Sonder Holdings Inc. Q3 FY2022 earnings call

Financial Performance Overview - Generated $125M revenue in Q3, up 85% y-o-y; RevPAR up 25% to $158; live units grew 43% to ~9,000. ### Cash Flow Positive Plan - 4 key levers: reduce cash costs by ~$85M annualized (including ~$55M from restructuring and $30M from reduced preopening costs/net CapEx); proactively reduce planned signings pace; target 100% capital-light unit signings; focus on rapid payback RevPAR initiatives (e.g., growing corporate travel offering with 600 accounts in Q3 vs 400 in Q2). ### Board Updates - Recent additions include Sean Aggarwal and Michelle Frymire; Sanjay to transition to Board in early 2023 with formal CFO search underway.

In the third quarter, Sonder generated $125 million of revenue, an 85% increase year-over-year. RevPAR grew by 25% to $158. The live portfolio grew 43%, ending the quarter with approximately 9,000 live units. Bookable nights were over 786,000, a 47% increase. Total portfolio had over 18,900 units, a 17% year-over-year growth. ADR grew 3% to $189, and occupancy increased to 84%, up 1,600 basis points year-over-year. Revenue contribution was driven by live portfolio growth and RevPAR increase.

• Expect revenue for 2022 to be better than $455M (>95% y-o-y growth) and Q4 revenue better than $129M. - For H2 2022, free cash flow before onetime restructuring costs is better than negative $70M, with Q4 better than negative $31M. - Starting next quarter, will provide quarterly revenue and free cash flow guidance instead of annual guidance.

• Macro uncertainty impacting real estate developers due to increased interest rates and development cost uncertainty, affecting signings. - FX headwinds in Q4 impacting revenue. - Delay in contracted units converting to live units due to developer challenges like labor and supply chain issues.

Q: On guidance, are RevPAR guide issues all FX-related and where is supply ramp?

A: Sanjay said FX is a mid- to high single-digit million revenue impact, and delay in contracted units converting to live units is a timing issue. Francis added focus is on cash flow positivity, live units have 43% y-o-y growth, and developer partners face labor challenges but Sonder has measures to accelerate.

Q: On RevPAR initiative trending and impact on free cash flow goal next year?

A: Sanjay said forecast leverages third-party info, base case doesn't contemplate extreme demand slowdown. Francis mentioned corporate travel grew to 600 accounts, high-occupancy strategy helped, and they take multiyear view on initiatives, with land-and-expand strategy for corporate travel.