Vacasa, Inc. (VCSA)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 revenue was $314,048K, adjusted EBITDA $69,091K, and net income $59,259K; revenue declined 17% YoY while adjusted EBITDA fell modestly vs last year due to restructuring and expense discipline .
• GBV fell 19% YoY to $670,135K on 21% fewer Nights Sold, partially offset by a 2% increase in GBV per Night Sold; homes under management were ~38,000 (down from ~42,000 YoY) reflecting elevated churn .
• Management provided no formal Q4 guidance and reiterated it does not anticipate reaching adjusted EBITDA profitability in 2024; bookings remain volatile with ongoing industry headwinds (soft demand and increased supply) .
• Early Q1 bookings are pacing slightly better than this time last year, but the team remains “extremely cautious” given volatility; hurricanes in October are not expected to be material to results .

What Went Well and What Went Wrong

What Went Well

• Operational execution during summer peak: ~400,000 guest reservations, >$300M income generated for homeowners; guest satisfaction and channel partner review scores improved YoY .
• Localized operating model and cost actions: corporate footprint reduced, local market autonomy increased; adjusted EBITDA only down $5M YoY despite a $65M revenue decline, highlighting expense discipline post-May restructuring .
• Initial AI deployment: began leveraging AI to deliver information and context to owner and guest-facing teams to resolve issues faster; early gains in guest experience department are “promising” .

What Went Wrong

• Demand softness and supply growth pressured bookings: GBV -19% YoY, Nights Sold -21% YoY, and average GBV per home down ~12%; ongoing elevated churn reduced the home count to ~38,000 .
• Revenue down 17% YoY to $314,048K as industry normalizes off prior-year highs; continued variability in bookings flows through to revenue and adjusted EBITDA .
• Lack of visibility: management unable to provide Q4 guidance given bookings variability and churn; still does not anticipate adjusted EBITDA profitability in 2024 .

Financial Results

KPIs and operating drivers:

Operating cost ratios (illustrative, % of revenue):

• Q3 2024: Cost of revenue 40%; Operations & support 17% (both “consistent with prior year”) .
• Q2 2024: Cost of revenue 48% vs 47% prior year; Operations & support 23% vs 20% prior year .

Estimates comparison:

• Wall Street consensus via S&P Global was unavailable for VCSA this quarter due to missing CIQ mapping; therefore, estimate comparisons could not be performed.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We believe our operational success during summer peak season offers an early proof point that the business transformation we are driving…is working.”
• “While we are executing well against what we can control, the short-term rental industry continues to adjust to softening demand…as well as increases in the supply of short-term rental units.”
• “This past quarter, we began leveraging artificial intelligence to more efficiently deliver information and context to our owner and guest-facing teams, enabling them to resolve issues faster…”
• CFO: “Adjusted EBITDA was $69 million…Despite progress on our expense reductions, adjusted EBITDA continues to be affected by bookings variability impacting gross booking value per home and ultimately revenue.”
• CFO: “Early bookings for the first quarter are currently pacing slightly better than what we saw at about this time in 2023…booking patterns are still very volatile, and we are extremely cautious.”

Q&A Highlights

• Visibility and guidance: Management cannot provide forward-looking guidance due to bookings variability and churn; emphasized caution despite slightly better early Q1 pacing .
• Industry impacts: Soft demand and increased supply continue to depress GBV/home and utilization; unit economics pressured by declines in home-level bookings .
• Hurricane impact: October hurricanes are not expected to be material to financial results .

Estimates Context

• S&P Global consensus estimates were unavailable this quarter due to missing CIQ mapping for VCSA, preventing comparisons of revenue and EPS vs Street expectations. If estimates become available, we would anchor comparisons to S&P Global consensus.

Key Takeaways for Investors

• Trajectory improved sequentially: Revenue rose Q/Q from $248,976K in Q2 to $314,048K in Q3 as peak season helped, while adjusted EBITDA rebounded to $69,091K; however, both remain below prior-year levels amid industry pressure .
• Demand/supply headwinds persist: GBV -19% YoY and Nights Sold -21% YoY, with GBV per Night Sold +2% indicating pricing resilience but weaker utilization; churn remains elevated, reducing homes to ~38,000 .
• Cost actions cushioning profitability: Expense discipline post-May restructuring limited adjusted EBITDA YoY decline to ~$5M despite $65M lower revenue; continued opex reductions evident in Q3 line-item trends .
• Near-term setup cautious: No Q4 guidance; 2024 adjusted EBITDA profitability not anticipated; watch bookings volatility and churn into Q4 and early Q1 (slightly better pacing vs last year but highly uncertain) .
• Strategic focus areas: Continue monitoring local market execution, sales alignment to “right homes,” AI-enabled service gains, and guest/owner satisfaction improvements as potential leading indicators .
• Liquidity backdrop: Company previously strengthened liquidity with revolver draw (May) and $30M convertible notes (Aug); no new Q3 financing actions disclosed .
• Actionable: Near-term trading likely driven by bookings updates and churn trajectory; medium-term thesis hinges on localized execution improving unit economics and stabilizing inventory amidst an industry normalization .

Supporting documents reviewed:

• Q3 2024 8-K shareholder letter (Item 2.02; full financials and metrics) .
• Q3 2024 earnings call transcript .
• Prior quarters: Q2 2024 8-K and call –; Q1 2024 8-K and call – –.
• No additional press releases for Q3 found [List: press-release 2024-09 to 2024-11 returned none].