Wheels Up Reports Second Quarter Results
Wheels Up Experience Inc. (NYSE: UP) reported Q2 2024 financial results, showing improvements in profitability despite revenue decline. Revenue decreased to $196 million, primarily due to divestiture of non-core assets and focus on profitable flying. Adjusted Contribution Margin increased to 7.8%, while net loss improved to $97 million. The company made strides in operational efficiency, product portfolio enhancement, and deepening its partnership with Delta Air Lines.
Key metrics include:
- Active Members: 8,268 (down 29% YoY)
- Active Users: 9,999 (down 20% YoY)
- Live Flight Legs: 12,855 (down 29% YoY)
- Total Private Jet Flight Transaction Value: $216.8 million (down 19% YoY)
- Adjusted EBITDA loss: $37.4 million (improved by $2.9 million YoY)
Wheels Up Experience Inc. (NYSE: UP) ha riportato i risultati finanziari del secondo trimestre del 2024, evidenziando miglioramenti nella redditività nonostante un calo dei ricavi. I ricavi sono diminuiti a 196 milioni di dollari, principalmente a causa della dismissione di attività non core e della concentrazione su operazioni di volo redditizie. Il Margine di Contribuzione Adjusted è aumentato al 7,8%, mentre la perdita netta è migliorata a 97 milioni di dollari. L'azienda ha fatto progressi nell'efficienza operativa, nel potenziamento del portafoglio prodotti e nel rafforzamento della partnership con Delta Air Lines.
I principali indicatori includono:
- Membri Attivi: 8.268 (in calo del 29% rispetto all'anno precedente)
- Utenti Attivi: 9.999 (in calo del 20% rispetto all'anno precedente)
- Voli Effettuati: 12.855 (in calo del 29% rispetto all'anno precedente)
- Valore Totale delle Transazioni di Volo in Jet Privato: 216,8 milioni di dollari (in calo del 19% rispetto all'anno precedente)
- Perdita Adjusted EBITDA: 37,4 milioni di dollari (migliorata di 2,9 milioni di dollari rispetto all'anno precedente)
Wheels Up Experience Inc. (NYSE: UP) reportó resultados financieros del segundo trimestre de 2024, mostrando mejoras en la rentabilidad a pesar de la disminución de los ingresos. Los ingresos disminuyeron a 196 millones de dólares, principalmente debido a la desinversión de activos no esenciales y el enfoque en vuelos rentables. El Margen de Contribución Ajustado aumentó al 7,8%, mientras que la pérdida neta mejoró a 97 millones de dólares. La compañía avanzó en eficiencia operativa, mejora de su portafolio de productos y profundización de su asociación con Delta Air Lines.
Las métricas clave incluyen:
- Miembros Activos: 8.268 (a la baja un 29% interanual)
- Usuarios Activos: 9.999 (a la baja un 20% interanual)
- Tramos de Vuelo en Vivo: 12.855 (a la baja un 29% interanual)
- Valor Total de Transacciones de Vuelo en Jet Privado: 216,8 millones de dólares (a la baja un 19% interanual)
- Pérdida EBITDA Ajustada: 37,4 millones de dólares (mejorada en 2,9 millones de dólares interanual)
Wheels Up Experience Inc. (NYSE: UP)는 2024년 2분기 재무 결과를 발표하며 수익 감소에도 불구하고 수익성이 개선되었음을 보여주었습니다. 수익은 1억 9600만 달러로 감소했으며, 이는 주로 비핵심 자산 매각과 수익성 높은 비행에 집중한 결과입니다. 조정된 기여 마진은 7.8%로 증가했으며, 순손실은 9,700만 달러로 개선되었습니다. 회사는 운영 효율성, 제품 포트폴리오 개선 및 Delta Air Lines와의 파트너십을 심화하는 데 진전을 보였습니다.
