upcoming Investor Day [17] Question: Plans for new house openings - Management confirmed plans to open two to four new houses, with recent openings in Portland and Sao Paulo, and upcoming openings in Manchester and Barcelona [19] Question: Impact of the Hollywood strike on in-house revenues - Management acknowledged ongoing impacts from the entertainment industry but noted improvements in member spend across houses [20] Question: Cross-border travel trends - Management reported a good season in Europe, with increased occupancy and average daily rates, particularly benefiting from events like the Olympics in Paris [23] Question: Performance of new Bodrum location and future openings - Management expressed confidence in the Bodrum location's performance and indicated that Tulum is still under construction [27][28] Question: Member satisfaction and retention - Management highlighted that members desire unique experiences and great service, with no significant changes in member retention noted [29][30]

Revenue Performance - Total revenues for the 13 weeks ended June 30, 2024, increased to $305,146, up from $288,923 for the same period in 2023, representing a growth of 5.5%[8] - Membership revenues rose to $103,584 for the 13 weeks ended June 30, 2024, compared to $89,193 in the prior year, marking an increase of 16.0%[8] - For the 26 weeks ended June 30, 2024, Soho House reported a consolidated net loss of $81 million, compared to a net loss of $34 million for the 13 weeks[24] - The company’s consolidated revenue for the 26 weeks ended June 30, 2024, was $568.3 million, with total segment revenue of $518.8 million[96] - Total revenues for the 26 weeks ended June 30, 2024, were $568,292, reflecting a 4% increase compared to $544,132 in the prior year[176] Membership Growth - Membership revenues increased by 16% to $103,584 for the 13 weeks ended June 30, 2024, compared to $89,193 for the same period last year[200] - The number of Soho House Members reached 204,028, a 16% increase from 176,305 in the previous year[146] - Membership revenues in the Americas segment increased by $6,631, or 16%, driven by a 17% increase in Adult Paying Soho House members year-on-year[154] - The company had approximately 264,500 members, including about 204,000 Soho House Members[123] - The company has a global waitlist of approximately 111,000 applicants as of June 30, 2024, indicating strong demand for membership[124] Financial Losses - Net loss attributable to Soho House & Co Inc. for the 13 weeks ended June 30, 2024, was $(33,869), compared to a net loss of $(2,644) for the same period in 2023[9] - For the 26 weeks ended June 30, 2024, the company reported a net loss of $80,514,000, compared to a net loss of $18,303,000 for the same period in 2023, indicating a significant increase in losses[18] - The company experienced a comprehensive loss of $79,391,000 for the 26 weeks ended June 30, 2024, compared to a comprehensive loss of $41,562,000 for the same period in 2023[10] - The net loss for the 26 weeks ended June 30, 2024, was $34,175,000, reflecting various expenses including $5 million in impairment losses on intangible assets[100] Operating Expenses - General and Administrative Expenses increased by $1,483, or 4%, to $38,726 for the 13 weeks ended June 30, 2024, compared to $37,243 for the same period in 2023[167] - Total operating expenses increased by 16% to $604,743, primarily due to higher In-House operating expenses[176] - In-House operating expenses increased to $314,513 for the 26 weeks ended June 30, 2024, an increase of $18,188 or 6% year-on-year[184] - Pre-opening expenses rose by $1,446, or 34%, to $5,652 for the 13 weeks ended June 30, 2024, driven by costs associated with the opening of Scorpios Bodrum and Soho House Sao Paulo[169] Asset and Liability Changes - Total current assets increased to $405,612 as of June 30, 2024, from $395,045 as of December 31, 2023, reflecting a growth of 2.7%[5] - Total liabilities rose to $2,775,912 as of June 30, 2024, compared to $2,688,429 as of December 31, 2023, indicating an increase of 3.2%[6] - Total shareholders' deficit attributable to Soho House & Co Inc. increased to $(231,658) as of June 30, 2024, from $(158,367) as of December 31, 2023[6] - Cash and cash equivalents decreased to $151,195 as of June 30, 2024, from $161,656 as of December 31, 2023, a decline of 6.5%[5] Segment Performance - Total consolidated segment revenue for the 13 weeks ended June 30, 2024, was $305,146,000, with the Americas contributing $119,555,000, the UK $93,191,000, and Europe & RoW $52,696,000[100] - The total segment revenue for the UK was $95.1 million for the 13 weeks ended June 30, 2024[94] - The Americas accounted for $119,555 in total revenues, representing a 7% increase from $111,687 in the previous year[152] - The Europe/RoW segment saw a 23% increase in Other revenues, driven by the opening of Scorpios, Bodrum[160] Cash Flow and Investments - Cash flows from operating activities for the 26 weeks ended June 30, 2024, provided $44,992,000, a substantial increase from $8,281,000 in the prior year[18] - The net cash used in investing activities for the 26 weeks ended June 30, 2024, was $45,059,000, compared to $40,774,000 in the prior year[18] - The company incurred cash paid for interest of $17,875 thousand for the 26 weeks ended June 30, 2024, compared to $15,889 thousand for the same period in 2023[24] Shareholder Actions - The company completed a stock repurchase program of up to $50 million, which was fully utilized by December 2022[86] - The company repurchased a total of 891,045 shares of Class A common stock for $5 million during the 13 weeks and 26 weeks ended June 30, 2024, under the new stock repurchase program[87] - The company repurchased 2 million shares of Class A common stock for $12 million on September 20, 2023, and authorized a new stock repurchase program for up to $50 million[87] Future Outlook - The company is currently evaluating the impact of several new accounting standards, including ASU 2023-06 and ASU 2023-07, which may affect future disclosures[31][32] - The company has factored in global economic uncertainties, including inflationary pressures, into its cash flow forecasts for the next 12 months[26] - The company continues to adopt a going concern basis in preparing its financial statements, indicating confidence in its operational continuity[27] - The company expects to open new locations including Bangkok, Mexico City, Portland, and Sao Paulo, enhancing its global footprint[128]

