Q2 2025 Inspirato Inc Earnings Call

Operator: Thank you for standing by and welcome to Inspirato's second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one one on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded. Now I would like to introduce your host for today's program, Bita Milanian, Senior Vice President of Marketing at Inspirato. Please go ahead. Bita, you may proceed. Bita, are you online? I cannot hear you at this moment.

Speaker #2: Thank you for standing by, and welcome to the Inspirato second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker #2: After the speakers' presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press *11 on your telephone.

Speaker #2: If your question has been answered and you'd like to remove yourself from the queue, simply press *11 again. As a reminder, today's program is being recorded.

Speaker #2: And now I'd like to introduce your host for today's program, Peter Milano. From Senior Vice President of Marketing at Inspirato. Please go ahead. Peter, you may proceed.

Speaker #2: Peter, are you online? I cannot hear you at this moment.

Bita Milanian: Operator, can you hear me?

Speaker #3: Operator, can you hear me?

Operator: Yes.

Speaker #2: Yes.

Bita Milanian: Okay, wonderful.

Operator: This is nice.

Speaker #3: Okay, wonderful. Thanks for what happened there. Thank you, and good morning. Welcome to Inspirato's second quarter 2025 earnings conference call. Joining us for today's presentation are Inspirato's Chairman and CEO, Kyle Zamani, and CFO, Michael Arthur.

Bita Milanian: Thank you for what happened there. Thank you and good morning. Welcome to Inspirato's second quarter 2025 earnings conference call. Joining us for today's presentation are Inspirato's Chairman and CEO, Payam Zamani, and CFO, Michael Arthur. At this time, our participants are in listen-only mode. Following management's remarks, we will open the call for questions. Before we begin, please note that today's call is being webcast live, and it will also be archived on the investor relations section of our website at inspirato.com. You can also find our earnings press release and the supplemental materials currently available there for your reference. As a reminder, some of today's comments are forward-looking statements. These statements are based on assumptions, and actual results could differ materially.

Speaker #3: At this time, our participants are in listen-only mode. Following management's remarks, we will open the call for questions. Before we begin, please note that today's call is being webcast live and we will also be archived on the Investor Relations section of our website at inspirato.com.

Speaker #3: You can also find our earnings press release and the supplemental materials currently available there for your reference. As a reminder, some of today's comments are forward-looking statements.

Speaker #3: These statements are based on assumptions, and actual results could differ materially. For a discussion of these risks and uncertainties, please refer to our filings with the SEC, including our most recent annual report on Form 10-K and our subsequent Form 10-Qs.

Bita Milanian: For a discussion of these risks and uncertainties, please refer to our filings with the SEC, including our most recent annual report on Form 10-K and our subsequent Form 10-Qs. In addition, during the call, management will discuss non-GAAP measures, which are useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Reconciliations of these measures with the most directly comparable GAAP measures are included in our earnings release. With that, I'd like to turn the call over to Inspirato's Chairman and CEO, Payam Zamani. Payam, please proceed.

Speaker #3: In addition, during the call, management will discuss non-GAAP measures, which are useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

Speaker #3: Reconciliations of these measures to the most directly comparable GAAP measures are included in our earnings release. With that, I'd like to turn the call over to Inspirato's Chairman and CEO, Kyle Zamani.

Speaker #3: Kyle, please proceed.

Payam Zamani: Thank you, and good morning, everyone. Yesterday afternoon, we issued a press release announcing our financial and operational results for the second quarter. I encourage all listeners to review the press release, which has been posted to our investor relations website, as it contains information relevant to today's call. Before we dive into the quarter and our financial performance, I want to take a moment to step back and look at the bigger picture. As our long-time customers and investors know, Inspirato has always been about reimagining luxury travel, giving our members seamless access to a curated portfolio of high-end homes, five-star hotel partners, and one-of-a-kind experiences around the world. From personalized trip planning to elevated service, our goal is simple: to make luxury travel effortless, memorable, and repeatable. That mission hasn't changed, but how we achieve it and how far we can scale it is evolving.

Speaker #4: Thank you, and good morning, everyone. Yes, for the afternoon, we issued a press release announcing our financial and operational results for the second quarter.

Speaker #4: I encourage our listeners to review the press release, which has been posted to our Investor Relations website as it contains information relevant to today's call.

Speaker #4: Before we dive into the quarter and our financial performance, I want to take a moment to step back and look at the bigger picture.

Speaker #4: As our long-time customers and investors know, Inspirato has always been about reimagining luxury travel. Giving our members seamless access to a curated portfolio of high-end homes, five-star hotel partners, and one-of-a-kind experiences around the world.

Speaker #4: From personalized trip planning to elevated service, our goal is simple: to make luxury travel effortless, memorable, and repeatable. That mission hasn't changed, but how we achieve it and how far we can scale it is evolving.

