Sign in

You're signed outSign in or to get full access.

VI

Vacasa, Inc. (VCSA)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 revenue declined 19% year-over-year to $177.4M as GBV and pricing fell; adjusted EBITDA was -$54.9M and GAAP net loss was $76.5M .
  • Management withheld 2024 guidance citing “softening demand,” increased supply, bookings variability, and elevated churn; focus remains on adjusted EBITDA profitability and positive FCF in 2024 .
  • Cost actions accelerated: ~320 roles (≈5% of workforce) eliminated and COO departure announced to align cost base with priorities; expected severance costs $4–5M in 1H24 .
  • Operational efficiency improved (e.g., field scheduling, Airbnb connectivity, AI tools) and owner/guest satisfaction rose, but churn remains elevated; home count ended 2023 at ~42,000, down 5% YoY .
  • Potential stock reaction catalysts: no 2024 guidance, workforce reduction/COO transition, and margin discipline amid demand softness .

What Went Well and What Went Wrong

What Went Well

  • Efficiency gains in local markets and central ops: Q4 cost of revenue dollars down 12% YoY and operations/support dollars down 13% YoY, despite revenue decline .
  • Product/tech execution: rollout of owner communications portal, market rates comparison tool, upgraded Airbnb connectivity, channel expansion, and AI tools (e.g., guest review processing) to improve satisfaction and reduce support load .
  • Owner/guest satisfaction improved through 2H23; Q4 posted highest guest reviews, cleanliness, and NPS of 2023 across major channels .

What Went Wrong

  • Top-line pressure: Q4 revenue down 19% YoY to $177.4M; GBV down 19% to $337M; GBV/night sold down 15% to $309; nights sold down 5% to 1.092M .
  • Profitability deterioration in seasonally weak Q4: adjusted EBITDA -$54.9M (vs -$49.0M LY) and net loss -$76.5M (vs -$302.0M LY driven by prior-year impairment) .
  • Elevated homeowner churn continues to pressure home count and revenue trajectory; ~42,000 homes at year-end (-5% YoY), with management acknowledging churn not yet turned despite improving owner NPS .

Financial Results

MetricQ2 2023Q3 2023Q4 2023
Revenue ($M)$304.6 $379.1 $177.4
GAAP Net Income (Loss) ($M)($5.6) ($402.5) ($76.5)
GAAP EPS ($)(N/A, pre-reverse split, not comparable)($18.37) ($3.48)
Adjusted EBITDA ($M)$16.1 $74.3 ($54.9)
Cost of Revenue (% Rev)47% 40% 58%
Operations & Support (% Rev)20% 17% 33%

Notes: Q4 2022 revenue was $218.2M; net loss $302.0M; YoY revenue -19% . Adjusted EBITDA is non-GAAP; see reconciliation .

KPIs (Demand and Pricing)

KPIQ2 2023Q3 2023Q4 2023
Gross Booking Value ($M)$622.3 $830.1 $336.9
Nights Sold (000s)1,689 2,047 1,092
GBV per Night Sold ($)$368 $406 $309

Estimates vs. Actuals (Q4 2023)

  • S&P Global consensus data for VCSA was unavailable in our system during this review; therefore, estimate comparisons are not shown. We attempted to fetch “Primary EPS Consensus Mean” and “Revenue Consensus Mean,” but the company mapping was missing from the S&P Global interface for ticker VCSA at the time of query.

Guidance Changes

MetricPeriodPrevious Guidance (as of Q3 letter)Current (Q4 report/call)Change
Revenue (YoY)FY 2023Decline 7% to 6% YoY $1.118B vs $1.188B in 2022 (~-5.9% YoY) Better than guide (smaller decline)
Adjusted EBITDA ($M)FY 2023$5–$15M $23.5M Raised vs guidance
2024 OutlookFY 2024Not providedNo guidance due to demand softness, increased supply, churn; prioritizing adj. EBITDA profitability and FCF Guidance withheld
Restructuring Costs1H 2024N/A$4–$5M cash costs expected (severance/fees) New cost item

