Wheels Up Reports First Quarter Results
Wheels Up Experience Inc. (NYSE: UP) reported financial results for the first quarter of 2024, showing a decrease in total revenue by $155 million to $197 million. Despite the net loss improving slightly to $97 million, adjusted EBITDA remained flat at a loss of $49 million. The company highlighted operational improvements and plans for long-term profitable growth, with increasing market interest and commercial momentum through a partnership with Delta Air Lines.
Improved operational performance and customer experience delivery.
Plans for long-term profitable growth and market interest with strategic partnerships.
Sequential improvement in demand and financial profile expectations for the year.
Total revenue decreased by $155 million to $197 million.
Adjusted EBITDA remained flat at a loss of $49 million.
Declines in active members, active users, flight legs, and total private jet flight transaction value.
Net loss of $97.4 million and reduced revenue due to exiting aircraft management and sales businesses.
Insights
The disclosed financial results from Wheels Up Experience Inc. reflect a state of contraction, with a year-over-year revenue decline of 44%, dropping to
The report points to a reduction in both Active Members and Users by 25% and 23% respectively, showing a tightening of the company's focus on 'profitable flying'. Despite this, the company's net loss saw only a marginal improvement from
Investors might view the short-term implications of this report as concerning, given the significant revenue drop and persisting losses. Long-term prospects could be more positive if the company's strategy to streamline operations and focus on profitable segments pays off. However, these results highlight the need for a clear path to profitability and sustainable growth.
The aviation industry is experiencing a shift as players like Wheels Up recalibrate their service offerings, reacting to both market demands and operational efficiencies. The report indicates a strategic partnership with Delta Air Lines, which could position Wheels Up favorably within the market by leveraging Delta's vast customer base and brand strength.
Despite the current performance downturn, Wheels Up reports operational improvements, such as a 98% Completion Rate and an 87% On-Time Performance, which are essential metrics in the aviation industry. These metrics, if maintained, could signal to potential customers Wheels Up's reliability and service quality, possibly translating into increased demand and customer loyalty in the longer term.
It’s important for investors to note the broader industry context, such as economic conditions and consumer spending patterns, which can significantly affect the demand for private air travel. The reduction in Active Members and Users may reflect broader industry trends or specific challenges within Wheels Up's market segmentation and customer acquisition strategies.
Examination of Wheels Up's financials reveals a company at a crossroads in the private aviation sector, a heavily competitive and capital-intensive industry. Pivoting away from segments like aircraft management and sales, the company is honing in on its core charter operations. This strategic sharpening could benefit the company by improving asset utilization and management focus.
However, investors should scrutinize the 33% increase in Private Jet Charter Flight Transaction Value (FTV), against the backdrop of a 24% decrease in Live Flight Legs. This suggests a shift towards higher-value charter services, which may imply a repositioning within the market to target more lucrative contracts.
The announcement of a new flagship maintenance facility should be understood as a long-term investment in operational efficiency and reliability, likely aimed at reducing costs and improving service quality.
Delivering continued operational performance improvements
Positioned for long-term profitable growth
First Quarter 2024 Highlights
- Total Revenue decreased
$155 million $197 million - Adjusted Contribution decreased
$4 million $2 million - Net loss improved slightly year-over-year to
$97 million - Adjusted EBITDA was relatively flat year-over-year at a loss of
$49 million
"Wheels Up has made great strides to improve our operations and consistently deliver exceptional service and an experience worth repeating for our customers," said George Mattson, Chief Executive Officer. "Our strong operational performance provides the foundation for driving to profitable growth. I am pleased with the market interest in the accessibility and flexibility of our offerings, and we are seeing accelerating commercial momentum through our strategic partnership with Delta Air Lines."
"Despite slower demand in January and February, we saw sequential improvement in March that is following through into the second quarter," said Todd Smith, Chief Financial Officer. "The plan that we put in place over the last year in terms of rebalancing our revenue mix, reducing our cost structure and improving our operational execution has laid the foundation for the improvement in our financial profile that we expect over the course of this year."