주요 지표는 다음과 같습니다:
- 활성 회원 수: 8,268명 (전년 대비 29% 감소)
- 활성 사용자 수: 9,999명 (전년 대비 20% 감소)
- 실시간 비행 구간: 12,855개 (전년 대비 29% 감소)
- 총 프라이빗 제트 비행 거래 가치: 2억 1,680만 달러 (전년 대비 19% 감소)
- 조정된 EBITDA 손실: 3,740만 달러 (전년 대비 290만 달러 개선)
Wheels Up Experience Inc. (NYSE: UP) a annoncé les résultats financiers du deuxième trimestre 2024, montrant des améliorations en matière de rentabilité malgré une baisse des revenus. Les revenus ont diminué à 196 millions de dollars, principalement en raison de la cession d'actifs non essentiels et d'une concentration sur des vols rentables. La marge de contribution ajustée a augmenté à 7,8%, tandis que la perte nette s'est améliorée à 97 millions de dollars. L'entreprise a progressé en matière d'efficacité opérationnelle, d'amélioration de son portefeuille de produits et de renforcement de son partenariat avec Delta Air Lines.
Les principales mesures comprennent :
- Membres actifs : 8 268 (en baisse de 29 % par rapport à l'année précédente)
- Utilisateurs actifs : 9 999 (en baisse de 20 % par rapport à l'année précédente)
- Secteurs de vol en direct : 12 855 (en baisse de 29 % par rapport à l'année précédente)
- Valeur totale des transactions de vol en jet privé : 216,8 millions de dollars (en baisse de 19 % par rapport à l'année précédente)
- Perte EBITDA ajustée : 37,4 millions de dollars (améliorée de 2,9 millions de dollars par rapport à l'année précédente)
Wheels Up Experience Inc. (NYSE: UP) hat die Finanzzahlen für das zweite Quartal 2024 veröffentlicht und zeigt Verbesserungen bei der Rentabilität trotz eines Rückgangs der Einnahmen. Die Einnahmen sanken auf 196 Millionen Dollar, was hauptsächlich auf den Verkauf von nicht zum Kerngeschäft gehörenden Vermögenswerten und die Konzentration auf rentable Flüge zurückzuführen ist. Die bereinigte Beitragsspanne stieg auf 7,8%, während sich der Nettoverlust auf 97 Millionen Dollar verbesserte. Das Unternehmen erzielte Fortschritte bei der operationellen Effizienz, der Verbesserung des Produktportfolios und der Vertiefung der Partnerschaft mit Delta Air Lines.
Wichtige Kennzahlen sind:
- Aktive Mitglieder: 8.268 (29% Rückgang im Jahresvergleich)
- Aktive Benutzer: 9.999 (20% Rückgang im Jahresvergleich)
- Live-Flugbeine: 12.855 (29% Rückgang im Jahresvergleich)
- Wert aller privaten Jet-Transaktionen: 216,8 Millionen Dollar (19% Rückgang im Jahresvergleich)
- Bereinierter EBITDA-Verlust: 37,4 Millionen Dollar (um 2,9 Millionen Dollar im Jahresvergleich verbessert)
- Adjusted Contribution Margin increased year-over-year to 7.8%
- Net loss improved by $63.6 million year-over-year to $97.0 million
- Adjusted EBITDA loss improved by $2.9 million year-over-year to $37.4 million
- Total Private Jet Flight Transaction Value per Live Flight Leg increased 15% year-over-year
- Private Jet Charter FTV increased 35% year-over-year to $113.2 million
- Completion Rate improved to 99% from 98% year-over-year
- Revenue decreased 41% year-over-year to $196 million
- Active Members decreased 29% year-over-year to 8,268
- Active Users decreased 20% year-over-year to 9,999
- Live Flight Legs decreased 29% year-over-year to 12,855
- Total Private Jet Flight Transaction Value decreased 19% year-over-year to $216.8 million
- On-Time Performance (D-60) decreased to 87% from 89% year-over-year
Wheels Up's Q2 results show a mixed picture. While revenue decreased
The strategic shift towards more profitable flying and the divestiture of non-core assets have impacted top-line growth but are laying the groundwork for improved financial health. The
Wheels Up's strategic repositioning is evident in their product portfolio changes. The introduction of Wheels Up Charter and enhanced Wheels Up Membership offerings demonstrate a shift towards flexibility and value-driven services. This aligns with current market trends favoring on-demand services over traditional ownership models.
