Q2 2024 Vacasa Inc Earnings Call

Welcome, everyone, to the Vacasa 2Q24 Earnings Conference Call. All lines have been placed on mute to prevent...

Operator: All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, simply press the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. At this time, I'd like to turn the conference over to Ryan Domyancic of Investor Relations. Please go ahead.

Background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, simply press the star followed by the number one on your telephone keypad.

If you would like to enjoy your question, press star one again. At this time, I'd like to turn the conference over to Ryan Domyancic of Investigation. Please go ahead.

[inaudible]

Speaker Change: Episode 2

Ryan Domyancic: Good afternoon, everyone, and thank you for joining us for today's call. We are pleased to be joined by Vacasa CEO Rob Graver and CFO Bruce Schuman. We have posted a letter to the Investor Relations section of our website at investorsoutthecostal.com that will be referenced in our speech. Comments made during this conference call and in our letter contain forward-looking statements. Such statements include those about our restructuring actions, including cost savings, future expectations, beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions, and financial performance, including guidance for future period results.

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Speaker Change: Good afternoon, everyone, and thank you for joining us for today's call. I'm pleased to be joined by Picasa CEO Rob Greyber and CFO Bruce Schuman.

Speaker Change: We have posted a letter to the Investor Relations section of our website at investors.vacasa.com that will be referenced by our speakers.

Ryan Domyancic: We caution you that various risks and uncertainties could cause actual results to differ from those in our forward-looking statements. For additional information concerning these risks and uncertainties, please read the forward-looking statement section in the letter we issued earlier today and the forward-looking statements and risk factors section in our filings with the Securities and Exchange Commission. During this call, we may reference various non-GAAP financial measures. Information regarding our non-GAAP financial results, including a reconciliation of non-GAAP results to the most directly comparable GAAP financial measures, can be found in our letter.

Comments made during this conference call and in our letter contain forward-looking statements.

Such statements include those about our restructuring actions, including cost savings, feature applications, police, plans, projections, strategies, targets, estimates, objectives, events, conditions and financial performance, including guidance for future period results.

Speaker Change: We caution you that various risks and uncertainties could cause actual results to differ from those in our forward-looking statements.

Speaker Change: For additional information concerning these risks and uncertainties, please read the forward looking statement section in the letter we issued earlier today, and the forward looking statements and risk factor sections in our filing with the Securities and Exchange Commission.

Speaker Change: During this call, we may reference various non-gap financial measures, information regarding our non-gap financial results, including a reconciliation of non-gap results to the most directly comparable gap financial measures may be found in our letter.

Ryan Domyancic: These non-gap measures should be considered in addition to our gap results and are intended to supplement but not substitute for the performance measures calculated in accordance with the gap, and now I will turn the call over to Rob Greyber.

Speaker Change: These non-GAAP measures should be considered in addition to our GAAP results and are intended to supplement but not substitute for the performance measures calculated in accordance with GAAP. And now I will turn the call over to Rob Greyber. Rob?

Robert Greyber: Thanks Ryan, and thank you everyone for joining us this afternoon. I'll begin with some opening remarks and a comment on the business. Bruce will follow with a review of the second quarter financial results, and then we'll open it up for Q&A. We are currently in the heart of our peak season, the busiest time of the year for our local team. I want to extend my gratitude to all our team members who are working tirelessly to ensure a seamless experience for our guests on behalf of our own, and a special note of appreciation to our teams in markets where we have had natural disasters, including wildfires, hurricanes, and extreme flooding, and I am continually impressed by the professionalism and tenacity of our team.

Rob Greyber: Thanks, Ryan, and thank you, everyone, for joining us this afternoon.

Rob Greyber: I'll begin with some opening remarks and commentary on the business. Bruce will follow with a review of second quarter financial results and then we'll open it up for Q&A.

Speaker Change: We are currently in the heart of our peak season, the busiest time of the year for our local teams.

