NEW YORK, Nov. 10, 2021 /PRNewswire/ -- Wheels Up
Experience Inc. (NYSE:UP) today announced financial results for the
third quarter, which ended September 30, 2021.
Third Quarter 2021 Highlights
- Revenue increased 55% year-over-year to $302.0 million
- Active Members grew 45% year-over-year to 11,375 in total
- Live Flight Legs increased 52% year-over-year to 19,714 in
total
- Adjusted EBITDA decreased by $(15.9)
million year-over-year to $(23.9)
million
"I am pleased to report another quarter of record revenue, which
offers further evidence that the work to expand our fleet
offerings, invest in our iconic brand, and serve our high value
customers is setting us apart." said Kenny
Dichter, Wheels Up Chairman & Chief Executive Officer.
"Our supply constraints are no different than what many companies
are facing today, and reinforces the need for the
technology-enabled marketplace platform that we are building. In
the meantime, however, it's imperative that we continue our
investments to deliver the best experience possible for every
customer. I want to express my appreciation to our extraordinary
team for their relentless dedication to the operation and their
passion for our Members and Customers. In turn, I also want to
thank our Members and Customers for their loyalty and trust."
"We are steadfastly committed to serving and investing in our
growing base of loyal Customers, even as the state of the industry
has brought unique and unprecedented challenges," said Eric Jacobs, Wheels Up Chief Financial Officer.
"We are managing through these challenges and the near-term impact
they are having on our margins, and believe we can significantly
increase margins in the long-term."
Recent Initiatives
- Commenced strategic relationship with American Express,
offering their members exclusive benefits. The partnership has
driven strong new flight activity, membership purchases, and fund
block purchases as well as a significant increase in mobile
downloads during the quarter.
- Accelerated success in selling "UP for Business," which has
benefited from the commercial relationship with Delta Air Lines
that gives businesses the flexibility to fly both commercial and
private as well as access a diverse range of aircraft to fit their
varying needs.
- Announced new capped rate pricing and program changes for our
membership programs, which will take effect on December 1, 2021.
- Enhanced the senior leadership team with the appointment of
Vinayak Hegde to President on
October 5, 2021, as well as the
hiring of a Gene McKenna as Chief
Product Officer; Srikanth Satya as
Chief Technology Officer; and Julia
Zhang as SVP of Pricing and Revenue Management.
Financial and Operating Highlights
|
As of September
30,
|
|
|
|
2021
|
|
2020
|
|
%
Change
|
Active
Members(1)
|
11,375
|
|
|
7,864
|
|
|
45
|
%
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
(in thousands,
except percentages, Active Users, Live Flight Legs and
Revenue per Live Flight Leg)
|
2021
|
|
2020
|
|
%
Change
|
Active
Users(1)
|
12,011
|
|
|
9,280
|
|
|
29
|
%
|
Live Flight
Legs(1)
|
19,714
|
|
|
12,951
|
|
|
52
|
%
|
Revenue per Live
Flight Leg
|
$
|
11,076
|
|
|
$
|
10,832
|
|
|
2
|
%
|
Revenue
|
$
|
301,978
|
|
|
$
|
194,781
|
|
|
55
|
%
|
Net income
(loss)
|
$
|
(59,455)
|
|
|
$
|
20,548
|
|
|
(389)
|
%
|
Adjusted
EBITDA(1)
|
$
|
(23,928)
|
|
|
$
|
(8,025)
|
|
|
(198)
|
%
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
(in thousands,
except percentages)
|
2021
|
|
2020
|
|
%
Change
|
Revenue
|
$
|
849,215
|
|
|
$
|
485,208
|
|
|
75
|
%
|
Net loss
|
$
|
(120,622)
|
|
|
$
|
(51,292)
|
|
|
(135)
|
%
|
Adjusted
EBITDA(1)
|
$
|
(41,070)
|
|
|
$
|
(41,111)
|
|
|
—
|
%
|
|
(1) For information
regarding Wheels Up's use and definition of this measure see
"Definitions of Key Operating Metrics and Non-GAAP Financial
Measures" and "Reconciliations of Non-GAAP Financial Measures"
sections herein.
|
For the third quarter:
- Active Members grew 45% year-over-year to 11,375 driven by
strong new Member additions and existing membership retention, as
well as continued success converting legacy Wheels Up Private Jets
LLC Jet Card holders into Wheels Up Members.
- Active Users grew 29% to 12,011 year-over-year primarily driven
by the growth in Active Members.
