Inspirato Incorporated

In Q3, total revenue was approximately $56 million, down 20% year over year. Adjusted EBITDA improved 97% to negative $0.1 million, while cost of revenue declined 23% or roughly $11.5 million and cash operating expenses were down approximately $7 million year over year. Subscription revenue was $19.4 million, down 16% year over year, and travel revenue was $33.9 million, down 20% year over year. Occupancy was 56% and ADR was up 25%. Free cash flow in Q3 was negative $3 million; year-to-date free cash flow was negative $10 million, or roughly negative $6 million after adjusting for about $4 million of one-time payments. Year-to-date EBITDA was $4.8 million, a $13.2 million improvement versus the same period in 2024. Management reinstated full-year 2025 guidance for EBITDA of $2 million-$4 million, revenue of $235 million-$240 million, and operating expenses of $80 million-$85 million, implying a 15% year-over-year reduction in opex.

Payam Zamani framed the quarter as evidence that Inspirato is “heading in the right direction,” emphasizing operational efficiency, brand elevation, member experience, and digital platform investment as the company’s four strategic pillars. He said the company reviewed hundreds of vendor contracts and identified $4 million in annualized savings, and noted that the redesigned Pass product is now more flexible and profitable because it focuses on controlled properties rather than hotels. His tone was confident and forward-looking, saying the business is positioned for efficient growth in 2026 and beyond, while also acknowledging the end of the Buyerlink deal without changing the broader strategy.

Michael Arthur highlighted the financial turnaround, citing Q3 adjusted EBITDA of negative $0.1 million, down materially from prior losses, along with a 23% decline in cost of revenue and roughly $7 million lower cash operating expenses. He said subscription revenue was flat sequentially, which he described as a meaningful improvement versus the prior 10-quarter average decline, and pointed to the mix shift toward higher-value Club members as part of a healthier subscription base. On cash, he said Q3 free cash flow was negative $3 million, year-to-date free cash flow was negative $10 million (roughly negative $6 million adjusted for one-time items), and about $1.3 million of restricted cash was unlocked after quarter-end. He also said fourth quarter is historically a strong cash flow period and reiterated that the company is now focused on sustained free cash flow and profitable growth.

Analysts focused on the redesigned Pass product, asking how it differs and what the 2026 goals are. Management said the new Pass is designed to be profitable as volume grows, gives access only to company-controlled properties, allows two active reservation tracks, and is capped at 2,500 members; with about 1,100 Pass members already in place, management said roughly 1,400 spots remain. Another question addressed marketing, where management said search engine marketing spend has risen from essentially nothing at the start of Q2 to a couple hundred thousand dollars per quarter, with early test results described as very promising. A final question asked about the CFO transition, and Michael Arthur said the company had only just initiated the search for his successor.