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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_________to ________
Commission File Number: 001-41130

Vacasa_Identity_Lockup_Horizontal_RGB-Blue.gif
Vacasa, Inc.
(Exact name of registrant as specified in its charter)
_________________________
Delaware
(State or other jurisdiction of incorporation or organization)
87-1995316
(I.R.S. Employer Identification No.)
850 NW 13th Avenue
Portland, OR 97209
(Address of principal executive offices)(Zip Code)
(503) 946-3650
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
_________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)Name of Each Exchange on Which Registered
Class A Common Stock, par value $0.00001 per share
VCSA
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐
Accelerated filer ☒
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☒






If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 5, 2024, 15,514,987 shares of the registrant's Class A Common Stock were outstanding, 6,749,244 shares of the registrant's Class B Common Stock were outstanding, and 316,666 shares of the registrant's Class G Common Stock were outstanding.

2

Table of Contents
Page

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q ("Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our results of operations, financial position, growth strategy, seasonality, business strategy, policies, and approach, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance, or achievements, and one should avoid placing undue reliance on such statements.

3
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties, and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to:

•our ability to execute our business plan and achieve the expected benefits of the Reorganization (as defined below) and other cost saving measures we may take in the future;
•any indebtedness we may incur from time to time (including the Convertible Notes (as defined below)), our cash position, and our ability to raise additional capital or generate the significant capital necessary to expand our operations and invest in new offerings, including that additional financing (including any Convertible Notes) may not be available on acceptable terms or at all, or could be dilutive to our stockholders or impose additional restrictive debt covenants on our activities;
•our ability to achieve profitability;
•our ability to manage the impacts the Reorganization will have on our systems, process and controls, including our ability to address competitive challenges, manage our employee base, or maintain our corporate culture;
•our past growth may not be indicative of our future prospects;
•our ability to compete in our industry;
•our ability to attract and retain homeowners and guests;
•our ability to provide high-quality customer service;
•our ability to develop new or enhanced offerings and services;
•our ability to maintain and enhance relationships with distribution partners;
•our ability to cost-effectively drive traffic to our platform;
•our ability to maintain and enhance our brand and reputation, and avoid negative publicity that could damage our brand;
•the safety or perception of safety of our platform and services;
•our ability to manage our international operations;
•our ability to consummate or successfully integrate recent and future acquisitions;
•our ability to attract and retain capable management and employees;
•increased personnel costs or labor shortages;
•declines or disruptions to the travel and hospitality industries or general economic downturns;
•the effects of seasonal and other trends on our results of operations;
•our ability to obtain adequate insurance coverage for the needs of our business;
•any future impairment of our long-lived assets or goodwill;
•significant fluctuations in our results of operations from quarter to quarter and year to year as a result of seasonality and other factors;
•operational metrics subject to inherent challenges in measurement and real or perceived inaccuracies;
•upticks or downturns in bookings are not immediately reflected in our results of operations;
•our ability to manage funds held on behalf of customers;
•our expectations regarding our tax liabilities and the adequacy of our reserves;
•any undetected errors on our platform;
•reliance on third-party service providers in connection with key aspects of our platform and operations;
•our ability to adapt to changes in technology and the evolving demands of homeowners and guests;
•our ability to protect our intellectual property and our data;
•our use of "open source" software;
•our use of artificial intelligence, or AI, in our business and risks related to cyberattacks, data security breaches, or other security incidents;
•our ability to stay in compliance with laws and regulations, including tax laws, that currently apply or may become applicable to our business both in the United States and internationally and our expectations regarding the impact of various laws, regulations, and restrictions that relate to our business;
•risks related to the ownership of our Class A Common Stock, including the significant influence our principal stockholders and holders of our Convertible Notes have over the Company; and
•those risks, uncertainties, and assumptions identified in Part I, Item 1A. "Risk Factors" and Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Annual Report"), in Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part II, Item 1A. "Risk Factors" of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 ("Q1 2024 Quarterly Report") and Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part II, Item 1A. "Risk Factors" in this Quarterly Report, and in our subsequent filings with the Securities and Exchange Commission.

4
There may be additional risks that we currently consider immaterial or which are unknown. It is not possible to predict or identify all such risks.

The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, investors are cautioned not to unduly rely upon these statements, and our actual future results, levels of activity, performance, and achievements may be materially different from what we expect.

These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events, or otherwise.

Basis of Presentation

Vacasa, Inc. was incorporated on July 1, 2021 under the laws of the state of Delaware as a wholly owned subsidiary of Vacasa Holdings LLC ("Vacasa Holdings") for the purpose of consummating the business combination described herein. In December 2021, Vacasa, Inc. merged with TPG Pace Solutions Corp., with Vacasa, Inc. continuing as the surviving entity, following which Vacasa, Inc. consummated a series of reorganization transactions through which Vacasa, Inc. became the sole manager and owner of approximately 50.3% of the outstanding equity interests in Vacasa Holdings, and Vacasa Holdings cancelled its ownership interest in Vacasa, Inc. The business combination was accounted for as a reverse recapitalization (the "Reverse Recapitalization") in accordance with accounting principles generally accepted in the United States of America ("GAAP"). For the period from inception to December 6, 2021, Vacasa, Inc. had no operations, assets or liabilities. Unless otherwise indicated, the financial information included herein is that of Vacasa Holdings, which, following the business combination, became the business of Vacasa, Inc. and its subsidiaries.

Additionally, unless the context otherwise requires, references herein to the “Company,” “we,” “us,” or “our” refer (a) after December 6, 2021, to Vacasa, Inc. and its consolidated subsidiaries and (b) prior to December 6, 2021, to Vacasa Holdings and its consolidated subsidiaries.

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report and in Part I, Item 1A. "Risk Factors" in our 2023 Annual Report. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include, but are not limited to, the following:

•our ability to execute our business plan and achieve the expected benefits of the Reorganization and other cost saving measures we may take in the future;
•any indebtedness we may incur from time to time (including the Convertible Notes (as defined below)), our cash position, and our ability to raise additional capital or generate the significant capital necessary to expand our operations and invest in new offerings, including that additional financing may not be available on acceptable terms or at all, or could be dilutive to our stockholders or impose additional restrictive debt covenants on our activities;
•our ability to achieve profitability;
•our ability to manage the impacts the Reorganization will have on our systems, process and controls, including our ability to address competitive challenges, manager our employee base, or maintain our corporate culture;
•our past growth may not be indicative of our future prospects;
•our ability to appropriately manage the strain to our business brought by its rapid historical growth, and our ability to improve our systems, processes and controls;
•our ability to compete in our industry;
•our ability to attract and retain homeowners and guests;
•our ability to provide high-quality customer service;
•our ability to maintain and enhance relationships with distribution partners;
•our ability to develop new or enhanced offerings and services;
•our ability to cost-effectively drive traffic to our platform;
•our ability to maintain and enhance our brand and reputation, and avoid negative publicity that could damage our brand;
•the safety or perception of safety of our platform and services;
•our ability to manage our international operations;
5
•our ability to consummate or successfully integrate recent and future acquisitions;
•our ability to attract and retain capable management and employees;
•increased personnel costs or labor shortages;
•any decline or disruption to the travel and hospitality industries or economic downturn, natural disasters, local and global public health emergencies, geopolitical conflict, and other catastrophic events or other events outside of our control;
•our ability to obtain adequate insurance for the needs of our business;
•a future impairment of our long-lived assets or goodwill;
•significant fluctuations in our results of operations from period to period, as a result of seasonality and other factors;
•certain operational metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation;
•upticks or downturns in bookings are not immediately reflected in our results of operations;
•any failure to properly manage funds held on behalf of customers;
•our reliance on third-party payment service providers to process payments made by guests and certain payments made to homeowners on our platform;
•risks related to payment network rules and any material modification of our payment card acceptance privileges;
•uncertainty in the application of taxes to our homeowners, guests, or platform;
•exposure to greater than anticipated tax liabilities;
•changes in tax laws or tax rulings;
•our ability to use our net operating loss carryforwards and certain other tax attributes;
•our dependence upon distributions from Vacasa Holdings LLC ("OpCo") to pay taxes and other expenses;
•we may incur certain tax liabilities attributable to the Blockers (as defined below) as a result of the Business Combination (as defined below);
•we may bear certain tax liabilities that are attributable to audit adjustments for taxable periods (or portions thereof) ending prior to the Business Combination, or that are disproportionate to our ownership interest in OpCo in the taxable period for which the relevant adjustment is imposed;
•Vacasa, Inc. will be required to pay the TRA Parties (as defined below) for certain tax benefits it may claim (or is deemed to realize) in the future;
•our ability to comply with federal, state, and foreign laws relating to privacy and data protection;
•risks related to cyberattacks, data security breaches, or other security incidents;
•our reliance primarily on Amazon Web Services to host and deliver our platform and on a number of other third-party service providers in connection with other key aspects of our platform and operations;
•any undetected errors in our platform, system capacity constraints, system or operational failures, or denial-of-service or other attacks;
•our ability to operate effectively on platforms other than desktop computers;
•our ability to adapt to changes in technology and the evolving demands of homeowners and guests;
•our ability to protect our intellectual property and our data;
•risks related to claims that we or others violated certain third-party intellectual property rights;
•risks related to our use of “open source” software;
•risks related to our use of artificial intelligence;
•risks related to laws, regulations, and rules that affect the short-term rental business;
•risk related to complex, evolving, and sometimes inconsistent and ambiguous laws and regulations that may adversely impact our operations and discourage homeowners and guests from using our services;
•our reliance on a mix of independent contractors and employees to provide operational services to us and any potential reclassification of independent contractors as deemed employees;
•risk related to regulatory audits, inquiries, litigation, and other disputes;
•liability for information or content that is on, or accessible through, our platform;
•risks related to governmental economic and trade sanctions laws and regulations; and violation of anti-corruption laws;
•our Certificate of Incorporation provides that the doctrine of “corporate opportunity” will not apply with respect to any director or stockholder who is not employed by us or our subsidiaries;
•our focus on the long-term best interests of our company and our consideration of all of our stakeholders;
•our principal stockholders and holders of our Convertible Notes have significant influence over us;
•volatility in the trading price of the shares of our Class A Common Stock;
•future sales of our Class A Common Stock in the public market, including as a result of any conversion of the Convertible Notes;
•our status as an “emerging growth company” within the meaning of the Securities Act; and
•our expectation not to pay any cash dividends on our Class A Common Stock in the foreseeable future.
6
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited)

Vacasa, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)


As of June 30,As of December 31,
20242023
Assets
Current assets:
Cash and cash equivalents$186,717 $88,049 
Restricted cash268,370 137,788 
Accounts receivable, net19,740 14,242 
Prepaid expenses and other current assets26,097 25,766 
Total current assets500,924 265,845 
Property and equipment, net52,603 56,717 
Intangible assets, net19,296 114,464 
Goodwill171,843 171,879 
Other long-term assets49,676 54,643 
Total assets$794,342 $663,548 
Liabilities, Temporary Equity, and Equity
Current liabilities:
Accounts payable$44,278 $30,353 
Funds payable to owners291,101 178,670 
Hospitality and sales taxes payable68,254 45,179 
Deferred revenue157,396 105,217 
Future stay credits246 584 
Accrued expenses and other current liabilities65,256 62,820 
Total current liabilities626,531 422,823 
Long-term debt, net of current portion81,000 — 
Other long-term liabilities28,942 33,079 
Total liabilities$736,473 $455,902 
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests32,881 76,593 
Equity:
Class A Common Stock, par value $0.00001, 1,000,000,000 shares authorized; 15,547,082 and 12,730,577 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.(1)
3 3 
Class B Common Stock, par value $0.00001, 469,844,106 shares authorized; 6,751,481 and 9,340,553 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.(1)
2 2 
Additional paid-in capital1,362,061 1,372,618 
Accumulated deficit(1,335,384)(1,240,850)
Accumulated other comprehensive loss(1,694)(720)
Total equity24,988 131,053 
Total liabilities, temporary equity, and equity$794,342 $663,548 
(1) Common stock shares issued and outstanding have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split that occurred on October 2, 2023. Refer to Note 11, Equity and Equity-Based Compensation for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Vacasa, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share data)
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenue$248,976 $304,579 $458,448 $561,433 
Operating costs and expenses:
Cost of revenue, exclusive of depreciation and amortization shown separately below119,330 142,126 225,068 266,257 
Operations and support57,494 61,851 117,478 122,664 
Technology and development16,635 15,601 31,941 29,874 
Sales and marketing43,143 56,397 92,586 113,901 
General and administrative20,790 16,367 42,522 42,074 
Depreciation3,607 5,396 7,413 10,393 
Amortization of intangible assets1,781 15,187 11,098 30,877 
Impairment of long-lived assets— — $84,000 $— 
Total operating costs and expenses262,780 312,925 612,106 616,040 
Loss from operations(13,804)(8,346)(153,658)(54,607)
Interest income1,162 2,095 1,967 3,673 
Interest expense(428)(589)(953)(1,312)
Other income, net119 1,617 195 3,774 
Loss before income taxes(12,951)(5,223)(152,449)(48,472)
Income tax expense(147)(419)(1,565)(782)
Net loss$(13,098)$(5,642)$(154,014)$(49,254)
Less: Net loss attributable to redeemable noncontrolling interests(4,247)(2,521)(59,480)(22,341)
Net loss attributable to Class A Common Stockholders$(8,851)$(3,121)$(94,534)$(26,913)
Net loss per share of Class A Common Stock(1):
Basic and diluted$(0.59)$(0.26)$(6.64)$(2.25)
Weighted-average shares of Class A Common Stock used to compute net loss per share(1):
Basic and diluted15,017 12,054 14,229 11,950 

(1) Weighted-average shares outstanding used in the computation of basic and diluted loss per share reflect the 1-for-20 Reverse Stock Split that occurred on October 2, 2023. Refer to Note 11, Equity and Equity-Based Compensation for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.