Recent Initiatives
- Achieved Completion Rate of
98% and On-Time Performance (D-60) of87% in the first quarter, both exceeding our goals and inclusive of weather, air traffic control delays, maintenance and customer delays. Wheels Up continues to lead the industry in the publication of its service metrics. - Announced plans to open new flagship maintenance facility at
Palm Beach International Airport (PBI), consolidating legacy maintenance facilities while aligning with our primary service area. - Appointed David Harvey as Chief Commercial Officer.
Financial and Operating Highlights(1) | |||
As of March 31, | |||
2024 | 2023 | % Change | |
Active Members | 9,155 | 12,285 | (25) % |
Three Months Ended March 31, | |||
(In thousands, except Active Users, Live Flight Legs, Total Private Jet Flight Transaction Value per Live Flight Leg and percentages) | 2024 | 2023 | % Change |
Active Users | 10,218 | 13,336 | (23) % |
Live Flight Legs | 11,754 | 15,389 | (24) % |
Total Private Jet Flight Transaction Value | $ 191,763 | $ 258,109 | (26) % |
Total Private Jet Flight Transaction Value per Live Flight Leg | $ 16,315 | $ 16,772 | (3) % |
Private Jet Charter FTV | $ 88,688 | $ 66,528 | 33 % |
Other Charter FTV | 32,911 | 31,083 | 6 % |
Total Charter FTV | $ 121,599 | $ 97,611 | 25 % |
On-Time Performance (D-60) | 87 % | 86 % | 1 % |
Completion Rate | 98 % | 98 % | — % |
Revenue | $ 197,101 | $ 351,812 | (44) % |
Net loss | $ (97,393) | $ (100,866) | 3 % |
Adjusted EBITDA | $ (49,229) | $ (48,915) | (1) % |
____________________ | |
(1) | For information regarding Wheels Up's use and definitions of the key operating metrics and non-GAAP financial measures listed in the table above (except Revenue and Net loss), see "Definitions of Key Operating Metrics," "Definitions of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures" sections herein. |
For the first quarter:
- Active Members decreased
25% year-over-year to 9,155, primarily as a result of the regionalization of our member programs and focus on profitable flying. - Active Users decreased
23% year-over-year to 10,218, due to the decline in Active Members. - Live Flight Legs and Total Private Jet Flight Transaction Value decreased
24% and26% , respectively, year-over-year, reflecting our efforts to focus on profitable flying and a slowdown in the industry. - Total Private Jet Flight Transaction Value per Live Flight Leg decreased
3% year-over-year. - Revenue decreased
44% year-over-year, primarily driven by exiting the aircraft management and aircraft sale businesses, as well as reduced Membership and Flight revenue. - Net loss improved by
$3.5 million $97.4 million - Adjusted EBITDA was relatively flat year-over-year at a loss of
$49.2 million
About Wheels Up
Wheels Up is a leading provider of on-demand private aviation in the U.S. and one of the largest companies in the industry. Wheels Up offers a complete global aviation solution with a large and diverse fleet and a global network of safety vetted charter operators, all backed by an uncompromising commitment to safety and service. Customers can access charter and membership programs, as well as unique commercial travel benefits through a one-of-a-kind, strategic partnership with Delta Air Lines. Wheels Up also offers freight, safety and security solutions and managed services to individuals, industry, government and civil organizations.
