Inspirato Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2025

Key Takeaways

  • Positive Sentiment: The definitive agreement to combine with BioLink immediately creates a $350 million+ revenue platform and is expected to deliver approximately $30 million in pro forma 2025 adjusted EBITDA, broadening verticals beyond luxury travel.
  • Positive Sentiment: Q2 adjusted EBITDA swung to a negative $0.3 million, a year-over-year improvement of $8.9 million from –$9.2 million, and the company posted $3.9 million of trailing twelve-month positive adjusted EBITDA, highlighting operational gains.
  • Neutral Sentiment: Total Q2 revenue declined 6% to $63.1 million due to the strategic scale-back of the Pass subscription, but ex-Pass revenues were up 1% year-over-year and a reimagined Pass program is set to relaunch.
  • Positive Sentiment: Travel revenue rose 1% to $39.4 million with experiential business up 47%, while average daily rates jumped 24% despite occupancy dropping to 59%, underscoring strong pricing power.
  • Positive Sentiment: Cost of revenue fell $5.5 million (11%) and operating expenses dropped ~$9 million, enabling near-break-even Q2 free cash flow of $0.2 million and positioning the company toward consistent positive cash generation.
AI Generated. May Contain Errors.
Earnings Conference Call
Inspirato Q2 2025
00:00 / 00:00

There are 5 speakers on the call.

Operator

Thank you for standing by and welcome to the Inspirano Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. If your question has been answered and you'd like to remove yourself from the queue, simply press 11 again. As a reminder, today's program is being recorded.

Operator

And now I'd like to introduce your host for today's program, Pita Melano, Senior Vice President of Marketing at Inspirato. Please go ahead. Peter, you you may proceed. Peter, are are you online? Cannot hear you at this moment.

Speaker 1

Operator, can you hear me? Yes. Wonderful. I'm sure what happened there. You, and good morning.

Speaker 1

Welcome to Inspirato's second quarter twenty twenty five earnings conference call. Joining us for today's presentation are Insperado's Chairman and CEO, Hayam Zamani and CFO, Michael Arthur. At this time, all participants are in listen only mode. Following management's remarks, we will open the call for questions. Before we begin, please note that today's call is being webcast live and it will also be archived on the Investor Relations section of our website at insprado.com.

Speaker 1

You can also find our earnings press release and the supplemental materials currently available there for your reference. As a reminder, some of today's comments are forward looking statements. These statements are based on assumptions and actual results could differ materially. For a discussion of these risks and uncertainties, please refer to our filings with the SEC, including our most recent annual report on Form 10 ks and our subsequent Form 10 Q. In addition, during the call, management will discuss non GAAP measures, which are useful in evaluating the company's operating performance.

Speaker 1

These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Reconciliations of these measures to the most directly comparable GAAP measures are included in our earnings release. With that, I'd like to turn the call over to Insprano's Chairman and CEO, Hayom Zamani. Hayom, please proceed.

Speaker 2

Thank you, and good morning, everyone. Yesterday afternoon, we issued a press release announcing our financial and operational results for the second quarter. I encourage all listeners to review the press release, which has been posted to our Investor Relations website as it contains information relevant to today's call. Before we dive into the quarter and our financial performance, I want to take a moment to step back and look at the bigger picture. As our longtime customers and investors know, Inspirato has always been about reimagining luxury travel, giving our members seamless access to a curated portfolio of high end homes, five star hotel partners, and one of a kind experiences around the world.

Speaker 2

From personalized trip planning to elevated service, our goal is simple, to make luxury travel effortless, memorable, and repeatable. That mission hasn't changed, but how we achieve it and how far we can scale it is evolving. Today, Insprano provides over 11,000 members access to approximately 325 luxury homes and over 200 premium hotel partnerships across more than 170 destinations. And with our recent agreement to combine with BioLink, a leader in building and operating online marketplaces, performance marketing, and demand generation, we're now positioned to amplify that reach, enhance personalization, and bring our curated travel experiences to a broader audience. In q two, we entered into a definitive agreement to combine with BuyerLink.

