Vivid Seats, Inc. Q1 FY2025 earnings call

• Stan Chia started by sharing a recap of first quarter results, noting $820 million of marketplace GOV, $164 million of revenues, and $22 million of adjusted EBITDA, with a challenging year-over-year comparison due to robust competitive intensity and softening industry trends amidst consumer uncertainty. • Emphasized confidence in the long-term resiliency of the industry and consumers prioritizing live experiences over goods. • Focused on strategic investments in product development, with upcoming app enhancements to optimize discoverability and personalization, and ongoing investment in Game Center with consumer engagement efforts like contests around tours and March Madness. • Highlighted investment in SkyBox for the seller side and progress in internationalization, including the European launch, and a new partnership with United Airlines. • Mentioned progress on corporate responsibility and governance strategy initiatives.

In the first quarter, Vivid Seats delivered $820 million of marketplace GOV, $164 million of revenues and $22 million of adjusted EBITDA. Marketplace GOV was $820 million, revenues were $164 million, and adjusted EBITDA was $22 million. The marketplace take rate was 16.3% in Q1 2025, up 70 basis points from 15.6% in Q1 2024.

• Larry Fey stated that Vivid Seats is suspending guidance for the full year 2025 due to continued competitive intensity, additional variability across the global economy, potential consumer softness, and atypical changes in the performance marketing landscape. • Anticipated continued pressure in the near term but noted starting to lap easier year-over-year volume comps in the second half of the year.

• Robust competitive intensity and softening industry trends amidst consumer uncertainty. • Economic and political volatility impacting consumer sentiment, which can affect how and when artists and rights holders go to market. • Unexpected changes in performance marketing channels like the unannounced change in Google channel data reporting causing inefficiencies.

Q: I want to start with and maybe it's kind of a two part question, the competitive environment, but the performance marketing and atypical nature that happened in Q1, can you elaborate exactly what's happening there and then, as in the context of that and the continued competitive intensity, namely from one of your skilled peers. Does that change your strategy?

A: On the performance marketing side, saw changes in the Google channel with unannounced inconsistent data reporting causing folks to bid more aggressively. Continued competitive intensity from peers, and presuming performance marketing channel will remain under pressure and preparing to adjust accordingly.

Q: Maybe I'll just follow up on that a little bit. Maybe Stan could you extrapolate on that comment that sounds like macro uncertainty is impacting when rent holders go to market? Are you actually seeing artists pull back or, you know, maybe delay plan tours?

A: No surprise, there's a lot of volatility in the industry. Seen a dearth of what we would normally expect during this period with multiple factors impacting it.

Q: So do you compare what you're seeing in concerts versus sporting events versus theater and comedy?

A: Concert landscape has been volatile with monthly trends, sports has had tough comps, theater has been strong. Our performance relative to the industry has been broadly similar.

Q: You mentioned still being excited about growing the TAM. I was wondering if you could elaborate just on I know I realize it’s early, but any additional update in terms of your international efforts and what’s progressing there? Any early learnings?

A: Remain pleased with early signs of international efforts, focused on building scale across marketplace dimensions, and early reads have been positive.

Q: You were pretty clear on a lot of the dynamics affecting order volume and the things that are going on there. But wanted to think about the AOS variable given that there’s presumably a macro headwind, but you’re also entering a period of easier comps once you lap the Vegas.com and the Wabash impacts.

A: In Q1, average order size was flat. Industry average order size was down, so we skewed slightly higher. Balance of the year is tough to predict precisely, but flat seems a good guess.

Q: Maybe a few, I guess. Stan, don’t think we’ve addressed some of the regulatory stuff, whether it’s the Trump executive order or the Ticket Act with the concierge, component in it. So maybe start there and just give your thoughts on your impact to the industry or how you view that played out.

A: Supportive of regulation for consumer transparency, believe our lean cost structure and lower pricing for consumers is favorable.

Q: Just on the marketing change that you called out, and Google makes changes from time to time. I’m sure you’ve kind of worked through them historically. But maybe if you could sort of frame the order of magnitude of this change versus what you’ve seen historically, and just some sense from your perspective on the workarounds or how long you and or the industry will be able to work through this change as well.

A: This change was impactful with correlated inefficiency erosion. It's like piling on in a competitive environment, took time to recalibrate, and still some uncertainty on the long-term impact and workarounds.