Wheels Up is guided by the mission to deliver a premium solution for every customer journey. With the Wheels Up mobile app and website, members and customers have the digital convenience to search, book and fly.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of the control of Wheels Up Experience Inc. ("Wheels Up", or "we", "us", or "our"), that could cause actual results to differ materially from the results discussed in the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding: (i) the impact of Wheels Up's cost reduction efforts and measures intended to increase Wheels Up's operational efficiency on its business and results of operations, including the timing and magnitude of such expected actions and any associated expenses in relation to liquidity levels and working capital needs; (ii) Wheels Up's liquidity, future cash flows and certain restrictions related to its debt obligations; (iii) the size, demands, competition in and growth potential of the markets for Wheels Up's products and services and Wheels Up's ability to serve and compete in those markets; (iv) the degree of market acceptance and adoption of Wheels Up's products and services, including our member programs, charter offerings and other products introduced by Wheels Up; (v) Wheels Up's ability to perform under its contractual and indebtedness obligations; (vi) the expected impact or benefits of any potential strategic actions involving Wheels Up or its subsidiaries or affiliates, including asset sales, acquisitions, new financings or refinancings of existing indebtedness; (vii) Wheels Up's ability to achieve positive
Adjusted EBITDA (as defined herein) pursuant to the schedule that it has announced; and (viii) general economic and geopolitical conditions, including due to fluctuations in interest rates, inflation, foreign currencies, consumer and business spending decisions, and general levels of economic activity. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "strive," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that statement is not forward-looking. We have identified certain known material risk factors applicable to Wheels Up in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, such as Adjusted EBITDA, Adjusted Contribution, Adjusted Contribution Margin, Total Private Jet Flight Transaction Value and Total Flight Transaction Value. These non-GAAP financial measures are an addition, and not a substitute for or superior to, measures of financial performance prepared in accordance with generally accepted accounting principles in
equivalents, including that they exclude significant expenses that are required by GAAP to be recorded in Wheels Up's financial measures or represent a transaction value that Wheels Up does not book as revenue. In addition, other companies may calculate non-GAAP financial measures differently, or may use other measures to calculate their financial performance, and therefore, Wheels Up's non-GAAP financial measures may not be directly comparable to similarly titled measures of other companies. Additionally, to the extent that forward-looking non-GAAP financial measures are provided, they are presented on a non-GAAP basis without reconciliations of such forward-looking non-GAAP financial measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.
For more information on these non-GAAP financial measures, see the sections titled "Definitions of Key Operating Metrics," "Definitions of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures" included in this press release.
WHEELS UP EXPERIENCE INC. | ||
(Unaudited, in thousands, except share data) | ||
March 31, 2024 | December 31, 2023 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 180,857 | $ 263,909 |
Accounts receivable, net | 42,317 | 38,237 |
Other receivables | 9,309 | 11,528 |
Parts and supplies inventories, net | 20,561 | 20,400 |
Aircraft inventory | — | 1,862 |
Aircraft held for sale | 20,239 | 30,496 |
Prepaid expenses | 43,360 | 55,715 |
Other current assets | 16,257 | 11,887 |
Total current assets | 332,900 | 434,034 |
Property and equipment, net | 321,904 | 337,714 |
Operating lease right-of-use assets | 63,043 | 68,910 |
Goodwill | 217,516 | 218,208 |
Intangible assets, net | 112,447 | 117,766 |
Restricted cash | 32,433 | 28,916 |
Other non-current assets | 101,049 | 110,512 |
Total assets | $ 1,181,292 | $ 1,316,060 |
LIABILITIES AND EQUITY | ||
Current liabilities: | ||
Current maturities of long-term debt | $ 22,265 | $ 23,998 |
Accounts payable | 45,694 | 32,973 |
Accrued expenses | 90,122 | 102,475 |
Deferred revenue, current | 698,013 | 723,246 |
Operating lease liabilities, current | 20,718 | 22,869 |
Other current liabilities | 1,920 | 1,941 |
Total current liabilities | 878,732 | 907,502 |
