Company: UP
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001819516-25-000044
Chunk: 84

Company: Wheels Up Experience Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 1
Chunk 84
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 sales of inventory aircraft, as we have reduced our focus on whole aircraft sales after the first quarter of 2024.

Cost of Revenue

Cost of revenue decreased by $57.6 million, or 15%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. In addition to the general decrease attributable to the decrease in Flight and Other revenue noted above, the decrease in Cost of revenue was primarily driven by the impact of reduced headcount, including a $27.4 million reduction in employee compensation and allocable costs, inclusive of the absence of $3.7 million in restructuring charges associated with certain actions taken during the second quarter of 2024, a $7.5 million decrease in aircraft lease costs, a $3.7 million decrease in pilot travel costs and a $3.6 million decrease in charges related to the reserve for certain parts inventory deemed obsolete or in excess of forecasted demand for aircraft maintenance. The decrease was also driven by the absence of $3.5 million of FAA certificate consolidation-related expenses and $1.9 million of expenses associated with setting up our Atlanta Member Operations Center in the prior year period. The decreases were partially offset by a $10.8 million increase in expenses related to executing our fleet modernization strategy, which primarily includes expenses associated with adding Embraer Phenom 300 series and Bombardier Challenger 300 series aircraft to our operations and related pilot training programs, as well as certain costs incurred associated with exiting legacy private jet models.

Adjusted Contribution Margin increased 800 basis points for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily attributable to the realization of cost savings as a result of restructuring actions taken during fiscal year 2024 and other discrete cost optimization and operational efficiency measures. See “Non-GAAP Financial Measures” above for a definition of Adjusted Contribution Margin, information regarding our use of Adjusted Contribution Margin and a reconciliation of Gross profit and Adjusted Contribution to Revenue.

Other Operating Expenses

Technology and Development 

Technology and development expenses decreased by $1.7 million, or 8%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024,  primarily attributable to a $1.6 million decrease in IT expenses, including reduction in spend for software and software licensing  as a result of cost optimization actions. 

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Sales and Marketing

Sales and