Sonder(SOND) - 2025 Q3 - Quarterly Results

Introduction & Company Overview Sonder announced Q2 2025 results, detailed its global hospitality brand, and completed Marriott partnership integration Announcement of Q2 2025 Financial Results Sonder Holdings Inc. announced its financial results for the second quarter ended June 30, 2025, and filed the related Quarterly Report on Form 10-Q - Sonder Holdings Inc. (Nasdaq: SOND) announced Q2 2025 financial results for the period ended June 30, 2025[1] - The company filed its Quarterly Report on Form 10-Q for Q2 2025[1] About Sonder Sonder is a leading global brand offering premium, design-forward apartments and boutique hotels in 37 cities across nine countries, providing tech-enabled service for modern travelers - Sonder is a leading global brand of premium, design-forward apartments and intimate boutique hotels serving the modern traveler[5] - Sonder properties are located in 37 cities, spanning nine countries, and three continents[5] - The company offers thoughtfully designed accommodations and innovative, tech-enabled service[5] Strategic Partnerships Sonder completed the full integration of its long-term strategic licensing agreement with Marriott International in Q2 2025, making all Sonder properties available on Marriott's digital channels under the 'Sonder by Marriott Bonvoy' collection - Sonder entered into a long-term strategic licensing agreement with Marriott International in August 2024[4] - The full Marriott integration was completed in the second quarter of 2025[4] - As of June 2025, all Sonder properties are available for booking on Marriott's digital channels and participate in the Marriott Bonvoy® travel platform[4] Financial Highlights Sonder's Q2 and year-to-date 2025 financial performance is summarized, covering key revenue, profitability, and operational metrics Second Quarter 2025 Financial Highlights For Q2 2025, Sonder reported a 13% increase in RevPAR to $184 and a 6 percentage point increase in Occupancy Rate to 86%. Revenue decreased by 11% to $147.1 million, and Net Loss significantly widened to $44.5 million. Adjusted EBITDA improved by 83% to $(2.6) million Second Quarter 2025 Key Financial Highlights | Metric | Q2 2025 Value | YoY Change | | :-------------------------------- | :-------------- | :--------- | | RevPAR | $184 | +13% | | Occupancy Rate | 86% | +6 percentage points | | Bookable Nights | 798,000 | -21% | | Revenue | $147.1 million | -11% | | Net Loss | $(44.5) million | -236% | | Adjusted EBITDA | $(2.6) million | +83% | | Adjusted EBITDAR | $58.6 million | +1% | | Cash Used In Operating Activities | $(19.6) million | +40% improvement | | Adjusted Free Cash Flow | $(17.5) million | -29% | | Total Cash, Cash Equivalents and Restricted Cash | $71.0 million | (as of June 30, 2025) | | Live Units | ~8,300 | (as of June 30, 2025) | | Total Portfolio | ~8,990 | (as of June 30, 2025) | - The 21% decrease in Bookable Nights was driven by the Company's Portfolio Optimization Program[9] Year-to-Date Financial Highlights For the six months ended June 30, 2025, RevPAR increased by 13% to $161, and Occupancy Rate rose by 7 percentage points to 84%. Revenue decreased by 11% to $265.9 million, and Net Loss was $101.0 million, a 469% decrease year-over-year. Adjusted EBITDA showed a 20.3% increase year-over-year, reaching $(59.3) million Year-to-Date June 30, 2025 Key Financial Highlights | Metric | YTD 2025 Value | YoY Change | | :-------------------------------- | :-------------- | :--------- | | RevPAR | $161 | +13% | | Occupancy Rate | 84% | +7 percentage points | | Bookable Nights | 1,656,000 | -21% | | Revenue | $265.9 million | -11% | | Net Loss | $(101.0) million | -469% | | Adjusted EBITDA | $(59.3) million | +20.3% | | Adjusted EBITDAR | $79.8 million | -5% | | Cash Used In Operating Activities | $(24.0) million | +67% improvement | | Adjusted Free Cash Flow | $(24.4) million | -54.2% | - The 21% decrease in Bookable Nights year-to-date was due to the Company's Portfolio Optimization Program[9] Condensed Consolidated Financial Statements This section presents condensed consolidated balance sheets, statements of operations, and cash flows for the reported periods Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $1,004.8 million, down from $1,137.2 million at December 31, 2024. Total liabilities also decreased to $1,490.0 million from $1,573.1 million. The company reported a total stockholders' deficit of $(715.4) million, worsening from $(598.8) million Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :-------------- | :---------------- | :----- | | Total assets | $1,004,807 | $1,137,177 | $(132,370) | | Total liabilities | $1,490,032 | $1,573,065 | $(83,033) | | Total stockholders' deficit | $(715,437) | $(598,795) | $(116,642) | | Cash and cash equivalents | $27,130 | $20,786 | $6,344 | | Restricted cash | $43,828 | $51,268 | $(7,440) | | Total cash, cash equivalents and restricted cash | $70,958 | $72,054 | $(1,096) | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For Q2 2025, revenue was $147.1 million, down from $164.6 million in Q2 2024. The company reported a net loss of $(44.5) million, a significant decline from a net income of $32.7 million in the prior year. Year-to-date, revenue was $265.9 million, and net loss was $(101.0) million. A significant loss on preferred stock issuance of $43.8 million was recorded in both periods Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $147,085 | $164,601 | $265,941 | $298,080 | | Loss from operations | $(6,880) | $(31,699) | $(70,521) | $(99,360) | | Net income (loss) | $(44,523) | $32,747 | $(101,018) | $(17,740) | | Basic and diluted net income (loss) per common share | $(3.96) | $2.94 | $(8.44) | $(1.59) | | Loss on preferred stock issuance | $43,842 | $— | $43,842 | $— | - Revenue decreased by 11% for both the three and six months ended June 30, 2025, compared to the prior year periods[13] - Net