Wheels Up Announces Record Second Quarter Revenue Up 49% Year-over-Year

·12 min read

Technology investments & operational focus expected to drive Adjusted EBITDA profitability in 2024

NEW YORK, Aug. 11, 2022 /PRNewswire/ -- Wheels Up Experience Inc. (NYSE:UP) today announced financial results for the second quarter, which ended June 30, 2022.

Wheels Up (PRNewsfoto/Wheels Up)
Wheels Up (PRNewsfoto/Wheels Up)

Second Quarter 2022 Highlights

  • Revenue increased 49% year-over-year to $425.5 million

  • Strong demand with prepaid block sales up 187% year-over-year

  • Active Members grew 20% year-over-year to 12,667 in total

  • Live Flight Legs increased 19% year-over-year to 21,705 in total

  • Net loss increased by $63.8 million year-over-year to a net loss of $92.8 million

  • Adjusted EBITDA decreased by $38.4 million year-over-year to a loss of $46.9 million

"Our strong market position and iconic brand helped drive record revenue in the second quarter, and another quarter of growth in prepaid blocks speaks both to the steadfast loyalty of our member base, and the continued consumer demand for private aviation," said Chairman and CEO Kenny Dichter. "Air Partner is off to a strong start in its first quarter as part of our company, and we are already seeing the benefits of having a global footprint. Our team is moving quickly to enhance our technology-enabled marketplace platform which we expect will provide us with a significant competitive advantage."

"We continue to invest in technology and other areas of the business to drive improvement in our execution and operational capabilities," said Todd Smith, CFO.  "We remain focused on delivering great service for our members and customers during our journey towards significant and sustainable profitability for our shareholders."

Recent Initiatives

  • Entire Wheels Up controlled fleet now managed through UP FMS that aggregates the data for all flight operations under one consolidated dashboard. This platform sets the company on the path to fully automate aircraft and crew scheduling and more effectively and efficiently manage daily operations and shape demand.

  • Continuing to make progress to streamline operations. Combined with the previously communicated efforts around certificate consolidation, these efforts will enhance the company's operational effectiveness and efficiency as well as customer service and are part of the plan to achieve positive Adjusted EBITDA in 2024.

  • Exceeded pilot hiring targets. The company is continuing to make progress on pilot training and investing in maintenance hiring and capabilities to improve overall fleet availability.

Financial and Operating Highlights


As of June 30,




2022


2021


% Change

Active Members(1)

12,667


10,515


20 %








Three Months Ended June 30,



(In thousands, except percentages, Active Users,  Live Flight Legs and
Flight revenue per Live Flight Leg)

2022


2021


% Change

Active Users(1)

13,119


11,281


16 %

Live Flight Legs(1)

21,705


18,234


19 %

Flight revenue per Live Flight Leg

$             13,088


$             11,663


12 %

Revenue

$           425,512


$           285,580


49 %

Net loss

$            (92,760)


$            (28,954)


(220) %

Adjusted EBITDA(1)

$            (46,889)


$              (8,480)


(453) %








Six Months Ended June 30,



(In thousands, except percentages)

2022


2021


% Change

Revenue

$           751,147


$           547,237


37 %

Net loss

$          (181,800)


$            (61,167)


(197) %

Adjusted EBITDA(1)

$            (96,317)


$            (17,141)


(462) %


(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.

For the second quarter:

  • Active Members grew 20% year-over-year to 12,667 driven by strong new member sales and existing membership retention.

  • Active Users grew 16% to 13,119 year-over-year primarily driven by the growth in Active Members.

  • Live Flight Legs increased by 19% year-over-year to 21,705 with strong flight demand across all cabin classes driven by the growth in Active Members and the acquisition of Air Partner.

  • Flight revenue per Live Flight Leg was $13,088, up 12% year-over-year, and up 16% year-over-year excluding Air Partner. The increase was the result of the introduction of fuel surcharges, higher pricing, and a higher mix of larger cabin flying.

  • Revenue increased 49% year-over-year driven by strong flight demand.

  • Net loss increased by $63.8 million due to several factors, including a decrease in Adjusted Contribution Margin caused by supply constraints and increased operating costs, as well as an increase in equity-based compensation expense, including a broad-based equity grant to the Wheels Up employee pilots.

  • Adjusted EBITDA loss of $46.9 million decreased $38.4 million year-over-year, due primarily to lower Adjusted Contribution Margin.

Webcast and Conference Call Information

A conference call with management will be held today at 4:30 pm ET. To access a live webcast of the conference call and any supporting materials please visit the Wheels Up investor site (www.wheelsup.com/investors). The site will include an archive of this webcast and supporting materials as well as any announcements regarding the Company's financial performance, including U.S. Securities and Exchange Commission (the "SEC") filings, investor events, press and earnings releases.

About Wheels Up

Wheels Up is the leading provider of on-demand private aviation in the U.S. and one of the largest private aviation companies in the world. Wheels Up offers a complete global aviation solution with a large, modern and diverse fleet, backed by an uncompromising commitment to safety and service. Customers can access membership programs, charter and aircraft management services—as well as unique commercial travel benefits through a strategic partnership with Delta Air Lines Inc. The Wheels Up Services brands also offer freight, safety & security solutions and managed services to individuals, industry, government and civil organizations.

