Wheels Up Experience Inc. Quarterly Report for the Quarter Ended March 31, 2024

Financial Performance Overview

Revenue Trends

Total revenue for the first quarter of 2024 was $197.1 million, a 44% decrease compared to $351.8 million in the first quarter of 2023.

• Membership revenue decreased 22% to $16.9 million due to a 25% decrease in active members. This was partially offset by a shift towards more higher-tier Core members.

• Flight revenue, the largest revenue segment, decreased 35% to $150.9 million. This was driven by a 24% decrease in flight volume as the company focused on profitable flying and industry slowdown. There was also a higher mix of charter flights, which have lower recognized revenue.

• Aircraft management revenue decreased 95% to $3.2 million due to the sale of the aircraft management business in September 2023.

• Other revenue decreased 25% to $26.1 million, primarily due to a $9.5 million decrease in whole aircraft sales.

Profitability

The company reported a net loss of $97.4 million in the first quarter of 2024, a 3% improvement from a $100.9 million net loss in the first quarter of 2023.

• Gross loss was $16.6 million compared to $16.4 million in the prior year period. Gross margin improved from -4.7% to -8.4%.

• Adjusted EBITDA loss narrowed to $49.2 million from $48.9 million. Adjusted Contribution Margin improved slightly to 1.0% from 1.8%.

The reduced losses were driven by strong cost management, with total operating expenses decreasing 38% year-over-year. This includes a 44% reduction in cost of revenue from lower flight volume and the sale of the aircraft management business.

Business Update

The company is going through a strategic transition to focus its fleet and operations within core U.S. regions on the east coast, west coast, and routes in between. This is expected to improve network density for better cost efficiency and pricing.

Additional business updates:

• Prepaid Block sales increased 14% year-over-year showing improved momentum from the Delta partnership. Corporate customer sales were strong.

• The company is consolidating maintenance operations into a new flagship facility in Florida by end of 2024 to better align with network and demand. Other facilities were closed or relocated.

• Ongoing efforts to simplify flight operations and reduce costs through measures like consolidating FAA operating certificates.

Financial Condition

Cash Position: As of March 31, 2024, Wheels Up had $180.9 million of cash on hand and $32.4 million in restricted cash reserves.

Debt Obligations: Long-term debt obligations totaled approximately $603.2 million, consisting primarily of $192.6 million in secured Equipment Notes and $410.6 million in the Term Loan (including paid-in-kind interest).

Liquidity Outlook: The company has a working capital deficit of $545.8 million and continues to operate with negative cash flow, using $73.8 million in the quarter ended March 31, 2024. Wheels Up expects to meet the next 12 months of liquidity needs through existing cash reserves, operating cash flows, asset sales, and if needed, borrowing from its $100 million Revolving Credit Facility provided by Delta.

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