Vivid Seats Inc. Q3 FY2025 earnings call

• Leadership Transition: Lawrence Fey succeeds Stan Chia as CEO, Ted Pickus becomes Interim CFO. • Strategy Pillars: Focus on leading tech capabilities, unique data, and efficiency. Invested in app with lowest price guarantee and loyalty program. • Partnerships: Renewed partnership with ESPN for a national marketing campaign on Disney streaming. • Cost Reduction: More than doubled fixed cost reduction target to $60 million, with savings in fixed marketing, G&A, and stock-based compensation. • Corporate Simplification: Terminated tax receivable agreement and collapsed dual class share structure, yielding savings and tax benefits. • Segment Performance: Owned property GOV stabilized with sequential growth, app GOV had year-over-year growth.

In the third quarter, Vivid Seats generated $618 million of marketplace GOV, $136 million of revenues, and $5 million of adjusted EBITDA. Owned properties such as Vivid Seats and Vegas.com saw sequential GOV growth, while the Vivid Seats app achieved double-digit sequential growth and returned to year-over-year GOV growth. Revenue contribution breakdown wasn't explicitly detailed by product segment, but owned properties showed signs of stabilization and momentum against a flat sequential industry backdrop.

• 2026 Marketplace GOV expected in the range of $2.2 billion to $2.6 billion, midpoint assumes marketplace GOV roughly in line with Q3 run rate. • 2026 adjusted EBITDA anticipated to be $30 million to $40 million, with reinvestment in customer value proposition. • Guidance assumes flat year-over-year industry volume, with industry visibility dependent on concert on sale calendar and competitive environment.

• Competitive Intensity: Continued pressure from performance marketing channels and competitor actions. • Industry Dynamics: Uncertainty around secondary market supply and demand due to regulatory actions (FTC lawsuit, Ticketmaster policies) and potential fragmentation. • World Cup Impact: Lack of precedent for U.S. World Cup in online secondary ticketing, making its impact on outlook hard to precisely predict.

Q: What gives confidence in issuing 2026 guidance early given recent business pressures?

A: Guidance presumes flat industry outlook; low end driven by under-indexing to flat, high end by over-indexing/growth. Elements include cost reduction initiatives, reinvestment in value proposition, and conservatism in assuming competitive intensity continuation.

Q: Thoughts on leadership transition and app visibility?

A: Transition was for efficiency push; app focuses on retained customers and potential fusion with AI-driven info synthesis, ensuring value proposition is digestible by AI platforms.

Q: Competitive backdrop and early signs of competitors focusing on profitability?

A: Saw shift in StubHub's marketing behavior with volume shift, and noted change in competitive posture with StubHub's share reversing year-over-year in September-October.

Q: Perspective on FTC lawsuit, Ticketmaster actions, and secondary market supply?

A: Disruption to TradeDesk is tailwind; potential secondary market contraction or fragmentation depends on bad actor behaviors and market adaptation.

Q: Driving awareness to app and marketing efforts?

A: Brand marketing surge via ESPN in Q4, focusing on personalized messaging, existing user base engagement, and targeted performance-based metrics.

Q: World Cup assumptions in 2026 guidance?

A: No meaningful impact assumed due to lack of precedent and FIFA's monetization efforts, representing upside if realized.

Q: Q3 exit rate improvement and StubHub's marketing spend?

A: Fair to say Q3 exit rate improved year-over-year with StubHub's marketing spend pullback closer to Q3 end.

Q: Stabilization drivers for owned property business?

A: Main drivers include competitive landscape easing and value proposition push, with app volume growth providing a protected ecosystem.

Q: Cash conversion relative to 2026 EBITDA guide?

A: Cash obligations include net interest, ex cap software, and taxes; cash generative next year depends on sequential GOV growth and working capital reversal.

Q: Competitive environment contemplated in 2026 and app value proposition uniqueness?

A: Midpoint competitive environment is between September-October intensity and earlier extremes; app value prop unique via loyalty program, base lower pricing, and lifetime customer experience.

Q: Consumer behavior in secondary ticket market?

A: Live events remain a spending priority, with softness in lower-end market and Vegas showing more impact.

Q: Capital allocation priorities?

A: Prioritize core business reinvestment, with prudence on acquisitions, buybacks, and focus on stabilization before expanding aperture.