8
Vacasa, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net loss$(13,098)$(5,642)$(154,014)$(49,254)
Foreign currency translation adjustments(814)(29)(1,001)(999)
Total comprehensive loss$(13,912)$(5,671)$(155,015)$(50,253)
Less: Comprehensive income (loss) attributable to redeemable noncontrolling interests(4,431)(2,543)(59,507)(22,802)
Total comprehensive loss attributable to Class A Common Stockholders$(9,481)$(3,128)$(95,508)$(27,451)

The accompanying notes are an integral part of these condensed consolidated financial statements.
9
Vacasa, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
20242023
Cash from operating activities:
Net loss$(154,014)$(49,254)
Adjustments to reconcile net loss to net cash provided by operating activities:
Credit loss expense2,087 1,789 
Depreciation7,413 10,393 
Amortization of intangible assets11,098 30,877 
Impairment of long-lived assets84,000 — 
Impairment of right-of-use assets— 4,240 
Future stay credit breakage(105)(955)
Reduction in the carrying amount of right-of-use assets4,700 5,254 
Deferred income taxes— (6)
Other gains and losses816 (592)
Fair value adjustment on derivative liabilities— (3,364)
Non-cash interest expense108 107 
Equity-based compensation expense5,179 8,031 
Change in operating assets and liabilities, net of assets acquired and liabilities assumed:
Accounts receivable(7,570)447 
Prepaid expenses and other assets6,137 13,874 
Accounts payable13,883 13,816 
Funds payable to owners112,216 161,159 
Hospitality and sales taxes payable23,023 35,680 
Deferred revenue and future stay credits51,778 85,932 
Operating lease obligations(4,955)(5,367)
Accrued expenses and other liabilities7,780 (2,995)
Net cash provided by operating activities163,574 309,066 
Cash from investing activities:
Purchases of property and equipment(1,426)(2,930)
Cash paid for internally developed software(2,666)(4,074)
Cash paid for business combinations, net of cash and restricted cash acquired— (735)
Net cash used in investing activities(4,092)(7,739)
Cash from financing activities:
Cash paid for business combinations(7,644)(16,394)
Payments of long-term debt(125)(250)
Proceeds from exercise of stock options59 101 
Proceeds from (payments to) Employee Stock Purchase Program, net of refunds(44)719 
Proceeds from borrowings on revolving credit facility81,000 2,000 
Repayment of borrowings on revolving credit facility— (2,000)
Repayment of financed insurance premiums(3,068)(3,104)
Other financing activities(28)(96)
Net cash provided by (used in) financing activities70,150 (19,024)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash(382)(466)
Net increase in cash, cash equivalents and restricted cash229,250 281,837 
Cash, cash equivalents and restricted cash, beginning of period225,837 319,660 
Cash, cash equivalents and restricted cash, end of period$455,087 $601,497 
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Vacasa, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
20242023
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net of refunds$630 $1,694 
Cash paid for interest1,073 1,309 
Cash paid for operating lease liabilities2,977 3,105 
Supplemental disclosures of non-cash activities:
Financed insurance premiums113 186 
Lease liabilities exchanged for right-of-use assets1,688 478 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$186,717 $280,758 
Restricted cash268,370 320,739 
Total cash, cash equivalents and restricted cash$455,087 $601,497 

The accompanying notes are an integral part of these condensed consolidated financial statements.
11

Vacasa, Inc.
Condensed Consolidated Statements of Equity (Deficit)
(in thousands, except share and unit data)
(unaudited)
Redeemable Non-controlling InterestsClass A Common StockClass B Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Equity (Deficit)
Amount
Shares(1)
Amount
Shares(1)
AmountAmountAmountAmountAmount
Balance as of December 31, 2023$76,593 12,730,577 $3 9,340,553 $2 $1,372,618 $(1,240,850)$(720)$131,053 
Vesting of employee equity units7 3,685 (7)(7)
Vesting of restricted stock units(139)204,400 144 (5)139 
Exercise of equity-based awards(48)19,348 107 107 
Redemption of OpCo units and retirement of Class B Common Stock(9,881)2,592,757 (2,592,757)10,160 (279)9,881 
Equity-based compensation109 5,070 5,070 
Foreign currency translation adjustments(311)(690)(690)
Net loss(59,480)(94,534)(94,534)
Adjustment of redeemable noncontrolling interest to redemption amount26,031 (26,031)(26,031)
Balance as of June 30, 2024$32,881 15,547,082 $3 6,751,481 $2 $1,362,061 $(1,335,384)$(1,694)$24,988 
Balance as of March 31, 2024$52,259 14,496,062 $3 7,662,397 $2 $1,345,002 $(1,326,533)$(1,064)$17,410 
Vesting of employee equity units(1)1,841 1 1 
Vesting of restricted stock units41 137,078 (38)(3)(41)
Exercise of equity-based awards— 1,185 3 3 
Redemption of OpCo units and retirement of Class B Common Stock803 912,757 (912,757)(744)(59)(803)
Equity-based compensation54 2,055 2,055 
Foreign currency translation adjustments(246)(568)(568)
Net loss(4,247)(8,851)(8,851)
Adjustment of redeemable noncontrolling interest to redemption amount(15,782)15,782 15,782 
Balance as of June 30, 2024$32,881 15,547,082 $3 6,751,481 $2 $1,362,061 $(1,335,384)$(1,694)$24,988 

(1) Common stock shares outstanding reflect the 1-for-20 Reverse Stock Split that occurred on October 2, 2023. Refer to Note 11, Equity and Equity-Based Compensation for additional information.
12

Vacasa, Inc.
Condensed Consolidated Statements of Equity (Deficit)
(in thousands, except share and unit data)
(unaudited)
Redeemable Non-controlling InterestsClass A Common StockClass B Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Equity (Deficit)
Amount
Shares(1)
Amount
Shares(1)
AmountAmountAmountAmountAmount
Balance as of December 31, 2022$306,943 11,819,511 $2 9,872,261 $2 $1,355,141 $(942,147)$2 $413,000 
Vesting of employee equity units289 17,301 (289)(289)
Vesting of restricted stock units(1,038)76,572 1,037 1 1,038 
Exercise of equity-based awards(163)11,918 265 265 
Purchase of shares under the ESPP(820)62,813 1,636 1,636 
Redemption of OpCo units and retirement of Class B Common Stock(7,339)220,493 (220,493)7,330 9 7,339 
Equity-based compensation1,533 6,498 6,498 
Foreign currency translation adjustments(451)(548)(548)
Net loss(22,341)(26,913)(26,913)
Balance as of June 30, 2023$276,613 12,191,307 $2 9,669,069 $2 $1,371,618 $(969,060)$(536)$402,026 
Balance as of March 31, 2023$285,393 11,922,225 $2 9,822,249 $2 $1,360,639 $(965,939)$(529)$394,175 
Vesting of employee equity units92 5,708 (92)(92)
Vesting of restricted stock units(554)42,276 553 1 554 
Exercise of equity-based awards(67)5,105 103 103 
Purchase of shares under the ESPP(820)62,813 1,636 1,636 
Redemption of OpCo units and retirement of Class B Common Stock(5,424)158,888 (158,888)5,415 9 5,424 
Equity-based compensation526 3,364 3,364 
Foreign currency translation adjustments(12)(17)(17)
Net loss(2,521)(3,121)(3,121)
Balance as of June 30, 2023$276,613 12,191,307 $2 9,669,069 $2 $1,371,618 $(969,060)$(536)$402,026 

(1) Common stock shares outstanding reflect the 1-for-20 Reverse Stock Split that occurred on October 2, 2023. Refer to Note 11, Equity and Equity-Based Compensation for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.
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14
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)


Vacasa, Inc. and its subsidiaries (the "Company") operate a vertically integrated vacation rental platform. Homeowners utilize the Company’s technology and services to realize income from their rental assets. Guests from around the world utilize the Company’s technology and services to search for and book Vacasa-listed properties in the United States, Belize, Canada, Costa Rica, and Mexico. The Company collects nightly rent on behalf of homeowners and earns the majority of its revenue from commissions on rent and from additional reservation-related fees paid by guests when a vacation rental is booked directly through the Company’s website or app or through its distribution partners. The Company conducts its business through Vacasa Holdings LLC ("Vacasa Holdings" or "OpCo") and its subsidiaries. The Company is headquartered in Portland, Oregon.


Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with GAAP and the rules and regulations of the Securities and Exchange Commission ("SEC"). These condensed consolidated financial statements include the accounts of the Company, its wholly-owned or majority-owned subsidiaries, and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany balances and transactions have been eliminated in consolidation. The financial information as of December 31, 2023 contained in this Quarterly Report is derived from the audited consolidated financial statements and notes included in the Company's 2023 Annual Report, which should be read in conjunction with these condensed consolidated financial statements. Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with GAAP. In the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The interim results of operations and cash flows are not necessarily indicative of those results and cash flows expected for the year.

As of June 30, 2024, the Company held 15,547,082 units of Vacasa Holdings ("OpCo Units"), which represented an ownership interest of approximately 70%. The portion of the consolidated subsidiaries not owned by the Company and any related activity is eliminated through redeemable noncontrolling interests in the condensed consolidated balance sheets and net loss attributable to redeemable noncontrolling interests in the condensed consolidated statements of operations.

The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), which permits the Company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As of January 1, 2022, the Company elected to irrevocably opt out of the extended transition period.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in the condensed consolidated financial statements include, but are not limited to, the useful lives of property and equipment and intangible assets, allowance for credit losses, valuation of assets acquired and liabilities assumed in business acquisitions and related contingent consideration, valuation of redeemable convertible preferred units, valuation of equity-based compensation, valuation of goodwill, and valuation of long-lived assets. Actual results may differ materially from such estimates. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company’s condensed consolidated financial statements will be affected.

Risks and Uncertainties

Liquidity
Since the Company's founding, its principal sources of liquidity have been from proceeds received through the issuance of equity and debt financing. The Company has incurred significant operating losses and generated negative cash flows from operations as it has invested to support the growth of the business. To execute on its strategic initiatives, the Company has and will continue to incur operating losses and generate negative cash flows from operations on an annual basis now and in the future, and as a result, will require and continue to need additional capital resources.

15
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

As of June 30, 2024, we had cash and cash equivalents of $186.7 million. We experienced more variable and generally weaker demand than is typical in the six months ended June 30, 2024 and, as a result, our cash position did not build as expected in the period.

On May 7, 2024, the Board of Directors of the Company approved a workforce reduction and reorganization plan (the “Reorganization”), see Note 14, Workforce Reductions, which is intended to, among other things, reduce certain fixed costs in the business, promote greater efficiency, and realign its business and strategic priorities as a way to accelerate the transformation of the business to a model focused more on local market accountability and execution. This plan involves significant structural changes to the way the Company runs its business, including a significant reduction in our corporate personnel and functions. Although the Company believes the Reorganization and associated operational changes will improve the long-term efficacy of its business model by empowering the local markets, streamlining corporate functions, and better position it for profitability and to generate free cash flow over the long term, the implementation and execution of the Reorganization measures are subject to significant risks and uncertainties, including whether the Company has targeted the appropriate areas for its cost-saving efforts and at the appropriate scale. If the Reorganization plan is not successful, the Company may not realize all or any of the anticipated benefits, which could adversely affect the business, financial condition, and results of operations, including its liquidity position and ability to raise additional capital.

The Company’s primary requirements for liquidity and capital are to finance working capital requirements, capital expenditures, and other general corporate purposes. As a result of the significant fluctuations in the Company's cash position, continued decreases in the number of homes on our platform, lower guest demand, changes in booking patterns, and the potential impact of the Reorganization on the business, the Company sought opportunities for additional capital. On May 8, 2024, the Company drew $81.0 million under the Revolving Credit Facility (defined in Note 8, Debt), which is subject to financial covenants (see Note 8, Debt). On August 7, 2024, a subsidiary of the Company issued $30.0 million of Convertible Notes (as defined in Note 15, Subsequent Event below) to supplement our cash position.

The Company continues to assess its liquidity position and opportunities for additional capital, which may be obtained through additional equity offerings, which would dilute the ownership of the Company's existing stockholders, or additional debt financings, which may contain covenants that restrict the operations of the business or otherwise contain terms unfavorable or dilutive to the business and its existing stockholders. In the event that additional financing is required from outside sources, the Company may not be able to raise the financing on terms acceptable to the Company or at all. If the Company is unable to raise additional capital when desired, its business, financial condition, and results of operations could be adversely affected.

The Company expects to continue to fund operations primarily through use of its cash and cash equivalents, debt financing, and equity offerings. The Company believes its existing sources of liquidity will be sufficient to fund operations, working capital requirements, capital expenditures, and service debt obligations for at least the next 12 months as of the date of this filing.

Significant Accounting Policies

Except as identified below, there were no changes to the accounting policies disclosed in Note 2, Significant Accounting Policies of the Company's 2023 Annual Report that had a material impact on the Company's condensed consolidated financial statements and related notes.

Impairment of Long-lived Assets

The Company evaluates its long-lived assets or asset groups for indicators of possible impairment by comparing the carrying amount to future net undiscounted cash flows expected to be generated by such asset or asset group, including upon its eventual disposal, when events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. If the carrying amount of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined primarily using the estimated cash flows discounted at a rate commensurate with the risk involved and based on assumptions representative of market participants. During the first six months of 2024, the Company recorded long-lived asset impairment charges of $84.0 million. There were no long-lived asset impairment charges recorded during the first six months of 2023. Refer to Note 6, Intangible Assets, Net and Goodwill, for additional information.

Accounting Pronouncements Adopted in Fiscal 2024

The Company has not adopted any recent accounting pronouncements that have had a material impact on the Company's financial position, results of operations, or cash flows in fiscal 2024.

Accounting Pronouncements Not Yet Adopted
16
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)


In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, that modifies the disclosure and presentation requirements of reportable segments. The new guidance requires the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss. In addition, the new guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, to improve its income tax disclosure requirements. Under the new guidance, public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). The new guidance is effective for public business entities for annual periods beginning after December 15, 2024. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures.


Revenue Disaggregation

A disaggregation of the Company’s revenues by nature of the Company’s performance obligations are as follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Vacation rental platform$243,234 $297,110 $447,202 $545,337 
Other services5,742 7,469 11,246 16,096 
Total$248,976 $304,579 $458,448 $561,433 

Contract Liability Balances

Contract liability balances on the Company’s condensed consolidated balance sheets consist of deferred revenue for amounts collected in advance of a guest stay, limited to the amount of the booking to which the Company expects to be entitled as revenue. The Company’s deferred revenue balances exclude funds payable to owners and hospitality and sales taxes payable, as those amounts will not result in revenue recognition. Deferred revenue is recognized into revenue over the period in which a guest completes a stay. Substantially all of the deferred revenue balances at the end of each period are expected to be recognized as revenue within the subsequent 12 months.