Payam Zamani: Today, Inspirato provides over 11,000 members access to approximately 325 luxury homes and over 200 premium hotel partnerships across more than 170 destinations. With our recent agreement to combine with BuyerLink, a leader in building and operating online marketplaces, performance marketing, and demand generation, we're now positioned to amplify that reach, enhance personalization, and bring our curated travel experiences to a broader audience. In Q2, we entered into a definitive agreement to combine with BuyerLink. This transaction represents an important milestone in our strategy to expand Inspirato's platform and long-term value by integrating into BuyerLink's technology-driven ecosystem to enhance how luxury travel, like other verticals, are discovered, marketed, and monetized. For background, BuyerLink is a technology-first business with proven capabilities in building online marketplaces across industries such as automotive and home services.

Speaker #4: Today, Inspirato provides over 11,000 members access to approximately 325 luxury homes and over 200 premium hotel partnerships across more than 170 destinations. With our recent agreement to combine with Bayer Link, a leader in building and operating online marketplaces, performance marketing, and demand generation, we're now positioned to amplify that reach, enhance personalization, and bring our curated travel experiences to a broader audience.

Speaker #4: In Q2, we entered into a definitive agreement to combine with Bayer Link. This transaction represents an important milestone in our strategy to expand Inspirato's platform and long-term value by integrating into Bayer Link's technology-driven ecosystem.

Speaker #4: To enhance how luxury travel, like other verticals, is discovered, marketed, and monetized. For background, Bayer Link is a technology-first business, with proven capabilities in building online marketplaces across industries such as automotive and home services.

Payam Zamani: By combining forces, we will harness that technology to enhance discovery, personalization, and monetization of luxury travel, unlocking new ways to reach untapped markets. This will also enable us to accelerate our efforts in enhancing the current member experience through improved trip personalization and a broader, more distinctive portfolio of upscale homes, hotels, and experiences. The combination will result in the formation of One Planet Platforms, a new entity that will operate a diversified platform for online marketplaces. From a business perspective, the combination immediately expands our verticals beyond luxury travel, with additional potential in future categories where BuyerLink's platform can be applied. This will significantly enhance our vectors for growth and revenue diversification. We expect the deal to close in the third quarter, and we are working closely with the BuyerLink team to ensure smooth integration.

Speaker #4: By combining forces, we will harness that technology to enhance discovery, personalization among regional luxury travel, unlocking new ways to reach untapped markets. This will also enable us to accelerate our efforts in enhancing the current member experience through improved trip personalization and a broader, more distinctive portfolio of upscale homes, hotels, and experiences.

Speaker #4: The combination will result in the formation of one-planet platforms, a new entity that will operate a diversified platform for online marketplaces. From a business perspective, this combination immediately expands our verticals beyond luxury travel, with additional potential in future categories where Bayer Link's platform can be applied.

Speaker #4: This will significantly enhance our vectors for growth and revenue diversification. We expect a deal to close in the third quarter, and we are working closely with the Bayer Link team to ensure smooth integration.

Payam Zamani: From day one, we anticipate the combination to be financially accretive, with BuyerLink bringing robust margins, meaningful cash flow, and a proven playbook for scaling efficiently. The combination with BuyerLink also brings meaningful scale and the strategic opportunity to Inspirato. In 2024, BuyerLink generated approximately $124 million in revenue and over $26 million in EBITDA, with profitability metrics that are best-in-class across the industry. This performance is driven by disciplined operations and a differentiated advantage in marketing and technology, capabilities we intend to leverage across the broader Inspirato platform. The transaction increases our combined revenue to over $350 million and positions us to deliver approximately $30 million in adjusted EBITDA on a pro forma basis for 2025. With this scale, we can better optimize shared resources and overhead, while also unlocking greater access to capital markets through an expanded market capitalization and stronger financial profile.

Speaker #4: From day one, we anticipate a combination to be financially accretive, with Bayer Link bringing robust margins and meaningful cash flow, and a proven playbook for scaling efficiently.

Speaker #4: The combination with Bayer Link also brings meaningful scale and strategic opportunity to Inspirato. In 2024, Bayer Link generated approximately $124 million in revenue and over $26 million in EBITDA.

Speaker #4: With profitability metrics that are best in class across the industry, this performance is driven by disciplined operations and a differentiated advantage in marketing and technology.

Speaker #4: Capabilities we intend to leverage across the broader Inspirato platform. The transaction increases are combined revenue to over $350 million, and positions us to deliver approximately $30 million in adjusted EBITDA and a pro forma basis for 2025.

Speaker #4: With this scale, we can better optimize shared resources and overhead, while also unlocking greater access to capital markets through an expanded market capitalization and stronger financial profile.

