Inspirato rporated(US:ISPO)2023-05-14 13:01Financial Data and Key Metrics Changes - The company generated total revenue of $92 million in Q1 2023, a 12% year-over-year increase compared to $82 million in Q1 2022 [12] - The net loss was $5.9 million, an improvement from a loss of $24 million in the same quarter last year [12] - Adjusted EBITDA loss was approximately $3.1 million, compared to a loss of $3.7 million in Q1 2022 [12] - Gross margin was 35%, down from 42% in Q1 2022, but consistent with performance over the past two years [12][49] Business Line Data and Key Metrics Changes - Subscription revenue increased 14% year-over-year to $37 million from $32 million [18] - Travel revenue increased 11% to $55 million compared to $50 million in Q1 2022 [18] - Inspirato for Good sold trip and membership packages for $2.3 million, up from $1.2 million in Q4 2022 [5] - Inspirato for Business generated approximately $4 million in sales, compared to just over $2 million in Q4 2022 [5] Market Data and Key Metrics Changes - Total nights delivered were 50,700, marking an 18% year-over-year increase and a 7% sequential increase from Q4 2022 [41] - Total occupancy rebounded to 77% from 73% in the previous quarter, but down from 87% in Q1 2022 [41] - The company ended the quarter with 726 controlled accommodations, an 11% year-over-year increase but a 1% decrease compared to year-end [46] Company Strategy and Development Direction - The company is focusing on monetizing available capacity through new member acquisition strategies and a member success team [13] - There is a strategic shift towards longer-term subscriptions, with over 80% of new club sales being multiyear contracts compared to approximately 15% in Q1 2022 [14] - The company aims to optimize its portfolio and reduce lease expenses, expecting over $5 million in savings for 2023 [17] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in consumer preferences towards urban hotels and a shorter stay trend, impacting the traditional vacation rental market [25] - The company is optimistic about the future of Inspirato for Business and anticipates strong growth in reward travel [54] - Management reaffirmed revenue guidance of $350 million to $370 million for fiscal year 2023, with adjusted EBITDA guidance of a loss between $10 million and $20 million [50] Other Important Information - The company exited the quarter with approximately $62 million in cash, down from $82 million at year-end [21] - The partnership with Saks was soft launched on May 1, with training for their 3,000 stylists underway [44] Q&A Session Summary Question: What drove the strength in demand trends in Q1? - Management noted a shift in demand from traditional vacation rentals to urban locations, particularly in European cities, and highlighted a strong booking calendar ahead of Q1 [53] Question: What is the strategic goal for Inspirato for Business? - The company is bullish on the future of reward travel, aiming to motivate and retain key employees through individual travel opportunities [54] Question: How is the company getting more club members into multiyear contracts? - The company shifted focus to long-term subscriptions, believing that members with a longer commitment will enhance profitability [58] Question: What is the overall supply strategy moving forward? - The company is rightsizing its portfolio, canceling leases that do not make sense, and focusing on partnerships with hotels to ramp up supply [59] Question: How does portfolio optimization impact subscriber choice? - Management emphasized that while some inventory may be reduced, the overall availability remains strong, and new properties are continuously added [96]