Wheels Up Reports Third Quarter Results

Rhea-AI Summary

Wheels Up (NYSE:UP) reported Q3 2024 financial results with revenue of $194 million, showing stabilization but down year-over-year. The company achieved its highest-ever Adjusted Contribution Margin of 14.8%, up 380 basis points year-over-year. Net loss improved to $58 million, an $87 million improvement year-over-year. The company announced a fleet modernization strategy, including plans to acquire GrandView Aviation's 17 Phenom aircraft and sell 13 Citation X aircraft. A new $332 million credit facility commitment from Bank of America, supported by Delta Air Lines, is expected to strengthen the balance sheet.

Positive

• Record Adjusted Contribution Margin of 14.8%, up 380 basis points YoY
• Net loss improved by $87 million YoY to $58 million
• 94% improvement in operating cash outflow to $15 million vs $250 million last year
• Secured $332 million credit facility commitment from Bank of America
• Expected to achieve positive Adjusted EBITDA for full year 2025

Negative

• Revenue declined 39% YoY to $194 million
• Active Members decreased 38% YoY to 6,699
• Active Users decreased 35% YoY to 8,215
• Adjusted EBITDA loss of $20 million, slightly worse YoY
• Live Flight Legs decreased 23% YoY to 12,776

Insights

Financial Analyst

The Q3 results show significant operational improvements despite top-line pressure. The 14.8% Adjusted Contribution Margin marks a historic high, while net loss narrowed to $57.7 million, a substantial 60% improvement year-over-year. The strategic fleet modernization plan, backed by a new $332 million credit facility from Bank of America with Delta Air Lines' support, positions the company for better operational efficiency. The acquisition of GrandView Aviation's fleet and the planned divestment of Citation X aircraft demonstrate a focused approach to fleet optimization. Cash burn has dramatically improved, with operating cash outflow reduced by 94% to $15 million. The company's projection of positive Adjusted EBITDA by 2025 appears more credible given these improvements, though current membership declines of 38% warrant monitoring.

Aviation Industry Expert

The strategic shift to standardize around Phenom 300 and Challenger 300 series aircraft represents a important operational pivot. This fleet rationalization will likely drive significant maintenance and operational efficiencies, reducing costs and complexity across the network. The partnership with Gogo for Galileo HDX WiFi installation indicates a commitment to premium service quality. The 82% on-time performance and 98% completion rate demonstrate solid operational metrics, though the on-time performance shows slight deterioration from 86% last year. The increase in Private Jet Gross Bookings per Live Flight Leg to $15,990 suggests successful yield management despite lower volume.

Improvement in financial performance driven by operating initiatives over past year

Fleet modernization plan represents next phase of strategic journey to profitability 

New credit facility expected to strengthen balance sheet; credit support from Delta Air Lines underscores commitment to strategic partnership

ATLANTA, Nov. 7, 2024 /PRNewswire/ -- Wheels Up Experience Inc. (NYSE:UP) today announced financial results for the third quarter, which ended September 30, 2024.

Third Quarter 2024 Highlights¹

• Revenue was $194 million, stabilizing at levels consistent with the first and second quarters of 2024, though down year over year due primarily to the sale of non-core businesses and focus on profitable flying
• Adjusted Contribution Margin was 14.8%, the highest as a public company, and an increase of 380 basis points year over year and 700 basis points sequentially
• Net loss was $58 million for the quarter, an improvement of $87 million year over year and $39 million sequentially
• Adjusted EBITDA loss was $20 million, an improvement of $17 million sequentially and slightly worse year over year on lower revenues
• Net cash used in operating activities improved to an outflow of $15 million, a 94% improvement versus $250 million last year

"After seven consecutive quarters of revenue contraction leading into 2024, the intentional improvements we have made to our business over the last year have stabilized our top line, expanded margins to record levels, and positioned us for growth," said George Mattson, Chief Executive Officer. "We expect our next phase of financial and operational improvement to be driven by the positive impact of our fleet transition, both immediately and over the next several years."