Payam Zamani: With enhanced access to capital, coupled with operational discipline, we're well-positioned to make targeted investments that will drive sustained profitable growth for the Inspirato brand. In the meantime, we remain focused on execution across four key strategic pillars at Inspirato. As a reminder, these are operational efficiency, brand elevation, member experience, and digital platform. First, we focus on driving operational efficiency. In Q2, we achieved a 96% or $8.8 million year-over-year improvement in adjusted EBITDA, demonstrating the tangible impact of our cost optimization initiatives, even against a more difficult macro environment. The changes we've made are not just short-term wins; they are about building a stronger business model for Inspirato. We're building a more agile, efficient company with a clear path towards sustainable profitability. Once combined with BuyerLink, we expect even greater margin expansion and operational synergies across the platform.

Speaker #4: With enhanced access to capital, coupled with operational discipline, we're well positioned to make targeted investments that will drive sustained profitable growth for the Inspirato brand.

Speaker #4: In the meantime, we remain focused on execution across four key strategic pillars at Inspirato. As a reminder, these are operational efficiency, brand elevation, member experience, and digital platform.

Speaker #4: First, we focus on driving operational efficiency. In Q2, we achieved a 96% or $8.8 million year-over-year improvement in adjusted EBITDA, demonstrating a tangible impact of our cost optimization initiatives.

Speaker #4: Even against a more difficult macro environment, the changes we've made are not just short-term wins. They are about building a stronger business model for Inspirato.

Speaker #4: We're building a more agile, efficient company with a clear path towards sustainable profitability. Once combined with Bayer Link, we expect even greater margin expansion and operational synergies across the platform.

Payam Zamani: We've been reviewing every detail of Inspirato and will do the same with BuyerLink. Operational excellence remains a core competency we're building into the DNA of the company. Second, brand elevation. As we look to the future, one of our key priorities is to further strengthen the Inspirato brand and enhance its appeal among discerning travelers. We believe a more vibrant, visible, and aspirational brand will not only reinforce member loyalty but also expand our reach to new audiences. One example of our progress is the reimagination of the Inspirato magazine, one of our more powerful touchpoints with both members and prospective members. Relaunching in Q3, the new edition will debut a refreshed editorial vision, refined design, and curated partnerships with iconic brands that embody the luxury lifestyle we represent.

Speaker #4: We've been reviewing every detail of Inspirato and will do the same with Bayer Link. Operational excellence remains a core competency we're building into the DNA of the company.

Speaker #4: Second, brand elevation. As we look to the future, one of our key priorities is to further strengthen the Inspirato brand and enhance its appeal among discerning travelers.

Speaker #4: We believe a more vibrant, visible, and aspirational brand will not only reinforce member loyalty but also expand our reach to new audiences. One example of our progress is the reimagination of the Inspirato magazine, one of our more powerful touchpoints with both members and prospective members.

Speaker #4: Relaunching in Q3, the new edition will debut a refreshed editorial vision, refined design, and curated partnerships with iconic brands that embody the luxury lifestyle we represent.

Payam Zamani: More than a publication, it will serve as a signature brand experience designed to capture the sophistication and exclusivity that we've defined for Inspirato. We also began to scale our digital and social media presence in a more intentional way. While early, we are already seeing encouraging signs of increased engagement and awareness, especially among high-value audiences who are discovering or reconnecting with the brand. On the property side, we continue to refine and elevate our luxury portfolio by adding highly curated homes in the world's most desirable destinations, while also phasing out properties that no longer align with our brand standards. In Q2, we introduced new residences in the Mexican Riviera and along the coast of Spain, destinations that enhance our offering and generate excitement among current and prospective members.

Speaker #4: More than the publication, it will serve as a signature brand experience designed to capture the sophistication and exclusivity that defines Inspirato. We also began to scale our digital and social media presence in a more intentional way.

Speaker #4: While early, we are already seeing encouraging signs of increased engagement and awareness. Especially among high-value audiences who are discovering or reconnecting with the brand.

Speaker #4: On the property side, we continue to refine and elevate our luxury portfolio by adding highly curated homes in the world's most desirable destinations. While also phasing out properties that no longer align with our brand standards.

Speaker #4: In Q2, we introduced new residences in the Mexican Riviera and along the coast of Spain, destinations that enhance our offering and generate excitement among current and prospective members.

Payam Zamani: As we look ahead, the combination of Inspirato's brand equity and BuyerLink's digital capabilities creates a powerful foundation for growth. With additional scale and resources, we're well-positioned to accelerate investments in brand storytelling, premium supply, and strategic partnerships, building long-term value and deepening the halo around the Inspirato experience. Third, we continue to enhance the member experience. Every decision we make starts with our members, how we surprise and delight, how we earn loyalty, and how we become indispensable to the most important moments. We remain focused on elevating our service and experiences to be more consistent, curated, and unique, all through the lens of delivering truly one-of-a-kind luxury travel. In Q2, we advanced initiatives to improve consistency and service quality, with particular emphasis on enhancing the local concierge experience and embedding higher service standards into our daily operations.

