Sonder Holdings Inc. · OTC:SONDQ
Sonder — Gores Metropoulos II — Q3 2021 Earnings Presentation
64 slides from Sonder's earnings presentation, Nov 9, 2021
Slide 1: Third Quarter 2021 Summary Results
Third Quarter 2021 Summary Results November 9, 2021 Hotel Atala, Paris Opened in August 2021
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is being made in connection with a potential transaction Such forward-looking statements are based upon the current beliefs and expectations of the (the “Business Combination”) between Sonder Holdings Inc. (“Sonder”) and Gores Metropoulos management
Slide 3: Disclaimer
Disclaimer Sonder and GM II believe that such non-GAAP financial measures provide useful information to Trademarks and Trade Names Participants in Solicitation investors and others in understanding and evaluating Sonder’s operating results in the same Sonder and GM II and their respective affiliates
Slide 4: Q3 2021 Financial Highlights
Third Quarter 2021 Summary Results Q3 2021 Financial Highlights Accelerating growth supported by robust market tailwinds $67M Record Q3 Revenue +155% YoY +43% QoQ $1261 Driven in part by continued 83% of Q3’19 RevPAR recovery +64% YoY +26% QoQ Improving Property Level $11M Profit and Adj. EBITDA QoQ
Slide 5: Q3 2021 Corporate Highlights
Third Quarter 2021 Summary Results Q3 2021 Corporate Highlights Announced additional capital to allow us to pursue our ambitious growth and expansion strategy Parián, Mexico City Opened in September 2021 De-risked balance sheet with $530M fully funded plan Total Capital1,2 1,2 ~$530M of Total Capita
Slide 6: Raising our full year outlook
Third Quarter 2021 Summary Results Raising our full year 2021 Outlook Continued RevPAR growth and portfolio expansion driving revenue outperformance and improving Adjusted EBITDA The Quincy, Washington D.C. Opened in October 2021 $200M 2021 Revenue Outlook 17% (midpoint) increase vs. initial outlook
Slide 7: ADR, occupancy and RevPAR growth
Third Quarter 2021 Summary Results Robust travel demand has helped drive continued growth in ADRs, while occupancy rates have stabilized near ~70%, yielding 26% QoQ RevPAR growth in Q3’21 Quarterly ADR ($) and Occupancy Rate (%) Quarterly RevPAR ($) (ADR x Occupancy) 83% of Q3’19 RevPAR 62% of Q2’19
Slide 8: Quarterly revenue, Adjusted EBITDA and property level profit
Third Quarter 2021 Summary Results RevPAR recovery combined with bookable nights growth drove record Q3 2021 Revenue and improvement in Adjusted EBITDA and Property Level Profit (Loss) Quarterly Revenue ($M) Quarterly Adjusted EBITDA2 ($M) Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q1’20 Q2’20 Q3’20
Slide 9: 2021 Full Year Revenue Outlook
Third Quarter 2021 Summary Results 2021 Full Year Revenue Outlook ($M) +17% +7% vs. Initial Outlook2 vs. Initial Outlook2 +75% +59% YoY Growth2 YoY Growth2 We are raising our outlook for +49% $205 YoY Growth $190 full year 2021 Revenue given RevPAR outperformance throughout the first 9 months of the
Slide 10: Appendix
Downtown Tower II, Dubai Opened in October 2021 Appendix
Slide 11: Transaction summary
Appendix Transaction summary Illustrative Pro Forma Valuation ($M, except per share values) Key Transaction Terms Pro Forma Capitalization • Pro forma enterprise value of $1,925M (3.2x 2022E revenue) Share Price at Merger $ 10.00 • Pro forma net balance sheet cash includes proceeds from the March 20
Slide 12: Financial summary and operating results
Appendix Metric Q3 2021 Q3 2020 Ä YoY Revenue (000s) $67,454 $26,471 155% Net Loss (000s) $(64,584) $(55,514) (16)% Live Units 6,300 3,900 62% Total Portfolio1 16,200 10,400 56% Bookable Nights2 535,603 345,989 55% Occupied Nights 365,979 257,279 42% Occupancy Rate 68% 74% (8)% Average Daily Rate (A
Slide 13: GAAP to Non-GAAP Bridges
Appendix GAAP to Non-GAAP Bridges ($ in 000s) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Loss from operations $(71,229) $(54,265) $(52,197) $(66,131) $(71,049) $(64,934) $(55,401) Operations & Support, General & Administrative, $66,184 $44,719 $54,160 $57,442 $63,402 $68,458 $70,453 Res
