Vacasa, Inc. (VCSA)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 revenue fell 18% YoY to $209.5M as GBV declined 18% (Nights Sold -12%, GBV/night -7%); net loss widened to $140.9M, including an $84M long‑lived asset impairment; Adjusted EBITDA loss was $36.3M .
• Management accelerated a major reorganization: ~800 roles eliminated (~13% of workforce; ~40% corporate/central ops, ~6% field), shifting accountability to local market teams and pivoting tech strategy toward more third‑party tooling alongside targeted in‑house development .
• Guidance withdrawn; management does not anticipate reaching Adjusted EBITDA profitability in 2024 despite >$50M in expected in‑year cost savings (~$120M run‑rate), citing persistent bookings and pricing pressure into summer; company drew ~$80–81M on revolver to bolster liquidity .
• Primary narrative/catalysts: continued demand softness and increased supply in domestic non‑urban vacation rentals, elevated churn, cost takeout and field empowerment, revolver draw, and absence of guidance—key drivers of investor sentiment near term .

What Went Well and What Went Wrong

• What Went Well

  • Decisive cost actions: reduction of ~800 roles (13% of workforce) with >$50M 2024 savings and ~$120M annual run‑rate, focused on corporate layers while protecting field service levels .
  • Clear operating model shift: empowering local teams to own sales, onboarding, revenue management, and marketing—aimed at improving owner/guest experience and unit economics .
  • Non‑GAAP operating discipline continues: detailed reconciliation shows manageable operating expense trajectory despite top‑line pressure; restructuring costs recognized ($3.3M) and non‑cash impairment isolated ($84M) in EBITDA bridge .

• What Went Wrong

  • Demand/supply headwinds intensified: bookings weakness (both Nights Sold and price) into crucial summer build; GBV down 18% YoY; homes down to ~41k (from ~43k) amid elevated churn .
  • Profitability compression: revenue -18% YoY to $209.5M; Adjusted EBITDA loss widened to -$36.3M vs -$12.0M last year; cost of revenue mix elevated vs last year despite dollar reductions .
  • Liquidity caution and no guidance: ~$80–81M revolver draw and suspension of annual guidance; management does not expect Adjusted EBITDA profitability in 2024 given current booking dynamics .

Financial Results

Revenue and Adjusted EBITDA (oldest → newest)

EPS (YoY comparison)

Key KPIs (oldest → newest)

Q1 cost structure (GAAP dollars)

Additional P&L and cash/liquidity

• Net loss Q1 2024: -$140.9M (includes $84M impairment) .
• Cash and restricted cash at 3/31/24: $311.4M; revolver draw $81M on 5/8/24 .
• Funds payable to owners rose to $240.4M at 3/31/24 reflecting seasonality .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “The bookings weakness we saw at the start of the year is likely to persist through the remainder of 2024.” — CEO Rob Greyber .
• “We are reducing our headcount by about 800 employees or 13%...eliminated approximately 40% [of] corporate...~6% [of] field.” — CEO Greyber .
• “We expect these adjustments to provide over $50 million of cost savings in 2024, and over $120 million on an annual run rate basis…we don’t anticipate reaching Adjusted EBITDA profitability this year.” — CFO Bruce Schuman .
• “Gross Booking Value reached $427 million, down 18%...Revenue was $209 million…Net Loss was $141 million…Adjusted EBITDA loss was $36 million.” — Shareholder Letter .
• “We drew about $80 million under our revolving credit facility to supplement our liquidity.” — CFO Schuman ; 8‑K disclosed $81M draw on 5/8/24 .

Q&A Highlights

• Local market focus and unit economics: Management aims to concentrate resources where local teams can drive better sales/onboarding and service; corporate costs being reduced to unlock local contribution margins .
• Churn and gross adds: Churn remains elevated; owner revenue frustration is primary driver; local sales empowerment and incentives intended to improve gross adds and retention over time .
• Pricing vs occupancy: Nights Sold per home declined with ADR pressure; revenue management algorithms balance occupancy and price to maximize homeowner income .
• Guidance and liquidity: No 2024 guidance; revolver draw was a prudent measure amid uncertain bookings build into summer .

Estimates Context

• Wall Street consensus via S&P Global: Unavailable in our system for VCSA this quarter; as a result, we cannot provide a formal beat/miss versus consensus for revenue, EPS, or EBITDA (S&P Global mapping not available).
• Given the absence of formal guidance and consensus, we expect Street models to move lower on revenue and Adjusted EBITDA for 2024, reflecting weaker summer bookings commentary and management’s expectation of no Adjusted EBITDA profitability in 2024 .

Key Takeaways for Investors

• Narrative turning point: Structural shift to hyper‑local execution with a materially leaner corporate layer; execution risk near term but potentially improved field accountability and service levels medium term .
• Macro/industry headwinds persist: Domestic non‑urban leisure demand softness and increased supply continue to pressure nights and ADR; churn remains elevated, weighing on homes under management .
• 2024 profitability reset: Management does not expect Adjusted EBITDA profitability in 2024 despite >$50M in-year cost savings; watch for second‑half cost realization timing and any stabilization in bookings .
• Liquidity posture tightened: ~$80–81M revolver draw is a cautionary signal given bookings uncertainty; monitor cash, restricted cash dynamics, and funds payable seasonality .
• Near‑term trading setup: Lack of guidance, revolver draw, and summer build commentary are likely overhangs; catalysts include evidence of churn moderation, stabilization in GBV/night, and tangible local model benefits in 2H .
• Medium‑term thesis hinge: If local empowerment plus tech pragmatism can improve owner/guest experience and reduce cost-to-serve, operating leverage can improve when demand stabilizes; execution in 2024 is key .
• Cross‑checks: 8‑K figures reconcile with call commentary (e.g., revenue $209M, Adjusted EBITDA -$36M, impairment $84M), supporting reliability of the print .

Appendix: Additional Detail and Non‑GAAP Disclosures

• Adjusted EBITDA reconciliation includes add‑backs for D&A ($13.1M), impairment ($84.0M), equity‑based comp ($3.1M), restructuring ($3.3M), and other items; Q1 2024 Adjusted EBITDA = -$36.3M .
• Non‑GAAP operating expense breakouts (ex‑SBC, restructuring, and business combination costs) are provided for cost of revenue, operations & support, technology & development, sales & marketing, G&A .
• Risk factor supplement highlights execution risks of the reorganization, potential negative cash flow impacts from severance, morale/productivity risks, and technology strategy shift risks .