loss significantly increased, primarily due to a $43.8 million loss on preferred stock issuance in 2025[13] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities improved to $(24.0) million from $(73.1) million in the prior year. Net cash provided by investing activities was $5.3 million, a significant improvement from a net use of $(2.2) million. Net cash provided by financing activities was $17.5 million, up from $8.9 million, primarily due to proceeds from preferred stock issuance Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(23,971) | $(73,087) | | Net cash provided by (used in) investing activities | $5,297 | $(2,209) | | Net cash provided by financing activities | $17,480 | $8,917 | | Net change in cash, cash equivalents, and restricted cash | $(1,096) | $(67,374) | | Proceeds from preferred stock issuance | $17,980 | $— | - Operating cash flow showed a 67% improvement year-over-year for the six months ended June 30, 2025[9][15] Non-GAAP Financial Measures & Reconciliations This section reconciles key non-GAAP financial measures: Adjusted Free Cash Flow, Adjusted EBITDA, and Adjusted EBITDAR Reconciliation of Adjusted Free Cash Flow Adjusted Free Cash Flow (FCF) for Q2 2025 was $(17.5) million, an improvement from $(24.7) million in Q2 2024. Year-to-date, Adjusted FCF was $(24.4) million, also an improvement from $(53.2) million in the prior year, reflecting reduced cash used in operating activities and investing activities Adjusted Free Cash Flow Reconciliation (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cash used in operating activities | $(19,618) | $(32,778) | $(23,971) | $(73,087) | | Cash provided by (used in) investing activities | $6,256 | $(1,493) | $5,297 | $(2,209) | | Adjusted FCF | $(17,493) | $(24,692) | $(24,351) | $(53,211) | - Adjusted FCF improved by 29% for Q2 2025 and 54.2% year-to-date, indicating progress towards financial sustainability[9][17] Reconciliation of Adjusted EBITDA Adjusted EBITDA for Q2 2025 was $(2.6) million, a significant improvement from $(17.6) million in Q2 2024. Year-to-date, Adjusted EBITDA was $(59.3) million, improving from $(73.8) million in the prior year, despite a substantial net loss Adjusted EBITDA Reconciliation (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(44,523) | $32,747 | $(101,018) | $(17,740) | | EBITDA | $(41,060) | $45,992 | $(84,798) | $7,988 | | Adjusted EBITDA | $(2,628) | $(17,567) | $(59,324) | $(73,837) | | Loss on preferred stock issuance | $43,842 | $— | $43,842 | $— | - Adjusted EBITDA improved by 83% for Q2 2025 and 20.3% year-to-date, reflecting better core operating performance despite a higher net loss[9][18] Reconciliation of Adjusted EBITDAR Adjusted EBITDAR for Q2 2025 increased slightly to $58.6 million from $58.0 million in Q2 2024. Year-to-date, Adjusted EBITDAR decreased to $79.8 million from $84.3 million in the prior year Adjusted EBITDAR Reconciliation (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA | $(2,628) | $(17,567) | $(59,324) | $(73,837) | | Operating lease related rent charges | $61,261 | $75,580 | $139,080 | $158,162 | | Adjusted EBITDAR | $58,633 | $58,013 | $79,756 | $84,325 | - Adjusted EBITDAR saw a 1% increase in Q2 2025 but a 5% decrease year-to-date, indicating varied performance when considering operating lease rent charges[9][20] Definitions This section defines key operational performance indicators and non-GAAP financial measures used by Sonder Key Performance Indicators (KPIs) This section defines key operational metrics used by Sonder, including Revenue Per Available Room (RevPAR), Average Daily Rate, Occupancy Rate, Bookable Nights, Occupied Nights, Live Units, and Total Portfolio - RevPAR (Revenue Per Available Room) represents the average revenue earned per available night[20] - Bookable Nights exclude nights lost to full building closures of greater than 30 nights[20] - Total Portfolio consists of Live Units (available for guests to book) and Contracted Units (signed real estate contracts, not yet available)[21] Non-GAAP Financial Measures Definitions This section provides detailed definitions and rationale for Sonder's non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDAR, and Adjusted Free Cash Flow. These measures are used internally to evaluate core operating performance, assess performance independent of operating leases, and track progress towards financial sustainability - Adjusted EBITDA is net income (loss) adjusted for net interest expense, income taxes, depreciation and amortization, stock-based compensation, lease adjustment gains, integration costs, loss on preferred stock issuance, restructuring charges, and non-recurring professional fees[22] - Adjusted EBITDAR is defined as Adjusted EBITDA adjusted for operating lease related rent charges[23] - Adjusted Free Cash Flow is cash used in operating activities plus cash provided by (used in) investing activities, excluding specific non-operational charges, and is a primary liquidity measure for evaluating progress towards financial sustainability[24] Forward-Looking Statements This section clarifies forward-looking statements are based on current expectations, subject to risks detailed in SEC filings Forward-Looking Statements This section clarifies that the press release contains forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties detailed in SEC filings. The company does not undertake to update these statements - The press release contains forward-looking statements regarding financial performance, key performance metrics, operational and strategic initiatives, and the Marriott agreement[26] - These statements are not guarantees of future performance and actual results could differ materially due to various risks and uncertainties described in SEC filings[26] - The Company does not undertake any obligation to update or revise its forward-looking statements after the date of the press release[26]