Long-term debt, net | 222,780 | 235,074 |
Operating lease liabilities, non-current | 51,093 | 54,956 |
Intangible liabilities, non-current | 10,295 | 10,677 |
Other non-current liabilities | 6,581 | 7,978 |
Total liabilities | 1,169,481 | 1,216,187 |
Mezzanine equity: | ||
Contingent performance awards | 10,875 | 2,476 |
Total mezzanine equity | 10,875 | 2,476 |
Equity: | ||
Common Stock, | 70 | 70 |
Additional paid-in capital | 1,881,821 | 1,879,009 |
Accumulated deficit | (1,860,653) | (1,763,260) |
Accumulated other comprehensive loss | (12,246) | (10,704) |
Treasury stock, at cost, 368,471 and 275,707 shares, respectively | (8,056) | (7,718) |
Total Wheels Up Experience Inc. stockholders' equity | 936 | 97,397 |
Non-controlling interests | — | — |
Total equity | 936 | 97,397 |
Total liabilities and equity | $ 1,181,292 | $ 1,316,060 |
WHEELS UP EXPERIENCE INC. CONSOLIDATED | ||
(Unaudited, in thousands except share and per share data) | ||
Three Months Ended March 31, | ||
2024 | 2023 | |
Revenue | $ 197,101 | $ 351,812 |
Costs and expenses: | ||
Cost of revenue | 198,260 | 353,791 |
Technology and development | 11,081 | 15,873 |
Sales and marketing | 21,437 | 25,803 |
General and administrative | 36,237 | 39,416 |
Depreciation and amortization | 15,395 | 14,445 |
Gain on sale of aircraft held for sale | (2,724) | (866) |
Total costs and expenses | 279,686 | 448,462 |
Loss from operations | (82,585) | (96,650) |
Other income (expense): | ||
Gain on disposal of assets, net | 1,440 | — |
Loss on extinguishment of debt | (1,706) | — |
Change in fair value of warrant liability | (28) | 125 |
Interest income | 56 | 3,821 |
Interest expense | (14,555) | (8,119) |
Other income (expense), net | (129) | 145 |
Total other income (expense) | (14,922) | (4,028) |
Loss before income taxes | (97,507) | (100,678) |
Income tax benefit (expense) | 114 | (188) |
Net loss | (97,393) | (100,866) |
Less: Net loss attributable to non-controlling interests | — | — |
Net loss attributable to Wheels Up Experience Inc. | $ (97,393) | $ (100,866) |
Net loss per share of Common Stock | ||
Basic and diluted | $ (0.14) | $ (3.98) |
Weighted-average shares of Common Stock outstanding: | ||
Basic and diluted | 697,983,030 | 25,334,527 |
WHEELS UP EXPERIENCE INC. | ||
(Unaudited, in thousands) | ||
Three Months Ended March 31, | ||
2024 | 2023 | |
Cash flows from operating activities | ||
Net loss | $ (97,393) | $ (100,866) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 15,395 | 14,445 |
Equity-based compensation | 11,211 | 11,538 |
Payment in kind interest | 10,123 | — |
Amortization of deferred financing costs and debt discount | (1,880) | 915 |
Change in fair value of warrant liability | 28 | (125) |
Gain on sale of aircraft held for sale | (2,724) | (866) |
Loss on extinguishment of debt | 1,706 | — |
Other | 391 | (146) |
Changes in assets and liabilities: | ||
Accounts receivable | (5,952) | 4,118 |
Parts and supplies inventories | (163) | (10,323) |
Aircraft inventory | 1,673 | 4,878 |
Prepaid expenses | 12,215 | (8,540) |
Other current assets | (4,371) | (1,027) |
Other non-current assets | 9,456 | (8,363) |
Accounts payable | 13,093 | (812) |
Accrued expenses | (12,211) | (10,276) |
Deferred revenue | (25,145) | (99,760) |
Other assets and liabilities | 754 | 2,728 |
Net cash used in operating activities | (73,794) | (202,482) |
Cash flows from investing activities | ||
Purchases of property and equipment | (4,022) | (8,750) |
Purchases of aircraft held for sale | (2,331) | (98) |
Proceeds from sale of aircraft held for sale, net | 25,988 | 5,697 |
Proceeds from sale of divested business, net | 3,403 | — |
Capitalized software development costs | (3,540) | (7,984) |
Other | 105 | 100 |
Net cash provided by (used in) by investing activities | 19,603 | (11,035) |
Cash flows from financing activities | ||
Purchase shares for treasury | (338) | — |
Repayments of long-term debt | (23,976) | (6,752) |
Net cash used in financing activities | (24,314) | (6,752) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,030) | (86) |
Net decrease in cash, cash equivalents and restricted cash | (79,535) | (220,355) |
Cash, cash equivalents and restricted cash, beginning of period | 292,825 | 620,153 |
Cash, cash equivalents and restricted cash, end of period | $ 213,290 | $ 399,798 |
Definitions of Non-GAAP Financial Measures
Adjusted EBITDA. We calculate Adjusted EBITDA as net income (loss) adjusted for (i) interest income (expense), (ii) income tax expense, (iii) depreciation and amortization, (iv) equity-based compensation expense, (v) acquisition and integration related expenses and (vi) other items not indicative of our ongoing operating performance, including but not limited to, restructuring charges.