"This quarter's Adjusted Contribution Margin was the highest in our history as a public company," said Eric Cabezas, Interim Chief Financial Officer. "We have made significant progress in reducing our operating cash burn and expect to achieve positive Adjusted EBITDA for the full year 2025, positioning the company for future profitability and long-term success. We expect the closing of our new revolving credit facility will enhance our access to capital and bolster our liquidity position, allowing us to expedite the modernization of our fleet and scale our business."

Recent Initiatives

• Detailed a fleet modernization strategy for the replacement of the Company's existing jet fleet across four aircraft types with two of the most preferred and successful aircraft in the industry: Embraer's Phenom 300 series and Bombardier's Challenger 300 series platforms.
• Announced plans to acquire the GrandView Aviation fleet of 17 Phenom 300 and 300E aircraft, which is expected to establish Wheels Up as the largest on-demand charter operator of Phenom 300 series aircraft in the world.
• Agreed to sell all 13 owned Citation X aircraft, and expect to lease a portion of the sold aircraft and amend existing Citation X leases to provide lease flexibility that will ease the transition to the Challenger 300 series aircraft.
• Secured up to $332 million commitment from Bank of America for new senior secured revolving credit facility. Credit support from Delta Air Lines expected to provide enhanced access to capital and on more attractive terms than the Company's existing aircraft facility.
• Anticipated funding under the new facility will be used to acquire the GrandView Aviation fleet, refinance existing aircraft debt, and provide a funding source for future aircraft acquisition as part of the Company's fleet modernization strategy. Additionally, in combination with proceeds from aircraft sales under contract, the refinancing is expected to add up to $115 million of cash to the balance sheet.
• Signed a letter of intent to equip anticipated Phenom and Challenger aircraft with Gogo's best-in-class Galileo HDX satellite-based WiFi, delivering high bandwidth, low latency, and universal coverage capable of live streaming and voice telephony.

____________________
1	For sequential change information, see "Financial and Operating Highlights," the condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023, and "Reconciliations of non-GAAP financial measures" relating to such periods included in this press release.

 

Financial and Operating Highlights(1)
	As of September 30,
	2024		2023		% Change
Active Members	6,699		10,775		(38) %
	Three Months Ended September 30,
(In thousands, except Active Users,  Live Flight Legs, Private Jet Gross Bookings per Live Flight Leg and percentages)	2024		2023		% Change
Active Users	8,215		12,549		(35) %
On-Time Performance (D-60)	82 %		86 %		n/m
Completion Rate	98 %		98 %		n/m
Live Flight Legs	12,776		16,581		(23) %
Private Jet Gross Bookings	$       204,289		$       255,415		(20) %
Total Gross Bookings	$       255,102		$       303,407		(16) %
Private Jet Gross Bookings per Live Flight Leg	$         15,990		$         15,404		4 %
Revenue	$       193,903		$       320,063		(39) %
Gross profit	$         14,560		$           4,717		209 %
Adjusted Contribution	$         28,758		$         35,243		(18) %
Adjusted Contribution Margin	14.8 %		11.0 %		4    pp
Net loss	$       (57,731)		$     (144,813)		60 %
Adjusted EBITDA	$       (19,982)		$       (18,529)		(8) %
Net cash used in operating activities	$       (15,031)		$     (249,824)		94 %
	Nine Months Ended September 30,
(In thousands)	2024		2023		% Change
Revenue	$       587,289		$    1,006,937		(42) %
Gross profit (loss)	$       (12,992)		$       (19,671)		34 %
Adjusted Contribution	$         46,071		$         59,688		(23) %
Adjusted Contribution Margin	7.8 %		5.9 %		2    pp
Net loss	$     (252,097)		$     (406,272)		38 %
Adjusted EBITDA	$     (106,566)		$     (107,747)		1 %
Net cash used in operating activities	$     (115,814)		$     (661,494)		82 %