The deeper integration with Delta Air Lines, allowing customers to earn Delta Medallion® status, is a significant move. This partnership could provide a competitive edge in the luxury travel market, potentially attracting a broader customer base. The focus on transparency in pricing and rewards through improved digital platforms is also important in today's consumer-centric market. These initiatives could help offset the decline in active members and users if executed effectively.
The consolidation of Wheels Up's fleet operations under a single FAA operating certificate is a significant operational achievement. This move should lead to substantial efficiencies in maintenance, training and scheduling, potentially improving both service quality and cost structure. The
However, the
Strong operational performance and increased efficiencies contribute to sequential margin and profitability improvement
Second Quarter 2024 Highlights
- Revenue decreased to
$196 million - Adjusted Contribution Margin increased year over year to
7.8% - Net loss improved year-over-year to
$97 million - Adjusted EBITDA improved year-over-year to a loss of
$37 million
"Over the past year, we've taken vital steps towards realizing our vision of building Wheels Up into a true innovator in private aviation. Our work this quarter further solidified our position at the forefront of delivering integrated global aviation solutions that seamlessly combine the previously separate ecosystems of private and commercial travel," said George Mattson, Chief Executive Officer. "We made great strides towards the structural changes that are necessary to build a sustainable business model. We continued to invest in operations to ensure we have a high-performing, reliable product. We enhanced our product portfolio to offer unparalleled value across our programmatic member and global charter offerings alike, and we continued to build on the one-of-a-kind strategic partnership with Delta Air Lines."
"The initiatives we have taken over the past year to strengthen our business are now contributing to sequential improvement in our financial results," said Todd Smith, Chief Financial Officer. "During the quarter, we have reduced underutilized maintenance facilities and removed significant structural costs from our operations. Today, we are operating much more efficiently and are in a strong position to scale our business as we take advantage of our enhanced commercial product offerings."
Recent Initiatives
- Strengthened product portfolio provides global access through membership and charter options that emphasize accessibility, flexibility and value. With Wheels Up Charter, travelers can fly anywhere in the world with no upfront cost. Alternatively, Wheels Up Membership offers guaranteed availability and recovery in the continental
U.S. ,U.K. andEurope with dynamic rates and price protection. - Introduced further pricing, savings and rewards transparency to drive value and increase flexibility for travelers via upgrades to pricing platform and website and mobile app experiences. Booking upgrades make it easier to explore dynamic rates across dates, departure and arrival destinations.
- Established deeper commercial integration with Delta Air Lines to provide enhanced value for Wheels Up's customers and members, including the ability to earn Delta Medallion® status.
- Completed the transition of our King Air 350i and Citation Excel/XLS fleets to a single FAA operating certificate, which already includes our Hawker 400XP aircraft. This is resulting in significant operational efficiencies across maintenance, training and scheduling. Transition of our Citation X aircraft to the same operating certificate is in process.