Slide 14: GAAP to Non-GAAP Bridges
Appendix GAAP to Non-GAAP Bridges ($ in 000s) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Net Loss $(61,743) $(60,799) $(55,514) $(72,260) $(78,541) $(73,949) $(64,584) Interest expense, net $1,507 $1,669 $1,658 $1,568 $3,827 $12,522 $13,279 Provision for income taxes—$3 $11 $309 $23 $70
Slide 15: Investor Presentation November 2021
Investor Presentation November 2021
Slide 16: Disclaimer
Disclaimer This presentation (the “Presentation”) is being made in connection with a potential transaction Such forward-looking statements are based upon the current beliefs and expectations of the Industry and Market Data (the “Business Combination”) between Sonder Holdings Inc. (“Sonder”) and Gore
Slide 17: Disclaimer (continued)
Disclaimer (continued) Sonder and GM II believe that such non-GAAP financial measures provide useful information to Trademarks and Trade Names Participants in Solicitation investors and others in understanding and evaluating Sonder’s operating results in the same Sonder and GM II and their respectiv
Slide 18: Today's speakers and senior leadership
Today’s speakers and senior leadership Francis Davidson Sanjay Banker Alec Gores Ted Fike Justin Wilson Co-Founder & CEO, President & CFO, Chief Executive Officer, Sr. Managing Director, Sr. Managing Director, Sonder Sonder The Gores Group The Gores Group The Gores Group 4
Slide 19: The Gores SPAC franchise has a premier track record
The Gores SPAC franchise has a premier track record Alignment with Key An Attractive Opportunity for Proven SPAC Track Record Stakeholders Prospective Targets • $36B transaction value across 7 • Sonder stockholders: • Nominal redemptions across 7 completed transactions Compelling valuations and comp
Slide 20: The Gores SPAC franchise track record
The Gores SPAC franchise has a premier track record Proceeds Acquisition Vehicle Target Transaction Close Transaction Value Redemption Rate Delivered November $2.3B $725M 0% 2016 October $2.4B $800M <1% 2018 February $1.5B $620M 0% 2020 December $2.9B $590M 0% 2020 January $16.1B $925M 0% 2021 Augus
Slide 21: Overview
Company Overview Company Overview Financial Overview Transaction Overview
Slide 22: Sonder is building the hospitality brand of tomorrow
Company Overview Sonder is building the hospitality brand of tomorrow 1950s Big box chains Introduced brands to consumers 2000s P2P marketplaces Applied technology only to connect guests and listings Tomorrow Leveraging technology and design across the entire value chain to create a 21st century bra
Slide 23: Sonder is revolutionizing the hospitality industry
Company Overview Sonder is revolutionizing the hospitality industry Tech-driven platform ~50% 100% Operating cost reduction1 Digital, mobile first service Design-forward experience 70%+ 350+ Customer Satisfaction loved by our guests 3 (CSAT) scores2 Extraordinary properties Enormous market opportuni
Slide 24: Travelers are forced to choose among three flawed options
Company Overview Today, travelers are forced to choose among three flawed options... Boutique Hotels “Big Box” Hotels Short Term Rentals Expensive Boring Unpredictable 10
Slide 25: …but we see no reason to compromise
Company Overview …but we see no reason to compromise Exceptional design 11
Slide 26: Global Lodging Market
Company Overview Global Lodging Market $222B Global luxury and upscale hotel spend in 2019 Our long term goal is to become the leading brand $809B within the massive, Total addressable $495B $800B+ addressable global lodging market in 2019 Untapped lodging lodging market markets $91B Global short-te
Slide 27: Design-led, tech-enabled experience drives value to guests and real estate owners
Company Overview Our design-led, tech-enabled experience drives exceptional value to both guests and real estate Guests estate owners Tech-centric Design-led economics Higher quality o management Lower cost edentialed partner platform manages the end-to-end guest experience 13