Costs to Obtain a Contract

The Company capitalizes certain costs it incurs to obtain new homeowner contracts when those costs are expected to be recovered through revenue generated from that contract. Capitalized amounts are amortized on a straight-line basis over the estimated life of the customer through sales and marketing expenses in the condensed consolidated statements of operations. Costs to obtain a contract capitalized as of June 30, 2024 and December 31, 2023 were $33.5 million and $34.8 million, respectively, and were recorded as a component of prepaid expenses and other current assets and other long-term assets in the condensed consolidated balance sheets. The amount of amortization recorded for the three and six months ended June 30, 2024 was $3.7 million and $7.4 million, respectively. The amount of amortization recorded for the three and six months ended June 30, 2023 was $2.0 million and $3.8 million, respectively.

Allowance for Credit Losses

As of June 30, 2024 and December 31, 2023, the Company’s allowance for credit losses related to accounts receivable was $12.4 million and $11.7 million, respectively. For the three and six months ended June 30, 2024, the Company recognized credit loss expense of $0.9 million and $2.1 million, respectively, which was recorded as a component of general and administrative expense in the condensed consolidated statements of operations. For the three and six months ended June 30, 2023, the
17
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Company recognized credit loss expense of $0.5 million and $1.8 million, respectively, which was recorded as a component of general and administrative expense in the condensed consolidated statements of operations.

18
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)


The following tables set forth the Company's financial liabilities that were measured at fair value on a recurring basis (in thousands):

As of June 30, 2024
Level 1Level 2Level 3Total
Liabilities
Contingent consideration$— $— $4,027 $4,027 
Class G Common Stock(1)
— — 506 506 

As of December 31, 2023
Level 1Level 2Level 3Total
Liabilities
Contingent consideration $— $— $8,043 $8,043 
Class G Common Stock(1)
— — 506 506 

(1) For more information, see Note 13, Equity of our 2023 Annual Report.

The carrying amounts of certain financial instruments, including cash equivalents, restricted cash, accounts receivable, accounts payable, and borrowings under our Revolving Credit Facility (defined in Note 8, Debt) approximate fair value due to their short-term maturities and are excluded from the fair value tables above.

Level 3 instruments consist of contingent consideration obligations related to acquired businesses and the liabilities for contingent earnout share consideration represented by the Company's Class G Common Stock.

Contingent Consideration

The contingent consideration obligations are recorded in accrued expenses and other current liabilities and other long-term liabilities on the condensed consolidated balance sheets. The fair value of the contingent consideration is estimated utilizing an income approach and based on the Company's expectation of achieving the contractually defined homeowner contract conversion and retention targets at the acquisition date. The Company assesses the fair value of these obligations at each reporting date thereafter with any changes reflected as gains and losses in general and administrative expenses in the condensed consolidated statements of operations. The charges for changes in fair value of the contingent consideration were not material for the three and six months ended June 30, 2024 and 2023.

Class G Common Stock

The contingent earnout share consideration represented by the Company's Class G Common Stock is recorded in other long-term liabilities on the condensed consolidated balance sheets. The fair value of the Class G Common Stock is estimated on a recurring basis using the Monte Carlo simulation method. The fair value is based on the simulated stock price of the Company over the remaining term of the shares. Pursuant to the Amended and Restated Certificate of Incorporation, the Class G Common Stock is automatically converted to Class A shares at certain conversion ratios upon the occurrence of their respective triggering events. Inputs used to determine the estimated fair value of the Class G Common Stock include the remaining contractual term of the shares, the risk-free rate, the volatility of comparable companies over the remaining term, and the price of the Company's Class A Common Stock. The Company assesses the fair value of the Class G Common Stock at each reporting date with any changes reflected within other income, net in the condensed consolidated statements of operations. The charges for changes in fair value of the contingent consideration were not material for the three and six months ended June 30, 2024 and 2023.

Impairment of Long-Lived Assets

During the six months ended June 30, 2024, the Company recorded long-lived asset impairment charges of $84.0 million. The fair value estimate of the Company's homeowner contract assets was classified in Level 3 of the fair value hierarchy due to the
19
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

significance of unobservable inputs developed using Company-specific information. For more information on the impairment of long-lived assets, refer to Note 6, Intangible Assets, Net and Goodwill.

Impairment of Right-of-Use Assets

The Company tests long-lived assets for recoverability whenever events or changes in circumstances suggest that the carrying value of an asset or group of assets may not be recoverable. During the three months ended March 31, 2023, the Company took substantive action to negotiate certain sublease agreements for portions of the Company's leased corporate office space in Portland, Oregon and Boise, Idaho. Based on the sublease negotiations, the Company determined that the respective right-of-use assets had net carrying values that exceeded their estimated undiscounted future cash flows. The Company then estimated the fair value of the asset groups based on their discounted cash flows. The carrying values of the asset groups exceeded their fair values and, as a result, the Company recorded right-of-use asset impairments of $4.2 million. The impairment charges are recorded within general and administrative expenses in the condensed consolidated statements of operations. No similar impairment charges were recorded for the three and six months ended June 30, 2024.


Property and equipment, net consisted of the following (in thousands):

As of June 30,As of December 31,
20242023
Land$13,394 $13,394 
Buildings and building improvements12,350 12,474 
Leasehold improvements6,521 6,526 
Computer equipment14,057 13,873 
Furniture, fixtures, and other27,453 26,340 
Vehicles8,127 8,276 
Internal-use software57,991 60,162 
Total139,893 141,045 
Less: Accumulated depreciation(87,290)(84,328)
Property and equipment, net$52,603 $56,717 


Intangible assets, net consisted of the following (in thousands):

Weighted Average Useful Life Remaining (in years)As of June 30, 2024
Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying Amount
Homeowner contracts(1)
3$314,066 $(164,809)$(130,000)$19,257 
Databases, photos, and property listings026,489 (26,489)— — 
Trade names19,583 (9,566)— 17 
Other(2)
42,902 (2,880)— 22 
Total intangible assets$353,040 $(203,744)$(130,000)$19,296 

20
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Weighted Average Useful Life Remaining (in years)As of December 31, 2023
Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying Amount
Homeowner contracts(1)
5$314,221 $(153,819)$(46,000)$114,402 
Databases, photos, and property listings026,526 (26,519)— 7 
Trade names19,597 (9,570)— 27 
Other(2)
52,903 (2,875)— 28 
Total intangible assets$353,247 $(192,783)$(46,000)$114,464 

(1) The homeowner contracts balance as of June 30, 2024 is net of accumulated impairment losses of $130.0 million that were recorded during the third quarter of fiscal year 2023 and the first quarter of fiscal year 2024. The homeowner contracts balance as of December 31, 2023 is net of accumulated impairment losses of $46.0 million that were recorded during the third quarter of fiscal year 2023.

(2) Other intangible assets consist primarily of non-compete agreements, websites, and domain names.

