UP Q2 2022 Earnings

Call Details

• Call Title: Wheels Up Q2 2022 Earnings Call
• Date: August 11, 2022 at 8:30 PM UTC
• Management Team:
  • Keith Ferguson (Head of Investor Relations)
  • Kenny Dichter (Chairman and Chief Executive Officer)
  • Vinayak Hegde (President & Chief Marketplace Officer)
  • Todd Smith (Chief Financial Officer)
  • Rob Kotz (EVP of Fleet Operations and Infrastructure)
  • Dave Boltz (Chairman of Operations)

Call Summary

Financial Performance

• Total revenue for Q2 2022 was over $425 million, which management stated was a record for the quarter and up nearly 50% year over year.
• Active members ended Q2 at 12,667, which was up approximately 20% year over year.
• Live flight legs were up about 19% year over year for the quarter, with AirPartner contributing over 5% of live leg growth.
• Prepaid block sales exceeded $330 million in the quarter and were up over 180% year over year.
• Flight revenue per live flight leg was $13,088 for the quarter, up 12% year over year on a reported basis and up 16% for core Wheels Up excluding AirPartner.
• Adjusted contribution margin was 4.7% in Q2, representing a 550 basis point sequential improvement, and adjusted EBITDA was negative $46.9 million for the quarter.
• Other revenue was $56.7 million in Q2 and included approximately $21 million from AirPartner's charter, freight, and security businesses.

Guidance

• Full year 2022 revenue guidance was updated to a range of $1.48 to $1.53 billion.
• Third quarter 2022 revenue is expected to grow approximately 25% plus year over year, with Q3 revenue headwind from lower expected asset sales versus Q2.
• Third quarter adjusted contribution margin is expected to be in the 4.5% to 5% range.
• Third quarter adjusted EBITDA is expected to be in the range of negative $42 million to negative $47 million.
• The company expects to report a GAAP net loss for Q3 2022 in the range of $95 million to $105 million, which includes non-cash and one-time items called out in the prepared remarks.
• Capital spending for 2022 is expected to be approximately $125 million, including approximately $67 million of normal capital spending and $58 million related to the purchase of previously leased Textron aircraft.
• The company reiterated the objective to reach positive adjusted EBITDA in 2024 and tied that target to operational improvements, AirPartner contribution, and pricing changes including a fuel surcharge.