Financial and Operating Highlights(1) | |||||
As of June 30, | |||||
2024 | 2023 | % Change | |||
Active Members | 8,268 | 11,639 | (29) % | ||
Three Months Ended June 30, | |||||
(In thousands, except Active Users, Live Flight Legs, Total Private Jet Flight | 2024 | 2023 | % Change | ||
Active Users | 9,999 | 12,549 | (20) % | ||
Live Flight Legs | 12,855 | 18,137 | (29) % | ||
Total Private Jet Flight Transaction Value | $ 216,843 | $ 266,714 | (19) % | ||
Total Private Jet Flight Transaction Value per Live Flight Leg | $ 16,868 | $ 14,706 | 15 % | ||
Private Jet Charter FTV | $ 113,153 | $ 83,665 | 35 % | ||
Other Charter FTV | 48,503 | 55,204 | (12) % | ||
Total Charter FTV | $ 161,656 | $ 138,869 | 16 % | ||
On-Time Performance (D-60) | 87 % | 89 % | n/m | ||
Completion Rate | 99 % | 98 % | n/m | ||
Revenue | $ 196,285 | $ 335,062 | (41) % | ||
Net loss | $ (96,973) | $ (160,593) | 40 % | ||
Adjusted EBITDA | $ (37,355) | $ (40,303) | 7 % | ||
Six Months Ended June 30, | |||||
(In thousands) | 2024 | 2023 | % Change | ||
Revenue | $ 393,386 | $ 686,874 | (43) % | ||
Net loss | $ (194,366) | $ (261,459) | 26 % | ||
Adjusted EBITDA | $ (86,584) | $ (89,218) | 3 % | ||
__________________ | |
(1) | For information regarding Wheels Up's use and definition of this measure see "Definitions of Key Operating Metrics and Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures" sections herein. |
n/m | Not meaningful |
For the second quarter:
- Active Members decreased
29% year-over-year to 8,268, primarily as a result of the regionalization of our member programs and focus on profitable flying. - Active Users decreased
20% year-over-year to 9,999, primarily related to the decline in Active Members. - Total Private Jet Flight Transaction Value per Live Flight Leg increased
15% year-over-year, primarily due a higher mix of flying with larger cabin aircraft. - Revenue decreased
41% year-over-year, primarily driven by exiting the aircraft management and aircraft sale businesses, as well as reduced Flight revenue, primarily due to our focus on more profitable flying. - Net loss improved by
$63.6 million $97.0 million $70 million - Adjusted EBITDA loss improved by
$2.9 million $37.4 million
About Wheels Up
Wheels Up is a leading provider of on-demand private aviation in the
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) the degree of market acceptance and adoption of Wheels Up's products and services, including the changes to our member programs and charter offerings announced in June 2024 and any additional new or revised products introduced by Wheels Up; (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) Wheels Up's liquidity, future cash flows and certain restrictions related to its debt obligations; (v) Wheels Up's ability to achieve positive Adjusted EBITDA (as defined herein) pursuant to the schedule that it has announced; (vi) Wheels Up's ability to perform under its contractual and indebtedness obligations; (vii) the expected impact or benefits of any potential strategic actions involving Wheels Up or its subsidiaries or affiliates, including asset sales, acquisitions, new debt or equity financings, or refinancings of existing indebtedness; and (viii) the impacts of general economic and geopolitical conditions on Wheels Up's business and the aviation industry, 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. 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
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.
Contacts
Investors:
ir@wheelsup.com
Media:
press@wheelsup.com
WHEELS UP EXPERIENCE INC. | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(Unaudited, in thousands, except share data) | |||
June 30, 2024 | December 31, 2023 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 141,493 | $ 263,909 | |
Accounts receivable, net | 34,005 | 38,237 | |
Parts and supplies inventories, net | 21,242 | 20,400 | |
Aircraft held for sale | 36,900 | 30,496 | |
Prepaid expenses | 33,608 | 55,715 | |
Other current assets | 21,558 | 25,277 | |
Total current assets | 288,806 | 434,034 | |
Property and equipment, net | 287,395 | 337,714 | |
