OVERVIEW

Inspirato is a subscription-based luxury travel company providing exclusive vacations to members. As of March 2024, Inspirato had:

• 430 private luxury homes available to members
• Hotel partnerships with over 240 luxury hotels in over 180 destinations
• 13,000 total active subscriptions

In August 2023, Inspirato launched a loyalty program called Inspirato Rewards to incentivize repeat business. Members can earn rewards like booking discounts and complimentary nights.

Also in August 2023, Inspirato secured a $25 million investment from Capital One. This provides funding for growth and establishes a strategic partnership expected to increase demand for Inspirato’s services.

In October 2023, Inspirato completed a reverse stock split to increase its stock price and maintain compliance with stock listing requirements.

FINANCIAL PERFORMANCE

Key Metric	Q1 2024	Q1 2023	Change
Revenue	$80.2 million	$91.7 million	-12% decrease
Gross Margin	40%	35%	+5 percentage points
Net Income	$2.2 million	-$5.9 million	$8.2 million improvement

Revenue

In Q1 2024, Inspirato’s revenue declined 12% year-over-year. Contributing factors included:

• 10% decrease in travel revenue
  
• 23% decrease in subscription revenue
• Increase of $2.4 million in revenue from new loyalty program

The declines in travel and subscription revenue were mainly driven by having 17% fewer active subscriptions in Q1 2024 compared to Q1 2023.

Expenses

In Q1 2024, Inspirato’s operating expenses decreased due to lower headcount and other cost reduction initiatives executed in 2023. This led to improved profitability.

• Cost of revenue down 19%
• General and administrative down 18%
• Operations down 15%
• Technology and development down 40%

Net Income

Inspirato achieved net income of $2.2 million in Q1 2024, a $8.2 million improvement from the $5.9 million net loss in Q1 2023. This turnaround was largely driven by decreased operating expenses combined with a non-cash gain of $4.1 million on fair value instruments.

Cash Flow

Cash Flow Metric	Q1 2024	Q1 2023	Change
Operating activities	-$7.2 million	-$17.6 million	$10.4 million less cash used
Investing activities	-$1.5 million	-$3.2 million	$1.7 million less cash used

In Q1 2024, Inspirato used less cash for both operating activities and investing activities compared to Q1 2023. This demonstrates improved cost management and spending discipline.

OUTLOOK

Inspirato operates in a challenging economic environment with some uncertainty that could impact future performance.

The company believes its $22.6 million cash balance provides adequate liquidity for at least the next 12 months. Longer term, Inspirato intends to meet cash needs through operating cash flows and financing activities if required.

Inspirato faces some key challenges to sustain growth including:

• Managing seasonality of luxury travel demand
  
• Attracting and retaining subscription members
• Optimizing use of leased vacation properties

However, the loyalty program, strategic partnership, and ongoing cost discipline position Inspirato to navigate challenges and continue expanding its luxury travel business.