- Live Flight Legs increased by 52% year-over-year to 19,714 with
strong flight demand across all cabin classes driven by the growth
in Active Members and the impact of COVID-19 on 2020 results. The
acquisition of Mountain Aviation, LLC, acquired on January 5, 2021, also contributed to the year
over year growth.
- Revenue per Live Flight Leg increased 2% year-over-year to
$11,076 as a result of a higher mix
of larger cabin flying and partially offset by a seasonal decrease
in average flight stage length.
- Revenue increased 55% year-over-year driven by strong flight
demand, the impact of COVID-19 on 2020 results and the acquisition
of Mountain Aviation.
- Net income (loss) decreased by $(80.0)
million due to several factors, including the impact of the
Company benefiting from the utilization of $51.6 million of CARES Act grant funding in 2020,
a decrease in Adjusted Contribution Margin caused by supply
constraints and increased operating costs, as well as an increase
in equity-based compensation expense, including a broad-based
equity grant to the Wheels Up employee pilots.
- Adjusted EBITDA of $(23.9)
million, decreased $(15.9)
million year-over-year, due primarily to lower Adjusted
Contribution Margin.
Webcast and Conference Call Information
A conference call with management will be held today at
8:30 am ET. To access a live webcast
of the conference call and supporting presentation materials,
please click on the Wheels Up investor site
(www.wheelsup.com/investors). To participate by phone, please dial
844-200-6205 (US Toll Free) or 929-526-1599 (Toll/International)
using the access code 122939. An online replay of the conference
call will be available approximately three hours after the
conference call at the link above. A telephone replay will be
available for two weeks by dialing 866-813-9403 (US Toll Free) or
+44 204 525 0658 (International) using the access code 006139.
Participants are asked to dial in 15 minutes early to ensure a
timely connection. This earnings press release and any supporting
materials will be available on the Company's investor relations
website. We also provide announcements regarding the Company's
financial performance, including U.S. Securities and Exchange
Commission (the "SEC") filings, investor events, press and earnings
releases, and blogs, on the investor relations website.
About Wheels Up
Wheels Up Experience Inc. ("Wheels Up"), a leading demand
generator in private aviation, offers a total private aviation
solution that includes world-class safety, service, and flexibility
through on-demand flights, membership programs, corporate
solutions, aircraft management, whole aircraft sales, and
commercial travel benefits through a strategic partnership with
Delta Air Lines. Wheels Up, which was founded and is led by
renowned entrepreneur Kenny Dichter,
is uniquely positioned to offer its Customers and Members access to
over 1,500 safety-vetted and verified aircraft.
Through the Wheels Up App anyone can search, book, and fly.
Wheels Up Connect, Core, and Business memberships provide
enhancements such as flight sharing, empty-leg Hot Flights, Shuttle
Flights, Shared Flights, signature Wheels Down events, and
exclusive member benefits from preeminent lifestyle brands. The
Company's ongoing Wheels Up Cares program aligns with philanthropic
organizations and initiatives that affect and matter to the Company
and its Customers, Members, stakeholders, families, and friends.
The Wheels Up Cares fleet is comprised of five custom painted
Beechcraft King Air 350i aircraft; each plane serves as a flying
symbol for a specific cause.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains certain "forward-looking statements"
within the meaning of the federal securities laws. These
forward-looking statements include, but are not limited to,
statements regarding Wheels Up's expectations, hopes, beliefs,
intentions or strategies regarding the future including, without
limitation, statements regarding: (i) the size, demands and growth
potential of the markets for Wheels Up's products and services and
Wheels Up's ability to serve those markets, (ii) the degree of
market acceptance and adoption of Wheels Up's products and
services, (iii) Wheels Up's ability to develop innovative products
and services and compete with other companies engaged in the
private aviation industry and (iv) Wheels Up's ability to attract
and retain customers. In addition, any statements that refer to
projections, forecasts, or other characterizations of future events
or circumstances, including any underlying assumptions, are
forward-looking statements. The words "anticipate," "believe,"
continue," "could," "estimate," "expect," "intend," "may," "might,"
