Inspirato rporated(US:ISPO)2023-08-09 17:49Financial Performance - Total revenue for Q2 2023 was $84,092, a slight increase of 0.5% compared to $83,698 in Q2 2022[17]. - Gross margin for Q2 2023 was negative at $(10,648), down from a positive $26,296 in Q2 2022[17]. - Net loss for Q2 2023 was $(46,672), significantly higher than the net loss of $(5,036) in Q2 2022, representing an increase of 826%[17]. - The company reported a basic and diluted net loss per Class A share of $(0.35) for Q2 2023, compared to $(0.04) for Q2 2022[17]. - The net loss for the first quarter of 2023 was $23.42 million, compared to a net loss of $12.30 million in the same period of 2022, indicating a year-over-year increase of approximately 90%[19]. - The company reported comprehensive losses totaling $46.67 million for the first quarter of 2023, compared to $24.20 million in the same quarter of 2022, indicating a significant increase in losses[19]. - For the six months ended June 30, 2023, the net loss and comprehensive loss increased to $52,575, compared to $29,239 for the same period in 2022, representing an increase of 79.5%[21]. - The company experienced a net loss of $2.90 million due to changes in accounting principles, impacting overall financial performance[19]. - The company reported a net loss and comprehensive loss of $46,672 million for the three months ended June 30, 2023, compared to a loss of $5,036 million for the same period in 2022[185]. Revenue Breakdown - Total revenue for the three months ended June 30, 2023, was $84.1 million, a slight increase from $83.7 million in the same period of 2022, while total revenue for the six months ended June 30, 2023, rose to $175.8 million from $165.8 million in 2022, representing a year-over-year growth of 6.4%[43]. - Subscription revenue for the six months ended June 30, 2023, increased to $72.5 million, up from $67.7 million in 2022, reflecting a growth of 7.5%[43]. - Subscription revenue as a percentage of total revenue was 43% for the three months ended June 30, 2023, compared to 42% for the same period in 2022[112]. - Travel revenue increased by $5.3 million from $98 million for the six months ended June 30, 2022, to $103 million for the same period in 2023, a 5% increase[158]. Asset and Equity Changes - Total current assets decreased from $116,881 in December 2022 to $85,048 in June 2023, a decline of 27%[15]. - Total equity (deficit) excluding noncontrolling interest shifted from $11,733 in December 2022 to $(11,984) in June 2023[15]. - Total equity as of March 31, 2023, was $245.27 million, down from $244.80 million as of December 31, 2022, reflecting a slight decrease[20]. - The balance of common stock as of March 31, 2023, was $66.70 million, reflecting an increase from $62.72 million at the beginning of the year[20]. - The company issued 5,000 shares of common stock during the first quarter of 2023, contributing to the overall equity increase[19]. Cash Flow and Liquidity - Cash and cash equivalents dropped from $80,278 in December 2022 to $44,383 in June 2023, a decrease of 45%[15]. - Cash flows from operating activities resulted in a net cash used of $29,308 for the six months ended June 30, 2023, compared to $26,411 for the same period in 2022, indicating a decline in operational cash flow[21]. - Cash, cash equivalents, and restricted cash decreased to $46,045 at the end of the period, down from $123,061 at the end of June 30, 2022, reflecting a decrease of 62.7%[21]. - Financing activities provided a net cash of $470 in the first half of 2023, a significant decrease from $71,627 in the same period of 2022, indicating a decline of 99.3%[21]. Expenses and Cost Management - Cost of revenue increased by $20 million from $104.7 million in the six months ended June 30, 2022, to $124.7 million in 2023, a 19% increase primarily due to higher direct travel costs[160]. - General and administrative expenses increased by $2.1 million from $33.9 million in the six months ended June 30, 2022, to $35.9 million in 2023, a 6% increase[163]. - Sales and marketing expenses decreased by $6.6 million from $21 million in the six months ended June 30, 2022, to $14.6 million in 2023, a 31% decrease[164]. - Operating lease expense for the three months ended June 30, 2023, was $22.4 million, up from $19.7 million in the same period of 2022, representing an increase of 8.5%[61]. - Technology and development expenses increased by 5% from $2.9 million in Q2 2022 to $3 million in Q2 2023, driven by investments in product development[149]. Legal and Regulatory Matters - The company is involved in various legal proceedings and has established reserves for specific legal matters where unfavorable outcomes are probable[12]. - A class action lawsuit was filed against the company alleging violations of the Exchange Act related to prior public statements about its financial condition[65]. - The company identified material weaknesses in internal controls over financial reporting, particularly related to the implementation of new accounting standards and IT general controls[202]. - The company is actively working on a remediation plan to address identified material weaknesses, including increasing finance staff and engaging third-party consultants[203]. Strategic Initiatives and Future Outlook - The company aims to enhance gross margin and operational efficiency through cost management and portfolio optimization[116]. - The company launched a new member loyalty program, Inspirato Rewards, in August 2023, aimed at providing exclusive discounts and benefits to members[95]. - A strategic investment agreement was entered into with Capital One for $25 million through an 8% Senior Secured Convertible Note due in 2028[96]. - The company may require additional capital to continue operations, which might not be available on acceptable terms[208]. - If additional funds are raised through equity or convertible debt securities, existing stockholders could suffer significant dilution[209].