Vacasa(VCSA) - 2024 Q3 - Quarterly Results

Executive Summary & Business Highlights Operational & Strategic Update The company successfully navigated the Q3 2024 peak season through a business transformation empowering local teams and leveraging AI - Served nearly 400,000 guest reservations and generated over $300 million for homeowners during Q3 2024 summer peak season[1] - Business transformation, including local team autonomy and AI integration, is driving improved hospitality and operational efficiency[2][3][4][5] - Despite industry headwinds, Vacasa listings generate more gross bookings per home than the industry average[6] Financial Performance Overview In Q3 2024, Gross Booking Value and Revenue declined, but Net Income significantly improved to $59 million due to successful restructuring Q3 2024 Key Financial Highlights | Metric | Q3 2024 | Q3 2023 | YoY Change | | :----- | :------ | :------ | :--------- | | Gross Booking Value (GBV) | $670 million | $830 million | -19% | | Nights Sold | 1.624 million | 2.047 million | -21% | | GBV per Night Sold | $413 | $406 | +2% | | Revenue | $314 million | $379 million | -17% | | Net Income (Loss) | $59 million | ($402 million) | Significant Improvement | | Adjusted EBITDA | $69 million | $74 million | -7% | | Homes on Platform | ~38,000 | ~42,000 | -9.5% | - Net Income significantly improved from a loss of $402 million in Q3 2023 to a profit of $59 million in Q3 2024, reflecting restructuring and expense discipline[9] Outlook The company anticipates continued bookings weakness in Q4 and does not expect to achieve Adjusted EBITDA profitability in 2024 - Expects continued bookings weakness in Q4 2024, affecting price (GBV per Night Sold) and utilization (Nights Sold per Home)[10] - Difficult to provide specific guidance for the remainder of 2024 due to industry dynamics and elevated churn[10] - Does not anticipate reaching Adjusted EBITDA profitability in 2024[10] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations Q3 2024 revenue decreased, but a significant reduction in operating costs led to a net income of $59.3 million Condensed Consolidated Statements of Operations (Q3 2024 vs Q3 2023) | Metric (in thousands) | Q3 2024 | Q3 2023 | | :-------------------- | :------ | :------ | | Revenue | $314,048 | $379,077 | | Total operating costs and expenses | $259,461 | $786,269 | | Income (loss) from operations | $54,587 | ($407,192) | | Net income (loss) | $59,259 | ($402,458) | | Basic Net income (loss) per share | $2.22 | ($18.37) | - Significant reduction in total operating costs and expenses, primarily due to the absence of impairment of goodwill ($411 million in Q3 2023) and long-lived assets ($46 million in Q3 2023)[11] Condensed Consolidated Balance Sheets Total assets decreased to $584 million as of September 30, 2024, driven by a reduction in intangible assets Condensed Consolidated Balance Sheets (Sept 30, 2024 vs Dec 31, 2023) | Metric (in thousands) | Sep 30, 2024 | Dec 31, 2023 | | :-------------------- | :----------- | :----------- | | Total assets | $584,030 | $663,548 | | Intangible assets, net | $17,336 | $114,464 | | Total liabilities | $463,820 | $455,902 | | Total current liabilities | $331,238 | $422,823 | | Funds payable to owners | $119,545 | $178,670 | | Deferred revenue | $73,921 | $105,217 | | Total equity | $101,243 | $131,053 | - Significant decrease in intangible assets, net, from $114.464 million to $17.336 million[12] Condensed Consolidated Statement of Cash Flows For the nine months ended September 30, 2024, net cash used in operations was ($60.6) million, while financing activities provided $98.2 million Condensed Consolidated Statement of Cash Flows (Nine Months Ended Sept 30, 2024 vs 2023) | Metric (in thousands) | 9M 2024 | 9M 2023 | | :-------------------- | :------ | :------ | | Net cash (used in) provided by operating activities | ($60,596) | $28,435 | | Net cash used in investing activities | ($6,210) | ($10,349) | | Net cash provided by (used in) financing activities | $98,176 | ($23,366) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $31,104 | ($6,042) | | Cash, cash equivalents, and restricted cash, end of period | $256,941 | $313,618 | - Net cash provided by financing activities significantly increased due to proceeds from borrowings on revolving credit facility ($81 million) and convertible