Wheels Up Experience (UP) - 2024 Q3 - Quarterly Report

Financial Performance - Revenue for Q3 2024 was $193.9 million, a decrease of 39.4% compared to $320.1 million in Q3 2023[8] - Net loss for Q3 2024 was $57.7 million, compared to a net loss of $144.8 million in Q3 2023, representing a 60.2% improvement[9] - The company reported a comprehensive loss of $50.9 million for Q3 2024, down from $153.0 million in Q3 2023[9] - Net loss for the nine months ended September 30, 2024, was $252,097, a significant improvement from a net loss of $406,272 for the same period in 2023, representing a reduction of approximately 38%[14] - Total revenue for the nine months ended September 30, 2024, was $587,289, down 42% from $1,006,937 in the same period of 2023[29] - Basic and diluted net loss per share for the three months ended September 30, 2024, was $(0.08), compared to $(3.51) for the same period in 2023[152] Cost Management - Total costs and expenses for Q3 2024 were $235.8 million, down 47.5% from $449.1 million in Q3 2023[8] - Adjusted EBITDA is expected to improve as the company implements cost reduction measures and operational efficiency strategies[5] - The company incurred restructuring charges of $10.5 million during the nine months ended September 30, 2023, primarily related to severance payments and employee benefits[141][142] Equity and Deficit - The accumulated deficit increased to $2.02 billion as of September 30, 2024, compared to $1.76 billion a year earlier[7] - As of September 30, 2024, Wheels Up Experience Inc. reported a total equity of $1,911,362,000, with an accumulated deficit of $(2,015,357,000)[10] - Total liabilities and equity stood at $1.04 billion, a decrease from $1.32 billion in the previous year[7] Cash Flow and Liquidity - Cash flows from operating activities showed a net cash used of $115,814 for the nine months ended September 30, 2024, compared to $661,494 for the same period in 2023, indicating an 83% improvement[14] - Cash, cash equivalents, and restricted cash at the end of the period were $148,834, down from $274,162 at the end of September 30, 2023[14] - Cash and cash equivalents decreased to $115.909 million as of September 30, 2024, from $263.909 million as of December 31, 2023[53] Revenue Streams - Membership revenue for the nine months ended September 30, 2024, was $46,131, down 28% from $63,780 in the same period of 2023[29] - The company reported a significant decrease in deferred revenue, with a balance of $12,813 for the nine months ended September 30, 2024, compared to $378,949 for the same period in 2023[14] - The company completed the sale of its aircraft management business on September 30, 2023, impacting revenue figures[29] Debt and Financing - Total long-term debt as of September 30, 2024, was $209.6 million, a decrease from $235.1 million as of December 31, 2023[57] - The company entered into a Credit Agreement on September 20, 2023, providing a term loan facility of $350.0 million and a revolving credit facility of $100.0 million[64] - Maturities of principal debt payments for the next five years total $596.9 million, with the largest payment of $496.7 million due in 2028[58] Shareholder Equity and Compensation - The total equity-based compensation expense for the nine months ended September 30, 2024, was $33.4 million, an increase from $21.7 million for the same period in 2023[121] - The number of non-vested PSUs as of September 30, 2024, was 387 thousand, with a weighted-average grant fair value of $3.05[105] - The total unrecognized compensation cost related to outstanding and unvested Executive Performance Awards was $164.4 million, expected to be recognized over 4.3 years[113] Legal and Compliance - The company filed a lawsuit against Exclusive Jets, LLC for wrongful termination of the Fleet Guaranteed Revenue Program Agreement, seeking compensatory damages including the return of material deposits totaling $10.3 million and $10.5 million as of September 30, 2024, and December 31, 2023, respectively[135][137] - The estimated potential exposure for sales and use tax liability was $10.3 million and $10.5 million as of September 30, 2024, and December 31, 2023, respectively, included in accrued expenses[136][137] Taxation - The company recorded income tax expenses of $0.4 million and $0.7 million for the three and nine months ended September 30, 2024, respectively[144] - The effective tax rate for the three months ended September 30, 2024, was (0.7)%, differing from the federal statutory rate of 21% due to a full valuation allowance against deferred tax assets[145] - As of September 30, 2024, the company established a valuation allowance on the majority of its U.S. deferred tax assets, concluding it is more likely than not that these assets will not be realized[147]