Vacasa, Inc.

Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vacasa third quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, simply press star one again. Thank you so much. I would like to now turn the call over to Jay Ginsko, Vice President, Investor Relations. And with that, Jay, you have the floor.

Good afternoon, everyone, and thank you for joining us today for Vacasa's third quarter 2023 earnings call. I'm pleased to be joined today by CEO Rob Graber and CFO Bruce Schumann. Before we begin, let me cover a few administrative details. This call contains information that speaks only as of today's date. We have posted a shareholder letter on the investor relations section of our website at investors.macasa.com that will be referenced by our speakers. Comments made during this conference call and in our shareholder letter contain forward-looking statements. Such statements include those about future expectations, beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions, and financial performance, including guidance for future period results. which are based on what the company believes is realizable as of today's date. We caution you that various factors could cause actual results to differ materially from those anticipated. For additional information concerning these risks and uncertainties, please read the forward-looking statements section in the shareholder letter we issued earlier today and the forward-looking statements and risk factors section in our filings with the Securities and Exchange Commission. During this call, we will focus primarily on various 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 would like to hand the call over to Rob Graber. Rob?

Good afternoon, everyone, and thank you for joining us. I'm pleased to be with you all today to share the progress the business has made during the third quarter and to review our financial results and outlook. We wrapped up the third quarter, the CASA's seasonally strongest, facilitating over 500,000 reservations, with the majority of those taking place in July and August, the second two months of our three-month peak season. That's over half a million family trips, weekend getaways, overdue breaks, and highly anticipated summer vacations. For our team, for our industry, bringing vacations home means creating moments for family and friends, moments that happen at kitchen counters or around coffee tables and over board games, and in that way, moments that are unique to the vacation rentals category and so important to our homeowners and guests. We are still navigating a dynamic macroeconomic and industry environment. Demand for our category in leisure markets looks different today than during the highs of 2021 and 2022. And while reservation volume remains robust, many homeowners across the industry are now making less from their homes than in those prior years. While these dynamics have challenged our business in recent periods, notably in revenue and homeowner retention, we remain highly focused on delivering for our homeowners and guests. And once again, we generated millions in income for our homeowners during the third quarter. I remain extremely optimistic about Picasa's potential and continue to believe we are, by far, the best option for homeowners who want to participate in the vacation rental industry. Our scale also uniquely positions Picasa to develop technology-driven products that result in a truly differentiated experience for our homeowners and our guests. We are working better and more efficiently in all our functions, and you can see that in our results. We believe in the vast majority of our markets. Based on our data, Vacasa listings are generating more revenue than the industry. Last November, when I spoke with you all for the first time, I outlined four critical priorities I wanted to tackle during my first year at Vacasa. These were improving execution in local markets and customer support functions, unlocking the potential of the individual sales approach, developing the right technology products and service offerings, and ruthlessly prioritizing our business needs to drive profitable execution. Let me be clear, there is more to do and more that will get done. But as we look back over the past 12 months, we have made significant progress against each priority. I'm proud of how our local teams performed across our markets during our third and busiest quarter. They delivered outstanding hospitality experiences to our guests while also leveraging some of our latest technology tools to increase efficiency. For example, Earlier this year, we told you about new capabilities in the automated scheduling systems used by our field operations teams. These capabilities help our teams better manage daily tasks, including ensuring homes are in top condition, ready to welcome guests. These features are particularly helpful during peak season when home utilization is high, and there may only be a small window between guest stays, and it's imperative that we have a well-planned schedule for our local teams. These systems help our local teams get to our homes at the right time, with the right work planned, ready to be completed on time, and it's working. During the third quarter, we achieved a higher property condition score every single week compared to last year, based on guest feedback, while operating in a more efficient manner. In the spring, we also refined a number of internal processes around housekeeping, including sharing post-clean photos from our clean inspection tool with owners. This had two important benefits. First, our CLEAN scores from guests have been higher year over year in the third quarter. Second, homeowners see real-time images of their home after every inspection that gives them the peace of mind that their home is being taken care of, and we've received positive homeowner feedback on this feature. It's just another touchpoint that keeps them connected to their home and allows them to see the work our field teams do. The positive results from our automated scheduling tool and enhanced photo inspection process are important proof points Better investment in differentiated technology is paying dividends. It's driving efficiency in our operations, and more importantly, it's resulting in a better experience for homeowners and guests. Over time, these products will only get better. With 500,000 reservations, you have 500,000 new opportunities to identify areas of improvement. Our individual sales approach, the primary way in which we add homes to our platform, had another quarter of improving productivity year over year. and another quarter of developing and building on the local market presence and expertise that attracts our prospective homeowners. We continue to refine the way we attract homeowners, shifting more of our resources to local channels and initiatives. This supports our locally-based sales and operating teams, allowing them to participate in community events and lets us sponsor unique local activities. We had a blast at the last annual Falmouth Road Festival on the Massachusetts coast and the Gulf Jam Festival in Panama City Beach, Florida. We're also giving potential homeowners more reasons to choose Vacasa over our local peers. For example, Vacasa was selected as a launch partner for the new offering from American Express Travel Select Homes and Retreats, a channel that positions us to reach more premium travelers. Our scale and commitment to quality positions us to provide these types of opportunities for our homeowners to reach more travelers across an expanding channel mix. With all that said, the short-term rental industry continues to adjust to a dynamic macroeconomic environment and changing travel patterns. And we see the impacts of this in elevated levels of homeowner churn. Homeowners are responding to recent market conditions, evaluating if they should continue to rent out their home, and if so, on what terms. We remain keenly focused on continuing to proactively communicate with homeowners, optimizing their rental income, and delivering exceptional hospitality to guests. Our product and technology teams continue to focus on building products that deliver a one-two punch, making Picasa's operations more efficient and improving the experience for our homeowners and guests. We do this by feature enhancements to existing products, as well as by focusing our efforts on larger scale products that have this double benefit. These include the improved photo inspection tool and automated scheduling tool I just mentioned, which have generated measurable cost efficiencies and positive owner feedback. We are also rigorously evaluating and taking steps to improve our internal technology infrastructure. Examples include adding additional filtering criteria to Vacasa.com to help guests find the perfect home, making it easier for guests to provide feedback on their stay, and in the field, simplifying the way they transact with owners and vendors. Finally, we continue to prioritize driving efficiency across our business. We are carefully managing our operating expenses with technology development, sales and marketing, and general and administrative expenses down year over year. We are also being judicious about the homes we manage on our platform, seeking to ensure all homes are the right fit across a variety of criteria, including homeowner objectives, rental income potential, the location of homes within a market, and revenue potential for Vacasa. We will continue to regularly assess the quality, fit, and mix of our inventory of homes. In closing, we remain focused on making improvements across our business, from the way we manage local operations to ruthlessly prioritizing our technology and product resources to the highest ROI. There is more to do, but I believe as you look back over the past 12 months, you'll see we have made substantial progress. I want to take a moment to thank all our Vacasa team members across the country, across all functions, for each playing an important role in continuing to improve our product offering and furthering our lead as the top vacation rental management platform in North America. Now I'll turn the call over to Bruce to discuss our third quarter results and provide an updated outlook. Bruce?