No specific guidance on OpEx line items, OI&E, tax rate, segments, or dividends was provided in Q4 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2023)Current (Q4 2023)Trend
AI/Technology & Product VelocityQ2: AI for listing image tagging; click-to-SMS adopted; automated field scheduling; Homecare Dashboard . Q3: Automation in scheduling and photo inspection improved reviews/efficiency .Q4: Airbnb connectivity upgrades; added channels; AI reduced time processing guest reviews; owner portal and market rates comparison tool launched .Continued product cadence; broader channel integrations; AI use expanding .
Demand & PricingQ2: Normalization from 2021–22 highs; GBV/night down; nights roughly flat; press attention on supply increases . Q3: GBV down 14%; price down 14%; softness persists .Q4: Softening demand and increased supply; bookings variability; close-in weakness; GBV -19%, price -15% .Worsened into early 2024; uncertainty elevated .
Homeowner ChurnQ2: Elevated but trending better; communication and market data sharing emphasized . Q3: Elevated churn continues amid lower homeowner income vs 2021–22 .Q4: Owner NPS improving, but churn not yet better; YE homes ~42k (-5% YoY) .Still elevated; retention remains priority .
Sales Motion (Individual Sales)Q2: Simplified pricing, incentives, onboarding; align reps to single markets . Q3: Productivity improved YoY .Q4: Three straight quarters of YoY productivity improvement .Improving productivity; growth tempered by churn .
Cost/Efficiency FocusQ2: Central OpEx down YoY . Q3: Local ops cost -13% YoY; ops & support -15% YoY; EBITDA +$28M YoY .Q4: CoR dollars -12% YoY, Ops/Support dollars -13% YoY; workforce reduction plan .Continued cost discipline, org streamlining .
Leadership/Org—COO to depart 3/31/24; retained as advisor through 9/30/24 .Leadership transition in ops .

Management Commentary

  • “2024 is off to a difficult start… the short-term rental industry continues to adjust to softening demand… and increases in supply… we are experiencing continued bookings variability… we do not plan to provide guidance for 2024 until we have better visibility” .
  • “We made significant progress in 2023… our first full year of adjusted EBITDA profitability at scale… adjusted EBITDA increased over $50 million despite revenue declines of $70 million” .
  • “We decided to reduce our head count… around 320 people, representing about 5% of our workforce… to become a more efficient, high-performing organization” .
  • “Our homeowner satisfaction scores improved steadily through the second half… but we have not yet turned the corner on churn” .
  • “We significantly upgraded our connectivity to Airbnb… expanded channels… introduced Artificial Intelligence tools that improve productivity” .

Q&A Highlights

  • No near-term monthly detail and no 2024 guidance: Management emphasized bookings variability and macro uncertainty; unwilling to parse Jan/Feb trends; noted industry-wide factors (shift to urban/international, return to offices, macro pressure) .
  • Pricing vs occupancy: Nights sold down ~5% YoY in Q4; revenue management aims to optimize owner income via price/occupancy trade-offs; GBV/night accounts for majority of decline .
  • Churn disclosures: Home count ~42k at YE (down 5% YoY); NPS improving but churn not yet; will disclose homes quarterly going forward .
  • Competitive environment and ops cuts: Competitors seeing similar demand challenges; local ops was a small portion of reductions, largely driven by efficiency and automation .
  • Margin priorities: 2024 priority is adjusted EBITDA profitability and positive FCF even at expense of top line if needed .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2023 EPS and revenue (“Primary EPS Consensus Mean,” “Revenue Consensus Mean”), but the CIQ mapping for VCSA was unavailable in our system at time of query; therefore, consensus comparisons are not shown. As such, we cannot designate beats/misses relative to Wall Street estimates in this recap.

Key Takeaways for Investors

  • Demand/supply headwinds persist into 1H24: management flagged softening demand and rising supply as key drivers of bookings variability and pricing pressure; expect ongoing volatility near term .
  • Cost discipline is working: despite top-line pressure, Vacasa lowered Q4 CoR and Ops/Support dollars double digits and delivered FY23 adjusted EBITDA of $23.5M vs $5–$15M guide, evidencing operating control .
  • Churn is the swing factor: improving owner NPS and new tools are encouraging, but home count fell 5% in 2023 and churn hasn’t turned; retention is central to stabilizing revenue .
  • Product/tech enhancements could compound: Airbnb connectivity, expanded channels, and AI to compress service workload and improve satisfaction may further reduce cost-to-serve and aid retention .
  • Organizational reset underway: 5% workforce reduction and COO transition are intended to right-size costs and sharpen focus; $4–$5M restructuring costs expected in 1H24 .
  • Lack of 2024 guidance elevates uncertainty: Withheld outlook raises estimate risk; monitor updates on bookings pace, GBV/night trends, and churn in coming quarters .
  • Tactical positioning: Near-term bias favors cost/margin discipline over growth; any stabilization in GBV/night or churn could unlock operating leverage given lower cost base .

Appendix: Additional Q4 2023 Data Points (from 8-K/shareholder letter)

  • Revenue $177.4M (Q4 2023) vs $218.2M (Q4 2022) .
  • Net loss $76.5M (Q4 2023) vs $302.0M (Q4 2022; impacted by goodwill impairment) .
  • Adjusted EBITDA ($54.9M) (Q4 2023) vs ($49.0M) (Q4 2022) .
  • FY23: Revenue $1.118B (-6% YoY), Adjusted EBITDA $23.5M, Net loss $528.2M (includes $411M goodwill impairment) .

Press Releases/Other Q4 Items

  • Workforce reduction plan (≈320 positions; 5% of workforce) with $4–$5M expected costs; emphasis on aligning cost base to 2024 priorities .
  • COO departure effective March 31, 2024; advisory role through Sept 30, 2024 .
  • Internal all-hands email disclosing reductions and organizational changes .