Speaker #4: As we look ahead, the combination of Inspirato's brand equity and Bayer Link's digital capabilities creates a powerful foundation for growth. With additional scale and resources, we're well positioned to accelerate investments in brand storytelling, premium supply, and strategic partnerships building long-term value and deepening the halo around the Inspirato experience.

Speaker #4: Third, we continue to enhance the member experience. Every decision we make starts with our members. It’s about how we surprise and delight, how we earn loyalty, and how we become indispensable to the most important moments.

Speaker #4: We remain focused on elevating our service and experiences to be more consistent, curated, and unique—all through the lens of delivering truly one-of-a-kind luxury travel.

Speaker #4: In Q2, we advanced initiatives to improve consistency and service quality, with particular emphasis on enhancing the local concierge experience and embedding higher service standards into our daily operations.

Payam Zamani: In July, we launched our new loyalty program centered around access and premium experience for our members. We expect this newly designed program to continue to grow and provide ever more value as we form new partnerships with adjacent brands in the luxury travel industry. We are also upgrading the Inspirato Pass member experience with a new product launching later this month, designed to simplify travel planning so members spend less time searching and more time traveling. We have expanded availability across our resident portfolio and streamlined trip options, making it easier for members to find and book the experiences they want. Each of these initiatives keeps the member experience and profitable growth at the forefront. Finally, our digital platform. We are building a robust technology and digital marketing platform that will unlock massive new potential for Inspirato.

Speaker #4: In July, we'll launch our new loyalty program centered around access and premium experience for our members. We expect this newly designed program to continue to grow and provide ever more value as we form new partnerships with adjacent brands in the luxury travel industry.

Speaker #4: We're also upgrading the past member experience. With a new product launching later this month, designed to simplify travel planning so members spend less time searching and more time traveling.

Speaker #4: We've expanded availability across our residence portfolio and streamlined trip options, making it easier for members to find and book the experiences they want. Each of these initiatives keeps the member experience and profitable growth at the forefront.

Speaker #4: And finally, our digital platform. We're building a robust technology and digital marketing platform that will unlock massive new potential for Inspirato. We started in Q2 with foundational tech investments and have taken a major step forward with the anticipated Bayer Link combination.

Payam Zamani: We started in Q2 with foundational tech investments and have taken a major step forward with anticipated BuyerLink combination. As we integrate with them, we will begin to roll out what will ultimately become a world-class platform, one that allows us to reach, target, and convert high-value travelers at scale previously impossible for us to reach. By combining the strength of our luxury brand with BuyerLink's data-driven digital platform, we are not just going to market more efficiently; we are going to expand our total addressable market. This is a meaningful growth catalyst and profitability accelerator that positions us to scale with precision and sustainability for years to come. In summary, we have made a transformational step forward. We have the right team and operations in place to reach new heights. I want to thank our team for their relentless focus and our members for their trust and loyalty.

Speaker #4: As we integrate with them, we'll begin to roll out what will ultimately become a world-class platform. One that allows us to reach target and convert high-value travelers at scale, previously impossible for us to reach.

Speaker #4: By combining the strength of our luxury brand with Bayer Link's data-driven digital platform, we're not just going to market more efficiently, we're going to expand our total addressable market.

Speaker #4: This is a meaningful growth catalyst and profitability accelerator that positions us to scale with precision and sustainability for years to come. In summary, we have made a transformational step forward.

Speaker #4: We have the right team and operations in place to reach new heights. I want to thank our team for their relentless focus and our members for their trust and loyalty.

Payam Zamani: I believe they are on the start of something extraordinary, and I cannot wait to share more progress with you in the quarters ahead. With that, I will turn it over to Michael Arthur to discuss our financial performance and outlook for the remainder of the year. Michael.

Speaker #4: I believe they're on the start of something extraordinary, and I can't wait to share more progress with you in the quarters ahead. With that, I'll turn it over to Michael to discuss our financial performance and outlook for the remainder of the year.

Speaker #4: Michael: Thank you, Kyle. And good morning, everyone. As Kyle outlined in Q2, we continue to make operational improvements to create a more efficient business.

Michael Arthur: Thank you, Payam, and good morning, everyone. As Payam outlined in Q2, we continue to make operational improvements to create a more efficient business. We're in a position to scale and reach new heights with BuyerLink. Turning to our Q2 results, the quarter was highlighted by negative adjusted EBITDA at $300,000, a meaningful turnaround from negative $9.2 million in Q2 of 2024. We also achieved positive trailing 12-month adjusted EBITDA at $3.9 million, reflecting the sustained impact of the cost efficiency measures implemented over the past year. Total revenue for the quarter was approximately $63.1 million. While revenue declined 6% year-over-year, this was primarily due to the planned decline in Pass subscriptions. Excluding the impacts from Pass, revenues were up 1% year-over-year. Subscription revenue was $19.4 million, down 23% as expected due to our strategic decision to scale back the previous version of Pass earlier this year.