"plan," "possible," "potential," "predict," "project," "should,"
"strive," "would" and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that statement is not forward-looking. Forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions and, as a result, are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside Wheels Up's control, that could cause actual
results to differ materially from the results discussed in the
forward-looking statements. Additional factors that could cause
actual results to differ materially from those expressed or implied
in forward-looking statements can be found in the registration
statement on Form S-1 filed with the SEC by Wheels Up on
August 3, 2021, and other documents
filed by Wheels Up from time to time with the SEC. New risks and
uncertainties arise from time to time, and it is impossible for us
to predict these events or how they may affect us. You are
cautioned not to place undue reliance upon any forward-looking
statements, which speak only as of the date made, and Wheels Up
undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, changes in
expectations, future events or otherwise. These filings identify
and address other important risks and uncertainties that could
cause actual events and results to differ materially from those
contained in the forward-looking statements. We do not give any
assurance that Wheels Up will achieve its expectations.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures
such as Adjusted EBITDA, Adjusted Contribution, and Adjusted
Contribution Margin. These non-GAAP financial measures are an
addition, and not a substitute for or superior to, measures of
financial performance prepared in accordance with generally
accepted accounting principles in the
United States of America ("GAAP") and should not be
considered as an alternative to net income (loss), operating income
(loss) or any other performance measures derived in accordance with
GAAP. Reconciliations of non-GAAP financial measures to their most
directly comparable GAAP counterparts are included in the
"Reconciliations of Non-GAAP Financial Measures" section herein to
this earnings press release. Wheels Up believes that these non-GAAP
financial measures of financial results provide useful supplemental
information to investors about Wheels Up. However, there are a
number of limitations related to the use of these non-GAAP
financial measures and their nearest GAAP equivalents, including
that they exclude significant expenses that are required by GAAP to
be recorded in Wheels Up's financial measures. In addition, other
companies may calculate non-GAAP financial measures differently, or
may use other measures to calculate their financial performance,
and therefore, Wheels Up's non-GAAP financial measures may not be
directly comparable to similarly titled measures of other
companies. Additionally, to the extent that forward-looking
non-GAAP financial measures are provided, they are presented on a
non-GAAP basis without reconciliations of such forward-looking
non-GAAP financial measures due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations.
For more information on these non-GAAP financial measures, see
the sections titled "Definitions of Key Operating Metrics and
Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP
Financial Measures" included at the end of this earnings press
release.
Contacts
Investors:
ir@wheelsup.com
Media:
wheelsup@jonesworks.com
WHEELS UP
EXPERIENCE INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited, in
thousands, except share data)
|
|
|
September 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
535,253
|
|
|
$
|
312,799
|
|
Accounts receivable,
net
|
69,044
|
|
|
50,397
|
|
Other
receivables
|
10,112
|
|
|
8,205
|
|
Parts and supplies
inventories, net
|
8,742
|
|
|
5,320
|
|
Prepaid expenses and
other
|
34,106
|
|
|
18,801
|
|
Total current
assets
|
657,257
|
|
|
395,522
|
|
Property and
equipment, net
|
313,986
|
|
|
323,090
|
|
Operating lease
right-of-use assets
|
112,372
|
|
|
64,479
|
|
Goodwill
|
437,181
|
|
|
400,160
|
|
Intangible assets,
net
|
152,416
|
|
|
163,710
|
|
Restricted
cash
|
2,177
|
|
|
12,077
|
|
Employee loans
receivable, net
|
—
|
|
|
102
|
|
Other non-current
assets
|
1,104
|
|
|
849
|
|
Total
assets
|
$
|
1,676,493
|
|
|
$
|
1,359,989
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
|
131
|
|
|
$
|
62,678
|
|
Accounts
payable
|
42,363
|
|
|
20,920
|
|
Accrued
expenses
|
83,231
|
|
|
71,381
|
|
Deferred revenue,
current
|
585,319
|
|
|
651,096
|
|
Operating lease
liabilities, current
|
32,315
|
|
|
15,858
|
|
Intangible
liabilities, current
|
2,000
|
|
|
2,000
|
|
Other current
liabilities
|
14,942
