UP Q3 2022 Earnings

Call Details

• Call Title: Wheels Up Q3 2022 Earnings Call
• Date: November 9, 2022 at 9:30 PM UTC
• Management Team:
  • Keith Ferguson (Head of Investor Relations)
  • Kenny Dichter (Chief Executive Officer)
  • Todd Smith (Chief Financial Officer)

Call Summary

Financial Performance

• Revenue for Q3 was $420M, up 39% year-over-year and described as a record for the third quarter.
• Adjusted contribution margin was 5.1% for Q3, which was slightly above the high end of prior guidance of 4.5% to 5.0%.
• Adjusted EBITDA was negative $45.2M for Q3, which fell within the company's guidance range of negative $42M to negative $47M.
• Membership revenue increased 25% year-over-year driven by new member additions, while active members were up 12% year-over-year.
• Live flight legs increased 7% year-over-year and flight revenue per live leg increased about 20% year-over-year, or 25% excluding AirPartner which reports net.
• Prepaid block sales year-to-date through Q3 were up 85% year-over-year, although Q3 block sales were down sequentially due to an out-of-cycle June price increase.

Guidance

• Full-year 2022 revenue is expected to be $1.55-$1.58B, with Q4 revenue expected to be up approximately 15% year-over-year.
• Q4 adjusted contribution margin is expected to be in the 4.25% to 4.75% range, with lower sequential contribution from AirPartner and aircraft sales.
• Q4 adjusted EBITDA is expected to be negative $40-$45M, and full Q4 GAAP net loss is expected to be $90-$100M.
• The company expects to achieve positive adjusted EBITDA in 2024 and targets a mid-teens adjusted contribution margin over time.
• Capital spending for 2022 is expected to be a few million below the prior $125M guidance, with normal capital spending of approximately $67M and $58M for purchase of previously leased Textron aircraft categorized as financing.
• The company expects normal capital spending going forward to be in the mid-single-digit percentage of revenue.