Speaker #4: We're in our position to scale and reach new heights with Bayer Link. And turning to our Q2 results, the quarter was highlighted by negative adjusted EBITDA, A, $300,000, and meaningful turnaround from negative 9.2 million in Q2 of 2024.

Speaker #4: We also achieved positive trailing 12-month adjusted EBITDA, 3.9 million, reflecting the sustained impact of the cost efficiency measures implemented over the past year. Total revenue for the quarter was approximately $63.1 million.

Speaker #4: While revenue declined 6% year over year, this was primarily due to the planned decline in past subscriptions. Excluding the impacts from past subscriptions, revenues were up 1% year over year.

Speaker #4: Subscription revenue was $19.4 million, down 23% as expected due to our strategic decision to scale back the previous version of PASS earlier this year.

Michael Arthur: With a new version of Inspirato Pass launching this month, we're positioning the subscription business for future growth through a simplified, more flexible offering. Importantly, Club and legacy revenue remained flat year-over-year for the first time in several years, reflecting our success in attracting higher-value members who are more engaged in driving greater yield per member. At the end of Q2, we had roughly 11,000 active memberships, including 9,900 active Club members and 1,200 active Pass members, consistent with the strategic shift we outlined last year. While Pass remains an important part of our offering, we intentionally shifted our emphasis towards Club growth and overall profitability, with Pass now representing approximately 10% of our total membership base. In the coming quarters, we'll continue to allow periods of higher Pass volume from prior years and establish a more stable, sustainable baseline aligned with the relaunch of our new Pass product.

Speaker #4: With a new version of Inspirato Pass launching this month, we're positioning the subscription business for future growth through a simplified, more flexible offering. Importantly, cloud and legacy revenue remained flat year over year for the first time in several years, reflecting our success in attracting higher-value members who are more engaged in driving greater yield per member.

Speaker #4: At the end of Q2, we had roughly 11,000 active memberships, including 9,900 active club members and 1,200 active pass members, consistent with the strategic shift we outlined last year.

Speaker #4: While Pass remains an important part of our offering, we intentionally shifted our emphasis towards club growth and overall profitability, with Pass now representing approximately 10% of our total membership base.

Speaker #4: In the coming quarters, we'll continue to allow periods of higher pass volume from prior years and establish a more stable, sustainable baseline aligned with the relaunch of our new pass product.

Michael Arthur: We're excited about the upcoming relaunch of Pass, which we believe will drive incremental revenue and better align the product with our evolved brand and business strategy. Travel revenue was up roughly 1% to $39.4 million, driven by experiential travel business, up 47% year-over-year. This was achieved both as a result of growth in our bespoke services and timing of some of our experiences versus this time last year. Year-to-date experiential travel is up over double digits, an area we see continued opportunity. In our controlled accommodations, we delivered an occupancy level of 59%, down from 71% in Q2 of 2024. This is while increasing ADR by 24% in the quarter, supporting the gross margin and profitability goals we set for the year. On the cost side, we saw continued benefits from our optimization efforts.

Speaker #4: We're excited about the upcoming relaunch of pass, which we believe will drive incremental revenue and better align the product with our evolved brand and business strategy.

Speaker #4: Travel revenue was up roughly 1% to $39.4 million. Driven by experiential travel business, up 47% year over year. This was achieved both as a result of growth in our bespoke services and timing of some of our experiences versus this time last year.

Speaker #4: Year to date, experiential travel is up over double digits, an area we see continued opportunity. In our control accommodations, we delivered occupancy level of 59%, down from 71% in Q2 of 2024.

Speaker #4: This is while increasing ADR by 24% in the quarter, supporting the gross margin and profitability goals we set for the year. And on the cost side, we saw continued benefits from our optimization efforts.

Michael Arthur: Cost of revenue declined by $5.5 million, or 11% year-over-year, largely due to our ongoing portfolio optimization efforts. Operating expenses were also marginally lower, down approximately $9 million, benefiting from reduced overhead and continued focus on streamlining operations across the organization. Free cash flow in Q2 was approximately break-even at roughly $200,000, reflecting the continued benefit of the cost reductions and operational efficiencies we've implemented. Year-to-date free cash flow remains negative at $7.3 million, an improvement from the prior year. We're encouraged by the trajectory and continue to prioritize cash and liquidity as we work towards achieving consistent positive free cash flow, a critical milestone that will give us the flexibility to reinvest in key areas that drive long-term growth.

Speaker #4: Cost of revenue declined by 5.5 million, or 11% year over year, largely due to our ongoing portfolio optimization efforts. Operating expenses were also marginally lower, down approximately 9 million, benefiting from reduced overhead and continued focus on streamlining operations across the organization.

Speaker #4: Free cash flow in Q2 was approximately break even at roughly $200,000, reflecting the continued benefit of the cost reductions and operational efficiencies we've implemented.