Rob Greyber: I want to extend my gratitude to all our team members who are working tirelessly to ensure a seamless experience for our guests on behalf of our owners, and a special note of appreciation to our teams in markets where we have had natural disasters, including wildfires, hurricanes and extreme flooding, and I'm continually impressed by the professionalism and composure of our teams.

Robert Greyber: At the same time, we're executing against the business transformation we outlined last quarter. While we operate nationally with thousands of employees across hundreds of destinations, our success and our business transformation fundamentally depend on delivering hospitality at a local level. Each week, we are further empowering our teams who know our markets, owners, and guests best by giving them more decision-making authority across many aspects of our business, including sales, onboarding revenue management, and marketing.

Rob Greyber: At the same time, we're executing against the business transformation we outlined last quarter. While we operate nationally with thousands of employees across hundreds of destinations are success and our business transformation fundamentally depends on delivering hospitality at a local level.

Rob Greyber: Each week, we are further empowering our teams who know our markets, owners, and guests best by giving them more decision-making authority across many aspects of our business, including sales, onboarding, revenue management, and marketing.

Robert Greyber: I'm pleased with the progress we are making in the way we operate our business. However, the short-term rental industry continues to adjust to softening demand for domestic non-urban vacation rentals, as well as increases in the supply of short-term rental units. We also continue to experience booking variability, and at this point, we don't see the debate happening in the second half of 2024.

Rob Greyber: And please, with the progress we are making in the way we operate our business. However, the short-term rental industry continues to adjust to softening demand for domestic, non-urban vacation rentals, as well as increases in the supply of short-term rental units.

Robert Greyber: We also continue to experience bookings variability, and at this point we don't see the debating in the second half of 2024. These ongoing trends are continuing to put real pressure on our business.

Rob Greyber: Nonetheless, based on our and industry data, we continue to believe in the significant majority of our markets, Vacasa listings are generating more gross bookings per home than the industry.

Robert Greyber: So while the industry booking trends remain challenging, we are focused on what we can control and so I'd like to share some more details about the business transformation I mentioned just a moment ago.

Robert Greyber: Over the past few months, we've taken significant steps to reorganize and decentralize our operations into locally-focused regions. These regions are now managed by cross-functional teams with many of the roles that traditionally were ported up to corporate leadership now reporting to and collaborating directly with regional leadership.

Rob Greyber: Over the past few months, we've taken significant steps to reorganize and decentralize our operations into locally focused regions.

Robert Greyber: These regions are now managed by cross-functional teams with many of the roles that traditionally reported up to corporate leadership, now reporting to and collaborating directly with regional leadership.

Robert Greyber: This shift provides more autonomy and accountability to our field teams, aligning our structure more closely with our localized approach to property management. Additionally, our incentive plans are increasingly geared toward encouraging local teams to focus on and manage their region. In the next few weeks, we'll kick off planning for 2025, and we expect regional leadership to play a much more central role in shaping that plan. Their insights and on the ground knowledge will be invaluable as we seek to tailor our approach for each market. These local leaders will also be responsible and accountable for implementing and delivering on their market level plan.

Robert Greyber: This shift provides more autonomy and accountability to our field teams, aligning our structure more closely with our localized approach to property management.

Robert Greyber: Additionally, our incentive plans are increasingly geared toward encouraging local teams to focus on and manage their regions.

Robert Greyber: In the next few weeks, we'll kick off planning for 2025 and we expect region leadership to play a much more central role in shaping that plan.

Robert Greyber: Their insights and on-the-ground knowledge will be invaluable as we seek to tailor our approach for each market. These local leaders will also be responsible and accountable for implementing and delivering on their market-level plans.

Robert Greyber: We're also adjusting the day-to-day workflows to more easily allow local teams to affect change within their markets, enabling them to better serve owners and guests and drive efficiency. For example, we've enabled local teams to update aspects of the homeowner listing in real time and streamline the approval process for in-market expenses. Changes like these help satisfy owner requests more quickly and limit duplication of effort. We're also giving the local teams more input on identifying the type of homes that are brought on in their markets and ensuring the sales teams are more focused on signing the right homes based on certain characteristics, including location, amenities, and rent potential.

