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II

Inspirato Inc (ISPO)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $63.1M, gross margin improved to 28% (up 350 bps YoY), and adjusted EBITDA was approximately ($0.3M), marking a 96% YoY improvement; free cash flow was positive at $0.25M, achieving breakeven on cash generation .
  • Subscription revenue fell 23% YoY to $19.4M due to the intentional scale-back of the prior Pass product, while travel revenue rose 1% YoY, driven by 48% growth in experiences; ADR rose 24% and occupancy was 59% as portfolio optimization supported margins .
  • Management reaffirmed tracking toward full-year guidance (revenue $235–$255M, adjusted EBITDA $0–$5M, cash OpEx $80–$90M) but will not update standalone guidance due to the pending BuyerLink merger; no quarterly guidance provided .
  • Catalysts: Pending close of the BuyerLink transaction (expected Q3 2025) with planned refinancing and recapitalization, the relaunch of Inspirato Pass ($40,000/year, limited to 2,500 memberships), and continued margin expansion efforts .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA improved by $8.8M YoY (96%) and free cash flow turned positive, reflecting the impact of cost optimization and portfolio improvements; CFO highlighted positive TTM adjusted EBITDA of $3.9M .
  • Experiences and bespoke travel grew 48% YoY, boosting travel revenue and mix quality; ADR increased 24% to $1,670, supporting gross margin expansion to 28% .
  • CEO emphasized strategic momentum: “EBITDA improvement of $8.8 million year-over-year and achieving free cash flow breakeven…building a more agile, digitally enabled Inspirato” .

What Went Wrong

  • Subscription revenue declined 23% YoY to $19.4M amid the intentional scale-back of legacy Pass; total active memberships dropped to ~11,200 from ~12,700 YoY, including fewer Pass members .
  • Occupancy fell to 59% (from 71% YoY) as paid nights declined across residences and hotels, though ADR increases offset margin pressure .
  • Net loss was $5.3M with diluted EPS of ($0.42); cost of revenue was still elevated at $45.7M despite improvements, and management cited no incremental CapEx plan near term, focusing instead on resource prioritization .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$63.114 $65.889 $63.108
Gross Margin ($USD Millions)$21.931 $25.545 $17.372
Gross Margin (%)35% 39% 28%
Net Income (Loss) ($USD Millions)($2.282) $1.622 ($5.313)
Diluted EPS ($USD)($0.21) $0.12 ($0.42)

Segment revenue/margin components (YoY comparison):

Component ($USD Millions)Q2 2024Q2 2025
Residence & hotel travel$29.1 $24.9
Experiences & bespoke travel$9.8 $14.5
Total Travel$38.8 $39.4
Subscription revenue$25.2 $19.4
Rewards & other revenue$3.3 $4.4
Total revenue$67.4 $63.1
Cost of revenue$51.2 $45.7
Gross margin ($)$16.2 $17.4
Gross margin (%)24% 28%

KPIs:

KPIQ2 2024Q2 2025
Occupancy (Total)71% 59%
ADR (Total)$1,346 $1,670
Paid Nights Delivered (Total)21,900 15,800
Total Nights Delivered (Total)35,700 23,600
Active Memberships (Total)12,700 11,200
Club10,800 9,900
Pass1,900 1,200
Invited— 100

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY 2025$0–$5M $0–$5M; tracking, no further standalone updates due to BuyerLink Maintained
RevenueFY 2025$235–$255M $235–$255M; tracking, no further standalone updates due to BuyerLink Maintained
Cash Operating ExpensesFY 2025$80–$90M $80–$90M; tracking, no further standalone updates due to BuyerLink Maintained
Gross Margin expansionFY 2025~300 bps YoY improvement (narrative) Management continues portfolio optimization supporting margins Maintained (qualitative)