__________________
(1)	For information regarding Wheels Up's use and definitions of our key operating metrics and non-GAAP financial measures, see "Definitions of Key Operating Metrics, "Definitions of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures" sections herein.
n/m	Not meaningful

For the third quarter:

• Active Members decreased 38% year-over-year to 6,699, primarily as a result of the regionalization of our member programs and focus on profitable flying, as well as streamlining our membership offering.
• Active Users decreased 35% year-over-year to 8,215, primarily related to the decline in Active Members.
• Revenue decreased 39% 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 $87.1 million year-over-year to $57.7 million, as the third quarter of 2023 included a $56.2 million non-cash goodwill impairment charge with no equivalent charge in the third quarter of 2024.
• Adjusted EBITDA loss slightly increased by $1.5 million year-over-year to $20.0 million, reflecting the absence of $5.9 million of software licensing revenue recognized in the third quarter of 2023 with no current year equivalent, partially offset by our operational efficiency and other spend reduction efforts.

	Three Months Ended
(In thousands, except percentages)(1)	September 30, 2024		June 30, 2024		% Change
Revenue	$       193,903		$       196,285		(1) %
Gross profit (loss)	$         14,560		$       (10,998)		232 %
Adjusted Contribution	$         28,758		$         15,298		88 %
Adjusted Contribution Margin	14.8 %		7.8 %		7          pp
Net loss	$       (57,731)		$       (96,973)		40 %
Adjusted EBITDA	$       (19,982)		$       (37,355)		47 %

__________________
(1)	For information regarding Wheels Up's use and definitions of our key operating metrics and non-GAAP financial measures, see "Definitions of Key Operating Metrics, "Definitions of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures" sections herein.
n/m	Not meaningful

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 fleet modernization strategy and its ability to execute such strategy, as well as the expected operational and financial impacts to Wheels Up from implementing such strategy on the timeline that it currently anticipates; (iii) 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; (iv) 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; (v) Wheels Up's liquidity, future cash flows and certain restrictions related to its indebtedness obligations, and its ability to perform under its contractual and indebtedness obligations; (vi) Wheels Up's ability to achieve positive Adjusted EBITDA (as defined herein) in the future pursuant to the most recent schedule that it has announced; (vii) Wheels Up's ability to consummate the closing of pending acquisitions and sales of aircraft and assets on the schedule that it currently anticipates or at all, and the expected benefits or impacts to Wheels Up from such pending transactions and the operation of any aircraft or assets following the closing of such transactions; (viii) Wheels Up's ability to consummate the initial closing of any new financing on the terms and timeline that it currently anticipates, and the expected benefits or impacts to Wheels Up from such financing, including the expected terms of such financing, the ability to use net proceeds from such financing to consummate any pending aircraft and asset acquisitions, the refinancing of Wheels Up's existing equipment notes, the potential receipt and expected use of any remaining net proceeds from the initial closing under such financing (including the potential future acquisition of aircraft using such net proceeds, assumptions about the consummation of aircraft sales currently under contract and other factors that may impact the amount of remaining net proceeds from such initial closing) and the ability of the Company to reborrow under such financing in the future; and (ix) 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. 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 U.S. Securities and Exchange Commission ("SEC") and our other filings with the SEC. Moreover, it is not always possible for us to predict how new risks and uncertainties that arise from time to time may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Except as required by law, we do not intend to update any of these forward-looking statements after the date of this press release.