Robert Greyber: We are also adjusting the day-to-day workflows to more easily allow local teams to affect change within their markets, enabling them to better service owners and guests and drive efficiencies.

Robert Greyber: For example, we've enabled local teams to update aspects of the homeowner listing in real time and streamline the approval process for in-market expenses.

Robert Greyber: Changes like these help satisfy owner requests more quickly and limit duplication of effort.

Robert Greyber: We are also giving the local teams more input on identifying the type of homes that are brought on in their markets and ensuring the sales teams are more focused on signing the right homes based on certain characteristics including location, amenities, and rent potential.

Robert Greyber: Our thesis is that empowering our local teams would drive the strongest impact on the homeowner and guest experience, which in turn should result in a better business outcome. While it's early days, since we announced the transformation in May, we've been seeing year-over-year improvements each week through the end of July in many of our markets in key metrics that measure guest satisfaction, including clean scores, property condition scores, and service scores on the sales side. The number of homes added to our platform has declined quarter over quarter, as expected due to the reduced number of sales executives and advertising spend.

Robert Greyber: Our thesis is that empowering our local teams would drive the strongest impact on the homeowner and guest experience, which in turn should result in better business outcomes.

Robert Greyber: While it's early days, since we announced the transformation in May, we've been seeing your or your improvements each week through the end of July, in many of our markets and key metrics that measure guess satisfaction, including clean scores, property condition scores and service scores.

Robert Greyber: On the sales side, the number of homes added to our platform has declined quarter over quarter as expected due to the reduced number of sales executives and advertising spend.

Robert Greyber: As a reminder, as part of the business transformation, we are moving to focus our sales teams on revenue potential and unit quality rather than on an absolute number of opponents on their management.

Robert Greyber: Finally, we continue to develop and deploy technology tools that improve the experience for owners, guests, and team members who support them. We are also continuing to evaluate leveraging third-party industry applications for various aspects of our infrastructure.

Robert Greyber: The industry dynamics remain challenging, and there is more to do, so we remain highly focused on executing our transformation plan.

Robert Greyber: Lastly, as you will have seen, today we also announced a $30 million investment by Davidson Chemner, which will help strengthen our balance sheet. We look forward to working with Davidson Chemner's Allen Lou and Lee Sosa as they join our board of directors. I would now like to pass it over to British to discuss our second quarter results.

Robert Greyber: Lastly, as you've all seen today, we also announced a $30 million investment by Davidson Camper, which will help strengthen our balance sheet.

Speaker Change: We look forward to working with the Davidson-Kempner's Alan Liu and Luis Sosa as they join our board of directors. I'd now like to pass it over to Bruce to discuss our second quarter results.

Bruce Schuman: Let me note it otherwise. I will be comparing our second quarter results with the second quarter of 2023, and I'll be referencing the operating expense lines, excluding the impact of stock-based compensation, restructuring costs, and business combination costs, which you can find outlined in our shareholder list. And In the second quarter, Gross Booking Value, which is the combination of nights sold and Gross Booking Value per night sold, was $555 million, down 19% year over year.

Bruce Schuman: Thanks for watching!

Bruce Schuman: And let's note it otherwise, I will be comparing our second quarter results, the second quarter of 2023, and I'll be referencing the operating expense lines excluding the impact of stock-based compensation, restructuring costs and business combination costs, which you can find outlined in our shareholder letter.

Bruce Schuman: In the second quarter, gross booking value, which is the combination of nights sold and gross booking value per night sold, was $505 million, down 19% year-over-year.

Bruce Schuman: Knight sold over $1.4 million in the second quarter, down 17% year over year. Gross booking value per night sold was $361 in the second quarter, down 2% year-over-year. As a reminder, there is a strong correlation between nights sold and gross booking value per night sold, and it's difficult to look at either in isolation. Our revenue management algorithms and data team constantly evaluate the tradeoff between price and occupancy and the mix of nights sold and gross booking value per night sold, with the goal of optimizing home ownership.

