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Sonder Announces Cash Flow Positive Plan And Projects Positive Quarterly Free Cash Flow Within 2023

The Cash Flow Positive plan forecasts reaching positive quarterly FCF within 2023 using four key levers: Cut cash costs by approximately $85 million on an annualized basis1 Reduce planned signings pace and drive

Benzinga · 06/09/2022 06:16

The Cash Flow Positive plan forecasts reaching positive quarterly FCF within 2023 using four key levers:

  • Cut cash costs by approximately $85 million on an annualized basis1
  • Reduce planned signings pace and drive growth primarily by opening already contracted units
  • Improve growth quality by increasing our high threshold for incremental signings targeting 100% capital light2
  • Focus on RevPAR initiatives to improve near term FCF

The Company will also continue to deliver its signature tech-enabled, design-forward experience to guests around the world, and look to attract a growing share of both business and leisure travelers.

Sonder also reaffirmed its Q2 2022 and FY2022 revenue guidance, and provided the following additional outlook for Free Cash Flow, which going forward replaces Adjusted EBITDA guidance as the Company’s main measure of expected profitability:

  • Free Cash Flow
    • Q2 2022 FCF of better than $(50) million (before one-time restructuring costs), a more than $15M improvement from Q1 2022 FCF
    • Total 2H 2022 FCF of better than $(70) million
    • Reach positive quarterly FCF within 2023
  • Revenue
    • Q2 2022 revenue growth of better than 140% year-over-year (vs. $47 million in Q2 2021)
    • Q2 2022 RevPAR of better than $160
    • FY 2022 revenue growth of 100-110% year-over-year (vs. $233 million in FY 2021)

The Company is completing a restructuring of its operations which will result in an approximately 21% reduction of existing corporate roles and a 7% reduction of existing frontline roles. Sonder is providing severance, benefits continuation and other support to assist departing employees with transitioning to new roles. The Company expects to incur $3.5 million to $5.5 million in one-time restructuring costs, approximately 80% of which are expected to be paid out in Q2 2022 and approximately 20% of which are expected to be paid out in 2H 2022.