Speaker 2

This transaction represents an important milestone in our strategy to expand Inspirato's platform and long term value by integrating into BIOLINK's technology driven ecosystem to enhance how luxury travel and other verticals are discovered, marketed, and monetized. For background, BIOLINK is a technology first business with proven capabilities in building online marketplaces across industries such as automotive and home services. By combining forces, we will harness that technology to enhance discovery, personalization, monetization of luxury travel, unlocking new ways to reach untapped markets. This will also enable us to accelerate our efforts in enhancing the current member experience through improved trip personalization and a broader, more distinctive portfolio of upscale homes, hotels, and experiences. The combination will result in a formation of one planet platforms, a new entity that will operate a diversified platform for online marketplaces.

Speaker 2

From a business perspective, a combination immediately expands our verticals beyond luxury travel with additional potential in future categories where BioLINK's platform can be applied. This will significantly enhance our vectors for growth and revenue diversification. We expect a deal to close in the third quarter, and we are working closely with the BioLink team to ensure smooth integration. From day one, we anticipate the combination to be financially accretive with BioLink bringing robust margins, meaningful cash flow, and a proven playbook for scaling efficiently. The combination with BioLink also brings meaningful scale and strategic opportunity to Insprado.

Speaker 2

In 2024, BioLink generated approximately $124,000,000 in revenue and over 26,000,000 in EBITDA with profitability metrics that are best in class across the industry. This performance is driven by disciplined operations and a differentiated advantage in marketing and technology capabilities we intend to leverage across the broader Inspirato platform. The transaction increases our combined revenue to over $350,000,000 and positions us to deliver approximately $30,000,000 in adjusted EBITDA on a pro form a basis for 2025. With this scale, we can better optimize shared resources and overhead, while also unlocking greater access to capital markets through an expanded market capitalization and stronger financial profile. With enhanced access to capital coupled with operational discipline, we're well positioned to make targeted investments that will drive sustained profitable growth for the Insprado brand.

Speaker 2

In the meantime, we remain focused on execution across four key strategic pillars at Insprado. As a reminder, these are operational efficiency, brand elevation, member experience, and digital platform. First, we focus on driving operational efficiency. In q two, we achieved a 96% or 8,800,000 year over year improvement in adjusted EBITDA, demonstrating the tangible impact of our cost optimization initiatives, even against a more difficult macro environment. The changes we've made are not just short term wins.

Speaker 2

They are about building a stronger business model for Insprado. We're building a more agile, efficient company with a clear path towards sustainable profitability. Once combined with BioLink, we expect even greater margin expansion and operational synergies across the platform. We've been reviewing every detail of Insprano, and we'll do the same with BioLink. Operational excellence remains a core competency we're building into the DNA of the company.

Speaker 2

Second, brand elevation. As we look to the future, one of our key priorities is to further strengthen the inspirato brand and enhance its appeal among discerning travelers. We believe a more vibrant, visible, and aspirational brand will not only reinforce member loyalty, but also expand our reach to new audiences. One example of our progress is the reimagination of the Inspraudo Magazine, one of our more powerful touch points with both members and prospective members. Relaunching in q three, the new edition will debut a refreshed editorial vision, refined design, and curated partnerships with iconic brands that embody the luxury lifestyle we represent.

Speaker 2

More than a publication, it will serve as a signature brand experience designed to capture the sophistication and exclusivity that product. We also began to scale our digital and social media presence in a more intentional way. While early, we're already seeing encouraging signs of increased engagement and awareness, especially among high value audiences who are discovering or reconnecting with the brand. On the property side, we continue to re refine and elevate our luxury portfolio by adding highly curated homes in the world's most desirable destinations, while also phasing out properties that no longer align with our brand standards. In q two, we introduced new residences in the Mexican Riviera and along the coast of Spain, destinations that enhance our offering and generate excitement among current and prospective members.

