Sonder(US:SOND)2022-08-10 23:02Financial Data and Key Metrics Changes - The company reported a revenue of $121 million for Q2 2022, representing a 157% increase year-over-year, marking the highest quarterly revenue in company history [27] - Free cash flow improved to negative $45 million before one-time restructuring costs, compared to negative $62 million in Q1 2022 and negative $60 million a year ago, with a free cash flow margin of negative 37% [9][34] - RevPAR grew by 67% year-over-year to a record $167, while occupancy rate increased by 1400 basis points to 82% [32] Business Line Data and Key Metrics Changes - The live unit portfolio grew by 53% year-over-year, ending the quarter with approximately 8,400 live units [28] - Bookable nights increased by 53%, leading to an 86% growth in occupied nights [32] - The company opened 14 new properties worldwide in Q2, including three in New York City, surpassing 1,000 live units in that market [28] Market Data and Key Metrics Changes - The total portfolio reached approximately 18,700 units, representing a 26% year-over-year growth [30] - The company anticipates continued growth in urban travel, which is expected to recover through 2023 [33] Company Strategy and Development Direction - The company shifted its focus from hyper growth to steady growth, emphasizing sustainable positive free cash flow [11] - Key levers for the cash flow positive plan include cutting cash costs, reducing plan signings, raising the bar on incremental lease signings, and focusing on rapid payback RevPAR initiatives [13][41] - The company aims to achieve positive quarterly free cash flow within 2023 without additional fundraising [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the decision to shift strategy due to changing macro conditions, believing it was prudent to adapt [11] - The company expects revenue in Q3 2022 to exceed $120 million, representing over 78% year-over-year growth, despite anticipated lower RevPAR due to onboarding new properties [36] - Management noted that the travel market is not fully recovered and sees significant headroom for growth in 2023 [68] Other Important Information - The company announced an option exchange program for employees to exchange underwater stock options for new options at fair market value [23] - The restructuring plan is expected to yield nearly $55 million in annualized cost savings [13] Q&A Session Summary Question: Can you elaborate on the cash capital light supply strategy and competitor behavior? - Management explained that capital light deals are cash accretive within six months, with various structures to achieve this, and noted that competitors vary by deal and market [45][47] Question: What strategies are in place to increase RevPAR in 2023? - Management highlighted ancillary revenue streams and the growth of corporate travel accounts as key strategies to bolster RevPAR [50][53] Question: How are July trends compared to June, particularly regarding occupancy and RevPAR? - Management indicated that while Q2 had robust travel dynamics, they do not expect the same level of demand in Q3 and Q4, but see recovery potential in 2023 [67][68]