|
|
|
15,980
|
|
Total current
liabilities
|
760,301
|
|
|
839,913
|
|
Long-term
debt
|
22
|
|
|
148,411
|
|
Deferred revenue,
non-current
|
1,948
|
|
|
1,982
|
|
Operating lease
liabilities, non-current
|
87,087
|
|
|
56,358
|
|
Warrant
liability
|
15,948
|
|
|
—
|
|
Intangible
liabilities, non-current
|
14,583
|
|
|
16,083
|
|
Other non-current
liabilities
|
3,548
|
|
|
3,415
|
|
Total
liabilities
|
883,437
|
|
|
1,066,162
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Class A common stock,
$0.0001 par value; 2,500,000,000 authorized; 245,583,108 and
169,717,146 shares issued and outstanding as of September 30,
2021 and December 31, 2020, respectively
|
25
|
|
|
17
|
|
Additional paid-in
capital
|
1,460,053
|
|
|
831,226
|
|
Accumulated
deficit
|
(677,491)
|
|
|
(563,441)
|
|
Total Wheels Up
Experience Inc. stockholders' equity
|
782,587
|
|
|
267,802
|
|
Non-controlling
interests
|
10,469
|
|
|
26,025
|
|
Total
equity
|
793,056
|
|
|
293,827
|
|
Total liabilities and
equity
|
$
|
1,676,493
|
|
|
$
|
1,359,989
|
|
WHEELS UP
EXPERIENCE INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in
thousands except share and per share data)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
$
|
301,978
|
|
|
$
|
194,781
|
|
|
$
|
849,215
|
|
|
$
|
485,208
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
revenue
|
283,495
|
|
|
171,338
|
|
|
773,191
|
|
|
446,632
|
|
Technology and
development
|
8,769
|
|
|
6,044
|
|
|
23,818
|
|
|
15,345
|
|
Sales and
marketing
|
22,157
|
|
|
13,655
|
|
|
55,846
|
|
|
38,893
|
|
General and
administrative
|
42,490
|
|
|
14,542
|
|
|
76,444
|
|
|
38,740
|
|
Depreciation and
amortization
|
13,639
|
|
|
14,722
|
|
|
40,952
|
|
|
44,189
|
|
Cares Act
grant
|
—
|
|
|
(51,646)
|
|
|
—
|
|
|
(64,923)
|
|
Total costs and
expenses
|
370,550
|
|
|
168,655
|
|
|
970,251
|
|
|
518,876
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(68,572)
|
|
|
26,126
|
|
|
(121,036)
|
|
|
(33,668)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Change in fair value
of warrant liability
|
12,271
|
|
|
—
|
|
|
12,271
|
|
|
—
|
|
Loss on extinguishment
of debt
|
(2,379)
|
|
|
—
|
|
|
(2,379)
|
|
|
—
|
|
Interest
income
|
7
|
|
|
36
|
|
|
25
|
|
|
503
|
|
Interest
expense
|
(782)
|
|
|
(5,614)
|
|
|
(9,503)
|
|
|
(18,127)
|
|
Total other income
(expense)
|
9,117
|
|
|
(5,578)
|
|
|
414
|
|
|
(17,624)
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
(59,455)
|
|
|
20,548
|
|
|
(120,622)
|
|
|
(51,292)
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(59,455)
|
|
|
20,548
|
|
|
(120,622)
|
|
|
(51,292)
|
|
Less: net income
(loss) attributable to non-controlling interests
|
(970)
|
|
|
1,639
|
|
|
(6,572)
|
|
|
(3,944)
|
|
Net income (loss)
attributable to Wheels Up Experience Inc.
|
$
|
(58,485)
|
|
|
$
|
18,909
|
|
|
$
|
(114,050)
|
|
|
$
|
(47,348)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per share of Class A common stock:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.25)
|
|
|
$
|
0.11
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.29)
|
|
Diluted
|
$
|
(0.25)
|
|
|
$
|
0.11
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares of Class A common stock outstanding:
|
|
|
|
|
|
|
|
Basic
|
235,341,054.00
|
|
165,055,043.00
|
|
191,057,091.00
|
|
161,649,090.00
|
Diluted
|
235,341,054.00
|
|
165,055,043.00
|
|
191,057,091.00
|
|
161,649,090.00
|
WHEELS UP
EXPERIENCE INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
|
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
OPERATING
ACTIVITIES:
|
|
|
|
Net loss
|
$
|
(120,622)
|
|
|
$
|
(51,292)
|
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
40,952
|
|
|
44,190
|
|
Amortization of
deferred financing costs and debt discount
|
618
|
|
|
1,265
|
|
Equity-based
compensation
|
30,668
|
|
|
2,524
|
|
Change in fair value of
warrant liability
|
(12,271)
|
|
|
—
|
|
Provision for expected
credit losses
|
1,163
|
|
|
328
|
|
Loss on extinguishment
of debt
|
2,379
|
|
|
—
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
Accounts
receivable
|
(9,074)
|
|
|
28,196
|
|
Other
receivables
|
(1,906)
|
|
|
2,368
|
|
Parts and supplies
inventories
|
(2,749)
|
|
|
263
|
|
Prepaid expenses and
other
|
(11,673)
|
|
|
1,214
|
|
Other non-current
assets
|
(256)
|
|
|
1,019
|
|
Operating lease
liabilities, net
|
(1,414)
|
|
|
(297)
|
|
Accounts
payable
|
11,807
|
|
|
(16,786)
|
|
Accrued
expenses
|
(9,742)
|
|
|
(9,021)
|
|
Other current
liabilities
|
(1,037)
|
|
|
(613)
|
|
Other non-current
liabilities
|
131
|
|
|
2,069
|
|
Deferred
revenue
|
(69,390)
|
|
|
(26)
|
|
Net cash (used in)
provided by operating activities
|
(152,416)
|
|
|
5,401
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
Purchases of property