Use of Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures, such as Adjusted EBITDA, Adjusted Contribution and Adjusted Contribution Margin. 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 the United States of America ("GAAP") and should not be considered as an alternative to revenue or any component thereof, net income (loss), operating income (loss) or any other performance measures derived in accordance with GAAP. Definitions and reconciliations of non-GAAP financial measures to their most comparable GAAP counterparts are included in the sections titled "Definitions of key metrics and non-GAAP financial measures" and "Reconciliations of non-GAAP financial measures," respectively, in this press release. Wheels Up believes that these non-GAAP financial measures of financial results provide useful supplemental information to investors about Wheels Up. However, there are a number of limitations related to the use of these non-GAAP financial measures and their nearest GAAP equivalents, including that they exclude significant expenses that are required by GAAP to be recorded in Wheels Up's financial measures. 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 metrics and 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)
	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$                115,909		$               263,909
Accounts receivable, net	32,029		38,237
Parts and supplies inventories, net	22,539		20,400
Aircraft held for sale	50,652		30,496
Prepaid expenses	29,490		55,715
Other current assets	20,691		25,277
Total current assets	271,310		434,034
Property and equipment, net	266,534		337,714
Operating lease right-of-use assets	54,588		68,910
Goodwill	222,482		218,208
Intangible assets, net	102,663		117,766
Other non-current assets	125,560		139,428
Total assets	$             1,043,137		$            1,316,060
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$                  30,048		$                 23,998
Accounts payable	34,997		32,973
Accrued expenses	94,369		102,475
Deferred revenue, current	711,097		723,246
Other current liabilities	17,898		24,810
Total current liabilities	888,409		907,502
Long-term debt, net	209,586		235,074
Operating lease liabilities, non-current	47,816		54,956
Other non-current liabilities	11,505		18,655
Total liabilities	1,157,316		1,216,187
Mezzanine equity:
Contingent performance awards	3,487		2,476
Total mezzanine equity	3,487		2,476
Equity:
Common Stock, $0.0001 par value; 1,500,000,000 authorized; 698,251,115 and 697,131,838 shares issued and 697,811,664 and 696,856,131 shares outstanding as of September 30, 2024 and December 31, 2023, respectively	70		70
Additional paid-in capital	1,911,362		1,879,009
Accumulated deficit	(2,015,357)		(1,763,260)
Accumulated other comprehensive loss	(5,537)		(10,704)
Treasury stock, at cost, 439,451 and 275,707 shares, respectively	(8,204)		(7,718)
Total Wheels Up Experience Inc. stockholders' equity	(117,666)		97,397
Non-controlling interests	—		—
Total equity	(117,666)		97,397
Total liabilities and equity	$             1,043,137		$            1,316,060

 

WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except share and per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$           193,903		$           320,063		$           587,289		$        1,006,937
Costs and expenses:
Cost of revenue (exclusive of items shown separately below)	166,859		299,887		556,809		981,581
Technology and development	9,594		19,962		31,204		50,265
Sales and marketing	20,029		22,548		62,946		71,500
General and administrative	27,058		42,853		99,244		122,334
Depreciation and amortization	12,484		15,459		43,472		45,027
(Gain) loss on sale of aircraft held for sale	(190)		(7,841)		(2,680)		(11,328)
Impairment of goodwill	—		56,200		—		126,200
Total costs and expenses	235,834		449,068		790,995		1,385,579
Loss from operations	(41,931)		(129,005)		(203,706)		(378,642)
Other income (expense)
Gain (loss) on divestiture	—		(2,991)		3,403		(2,991)
Gain (loss) on disposal of assets, net	70		—		(1,757)		(1,538)
Loss on extinguishment of debt	(289)		(1,936)		(2,800)		(2,806)
Change in fair value of warrant liability	107		(61)		9		685
Interest income	907		404		1,248		6,090
Interest expense	(16,041)		(11,258)		(47,263)		(27,035)
Other income (expense), net	(149)		613		(499)		716
Total other income (expense)	(15,395)		(15,229)		(47,659)		(26,879)
Loss before income taxes	(57,326)		(144,234)		(251,365)		(405,521)
Income tax benefit (expense)	(405)		(579)		(732)		(751)
Net loss	(57,731)		(144,813)		(252,097)		(406,272)
Less: Net loss attributable to non-controlling interests	—		—		—		—
Net loss attributable to Wheels Up Experience Inc.	$           (57,731)		$         (144,813)		$         (252,097)		$         (406,272)
Net loss per share of Common Stock
Basic and diluted	$               (0.08)		$               (3.51)		$               (0.36)		$             (13.22)
Weighted-average shares of Common Stock outstanding:
Basic and diluted	697,721,699		41,261,003		697,575,821		30,737,324