Bruce Schuman: Nights sold were $1.4 million in the second quarter, down 17% year-over-year.

Bruce Schuman: Gross booking value per night sold was $361 in the second quarter, down 2% year-over-year.

Bruce Schuman: As a reminder, there's a strong correlation between night-sold and gross-booking value per night-sold, and it's difficult to look at either an isolation.

Bruce Schuman: Our revenue management algorithms and data team constantly evaluates the trade-off between price and occupancy and the mix of night sold and gross booking value per night sold with the goal of optimizing homeowner income.

Bruce Schuman: Over the past several quarters, we've discussed the year over year declines in average gross booking value per home, as the industry normalizes off of the record highs from the past few years, and we saw this dynamic play out again in the second quarter, with average gross booking value per home declining by nearly 13% year over year. We finished the second quarter with approximately 40,000 homes on our platform, down from approximately 41,000 at the end of the first quarter, reflecting the ongoing churn dynamic that we have been seeing.

Bruce Schuman: Over the past several quarters, we've discussed the year-over-year declines in average gross booking value per home as the industry normalizes off of the record highs from the past few years.

Bruce Schuman: And we saw this dynamic play out again the second quarter, with average gross booking value per home declining by nearly 13% year-over-year.

Bruce Schuman: We finished the second quarter with approximately 40,000 homes on our platform, down from approximately 41,000 at the end of the first quarter, reflecting the ongoing churn dynamic that we have been seeing.

Bruce Schuman: The short-term rental industry continues to adjust to various headwinds, such as increased supply and lower average gross booking value per home. We also continue to see owner concerns with rates and their resulting income as a leading cause of churn as the industry wrestles with these factors. Revenue, which consists primarily of our commission on the rents we generate for homeowners, the fees we collect from guests, and revenue from home care solutions provided directly to our homeowners, was $249 million in the second quarter, down 18% yearly. Now, turning to expenses.

Bruce Schuman: The short-term rental industry continues to adjust to various headwinds such as increased supply and lower average gross booking value per home.

Bruce Schuman: We also continue to see owner concerns with rates and their resulting income as a leading cause of churn, as the industry wrestles with these factors.

Bruce Schuman: Revenue, which consists primarily of our commission on the rents we generate for homeowners, the fees we collect from guests, and revenue from home care solutions provided directly to our homeowners, was $249 million in the second quarter, down 18% year over year.

Bruce Schuman: Cost of revenue was 48% of revenue in the second quarter versus 47% of revenue in the same period last year. Cost of revenue dollars declined by 16% year over year, roughly in line with the 17% decline in nights sold. Operations and Support expense was 23% of revenue in the second quarter versus 20% of revenue in the same period last year. Operations and Support expense dollars declined by 9% year over year. In terms of our other operating expenses, sales and marketing expense, which includes the fees we pay our third-party distribution partners declined 26%. Technology and Development expense declined 5%, and general and administrative expenses increased by 16% due primarily outside professional services and legal. Adjusted EBITDA was $2 million for the second quarter compared to $16 million for the same period last year.

Bruce Schuman: Now turning to expenses.

Bruce Schuman: Cost of revenue is 48% of revenue in the second quarter versus 47% of revenue in the same period last year.

Bruce Schuman: Cost of revenue dollars declined by 16% year-over-year, roughly in line with the 17% decline in nights sold.

Bruce Schuman: Operations and support expense was 23% of revenue in the second quarter versus 20% of revenue in the same period last year.

Bruce Schuman: Operations and support expense dollars declined by 9% year-over-year.

Bruce Schuman: in terms of our other operating expenses.

Bruce Schuman: Sales and marketing expense, which includes the fees we pay our third-party distribution partners, declined 26 percent.

Bruce Schuman: Technology and Development expense declined 5% and general and administrative expenses increased by 16% due primarily outside professional services and legal expenses.

Bruce Schuman: Adjusted EBITDA was $2 million for the second quarter compared to $16 million in the same period last year.