Slide 28: Traditional hospitality still relies on antiquated services
Company Overview Traditional hospitality still Concierge desk relies on antiquated services Front desk Taxi stand 14
Slide 29: Our technology powers the entire guest journey
Company Overview Our technology powers the entire guest journey, from booking through checkout 1 2 3 4 5 6 Search, Discovery Check-In One-Touch Wifi Digital Customer Service Check-out & Booking Seamless check-in with Wifi and other amenities Concierge On Demand Guest survey and Easy, intuitive brows
Slide 30: Technology infused into every part of the hospitality system
system for hospitality, infusing technology into every Building Openings Operations Supply Revenue Demand Chain / Forecasting Generation Onboarding Custom boundary drawn comps Powering our property onboardings and openings Pricing automation Contextual data to better forecast revenue Warehouse & inv
Slide 31: Technology and model reduce operating costs
Company Overview Operating Costs Process automation Check-ins Requests Operations Our technology and differentiated model Service efficiency enable us to reduce ~50% Messaging, not calling operating costs vs. Centralized contact center traditional hotels by Self-serve & automation as much as 50% 3rd
Slide 32: We partner with artists, architects and designers
Company Overview We partner with artists, architects and designers to bring extraordinary spaces to life Featured in 18
Slide 33: Global scale with 350+ properties across markets
Company Overview We have global scale with 350+ properties across 39 markets and a proven expansion playbook 16K+ Live and Contracted Units ~6x Size of largest direct competitor1 Americas Europe & Other International Live Markets Contracted Markets Atlanta Dallas Los Angeles Montreal Orlando San Ant
Slide 34: Entire properties curated and operated by Sonder
Company Overview We offer entire properties curated and operated by Sonder, from apartment developments to modernized hotels Apartment developments1 Modernized hotels 17 West Marina V Hotel Flatiron Miami Dubai Palm Springs New York Witherspoon Randolph Chelsea Green Crescent Philadelphia Detroit Lo
Slide 35: Guest reviews and satisfaction
Company Overview Whether you need Montreal Dubai a Sonder for a The Richmond Marina Suites night, a week or a 82% 5/5 | 60+ Reviews 78% 5/5 | 240+ Reviews “Brand new building in a trendy neighbourhood, surrounded by good “The room was superb. [There was] privacy even if travelling with friends or fa
Slide 36: Exceptional experience keeps driving direct bookings
Company Overview Direct Bookings, % Booked Revenue ~60% Direct bookings benchmark for Our exceptional US Hotels1 experience keeps driving direct ~70% booking share, Of repeat bookings even with minimal are direct2 marketing spend 2x Increase in repeat bookings from 2019 to Dec. 2020 2018 2019 2020 2
Slide 37: Resiliency of our business model through COVID
Company Overview 2 Monthly RevPAR Sonder RevPAR Traditional Hotels RevPAR (Urban—Upper Upscale) Through COVID, we showcased the resiliency of our business model Sep-21 Monthly Occupancy Rate Sonder OR Traditional Hotels OR (Urban—Upper Upscale) Sonder RevPAR vs. 1.2x traditional hotels1 Sonder Occup
Slide 38: Our guest profile
Company Overview The majority of our guests are: Leisure Travelers1 Domestic Travelers2 Younger Travelers Leisure Business N. America International Under 50 Over 50 Our guest profile and wide range of use cases position us to rebound from the pandemic much faster than the Our product portfolio can s
Slide 39: Significant whitespace in apartment and hotel markets
Company Overview We have significant whitespace within the apartment development and hotel markets 3.5M US Apartment New apartment units in Units Sonder’s current US markets from 2021E—2025E1 Global 2.2M Hotel Units Total hotel units in Sonder’s current global markets by EOY 20252 0.8% 1.8% Cumulati