Speaker #4: Year to date, free cash flow remains negative at 7.3 million, an improvement from the prior year. We're encouraged by the trajectory and continued to prioritize cash and liquidity as we work towards achieving consistent, positive free cash flow.

Speaker #4: A critical milestone that will give us the flexibility to reinvest in key areas that drive long-term growth. Moving to our outlook, we remain pleased with our progress in Inspirato has made year to date and continue to track toward the previously commuted full year of 2025 targets, which include adjusted EBITDA between break even and 5 million, total revenue between $235 million and $255 million, and cash to operating expenses between 80 million and 90 million, a 15% year over year improvement.

Michael Arthur: Moving to our outlook, we remain pleased with our progress Inspirato has made year-to-date and continue to track toward the previously committed full year 2025 targets, which include adjusted EBITDA between break-even and $5 million, total revenue between $235 million and $255 million, and cash operating expenses between $80 million and $90 million, a 15% year-over-year improvement. With the anticipated close of our transaction with BuyerLink, we recognize that these standalone Inspirato targets will become less relevant to how the business will report financial performance moving forward. As such, while we will continue to manage towards these targets to the end of the year, we do not plan to update standalone guidance going forward. In the meantime, Inspirato remains focused on disciplined execution while strengthening the foundation for scalable and profitable growth under the new platform.

Speaker #4: With the anticipated close of our transaction with Bayer Link, we recognize that these standalone Inspirato targets will become less relevant to how the business will report financial performance moving forward.

Speaker #4: As such, while we will continue to manage towards these targets at the end of the year, however, we do not plan to update standalone guidance going forward.

Speaker #4: In the meantime, Inspirato remains focused on disciplined execution while strengthening the foundation for scalable, profitable growth. Under the new platform, over the past year, the choices we made are showing up in our financial performance.

Michael Arthur: Over the past year, the choices we've made are showing up in our financial performance. By sharpening our focus, instilling stronger discipline throughout the company, and constantly refining how we deliver value to our members, we've become more agile and effective. With the anticipated combination of BuyerLink and Inspirato, we're focused on strengthening our business to deliver an even more exceptional experience to our customers. Together, we look forward to scaling profitably and achieving sustainable growth. With that, I will turn it back to the operator for Q&A.

Speaker #4: By sharpening our focus and selling stronger discipline throughout the company, and constantly refining how we deliver value to our members, we've become more agile and effective.

Speaker #4: With anticipated combination of Bayer Link and Inspirato, we're focused on strengthening our business, to deliver an even more exceptional experience to our customers. Together, we look forward to scaling profitably and achieving sustainable growth.

Speaker #4: And with that, I'll turn it back to the operator for Q&A.

Operator: Certainly. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. If your question has been answered and you would like to remove yourself from the queue, please press star one one again. One moment for our first question. Our first question comes from the line of Mike Garnedale from Northland Capital. Your question, please.

Speaker #2: Certainly, and as a reminder, ladies and gentlemen, if you do have a question at this time, please press *11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, please press *11 again.

Speaker #2: One moment for our first question. And our first question comes from the line of Mike Garndale from Northland Capital. Your question, please.

Mike Garnedale: Hey, guys. Could you walk through the pro forma balance sheet, cash levels, debt levels, and kind of address how you're thinking about Capital One and the BuyerLink debt? Then maybe kind of CapEx kind of thought, you know, how you're going to expand through CapEx sort of the next 6 to 18 months?

Speaker #5: Hey, guys. Could you walk through the pro forma balance sheet—cash levels, debt levels—and kind of address how you're thinking about Capital One and the Bayer Link debt?

Speaker #5: And then maybe kind of CapEx, kind of thought, you know, how you're going to expand through CapEx sort of the next six to 18 months.

Michael Arthur: Hey, Mike. This is Michael. Thanks for the question. We are, as we are going through this process, we obviously acknowledge that BuyerLink and Inspirato both have senior secured notes. As part of the agreement, we do anticipate refinancing some of the secured note and recapitalize the whole business on a go-forward basis. We are in the process of doing that now. Once we have a more definitive plan on the refinancing and recapitalization, we will certainly update you in the market.

Speaker #6: Hey, Mike, this is Michael. Thanks for the question. We are, you know, as we're going through this process, we obviously acknowledge that Bayer Link and Inspirato both have senior secured notes.

Speaker #6: And as part of the agreement, we do anticipate refinancing some of the secured note and recapitalize the whole business when we go forward basis.

Speaker #6: We're in the process of doing that now. And once we have a more definitive plan on kind of the refinancing and recapitalization, we'll certainly update you and the market.

Mike Garnedale: Got it. So, I guess specifically, the Capital One debt, are they supportive, or do you think you will have that refinanced by the close? Then I think the BuyerLink debt is with Citi, and I think, if I read right, like $8 million due later this year. Just kind of thinking, is that pre or post merger?