and equipment
|
(6,683)
|
|
|
(4,878)
|
|
Acquisition of
businesses, net of cash acquired
|
7,844
|
|
|
97,104
|
|
Capitalized software
development costs
|
(9,589)
|
|
|
(5,144)
|
|
Net cash (used in)
provided by investing activities
|
(8,428)
|
|
|
87,082
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
Proceeds from stock
option exercises
|
1,332
|
|
|
—
|
|
Proceeds from the
Business Combination and PIPE Investment
|
656,304
|
|
|
—
|
|
Transaction costs in
connection with the Business Combination and PIPE
Investment
|
(70,406)
|
|
|
—
|
|
Proceeds from
long-term debt
|
—
|
|
|
755
|
|
Repayments of
long-term debt
|
(213,934)
|
|
|
(54,772)
|
|
Repayment (issuance)
of loans to employees
|
102
|
|
|
(67)
|
|
Net cash provided by
(used in) financing activities
|
373,398
|
|
|
(54,084)
|
|
|
|
|
|
NET INCREASE IN
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
212,554
|
|
|
38,399
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH BEGINNING OF
PERIOD
|
324,876
|
|
|
96,440
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH END OF PERIOD
|
$
|
537,430
|
|
|
$
|
134,839
|
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
|
|
|
|
Non-cash consideration
issued for business acquisition of Delta Private Jets
LLC
|
—
|
|
|
$
|
427,007
|
|
Non-cash consideration
issued for business acquisition of Gama Aviation LLC
|
—
|
|
|
$
|
32,638
|
|
Non-cash consideration
issued for business acquisition of Mountain Aviation,
LLC
|
$
|
30,172
|
|
|
—
|
|
Assumption of warrant
liability in Business Combination
|
$
|
28,219
|
|
|
—
|
|
Definitions of Key Operating Metrics and Non-GAAP Financial
Measures
We report certain key financial measures that are not required
by, or presented in accordance with, GAAP. These non-GAAP financial
measures are an addition, and not a substitute for or superior to,
measures of financial performance prepared in accordance with GAAP
and should not be considered as an alternative to any performance
measures derived in accordance with GAAP. We believe that these
non-GAAP financial measures of financial results provide useful
supplemental information to investors, about Wheels Up. However,
there are a number of limitations related to the use of these
non-GAAP financial measures and their nearest GAAP equivalents,
including that they exclude significant expenses that are required
by GAAP to be recorded in Wheels Up's financial measures. In
addition, other companies may calculate non-GAAP financial measures
differently, or may use other measures to calculate their financial
performance, and therefore, our non-GAAP financial measures may not
be directly comparable to similarly titled measures of other
companies.
Definitions of Key Operating Metrics
Active Members. We define Active Members as the
number of Connect, Core, and Business membership accounts that
generated membership revenue in a given period and are active as of
the end of the reporting period. We use Active Members to assess
the adoption of our premium offerings which is a key factor in our
penetration of the market in which we operate and a key driver of
membership and flight revenue.
Active Users. We define Active Users as Active
Members and legacy WUPJ jet card holders as of the reporting date
plus unique non-member consumers who completed a revenue generating
flight at least once in a given period and excluding wholesale
flight activity. While a unique consumer can complete multiple
revenue generating flights on our platform in a given period, that
unique user is counted as only one Active User. We use Active Users
to assess the adoption of our platform and frequency of
transactions, which are key factors in our penetration of the
market in which we operate and our growth in revenue.
Live Flight Legs. We define Live Flight Legs as the
number of completed one-way revenue generating flight legs in a
given period. The metric excludes empty repositioning legs and
owner legs related to aircraft under management. We believe Live
Flight Legs are a useful metric to measure the scale and usage of
our platform, and our growth in flight revenue.
Definitions of Non-GAAP Financial Measures
Adjusted Contribution and Adjusted Contribution Margin.
We calculate Adjusted Contribution as gross profit (loss) excluding
depreciation and amortization and adjusted further for (i)
equity-based compensation included in cost of revenue, (ii)
acquisition and integration expense included in cost of revenue and
(iii) other items included in cost of revenue that are not
indicative of our ongoing operating performance, including COVID-19
response initiatives for 2020. Adjusted Contribution Margin is
calculated by dividing Adjusted Contribution by total revenue.