Slide 40: Unique value proposition to real estate partners
Company Overview We offer a unique value proposition to Apartment developers Hotel owners real estate partners... Eliminate 12-24 month Technology, design & lease-ups brand-driven revenue Faster construction loan pay Significant operating cost down reduction Cash flow advantage driven by No manageme
Slide 41: Pre- and post-COVID business model and unit economics
Company Overview Pre-COVID-19 pandemic Post-COVID-19 pandemic Business ~100% Flexible ...while also achieving Model Fixed leases Contract structure more attractive terms (Fixed lease, Rev. share, Mixed leases) for Sonder than ever before Capital Light <15% ~90% Owner-funded CapEx Owner-funded CapEx
Slide 42: The Sonder flywheel
Company Overview 5 1 Faster Supply, Investments Revenue & 1 in Tech PLP Growth The Sonder flywheel underscores our rapid growth as 4 2 we transform the Improved Deal Terms and Better Guest industry Conversion Rates Experience & Cost on Better Supply Structure 3 Better Unit Economics & Brand (1) Prop
Slide 43: Multiple levers to drive continued growth
Company Overview We have multiple levers to drive continued growth In Process Medium Term Longer Term (Next 3 Years) (3-5 Years) (5+ Years) Global portfolio of 56K1 Expand to Asia and within Latin Franchise contracts for Sonder economically attractive units America technology, brand and distribution
Slide 44: Our high performance executive team
Company Overview Our high performance executive team combines deep technology, operations and hospitality experience Francis Davidson Sanjay Banker Martin Picard Satyen Pandya Phil Rothenberg Co-Founder & CEO President & CFO Co-Founder & CTO General Counsel Global Head of RE Melika Carroll Shruti Ch
Slide 45: Financial Overview
Financial Overview Company Overview Financial Overview Transaction Overview
Slide 46: Financial highlights
Financial Overview Financial highlights Scaled business Rapid growth $4.0B ~77K 103% 77% 2025E Ending 2020A—2025E 2020A—2025E Live 2025E Revenue Live Units Revenue CAGR Unit CAGR Outstanding unit economics Capital and liability light 3 mo. ~90% 19% Average estimated payback period1 CapEx funded by l
Slide 47: Supply growth engine to drive live unit growth
Financial Overview Our powerful supply growth engine is expected to drive rapid live unit growth Ending Live Units & Contracted Units Live Units Contracted Units Forecast assumes conservative unit contracting cadence ~900 1,100+ Forecasted average units < Achieved average units contracted per month
Slide 48: Conservative RevPAR growth forecast
Financial Overview We’re conservatively forecasting RevPAR growth despite our conviction around pent-up demand and our ability to achieve planned revenue initiatives RevPAR (Initial Outlook1) RevPAR growth2 split between CBRE forecasts +29% 2020A-2025E RevPAR CAGR for traditional hotels2, ~80% marke
Slide 49: Strong revenue growth outlook
Financial Overview We’re confident in our strong revenue growth outlook driven by a combination of rapid supply aggregation, modest market recovery and RevPAR initiatives GAAP Revenue ($M, Initial Outlook1) 103% 2020A-2025E CAGR 70%+ of 2022E revenue driven by units already live or contracted Q2 202
Slide 50: High visibility into 2021 and 2022 revenue targets
Financial Overview Our current portfolio of already live and contracted units gives us high visibility into our 2021 and 2022 revenue targets 2021E GAAP Revenue ($M, Initial Outlook1) 2022E GAAP Revenue ($M) 70%+ of 2022E Revenue (before initiatives2) from units already live or contracted 98%+ of 20
Slide 51: Path to +30% Property Level Profit Margin
Financial Overview We see a clear path to +30% Property Level Profit Margin via market recovery, improved post-COVID deal terms, scale economies and technology investments Total Portfolio—Property Level Profit (Loss) Margin (%, Initial Outlook1) Note: All references to Property Level Profit (Loss) (
