Vacasa, Inc.

Good afternoon and welcome to VCASA's fourth quarter 2022 earnings call. All participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. To ask a question, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Ryan Donancic, Investor Relations. Thank you. Please go ahead.

Good afternoon, everyone, and thanks for joining us today for Vacasa's fourth quarter 2022 earnings call. I'm pleased to be joined today by CEO Rob Graber and CFO Jamie Pellen. Before we begin, let me cover a few administrative details. This call contains information that speaks only as of the date of today's live broadcast and redistribution of this broadcast is prohibited. We have posted a shareholder letter on the IR section of our website at investors.vocasa.com that will be referenced by our speakers. Comments made during this conference call and in our shareholder letter may contain statements that are commonly referred to as forward-looking statements. Such statements include those about future expectations, beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions, and financial performance. We caution that various factors could cause actual results to differ from those anticipated. For additional information concerning these risks and uncertainties, please read the forward-looking statement section in the shareholder letter we issued earlier today in the forward-looking statements and risk factors section in our filings with the SEC. During this call, we will discuss certain non-GAAP financial measures, information regarding our non-GAAP financial results, including a reconciliation of non-GAAP results, to the most directly comparable GAAP financial measures may be found in our shareholder letter. These non-GAAP measures should be considered in addition to our GAAP results and are not intended to be a substitute for our GAAP results. And now, I'd like to hand the call over to Rob Graber.

Rob? Good afternoon, everyone, and thank you for joining us. I'm pleased to be here with you all today to share an update on how we are positioning Picasa for success, review our fourth quarter financial results, and finally provide an outlook on 2023. It's been nearly seven months since I joined Vacasa. In that time, I familiarized myself with the business and worked with leaders across the organization on developing Vacasa's go-forward strategy. Through my learnings and interactions, my conviction in Vacasa's potential has only increased. I firmly believe that Vacasa's current business model, providing full-service vacation rental management, is the right one when combined with innovative technology and consistent execution. The CASA's rental management offering addresses a large and growing market opportunity here in the United States with more than 1.5 billion whole homes listed on our major channel partners. And over time, there is the opportunity to deploy our solution in international markets. Managing vacation homes is best done when combining outstanding people, robust processes, and innovative technology. Our scale as the largest vacation rental manager in the United States uniquely allows us to design, and invest in technology-driven solutions resulting in a differentiated experience for homeowners and guests. We also have the opportunity to learn from our scale. In the past year, we facilitated over 6 million nights sold, equating to nearly 1.5 million reservations. That means we have over a million opportunities each year to test, learn, and iterate on the best approach to pricing a reservation, cleaning a home, and interacting with guests. This is a massive advantage relative to others in the industry, and we expect the benefits to Picasa to continue to compound over time. And then the most exciting part to me is there are only a handful of other companies even attempting to win in this market at scale. In order to capitalize on the opportunity ahead, we must execute across all facets of our business, but we have a lot of work to do across the organization to get there. Over the past few years, the team was operating in a hyper growth environment focused on facilitating record reservations and home growth on our platform. Today, we are operating in an environment that is more dynamic relative to the prior two record years. While I'm optimistic about the CASA's long-term potential, I see challenges which are fixable but not yet fixed. Our priorities are shifting to improving our efficiency and further developing our processes to deliver an unmatched experience for our homeowners and elevated hospitality for our guests. We are refining our local market operations, individual sales approach, and product roadmap. We believe all this work will further our competitive advantage, but it will take hard work and time. As a result, 2023 will be a transition year for Vacasa to set us up for long-term measured profitable growth in the future. When I spoke to you last November, I outlined my initial four priorities, which were ruthlessly prioritizing our business needs to drive profitable growth, improving execution in local markets and customer support functions, unlocking the potential of the individual sales approach, and developing the right technology products. During the past four months, we have made progress against all four, but there is still work to do. As you know, in January, we undertook a significant workforce reduction. As we reviewed our business and refined our plan to put us on a path to adjusted EBITDA profitability, we made the difficult decision to reduce our headcount by approximately 1,300 employees, representing about 17% of our workforce. On the corporate side, we reduced approximately 300 positions with the majority in our sales and marketing function as we reduced the number of sales executives and teams associated with our portfolio program. We also reduced approximately 1,000 field positions across the more than 500 destinations in which we operate. During the past two years, we ramped up our local market staff to stay ahead of home and reservation growth we were experiencing. As the industry exits this period of record growth, we are focused on calibrating our staffing levels to business needs and driving efficiencies in our local market operations while continuing to deliver excellent service to our homeowners and guests. I'm pleased with the initial progress we've made on housekeeping and field operations, but we need to maintain the improvements as we head into our busier peak season. In February, I appointed TJ Clark as the new Chief Commercial Officer to lead the sales team. TJ had a similar role at Turnkey, and he will be responsible for improving our individual sales approach. The sales team went through huge changes over the past two years, including more than doubling in size. As we prioritize profitability, even at the expense of growth, we believe it makes sense to reevaluate their focus and how they are working to optimize productivity and improve performance. Following our workforce reduction, we now have approximately 350 sales executives versus the approximately 425 we employed at the end of 2022. In addition, we are also winding down our real estate brokerage services in the second quarter of this year. which generated about 20 million of revenue and negligible profit in 2022. In February, we welcomed Harish Naidoo as the new Chief Product and Technology Officer. Harish has a strong technology background, having spent more than 20 years at Microsoft and seven years at Accolade, a healthcare technology company. In terms of the product roadmap, in the year ahead, the team will largely be building and adding functionality to tools used to support internal teams and processes. We are highly focused on improving our execution across the company, and the right tools and products are instrumental in helping us achieve our operational goals while delivering a differentiated superior service to homeowners and guests. Going forward, we will continue to invest in the business, local market operations, technology, and our sales executives, but these investments will be sized appropriately and driven by business needs. I mentioned we welcomed TJ Clark and Harish Naidoo to the leadership team to help us execute across these four priorities. Additionally, we brought on Rebecca Boyden to serve as our new chief legal officer and Manu Sivanandan to serve as Vicasa's new chief marketing officer. Rebecca comes to Vicasa having led aspects of the legal function at both large and small technology companies. Manu has experience in marketing, strategy, operations, and financial leadership, including at the online travel company Orbitz. Each of these executives bring significant and directly relevant experience from across the technology and online travel landscape, and I'm excited about the leadership team we've assembled. In closing, 2023 will be a year of transition for Vacasa, but I remain excited about the opportunity ahead. Yes, it will take time, but we are making these decisions to firm up the foundation of our business, which we believe sets us up for long-term profitable growth. Now, I'll turn the call over to Jamie to review our fourth quarter results and provide some additional commentary on 2023. Jamie? Thanks, Rob.