Sonder(SOND) - 2025 Q2 - Quarterly Results

Financial Performance Overview Fourth Quarter 2024 Financial Highlights In Q4 2024, Sonder's revenue saw a slight decrease of 2% year-over-year to $161 million, primarily due to an 18% reduction in Bookable Nights from its portfolio optimization program. However, the company achieved a significant turnaround in profitability, reporting a Net Income of $31 million compared to a loss in the prior year, heavily influenced by a $92 million positive change in the fair value of a forward contract. Key operational metrics showed strength, with RevPAR increasing by 19% to $180 and Occupancy Rate rising by three percentage points to 85% Q4 2024 Key Financial Metrics (vs. Q4 2023) | Metric | Q4 2024 | YoY Change | | :--- | :--- | :--- | | Revenue | $161 million | -2% | | RevPAR | $180 | +19% | | Occupancy Rate | 85% | +3pp | | Bookable Nights | 897,000 | -18% | | Net Income | $31 million | +128% | | Adjusted EBITDA | $(20) million | +51% | | Adjusted Free Cash Flow | $(26) million | +30% | | Live Units (as of Dec 31) | ~9,900 | N/A | - The significant increase in Net Income to $31 million was primarily driven by a $(92) million change in the fair value of a forward contract related to a preferred stock transaction[6] Full Year 2024 Financial Highlights For the full year 2024, Sonder reported a 3% increase in revenue to $621 million, supported by a 5% rise in RevPAR to $159. The company demonstrated improved profitability, narrowing its Net Loss by 24% to $224 million. This result includes significant non-cash items such as a $93 million gain from lease adjustments, an $84 million loss on preferred stock issuance, and a $29 million change in the fair value of a forward contract. Adjusted EBITDA and Adjusted Free Cash Flow also showed substantial year-over-year improvements Full Year 2024 Key Financial Metrics (vs. FY 2023) | Metric | FY 2024 | YoY Change | | :--- | :--- | :--- | | Revenue | $621 million | +3% | | RevPAR | $159 | +5% | | Net Loss | $(224) million | +24% (improvement) | | Adjusted EBITDA | $(105) million | +38% (improvement) | | Adjusted Free Cash Flow | $(90) million | +25% (improvement) | | Cash Used in Operating Activities | $129 million | +17% (increase in use) | - The full-year Net Loss of $224 million was impacted by several significant items, including a $93 million gain on lease adjustments, an $84 million loss on preferred stock issuance, and a $29 million change in the fair value of a forward contract[6] Strategic and Operational Updates Long-Term Strategic Licensing Agreement with Marriott International Sonder has entered into a long-term strategic licensing agreement with Marriott International. The integration was completed in Q2 2025, making all Sonder properties available for booking on Marriott's digital platforms, including Marriott.com and the Marriott Bonvoy® app, under the new 'Sonder by Marriott Bonvoy' collection. This partnership also allows Sonder properties to participate in the Marriott Bonvoy® travel program - Sonder entered into a long-term strategic licensing agreement with Marriott in August 2024[4] - As of June 2025, all Sonder properties are fully integrated and bookable on Marriott's digital channels and participate in the Marriott Bonvoy® travel platform[4] Portfolio Optimization Program Initiated in November 2023, the portfolio optimization program aims to reduce losses from underperforming properties. As of December 31, 2024, Sonder had signed agreements to exit or reduce rent for approximately 110 buildings, totaling 4,500 units. Of these, finalized exit agreements were in place for 85 buildings (3,300 units), with the full exit of these properties completed by June 30, 2025 - The program targets mitigating losses from underperforming properties by exiting or renegotiating rents[5] - By the end of 2024, agreements were signed for ~110 buildings (4,500 units)[5] - As of June 30, 2025, the company had completed the exit of all 85 buildings (3,300 units) with finalized exit agreements[7] Consolidated Financial Statements Consolidated Balance Sheets As of December 31, 2024, Sonder's total assets stood at $1.14 billion, a decrease from $1.52 billion at the end of 2023, largely driven by a reduction in operating lease right-of-use assets. Total liabilities also decreased to $1.57 billion from $1.90 billion. The company's cash position (including restricted cash) declined to $72.1 million from $136.5 million year-over-year, while long-term debt increased significantly to $217.2 million Selected Balance Sheet Data (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total cash, cash equivalents and restricted cash | $72,054 | $136,497 | | Total current assets | $99,846 | $161,207 | | Total assets | $1,137,177 | $1,521,267 | | Total current liabilities | $338,547 | $506,236 | | Total liabilities | $1,573,065 | $1,897,968 | | Total stockholders' deficit | $(598,795) | $(376,701) | Consolidated Statements of Operations For the year ended December 31, 2024, Sonder's revenue increased to $621.3 million from $602.1 million in 2023. The company significantly reduced its loss from operations to $182.6 million from $278.0 million in the prior year, aided by lower operating expenses and impairment losses. The net loss for the year improved to $224.1 million, or $(20.69) per share, compared to a net loss of $295.7 million, or $(27.04) per share, in 2023 