Note: Management will not update standalone Inspirato guidance going forward due to the pending BuyerLink transaction; execution continues against prior targets .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Digital platform, AI/performance marketingEmphasis on tech and margin-driven transformation; positive Q4 cash from ops ; Q1 focused on foundational tech investments BuyerLink combination to create “One Planet Platforms,” leveraging marketplace tech and performance marketing for scaled acquisition and personalization Improving; strategic acceleration
Membership mix, PassQ4/Q1: Pass scaled down; club stabilization ; Q1 ADR 1,915, occupancy 73% Relaunch of Inspirato Pass ($40,000/year, limited to 2,500 seats); Pass ~10% of base (1,200 members); aim to drive incremental revenue with simplified product Reset; relaunch underway
Occupancy & ADRQ4 total occupancy 67%, ADR $1,475 ; Q1 occupancy 73%, ADR $1,915 Q2 occupancy 59% with ADR up 24% to $1,670; margin expansion despite lower utilization Mixed: ADR up, occupancy down
Capital structure & refinancingQ4 improved cash from ops; 2024 debt remained Q&A: plan to refinance Capital One note at merger close; Citi likely continues; targeting recapitalization with possible incremental debt/equity Improving clarity (pending execution)
Free cash flow / liquidityQ4 FCF +$5.8M ; Q1 FCF ($7.5M) Q2 FCF +$0.25M (breakeven trajectory); focus on sustained positive FCF Improving trajectory
Macro demand & experiencesQ4 travel/rewards resilience ; Q1 travel down YoY, mix evolving Q2 experiences +48% YoY; bespoke timing aided growth Improving in experiences

Management Commentary

  • CEO: “Our second quarter results reflect continued progress in our transformation, highlighted by an EBITDA improvement of $8.8 million year-over-year and achieving free cash flow breakeven…building a more agile, digitally enabled Inspirato” .
  • CFO: “Negative adjusted EBITDA of $300,000…a meaningful turnaround from negative $9.2 million in 2024; positive trailing twelve month adjusted EBITDA of $3.9 million” .
  • CEO on BuyerLink: “By combining forces, we will harness that technology to enhance discovery, personalization, and monetization of luxury travel…positioned to scale efficiently” .
  • CFO on guidance: “We continue to track towards…adjusted EBITDA between breakeven and $5M, total revenue $235–$255M, and cash operating expenses $80–$90M…we do not plan to update standalone guidance going forward” .
  • CEO on brand/membership: “We’re elevating service quality and launching a new loyalty program centered around access and premium experience…upgrading the Pass member experience with a new product” .

Q&A Highlights

  • Pro forma balance sheet and refinancing: Management anticipates refinancing the Capital One senior secured note at close; Citi likely continues with the combined company; exploring incremental capital (debt/equity) alongside recapitalization .
  • CapEx outlook: No meaningful change in CapEx expected post-merger; focus on resource prioritization over increased capital spending .
  • BuyerLink impact timeline: Marketplace buildout and integration underway; foundation expected to deliver benefits starting in 2026, with continued progress through 2026 .
  • BuyerLink growth profile: Growth vectors include adding verticals, increasing liquidity/demand in marketplaces (e.g., home services, used cars), and consolidation of smaller assets; historical average growth north of 20% (via KGET reference) .

Estimates Context

  • S&P Global consensus estimates for quarterly EPS and revenue were unavailable for ISPO for Q2 2025 and the immediate forward quarter, limiting formal beat/miss analysis; management does not provide quarterly guidance and is transitioning to combined-company reporting post-merger .
  • In absence of consensus, anchor to full-year guidance reaffirmation and intra-quarter operating metrics (gross margin, ADR, occupancy) to gauge trajectory .
    Data note: We attempted to retrieve consensus via S&P Global; no estimate data was returned.*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin story intact: ADR strength and cost optimization lifted gross margin to 28% despite lower occupancy; continued mix shift to experiences supports margin durability .
  • Cash discipline: Free cash flow breakeven in Q2 (~$0.25M) and improved TTM adjusted EBITDA signal progress toward sustainable cash generation; monitor trajectory through H2 .
  • Strategic catalysts: BuyerLink merger (expected Q3 close) plus planned refinancing/recapitalization should enhance capital structure and unlock tech-driven growth; look for definitive financing details at/after close .
  • Subscription reset: Pass relaunch at $40,000/year (limited to 2,500 memberships) targets higher-yield, more engaged customers; watch adoption vs. legacy Pass declines .
  • Near-term setup: With no quarterly consensus available, trade the narrative—closing of the merger, refinancing outcomes, and operational KPIs (ADR, occupancy, experiences growth) as the primary drivers .
  • Medium-term thesis: Combined platform (One Planet Platforms) should enable scaled, data-driven customer acquisition and monetization in luxury travel, with potential for margin expansion and revenue diversification across marketplaces .
  • Risk monitoring: Membership declines and occupancy pressure, debt refinancing execution, and integration risk with BuyerLink remain key watch items; legal/investigative headlines and governance also bear monitoring .