Company: UP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001819516-25-000028
Chunk: 157

Company: Wheels Up Experience Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 8
Chunk 157
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 the regionalization of our member programs and focus on profitable flying, as well as streamlining our membership offering.

The decrease in Flight revenue was primarily driven by a 7% reduction in Live Flight Legs year-over-year, resulting in an $11.0 million reduction to Flight revenue, partially offset by a 5% increase in Flight Revenue per Live Flight Leg, resulting in a $7.7 million increase to Flight revenue primarily due to our focus on more profitable flying. 

The decrease in Other revenue was primarily attributable to the absence of $6.0 million recognized in the three months ended March 31, 2024 related to a government contract.

Cost of Revenue

Cost of revenue decreased by $39.8 million, or 20%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease in cost of revenue was primarily driven by the impact of reduced headcount, including a $14.4 million decrease in employee compensation and allocable costs, $2.6 million reduction in travel expense and $0.7 million reduction in equity-based compensation expense. The decrease was also driven by the decrease in Flight and Other revenue. The decrease also reflects the absence of $1.4 million of expenses associated with setting up our Atlanta Member Operations Center, as well $1.0 million of expenses associated with our FAA certificate consolidation. The decreases were partially offset by a $1.8 million increase in expenses related to executing our fleet modernization strategy first announced in October 2024, which primarily includes expenses associated with transitioning the Embraer Phenom 300 series and Bombardier Challenger 300 series aircraft to our operations and pilot training programs aligned to our fleet modernization strategy.

Adjusted Contribution Margin increased 1,160 basis points for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily attributable to the realization of cost savings as a result of restructuring actions taken during fiscal year 2024, as well as 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 margin and Adjusted Contribution Margin to Revenue.

Other Operating Expenses

Technology and Development 

Technology and development expenses decreased by $0.6 million, or 5%, for the three months ended March 31, 2025 compared to the three months ended March 31