Speaker 2

As we look ahead, the combination of Esperado's brand equity and BioLink's digital capabilities create a powerful foundation for growth. With additional scale and resources, we're well positioned to accelerate investments in brand storytelling, premium supply, and strategic partnerships, building long term value and deepening the halo around the Insprano experience. Third, we continue to enhance the member experience. Every decision we make starts with our members. How we surprise and delight, how we earn loyalty, and how we become indispensable to the most important moments.

Speaker 2

We remain focused on elevating our service and experiences to be more consistent, curated, and unique, all through the lens of delivering truly one of a kind luxury travel. In q two, we advanced initiatives to improve consistency and service quality with particular emphasis on enhancing the local concierge experience and embedding higher service standards into our daily operations. In July, we'll launch our new loyalty program centered around access and premium experience for our members. We expect this newly designed program to continue to grow and provide ever more value as we form new partnerships with adjacent brands in the luxury travel industry. We're also upgrading the past member experience with a new product launching later this month designed to simplify travel planning so members spend less time searching and more time traveling.

Speaker 2

We've expanded availability across our resident portfolio and streamlined trip options, making it easier for members to find and book the experiences they want. Each of these initiatives keeps the member experience and profitable growth at the forefront. And finally, our digital platform. We're building a robust technology and digital marketing platform that will unlock massive new potential for Insprano. We started in q two with foundational tech investments and have taken a major step forward with anticipated buyer link combination.

Speaker 2

As we integrate with them, we'll begin to roll out what will ultimately become a world class platform, one that allows us to reach, target, and convert high value travelers at scale previously impossible for us to reach. By combining the strength of our luxury brand with BIOLINX data driven digital platform, we're not just going to market more efficiently, we're going to expand our total addressable market. This is a meaningful growth catalyst and profitability accelerator that positions us to scale with precision and sustainability for years to come. In summary, we have made a transformational step forward. We have the right team and operations in place to reach new heights.

Speaker 2

I want to thank our team for their relentless focus and our members for their trust and loyalty. I believe they're on the start of something extraordinary, and I can't wait to share more progress with you in the quarters ahead. With that, I'll turn it over to Michael to discuss our financial performance and outlook for the remainder of the year. Michael?

Speaker 3

Thank you, Payam, and good morning, everyone. As Payam outlined in Q2, we continue to make operational improvements to create a more efficient business. We're now positioned to scale and reach new heights with BuyerLink. And turning to our Q2 results, the quarter was highlighted by negative adjusted EBITDA of $300,000 and meaningful turnaround for negative $9,200,000 in 2024. We also achieved positive trailing twelve month adjusted EBITDA of $3,900,000 reflecting the sustained impact of the cost efficiency measures implemented over the past year.

Speaker 3

Total revenue for the quarter was approximately $63,100,000 While revenue declined 6% year over year, this was primarily due to the planned decline in past subscriptions. Excluding the impacts from Pass, revenues were up 1% year over year. Subscription revenue was $19,400,000 down 23% as expected due to our strategic decision to scale back the previous version of Pass earlier this year. With a new version of Inspirono Pass launching this month, we're positioning the subscription business for future growth through a simplified, more flexible offering. Importantly, Cloud and Legacy revenue remained flat year over year for the first time in several years, reflecting our success in attracting higher value members who are more engaged in driving greater yield per member.

Speaker 3

At the end of Q2, we had roughly 11,000 active memberships, including 9,900 active club members and 1,200 active Pass members, consistent with the strategic shift we outlined last year. While Pass remains an important part of our offering, we intentionally shifted our emphasis towards club growth and overall profitability, with Pass now representing approximately 10% of our total membership base. In the coming quarters, we'll continue to lap periods of higher Pass volume from prior years and establish a more stable, sustainable baseline aligned with relaunch of our new Pass product. We're excited about the upcoming relaunch of Pass, which we believe will drive incremental revenue and better align the product with our evolved brand and business strategy. Travel revenue was up roughly 1% to $39,400,000 driven by experiential travel business up 47% year over year.

