UP Q3 2021 Earnings

Call Details

• Call Title: Wheels Up Q3 2021 Earnings Call
• Date: November 10, 2021 at 1:30 PM UTC
• Management Team:
  • Keith Ferguson (Head of Investor Relations)
  • Kenny Dichter (Chief Executive Officer)
  • Vinayak Hegde (President & Chief Marketplace Officer)
  • Jean McKenna (Chief Product Officer)
  • Julia Zhang (SVP, Pricing and Revenue Management)
  • Srikanth Satya (Chief Technology Officer)
  • Greg Farnbrook (Head of First-Party Operations (promoted from CEO, Mountain Aviation))
  • Phil Dodick (Head of Second-Party Operations)

Call Summary

Financial Performance

• Reported revenue for Q3 2021 was $302M, which was presented as both approximately $300M and specifically $302M during the call.
• Reported year-over-year revenue growth for the quarter was described as 55% in one prepared remark and as 50% elsewhere in the prepared remarks.
• Revenue for the first nine months of 2021 was reported as nearly $850M, which was described as up 75% year-over-year.
• Adjusted contribution margin declined to 6.3% in Q3 2021 from 10.7% in Q2 2021, representing a sequential margin deterioration of 440 basis points.
• Adjusted EBITDA decreased by $15.9M year-over-year in the quarter, and free cash flow for the quarter was negative $39M.
• Flight revenue per live flight leg was reported as approximately $11,100 for the quarter, which management stated was up 2% year-over-year and down 5% sequentially.
• Active members finished the quarter at 11,325, which was reported as up 45% year-over-year, and live flight legs were reported at ~19,700 for the quarter, up over 50% year-over-year.
• At quarter end, cash and cash equivalents were reported at $535M and the company stated it had essentially zero debt.

Guidance

• Updated 2021 revenue guidance was provided in a range of $1.115B to $1.14B for full-year 2021.
• Updated adjusted EBITDA guidance for 2021 was provided as a loss in a range of negative $80M to negative $90M for the full year.
• GAAP net loss guidance for 2021 was provided in a range of $200M to $210M, which includes non-cash items such as a $20M earn-out charge and a $35M stock-based compensation expense.
• The company expects CapEx for 2021 to be at the higher end of the $25M to $35M range and indicated likely aircraft acquisitions in Q4.
• The company stated adjusted contribution margins are expected to remain in the low- to mid-single digits for the next several quarters while supply constraints persist.
• Management said 2022 guidance will be provided with the Q4 earnings release and emphasized that supply constraints are expected to persist into the near term.