Wheels Up Experience (US:UP)2021-11-11 07:39Financial Data and Key Metrics Changes - The company reported over $300 million in revenue for Q3 2021, marking a 50% increase year-over-year [9] - Revenue for the first nine months of 2021 reached nearly $850 million, up 75% year-over-year [9] - Adjusted contribution margin fell to 6.3% in Q3, down from 10.7% in Q2 due to increased costs and supply constraints [49][50] - The company expects a GAAP net loss between $200 million to $210 million for 2021 [59] Business Line Data and Key Metrics Changes - Membership revenue grew 35% year-over-year in Q3, with a retention rate of approximately 80% for Core and Business members [40][41] - Flight revenue increased 56% year-over-year, with Live Flight Legs up 52% year-over-year [42] - Aircraft management revenue grew 51% year-over-year, reflecting higher owner usage of aircraft [45] Market Data and Key Metrics Changes - The company has over 11,000 active members, growing 45% year-over-year [9] - Block sales reached $172 million, up 120% year-over-year, indicating strong demand [16] - The company is experiencing unprecedented demand in the private aviation industry, which is impacting supply [7][10] Company Strategy and Development Direction - The company aims to build a technology-driven marketplace similar to Uber and Airbnb, focusing on connecting demand with fragmented supply [6][7] - Recent program changes include requiring more advanced notice for travel and raising pricing for peak day guarantees to manage supply and demand [18][26] - The company is investing in technology and operational improvements to enhance efficiency and customer experience [20][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges supply challenges exacerbated by COVID-19 and is focused on addressing these issues [10][11] - The company is optimistic about long-term demand for private aviation and is taking steps to improve pilot recruitment and retention [12][53] - Management expects supply constraints to persist in the near term but believes margins can significantly increase in the long term [55] Other Important Information - The company has a strong balance sheet with over $500 million in cash and essentially no debt [8][58] - Recent management additions include experts from Amazon and T-Mobile to enhance technology and pricing strategies [19][21] Q&A Session Summary Question: Can you talk about the timing of the improvement in adjusted EBITDA? - Management expects contribution margins to remain in the low to mid-single digits for the next couple of quarters due to ongoing investments in pilots and technology [64] Question: Is the price increase sufficient, and how are competitors responding? - The company is raising prices by 8% to 13% for certain aircraft types, while competitors have moved pricing more drastically [66] Question: What types of planes will be acquired in Q4? - The company plans to acquire a couple of smaller planes and will focus on long-term guaranteed rate programs for third-party fleets [70][71] Question: How is the company managing membership growth? - A 90-day delay for new members to book flights has been implemented to manage current membership and demand effectively [72] Question: Can you segment the price changes for various membership levels? - The company is raising cap rates for King Air by 8% and Light Jets by 13%, while leaving mid and super mid rates unchanged [75]