2025 plan targets full-year profitability through improved gross margins and operational efficiencies
DENVER, Feb. 24, 2025 (GLOBE NEWSWIRE) -- Inspirato Incorporated ("Inspirato” or the "Company”) (NASDAQ: ISPO), the premier luxury vacation club, today announced its 2024 fourth quarter and full year financial and operating results. The Company closed the fourth quarter with profitability and positive cash flow from operations, reinforcing its momentum heading into 2025, where it plans to achieve full-year profitability by strengthening gross margins and optimizing operational efficiencies.
2024 Highlights:
- Fourth quarter Net Loss of $2.3 million, representing an 86% year-over-year improvement
- Fourth quarter Adjusted EBITDA income of $1.9 million, a $7.3 million year-over-year improvement
- Fourth quarter net cash from operating activities of $6.9 million, an improvement of $12.9 million as compared to the fourth quarter of 2023
- 2024 Adjusted EBITDA loss of $6.5 million and total revenue of $279.9 million, both in line with previous guidance
- Optimized portfolio while adding 14 new luxury residences
- Delivered industry-leading Net Promoter Score of 70
- Anticipated Adjusted EBITDA of $0 to $5 million, a year-over-year improvement driven by an expected 300 basis point improvement in gross margins and other operational efficiencies
- Full year expected revenue of $235 to $255 million, in-line with annualized fourth quarter 2024 revenue
- Cash operating expenses between $80 and $90 million, a 15% year-over-year improvement
Chairman and Chief Executive Officer, Payam Zamani, commented, "I'm incredibly proud of how we closed out 2024 and the strong position we've built as we enter 2025. The fourth quarter brought several key achievements, including profitability and positive free cash flow, and our opportunities ahead remain vast. This year, we are deepening our investments in our homes, technology, and sales organization, all with the goal of building a financially strong enterprise while elevating the Inspirato brand and enhancing the member experience. We anticipate achieving full-year profitability and strengthening our foundation for sustainable growth in 2026 and beyond.”
2024 Fourth Quarter and Full Year Financial Results and Operational Metrics
Fourth quarter and full year 2024 revenue was $63.1 million and $279.9 million, respectively, and comprised of $38.2 million and $178.7 million, respectively, of travel and rewards revenue and $24.9 million and $101.2 million, respectively, of subscription revenue. Total revenue decreased by 11% and 15% from the comparable fourth quarter and full year 2023 periods, respectively, due to decreases of 22% and 26%, respectively, in subscription revenue primarily associated with the planned decrease in number of Inspirato Pass members. Meanwhile, travel and rewards revenue decreased by approximately 2% and 7% on a fourth quarter and full year basis, respectively, as an increase in Experience and Bespoke revenue, as well as paid residence ADRs, partially offset the decrease in paid residence nights associated with fewer members.
Fourth quarter and full year 2024 gross margins of $21.9 million, or 35% of total revenue, and $119.2 million, or 43% of total revenue, respectively, improved from $12.8 million, or 18% of total revenue, and $54.3 million, or 17% of total revenue, respectively, in the comparable 2023 periods. Gross margin in the fourth quarter and full year of 2024 reflect improvements over the comparable 2023 periods on an absolute and percent basis due to portfolio optimization efforts leading to decreased lease expenses as well as the impacts from the 2023 asset impairments and the 2024 gain on a lease termination.
Fourth quarter and full year net losses of $2.3 million and $8.8 million, respectively, compared to net losses of $15.9 million and $93.9 million, respectively, in the comparable 2023 periods. The improvement in net loss between all periods is primarily associated with the 2023 asset impairments and a 2024 gain on lease termination.
Fourth quarter Adjusted EBITDA, a non-GAAP measure defined below, of $1.9 million compared to an Adjusted EBITDA loss of $5.4 million in the comparable 2023 period. Full year 2024 Adjusted EBITDA loss of $6.5 million compared to Adjusted EBITDA loss of $29.3 million in the comparable 2023 period. Adjusted EBITDA improvements in each time period were due to improved gross margins and reduced operating expenses.
