Inspirato signals $350M combined revenue with Buyerlink merger while advancing adjusted EBITDA targets

Earnings Call Insights: Inspirato Incorporated (ISPO) Q2 2025

MANAGEMENT VIEW

* CEO Payam Zamani announced a definitive agreement to combine with Buyerlink, stating the transaction is 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 and other verticals are discovered, marketed and monetized."
* Zamani detailed that Buyerlink generated approximately $124 million in revenue and over $26 million in EBITDA in 2024, and expects the combined entity to deliver over $350 million in revenue and about $30 million in adjusted EBITDA on a pro forma basis for 2025.
* Zamani emphasized four strategic pillars: operational efficiency, brand elevation, member experience, and digital platform, highlighting an "$8.8 million year-over-year improvement in adjusted EBITDA" and the launch of a new loyalty program in July.
* CFO Michael J. Arthur stated, "The quarter was highlighted by negative adjusted EBITDA of $300,000, a meaningful turnaround from negative $9.2 million in Q2 2024. We also achieved positive trailing 12-month adjusted EBITDA of $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."

OUTLOOK

* Zamani indicated, "We expect the deal to close in the third quarter," and stated, "We remain pleased with our progress Inspirato has made year-to-date and continue to track towards the previously commuted full year 2025 targets, which include adjusted EBITDA between breakeven of $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."
* CFO Arthur noted that with the anticipated close of the Buyerlink transaction, "stand-alone Inspirato targets will become less relevant to how the business will report financial performance moving forward," and the company does not plan to update stand-alone guidance going forward.

FINANCIAL RESULTS

* CFO Arthur reported negative adjusted EBITDA of $300,000 for the quarter, a substantial improvement from negative $9.2 million in Q2 2024, and positive trailing 12-month adjusted EBITDA of $3.9 million.
* Total revenue was approximately $63.1 million, with subscription revenue at $19.4 million, down 23%, due to the strategic scale-back of Pass subscriptions. Club and legacy revenue remained flat year-over-year.
* Travel revenue rose to $39.4 million, with experiential travel business up 47% year-over-year. Controlled accommodations delivered a 59% occupancy rate, down from 71% in Q2 2024, but ADR increased by 24%.
* Cost of revenue declined by $5.5 million or 11% year-over-year, and operating expenses decreased by about $9 million. Free cash flow for Q2 was approximately breakeven at $200,000, while year-to-date free cash flow remained negative at $7.3 million.

Q&A

* Michael John Grondahl, Northland Capital: Asked about the pro forma balance sheet, debt levels, and CapEx requirements. CFO Arthur responded, "We obviously acknowledge that Buyerlink and Inspirato both have senior secured notes. And as part of the agreement, we do anticipate refinancing some of the secured note and recapitalize the whole business on a go-forward basis."
* Grondahl questioned support from Capital One and Citi. Arthur confirmed, "Both senior secured lenders are positive about the transaction and supportives and we anticipate that we likely will refinance the Capital One note at the close."
* Grondahl inquired about CapEx needs. Arthur stated, "I wouldn't anticipate any change meaningfully in the CapEx of either business...I wouldn't expect a meaningful change in overall CapEx due to any kind of increased investment."
* Grondahl asked about Buyerlink's growth profile and vertical expansion. Zamani explained, "The business growth as a result of adding marketplaces, new vectors, new verticals and bringing more liquidity, more demand, more partners to that marketplace...the average growth, both organic and through acquisitions has been north of 20%."

SENTIMENT ANALYSIS

* Analysts displayed a neutral and fact-finding tone, probing for details on debt, CapEx, and growth without overt skepticism or optimism.
* Management maintained a confident and constructive tone, particularly regarding operational improvements and the Buyerlink combination, with statements such as "we are working closely with the Buyerlink team to ensure smooth integration" and "operational excellence remains a core competency we're building into the DNA of the company."
* Compared to the previous quarter, management's confidence remained high, but with greater emphasis on integration and synergy realization, while analysts focused more on transaction-related financial structure than in the prior call.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter highlighted the Buyerlink combination as a strategic shift, compared to the previous quarter's focus on foundational operational efficiency and digital platform development.
* Adjusted EBITDA improved from $5.6 million positive in Q1 to ($300,000) in Q2, but with notable year-over-year improvement from Q2 2024.
* Revenue declined from $66 million in Q1 to $63.1 million in Q2, with travel revenue increasing and subscription revenue declining as the company repositions its Pass product.
* Management tone remained confident, but shifted toward integration and future scale, while analysts' focus moved from operational discipline and membership stabilization to capital structure and M&A integration.

RISKS AND CONCERNS

* Management acknowledged refinancing needs for both Inspirato and Buyerlink's senior secured notes and the necessity to recapitalize the business post-merger.
* Arthur stated, "We do anticipate refinancing some of the secured note and recapitalize the whole business on a go-forward basis."
* Zamani highlighted the challenge of integrating Buyerlink's technology and marketplaces, noting ongoing foundational work and the importance of prioritization without significant CapEx increases.
* The company addressed expected continued declines in Pass subscriptions and the need to stabilize and grow club memberships.

FINAL TAKEAWAY

Inspirato underscored a pivotal quarter marked by the announcement of a combination with Buyerlink, targeting over $350 million in pro forma revenue and $30 million in adjusted EBITDA for 2025. Operational improvements drove significant year-over-year EBITDA gains and a breakeven cash flow for the quarter. The company remains focused on integration, margin expansion, and disciplined execution, while preparing for a new phase of growth and platform diversification as part of One Planet platforms. Management views the Buyerlink merger as a transformative step to scale efficiently and diversify revenue streams, while continuing to enhance member experience and operational excellence.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ispo/earnings/transcripts]

MORE ON INSPIRATO

* Inspirato Incorporated (ISPO) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4813178-inspirato-incorporated-ispo-q2-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on Inspirato [https://seekingalpha.com/symbol/ISPO/ratings/quant-ratings]
* Historical earnings data for Inspirato [https://seekingalpha.com/symbol/ISPO/earnings]
* Financial information for Inspirato [https://seekingalpha.com/symbol/ISPO/income-statement]