Vivid Seats Inc. Q4 FY2024 earnings call

• Loyalty program: Vivid Seats Rewards members have repeat orders 2-3x more often than non-enrolled customers. In 2024, repeat orders reached 61% of total.
• Game Center: Paired contests with concert on sale announcements in Q4, saw increased app downloads (doubled Q/Q and Y/Y in Q4).
• Vegas.com: Cross-listing and cross-selling synergies ramping, with Vegas.com customers converting to Vivid Seats customers at encouraging rates.
• International expansion: European launch kicked off in 2024, with plans to ramp activity in 2025 contributing modestly to revenues.
• Skybox: Industry-leading ERP with over 55% of professional sellers using it. Skybox Drive, an automated pricing tool, is being monetized as users move beyond trial periods.
• Strategic partnerships: Partnership with United Airlines launched later in 2024, allowing MileagePlus members to earn miles for ticket purchases.

In the fourth quarter of 2024, Vivid Seats generated $200 million in revenues, which was a 1% year-over-year increase, and $33 million in adjusted EBITDA, a 5% year-over-year decrease. For the full year 2024, total revenues reached $776 million, a 9% year-over-year growth, and adjusted EBITDA was $151 million, a 7% year-over-year increase. In the fourth quarter, marketplace GOV was $994 million, a 11% year-over-year decline, with average order size up 2% year-over-year. For full year 2024, marketplace GOV was $3.9 billion, roughly flat year-over-year, with total marketplace orders up 6% but average order size down 6%. Revenue contribution: Fourth quarter revenues were $200M (1% of full year), full year revenues $776M. Adjusted EBITDA: Fourth quarter $33M (5% decline Y/Y), full year $151M (7% growth Y/Y).

• 2025 marketplace GOV expected to be in the range of $3.7 billion to $4.1 billion.
• 2025 revenues expected in the range of $730 million to $810 million.
• 2025 adjusted EBITDA expected in the range of $110 million to $150 million.
• Expecting marketplace GOV and revenues to inflect and return to growth in the back half of 2025 due to easier comps, with flexibility in marketing, product, and tech investment built into the guidance.

• Competitive intensity: High competitive intensity in performance marketing channels in 2024 impacted adjusted EBITDA, and could continue to pressure margins in 2025.
• Macroeconomic uncertainties: Uncertainty in the macroeconomic environment could impact consumer spending on live events, affecting demand.
• Execution risks: Risks associated with international expansion, including scaling the platform and flywheel in new markets, and successfully integrating partnerships.

Q: Starting on international, which countries are going into first and comment on EBITDA additive in 2025?

A: Stan Chia said they started in the UK and are excited to expand in other European countries. Larry Fey noted current philosophy is to get to scale on volume with contribution margin neutrality as they build volume base.

Q: Will you use contra take rate to compete and how to make loyalty sticky?

A: Stan Chia emphasized focus on ecosystem elements like loyalty program, Game Center to drive engagement. Larry Fey mentioned buyback is core part of capital allocation strategy.

Q: Expand on key investment priorities for international markets and impact of STC junk fee rule?

A: Stan Chia said they built platform infrastructure for international launch, focusing on ramping supply and leveraging existing/seller relationships. Stan Chia stated support for STC's transparency-oriented rule.

Q: On guidance range, color on top and bottom end and Skybox Drive monetization sizing?

A: Larry Fey said guidance range accounts for competitive intensity flexibility. He sized Skybox Drive monetization opportunity as roughly $10 million a year if capturing entirety of market.

Q: On marketing expense, will it go down year-over-year?

A: Larry Fey said marketing moves alongside volume, with guidance range building flexibility to shift from rigid unit economics.

Q: Exploration of sale and free cash flow conversion and M&A?

A: Stan Chia said they always look at strategic opportunities but can't comment on rumors. Larry Fey said cash conversion linked to growth, expecting revert to historical levels if growth achieved, and cautious on M&A near term due to multiple considerations.