We include Adjusted EBITDA as a supplemental measure for assessing operating performance. Adjusted EBITDA is used in conjunction with bonus program target achievement determinations, strategic internal planning, annual budgeting, allocating resources and making operating decisions. In addition, Adjusted EBITDA provides useful information for historical period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and other items not indicative of our ongoing operating performance.
Adjusted Contribution and Adjusted Contribution Margin. We calculate Adjusted Contribution as gross profit (loss) excluding depreciation and amortization and adjusted further for equity-based compensation included in cost of revenue and other items included in cost of revenue that are not indicative of our ongoing operating performance. Adjusted Contribution Margin is calculated by dividing Adjusted Contribution by total revenue.
We include Adjusted Contribution and Adjusted Contribution Margin as supplemental measures for assessing operating performance. Adjusted Contribution and Adjusted Contribution Margin are used to understand our ability to achieve profitability over time through scale and leveraging costs. In addition, Adjusted Contribution and Adjusted Contribution Margin provides useful information for historical period-to-period comparisons of our business and to identify trends.
Total Private Jet Flight Transaction Value. We calculate Total Private Jet Flight Transaction Value as the sum of total gross spend by members and customers on all private jet flight services, which excludes all group charter flights with 15 or more passengers and cargo flight services. Total Private Jet Flight Transaction Value reflects the Flight revenue recognized from Programmatic Flights (as defined below) and private, on-demand charter flights by members and customers. "Programmatic Flights" are all flights that were flown subject to a Wheels Up Member Flight Service Agreement, Custom Corporate Agreement or other similar agreement (excluding jet cards) that provides for guaranteed aircraft availability, shorter call-out periods, capped rate protection or fixed rates, and other benefits.
We include Total Private Jet Flight Transaction Value and Total Flight Transaction Value as supplemental measures for assessing the size of the markets which we serve.
Definitions of Key Operating Metrics
Active Members. We define Active Members as the number of Connect, Core, and UP for Business membership accounts that generated membership revenue in the applicable period and are active as of the end of the reporting period. We use Active Members to assess the adoption of our premium offerings which is a key factor in our penetration of the market in which we operate and a key driver of membership and flight revenue.
Active Users. We define Active Users as Active Members as of the reporting date plus unique non-member consumers who completed a revenue generating flight at least once in the applicable period and excluding wholesale flight activity. While a unique consumer can complete multiple revenue generating flights on our platform in a given period, that unique user is counted as only one Active User. We use Active Users to assess the adoption of our platform and frequency of transactions, which are key factors in our penetration of the market in which we operate and our growth in revenue.
Live Flight Legs. We define Live Flight Legs as the number of completed one-way revenue generating private jet flight legs in the applicable period. The metric excludes empty repositioning legs and owner legs related to aircraft under management. We believe Live Flight Legs is a useful metric to measure the scale and usage of our platform, and our growth in flight revenue.
Total Private Jet Flight Transaction Value per Live Flight Leg. We use Total Private Jet Flight Transaction Value per Live Flight Leg to measure the average price for each Live Flight Leg. See "Definitions of Non-GAAP Financial Measures" above and "Reconciliations of Non-GAAP Financial Statements" below for more information regarding our use and definition of Total Private Jet Flight Transaction Value.