Operating lease right-of-use assets | 60,059 | 68,910 | |
Goodwill | 217,656 | 218,208 | |
Intangible assets, net | 107,269 | 117,766 | |
Other non-current assets | 125,104 | 139,428 | |
Total assets | $ 1,086,289 | $ 1,316,060 | |
LIABILITIES AND EQUITY | |||
Current liabilities: | |||
Current maturities of long-term debt | $ 21,152 | $ 23,998 | |
Accounts payable | 41,934 | 32,973 | |
Accrued expenses | 88,124 | 102,475 | |
Deferred revenue, current | 702,174 | 723,246 | |
Other current liabilities | 20,722 | 24,810 | |
Total current liabilities | 874,106 | 907,502 | |
Long-term debt, net | 218,612 | 235,074 | |
Operating lease liabilities, non-current | 49,887 | 54,956 | |
Other non-current liabilities | 14,743 | 18,655 | |
Total liabilities | 1,157,348 | 1,216,187 | |
Mezzanine equity: | |||
Contingent performance awards | 1,093 | 2,476 | |
Total mezzanine equity | 1,093 | 2,476 | |
Equity: | |||
Common Stock, | 70 | 70 | |
Additional paid-in capital | 1,905,871 | 1,879,009 | |
Accumulated deficit | (1,957,626) | (1,763,260) | |
Accumulated other comprehensive loss | (12,344) | (10,704) | |
Treasury stock, at cost, 393,218 and 275,707 shares, respectively | (8,123) | (7,718) | |
Total Wheels Up Experience Inc. stockholders' equity | (72,152) | 97,397 | |
Non-controlling interests | — | — | |
Total equity | (72,152) | 97,397 | |
Total liabilities and equity | $ 1,086,289 | $ 1,316,060 | |
WHEELS UP EXPERIENCE INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(Unaudited, in thousands except share and per share data) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenue | $ 196,285 | $ 335,062 | $ 393,386 | $ 686,874 | |||
Costs and expenses: | |||||||
Cost of revenue (exclusive of items shown | 191,690 | 327,903 | 389,950 | 681,694 | |||
Technology and development | 10,529 | 14,430 | 21,610 | 30,303 | |||
Sales and marketing | 21,480 | 23,149 | 42,917 | 48,952 | |||
General and administrative | 35,949 | 40,065 | 72,186 | 79,481 | |||
Depreciation and amortization | 15,593 | 15,123 | 30,988 | 29,568 | |||
(Gain) loss on sale of aircraft held for sale | 234 | (2,621) | (2,490) | (3,487) | |||
Impairment of goodwill | — | 70,000 | — | 70,000 | |||
Total costs and expenses | 275,475 | 488,049 | 555,161 | 936,511 | |||
Loss from operations | (79,190) | (152,987) | (161,775) | (249,637) | |||
Other income (expense) | |||||||
Gain (loss) on disposal of assets, net | 136 | (1,538) | 1,576 | (1,538) | |||
Loss on extinguishment of debt | (805) | (870) | (2,511) | (870) | |||
Change in fair value of warrant liability | (70) | 621 | (98) | 746 | |||
Interest income | 285 | 1,865 | 341 | 5,686 | |||
Interest expense | (16,667) | (7,658) | (31,222) | (15,777) | |||
Other income (expense), net | (221) | (42) | (350) | 103 | |||
Total other income (expense) | (17,342) | (7,622) | (32,264) | (11,650) | |||
Loss before income taxes | (96,532) | (160,609) | (194,039) | (261,287) | |||
Income tax benefit (expense) | (441) | 16 | (327) | (172) | |||
Net loss | (96,973) | (160,593) | (194,366) | (261,459) | |||
Less: Net loss attributable to non-controlling | — | — | — | — | |||
Net loss attributable to Wheels Up Experience Inc. | $ (96,973) | $ (160,593) | $ (194,366) | $ (261,459) | |||
Net loss per share of Common Stock | |||||||
Basic and diluted | $ (0.14) | $ (6.28) | $ (0.28) | $ (10.27) | |||
Weighted-average shares of Common Stock | |||||||
Basic and diluted | 697,458,966 | 25,570,200 | 697,403,388 | 25,446,199 | |||
WHEELS UP EXPERIENCE INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(Unaudited, in thousands) | |||
Six Months Ended June 30, | |||
2024 | 2023 | ||
Cash flows from operating activities | |||
Net loss | $ (194,366) | $ (261,459) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 30,988 | 29,568 | |
Equity-based compensation | 25,479 | 18,142 | |
Payment in kind interest | 20,501 | — | |
Amortization (accretion) of deferred financing costs and debt discount | (1,328) | 1,124 | |
Change in fair value of warrant liability | 98 | (746) | |
Gain on sale of aircraft held for sale | (5,208) | (3,487) | |
