Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vivid Seats Inc (SEAT, Financial) delivered $187 million in revenues and $34 million in adjusted EBITDA with an 18% adjusted EBITDA margin, showcasing strong unit economics despite market challenges.
- The company announced a strategic partnership with Brandon Marshall's IM Athlete, enhancing brand awareness and engagement through exclusive content and promotions.
- Vivid Seats Inc (SEAT) successfully launched SkyBox Drive, an innovative pricing tool, with rapid adoption and a waitlist of prospective users, strengthening its position with professional sellers.
- The company was recognized by Newsweek for the fifth time for its excellence in customer service in the ticketing category.
- Vivid Seats Inc (SEAT) is on track to launch operations in select international geographies by the end of the year, expanding its total addressable market (TAM).
Negative Points
- Marketplace Gross Order Value (GOV) declined by 13% year-over-year, driven by an 11% reduction in average order size and a 2% decline in total marketplace orders.
- The concert industry faced a 'digestion year' with a notable reduction in stadium tour activity, impacting Vivid Seats Inc (SEAT)'s performance.
- High marketing intensity from competitors has created pressure on incremental orders and GOV, with some competitors pursuing uneconomic volume growth.
- The company's guidance for 2024 Marketplace GOV and revenues was revised downwards due to challenging concert supply dynamics and continued marketing intensity.
- Free cash flow conversion is expected to be lower in 2024 due to reduced top-line growth and working capital headwinds, impacting cash generation.
Q & A Highlights
Q: Can you explain the implied take rate guidance for Q4, considering the strong performance in Q2 and Q3?
A: Lawrence Fey, CFO: The take rate in Q2 and Q3 was strong due to a balance between take rate and volume. We aim to maintain flexibility to adjust based on market conditions. The World Series, being a high AOS event, can deflate take rates when it constitutes a larger portion of our business. This year's World Series matchup was particularly favorable, which may impact take rates.
Q: How do you view the 2024 "digestion year" for concerts, and is this a cyclical pattern?
A: Lawrence Fey, CFO: The event mix varies, with concerts facing challenging comps due to fewer high-profile artists compared to last year. Sports and theater have shown strength, indicating robust demand. The concert supply issue is temporary, and we expect a return to growth in 2025.
Q: What are your expectations for industry growth in 2025, given a potentially stronger concert supply?
A: Stanley Chia, CEO: We are optimistic about 2025, expecting a return of stadium tours and strong secular trends in the concert industry. The current year saw a shift to smaller venues, but we anticipate a more robust lineup next year.
Q: How does the high marketing intensity from competitors affect your customer acquisition strategy?
A: Stanley Chia, CEO: We focus on long-term value and strong unit economics, even amid aggressive competitor marketing. Our investments in loyalty programs and differentiated products allow us to target volume effectively and maintain discipline in execution.
Q: Can you provide insights on the adoption of SkyBox Drive and its impact on sellers?
A: Stanley Chia, CEO: SkyBox Drive has seen rapid adoption, particularly among existing SkyBox users, due to its turnkey integration and unique features. We are pleased with the early uptake and expect continued growth as more sellers onboard.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