Private Jet Charter FTV. We define Private Jet Charter FTV as the sum of total gross spend by members and customers on all private, on-demand charter flights that are at market-based rates and are not Programmatic Flights. Private Jet Charter FTV excludes customer gross spend attributable to all group charter flights with 15 or more passengers and cargo flight services. We use Private Jet Charter FTV to measure the size of our private jet charter business relative to the overall industry. See "Definitions of Non-GAAP Financial Measures" above and "Reconciliations of Non-GAAP Financial Statements" below for more information about the use of Private Jet Charter FTV in the calculation of Total Private Jet Flight Transaction Value and Total Flight Transaction Value.
Other Charter FTV. We define Other Charter FTV as the sum of total gross spend by customers on all group charter flights with 15 or more passengers and cargo flight services. We use Other Charter FTV to measure the size of our group charter and cargo charter businesses relative to the overall industry. See "Definitions of Non-GAAP Financial Measures" above and "Reconciliations of Non-GAAP Financial Statements" below for more information about the use of Other Charter FTV in the calculation of Total Flight Transaction Value.
Total Charter FTV. We define Total Charter FTV as the sum of Private Jet Charter FTV and Other Charter FTV. We use Total Charter FTV to measure the size of our total charter business relative to the overall industry.
On-Time Performance (D-60). We define On-Time Performance (D-60) as the percentage of flights that depart within 60 minutes of the scheduled time, inclusive of air traffic control, weather, maintenance and customer delays.
Completion Rate. We define Completion Rate as the percentage of scheduled flights operated and completed.
Reconciliations of Non-GAAP Financial Measures | ||
Adjusted EBITDA | ||
The following table reconciles Adjusted EBITDA to net loss, which is the most directly comparable GAAP measure | ||
Three Months Ended March 31, | ||
2024 | 2023 | |
Net loss | $ (97,393) | $ (100,866) |
Add back (deduct) | ||
Interest expense | 14,555 | 8,119 |
Interest income | (56) | (3,821) |
Income tax expense | (114) | 188 |
Other expense, net | 129 | (145) |
Depreciation and amortization | 15,395 | 14,445 |
Change in fair value of warrant liability | 28 | (125) |
Gain on disposal of assets, net | (1,440) | — |
Equity-based compensation expense | 11,211 | 11,538 |
Acquisition and integration expense(1) | — | 2,034 |
Restructuring charges(2) | 2,144 | 10,491 |
Atlanta Member Operations Center set-up expense(3) | 3,023 | 6,960 |
Certificate consolidation expense(4) | 1,138 | 2,647 |
Other(5) | 2,151 | (380) |
Adjusted EBITDA | $ (49,229) | $ (48,915) |
____________________ | |
(1) | Consists of expenses incurred associated with acquisitions, as well as integration-related charges incurred within one year of acquisition date primarily related to system conversions, re-branding costs and fees paid to external advisors. |
(2) | For the three months ended March 31, 2024, primarily includes charges for contract termination charges and employee separation programs as part of our ongoing cost reduction initiatives. For the three months ended March 31, 2023, includes restructuring charges related to the restructuring plan that we announced on March 1, 2023 (the "Restructuring Plan") and other strategic business initiatives. |
(3) | Consists of expenses associated with establishing our Member Operations Center located in the |
(4) | Consists of expenses incurred to execute the consolidation of our |
(5) | Includes (i) collections of certain aged receivables which were added back to Net Loss in the reconciliation presented for the twelve months ended December 31, 2022, (ii) reserves and/or write-off of certain aged receivables associated with the aircraft management business which was divested on September 30, 2023, and (iii) expenses incurred associated with ongoing litigation matters. |
Refer to "Supplemental Expense Information" below, for further information