 

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 separately below)	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 interests	—		—		—		—
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 outstanding:
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)
	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities
Net loss	$        (252,097)		$        (406,272)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	43,472		45,027
Equity-based compensation	33,364		21,650
Payment in kind interest	31,259		972
Amortization (accretion) of deferred financing costs and debt discount	(1,022)		2,390
Gain on sale of aircraft held for sale	(2,680)		(11,328)
Loss on extinguishment of debt	2,800		2,806
Impairment of goodwill	—		126,200
Other	(650)		207
Changes in assets and liabilities:
Accounts receivable	4,867		22,513
Parts and supplies inventories	1,453		5,074
Prepaid expenses	24,640		(8,589)
Other non-current assets	17,910		(36,988)
Accounts payable	1,913		(15,177)
Accrued expenses	(8,562)		(36,293)
Deferred revenue	(12,813)		(378,949)
Other assets and liabilities	332		5,263
Net cash used in operating activities	(115,814)		(661,494)
Cash flows from investing activities
Purchases of property and equipment	(14,716)		(12,312)
Purchases of aircraft held for sale	(2,313)		(2,311)
Proceeds from sale of aircraft held for sale, net	47,631		53,911
Proceeds from sale of divested business, net	6,803		13,200
Capitalized software development costs	(11,452)		(16,041)
Other	105		172
Net cash provided by investing activities	26,058		36,619
Cash flows from financing activities
Purchase shares for treasury	(486)		—
Purchase of fractional shares	—		(3)
Proceeds from notes payable	—		70,000
Repayment of notes payable	—		(70,000)
Proceeds from long-term debt, net	—		343,000
Payment of debt issuance costs in connection with debt	—		(19,630)
Repayments of long-term debt	(52,475)		(40,196)
Net cash provided by (used in) financing activities	(52,961)		283,171
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,274)		(4,287)
Net decrease in cash, cash equivalents and restricted cash	(143,991)		(345,991)
Cash, cash equivalents and restricted cash, beginning of period	292,825		620,153
Cash, cash equivalents and restricted cash, end of period	$          148,834		$          274,162

 

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.

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.

Private Jet Gross Bookings & Total Gross Bookings.  We define Private Jet Gross Bookings as the total gross spend by our members and customers on all private jet flight services under our member programs and charter offerings (excluding all group charter flights, which are charter flights with 15 or more passengers ("Group Charter Flights"), and cargo flight services ("Cargo Services")).  We believe Private Jet Gross Bookings provides useful information about the aggregate amount our members and customers spend with Wheels Up versus our competitors. 

We define Total Gross Bookings as the total gross spend by our members and customers on all private jet flight services under our member programs and charter offerings, Group Charter Flights and Cargo Services.  We believe Total Gross Bookings provides useful information about the scale of the overall global aviation solutions that we provide our members and customers.

For each of Private Jet Gross Bookings and Total Gross Bookings, the total gross spend by our members and customers is the amount invoiced to the member or customer, and includes the cost of the flight and related services, such as catering, ground transportation, certain taxes, fees and surcharges.  We use Private Jet Gross Bookings and Total Gross Bookings to provide useful information for historical period-to-period comparisons of our business and to identify trends, including relative to our competitors.  Our calculation of Private Jet Gross Bookings and Total Gross Bookings may not be comparable to similarly titled measures reported by other companies.