Speaker #5: Got it. So I guess specifically the Capital One debt, are they supportive or do you think you'll have that refinanced by the close? And then I think the Bayer Link debt is with Citi, and I think if I read right, like $8 million is due later this year.

Speaker #5: Just kind of thinking, is that pre or post merger?

Michael Arthur: Again, on the Capital One note, I would say both senior secured lenders are positive about the transaction and supportive. We anticipate that we likely will refinance the Capital One note at the close, and Citi will continue on with us at some level. As I mentioned, we are anticipating and looking towards a refinancing and recapitalization of the whole business, Citi with us, but also looking at incremental capital into the business, either in the form of additional debt, equity, and cash flow from the business.

Speaker #6: Yeah, again, on the Capital One note, I mean, I would say both senior secured lenders are positive about the transaction and supportive. We anticipate that we will likely refinance the Capital One note at the close.

Speaker #6: And Citi will continue on with us at some level. As I mentioned, you know, we are anticipating and looking towards a refinancing and recapitalization of the whole business.

Speaker #6: Citi with us, but also looking at incremental capital into the business, either in the form of additional debt, equity, and cash flow from the business.

Mike Garnedale: Got it. Anything on the rough CapEx requirements you think the business will see over the next 6 to 18 months?

Speaker #5: Got it. And then anything on the rough CapEx requirements you think the business will see over the next six to 18 months?

Michael Arthur: Yeah, I wouldn't anticipate any change meaningfully in the CapEx of either business. You know, they are in many ways different, but also, I think on the Inspirato side, as Payam Zamani mentioned in his prepared remarks, we'll be able to leverage their resources and marketing resources and capability in marketing and technology that Inspirato Incorporated certainly over the last couple of years has been less invested in. But I wouldn't expect a meaningful change in overall CapEx due to any kind of increased investment.

Speaker #6: Yeah, I wouldn't anticipate any meaningful change in the CapEx of either business. You know, they are, in many ways, different. But also, you know, I think on Inspirato's side, Kyle mentioned in his prepared remarks that we'll be able to leverage their resources and marketing capabilities, including marketing and technology, that Inspirato has certainly been less invested in over the last couple of years.

Speaker #6: But I wouldn't expect a meaningful change in overall CapEx due to any kind of increased investment.

Mike Garnedale: Got it. Payam, a question for you. BuyerLink is a lead gen business. It has done things in auto extensively. How much investment or modification and what is the timeline that it can begin to work for Inspirato and really drive leads for travel and leisure?

Speaker #5: Got Got it. And then, Pam, a question for you. You know, Bayer Link, is a lead gen business. You know, it's done things in auto extensively.

Speaker #5: How much investment or modification and what's sort of the timeline that it can begin to work for Inspirato and really drive leads for travel and leisure?

Payam Zamani: Hi, Mike. Thank you for the question. I think it is important to categorize BuyerLink as a company with deep expertise in building marketplaces and performance marketing. Lead gen is a segment of that, but it is not the whole story. Lead gen just represents one way that the consumer demand through the marketplaces that BuyerLink operates is monetized. As an example, lead gen is not something that Inspirato could benefit from, but rather the marketplace that Inspirato needs to have curated homes and hotels all over the world, way beyond what we have today. Some of that work has begun. We have the team at Inspirato who has been working on doing some of the work that can be done in the meantime.

Speaker #7: Hi, Mike. Thank you for the question. So, I think it's important to categorize Bayer Link as a company with deep expertise in building marketplaces and performance marketing.

Speaker #7: I think lead generation is a segment of that, but it is not the whole story. Lead generation just represents one way that the consumer demand through the marketplaces that Bayer Link operates monetizes.

Speaker #7: And as an example, lead generation is not something that Inspirato could benefit from, but rather the marketplace that Inspirato needs to have curated homes and hotels all over the world.

Speaker #7: Way beyond what we have today. Some of that work has begun; we have the team at Inspirato working on doing some of the work that can be done in the meantime.

Payam Zamani: As I mentioned in my remarks in Q2, we had a good number of people focused on starting to build that foundation. It is a foundation and it is a presence that will never be done building, but a good chunk of that will be done by, let's say, end of Q1 of 2026. I certainly expect that at some point in 2026, we will start benefiting from that foundation. That is an important vector of growth that we are quite focused on.

Speaker #7: And so, as I mentioned in my remarks, in Q2, we had a good number of people focused on starting to build that foundation. It's a foundation and a presence that will never be done building, but a good chunk of that will be done by, let's say, the end of Q1 of 2026.

Speaker #7: And I certainly expect that at some point in 2026, we'll start benefiting from that foundation. That is an important vector of growth that we are quite focused on.

Mike Garnedale: Will that require much investment?

Speaker #5: And will that require much investment?

Payam Zamani: I mean, the investment in debt is primarily investment in resources. It is more of a prioritization. What are the kinds of stuff that we will not do in order to focus on what is important? I would not say that you are going to see increased CapEx in a meaningful way, but you will see that we will have resources dedicated to this effort.