The Company's estimated future amortization of intangible assets as of June 30, 2024 is expected to be as follows (in thousands):

Year Ending December 31:Amount
Remainder of 2024$4,452 
20257,541 
20264,582 
20271,539 
2028947 
Thereafter235 
Total$19,296 

The following table summarizes the changes in the Company's goodwill balance (in thousands):

Six Months Ended June 30,
2024
Balance at beginning of period(1)
$171,879 
Foreign exchange translation and other(36)
Balance at end of period(1)
$171,843 

(1) Goodwill is net of accumulated impairment losses of $655.0 million that were recorded to the Company's single reporting unit in prior periods.

Impairment

During the first quarter of 2024, the Company saw significant declines in Gross Booking Value ("GBV") and Nights Sold. The declines are attributable to volatile guest demand and guest bookings. Further, the Company continued to experience a sustained decline in stock price. Based on these factors, the Company concluded the events and changes in circumstances indicated an impairment may exist (the "triggering event") and conducted quantitative impairment assessments of long-lived assets and goodwill as of March 31, 2024. No triggering event was identified as of June 30, 2024.

Impairment of Long-lived Assets

The Company evaluates its long-lived assets or asset groups for indicators of possible impairment by comparing the carrying amount to future net undiscounted cash flows expected to be generated by such asset or asset group, including upon its eventual disposal (the "recoverability test"), when there is a triggering event. The Company determined its long-lived assets represent one asset group for purposes of long-lived asset impairment. Based on the results of the recoverability test as of
21
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

March 31, 2024, the Company concluded the carrying value of the single asset group was not recoverable. To allocate and recognize the impairment charge, the Company determined the individual fair value of the long-lived assets.

As of March 31, 2024, the carrying value of the Company's homeowner contracts exceeded the fair value, resulting in a long-lived asset impairment charge of $84.0 million. No impairment was recognized on the remaining long-lived assets, as their carrying values did not exceed their fair values. The Company estimated the fair value of the homeowner contracts based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of future revenue and operating margins, taking into consideration the historical performance and the current macroeconomic, industry, and market conditions. The Company based the discount rate on the weighted-average cost of capital considering Company-specific characteristics and changes in the reporting unit's projected cash flows.

Impairment of Goodwill

The Company reviews goodwill for impairment annually, as of the first day of the fourth quarter, and more frequently if events or changes in circumstances indicate an impairment may exist. Based on the triggering event identified above, the Company conducted a quantitative goodwill impairment assessment as of March 31, 2024. The goodwill impairment assessment did not result in goodwill impairment charges as of March 31, 2024 as the fair value estimate of the Company's single reporting unit exceeded its carrying amount. The fair value estimate of the Company's single reporting unit was derived from a combination of an income approach and a market approach. Under the income approach, the Company estimated the fair value of the reporting unit based on the present value of estimated future cash flows, which the Company considers to be a Level 3 unobservable input in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of future revenue and operating margins, taking into consideration the historical performance and the current macroeconomic, industry, and market conditions. The Company based the discount rate on the weighted-average cost of capital considering Company-specific characteristics and changes in the reporting unit's projected cash flows. Under the market approach, the Company estimated the fair value of the reporting unit based on revenue market multiples derived from comparable publicly traded companies with similar characteristics as the reporting unit, as well as an estimated control premium. No triggering event was identified as of June 30, 2024.

Potential indicators of impairment include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in the Company's stock price and/or market capitalization for a sustained period of time. It is reasonably possible that one or more impairment indicators could occur or intensify in the near term, which may result in further impairment of long-lived assets or goodwill.


Accrued expenses and other current liabilities consisted of the following (in thousands):

As of June 30,As of December 31,
20242023
Employee-related accruals$23,718 $23,834 
Homeowner reserves9,183 9,198 
Current portion of acquisition liabilities(1)
9,123 11,641 
Current portion of operating lease liabilities8,975 8,670 
Other14,258 9,477 
Total accrued expenses and other current liabilities$65,256 $62,820 

(1) The current portion of acquisition liabilities includes contingent consideration and deferred payments to sellers due within one year.


The Company's debt obligations consisted of the following (in thousands):

22
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

As of June 30,As of December 31,
20242023
Insurance premium financing$878 $3,300 
Other long-term debt81,000 — 
Total debt81,878 3,300 
Less: current maturities(1)
(878)(3,300)
Long-term portion$81,000 $— 

(1) Current maturities of debt are recorded within accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Insurance Premium Financing

The Company has entered into short-term agreements to finance certain insurance premiums. The outstanding balance of $0.9 million as of June 30, 2024 is repayable in monthly installments of principal and interest through September 2024, at a weighted-average annual percentage rate of 8.99%.

Revolving Credit Facility

In October 2021, the Company and its wholly owned subsidiary (the "Borrower") and certain of its subsidiaries (collectively, the "Guarantors") entered into a credit agreement with JPMorgan Chase Bank, N.A. and the other lenders party thereto from time to time.

The credit agreement, as subsequently amended in December 2021 and June 2023 (as amended, the "Credit Agreement"; capitalized terms used herein and not otherwise defined are used as defined in the Credit Agreement), provides for a senior secured revolving credit facility in an aggregate principal amount of $105.0 million ("Revolving Credit Facility"). The Revolving Credit Facility includes a sub-facility for letters of credit in aggregate face amount of $40.0 million, which reduces borrowing availability under the Revolving Credit Facility. Proceeds may be used for working capital and general corporate purposes.

The June 2023 amendment modified the Credit Agreement to replace the LIBOR-based reference rate options with Adjusted Term Secured Overnight Financing Rate ("SOFR") based reference rate options. Subsequent to the amendment, any borrowings under the Revolving Credit Facility are subject to interest, determined as follows:

•Alternate Base Rate ("ABR") borrowings accrue interest at a rate per annum equal to the ABR plus a margin of 1.50%. The ABR is equal to the greatest of (i) the Prime Rate, (ii) the New York Federal Reserve Bank Rate plus 0.50%, and (iii) the Adjusted Term SOFR for a one-month interest period plus 1.00%.
•Term SOFR borrowings accrue interest at a rate per annum equal to the Adjusted Term SOFR plus a margin of 2.50%. Adjusted Term SOFR means, for any Interest Period, an interest rate per annum equal to the Term SOFR for such Interest Period.

Borrowings under the Revolving Credit Facility do not amortize and are due and payable on October 7, 2026. Amounts outstanding under the Revolving Credit Facility may be voluntarily prepaid at any time and from time to time, in whole or in part, without premium or penalty. In addition to paying interest on the principal amounts outstanding under the Revolving Credit Facility, the Company is required to pay a commitment fee on unused amounts at a rate of 0.25% per annum. The Company is also required to pay customary letter of credit and agency fees.

The Credit Agreement contains a number of covenants that, among other things and subject to certain exceptions, restrict the ability of the Borrower and its restricted subsidiaries to:

•create, incur, assume or permit to exist any debt or liens;
•merge into or consolidate or amalgamate with any other person, or permit any other person to merge into or consolidate with it, or liquidate or dissolve;
•make or hold certain investments;
•sell, transfer, lease, license or otherwise dispose of its assets, including equity interests (and, in the case of restricted subsidiaries, the issuance of additional equity interests);
•pay dividends or make certain other restricted payments;
•substantively alter the character of the business of the Borrower and its restricted subsidiaries, taken as a whole; and
•sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its affiliates.
23
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)


In addition, beginning on June 30, 2022, the Borrower and its restricted subsidiaries are required to maintain a minimum amount of consolidated revenue, measured on a trailing four-quarter basis, as of the last date of each fiscal quarter, provided that such covenant will only apply if, on such date, the aggregate principal amount of outstanding borrowings under the Revolving Credit Facility and letters of credit (excluding undrawn amounts under any letters of credit in an aggregate face amount of up to $20.0 million and letters of credit that have been cash collateralized) exceeds 35% of the then-outstanding revolving commitments. The Borrower is also required to maintain liquidity of at least $15.0 million as of the last date of each fiscal quarter beginning on June 30, 2022.