Wheels Up is guided by the mission to connect flyers to private aircraft—and one another—and deliver exceptional, personalized experiences. Powered by a global private aviation marketplace connecting its growing base of 12,000+ members and customers to a network of more than 1,500 safety-vetted and verified private aircraft, Wheels Up is widening the aperture of private travel for millions of consumers globally. With the Wheels Up mobile app, members and customers have the digital convenience to search, book and fly. Wheels Up is committed to aligning with philanthropic organizations that matter most to our company, members, customers, families and friends. Through the Wheels Up Cares program, a Wheels Up Beechcraft King Air 350i aircraft is custom-designed to represent the established cause and is a flying symbol of each charity's mission. Headquartered in New York City, Wheels Up has office locations in 25 cities and towns across three continents and a workforce of nearly 2,700 employees.

To learn more about Wheels Up, go to wheelsup.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains certain "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding Wheels Up's expectations, hopes, beliefs, intentions or strategies regarding the future including, without limitation, statements regarding: (i) the size, demands and growth potential of the markets for Wheels Up's products and services and Wheels Up's ability to serve those markets, (ii) the degree of market acceptance and adoption of Wheels Up's products and services, (iii) Wheels Up's ability to develop innovative products and services and compete with other companies engaged in the private aviation industry, (iv) Wheels Up's ability to attract and retain customers and (v) general economic and geopolitical conditions, including due to fluctuations in interest rates, inflation, foreign currencies, consumer and business spending decisions, and general levels of economic activity. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "strive," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that statement is not forward-looking. 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 Wheels Up's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. Additional factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC by Wheels Up on March 10, 2022, and other documents filed by Wheels Up from time to time with the SEC. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and Wheels Up undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. We do not give any assurance that Wheels Up will achieve its expectations.

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 ("U.S. GAAP") and should not be considered as an alternative to net income (loss), operating income (loss) or any other performance measures derived in accordance with U.S. GAAP. Reconciliations of non-GAAP financial measures to their most directly comparable U.S. GAAP counterparts are included in the "Reconciliations of Non-GAAP Financial Measures" section herein to this earnings 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 U.S. GAAP equivalents, including that they exclude significant expenses that are required by U.S. 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 Operating Metrics and Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures" included at the end of this earnings press release.

Contacts
Investors:
ir@wheelsup.com

Media:
press@wheelsup.com

 

WHEELS UP EXPERIENCE INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



June 30, 2022
(Unaudited)


December 31, 2021

ASSETS




Current assets:




Cash and cash equivalents

$                 426,984


$                 784,574

Accounts receivable, net

114,024


79,403

Other receivables

12,111


8,061

Parts and supplies inventories, net

12,355


9,410

Aircraft inventory

30,464


Aircraft held for sale

37,375


18,101

Prepaid expenses

40,481


21,789

Other current assets

18,144


11,736

Total current assets

691,938


933,074

Property and equipment, net

389,395


317,836

Operating lease right-of-use assets

113,291


108,582

Goodwill

528,327


437,398

Intangible assets, net

154,666


146,959

Restricted cash

27,432


2,148

Other non-current assets

63,998


35,067

Total assets

$              1,969,047


$              1,981,064

LIABILITIES AND EQUITY




Current liabilities:




Accounts payable

$                   61,957


$                   43,672

Accrued expenses

124,073


107,153

Deferred revenue, current

1,039,279


933,527

Operating lease liabilities, current

28,378


31,617

Intangible liabilities, current

2,000


2,000

Other current liabilities

16,678


17,068

Total current liabilities

1,272,365


1,135,037

Deferred revenue, non-current

1,793


1,957

Operating lease liabilities, non-current

90,801


83,461

Warrant liability

4,508


10,268

Intangible liabilities, non-current

13,083


14,083

Other non-current liabilities

3,741


30

Total liabilities

1,386,291


1,244,836

Commitments and contingencies




Equity:




Class A common stock, $0.0001 par value; 2,500,000,000 authorized; 246,187,546 shares
issued and 244,274,300 shares outstanding as of June 30, 2022; and 245,834,569 shares
issued and outstanding as of December 31, 2021

25


25

Additional paid-in capital

1,499,864


1,450,839

Accumulated deficit

(902,126)


(720,713)

Accumulated other comprehensive loss

(8,318)


Treasury stock, at cost, 1,913,246 and 0 shares, respectively

(6,689)


Total Wheels Up Experience Inc. stockholders' equity

582,756


730,151

Non-controlling interests


6,077

Total equity

582,756


736,228

Total liabilities and equity

$              1,969,047


$              1,981,064

 

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,


2022


2021


2022


2021

Revenue

$        425,512


$        285,580


$        751,147


$       547,237









Costs and expenses:








Cost of revenue

408,898


255,188


741,656


489,695

Technology and development

14,606


8,025


25,797


15,049

Sales and marketing

33,688


17,895


56,931


33,689

General and administrative

46,973


15,786


85,877


33,955

Depreciation and amortization

16,134


13,482


30,362


27,313

Gain on sale of aircraft held for sale

(663)



(2,634)


Total costs and expenses

519,636


310,376


937,989


599,701









Loss from operations

(94,124)


(24,796)


(186,842)


(52,464)









Other income (expense):








Change in fair value of warrant liability

2,129



5,760


Interest income

405


6


482


18

Interest expense


(4,164)



(8,721)

Other expense, net

(850)



(880)


Total other income (expense)

1,684


(4,158)


5,362


(8,703)









Loss before income taxes

(92,440)


(28,954)


(181,480)


(61,167)









Income tax expense

(320)



(320)










Net loss

(92,760)


(28,954)


(181,800)


(61,167)

Less: Net loss attributable to non-controlling interests


(2,798)


(387)


(5,602)

Net loss attributable to Wheels Up Experience Inc

$         (92,760)


$         (26,156)


$       (181,413)


$        (55,565)









Net loss per share of Class A common stock:








Basic

$             (0.38)


$             (0.15)


$             (0.74)


$            (0.33)