Bruce Schuman: Despite progress on our expense reductions, Adjusted E that there is continues to be affected by booking variability, impacting gross booking value per home and ultimately revenue, which declined by $56 million euros. As Rob touched on, we are continuing to experience booking weakness in terms of both price, or gross booking value per night sold, and utilization, or nights sold per home, in the summer peak and as we look out into the back half of this year.

Bruce Schuman: Despite progress on our expense reductions, adjusted EBITDA continues to be affected by booking variability impacting gross booking value per home and ultimately revenue, which declined by $56 million year.

Bruce Schuman: As Rob touched on, we are continuing to experience bookings weakness in terms of both price, or gross booking value per night sold, and utilization, or nights sold per home, in summer peak, and as we look out into the back half of this year.

Bruce Schuman: We are carefully monitoring intakes but don't yet see signs of stabilization in the near term. The ongoing industry dynamics and their impact on bookings variability and average gross bookings per home, as well as continued elevated churn, creates a wide range of outcomes for revenue, which then flows through to adjusted EBIT. At this point, it remains difficult to provide forward-looking guidance.

Bruce Schuman: We are carefully monitoring intakes, but don't yet see signs of stabilization in the near term.

Bruce Schuman: The ongoing industry dynamics and their impact on booking variability and average gross booking per home, as well as continued elevated turn, creates a wide range of outcomes for revenue, which then flows through to a adjusted EBITDA.

Bruce Schuman: At this point, it remains difficult to provide forward-looking guidance.

Bruce Schuman: Additionally, as Roth mentioned, today we announced the signing and closing of a convertible note financing with David's in-camp, with an initial purchase of $30 million of convertible notes. The note purchase agreement also provides for the issuance of up to an additional $45 million of convertible notes subject to the terms and conditions of the agreement. With this initial investment of $30 million, Davidson Kempner has the right to designate two directors to Vacasa's board of directors. Allen Liu and Luis Sosa, both principals of Davidson-Kempner, will join Vacasa's board effectively. With that, Rob and I will take your questions. Operator, please open up the line.

Speaker Change: Additionally, as Rob mentioned, today we announced the signing and closing of the convertible notes financing with David's Encounter.

Speaker Change: with an initial purchase of $30 million of kind of herbal notes.

Bruce Schuman: The note purchase agreement also provides for the issuance of up to an additional $45 million of convertible notes, subject to the terms and conditions of the agreement.

Bruce Schuman: With this initial investment of $30 million, Davis and Kempner has the right to designate two directors to the cost of board of directors.

Speaker Change: Alan Liu and Louie Sosa, both principles of Davidson Cabinet, will join Bacossas Board effective immediately.

Speaker Change: With that, Robin, I will take your questions. Operator, please open up the lines.

Operator: Thank you. We will now begin the question and answer session. At this time, I would like to remind everyone that in order to ask a question, press the star 1 and then the number 1 on your telephone keypad. If you are called upon to ask your question and are listening through a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute. We do request for today's session that you please limit to one question and one follow-up. We will pause for a moment. You can file the question and answer. Your first question comes from the line of Berlin McTernan, Otener Dhamn, his go ahead. Hi, this is

Operator: i

Operator: Thank you. We will now begin the question and answer session. At this time, I would like to remind everyone in order to ask a question, press the star 1 and then the number 1 on your telephone keypad.

Operator: If you are called upon to ask your question and are listening by a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute.

Operator: We do look as for today session that you can submit to one question and one follow-up. We will post for a moment to confile the question answer roster.

Speaker Change: Episode 2

Speaker Change: Your first question comes from the line of burning occurments of Nedham. Please go ahead.

Stefanos Crist: Hi, this is Stefanos Crist calling in for Bernie. Thanks for taking our questions. You mentioned the focus on quality versus number of homes. Is that the driver of the improved take rate year over year? And then we also noticed some promotion during Q2. So I guess we just wanted to get the puts and takes on take rate. Thanks.