Loss on extinguishment of debt | 2,511 | 870 | |
Impairment of goodwill | — | 70,000 | |
Other | 4,653 | 1,519 | |
Changes in assets and liabilities: | |||
Accounts receivable | 1,502 | 27,698 | |
Parts and supplies inventories | 2,635 | 5,637 | |
Aircraft inventory | 1,673 | (2,008) | |
Prepaid expenses | 20,204 | (14,499) | |
Other non-current assets | 17,473 | (16,420) | |
Accounts payable | 9,287 | 9,166 | |
Accrued expenses | (14,232) | (32,393) | |
Deferred revenue | (21,378) | (248,358) | |
Other assets and liabilities | (1,275) | 3,976 | |
Net cash used in operating activities | (100,783) | (411,670) | |
Cash flows from investing activities | |||
Purchases of property and equipment | (9,633) | (12,201) | |
Purchases of aircraft held for sale | (2,313) | (961) | |
Proceeds from sale of aircraft held for sale, net | 37,856 | 24,981 | |
Proceeds from sale of divested business, net | 5,903 | — | |
Capitalized software development costs | (7,825) | (12,924) | |
Other | 105 | 194 | |
Net cash provided (used in) by investing activities | 24,093 | (911) | |
Cash flows from financing activities | |||
Purchase shares for treasury | (404) | — | |
Purchase of fractional shares | — | (3) | |
Repayments of long-term debt | (40,992) | (18,680) | |
Net cash used in financing activities | (41,396) | (18,683) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,175) | (540) | |
Net decrease in cash, cash equivalents and restricted cash | (119,261) | (431,804) | |
Cash, cash equivalents and restricted cash, beginning of period | 292,825 | 620,153 | |
Cash, cash equivalents and restricted cash, end of period | $ 173,564 | $ 188,349 | |
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 and for the following: to be used in conjunction with bonus program target achievement determinations, strategic internal planning, annual budgeting, allocating resources and making operating decisions; and to provide 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 and for the following: to be used to understand our ability to achieve profitability over time through scale and leveraging costs; and to provide useful information for historical period-to-period comparisons of our business and to identify trends.
Total Private Jet Flight Transaction Value and Total 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 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 or fixed rate pricing, and other benefits.
We calculate Total Flight Transaction Value as Total Private Jet Flight Transaction Value, plus Other Charter FTV (as defined below).
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 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 customers who completed a revenue generating flight at least once in the applicable period and excluding wholesale flight activity. While a unique customer can complete multiple revenue generating flights on our platform in a given period, that unique customer 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 markets in which we operate and our ability to generate revenue.
On-Time Performance (D-60). We define On-Time Performance (D-60) as the percentage of total flights flown that departed within 60 minutes of the scheduled time, inclusive of air traffic control, weather, maintenance and customer delays. On-Time Performance (D-60) excludes all cancelled flights and wholesale flight activity.
Completion Rate. We define Completion Rate as the percentage of total scheduled flights operated and completed. Completion Rate excludes customer-initiated flight cancellations and wholesale flight activity.
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, excluding 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 ability to generate 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 gross spend by members and customers for each Live Flight Leg. See "Definitions of Non-GAAP Financial Measures" above 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 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 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 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.
