Vacasa Ups Outlook to ‘Slight’ Profitability in 2023

Property manager Vacasa is seeing itself through some unfavorable market dynamics such as a revenue decline and homeowners expressing disappointment in their income, but is forecasting “slight” profitability on an adjusted EBITDA basis for full-year 2023 as it continues to cut costs and push for operational efficiencies.

There was good news and bad news in the 2023 forecast that the company published Tuesday as part of its second quarter financial results. Although it now expects a full-year, high-single digit revenue decline, which was at the high end of the guidance it announced in May, the prospect for profitability improved. In the first quarter, Vacasa stated it would “continue to strive for Adjusted EBITDA profitability in 2023,” but on Tuesday the company said it expects “slight Adjusted EBITDA profitability in 2023.”

That would be no small feat as several companies that went public in special purpose acquisition company mergers over the past couple of years are still not guiding toward profitability in 2023.

Vacasa’s shareholder letter for the second quarter pointed to expense discipline as one of the reasons it is heading for black ink in 2023.

“Our technology and development, sales and marketing, and general and administrative expenses are all down in the second quarter of 2023, compared to the same period last year,” the shareholder letter said.

CEO Rob Greyber recalled that the company cited “elevated” homeowner churn at the tail end of last year and into the fourth quarter of this year. He argued that homeowners leaving platforms is an industrywide dynamic and that the company has done a better job of explaining to them that the sector is normalizing in terms of homeowner revenue after banner years in 2021 and 2022.

Vacasa, he said, is making operations more efficient by trimming salespeople’s turf to a single market, simplifying pricing choices for homeowners, introducing product features more often but in lower numbers, and using AI to analyze listings’ photos, for example.

After several rounds of layoffs since last year, Greyber said the company would consider increasing its salesforce toward the latter stages of this year and into next year.

For the second quarter, Vacasa recorded a net loss of $6 million on revenue of $305 million, which was a 2% year over year dip. Citing operational efficiencies, the shareholder letter noted that the company’s adjusted EBITDA was $16 million in the second quarter compared with a $2 million loss a year earlier.

Vacasa’s adjusted EBITDA excludes items such as equity-based compensation and restructuring costs, for example.