Stefanos Crist: Hi, this is Stefanos Crist calling in for Bernie. Thanks for taking our questions. You mentioned the focus on quality versus number of homes.

Stefanos Crist: Is that the driver of the improved take rate year over year? And then we also noticed some promo during Q2, so I guess we just wanted to get the puts and takes on take rate. Thanks.

Robert Greyber: Yeah, so we continue, I mean, basically, home quality is a very top focus for us, we've seen some improvement on that, which we talked about as a key focus of our transformation. There's really no difference we've been having to disclose anything about take rates, there was really nothing to comment on there specifically, but home quality is a very critical part of our transformation, and that continues to be a top priority.

Robert Greyber: Yeah, so we continue. I mean, basically, home quality is a very top focus for us. We've seen some improvement on that. We talked about as a key focus of our transformation.

Robert Greyber: There's really no difference. We haven't disclosed anything about take rates. There's really nothing to comment on there specifically, but home quality is a very critical part of our transformation and that continues to be a top priority for the company.

Speaker Change: Episode 2

Robert Greyber: God, thank you. And then just wanted to ask again on Tern versus what you're seeing in the market of increased supply. Can you talk anything about this gross ad during the quarter? Yeah, sure. I'll start with that.

Robert Greyber: God, thank you. And then just wanted to ask again, turn versus what you're seeing in the market of increased supply. Just can you talk anything about this gross ad, sir in the quarter?

Robert Greyber: Yeah, sure, I'll start in, and Bruce can add, if you'd like. I think that, first of all, the dynamics around term remain consistent. I think with what we've seen, we are very focused on it. We have, and we are focused on the drivers that go into it. Recall that there are two major drivers that we've seen with respect to turn: the first is around race and revenue. The second is around communications and how we interact with owners.

Robert Greyber: Yeah, sure. I'll start in and Bruce can add if you'd like. I think that first of all, the dynamics around term remain consistent. I think with what we've seen, we are very focused on it. We have.

Robert Greyber: We are focused on the drivers that go into it. Recall that there are two major drivers that we've seen with respect to churn. The first is around rates and revenue.

Robert Greyber: The second is around communications and how we interact with owners.

Bruce Schuman: The rates and revenue dynamic is challenging because so much of it is driven by what we see happening in the market overall on revenue per home and the industry dynamics around revenue per home.

Robert Greyber: And so we're focused on what we can control in that role working very hard with owners and with our revenue management teams, everyone in between to make sure that we're delivering revenue premiums for our owners.

Bruce Schuman: in as many months of the year and to as great a degree as possible in the work that we do.

Bruce Schuman: When it comes to communications, there's a lot that we're doing at the heart of our transformation, but also in the product work that we've shipped and have talked about before, around enabling our teams to work more constructively, more dynamically, and also more closely, changing and empowering, changing our processes and policies to kind of empower those local teams to work better with owners.

Operator: We've seen some, you know, some traction on the initiatives that we have, but we're not we're not where we want to be. When it comes to, you know, when it comes to the, you know, the dynamic around Eunice and Mix, and so forth, we're working to align the sales organization much more closely with the rest of the teams in the field. We hope to see that begin to bear fruit, but it's early days.

Operator: So, I think it right now, you know, we're continuing to see elevated adjourned, we've seen some, you know, some traction on the initiatives that we have but we're not, we're not, we're not where we want to be.

Operator: When it comes to, you know, when it comes to the, you know, the dynamic around around

Operator: Units and mix and so forth, you know, we're working to align the sales organization much more closely with the rest of the the rest of the teams in the field. And we hope to see that begin to bear fruit. But it's early days for us there.

Operator: Got it. Thank you.

Benjamin Miller: Again, if you would like to ask a question, press star and one on your telephone keypad. Your next question comes from the line of Ben Miller, of Goldman Sachs. Please go ahead.

Benjamin Miller: Again, if you would like to ask a question, press star and one on your telephone keypad.

Speaker Change: Your next question comes from the line of Ben Miller of Goldman Sachs, please go ahead.