Speaker #7: I mean, the investment in that is primarily investment in resources. It's more of a prioritization. What are the kinds of stuff that we will not do?

Speaker #7: In order to focus on what is important, I wouldn’t say that you’re going to see increased CapEx in a meaningful way, but you will see that we’ll have resources dedicated to this effort.

Mike Garnedale: Got it. One more on BuyerLink. I think you talked about roughly $120 million, $130 million in revenue last year, $26 million of adjusted EBITDA. What do you think BuyerLink's growth profile looks like, and what are the major drivers of that business?

Speaker #5: Got it. And then one more on Bayer Link. I think you talked about roughly $120 million to $130 million in revenue last year, and $26 million of adjusted EBITDA.

Speaker #5: What do you think Bayer Link's growth profile looks like, and what are the major drivers of that business?

Payam Zamani: Yeah. I mean, I think with any marketplace or an organization, a company that operates marketplaces, the business grows as a result of adding marketplaces, new vectors, new verticals, and bringing more liquidity, more demand, more partners to that marketplace. So there is more trading, more engagement takes place within that marketplace. That is what drives BuyerLink. In the case of BuyerLink, for example, an overwhelming majority of the car makers are partners of BuyerLink today. So a growth in the number of car makers is not something that is going to be realistic, but access to more consumer demand is what will drive that growth. Adding more verticals, home services is a small vertical today for BuyerLink, and that can become a much, much bigger business. Used cars, BuyerLink owns usedcars.com, and that is something that can become a very large business over time.

Speaker #7: Yeah, I mean, I think with any marketplace, or an organization, a company that operates marketplaces, the business grows as a result of adding marketplaces, new vectors, new verticals, and bringing more liquidity.

Speaker #7: More demand, more partners to that marketplace. So there's more trading and more engagement that takes place within that marketplace. So that is what drives Bayer Link.

Speaker #7: In the case of Bayer Link, for example, the overwhelming majority of the car makers are partners of Bayer Link today. So growth in the number of car makers is not something that's going to be realistic, but access to more consumer demand is what will drive that growth.

Speaker #7: And adding more verticals, you know, adding more verticals and home services is a small vertical today for Bayer Link, and that can become a much, much bigger business.

Speaker #7: Used cars, you know, Bayer Link owns usedcars.com, and that is something that can become a very large business over time, many of you know Autotrader, and that's a massive business, a marketplace for cars.

Payam Zamani: Many of you know Autotrader, and that is a massive business, a marketplace for cars, and that is something that BuyerLink owns. So bringing more liquidity to the existing marketplaces that it owns will be a major vector for growth and adding new verticals. Lastly, the way that BuyerLink is built and the patterned technology that it operates based on, it is an ideal magnet for consolidation in a very large industry where there are many, in a sense, small orphan companies of $5 million to $20 million in revenue that they could become an important part of a bigger story.

Speaker #7: And that's something that Bayer Link owns. So, bringing more liquidity to the existing marketplaces that it owns will be a major vector for growth and adding new verticals.

Speaker #7: And lastly, the way that Bayer Link is built and the patented technology that it operates based on, it is an ideal magnet for consolidation in a very large industry where there are many, in a sense, small orphan companies with $5 to $20 million in revenue.

Speaker #7: That they could become an important part of a bigger story.

Mike Garnedale: What kind of growth profile will BuyerLink have over three to five years? Do you see BuyerLink as a mid-high single-digit grower with some margin expansion?

Speaker #5: And I guess, growth profile, do you see Bayer Link as a mid-high single-digit grower with some margin expansion? Or what kind of growth profile will this have over the next three to five years?

Payam Zamani: That's a good question. I don't know if I have a great answer for you at this point, but I can tell you that if you look at CAGR for the last, I think, five years, the average growth, both organic and through acquisitions, has been north of 20%.

Speaker #7: That's a good question. I don't know if I have a great answer for you at this point, but I can tell you that if you look at Kager for the last, I think, five years, the average growth, both organic and through acquisitions, has been north of 20%.

Mike Garnedale: Okay. Thank you.

Speaker #5: Okay. Thank you.

Speaker #7: Sure.

Operator: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. This does conclude the question and answer session of today's program. I would like to hand the program back to Payam Zamani for any further remarks.

Speaker #2: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press *11 on your telephone. This concludes the question and answer session of today's program.

Speaker #2: I would like to hand the program back to Kyle Zamani for any further remarks.

Payam Zamani: Thank you again, everyone, for joining us today. I would also like to thank our employees, partners, and shareholders for their continued support. This concludes our call for today, and we look forward to reporting back in three months. Operator.

Speaker #7: Well, thank you again, everyone, for joining us today. I’d also like to thank our employees, partners, and shareholders for their continued support. This concludes our call for today.

Speaker #7: And we look forward to reporting back in three months. Operator.

Operator: Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.