Selected Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Revenue | $621,272 | $602,066 | | Total costs and operating expenses | $803,889 | $880,108 | | Loss from operations | $(182,617) | $(278,042) | | Net loss | $(224,087) | $(295,668) | | Basic and diluted net loss per common share | $(20.69) | $(27.04) | Consolidated Statements of Cash Flows For the full year 2024, net cash used in operating activities increased to $129.2 million from $110.9 million in 2023. Investing activities provided $5.7 million in cash, a reversal from a $12.4 million use of cash in the prior year, mainly due to proceeds from a Key Money investment. Financing activities provided $59.9 million, driven by proceeds from preferred stock and debt issuance. Overall, the company's cash, cash equivalents, and restricted cash decreased by $64.4 million during the year Consolidated Cash Flow Data (in thousands) | Cash Flow Category | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(129,222) | $(110,904) | | Net cash provided by (used in) investing activities | $5,729 | $(12,362) | | Net cash provided by (used in) financing activities | $59,851 | $(32,232) | | Net change in cash, cash equivalents, and restricted cash | $(64,443) | $(152,689) | | Cash, cash equivalents, and restricted cash at end of year | $72,054 | $136,497 | Non-GAAP Financial Measures and Reconciliations Reconciliation of Non-GAAP Financial Measures The company provides reconciliations for its key non-GAAP metrics, showing significant year-over-year improvements. Adjusted Free Cash Flow improved by 25% to $(89.5) million, Adjusted EBITDA improved by 38% to $(105.5) million, and Adjusted EBITDAR improved by 30% to $196.1 million for the full year 2024. These figures adjust for items like stock-based compensation, impairment losses, and non-recurring fees to provide a clearer view of core operating performance Adjusted Free Cash Flow (FCF) Reconciliation Adjusted Free Cash Flow for FY 2024 was $(89.5) million, a 25% improvement from $(119.6) million in FY 2023. The calculation starts with cash used in operating activities and adjusts for investing activities and specific non-recurring items such as a Key Money investment, professional fees, and restructuring costs Adjusted FCF Reconciliation (in thousands) | Metric | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Cash used in operating activities | $(129,222) | $(110,904) | | Adjusted FCF | $(89,513) | $(119,601) | Adjusted EBITDA Reconciliation Adjusted EBITDA for FY 2024 improved by 38% to $(105.5) million from $(169.4) million in FY 2023. The reconciliation from Net Loss adjusts for interest, taxes, depreciation, stock-based compensation, lease adjustment gains, impairment losses, and other non-recurring charges Adjusted EBITDA Reconciliation (in thousands) | Metric | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net loss | $(224,087) | $(295,668) | | Adjusted EBITDA | $(105,483) | $(169,412) | Adjusted EBITDAR Reconciliation Adjusted EBITDAR, which further adjusts Adjusted EBITDA for operating lease rent charges, increased by 30% to $196.1 million for FY 2024, up from $150.8 million in FY 2023. This metric is used to assess operating performance independent of operating lease costs Adjusted EBITDAR Reconciliation (in thousands) | Metric | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Adjusted EBITDA | $(105,483) | $(169,412) | | Adjusted EBITDAR | $196,095 | $150,840 | Definitions of Key Metrics and Non-GAAP Measures This section provides definitions for key operational and non-GAAP financial metrics used by Sonder. It clarifies terms like RevPAR, Live Units, and Total Portfolio, and explains the composition and management's rationale for using Adjusted EBITDA, Adjusted EBITDAR, and Adjusted Free Cash Flow to measure performance and liquidity Key Metrics Definitions The report defines key operational metrics: RevPAR (Revenue Per Available Room) is the average revenue per available night. Live Units are units available for booking. Total Portfolio includes both Live Units and Contracted Units not yet available for booking - RevPAR (Revenue Per Available Room): Represents the average revenue earned per available night, calculated by dividing revenue by Bookable Nights[22] - Live Units & Total Portfolio: Live Units are those available for guest booking, while Total Portfolio includes both Live Units and contracted units not yet open[23] Non-GAAP Measures Definitions Sonder defines its primary non-GAAP measures as follows: Adjusted EBITDA is Net Loss adjusted for interest, taxes, depreciation, and other specific items to evaluate core operating performance. Adjusted EBITDAR further removes operating lease rent charges from Adjusted EBITDA. Adjusted Free Cash Flow is a liquidity measure derived from operating and investing cash flows, excluding certain non-recurring items, and is central to the company's Cash Flow Positive Plan - Adjusted EBITDA: Defined as net income (loss) adjusted for interest, taxes, depreciation, amortization, and other specified items to measure core operating performance[24] - Adjusted EBITDAR: Defined as Adjusted EBITDA further adjusted for operating lease related rent charges to assess performance independent of lease costs[25] - Adjusted Free Cash Flow (Adjusted FCF): A primary liquidity measure defined as cash from operating and investing activities, excluding the impact of specific items like the Key Money investment and restructuring charges[26]