The obligations of the Borrower and certain guarantor subsidiaries (the "Guarantors") are secured by first-priority liens on substantially all of the assets of the Borrower and the Guarantors. As of June 30, 2024, there were $81.0 million in borrowings outstanding under the Revolving Credit Facility. As of December 31, 2023, there were no borrowings outstanding under the Revolving Credit Facility. As of June 30, 2024, there were $23.4 million of letters of credit issued under the Revolving Credit Facility, and $0.6 million was available for borrowings.


Other long-term liabilities consisted of the following (in thousands):

As of June 30,As of December 31,
20242023
Class G Common Stock(1)
$506 $506 
Long-term portion of acquisition liabilities(2)
594 4,682 
Long-term portion of operating lease liabilities17,138 17,196 
Other10,704 10,695 
Total other long-term liabilities$28,942 $33,079 

(1) For more information, see Note 13, Equity of our 2023 Annual Report.

(2) The long-term portion of acquisition liabilities includes contingent consideration and deferred payments to sellers due after one year.


The Company's effective tax rate was a 1% expense on pre-tax loss for the three months ended June 30, 2024 and an 8% expense on pre-tax loss for the three months ended June 30, 2023. The Company's effective tax rate was a 1% expense on pre-tax loss for the six months ended June 30, 2024 and a 2% expense on pre-tax loss for the six months ended June 30, 2023. The effective tax rate differs from our statutory rate in both periods due to the effect of flow-through entity income and losses for which the taxable income or loss is allocated to the Vacasa Holdings, LLC members and due to valuation allowance considerations.


Reverse Stock Split

On October 2, 2023, we completed a 1-for-20 Reverse Stock Split of the Company's outstanding Class A Common Stock, Class B Common Stock, and Class G Common Stock. The Reverse Stock Split had no effect on the number of authorized shares of any class of common stock. Par value remained $0.00001 per share. Stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split received a cash payment in lieu of receiving fractional shares. All share and share-related information presented in these condensed consolidated financial statements has been retroactively adjusted for all periods presented to reflect the decreased number of shares resulting from the Reverse Stock Split.

Equity-Based Award Activities

Restricted Stock Units

A summary of the Restricted Stock Unit ("RSU") activity was as follows during the period indicated:

24
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Activity TypeRestricted Stock Units
(in thousands)		Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2023833$27.58 
Granted2155.48 
Vested(206)25.78 
Forfeited(227)27.88 
Outstanding as of June 30, 202461522.27 

As of June 30, 2024, there was unrecognized compensation expense of $11.9 million related to unvested RSUs, which is expected to be recognized over a weighted-average period of 2.0 years.

Performance Stock Units

The Company has granted Performance Stock Units ("PSUs") to certain members of its leadership team, which vest based upon the achievement of performance criteria and requisite service. The performance criteria are based on the achievement of certain share price appreciation targets. Attainment of each share price appreciation target is measured based on either the trailing 45-day or 60-day average closing trading price of our Class A Common Stock or, in the event of a change in control, the amount per share of Class A Common Stock to be paid to a stockholder in connection with such change in control. For certain of the awards, depending on the performance achieved, the actual number of shares of Class A Common Stock issued to the holder may range from 0% to 200% of the target number of PSUs granted. The number of PSUs granted included in the table below is based on the maximum potential achievement for all awards. In the event that performance criteria and requisite service are not achieved, the corresponding portion of the PSUs that do not vest will be forfeited.

A summary of the PSU activity was as follows during the period indicated:

Activity TypePerformance Stock Units
(in thousands)		Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2023250$29.40 
Forfeited(35)17.03 
Outstanding as of June 30, 202421530.65 

As of June 30, 2024, there was unrecognized compensation expense of $2.6 million related to unvested PSUs, which is expected to be recognized over a weighted-average period of 1.5 years.

Stock Appreciation Rights

A summary of the Stock Appreciation Rights ("SARs") activity was as follows during the period indicated:

Activity TypeStock Appreciation Rights
(in thousands)		Weighted Average Exercise Price
Outstanding as of December 31, 202345$61.54 
Forfeited(5)62.03 
Outstanding as of June 30, 20244061.47 

As of June 30, 2024, there was less than $0.1 million of unrecognized compensation expense for the Company's SARs that will be recognized over a weighted-average remaining recognition period of 0.4 years. As of June 30, 2024, the Company's outstanding SARs had a weighted-average remaining contractual life of 2.8 years and no intrinsic value.

Stock Options

A summary of the stock options activity was as follows during the period indicated:

25
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Activity TypeStock Options
(in thousands)		Weighted Average Exercise Price
Outstanding as of December 31, 2023156 $20.76 
Exercised(19)3.03 
Forfeited(16)27.25 
Outstanding as of June 30, 2024121 22.73 

As of June 30, 2024, there was less than $0.1 million of unrecognized compensation expense for the Company's stock options that will be recognized over a weighted-average remaining recognition period of 0.5 years. As of June 30, 2024, the Company's outstanding stock options had a weighted-average remaining contractual life of 2.8 years and an intrinsic value of less than $0.1 million.

Employee Equity Units

A summary of the Vacasa Employee Holdings LLC employee equity units is as follows:

Employee Equity Units
(in thousands)		Weighted-Average Grant Date Fair Value
Unvested outstanding as of December 31, 20235$29.63 
Vested(4)29.63 
Unvested outstanding as of June 30, 2024129.63 

As of June 30, 2024, there was less than $0.1 million of unrecognized compensation expense related to unvested employee equity units, which is expected to be recognized over a weighted-average period of 0.3 years.

Employee Stock Purchase Plan

In connection with the Business Combination, the Company adopted the 2021 Nonqualified Employee Stock Purchase Plan ("ESPP"). Under the ESPP, eligible participants may purchase shares of the Company’s Class A Common Stock using payroll deductions, which may not exceed 15% of their total cash compensation. Offering and purchase periods begin on June 1 and December 1 of each year. Participants will be granted the right to purchase shares at a price per share that is 85% of the lesser of the fair market value of the shares at (i) the participant’s entry date into the applicable one-year offering period or (ii) the end of each six-month purchase period within the offering period.

The ESPP does not meet the criteria of Section 423 of the Internal Revenue Code and is considered a non-qualified plan for federal tax purposes. The Company has treated the ESPP as a compensatory plan under GAAP.

During both the three and six months ended June 30, 2024, there were no shares of Class A Common Stock purchased under the ESPP. During March 2024, the Company suspended further contributions to the ESPP and refunded all contributions remaining in the plan. Accordingly, there were no ESPP options outstanding as of June 30, 2024.


