Inspirato Incorporated

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Inspirado fourth quarter and year-end 2021 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, March 10, 2022. I will now turn the call over to James Knott, General Counsel.

Thank you, operator, and hello, everyone. By now, everyone should have access to our fourth quarter and year-end 2021 earnings release, which is available on the investor section of the investor website at www.inspirato.com. Before we begin our formal remarks, we need to remind everyone that some of the management's comments today will be forward-looking statements within the meeting of federal securities law, including but not limited to those regarding our expectations relating to future operating results and financial position, guidance and growth prospects, our anticipated future expenses and investments, our business strategy and plans, and our market growth, market position, and potential market opportunities. These statements are based on assumptions and beliefs, and we assume no obligation to update them. Actual results could differ materially from those indicated by these forward-looking statements. We refer you to our SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition. In addition, during the call, management will also discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Reconciliations of these measures to the most directly comparable gap measures are included in our earnings release, which is available on the investor relations section of our website, and which was furnished with our Form 8K today with the SEC. Hosting the call today, we have our co-founder and CEO, Brent Handler, and Chief Financial Officer, Webb Naber. They will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Brent. Brent.

Thank you, James, and good afternoon, everyone. Welcome to the Inspirato fourth quarter and year-end 2021 earnings call, the first after closing our business combination. I'd like to start by welcoming our newest shareholders and thanking our entire Inspirato team for their efforts over the past year to help us get to this point. This is an important milestone in the history of Inspirato, and it positions us for future growth in the years ahead. I also would like to take this opportunity to thank our nearly 14,000 loyal subscribers who entrust us with their most valuable resource, quality experiences with family and friends. Before we go into our financial results, I would like to quickly talk about the history of our brand and where we stand today. My brother Brad and I originally entered into the luxury travel market back in 2002 with a capital-intensive model that required a significant upfront fee and used the money to purchase real estate. We evolved that model in 2011 when we launched Inspirato, a scalable asset-light subscription travel platform. We have been serving affluent travelers now for 20 years and are constantly innovating to provide the best value and experience to the luxury consumer. Today, the Inspirato platform is comprised of two core subscription products. The first is Inspirato Club, the initial product we launched in 2011. Currently, new club subscribers pay $600 per month for access to an exclusive portfolio of branded luxury vacation homes, five-star hotels and resort partners, and custom travel experiences in hundreds of destinations around the world. In addition to their monthly subscription, subscribers pay nightly rates to book the trips of their choice. Our club subscribers travel with Inspirato because of the luxury, service, certainty, and value that we provide. Our second product is Inspirato Pass, which we launched in the summer of 2019. Inspirato Pass is the first ever luxury travel subscription inclusive of nightly rates, taxes, and fees. With Pass, subscribers pay $2,500 per month and choose from a list of typically more than 1.5 million trips. ranging from luxury homes and hotels to unique travel experiences around the world. A proprietary patented algorithm determines how subscribers use their pass to book and enjoy travel. Our subscribers realize substantial value from this product, and we believe it represents a significant opportunity that we can continue to grow as consumers further appreciate its many benefits. One of the differentiating aspects of our model versus traditional hospitality is that we have greater loyalty within our customer base. In fact, while hotel companies pay millions of dollars to incentivize their customers to travel with them, the reverse is true with Inspirato. Our subscribers pay us for the ability of being able to travel within our exclusive platform. Additionally, the Inspirato demographic is highly coveted, consisting of affluent travelers who want to spend more and better time with family and friends. Moving on to the current state of our business, let's start with some recent highlights. Specifically, on February 11th, 2022, we closed our business combination. And on February 14th, 2022, Inspirato's Class A common stock and warrants commenced trading on NASDAQ under the ticker symbol ISPO and ISPOW, respectively. Pro forma, following the closing of the transaction, Inspirato had approximately $140 million of cash on its balance sheet, including approximately $88 million in gross proceeds from a pipe led by Janice Henderson. In 2021, we expanded our business on both the supply side and the demand side. On the supply side, in response to luxury consumer preferences, For curated private accommodations, we increased total controlled accommodations to 538, a 36% year-over-year increase. On the demand side, we grew active subscriptions to 14,875, an 18% year-over-year increase, and past subscriptions to 2,987, a 67% year-over-year increase. As a result, in 2021, we delivered record revenue of $235 million, $13 million ahead of our initial forecast. In September 2021, we launched Inspirato Real Estate, our owner-leaseback platform that greatly enhances our supply pipeline and expands the selection of residences offered to our subscribers. In October of 2021, we released an updated 2.0 version of our innovative PASS product, which allows for greater trip planning flexibility and value for our subscribers. With this release, our PASS trip list grew from around 150,000 trips to over 1.5 million trips. As we look ahead, we believe there is a lot of room to grow and further improve the luxury travel experience for our subscribers. With that as context, let me touch on our recent financial performance, key business metrics, and other operating metrics. We ended the year with a record fourth quarter, with revenues of $68 million, up 71% year over year, a gap net loss of $9 million, and adjusted EBITDA loss of $6 million. For the full year, 2021, revenues were $235 million, up 42% year over year, Net loss was $22 million, and adjusted EBITDA was a loss of $16 million. Annual recurring revenue from our subscriptions grew to $135 million, an increase of 48% year over year, and it's very encouraging to see that our innovative subscription model is scaling as we expected. In a year with varying degrees of travel restrictions in different parts of the U.S. and the world, Our unique offering was compelling enough to both retain our subscriber base and attract new affluent travelers. In fact, the travel restrictions elevated the importance of avoiding vacation roulette that high net worth travelers often face with online vacation rental sites. The service and certainty our subscribers get with Inspirato gives them the comfort they need to experience the world with family and friends. even during otherwise challenging and uncertain times. On the supply side, during 2021, we added 141 controlled accommodations, including new residences, hotel penthouses, suites and rooms, up 36% year over year. An important and growing component of our supply acquisition strategy is working directly with premium hospitality brands, national resort developers, and institutional owners of high-quality vacation rental product. We have made significant investments over the past year in building our team and infrastructure to execute on these larger, more complex transactions. We now have an active pipeline of large strategic lease acquisition opportunities that will give us additional operating scale in some of our core markets and will expand our footprint into new markets that include some of the most iconic vacation destinations in the world. If consummated, these transactions represent large components of the overall supply growth we have previously forecasted. We look forward to updating you as we execute these transactions and have more details to share. As we look ahead, we continue to focus on growth and innovation. First and foremost, we are committed to delivering best-in-class service and certainty to our subscribers. we are accelerating our investment into the expansion of our portfolio. Third, we continue to innovate and evolve the past product, which could include offerings such as sports and entertainment events, and perhaps in the future, further segmentation such as new price points. And lastly, we see opportunity within adjacent subscription offerings such as corporate incentive travel, bespoke and adventure travel, private clubs, and air travels. Corporate incentive travel in particular represents an attractive growth avenue for us. In 2021, we received an unsolicited inquiry from a large global software company about providing reward travel for their sales force. This ultimately manifest into a multi-million dollar bespoke program, fully paid upfront by our client. Our early success in this area catalyzed our innovation and product development teams who are now actively exploring how to capitalize on the large and growing corporate incentive travel market. I'll now turn the call over to Webb to provide more specifics on the financials.