Vacasa(US:VCSA)2021-11-17 13:15Revenue Performance - Vacasa Holdings experienced a significant decline in revenue due to COVID-19, issuing $108.1 million in Senior Secured Convertible Notes for liquidity [247]. - The company reported a reduction in bookings and an increase in cancellations, impacting nights sold during the first half of 2020 [248]. - In the second half of 2020, Vacasa saw a significant increase in bookings and nights sold compared to the second quarter of 2020 and the same period in 2019 [248]. - Revenue for the three months ended September 30, 2021, was $329.9 million, a 77% increase from $186.1 million in the same period of 2020 [284]. - Revenue for the nine months ended September 30, 2021, was $697.0 million, an 82% increase from $382.9 million in the same period of 2020 [285]. - Gross Booking Value (GBV) for Nights Sold increased by $382.6 million, or 97%, for the three months ended September 30, 2021, and by $793.9 million, or 107%, for the nine months ended September 30, 2021 [284][285]. - Gross Booking Value (GBV) increased to $776.2 million, a 97% increase for the three months ended September 30, 2021, and $1,536.2 million, a 107% increase for the nine months ended September 30, 2021, compared to the same periods in 2020 [328]. Operational Changes - The company acquired TurnKey for $45.0 million in cash and 161,518,057 common units, enhancing its market density and expanding into new vacation rental destinations [253]. - Vacasa exited European and most Latin American operations, which accounted for approximately 1% of revenue for the nine months ended September 30, 2020 [252]. - The company plans to continue expanding its portfolio and enhancing its technology to support growth in Nights Sold and overall revenue [284][285]. Cost and Expenses - The company anticipates that operating costs will increase in absolute dollars as the business grows, but expects a decrease in costs as a percentage of revenue over the long term [263][265]. - General and administrative expenses are expected to increase in absolute dollars due to business growth and compliance requirements associated with being a public company [273]. - Cost of revenue for the three months ended September 30, 2021, was $138.5 million, a 67% increase from $82.7 million in the same period of 2020 [286]. - Cost of revenue as a percentage of revenue decreased to 42.0% for the three months ended September 30, 2021, from 44.4% in the same period of 2020 [286]. - Operations and support costs increased by $20.7 million, or 60%, for the three months ended September 30, 2021, compared to the same period in 2020 [292]. - Technology and development expenses increased by $5.5 million, or 82%, for the three months ended September 30, 2021, compared to the same period in 2020 [297]. - Sales and marketing expenses increased by $27.5 million, or 122%, for the three months ended September 30, 2021, primarily due to a $12.2 million increase in listing fees driven by a 97% increase in Gross Booking Value (GBV) [302]. - General and administrative expenses increased by $20.7 million, or 53%, for the nine months ended September 30, 2021, due to personnel-related costs and acquisition expenses [310]. - Amortization of intangible assets increased by $16.3 million, or 112%, for the nine months ended September 30, 2021, due to the acquisition of TurnKey Vacation Rentals Inc. [317]. - Interest expense increased by $4.4 million, or 93%, for the nine months ended September 30, 2021, primarily due to increased borrowings [322]. Profitability and Cash Flow - Net income for the three months ended September 30, 2021, was $32.8 million, compared to a net income of $9.4 million in the same period of 2020 [281]. - The company reported a net loss of $36.4 million for the nine months ended September 30, 2021, offset by $67.7 million of non-cash items [362]. - Net cash provided by operating activities was $76.3 million for the nine months ended September 30, 2021, compared to $37.7 million for the same period in 2020 [361][363]. - Net cash used in investing activities was $72.0 million for the nine months ended September 30, 2021, primarily due to $63.5 million paid for business acquisitions [364]. - Net cash used in financing activities was $9.7 million for the nine months ended September 30, 2021, mainly from $9.4 million in cash payments for business combinations [367]. Market Trends and Future Outlook - Vacasa's overall business is seasonal, with higher revenue typically seen in the second and third quarters due to increased nights sold [255]. - The company expects Adjusted EBITDA to fluctuate in the near term due to seasonality but aims for improvement over the medium to long term as it achieves operational scale [258]. - The company anticipates fluctuations in Adjusted EBITDA due to seasonal trends and ongoing investments in supply growth and technology [341]. - The company expects continued growth in Nights Sold driven by the addition of new homes and optimization of pricing and occupancy [332]. - Nights Sold increased to 1,840 for the three months ended September 30, 2021, compared to 1,113 for the same period in 2020 [325]. - Nights Sold increased to 1.8 million, representing a 65% growth compared to the same period in 2020 [331]. - Gross Booking Value per Night Sold increased to $422, a 19% increase compared to the same period in 2020 [334]. - Adjusted EBITDA for the nine months ended September 30, 2021, increased to $39.6 million, compared to a loss of $(5.8) million in the same period in 2020 [338]. - Adjusted EBITDA as a percentage of Revenue increased to 6% for the nine months ended September 30, 2021, compared to (2)% in the same period in 2020 [340]. Financial Position - Cash and cash equivalents as of September 30, 2021, were $150.4 million, with an additional $55.0 million available for borrowing under the Revolving Credit Facility [347]. - The Revolving Credit Facility provides for a senior secured revolving credit facility in an aggregate principal amount of $55.0 million [349]. - As of September 30, 2021, principal outstanding under the D-1 Convertible Notes was $115.6 million, with $2.9 million of uncapitalized PIK interest accrued [359]. - The D-1 Convertible Notes accrue cash interest at 3% per annum, with an increase to 5% upon an event of default [359]. - The company incurred significant operating losses and generated negative cash flows from operations as it invested to support business growth [346]. Compliance and Governance - The company did not have any off-balance sheet arrangements as of September 30, 2021 [368]. - There were no material changes to contractual obligations as of September 30, 2021 [369]. - The company meets the definition of an emerging growth company under the JOBS Act, allowing for an extended transition period for accounting standards compliance [371].