In the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Reports on Form 10-Q for each of the three months ended March 31, 2024 and June 30, 2024, as well as certain other earnings materials furnished in connection therewith, "Total Private Jet Flight Transaction Value" and "Total Flight Transaction Value" were presented as non-GAAP financial measures, and "Total Private Jet Flight Transaction Value per Live Flight Leg" was presented as a key operating metric.  To improve the clarity of our reports filed with the SEC and to use comparable terminology to other registrants, beginning with this Quarterly Report, we relabeled "Total Private Jet Flight Transaction Value," "Total Flight Transaction Value" and "Total Private Jet Flight Transaction Value per Live Flight Leg" as Private Jet Gross Bookings, Total Gross Bookings and Private Jet Gross Bookings per Live Flight Leg, respectively.  In addition, we now present Private Jet Gross Bookings and Total Gross Bookings as key operating metrics given their usage. We will no longer present Private Jet Charter FTV or Other Charter FTV, which were included in such past filings.

Private Jet Gross Bookings per Live Flight Leg.  We use Private Jet Gross Bookings per Live Flight Leg to measure the average gross spend by our members and customers on all private jet flight services under our member programs and charter offerings (excluding Group Charter Flights and Cargo Services) for each Live Flight Leg.

Reconciliations of Non-GAAP Financial Measures
Adjusted EBITDA
The following tables reconcile Adjusted EBITDA to Net loss, which is the most directly comparable GAAP measure (in thousands):
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net loss	$         (57,731)		$      (144,813)		$         (252,097)		$      (406,272)
Add back (deduct)
Interest expense	16,041		11,258		47,263		27,035
Interest income	(907)		(404)		(1,248)		(6,090)
Income tax expense	405		579		732		751
Other expense, net	149		(613)		499		(716)
Depreciation and amortization	12,484		15,459		43,472		45,027
Change in fair value of warrant liability	(107)		61		(9)		(685)
Gain (loss) on divestiture	—		2,991		(3,403)		2,991
Gain (loss) on disposal of assets, net	(70)		—		1,757		1,538
Equity-based compensation expense	7,885		3,508		33,364		21,650
Acquisition and integration expense(1)	—		—		—		2,108
Restructuring charges(2)	970		22,213		7,485		40,905
Atlanta Member Operations Center set-up expense(3)	—		10,765		3,481		26,895
Certificate consolidation expense(4)	1,143		3,279		5,955		10,799
Impairment of goodwill(5)	—		56,200		—		126,200
Other(6)	(244)		988		6,183		117
Adjusted EBITDA	$         (19,982)		$         (18,529)		$         (106,566)		$      (107,747)

__________________
(1)	Consists of expenses incurred associated with acquisitions, as well as integration-related charges incurred within one year of the acquisition date primarily related to system conversions, re-branding costs and fees paid to external advisors.
(2)	For the three and nine months ended September 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 nine months ended September 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 our Member Operations Center located in the Atlanta, Georgia area (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.
(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 and third quarters 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.

	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 Atlanta, Georgia area (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.
(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 tables reconcile Adjusted Contribution to Gross profit (loss), which is the most directly comparable GAAP measure (in thousands):
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$         193,903		$        320,063		$        587,289		$     1,006,937
Less: Cost of revenue	(166,859)		(299,887)		(556,809)		(981,581)
Less: Depreciation and amortization	(12,484)		(15,459)		(43,472)		(45,027)
Gross profit (loss)	14,560		4,717		(12,992)		(19,671)
Gross margin	7.5 %		1.5 %		(2.2) %		(2.0) %
Add back:
Depreciation and amortization	12,484		15,459		43,472		45,027
Equity-based compensation expense in Cost of revenue	535		826		2,097		3,097
Restructuring charges in Cost of revenue(1)	172		320		3,875		1,075
Atlanta Member Operations Center set-up expense in Cost of revenue(2)	—		10,642		1,860		22,440
Certificate consolidation expense in Cost of revenue(3)	1,032		3,279		4,503		7,720
Other in Cost of revenue(4)	(25)		—		3,256		—
Adjusted Contribution	$           28,758		$          35,243		$          46,071		$          59,688
Adjusted Contribution Margin	14.8 %		11.0 %		7.8 %		5.9 %

__________________
(1)	For the three and nine months ended September 30, 2024, primarily includes charges for employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the three and nine months ended September 30, 2023, includes restructuring charges related to the Restructuring Plan and related strategic business initiatives implemented during 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.

