Vivid Seats, Inc. Q3 FY2023 earnings call

• Delivered record Marketplace GOV of $999 million, up 28% YOY, with revenues at $188 million and adjusted EBITDA at $33 million.
• Announced acquisition of Vegas.com in early November, a strategic asset enhancing scale and reach in Las Vegas with $89 million in 2022 revenues.
• Repeat rates increased significantly and are pacing ahead of expectations, driven by brand and team partnerships, customer service recognition, and engagement platforms like Vivid Picks app and Game Center.
• Brand partnerships include ESPN campaign during NFL season, and team partnerships expanded to NHL (LA Kings) and MLS (LA Galaxy).
• Acquisitions of Wavedash in early September and Vegas.com, with plans to leverage these for TAM expansion and synergistic value.

In the third quarter of 2023, Vivid Seats achieved $999 million in Marketplace GOV, representing a 28% year-over-year growth. Revenues reached $188 million, a 20% year-over-year increase, and adjusted EBITDA was $33 million, up 18% year-over-year. Marketplace GOV was the highest quarter ever, driving strong growth across segments.

• Raised 2023 guidance: Marketplace GOV expected $3.75B - $3.9B, revenues $685M - $705M, adjusted EBITDA $136M - $142M.
• 2024 guidance: Marketplace GOV $4.2B - $4.5B, revenues $810M - $840M, adjusted EBITDA $170M - $180M. Excluding Vegas.com, expects high single-digit top line growth with operating leverage on EBITDA side.

Q: Jason Bazinet with Citi asked about parsing M&A contribution from growth vs underlying category growth and market share.

A: Lawrence Fey said a combination contributes, expecting high single-digit top line growth excluding Vegas.com with operating leverage, against a growing industry environment but muted growth relative to 2023.

Q: Maria Ripps with Canaccord asked about investment priorities and PayPal partnership.

A: Lawrence Fey said investment focuses on brand awareness and affinity, with PayPal partnership being an example of expanding wallet/checkout capabilities. Stan Chia added excitement about the PayPal partnership and future expansion.

Q: Curtis Nagle of Bank of America asked about Vegas acquisition rationale.

A: Stan Chia said Vegas.com is a market authority with comprehensive event inventory, strong tailwinds in Las Vegas, and synergistic opportunity to introduce Vivid Seats brand to visitors.

Q: Thomas Forte of DA Davidson asked about buyback authorization and YOLO vs FOMO.

A: Lawrence Fey said no current buyback authorization, but they consider it; Stan Chia discussed YOLO and FOMO in live events, noting strong resiliency despite consumer spending sentiment.

Q: Daniel Kurnos of The Benchmark Company asked about Vegas adjacent opportunities.

A: Stan Chia said Vegas.com adds flight and hotel capabilities, but near-term focus is on core business benefits; Lawrence Fey added on financial profile alignment with current business.

Q: Cameron Mansson-Perrone with Morgan Stanley asked about Vegas acquisition financials and cash/equity combo.

A: Stan Chia said Vegas market is $6B in shows/attractions; Lawrence Fey said it blends into Marketplace segment, accretive to take rates and margins; Stan Chia explained cash/equity combo for alignment and shared upside.

Q: Logan Reich with RBC asked about marketing spend and competitive backdrop.

A: Stan Chia said repeat rates are highest ever, engagement platform driving purchase behavior, and investments are pacing ahead of expectations; Lawrence Fey added on learning from investments and refining them for higher returns.

Q: Ralph Schackart with William Blair asked about competitive advantages.

A: Stan Chia discussed platform engagement, repeat rates, engagement platforms, acquisitions, and Vegas.com as market leaders, with Lawrence Fey highlighting organic growth plus inorganic contribution from Vegas.