StubHub Holdings, Inc. Q1 FY2026 earnings call

• Core Marketplace Growth & Competitive Position

  • StubHub maintained market leadership in the secondary live event ticketing space, delivering solid top-line growth and expanded profitability in Q1 2026, building on 2025 investments in liquidity, selection, and customer experience infrastructure
  • Leveraging network effects and scale advantages of its marketplace model, the company improved customer acquisition economics while growing the business, with a continued consumer-first focus on delivering broad selection, trusted transactions, and simple user experience
  • Expanded the supply side of the marketplace to include enterprise-scale sellers (professional sports teams, artists, venues, event organizers), pushing for non-exclusive open distribution of ticket inventory, which is supported by a recent antitrust settlement proposal in the live event space

• Product & Technology Development

  • Launched Distribution Manager, an AI-powered self-serve tool that lets enterprise rights holders list and manage ticket inventory directly on StubHub without complex integrations, providing real-time pricing and demand signals based on 25+ years of marketplace data
  • Established direct integrations with primary ticketing platforms, enabling rights holders to add StubHub as an additional distribution channel without changing existing systems or workflows (e.g., the recently announced integration with a primary ticketer serving Stanford University Athletics)
  • Multiple AI initiatives are underway to enhance end-user customer experience, improve post-purchase support, accelerate product development, and boost internal productivity; the company has already integrated with ChatGPT and Anthropic Cloud to make its live event catalog accessible via AI platforms
  • The new advertising initiative remains in the testing phase, with a focus on building sponsored listings that benefit both sellers and consumers; the company is currently optimizing auction mechanics, pricing, and user experience to avoid negative impacts on conversion

• Financial & Operational Progress

  • Generated strong operating cash flow enabled by the marketplace model's high gross margins and favorable working capital dynamics; paid down over $1 billion in debt in the last 12 months, including a $100 million term loan repayment after quarter-end, reducing net leverage to 4x trailing adjusted EBITDA from 4.5x at end-2025
  • Ended the quarter with $1.5 billion in cash and cash equivalents, with total outstanding debt of ~$1.4 billion and no maturities until March 2030, providing flexibility for organic investment, continued deleveraging, and dilution management
  • $314 million of preferred equity converted to Class A common stock in Q1, resulting in 374 million common shares outstanding at quarter-end; full diluted shares outstanding (excluding performance RSUs and options) total ~399 million, with expected 2026 dilution in the low-to-mid single digit percentage range

StubHub reports results for its core resale ticketing marketplace, with the business split into North American resale and international resale segments. Total marketplace Gross Merchandise Value (GMS) grew 7% year-over-year to $2.2 billion. International resale outpaced North American resale growth, with strong performance in the Latin America and Asia Pacific regions. Total company revenue increased 12% year-over-year to $446 million, outpacing GMS growth due to normalized GMS-to-revenue conversion following 2025 market share investments. Gross margin was 85%, expanding 100 basis points year-over-year. Sales and marketing expense was 50% of revenue, a 500 basis point improvement year-over-year. Adjusted EBITDA was $72.1 million, with an adjusted EBITDA margin of 16%, expanding 400 basis points year-over-year. Net income was $48 million. Trailing 12-month free cash flow was $298 million, representing 116% conversion of adjusted EBITDA.

• Management reaffirmed its full-year 2026 guidance, maintaining the prior outlook with no upward or downward revision
• Full-year GMS is projected to be between $9.9 billion and $10.1 billion, representing 8% to 10% year-over-year growth
• Full-year adjusted EBITDA is guided to be between $400 million and $420 million
• Full-year GMS-to-revenue conversion is expected to normalize to approximately 20%, consistent with historical levels
• The first half/second half split of full-year GMS is expected to remain broadly consistent with 2025, with the second half back-weighted due to seasonal live event patterns (World Cup in Q2/Q3, summer concerts, and fall/winter major league sports seasons)
• G&A as a percentage of revenue is expected to decrease over the remainder of 2026 as the business scales

• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from current expectations, with detailed risk factors discussed in recent FCC filings
• Proposed price cap regulation on secondary ticketing in the UK has been delayed, with no legislation included in the latest King's speech, pushing any potential action further down the line; StubHub argues price caps harm consumers by reducing event access, increasing black market activity and fraud, and become unenforceable with widespread primary market dynamic pricing
• Price caps have been implemented in Ontario, Canada, but as of the call, there has been no material impact on StubHub's business to date
• Live event cancellations and macroeconomic headwinds (including inflation and recession concerns) have not impacted demand so far, though any future slowdown in consumer spending could negatively affect attendance and ticket spending

Q: Given the operating leverage you're seeing from 2025 market share gains, how much more leverage can we expect through 2026, and how would you deploy any outperformance versus current adjusted EBITDA guidance?

A: The company's 2026 strategy was always to deliver top-line growth and expanding margins after 2025 market share investments, which is already playing out in Q1. Incremental operating leverage will naturally increase as the business scales through the year, with more profitability expected to flow through in the second half. Management did not specify additional plans for outperformance beyond continuing to execute on stated strategic priorities.

Q: What is driving your improved marketing efficiency, what is your outlook for industry growth and share gains, and what is the progress on open distribution product build-out and partner pipeline?

A: Marketing efficiency improves as a natural result of scale and market leadership in a marketplace business: greater liquidity and better data improve customer acquisition and seller management, allowing growth alongside margin expansion. The live events industry has consistent long-term underlying growth from more events and global geographic expansion, and as the largest market player, StubHub is well positioned to continue gaining share. The company is focused on productizing open distribution into a turnkey, self-serve offering rather than relying on business development, highlighted by the new AI-powered Distribution Manager tool and primary ticketing platform integrations that are already launching with early partners like Stanford Athletics.

Q: Can you share more details on the new advertising initiative, and what drove the strong international growth in Q1?

A: Advertising remains in the testing phase in 2026, with the company focused on getting the user experience right before scaling. It is currently testing auction mechanics, pricing, and conversion impacts to ensure sponsored listings add value for both consumers and sellers, and material contribution is not expected until 2027 at the earliest. Strong international growth is driven by an increasing number of major live events (including sports and concert tours) expanding into global markets like Latin America and Asia Pacific, and StubHub's global scale and market-leading position allow it to capture that growth.

Q: Do you see any impact from recent concert tour cancellations or macroeconomic weakness on consumer ticket demand?

A: StubHub has not seen any spike in cancellations impacting its business, and Q2 2026 is tracking in line with expectations. Over 26 years of operating through multiple economic cycles, the live events industry has proven extremely resilient: fans view live event attendance as a high-priority passion purchase that is not easily cut from consumer budgets, and half of all tickets traded on StubHub are priced below $100, providing accessible price points for all budgets. No evidence of trading down or reduced attendance has been observed to date.