Speaker 3

This was achieved both as a result of growth in our bespoke services and timing of some of our experiences versus this time last year. Year to date experiential travel is up over double digits, an area we see continued opportunity. In our controlled accommodations, we delivered occupancy level of 59%, down from 71% in Q2 twenty twenty four. This is while increasing ADR by 24% in the quarter, supporting the gross margin and profitability goals we set for the year. And on the cost side, we saw continued benefits from our optimization efforts.

Speaker 3

Cost of revenue declined by $5,500,000 or 11% year over year, largely due to our ongoing portfolio optimization efforts. Operating expenses were also marginally lower down approximately 9,000,000 benefiting from reduced overhead and continued focus on streamlining operations across the organization. Free cash flow in Q2 was approximately breakeven at roughly $200,000 reflecting the continued benefit of the cost reductions and operational efficiencies we've implemented. Year to date free cash flow remains negative at $7,300,000 an improvement from the prior year. We're encouraged by the trajectory and continued to prioritize cash and liquidity as we work towards achieving consistent positive free cash flow, a critical milestone that will give us the flexibility to reinvest in key areas that drive long term growth.

Speaker 3

Moving to our outlook, we remain pleased with our progress Inspirato has made year to date and continue to track towards the previously commuted full year 2025 targets which include adjusted EBITDA between breakeven and 5,000,000 total revenue between $235,000,000 and $255,000,000 and cash operating expenses between 80,000,000 and 90,000,000, a 15% year over year improvement. With the anticipated close of our transaction with BuyerLink, we recognize that these standalone Inspraud targets will become less relevant to how the business will report financial performance moving forward. As such, while we will continue to manage towards these targets through the end of the year, however, we do not plan to update standalone guidance going forward. In the meantime, Inspirada remains focused on disciplined execution while strengthening the foundation for scalable and profitable growth under the new platform. Over the past year, the choices we've made are showing up in our financial performance.

Speaker 3

By sharpening our focus and instilling stronger discipline throughout the company and constantly refining how we deliver value to our members, we've become more agile and effective. With the anticipated combination of Viralink and Inspirato, we're focused on strengthening our business to deliver an even more exceptional experience to our customers. Together, we look forward to scaling profitably and achieving sustainable growth. And with that, I'll turn it back to the operator for Q and A.

Speaker 2

Certainly.

Operator

And our first question comes from the line of Mike Garandel from Northland Capital. Your question please.

Speaker 4

Hey guys. Could you walk through the pro form a balance sheet cash levels, debt levels, and kind of address how you're thinking about Capital One and the buyer link debt? And then maybe kind of CapEx kind of thought, how you're going to expand through CapEx sort of the next six to eighteen months?

Speaker 3

Mike, this is Michael. Thanks for the question. As we're going through this process, we obviously acknowledge that Viralink and Inspirada both have senior secured notes. As part of the agreement, we do anticipate refinancing some of the secured note and recapitalize the whole business on a go forward basis. We're in the process of doing that now.

Speaker 3

And once we have a more definitive plan on the refinancing recapitalization, we'll certainly update you in the market.

Speaker 4

Got it. So I guess specifically the Capital One debt, are they supportive or do you think you'll have that refinanced by the close? Then I think the buyer link debt is with Citi and I think if I read right, like $8,000,000 is due later this year. Just of thinking is that pre or post merger?

Speaker 3

Yeah. Again, Capital One note, I mean, would say both senior secured lenders are positive about the transaction and supportive. And we anticipate that we likely will refinance the Capital One note at the close, and Citi will continue on with us at some level. As I mentioned, we are anticipating and looking towards a refinancing and recapitalization of the whole business, Citi with us, but also looking at incremental capital into the business either in the form of additional debt, equity and cash flow from the business.

Speaker 4

Got it. And then anything on the rough CapEx requirements you think the business will see over the next six to eighteen months?