 

	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 revenue	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 expense in Cost of revenue(2)	458		7,999		1,860		11,798
Certificate consolidation expense in Cost of revenue(3)	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.

 

Supplemental Revenue Information
(In thousands)	Three Months Ended September 30,				Change in
	2024		2023		$		%
Membership	$           13,231		$           20,622		$         (7,391)		(36) %
Flight	155,355		214,645		(59,290)		(28) %
Aircraft management	1,410		53,235		(51,825)		(97) %
Other	23,907		31,561		(7,654)		(24) %
Total	$         193,903		$         320,063		$     (126,160)		(39) %
(In thousands)	Nine Months Ended September 30,				Change in
	2024		2023		$		%
Membership	$           46,131		$           63,780		$       (17,649)		(28) %
Flight	469,968		681,691		(211,723)		(31) %
Aircraft management	7,560		165,431		(157,871)		(95) %
Other	63,630		96,035		(32,405)		(34) %
Total	$         587,289		$      1,006,937		$     (419,648)		(42) %

 

Supplemental Expense Information
(In thousands)	Three Months Ended September 30, 2024
	Cost of revenue		Technology and development		Sales and marketing		General and administrative		Total
Equity-based compensation expense	$              535		$              245		$              161		$          6,944		$          7,885
Restructuring charges	172		—		—		798		970
Certificate consolidation expense	1,032		—		—		111		1,143
Other	(25)		—		—		(219)		(244)
(In thousands)	Nine Months Ended September 30, 2024
	Cost of revenue		Technology and development		Sales and marketing		General and administrative		Total
Equity-based compensation expense	$          2,097		$              881		$              428		$        29,958		$        33,364
Restructuring charges	3,875		—		1,648		1,962		7,485
Atlanta Member Operations Center set- up expense	1,860		—		—		1,621		3,481
Certificate consolidation expense	4,503		—		—		1,452		5,955
Other	3,256		—		—		2,927		6,183
(In thousands)	Three Months Ended September 30, 2023
	Cost of revenue		Technology and development		Sales and marketing		General and administrative		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)
(In thousands)	Nine Months Ended September 30, 2023
	Cost of revenue		Technology and development		Sales and marketing		General and administrative		Total
Equity-based compensation expense	$          3,097		$          1,777		$          1,781		$        14,995		$        21,650
Acquisition and integration expenses	—		53		134		1,921		2,108
Restructuring charges	1,075		6,940		2,761		30,130		40,905
Atlanta Member Operations Center set- up expense	22,440		201		—		4,254		26,895
Certificate consolidation expense	7,720		—		—		3,079		10,799
Other	—		—		—		117		117

 

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SOURCE Wheels Up

FAQ

What was Wheels Up (UP) revenue in Q3 2024?

Wheels Up reported revenue of $194 million in Q3 2024, showing stabilization quarter-over-quarter but down 39% year-over-year.

How much is the new credit facility secured by Wheels Up (UP) in 2024?

Wheels Up secured a commitment for up to $332 million from Bank of America for a new senior secured revolving credit facility, supported by Delta Air Lines.

What is Wheels Up's (UP) fleet modernization plan announced in Q3 2024?

Wheels Up announced plans to replace its existing fleet with Embraer's Phenom 300 series and Bombardier's Challenger 300 series aircraft, including acquiring 17 Phenom aircraft from GrandView Aviation and selling 13 Citation X aircraft.

When does Wheels Up (UP) expect to achieve positive Adjusted EBITDA?

Wheels Up expects to achieve positive Adjusted EBITDA for the full year 2025.