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Sep 30, 2024
Wheels Up Q3 2024 Earnings Report
Wheels Up experienced improvements in financial performance due to operating initiatives, and outlined a fleet modernization plan to enhance profitability. A new credit facility is expected to strengthen the balance sheet, supported by Delta Air Lines' commitment to the strategic partnership.
Key Takeaways
Wheels Up reported stabilized revenue, record adjusted contribution margin, and improved net loss and operating cash flow in Q3 2024. The company is focused on fleet modernization and expects positive Adjusted EBITDA for the full year 2025.
Revenue was $194 million, consistent with the first and second quarters of 2024.
Adjusted Contribution Margin reached a record high of 14.8%, up 380 basis points year-over-year.
Net loss improved to $58 million, an $87 million improvement year-over-year.
Net cash used in operating activities improved to an outflow of $15 million, a 94% improvement year-over-year.
Wheels Up
Wheels Up
Wheels Up Revenue by Segment
Revenue by Segment
Flight Revenue
CapyFin.comMembership Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
Wheels Up anticipates that closing of our new revolving credit facility will enhance our access to capital and bolster our liquidity position, allowing us to expedite the modernization of our fleet and scale our business.
Positive Outlook
- Fleet modernization strategy for the replacement of the Company’s existing jet fleet across four aircraft types with two of the most preferred and successful aircraft in the industry: Embraer’s Phenom 300 series and Bombardier’s Challenger 300 series platforms.
- Plans to acquire the GrandView Aviation fleet of 17 Phenom 300 and 300E aircraft, which is expected to establish Wheels Up as the largest on-demand charter operator of Phenom 300 series aircraft in the world.
- Agreed to sell all 13 owned Citation X aircraft, and expect to lease a portion of the sold aircraft and amend existing Citation X leases to provide lease flexibility that will ease the transition to the Challenger 300 series aircraft.
- Secured up to $332 million commitment from Bank of America for new senior secured revolving credit facility.
- Signed a letter of intent to equip anticipated Phenom and Challenger aircraft with Gogo’s best-in-class Galileo HDX satellite-based WiFi, delivering high bandwidth, low latency, and universal coverage capable of live streaming and voice telephony.
Challenges Ahead
- Active Members decreased 38% year-over-year to 6,699, primarily as a result of the regionalization of our member programs and focus on profitable flying, as well as streamlining our membership offering.
- Active Users decreased 35% year-over-year to 8,215, primarily related to the decline in Active Members.
- Revenue decreased 39% year-over-year, primarily driven by exiting the aircraft management and aircraft sale businesses, as well as reduced Flight revenue, primarily due to our focus on more profitable flying.
- Adjusted EBITDA loss slightly increased by $1.5 million year-over-year to $20.0 million, reflecting the absence of $5.9 million of software licensing revenue recognized in the third quarter of 2023 with no current year equivalent, partially offset by our operational efficiency and other spend reduction efforts.
- The impacts of general economic and geopolitical conditions on Wheels Up’s business and the aviation industry, including due to fluctuations in interest rates, inflation, foreign currencies, consumer and business spending decisions, and general levels of economic activity.
Revenue & Expenses
Visualization of income flow from segment revenue to net income