Wheels Up Experience (US:UP)2025-05-05 20:43PART I. Financial Information Item 1. Financial Statements The company presents its unaudited condensed consolidated financial statements for the first quarter of 2025 Condensed Consolidated Balance Sheets Total assets decreased to $1.09 billion while the total equity deficit widened to $(288.1) million in Q1 2025 Condensed Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $171,845 | $216,426 | | Total current assets | $298,807 | $332,069 | | Total assets | $1,090,982 | $1,158,011 | | Liabilities & Equity | | | | Deferred revenue, current | $758,231 | $749,432 | | Total current liabilities | $925,404 | $917,284 | | Total liabilities | $1,370,865 | $1,354,239 | | Total equity | $(288,106) | $(202,109) | Condensed Consolidated Statements of Operations Q1 2025 revenue decreased to $177.5 million, with the net loss slightly increasing to $99.3 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $177,530 | $197,101 | | Cost of revenue | $158,424 | $198,260 | | Loss from operations | $(80,766) | $(84,548) | | Net loss | $(99,313) | $(97,393) | | Net loss per share | $(0.14) | $(0.14) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $47.9 million, resulting in a net cash decrease of $39.4 million Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(47,924) | $(73,794) | | Net cash provided by investing activities | $16,113 | $19,603 | | Net cash used in financing activities | $(8,686) | $(24,314) | | Net decrease in cash | $(39,405) | $(79,535) | Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, revenue disaggregation, impairment charges, and legal contingencies Disaggregation of Revenue (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Flights, net | $147,568 | $150,929 | | Memberships | $9,189 | $16,854 | | Other | $20,773 | $29,318 | | Total Revenue | $177,530 | $197,101 | - In Q1 2025, the company recorded a non-cash impairment charge of $20.2 million related to the right-of-use asset for a vacated corporate office space in New York City as part of its cost reduction initiatives82 - The company is engaged in litigation with flyExclusive, Inc (FE) over the alleged wrongful termination of a Fleet Guaranteed Revenue Program Agreement, seeking compensatory damages including the return of material deposits123 Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes Q1 2025 performance, highlighting lower revenue but improved cost efficiency and margins Overview of Our Business and Fleet Modernization The company is executing a fleet modernization strategy to improve efficiency by consolidating to two jet models Controlled Aircraft Fleet as of March 31, 2025 | Category | Owned | Leased | Total | | :--- | :--- | :--- | :--- | | Premium Jets | 18 | 3 | 21 | | Large Jets | — | 2 | 2 | | Super-Midsize Jets | — | 24 | 24 | | Midsize Jets | 12 | 4 | 16 | | Light Jets | 25 | 5 | 30 | | Total Jets | 55 | 38 | 93 | | Turboprops | 41 | — | 41 | | Total Aircraft | 96 | 38 | 134 | Non-GAAP Financial Measures Non-GAAP metrics show an improved Adjusted EBITDA loss of $(24.2) million and a significant increase in Adjusted Contribution Margin to 12.6% Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(99,313) | $(97,393) | | Adjustments | $75,163 | $48,164 | | Adjusted EBITDA | $(24,150) | $(49,229) | Reconciliation of Gross Profit (Loss) to Adjusted Contribution (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross profit (loss) | $(1,104) | $(16,554) | | Adjustments | $23,545 | $18,569 | | Adjusted Contribution | $22,441 | $2,015 | | Adjusted Contribution Margin | 12.6% | 1.0% | Key Operating Metrics Total Gross Bookings increased by 8%, while Live Flight Legs and Active Users declined by 7% and 40% respectively Key Operating Metrics Comparison | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Gross Bookings (in thousands) | $241,902 | $224,674 | 8% | | Live Flight Legs | 10,895 | 11,754 | (7)% | | Active Users | 6,166 | 10,218 | (40)% | Results of Operations Q1 2025 revenue fell 10% due to lower membership and flight activity, while cost of revenue decreased 20% - Q1 2025 revenue decreased by 10% YoY, driven by a 56% decrease in members and a 7% reduction in Live Flight Legs201202203 - Cost of revenue decreased by 20% YoY, primarily due to reduced headcount, lower travel expenses, and decreased flight activity, leading to an 1,160 basis point improvement in Adjusted Contribution Margin205206 Liquidity and Capital Resources The company holds $171.8 million in cash and has access to an undrawn $100.0 million revolving credit facility from Delta - The company's principal sources of liquidity are financing activities and deferred revenue from membership fund sales, with cash and cash equivalents at $171.8 million as of March 31, 2025214 - The company has access to a $100.0 million revolving credit facility from Delta, which was undrawn as of the report date and remains available through September 20, 2026215 Quantitative and Qualitative Disclosures About Market Risk There were no material changes to the company's principal market risks from interest rates, fuel prices, and foreign currency - There have been no material changes to the market risks related to interest rates, aircraft fuel, and foreign currency exchange as described in the company's 2024 Annual Report237 Controls and Procedures Management concluded that disclosure controls were not effective due to ongoing remediation of previously identified material weaknesses - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to ongoing remediation of material weaknesses in internal control over financial reporting239 - The company has implemented and is continuing to execute on a remediation plan to address the identified control deficiencies, with a target completion before December 31, 2025241242243 PART II. Other Information Legal Proceedings The company is engaged in ongoing litigation against flyExclusive, Inc over a terminated fleet agreement - The company is vigorously pursuing a lawsuit against flyExclusive, Inc (FE) for wrongful termination of a fleet agreement and is seeking to recover outstanding deposits and other damages248250 - The company notes that recovery of amounts from FE may be impacted by FE's financial condition, citing FE's reported net losses, working capital deficit, and potential need for additional capital250251252 Risk Factors The company's stock and warrant prices may experience volatility due to industry, market, and operational factors - The company warns that the price of its Common Stock and Warrants may be volatile due to numerous factors, including industry changes, market conditions, competitor actions, and its own operating performance254 Unregistered Sales of Equity Securities and Use of Proceeds The company made no unregistered sales of equity securities and repurchased shares to cover tax liabilities on vested RSUs Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2025 | — | $ — | | Feb 2025 | — | $ — | | Mar 2025 | 88,935 | $1.23 | | Total | 88,935 | $1.23 | Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None256 Mine Safety Disclosures This item is not applicable to the company - Not applicable257 Other Information No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter - No director or officer of the Company adopted, modified or terminated a Rule 10b5-1 trading arrangement during the three months ended March 31, 2025258 Exhibits This section lists the exhibits filed as part of the Quarterly Report, including contracts and required certifications