Financial Data and Key Metrics Changes - Total revenues for Q1 2024 grew 3% year-on-year to $263 million, driven by a 20% increase in membership revenues, which accounted for 38% of total revenue [21][19][25] - Adjusted EBITDA for Q1 was $19.3 million, slightly lower year-on-year, but higher than market expectations [15][27] - Cash and cash equivalents at the end of the quarter were $145 million, with net debt at $664 million, reflecting a reduction in net debt to EBITDA ratio from approximately 7x to 5x year-on-year [28][29] Business Line Data and Key Metrics Changes - Membership growth was significant, with over 4,000 new members added in the quarter, totaling 198,000 members, a 17% year-on-year increase [14][21] - In-house revenues decreased by $6 million year-on-year to $110 million, while other revenues fell by $3 million to $53 million [19][25] - House level contribution increased by 6% year-on-year, with house level margins rising to 25% [25] Market Data and Key Metrics Changes - RevPAR declined by 3% in the quarter, with U.S. leisure RevPAR estimated to be down approximately 4% [26] - The waitlist for membership grew to over 102,000, marking a 15% increase year-on-year, indicating strong demand [21] Company Strategy and Development Direction - The company is focused on enhancing membership value and operational excellence, with initiatives aimed at improving member experience and driving profitability [22][31] - New openings are progressing well, with strong demand noted in markets like Portland and Sao Paulo [23][24] - The company is investing in existing houses and launching new services, such as a gym in London [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the improving consumer behavior, noting that footfall trends are better than general market conditions, despite cautious spending [36] - The company anticipates stronger EBITDA performance as it moves into seasonally stronger quarters [15][27] Other Important Information - The company published its 2023 ESG report, highlighting sustainability efforts and social impact initiatives [31] - A new HR system is being rolled out globally to improve operational efficiency [24] Q&A Session Summary Question: Can you elaborate on the consumer behavior trends? - Management noted that while footfall is up, spending is down as members are being more cautious. However, trends have improved sequentially throughout the year [36] Question: Are there geographic differences in consumer behavior? - Management indicated no significant differences across regions, with consistent performance noted globally [37] Question: Can you provide details on in-house spending improvements? - In-house spending showed improvement from high-single digits down in January to low-single digits by April [41] Question: What insights have member surveys provided regarding spending? - Surveys indicated positive feedback overall, with a focus on improving member experience rather than addressing specific spending concerns [43] Question: Is there a regional improvement in member satisfaction scores? - North America showed marked improvement in member satisfaction, attributed to leadership changes and improvement initiatives [46] Question: What is the status of the Soho Friends membership base? - The decline in Soho Friends membership is a result of a strategic de-emphasis on that segment, focusing more on core Soho House members [47]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission File Number: 001-40605 Soho House & Co Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 86-3664553 (State or other jurisdiction o ...

"Total revenues grew 3% in the quarter, and we have seen steady improvement in underlying trends since the start of the year. This, coupled with continued strong execution, gives us confidence to raise the midpoint of our Adjusted EBITDA guidance." "I'd like to thank our teams for their passion and hard work, and members around the world for their continued loyalty." • Total Members in the first quarter 2024 grew to 261,571 from 259,884 in fourth quarter 2023 and by 9.9% year-over-year o Soho House Members ...