notes ($30 million)[13] Key Business Metrics & Non-GAAP Reconciliations Key Business Metrics Q3 2024 Gross Booking Value and Nights Sold decreased year-over-year, while GBV per Night Sold saw a slight increase Key Business Metrics (Q3 2024 vs Q3 2023) | Metric (in thousands) | Q3 2024 | Q3 2023 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Gross Booking Value ("GBV") | $670,135 | $830,094 | -19% | | Nights Sold | 1,624 | 2,047 | -21% | | GBV per Night Sold | $413 | $406 | +2% | Key Business Metrics (Nine Months Ended Sept 30, 2024 vs 2023) | Metric (in thousands) | 9M 2024 | 9M 2023 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Gross Booking Value ("GBV") | $1,602,206 | $1,973,749 | -19% | | Nights Sold | 4,282 | 5,168 | -17% | | GBV per Night Sold | $374 | $382 | -2% | Adjusted EBITDA Reconciliation Q3 2024 Adjusted EBITDA was $69.1 million, a 7% decrease, with net income improving due to the absence of prior-year impairment charges Adjusted EBITDA Reconciliation (Q3 2024 vs Q3 2023) | Metric (in thousands) | Q3 2024 | Q3 2023 | | :-------------------- | :------ | :------ | | Net income (loss) | $59,259 | ($402,458) | | Depreciation and amortization of intangible assets | 6,957 | 20,470 | | Impairment of long-lived assets | - | 46,000 | | Impairment of goodwill | - | 411,000 | | Equity-based compensation | 2,463 | 3,974 | | Restructuring | 5,023 | 3 | | Adjusted EBITDA | $69,091 | $74,315 | - The absence of $411 million goodwill impairment and $46 million long-lived asset impairment in Q3 2024 significantly contributed to the turnaround in net income[16] Reconciliations of Other Non-GAAP Financial Measures Non-GAAP operating expenses, which exclude items like equity-based compensation, showed reductions across most categories in Q3 2024 Non-GAAP Operating Expenses (Q3 2024 vs Q3 2023) | Metric (in thousands) | Q3 2024 | Q3 2023 | | :-------------------- | :------ | :------ | | Non-GAAP cost of revenue | $126,416 | $150,760 | | Non-GAAP operations and support | $54,438 | $64,606 | | Non-GAAP technology and development | $9,121 | $15,379 | | Non-GAAP sales and marketing | $39,846 | $57,198 | | Non-GAAP general and administrative | $15,136 | $16,819 | - Non-GAAP adjustments primarily exclude equity-based compensation and restructuring costs to reflect core operational performance[18][19] Company Information & Disclosures About Vacasa Vacasa is North America's leading vacation rental management platform, managing approximately 38,000 homes - Vacasa is the leading vacation rental management platform in North America[20] - Manages approximately 38,000 homes in hundreds of destinations across the United States, Belize, Canada, Costa Rica, and Mexico[20] - Distributes properties through Vacasa.com, Vacasa Guest App, and top channel partners including Airbnb, Booking.com, and Vrbo[20] Forward Looking Statements This section outlines forward-looking statements and highlights key risks and uncertainties that could affect actual results - Forward-looking statements are subject to various known and unknown risks and uncertainties, and actual results may differ materially[23][24] - Key risk factors include ability to execute business plans, achieve profitability, manage debt, and adapt to industry changes[24] Use of Non-GAAP Financial Measures The company uses Non-GAAP measures like Adjusted EBITDA to evaluate core business performance, excluding certain non-cash or one-time items - Non-GAAP Financial Measures (Adjusted EBITDA, Non-GAAP operating expenses) are used to evaluate performance and make strategic decisions[25] - These measures exclude non-cash or unpredictable items to allow for more meaningful comparisons of core business performance[26][27] - Non-GAAP measures have significant limitations and are not substitutes for GAAP financial measures[28][29][30] Key Business Metrics Definitions This section defines key performance indicators such as Gross Booking Value (GBV), Nights Sold, and GBV per Night Sold - Key business metrics include Gross Booking Value (GBV), Nights Sold, and GBV per Night Sold[33] - GBV is the dollar value of bookings, Nights Sold is the total number of nights stayed, and GBV per Night Sold reflects the pricing per night[34][35][36] - These metrics are influenced by home acquisition, retention, utilization, pricing, and are subject to seasonality[34][35]