Inspirato’s Earnings Call: Record EBITDA Amid Challenges

Inspirato Incorporated ((ISPO)) has held its Q1 earnings call. Read on for the main highlights of the call.

During Inspirato Incorporated’s recent earnings call, the sentiment was cautiously optimistic. The company celebrated significant operational improvements and a record adjusted EBITDA, reflecting effective strategic shifts. However, challenges such as declining revenue and member count, along with negative free cash flow, were also acknowledged. Despite these hurdles, the company remains hopeful about future profitability and growth, driven by operational efficiencies and strategic initiatives.

Record Adjusted EBITDA Performance

Inspirato achieved a milestone with its strongest adjusted EBITDA performance in history, reaching $5.6 million in Q1 2025. This achievement underscores the effectiveness of the company’s strategic shift towards operational discipline.

Cost of Revenue and Operating Expenses Decline

The company reported a decline in the cost of revenue by $8 million year-over-year, alongside a reduction in operating expenses by approximately $8 million. These figures highlight significant improvements in cost management.

Strong Occupancy and ADR Increase

Inspirato maintained a robust occupancy level of 74% in its controlled residence accommodations, coupled with an 8% increase in Average Daily Rate (ADR) to over $2,100. These metrics support the company’s gross margin goals.

Launch of New Initiatives for Member Experience

To enhance member experience, Inspirato launched new initiatives such as improved concierge training and a partnership with Sixth car rental, offering exclusive benefits to members.

Revenue Decline

The company faced a revenue decline, with total revenue for the quarter at approximately $66 million, down 18% year-over-year. Subscription revenue also fell by 26%, attributed to a strategic reduction in Pass subscriptions.

Member Count Decrease

Club memberships decreased from 10,900 to 10,200 year-over-year, with ongoing headwinds expected to impact member growth through the first half of the year.

Negative Free Cash Flow

Inspirato reported a negative free cash flow of $8 million for Q1, including $2.6 million in one-time cash outflows related to lease terminations. The underlying free cash flow burn was approximately $4.5 million.

Forward-Looking Guidance

Looking ahead, Inspirato aims to achieve sustainable profitability by refining its cost base and investing in digital marketing and technology. The company projects full-year 2025 adjusted EBITDA between breakeven and $5 million, with revenue expected to range between $235 million and $255 million. Operating expenses are anticipated to decrease by 15% year-over-year.

In summary, Inspirato’s earnings call reflected a mix of achievements and challenges. While the company celebrated record adjusted EBITDA and cost management successes, it also faced revenue and membership declines. Nonetheless, Inspirato remains optimistic about its strategic initiatives and future growth prospects.