We include Adjusted Contribution and Adjusted Contribution
Margin as supplemental measures for assessing operating
performance. Adjusted Contribution and Adjusted Contribution Margin
are used to understand our ability to achieve profitability over
time through scale and leveraging costs. In addition, Adjusted
Contribution and Adjusted Contribution Margin provides useful
information for historical period-to-period comparisons of our
business and to identify trends. Prior to issuing a broad-based
equity grant for our pilots during the third quarter of 2021,
equity-based compensation expense included in cost of revenue for
prior periods was not significant.
Adjusted EBITDA. We calculate Adjusted EBITDA as net
income (loss) adjusted for (i) interest income (expense), (ii)
income tax expense, (iii) depreciation and amortization, (iv)
equity-based compensation expense, (v) acquisition and integration
related expenses, (vi) public company readiness related expenses,
(vii) change in fair value of warrant liability, (viii) losses on
the extinguishment of debt and (ix) other items not indicative of
our ongoing operating performance, including the CARES Act grant
and COVID-19 response initiatives for 2020.
We include Adjusted EBITDA because it is a supplemental measure
used by our management team for assessing operating performance.
Adjusted EBITDA is used in conjunction with bonus program target
achievement determinations, strategic internal planning, annual
budgeting, allocating resources and making operating decisions. In
addition, Adjusted EBITDA provides useful information for
historical period-to-period comparisons of our business, as it
removes the effect of certain non-cash expenses and variable
amounts.
Reconciliations of Non-GAAP Financial Measures
Adjusted Contribution and Adjusted Contribution
Margin
The following table reconciles Adjusted Contribution to gross
profit (loss), which is the most directly comparable GAAP measure
(in thousands, except percentages):
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
$
|
301,978
|
|
$
|
194,781
|
|
$
|
849,215
|
|
$
|
485,208
|
|
Less: Cost of
revenue
|
(283,495)
|
|
(171,338)
|
|
(773,191)
|
|
(446,632)
|
|
Less: Depreciation and
amortization
|
(13,639)
|
|
(14,722)
|
|
(40,952)
|
|
(44,189)
|
|
Gross profit
(loss)
|
$
|
4,844
|
|
$
|
8,721
|
|
$
|
35,072
|
|
$
|
(5,613)
|
|
Gross
margin
|
1.6%
|
|
4.5%
|
|
4.1%
|
|
(1.2)%
|
|
Add
back:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
13,639
|
|
14,722
|
|
40,952
|
|
44,189
|
|
Equity-based
compensation expense in cost of revenue
|
679
|
|
109
|
|
779
|
|
226
|
|
Acquisition and
integration expense in cost of revenue
|
—
|
|
—
|
|
1,011
|
|
—
|
|
COVID-19 response
initiatives in cost of revenue
|
—
|
|
117
|
|
—
|
|
395
|
|
Adjusted
Contribution
|
$
|
19,162
|
|
$
|
23,669
|
|
$
|
77,814
|
|
$
|
39,197
|
|
Adjusted
Contribution Margin
|
6.3%
|
|
12.2%
|
|
9.2%
|
|
8.1%
|
|
Adjusted EBITDA
The following table reconciles Adjusted EBITDA to net income
(loss), which is the most directly comparable GAAP measure (in
thousands):
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
(loss)
|
$
|
(59,455)
|
|
|
$
|
20,548
|
|
|
$
|
(120,622)
|
|
|
$
|
(51,292)
|
|
Add back
(deduct)
|
|
|
|
|
|
|
|
Interest
expense
|
782
|
|
|
5,614
|
|
|
9,503
|
|
|
18,127
|
|
Interest
income
|
(7)
|
|
|
(36)
|
|
|
(25)
|
|
|
(503)
|
|
Depreciation and
amortization
|
13,639
|
|
|
14,722
|
|
|
40,952
|
|
|
44,189
|
|
Equity-based
compensation expense
|
27,906
|
|
|
1,168
|
|
|
30,668
|
|
|
2,524
|
|
Public company
readiness expense
|
2,455
|
|
|
40
|
|
|
3,298
|
|
|
242
|
|
Acquisition and
integration expense
|
644
|
|
|
376
|
|
|
5,017
|
|
|
7,694
|
|
CARES Act grant
recognition
|
—
|
|
|
(51,646)
|
|
|
—
|
|
|
(64,923)
|
|
COVID-19 response
initiatives
|
—
|
|
|
323
|
|
|
—
|
|
|
773
|
|
Corporate headquarters
relocation expense
|
—
|
|
|
866
|
|
|
31
|
|
|
2,058
|
|
Change in fair value of
warrant liability
|
(12,271)
|
|
|
—
|
|
|
(12,271)
|
|
|
—
|
|
Loss on extinguishment
of debt
|
2,379
|
|
|
—
|
|
|
2,379
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
(23,928)
|
|
|
$
|
(8,025)
|
|
|
$
|
(41,070)
|
|
|
$
|
(41,111)
|
|
The following tables reconcile Adjusted EBITDA to net income
(loss), including the impact of reconciled items on individual
income statement expense classifications (in thousands):
|
Three Months
Ended September 30, 2021
|
GAAP as
reported
|
|
Equity-based
compensation
expense
|
|
Public
company
readiness