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 (in thousands): | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net loss | $ (96,973) | $ (160,593) | $ (194,366) | $ (261,459) | |||
Add back (deduct) | |||||||
Interest expense | 16,667 | 7,658 | 31,222 | 15,777 | |||
Interest income | (285) | (1,865) | (341) | (5,686) | |||
Income tax expense | 441 | (16) | 327 | 172 | |||
Other expense, net | 221 | 42 | 350 | (103) | |||
Depreciation and amortization | 15,593 | 15,123 | 30,988 | 29,568 | |||
Change in fair value of warrant liability | 70 | (621) | 98 | (746) | |||
Gain (loss) on disposal of assets, net | (136) | 1,538 | (1,576) | 1,538 | |||
Equity-based compensation expense | 14,268 | 6,604 | 25,479 | 18,142 | |||
Acquisition and integration expense(1) | — | 74 | — | 2,108 | |||
Restructuring charges(2) | 4,371 | 8,201 | 6,515 | 18,692 | |||
Atlanta Member Operations Center set-up expense(3) | 458 | 9,170 | 3,481 | 16,130 | |||
Certificate consolidation expense(4) | 3,674 | 4,873 | 4,812 | 7,520 | |||
Impairment of goodwill(5) | — | 70,000 | — | 70,000 | |||
Other(6) | 4,276 | (491) | 6,427 | (871) | |||
Adjusted EBITDA | $ (37,355) | $ (40,303) | $ (86,584) | $ (89,218) | |||
__________________ | |
(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 and six months ended June 30, 2024, primarily includes charges for contract termination fees and employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the three and six months ended June 30, 2023, includes restructuring charges related to the restructuring plan that we announced on March 1, 2023 (the "Restructuring Plan") and related strategic business initiatives implemented in the first quarter of 2023, as well as expenses incurred during the second quarter of 2023 to support significant changes to our member programs and certain aspects of our operations, primarily consisting of consultancy fees associated with designing and implementing changes to our member programs, and severance and recruiting expenses associated with executive transitions. |
(3) | Consists of expenses associated with establishing the member operations center in the |
(4) | Consists of expenses incurred to execute the consolidation of our FAA operating certificates primarily including pilot training and retention programs and consultancy fees associated with planning and implementing the consolidation process. |
(5) | Represents a non-cash impairment charge related to goodwill recognized in the second quarter of 2023. |
(6) | 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, (iii) expenses incurred associated with ongoing litigation matters, and (iv) amounts reserved during the second quarter of 2024 related to Parts and supplies inventory deemed in excess after revision of future business needs associated with strategic business initiatives. |
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 GAAP measure (in thousands): | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenue | $ 196,285 | $ 335,062 | $ 393,386 | $ 686,874 | |||
Less: Cost of revenue | (191,690) | (327,903) | (389,950) | (681,694) | |||
Less: Depreciation and amortization | (15,593) | (15,123) | (30,988) | (29,568) | |||
Gross profit (loss) | (10,998) | (7,964) | (27,552) | (24,388) | |||
Gross margin | (5.6) % | (2.4) % | (7.0) % | (3.6) % | |||
Add back: | |||||||
Depreciation and amortization | 15,593 | 15,123 | 30,988 | 29,568 | |||
Equity-based compensation expense in Cost of | 816 | 1,092 | 1,562 | 2,271 | |||
Restructuring charges in Cost of revenue(1) | 3,703 | — | 3,703 | 755 | |||
Atlanta Member Operations Center set-up | 458 | 7,999 | 1,860 | 11,798 | |||
Certificate consolidation expense in Cost of | 2,445 | 1,840 | 3,471 | 4,441 | |||
Other in Cost of revenue(4) | 3,281 | — | 3,281 | — | |||
Adjusted Contribution | $ 15,298 | $ 18,090 | $ 17,313 | $ 24,445 | |||
Adjusted Contribution Margin | 7.8 % | 5.4 % | 4.4 % | 3.6 % | |||
__________________ | |
(1) | For the three and six months ended June 30, 2024, primarily includes charges for employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the three and six months ended June 30, 2023, includes restructuring charges related to the Restructuring Plan and related strategic business initiatives implemented in the first quarter of 2023. |
