DENVER, November 6, 2023 – Inspirato Incorporated (“Inspirato” or the “Company”) (NASDAQ: ISPO), the innovative luxury travel subscription brand, today announced its 2023 third quarter financial and operating results.
Except as otherwise stated, all financial results discussed below are presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. As supplemental information, we have provided certain additional non-GAAP financial measures in this press release’s supplemental tables, and such supplemental tables include a reconciliation of these non-GAAP measures to our GAAP results. The sum of individual metrics may not always equal total amounts indicated due to rounding.
2023 Third Quarter Highlights:
- Completed $25 million investment from Capital One Ventures, solidifying new strategic partnership and contributing to a cash balance of $51 million as of September 30, 2023.
- Launched Inspirato Rewards, the Company’s first ever member loyalty program offering savings and additional travel benefits based on tiered status levels.
- Third quarter 2023 total revenue of $83 million, an 11% year-over-year decrease and 2% decrease compared to the second quarter of 2023. In the third quarter, approximately $1.8 million of revenue was deferred related to Inspirato Rewards.
- Total Nights Delivered of 46,400, a year-over-year decrease of 9% and 2% decrease compared to the second quarter of 2023.
- Residence occupancy was 73% in the third quarter of 2023 compared to 81% in the third quarter of 2022 and 72% in the second quarter of 2023.
- Residence average daily rate (“ADR”) was approximately $1,600 in the third quarter of 2023 compared to $1,800 in the comparable 2022 period and $1,750 in the second quarter of 2023.
- Total Active Subscriptions of approximately 14,500 were comprised of approximately 11,800 Inspirato Club subscriptions and approximately 2,700 Inspirato Pass subscriptions. Inspirato Club and Pass subscriptions as of September 30 represent year-over-year decreases of 5% and 29%, respectively.
- Inspirato for Good (“IFG”) and Inspirato for Business (“IFB”) had third quarter contracted sales of $1.3 million and $4.4 million, respectively. IFG is subject to seasonality and, as expected, sales decreased from the second quarter of 2023 while IFB sales increased from the second quarter of 2023. Year-to-date, IFG has sold approximately 2,500 travel and membership packages.
- Changes to executive leadership and a reduction in force resulting in $3.7 million of severance-related expenses in the third quarter.
- Net loss of $25 million in the third quarter of 2023, compared to a net loss of $million in the comparable 2022 period.
- Adjusted EBITDA loss, a non-GAAP financial measure defined below, of $9.2 million in the third quarter of 2023 compared to Adjusted EBITDA loss of $6.8 million in the third quarter of 2022. Adjusted EBITDA loss was larger than the prior year due to the deferral of $1.8 million of revenue related to Inspirato Rewards and $3.7 million of severance-related expenses.
Management Commentary
Chief Executive Officer Eric Grosse commented, “I’m incredibly excited about the opportunity to lead Inspirato. For many years, we have worked tirelessly to cement ourselves as a leader in the world of luxury travel, all while creating an exceptional and differentiated traveler experience. As we look ahead, our initial focus is on bolstering our liquidity position, improving operational efficiencies and rebuilding revenue momentum, all while strengthening our core member value proposition. Capital One’s $25 million investment and strategic partnership is merely the first step in achieving these objectives.”
“We continue to execute against our plan of improving operating efficiencies and are finally on the cusp of realizing material cost savings,” added Chief Financial Officer Robert Kaiden. “While our third quarter results included several non-recurring expenses, we beat our internal expectations and through our efforts, got a glimpse of an improved travel mix within our portfolio that, if continued, further increases our confidence in achieving our profitability goals.”
2023 Guidance
For full-year 2023, Inspirato anticipates total revenue between $320 million and $340 million. The Company anticipates a full-year 2023 Adjusted EBITDA loss between $30 million and $45 million. These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause Inspirato’s actual results to differ materially from these forward-looking statements.
Forward-looking Adjusted EBITDA is a forward-looking non-GAAP financial measure. The Company is unable to reconcile forward-looking Adjusted EBITDA to net income, its most directly comparable forward-looking GAAP financial measure, without unreasonable effort, as a result of the uncertainty regarding, and the potential variability of, reconciling items such as equity-based compensation expense. However, it is important to note that material changes to reconciling items could have a significant effect on Inspirato’s future GAAP results.