Slide 52: Per night unit economics drive annual economics
Financial Overview Compelling “per night” unit economics drive robust annual economics... Per Bookable Night1 Assumptions 2025E Annualized New Unit Assumptions 2025E Average Daily Rate $ $220 Occupancy % 75% RevPAR $165 GAAP Cost of Revenue² $76 $60K $3K Property Level Costs³ $36 Revenue / Unit Sond
Slide 53: Post-pandemic outlook on margin expansion
Financial Overview … which underscore our post-pandemic outlook on margin expansion Initial Outlook ($ in 000s, except RevPAR) 2020A 2021E 2022E 2023E 2024E 2025E Live units (EOY) 4,489 8,133 18,572 34,889 55,654 77,234 Bookable Nights² 1,558,779 2,051,546 4,736,862 9,509,528 16,529,952 24,266,636 R
Slide 54: Hospitality deserves an iconic, 21st century brand
Financial Overview Hospitality deserves an iconic, 21st century brand. This is our moment. Tech-driven platform ~50% 100% Operating cost reduction1 Digital, mobile first service Design-forward experience 70%+ 350+ Customer Satisfaction loved by our guests 3 (CSAT) scores2 Extraordinary properties <2
Slide 55: Transaction Overview
Transaction Overview Company Overview Financial Overview Transaction Overview
Slide 56: Transaction summary
Transaction Overview Transaction summary Illustrative Pro Forma Valuation ($M, except per share values) Key Transaction Terms Pro Forma Capitalization • Pro forma enterprise value of $1,925M (3.2x 2022E revenue) Share Price at Merger $ 10.00 • Pro forma net balance sheet cash includes proceeds from
Slide 57: Sonder's peer set
Transaction Overview Sonder’s peer set represents strong brands and technology-enabled platforms Vertical Disruptors Digital Hospitality & Real Estate â– Similar long-term margin profile â– Disrupting traditional lodging industry â– Recognized consumer-brands â– Proven technology-enabled platforms â
Slide 58: Valuation benchmarking (1/2)
Transaction Overview Valuation benchmarking (1/2) 2022E Revenue Multiple Median: 3.7x Median: 2.8x Median: 5.1x 2022E Adj. EBITDA Multiple Sonder Median: 36.3x Median: 15.7x Median: 19.0x Implied Adj. Multiple at Target Margin of 20%: 15.8x NM NM NM NM NM NM Vertical Disruptors Digital Hospitality a
Slide 59: Valuation benchmarking (2/2)
Transaction Overview Valuation benchmarking (2/2) 2023E Revenue Multiple Median: 2.9x Median: 2.3x Median: 4.3x 2023E Adj. EBITDA Multiple Sonder Implied Adj. Multiple at Median: 21.6x Median: 15.4x Median: 16.2x Target Margin of 20%: 6.7x NM NM NM NM Vertical Disruptors Digital Hospitality and Real
Slide 60: Operational benchmarking
Transaction Overview Operational benchmarking 2017A – 2019A Revenue CAGR Median: 61% Median: 10% Median: 8% NA 2020A – 2023E Revenue CAGR Median: 37% Median: 39% Median: 30% Vertical Disruptors Digital Hospitality and Real Estate Upper Upscale Lodging Source: IBES, Bloomberg, Capital IQ, Company Fil
Slide 61: Appendix
Appendix
Slide 62: Audited and unaudited GAAP financials
Appendix Audited Unaudited ($ in 000s) 2019 2020 1H 2021 Q3 2021 Revenue $142,910 $115,678 $78,827 $67,454 Cost of Revenue $124,866 $136,995 $82,950 $52,402 Audited GAAP Total Operating Expenses $189,147 $222,505 $131,860 $70,453 2019, 2020 financials Operating Income (Loss) ($171,103) ($243,822) ($
Slide 63: GAAP to Non-GAAP Bridges
Appendix GAAP to Non-GAAP Bridges ($ in 000s) 2019 2020 1H 2021 Q3 2021 Loss from operations $(171,103) $(243,822) $(135,983) $(55,401) Operations & Support, General & Administrative, Research & Development and Sales & Marketing $189,147 $222,505 $131,860 $70,453 Property Level Costs $(33,666) $(41,
Slide 64: Risk Factors Summary
Appendix Risk Factors Summary • Sonder’s actual results may differ materially from its forecasts and projections. • Sonder must attract and retain sufficient, highly skilled personnel and is subject to risks associated with the employment of hospitality personnel, including unionized labor. • Sonder