Inspirato rporated(US:ISPO)2022-08-09 22:34Subscriber Growth - As of June 30, 2022, Inspirato had 14,323 Active Subscribers, an increase from 12,761 Active Subscribers as of June 30, 2021, representing a growth of approximately 12.2%[131] - The number of Active Subscriptions rose to 15,668 by June 30, 2022, up from 13,653 in the previous year, indicating an increase of about 14.7%[132] Revenue Performance - Annual Recurring Revenue (ARR) increased from $104 million at June 30, 2021, to $157 million at June 30, 2022, reflecting a growth of approximately 50.0%[136] - Total revenue increased by $31 million from $52 million in Q2 2021 to $83 million in Q2 2022, a 60% increase driven by higher travel demand due to eased COVID-19 restrictions[166] - Subscription revenue rose by $12 million from $24 million in Q2 2021 to $36 million in Q2 2022, reflecting a 50% increase attributed to growth in the subscriber base[167] - Travel revenue increased by $20 million from $28 million in Q2 2021 to $48 million in Q2 2022, marking a 69% increase due to increased travel demand[168] - Total revenue increased by $63 million from $102 million in the six months ended June 30, 2021, to $165 million in the same period of 2022, representing a 63% increase due to rising travel demand as COVID-19 restrictions eased[181] - Subscription revenue rose by $23 million from $45 million to $68 million, a 50% increase, driven by a growing subscriber base and the launch of new subscription products[182] - Travel revenue increased by $42 million from $56 million to $98 million, a 74% increase, primarily due to the loosening of COVID-19 related travel restrictions[183] Cost and Expenses - Cost of revenue grew by $24 million from $36 million in Q2 2021 to $60 million in Q2 2022, a 69% increase primarily due to higher direct travel costs[169] - Cost of revenue increased by $39 million from $68 million to $108 million, an increase of 58%, mainly due to higher direct travel costs and increased lease payments for new properties[184] - General and administrative expenses remained stable at $13 million for both Q2 2021 and Q2 2022, despite an increase in headcount[170] - General and administrative expenses (excluding equity-based compensation) rose by $10 million from $21 million to $31 million, a 48% increase, to support business growth[185] - Sales and marketing expenses surged by $5.1 million from $6 million in Q2 2021 to $11 million in Q2 2022, an 84% increase due to higher advertising spending[172] - Sales and marketing expenses increased by $10 million from $11 million to $21 million, an 88% increase, due to higher spending on various advertising channels and additional team hires[187] - Operations expenses rose by $5.3 million from $5.9 million in Q2 2021 to $11 million in Q2 2022, a 91% increase driven by a growing customer base[173] - Operations expenses increased by $10 million from $11 million to $21 million, a 92% increase, driven by the need for more staff to service the growing customer base[188] - Technology and development expenses increased by $2 million from $0.9 million in Q2 2021 to $2.9 million in Q2 2022, a 221% increase due to investments in product development[174] - Technology and development expenses surged by $3.9 million from $1.8 million to $5.7 million, a 219% increase, reflecting increased investments in product development[189] Financial Position - The company raised $90 million in gross proceeds during the Business Combination, with net cash proceeds amounting to $66 million after incurring $25 million in transaction costs[129] - As of June 30, 2022, the company had $121 million in cash and cash equivalents, indicating sufficient liquidity to meet projected working capital needs for at least the next 12 months[200] - The company incurred $25 million in transaction costs related to the Business Combination, with $24 million recorded as a reduction to additional paid-in capital[192] - The company had total minimum lease payments of $278,709 thousand, with the largest commitments due in 2023 at $68,820 thousand[217] - The company incurred $12 million in foreign currency expenditures for the six months ended June 30, 2022, primarily in Mexican Pesos and Euros[234] Operational Challenges - The ongoing impact of the COVID-19 pandemic has created uncertainties affecting Inspirato's business operations and financial results, with recovery largely dependent on vaccination effectiveness and travel demand[139] - The company has implemented cost management strategies during the pandemic, including negotiating lease expenses and reducing payroll costs through layoffs and salary reductions[140] Losses and Cash Flow - Adjusted Net Loss for Q2 2022 was $(18,374) thousand, compared to $(10,086) thousand in Q2 2021, reflecting a significant increase in losses[209] - Adjusted EBITDA for Q2 2022 was $(14,355) thousand, compared to $(8,234) thousand in Q2 2021, indicating a worsening operational performance[212] - Free Cash Flow for the six months ended June 30, 2022, was $(31,519) thousand, a decline from $18,301 thousand in the same period of 2021[214] - The company reported a net loss of $(31,063) thousand for the six months ended June 30, 2022, compared to $(13,542) thousand for the same period in 2021[209] - The company’s net cash provided by operating activities was $(13,745) thousand for Q2 2022, compared to $10,414 thousand in Q2 2021[214] Compliance and Liabilities - The company was not in compliance with one of its covenants on the Revolver as of June 30, 2022, but repaid it in full in July 2022[217] - The company recognized an $11 million gain related to the fair value adjustment of its outstanding warrant liabilities[176] - The company’s interest expense for Q2 2022 was $193 thousand, down from $378 thousand in Q2 2021[212] - The company’s equity-based compensation expense increased to $2,431 thousand in Q2 2022 from $466 thousand in Q2 2021[212]