Soho House & Co Inc

Hello everyone and welcome to the Soho House and Co. Incorporated second quarter 2024 results conference call. Please note that this call is being recorded. Everyone is on listen-only mode to avoid any background noise. You will have an opportunity to ask questions to our speakers later in the Q&A session. If you'd like to ask a question during that time, please press star 1 on your telephone keypad. Thank you. I'd now like to hand over to Thomas Allen, Soho House Incorporated Chief Financial Officer. You may now begin.

Thank you for joining us today to discuss Soho House & Co.' 's second quarter financial results. My name is Thomas Allen, and I'm the Chief Financial Officer. I'm here with Andrew Carney, our CEO. Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in our SEC filings. Any forward-looking statements represent our views only as of today, and we assume no obligation to update any forward-looking statements if our views change. By now, you should have access to our Q2 earnings release, which can be found at SohoHouseCo.com in the News and Events section. Additionally, We have posted our Q2 presentation, which can also be found in the news and events section on our site. During the call, we also refer to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from, our GAAP results. Reconciliations from the most comparable GAAP measures are available in today's earnings press release. Now, let me hand it over to Andrew.

Thanks, Thomas, and hello, everyone. I'm going to update you on the quarter's highlights and provide an update on the progress we've made against our strategic priorities. I'll then hand over to Thomas to talk through the financial performance, give an update on our balance sheet and our guidance before moving on to Q&A. Q2 has been another strong quarter, with year-on-year and quarter-on-quarter growth in membership, revenues and EBITDA, as we continue to deliver against our strategic priorities of growing enhancing membership and operational excellence to drive greater profitability. Membership demand continues to be very strong. Membership revenues increased 16% versus the same period last year, and 3% versus the last quarter. Our global waitlist continues to grow, finishing the quarter at 111,000. And we welcome 6,000 Soho House members growing to 204,000 members globally. Soho House member growth was driven by the strong opening of Soho House in Sao Paulo, our first house in South America, and other new openings such as Mexico City and Portland. We now have 26 houses that have opened since 2018 and are still in the ramp-up phase. We saw strong growth in houses such as Austin, Nashville, Downtown LA, Dumbo, White City, Hong Kong and Rome this quarter. As we think about the future, we also announced our plans to open new Sur houses in Madrid, Milan, Barcelona and Tokyo over the coming years. helping to further strengthen membership demand. Q2 adjusted EBITDA grew 2 million year-over-year to 33 million. It's worth noting that excluding our planned investments in growth with the initial losses at new houses, which this year includes Portland, San Paolo and Bodrum, that had a 4 million greater impact in the quarter, EBITDA would have grown closer to 20%. Total revenues grew 6% year-on-year to 305 million. we saw a sequential improvement in in-house trends, driven by better footfall and spend per visit, with in-house revenues up 2% year-on-year and improving throughout the quarter. We are really pleased with the membership demand we are seeing in our new markets and ramp-up houses, which gives us the confidence to raise our financial guidance today on total membership and membership revenue, while reiterating guidance on total revenue and adjusted EBITDA. Our goal is to provide our members with a great experience in service and our houses, which we have seen reflected in improved member satisfaction scores again this quarter. We introduced more dining choices across all our houses, including new menus, new pop-ups and one-night-only experiences. We continued our focus on service, rolling out further training, increasing the speed of service and enhanced member recognition when members check in and eat with us. We increased the quality and variety of member events, which, combined with the personalized event recommendations on the app, resulted in almost 20% more members attending events year-on-year and an increase of spend per member at events attended. Finally, we continue to provide members with the unique experiences they can't find anywhere else. We delivered our first backstage Soho House pop-up at Glastonbury Festival and a sellout house festival in London. We continue to focus on operational excellence, which leads to greater profits in cash flow. Through our new global beverages deal, we've improved the quality and choice of drinks for our members and have grown margins at the same time. We continue to transform our back of house systems to help us achieve greater efficiencies, improving member service and lowering our costs. And we have further streamlined our corporate office to reflect the current operating environment and our plans for fewer new openings over the next couple of years. These strategic initiatives contributed to house-level contribution increasing 12% year-on-year, with house-level margins up approximately 100 basis points, despite more new houses having a short-term impact on our growth and margins. Now, let me pass over to Thomas to give you more detail on the numbers and our guidance.