Bruce Schuman: Thanks so much for taking the questions. I just want to talk about financing and understand maybe why now, why that amount, and how you feel you're set up now from a liquidity perspective against various demand scenarios as we look out over the next year or so.

Bruce Schuman: Thanks so much for taking the questions. I just want to talk about the financing and understand, you know, maybe why now, why that amount, and how you feel you're set up now from a liquidity perspective against various demand scenarios as we look out over the next year or so.

Bruce Schuman: Yeah, thanks, Ben, for the question. So, first of all, I would say, as a public company, we're always open to listening to investors and open to opportunities that drive value for the long term. And we think that's what this was.

Bruce Schuman: Yeah, thanks, Ben, for the question. So, you know, first of all, I would say, as a public company, we're always, you know,

Bruce Schuman: Open to listening to investors and open to opportunities to drive value for the long term. We think that's what this was Davidson Kempner specifically they've been very engaged with us really

Speaker Change: They've been leaning in, interested in our business, interested in our transformation plan, especially since their purchase of Comma Stock earlier this year.

Bruce Schuman: So look, we think this investment from Davis and Keffner does help strengthen our balance sheet and liquidity to your point. We're managing a very challenging industry environment and softening demand and we think this helps us strengthen our balance sheet.

Bruce Schuman: Davidson Kempner specifically, they've been very engaged with us, really, they've been leaning in, interested in our business, interested in our transformation plan, especially since their, you know, their purchase of Comma Stock earlier this year. So look, we think this investment from Davidson Kempner does help strengthen our balance sheet and liquidity, to your point. We're managing a very challenging industry environment and softening demand, and we think this helps strengthen our balance sheet.

Bruce Schuman: But look, you know, Robin, I've been very focused on this. We know we have a lot of work to do, an accident, and executing the transformation plan over the next few quarters. And, you know, we look forward to working with Davis and Kepler and the rest of our board as we continue on the path to really empower our local teams to drive on.

Rob: But look, Rob and I, we've been very focused on this. We know we have a lot of work to do in actioning and executing the transformation plan over the next few quarters. And we look forward to working and partnering with Davidson Kepner and the rest of our board as we continue on the path of really empowering our local teams to drive the business forward.

Robert Greyber: Greyber, and then maybe just as a follow-up, curious just where we stand on the resetting of earnings expectations among homeowners on the platform and helping homeowners optimize for earnings around price and occupancy via some of the tools and communication initiatives that you've rolled out. Yeah, I think there's...

Robert Greyber: Great and then maybe just as a follow-up, curious just where we stand on the resetting of earnings expectations around among homeowners on the platform and helping homeowners optimize for earnings around price and occupancy via some of the the tools and communication initiatives that you've rolled out.

Robert Greyber: Yeah, I think there's a lot of work that has gone into that. As I said a moment ago, we're seeing some good initial feedback on that from owners. It's still a challenging environment. You can explain those dynamics if you're talking to your financial advisor about your personal investments. You can be beating the market, but if the market is down, it's still a challenge. I think a similar dynamic exists if the analogy holds with owners when we talk about that.

Robert Greyber: Yeah, I think there's a lot of work that has gone into that as I said a moment ago, we're seeing some good initial feedback on that from owners, it's still a challenging environment. You can explain those dynamics if you're talking to your financial advisor about your personal investments. You can be beating the market, but if the market is down and it's still a challenge, I think a similar dynamic exists if the analogy holds.

Robert Greyber: with owners when we talk about that. That's, again, why we're kind of focused on...

Robert Greyber: doing everything that we can to make sure that we're communicating what the market is doing, communicating what we are seeing in the market, and then how we are acting and ultimately how we're delivering. When we look at the industry data and we compare our results, we think that we are delivering revenue premiums versus the industry, but there's obviously a lot more work to do there. I think that more generally in terms of the transformation work that we're doing, it's all along those lines, Ben, to make sure that we challenge ourselves first to work more collaboratively across the company.