The following table provides the components of gross margin for the three and twelve months ended December 31, 2024 and 2023:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||
| (in millions other than percentages) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||
| Travel revenue | $ | 34.7 | $ | 38.1 | (8.8 | )% | $ | 165.8 | $ | 190.3 | (12.8 | )% | ||||||||||
| Subscription revenue | 24.9 | 31.7 | (21.6 | )% | 101.2 | 137.6 | (26.5 | )% | ||||||||||||||
| Rewards and other revenue | 3.5 | 0.9 | 290.6 | % | 12.9 | 1.2 | 951.7 | % | ||||||||||||||
| Total revenue | 63.1 | 70.7 | (10.7 | )% | 279.9 | 329.1 | (15.0 | )% | ||||||||||||||
| Cost of revenue | 41.2 | 51.4 | (19.9 | )% | 190.5 | 233.9 | (18.6 | )% | ||||||||||||||
| Asset impairments and (gain) on lease termination | - | 6.5 | n/m | (29.9 | ) | 40.8 | n/m | |||||||||||||||
| Gross margin | $ | 21.9 | $ | 12.8 | 71.3 | % | $ | 119.2 | $ | 54.3 | 119.5 | % | ||||||||||
| Gross margin (%) | 35 | % | 18 | % | 17 | pp | 43 | % | 17 | % | 26 | pp | ||||||||||
| n/m = not meaningful | ||||||||||||||||||||||
| pp = percentage points | ||||||||||||||||||||||
The following table provides a breakdown of Nights Delivered, Occupancy and ADR for the years ended December 31, 2024, 2023 and 2022:
| Three Months Ended December 31, | Year ended December 31, | |||||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | |||||||||||||||||||
| Residences | ||||||||||||||||||||||||
| Paid Nights Delivered | 12,200 | 14,100 | 14,500 | 58,400 | 61,400 | 67,800 | ||||||||||||||||||
| Total Nights Delivered | 17,300 | 24,400 | 27,700 | 87,800 | 111,600 | 114,900 | ||||||||||||||||||
| Occupancy | 65 | % | 65 | % | 73 | % | 71 | % | 72 | % | 81 | % | ||||||||||||
| ADR | $ | 1,828 | $ | 1,687 | $ | 1,923 | $ | 1,721 | $ | 1,825 | $ | 1,825 | ||||||||||||
| Hotels | ||||||||||||||||||||||||
| Paid Nights Delivered(1) | 7,400 | 9,600 | 10,400 | 32,700 | 41,900 | 38,900 | ||||||||||||||||||
| Total Nights Delivered(1) | 10,900 | 16,200 | 19,500 | 53,000 | 73,400 | 72,700 | ||||||||||||||||||
| Occupancy(2) | 79 | % | 70 | % | 70 | % | 76 | % | 72 | % | 79 | % | ||||||||||||
| ADR(1) | $ | 1,135 | $ | 925 | $ | 970 | $ | 1,083 | $ | 935 | $ | 970 | ||||||||||||
| Total | ||||||||||||||||||||||||
| Paid Nights Delivered(1) | 19,700 | 23,700 | 24,900 | 91,100 | 103,300 | 106,600 | ||||||||||||||||||
| Total Nights Delivered(1) | 28,200 | 40,600 | 47,200 | 140,800 | 185,000 | 187,600 | ||||||||||||||||||
| Occupancy(2) | 67 | % | 67 | % | 72 | % | 72 | % | 72 | % | 80 | % | ||||||||||||
| ADR(1) | $ | 1,475 | $ | 1,464 | $ | 1,513 | $ | 1,494 | $ | 1,464 | $ | 1,513 | ||||||||||||
| (1) Includes net-rate hotel nights. | ||||||||||||||||||||||||
| (2) Excludes net-rate hotel nights as we purchase individual nights but do not have a total number of nights obligation. | ||||||||||||||||||||||||
Reconciliation of Non-GA