Adjusted Contribution and Adjusted Contribution Margin | ||
The following table reconciles Adjusted Contribution to gross profit (loss), which is the most directly comparable | ||
Three Months Ended March 31, | ||
2024 | 2023 | |
Revenue | $ 197,101 | $ 351,812 |
Less: Cost of revenue | (198,260) | (353,791) |
Less: Depreciation and amortization | (15,395) | (14,445) |
Gross profit (loss) | (16,554) | (16,424) |
Gross margin | (8.4) % | (4.7) % |
Add back: | ||
Depreciation and amortization | 15,395 | 14,445 |
Equity-based compensation expense in cost of revenue | 746 | 1,179 |
Restructuring expense in cost of revenue(1) | — | 755 |
Atlanta Member Operations Center set-up expense in cost of revenue(2) | 1,402 | 3,799 |
Certificate consolidation expense in cost of revenue(3) | 1,026 | 2,601 |
Adjusted Contribution | $ 2,015 | $ 6,355 |
Adjusted Contribution Margin | 1.0 % | 1.8 % |
____________________ | |
(1) | Includes restructuring charges related to the Restructuring Plan and other employee separation programs as part of our cost reduction initiatives. |
(2) | Consists of expenses associated with establishing the Atlanta Member Operations Center and its operations primarily including redundant operating expenses during the transition period, relocation expenses for employees and costs associated with onboarding new employees. The Atlanta Member Operations Center began operating on May 15, 2023. |
(3) | Consists of expenses incurred to execute consolidation of our FAA operating certificates primarily including pilot training, retention programs and consultancy fees associated with planning and implementing the consolidation process. |
Total Private Jet Flight Transaction Value and Total Flight Transaction Value | ||
The following table reconciles each of Total Private Jet Flight Transaction Value and Total Flight Transaction Value | ||
Three Months Ended March 31, | ||
2024 | 2023 | |
Flight revenue | $ 150,929 | $ 231,762 |
Add back (deduct): | ||
Private Jet Charter Revenue in Flight revenue(1) | (47,854) | (40,181) |
Private Jet Charter FTV(2) | 88,688 | 66,528 |
Total Private Jet Flight Transaction Value | 191,763 | 258,109 |
Other Charter FTV(2) | 32,911 | 31,083 |
Total Flight Transaction Value | $ 224,674 | $ 289,192 |
____________________ | |
(1) | Represents the portion of Flight revenue not attributable to Programmatic Flights. |
(2) | See "Definitions of Key Operating Metrics" above for more information about Private Jet Charter FTV and Other Charter FTV. |
Supplemental Revenue Information | ||||
Three Months Ended March 31, | Change in | |||
(In thousands) | 2024 | 2023 | $ | % |
Membership | $ 16,854 | $ 21,680 | $ (4,826) | (22.3) % |
Flight | 150,929 | 231,762 | (80,833) | (34.9) % |
Aircraft management | 3,193 | 63,694 | (60,501) | (95.0) % |
Other | 26,125 | 34,676 | (8,551) | (24.7) % |
Total | $ 197,101 | $ 351,812 | $ (154,711) | (44.0) % |
Supplemental Expense Information | |||||||||
Three Months Ended March 31, 2024 | |||||||||
Cost of | Technology | Sales and | General and | Total | |||||
Equity-based compensation expense | $ 746 | $ 283 | $ 135 | $ 10,047 | $ 11,211 | ||||
Restructuring charges | — | — | 1,597 | 547 | 2,144 | ||||
Atlanta Member Operations Center set-up | 1,402 | — | — | 1,621 | 3,023 | ||||
Certificate consolidation expense | 1,026 | — | — | 112 | 1,138 | ||||
Other | — | — | — | 2,151 | 2,151 | ||||
Three Months Ended March 31, 2023 | |||||||||
Cost of | Technology | Sales and | General and | Total | |||||
Equity-based compensation expense | $ 1,179 | $ 484 | $ 700 | $ 9,175 | $ 11,538 | ||||
Acquisition and integration expense | — | 53 | 134 | 1,847 | 2,034 | ||||
Restructuring charges | 755 | 2,299 | 2,058 | 5,379 | 10,491 | ||||
Atlanta Member Operations Center set-up | 3,799 | — | — | 3,161 | 6,960 | ||||
Certificate consolidation expense | 2,601 | — | — | 46 | 2,647 | ||||
Other | — | — | — | (380) | (380) | ||||
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SOURCE Wheels Up
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