Inspirato Incorporated

Thank you for standing by. Welcome to the Inspirato Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kyle Sork, Investor Relations. Please go ahead.

Thank you, and good morning. On today's call, we have co-founder and CEO Brent Handler and CFO Webb Naber. Yesterday afternoon, we issued our press release announcing our third quarter results and posted an updated investor presentation, both of which are available on the investor relations page of our website at investor.inspirato.com. Before we begin our formal remarks, we remind everyone that some of today's comments are forward-looking statements. including but not limited to our expectations of future operating results and financial position, guidance and growth prospects, our anticipated future expenses and investments, business strategy and plans, and market growth, market positions, and potential market opportunities. These statements are based on assumptions, and we assume no obligation to update them. Actual results could differ materially. We refer you to our SEC filings for a more detailed discussion of additional risks. In addition, during the call, management will discuss non-GAAP measures, which are 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 GAAP measures are included in our earnings release. With that, I'll turn the call over to our CEO, Brent Handler.

Thank you, Kyle, and good morning, everyone. On our previous calls, we have highlighted a number of new company records and expressed confidence in the ability to execute our short-term and long-term business plan thanks to a resilient and growing subscription base of high net worth travel enthusiasts. Today, in spite of rising interest rates and macro uncertainty, we continue to establish new company milestones. We are less than a month away from completing a year That will see approximately 45% revenue growth, and we are extremely confident in our multi-year outlook. We entered 2022 with several key objectives. First and foremost was an emphasis on growing the supply of our residents and hotels to meet the demands of our growing subscriber base. Throughout the year, we have successfully demonstrated that this often identified key risk is very much an opportunity for Inspirato. As of September 30th, we had 726 controlled accommodations, an increase of nearly 50% year over year, and 35% year to date. Importantly, we have strategically entered key markets in an effort to not only better serve our existing subscribers, but also to grow our presence for potential new subscribers. Our partnership with Canoe Place Inn in the Hamptons is a perfect example of this approach. We also successfully increased our scale in existing high demand areas such as Kiowa Island, Park City, and Costa Rica. In terms of full year 2022 guidance, we now anticipate revenue of approximately $340 million and an adjusted EBITDA loss of approximately $35 million. These downward revisions are the product of a few contributing factors. First, a reallocation of internal sales and marketing resources to new and expanded target markets, business and philanthropy. Second, lower than anticipated InspiratoPath subscription sales in the fourth quarter. And third, lower than expected fourth quarter total occupancy due to less than anticipated travel demand during the peak festive season. We are keeping a close eye on these trends and believe we have built in the appropriate level of risk into our 2023 guidance. In terms of reallocating internal resources, we believe there are a number of long-term benefits to increasing internal focus on Inspirato for Business and Inspirato for Good, including lower customer acquisition costs, stable and growing recurring revenue, and a strong pipeline of highly qualified prospects for our flagship club and past subscription offerings. We believe these new products will further diversify our revenue streams and significantly expand our universe of potential subscribers. In years past, investment in digital marketing served as the key driver of our subscription growth. Now, with the early success of Inspirata for Business and Inspirata for Good, we have new marketing channels that are actually generating revenue while simultaneously driving lead generation and ultimately new subscriber growth. In other words, we are beginning to be paid for something that has historically cost us money. This combination of increased revenue and reduced expenses as it relates to customer acquisition has the potential to meaningfully improve our LTV to CAC and should accelerate our path to profitability. As far as early results, Inspirata for Good, which was launched just three months ago, is off to a tremendous start. By year end, we expect to have sold more than 500 subscription and trip packages, amounting to $1 million of incremental revenue, only a small portion of which is recognized in 2022, as it is split between subscription revenue over time and travel revenue at the time of trip. Equally important, our new Inspirato for Good subscribers have donated over $1 million to the charities of their choice. Last week, we launched Jaunt Living, a new extended stay offering that we believe will be a unique and differentiated benefit for our members. Our Jaunt Living trip list features extended stays ranging from two weeks to one year and select Inspirado accommodations with each reservation including the personalized service that is hallmark of traveling with Inspirado. As we head into 2023, our primary focus is on leveraging our existing infrastructure and the investments made throughout 2022 to improve our cost structure, both above and below the line. While we are well-positioned to opportunistically grow our supply in 2023, we're more focused on portfolio optimization than portfolio growth. In terms of additional cost savings, we are committed to being thoughtful regarding incremental investments and anticipate our OpEx as a percent of revenue to materially improve over next year. Much of this projected improvement is attributable to the fundamental change in the Inspirato customer acquisition cost equation I just referenced. We are now prioritizing our stated goal of returning to positive adjusted EBITDA and expect to achieve greater than $400 million of revenue for full year 2023. Finally, I want to thank our talented and dedicated team for all of their hard work throughout the course of the year. 2022 has been a year of outstanding growth and change, highlighted by a number of tremendous accomplishments. We look forward to more of the same in 2023. With that, I'll turn the call over to Webb to discuss the quarter in more detail.