Speaker 3

Yeah, wouldn't anticipate any change meaningfully in the CapEx of either business. They are in many ways different, but also I think on the Inspirona side, as Payam mentioned in his prepared remarks, we'll be able to leverage their resources and capability in marketing technology that Inspirato, certainly over the last couple of years, has been less invested in. But I wouldn't expect a meaningful change in overall CapEx due to any kind of increased investment.

Speaker 4

Got it. And then, Pam, a question for you. You know, BuyerLink is a lead gen business. It's done things in auto extensively. How much investment or modification what sort of the timeline that it can begin to work for Inspirato and really drive leads for travel and leisure?

Speaker 2

Hi, Mike. Thank you for the question. So I think it's important to categorize, BioLink as a company with deep expertise in building marketplaces and performance marketing. I think Legion is a segment of that, but it is not the whole story. Legion just represents one way that the consumer demand through the marketplaces that BioLINK operates Sure.

Speaker 2

Monetized. And as an example, lead gen is not something that Inspirada could benefit from, but rather the marketplace that Inspirada needs to have of curated homes and hotels all over the world, way beyond what we have today. So some of that work has begun. Know, have the team at Inspirato has been working on doing some of the work that can be done in the meantime. And so as I mentioned in my remarks, in q two, had a good number of people focused on starting to build that foundation.

Speaker 2

It's a foundation and it's a presence that will never be done building, but a good chunk of that will be done by, let's say, of 2026. And I certainly expect that at some point in 2026, we'll start benefiting from that foundation. That is an important vector of growth that we are quite focused on.

Speaker 4

And will that require much investment?

Speaker 2

I mean, the investment in that is primarily investment in resources. It's more about prioritization. What are the kinds of stuff that we will not do in order to focus on what is important? And so I wouldn't say that there is, you're gonna see increased CapEx in a meaningful way, but but you will see that, you know, we'll have resources dedicated to this effort.

Speaker 4

Got it. And then, one more on BuyerLink. I think you talked about roughly 120,000,000 to $130,000,000 in revenue last year, dollars 26,000,000 of adjusted EBITDA. What do you think BuyerLink's growth profile looks like and what are the major drivers of that business?

Speaker 2

Yeah. I mean, I think with any marketplace or an organization, a company that operates marketplaces, the business grows as a result of adding marketplaces, new vectors, new verticals, and bringing more liquidity, more demand, more partners to that marketplace. So there's more trading, more engagement takes place within that marketplace. So that is what drives Buyerlink. In the case of Buyerlink, for example, overwhelming majority of the card makers are partners of Buyerlink today.

Speaker 2

So growth in a number of carmakers is not something that's going to be realistic, but access to more consumer demand is what will drive that growth. And adding more verticals, you know, adding more verticals and, you know, home services is a small vertical today for BioLink and that can become a much, much bigger business. Used cars, you know, BioLink owns usedcars.com, and that is something that can become a very large business over time. Many of you know Autotrader, and that's a massive business, a marketplace for cars, and that's something that BuyerLink owns. So bringing more liquidity to the existing marketplaces that it owns will be a major vector for growth and adding new verticals.

Speaker 2

And lastly, the way that BioLINK is built and the patented technology that it operates based on, it is an ideal magnet for consolidation in a very large industry where there are many, in a sense, small orphan companies of 5 to $20,000,000 in revenue that they could become an important part of a bigger story.

Speaker 4

And and, I guess, growth profile, do you see BuyerLink as, like, a mid high single digit grower with some margin expansion? Or what kind of growth profile will this have over three to five years?

Speaker 2

That's a good question. I don't know if I have a great answer for you at at this point, but I can tell you that if you look at KGET for the last, I think, five years, the average growth, both organic and through acquisitions, has been north of 20%.

Speaker 4

Okay. Thank you.

Speaker 2

Sure.

Operator

Thank you. And this does conclude the question and answer session of today's program. I'd like to hand the program back to Payam Zemani for any further remarks.

Speaker 2

Well, thank you again everyone for joining us today. I also like to thank our employees, partners and shareholders for their continued support. This concludes our call for today and we look forward to reporting back in three months. Operator?

Operator

Thank you and thank you ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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