Robert Greyber: I think that more generally, in terms of the transformation work that we're doing, it's all along those lines, Ben, to make sure that we challenge ourselves first to work more collaboratively across the company and to empower our local teams to make and guide a lot more of the decisions. So we've really done a lot of work in the last several months to tighten up the relationships, the connections, the regular touch points between our local teams and the revenue management teams to make sure that just the exchange of information, we hear about concerns, that those things are communicated right away. So I feel like we are making progress on that, but it's a tough environment to make progress in, and there's still a lot of work.

Robert Greyber: and to empower our local teams to make and guide a lot more of the decisions. So we've really done a lot of work in the last several months to tighten up the relationships, to the connections, the regular touch points.

Robert Greyber: between our local teams and the revenue management teams.

Robert Greyber: to make sure that those that just the exchange of information we hear about concerns.

Robert Greyber: You know, that those things are communicated, you know, communicated right away. So I feel like we are, we're, we are making progress on that, but it's a tough environment to make progress against and, and there's still a lot of work to do.

Ben: Great, thanks so much.

Robert Greyber: That concludes our question and answer session. I will now turn the conference back over to Rob Greger for closing remarks.

Robert Greyber: A.S.

Robert Greyber: That concludes our question and answer session. I will now turn the conference back over to Rob Greger for closing remarks. Please go ahead.

Robert Greyber: Thank you very much. I want to thank everyone for joining the call today. I know it's a busy time, but I also want to take a moment to thank our owners for entrusting their homes to us, to all of Vacasa's guests who are making memories with us, and to all of our colleagues at Vacasa who are working so hard to bring vacations home every day, including in this important summer peak season of 2024. Thanks very much for joining us.

Robert Greyber: Thank you very much. I want to thank everyone for joining the call today. I know it's a busy time. I also want to take a moment to thank our owners for entrusting their homes to us, to all of Vacasa's guests who are making memories with us, and all of our colleagues at Vacasa who are working so hard to bring vacations home every day, including in this

Robert Greyber: important summer peak season of 2024. Thanks very much for joining.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining; you may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Speaker Change: Unknown Executive, Robert Greyber, Jed Kelly, Benjamin Miller, Bruce Schuman, Vincent

Robert Greyber: These ongoing trends are continuing to put real pressure on our business. Nonetheless, based on our and industry data, we continue to believe that in the significant majority of our markets, Vacasa listings are generating more gross bookings per home than the industry. So while the industry's booking trends remain challenging, we are focused on what we can control, and so I'd like to share some more details about the business transformation I mentioned just a moment ago.

Robert Greyber: As a reminder, as part of the business transformation, we are moving to focus our sales teams on revenue potential and unit quality rather than on an absolute number of homes under management. Finally, we continue to develop and deploy technology tools that improve the experience for owners, guests, and the team members who support them. We are also continuing to evaluate leveraging third-party industry applications for various aspects of our infrastructure. Industry dynamics remain challenging, and there is more to do, so we remain highly focused on executing our transformation plan.

Robert Greyber: The race and revenue dynamic is challenging because so much of it is driven by what we see happening in the market overall as revenue for home and the industry dynamics around revenue for home. And so we're focused on what we can control in that role, working very hard with owners and with our revenue management teams, and everyone in between to make sure that we're delivering revenue premiums for our owners. In as many months of the year as possible, and to be as great as possible in the work that we do.

Robert Greyber: That's, again, why we're kind of focused on... doing everything that we can to make sure that we're communicating what the market is doing, communicating what we are seeing in the market, and then how we are acting, and ultimately how we are delivering. When we look at the industry data and we compare our results, we think that we are delivering revenue premiums versus the industry. But there's obviously a lot more work to do.

Operator: When it comes to communications, there's a lot that we're doing at the heart of our transformation, also in the product work that we've shipped and talked about, work around enabling our teams to work more constructively, more dynamically, and also more closely changing and empowering, changing our processes and policies to kind of empower those local teams to work better with owners. So I think that right now, you know, we continue to see elevated churn.