(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 the consolidation of our FAA operating certificates primarily including pilot training and retention programs and consultancy fees associated with planning and implementing the consolidation process. |
(4) | Consists of amounts reserved during the second quarter of 2024 related to Parts and supplies inventory deemed in excess after revision of future business needs associated with strategic business initiatives. |
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 to Flight revenue, which is the most directly comparable U.S. GAAP measure (in thousands): | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||
2024 | 2023 | 2024 | 2023 | |||
Flight revenue | $ 163,684 | $ 235,284 | $ 314,613 | $ 467,046 | ||
Add back (deduct): | ||||||
Private Jet Charter Revenue in Flight | (59,994) | (52,235) | (107,848) | (92,416) | ||
Private Jet Charter FTV(2) | 113,153 | 83,665 | 201,841 | 150,193 | ||
Total Private Jet Flight Transaction Value | 216,843 | 266,714 | 408,606 | 524,823 | ||
Other Charter FTV(2) | 48,503 | 55,204 | 81,414 | 86,287 | ||
Total Flight Transaction Value | $ 265,346 | $ 321,918 | $ 490,020 | $ 611,110 | ||
__________________ | |
(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 | |||||||
(In thousands) | Three Months Ended June 30, | Change in | |||||
2024 | 2023 | $ | % | ||||
Membership | $ 16,046 | $ 21,478 | $ (5,432) | (25) % | |||
Flight | 163,684 | 235,284 | (71,600) | (30) % | |||
Aircraft management | 2,957 | 48,502 | (45,545) | (94) % | |||
Other | 13,598 | 29,798 | (16,200) | (54) % | |||
Total | $ 196,285 | $ 335,062 | $ (138,777) | (41) % | |||
(In thousands) | Six Months Ended June 30, | Change in | |||||
2024 | 2023 | $ | % | ||||
Membership | $ 32,900 | $ 43,158 | $ (10,258) | (24) % | |||
Flight | 314,613 | 467,046 | (152,433) | (33) % | |||
Aircraft management | 6,150 | 112,196 | (106,046) | (95) % | |||
Other | 39,723 | 64,474 | (24,751) | (38) % | |||
Total | $ 393,386 | $ 686,874 | $ (293,488) | (43) % | |||
Supplemental Expense Information | |||||||||
Three Months Ended June 30, 2024 | |||||||||
Cost of | Technology | Sales and | General and | Total | |||||
Equity-based compensation expense | $ 816 | $ 353 | $ 132 | $ 12,967 | $ 14,268 | ||||
Restructuring charges | 3,703 | — | 51 | 617 | 4,371 | ||||
Atlanta Member Operations Center set-up expense | 458 | — | — | — | 458 | ||||
Certificate consolidation expense | 2,445 | — | — | 1,229 | 3,674 | ||||
Other | 3,281 | — | — | 995 | 4,276 | ||||
Six Months Ended June 30, 2024 | |||||||||
Cost of | Technology | Sales and | General and | Total | |||||
Equity-based compensation expense | $ 1,562 | $ 636 | $ 267 | $ 23,014 | $ 25,479 | ||||
Restructuring charges | 3,703 | — | 1,648 | 1,164 | 6,515 | ||||
Atlanta Member Operations Center set-up expense | 1,860 | — | — | 1,621 | 3,481 | ||||
Certificate consolidation expense | 3,471 | — | — | 1,341 | 4,812 | ||||
Other | 3,281 | — | — | 3,146 | 6,427 | ||||
Three Months Ended June 30, 2023 | |||||||||
Cost of | Technology | Sales and | General and | Total | |||||
Equity-based compensation expense | $ 1,092 | $ 673 | $ 641 | $ 4,198 | $ 6,604 | ||||
Acquisition and integration expenses | — | — | — | 74 | 74 | ||||
Restructuring charges | — | — | — | 8,202 | 8,201 | ||||
Atlanta Member Operations Center set-up expense | 7,999 | 201 | — | 970 | 9,170 | ||||
Certificate consolidation expense | 1,840 | — | — | 3,033 | 4,873 | ||||
Other | — | — | — | (491) | (491) | ||||
Six Months Ended June 30, 2023 | |||||||||
Cost of | Technology | Sales and | General and | Total | |||||
Equity-based compensation expense | $ 2,271 | $ 1,157 | $ 1,341 | $ 13,373 | $ 18,142 | ||||
Acquisition and integration expenses | — | 53 | 134 | 1,921 | 2,108 | ||||
Restructuring charges | 755 | 2,299 | 2,058 | 13,581 | 18,692 | ||||
Atlanta Member Operations Center set-up expense | 11,798 | 201 | — | 4,131 | 16,130 | ||||
Certificate consolidation expense | 4,441 | — | — | 3,079 | 7,520 | ||||
Other | — | — | — | (871) | (871) | ||||
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SOURCE Wheels Up
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