expense
|
|
Acquisition
and
integration
expense
|
|
Corporate
headquarters
relocation
expense
|
|
Non-GAAP
|
Revenue
|
$
|
301,978
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
301,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
283,495
|
|
|
(679)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
282,816
|
|
Technology and
development
|
8,769
|
|
|
(619)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,150
|
|
Sales and
marketing
|
22,157
|
|
|
(2,449)
|
|
|
(780)
|
|
|
—
|
|
|
—
|
|
|
18,928
|
|
General and
administrative
|
42,490
|
|
|
(24,159)
|
|
|
(1,675)
|
|
1
|
|
(644)
|
|
|
—
|
|
|
16,012
|
|
Depreciation and
amortization
|
13,639
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,639
|
|
Total costs and
expenses:
|
370,550
|
|
|
(27,906)
|
|
|
(2,455)
|
|
|
(644)
|
|
|
—
|
|
|
339,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(68,572)
|
|
|
27,906
|
|
|
2,455
|
|
|
644
|
|
|
—
|
|
|
(37,567)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early
extinguishment of debt
|
(2,379)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,379)
|
|
Change in fair value
of warrant liability
|
12,271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,271
|
|
Interest
income
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Interest
expense
|
(782)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(782)
|
|
Total other
income
|
9,117
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(59,455)
|
|
|
|
|
|
|
|
|
|
|
(28,450)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back
(deduct)
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
13,639
|
|
Loss on early
extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
2,379
|
|
Change in fair value
of warrant liability
|
|
|
|
|
|
|
|
|
|
|
(12,271)
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
(7)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
782
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
$
|
(23,928)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2020
|
GAAP as
reported
|
|
Equity-based
compensation
expense
|
|
Public
company
readiness
expense
|
|
Acquisition
and
integration
expense
|
|
Corporate
headquarters
relocation
expense
|
|
COVID-19
response
initiatives
|
|
Cares Act
grant
recognition
|
|
Non-GAAP
|
|
Revenue
|
$
|
194,781
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
194,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
171,338
|
|
|
(109)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(117)
|
|
|
—
|
|
|
171,112
|
|
|
Technology and
development
|
6,044
|
|
|
(129)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,915
|
|
|
Sales and
marketing
|
13,655
|
|
|
(261)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,394
|
|
|
General and
administrative
|
14,542
|
|
|
(669)
|
|
|
(40)
|
|
|
(376)
|
|
|
(866)
|
|
|
(206)
|
|
|
—
|
|
|
12,385
|
|
|
Depreciation and
amortization
|
14,722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,722
|
|
|
CARES Act
grant
|
(51,646)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,646
|
|
|
—
|
|
|
Total costs and
expenses:
|
168,655
|
|
|
(1,168)
|
|
|
(40)
|
|
|
(376)
|
|
|
(866)
|
|
|
(323)
|
|
|
51,646
|
|
|
217,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
26,126
|
|
|
1,168
|
|
|
40
|
|
|
376
|
|
|
866
|
|
|
323
|
|
|
(51,646)
|
|
|
(22,747)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
Interest
expense
|
(5,614)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,614)
|
|
|
Total other
expense
|
(5,578)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,578)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
20,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28,325)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back
(deduct)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,722
|
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36)
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,614
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(8,025)
|
|
|
|
Nine Months
Ended September 30, 2021
|
GAAP as
reported
|
|
Equity-based
compensation
expense
|
|
Public
company
readiness
expense
|
|
Acquisition
and
integration
expense
|
|
Corporate
headquarters
relocation
expense
|
|
Non-GAAP
|
Revenue
|
$
|
849,215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
849,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
773,191
|
|
|
(779)
|
|
|
—
|
|
|
(1,011)
|
|
|
—
|
|
|
771,401
|
|
Technology and
development
|
23,818
|
|
|
(806)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,012
