Company: UP
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001819516-25-000012
Chunk: 116

Company: Wheels Up Experience Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 7
Chunk 116
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 divested on September 30, 2023, and (b) expenses incurred in connection with ongoing litigation matters; and (iii) for the year ended December 31, 2023, charges related to an individually immaterial litigation settlement during the third quarter of 2023.

58

Adjusted Contribution and Adjusted Contribution Margin

We calculate Adjusted Contribution as Gross profit (loss) excluding Depreciation and amortization and adjusted further for equity-based compensation included in cost of revenue and other items included in cost of revenue that are not indicative of our ongoing operating performance. Adjusted Contribution Margin is calculated by dividing Adjusted Contribution by total revenue. We include Adjusted Contribution and Adjusted Contribution Margin as supplemental measures for assessing operating performance and for the following:

•To be used to understand our ability to achieve profitability over time through scale and leveraging costs; and

•To provide useful information for historical period-to-period comparisons of our business and to identify trends.

The following table reconciles Adjusted Contribution to Gross profit (loss), which is the most directly comparable GAAP measure (in thousands, except percentages):

Year Ended December 31,20242023Revenue$792,104$1,253,317Less: Cost of revenue733,0751,232,506Less: Depreciation and amortization56,54658,533Gross profit (loss)$2,483$(37,722)Gross margin0.3 %(3.0) %Add back:Depreciation and amortization$56,546$58,533Equity-based compensation expense in cost of revenue2,2283,927Restructuring expense in cost of revenue(1)3,9841,075Fleet modernization expense in cost of revenue(2)10,033—Atlanta Member Operations Center set-up expense in cost of revenue(3)1,86024,704Certificate consolidation expense in cost of revenue(4)5,2978,044Other(5)3,2563,975Adjusted Contribution$85,687$62,536Adjusted Contribution Margin10.8  %5.0  %___________________

(1)For the year ended December 31, 2024, primarily consists of charges for employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the year ended December 31, 2023, primarily consists of restructuring charges related to the Restructuring Plan and other employee separation programs as part of our cost reduction initiatives.

(2