Equity-Based Compensation Expense

The Company recorded equity-based compensation expense for the periods presented in the condensed consolidated statements of operations as follows (in thousands):

26
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cost of revenue$9 $18 $29 $62 
Operations and support123 361 207 727 
Technology and development465 509 1,077 903 
Sales and marketing6 533 487 1,544 
General and administrative1,506 2,469 3,379 4,795 
Total equity-based compensation expense$2,109 $3,890 $5,179 $8,031 


The Company calculates net loss per share of Class A Common Stock in accordance with ASC 260, Earnings Per Share, which requires the presentation of basic and diluted net loss per share. Basic net loss per share is calculated by dividing net loss attributable to Vacasa, Inc. by the weighted-average shares of Class A Common Stock outstanding without the consideration for potentially dilutive shares of common stock. Diluted net loss per share represents basic net loss per share adjusted to include the potentially dilutive effect of RSUs, PSUs, SARs, stock options, employee equity units, and Class G Common Stock. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of Class A Common Stock equivalents outstanding for the period determined using the treasury stock method and if-converted method, as applicable. During periods of net loss, diluted loss per share is equal to basic net loss per share because the antidilutive effect of potential shares of common stock is disregarded.

The following is a reconciliation of basic and diluted loss per share of Class A Common Stock for the periods presented (in thousands, except per share data):

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Basic and diluted net loss per share of Class A Common Stock:
Net loss attributable to Class A Common Stockholders for basic and diluted net loss per share$(8,851)$(3,121)$(94,534)$(26,913)
Weighted-average shares for basic and diluted loss per share(1)(2)
15,017 12,054 14,229 11,950 
Basic and diluted net loss per share of Class A Common Stock(1)(2)
$(0.59)$(0.26)$(6.64)$(2.25)

(1) Basic and diluted weighted-average shares outstanding include restricted stock units that have vested but have not yet settled into shares of Class A Common Stock.

(2) Weighted-average shares outstanding and equity awards used in the computation of basic and diluted loss per share for prior years reflect the 1-for-20 Reverse Stock Split that occurred on October 2, 2023. Refer to Note 11, Equity and Equity-Based Compensation for additional information.

Shares of the Company's Class B Common Stock and Class G Common Stock do not participate in earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted loss per share of Class B Common Stock and Class G Common Stock under the two-class method has not been presented.

The following outstanding potentially dilutive securities were excluded from the calculation of diluted net loss per share of Class A Common Stock either because their impact would have been antidilutive for the periods presented or because they were contingently issuable upon the satisfaction of certain market conditions (in thousands)(1):

27
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
OpCo units(2)
6,751 9,669 6,751 9,669 
Restricted stock units615 590 615 590 
Performance stock units(3)
215 237 215 237 
Stock appreciation rights40 60 40 60 
Stock options121 221 121 221 
Employee equity units1 35 1 35 
Employee stock purchase plan— 173 — 173 
Class G Common Stock411 411 411 411 
Common shares excluded from calculation of diluted net loss per share8,154 11,396 8,154 11,396 

(1) The share amounts for prior years have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split that occurred on October 2, 2023. Refer to Note 11, Equity and Equity-Based Compensation for additional information.

(2) These securities are neither dilutive nor anti-dilutive for the period presented as their assumed redemption for shares of Class A Common Stock would cause a proportionate change to net loss attributable to Class A Common Stockholders, diluted.

(3) PSUs are contingently issuable upon the satisfaction of certain market conditions. As of June 30, 2024, none of the requisite market conditions have been met, and therefore all such contingently issuable shares have been excluded from the calculation of diluted net loss per share of Class A Common Stock.


Leases

The Company leases real estate and equipment under various non-cancelable operating leases. In the ordinary course of business, we enter into renewal periods under these leases, at which time the commitments typically increase to match then current market rental rates. For additional information, refer to Note 8, Leases, of the Company's 2023 Annual Report.

Regulatory Matters and Legal Proceedings

The Company’s operations are subject to laws, rules, and regulations that vary by jurisdiction. In addition, the Company has been and is currently a party to various legal proceedings, including employment and general litigation matters, which arise in the ordinary course of business. Such proceedings and claims can require the Company to expend significant financial and operational resources.

Regulatory Matters

The Company’s core business operations consist of the management of short-term vacation rental stays, which are subject to local, city, or county ordinances, together with various state, U.S. and foreign laws, rules and regulations. Such laws, rules, and regulations are complex and subject to change, and in several instances, jurisdictions have yet to codify or implement applicable laws, rules or regulations. Other ancillary components of the Company’s business activities include the management of long-term rental stays and homeowner association management. In addition to laws governing these activities, the Company must comply with laws in relation to travel, tax, privacy and data protection, intellectual property, competition, health and safety, consumer protection, employment and many others. These business operations expose the Company to inquiries and potential claims related to its compliance with applicable laws, rules, and regulations. Given the shifting landscape with respect to the short-term rental laws, changes in existing laws or the implementation of new laws could have a material impact on the Company’s business.

Tax Matters

Some states and localities impose transient occupancy, lodging accommodations, and sales taxes ("Hospitality and Sales Taxes") on the use or occupancy of lodging accommodations and other traveler services. The Company collects and remits Hospitality
28
Vacasa, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

and Sales Taxes collected from guests on behalf of its homeowners. Such Hospitality and Sales Taxes are generally remitted to tax jurisdictions within a 30-day period following the end of each month, quarter, or year end.

As of June 30, 2024 and December 31, 2023, the Company had an obligation to remit Hospitality and Sales Taxes collected from guests in these jurisdictions totaling $26.9 million and $14.7 million, respectively. These payables are recorded in hospitality and sales taxes payable on the condensed consolidated balance sheets.

The Company’s potential obligations with respect to Hospitality and Sales Taxes could be affected by various factors, which include, but are not limited to, whether the Company determines, or any tax authority asserts, that the Company has a responsibility to collect lodging and related taxes on either historical or future transactions or by the introduction of new ordinances and taxes that subject the Company’s operations to such taxes. The Company is under audit and inquiry by various domestic tax authorities with regard to hospitality and sales tax matters.

The Company has estimated liabilities in certain jurisdictions with respect to state, city, and local taxes related to lodging where management believes it is probable that the Company has additional liabilities, and the related amounts can be reasonably estimated. These contingent liabilities primarily arise from the Company's transactions with its homeowners, guests, and service contracts and relate to the applicability of transactional taxes (such as sales, value-added and similar taxes) to services provided. As of June 30, 2024 and December 31, 2023, accrued obligations related to these estimated taxes, including estimated penalties and interest, totaled $9.0 million and $10.7 million, respectively. Due to the inherent complexity and uncertainty of these matters and judicial processes in certain jurisdictions, the final outcomes of such matters may result in obligations that exceed the estimated liabilities recorded.

The Company has estimated other contingent non-income tax related liabilities related to domestic and foreign taxing authorities. The subject matter of these contingent liabilities arises from transactions with homeowners and the related information reporting requirements and potential back-up withholding on certain homeowner payments. As of June 30, 2024 and December 31, 2023, accrued obligations related to the information reporting requirements, including estimated penalties and interest, totaled $1.7 million and $1.9 million, respectively. With respect to potential back-up withholding on certain homeowner payments, any estimated liability is inherently subjective due to the complexity and uncertainty of this matter; therefore, any reasonably possible loss or range of loss cannot be estimated.

Refer to Note 10,