|
|
Sales and
marketing
|
55,846
|
|
|
(2,901)
|
|
|
(780)
|
|
|
—
|
|
|
—
|
|
|
52,165
|
|
General and
administrative
|
76,444
|
|
|
(26,182)
|
|
|
(2,517)
|
|
|
(4,007)
|
|
|
(31)
|
|
|
43,707
|
|
Depreciation and
amortization
|
40,952
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,952
|
|
Total costs and
expenses:
|
970,251
|
|
|
(30,668)
|
|
|
(3,297)
|
|
|
(5,018)
|
|
|
(31)
|
|
|
931,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(121,036)
|
|
|
30,668
|
|
|
3,297
|
|
|
5,018
|
|
|
31
|
|
|
(82,022)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early
extinguishment of debt
|
(2,379)
|
|
|
|
|
|
|
|
|
|
|
(2,379)
|
|
Change in fair value
of warrant liability
|
12,271
|
|
|
|
|
|
|
|
|
|
|
12,271
|
|
Interest
income
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
Interest
expense
|
(9,503)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,503)
|
|
Total other
expense
|
414
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(120,622)
|
|
|
|
|
|
|
|
|
|
|
(81,608)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back
(deduct)
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
40,952
|
|
Loss on early
extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
2,379
|
|
Change in fair value
of warrant liability
|
|
|
|
|
|
|
|
|
|
|
(12,271)
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
(25)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
9,503
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
$
|
(41,070)
|
|
|
Nine Months Ended
September 30, 2020
|
GAAP as
reported
|
|
Equity-based
compensation
expense
|
|
Public
company
readiness
expense
|
|
Acquisition
and
integration
expense
|
|
Corporate
headquarters
relocation
expense
|
|
COVID-19
response
initiatives
|
|
Cares Act
Grant
recognition
|
|
Non-GAAP
|
Revenue
|
$
|
485,208
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
485,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
446,632
|
|
|
(226)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(395)
|
|
|
—
|
|
|
446,011
|
|
Technology and
development
|
15,345
|
|
|
(342)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,003
|
|
Sales and
marketing
|
38,893
|
|
|
(814)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,079
|
|
General and
administrative
|
38,740
|
|
|
(1,142)
|
|
|
(242)
|
|
|
(7,694)
|
|
|
(2,058)
|
|
|
(377)
|
|
|
—
|
|
|
27,227
|
|
Depreciation and
amortization
|
44,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,189
|
|
CARES Act
grant
|
(64,923)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,922
|
|
|
(1)
|
|
Total costs and
expenses:
|
518,876
|
|
|
(2,524)
|
|
|
(242)
|
|
|
(7,694)
|
|
|
(2,058)
|
|
|
(772)
|
|
|
64,922
|
|
|
570,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(33,668)
|
|
|
2,524
|
|
|
242
|
|
|
7,694
|
|
|
2,058
|
|
|
772
|
|
|
(64,922)
|
|
|
(85,300)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
503
|
|
Interest
expense
|
(18,127)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,127)
|
|
Total other
expense
|
(17,624)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,624)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(51,292)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(102,924)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back
(deduct)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,189
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(503)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,127
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(41,111)
|
|
Supplemental Revenue Information
(in thousands,
except percentages)
|
Three Months Ended
September 30,
|
|
Change
in
|
2021
|
|
2020
|
|
$
|
|
%
|
Flight
|
$
|
218,360
|
|
|
$
|
140,280
|
|
|
$
|
78,080
|
|
|
56
|
%
|
Membership
|
17,982
|
|
|
13,345
|
|
|
4,637
|
|
|
35
|
%
|
Aircraft
management
|
58,005
|
|
|
38,402
|
|
|
19,603
|
|
|
51
|
%
|
Other
|
7,631
|
|
|
2,754
|
|
|
4,877
|
|
|
177
|
%
|
Total
|
$
|
301,978
|
|
|
$
|
194,781
|
|
|
$
|
107,197
|
|
|
55
|
%
|
(in thousands,
except percentages)
|
Nine Months Ended
September 30,
|
|
Change
in
|
2021
|
|
2020
|
|
$
|
|
%
|
Flight
|
$
|
621,494
|
|
|
$
|
343,571
|
|
|
$
|
277,923
|
|
|
81
|
%
|
Membership
|
49,144
|
|
|
39,787
|
|
|
9,357
|
|
|
24
|
%
|
Aircraft
management
|
158,840
|
|
|
93,416
|
|
|
65,424
|
|
|
70
|
%
|
Other
|
19,737
|
|
|
8,434
|
|
|
11,303
|
|
|
134
|
%
|
Total
|
$
|
849,215
|
|
|
$
|
485,208
|
|
|
$
|
364,007
|
|
|
75
|
%
|
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SOURCE Wheels Up