Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vivid Seats Inc (SEAT, Financial) reported strong financial results with $198 million in revenue and $44 million in adjusted EBITDA, representing 20% and 42% year-over-year growth, respectively.
- The company saw a significant increase in total marketplace orders, up 18% year-over-year.
- Skybox Drive is in the final stage of its beta phase, with a formal launch expected soon, indicating ongoing innovation and product development.
- The company's loyalty program and engagement initiatives have led to a higher mix of repeat orders, enhancing profitability.
- Vivid Seats Inc (SEAT) successfully refinanced its term loan, adding $125 million in cash and lowering the interest rate, providing additional strategic flexibility.
Negative Points
- The average order size decreased from $363 in Q2 2023 to $322 in Q2 2024, partially offsetting the increase in total marketplace orders.
- The company adjusted its full-year guidance for Marketplace GMV and revenue to lower ranges, indicating a more cautious outlook.
- There were notable event cancellations, including tours by Aerosmith and Jennifer Lopez, impacting supply and potentially revenue.
- Competitive intensity in the performance marketing channel persists, affecting customer acquisition costs and market share.
- The company faces challenges in maintaining growth momentum as it laps a year with an unusually high number of popular artists touring in large venues.
Q & A Highlights
Q: Could you give more color on the slower integrated top line outlook for the rest of the year? Is there anything in the macro environment or competitive front causing this change?
A: We continue to see strength and resiliency with the consumer in our category. However, on the supply side, it's been a softer year compared to last year, which had some of the largest artists touring. This year, the focus is more on amphitheaters and arenas, which typically have lower attendance and price points. Additionally, some major tours have been canceled. Despite this, we see strong consumer demand and our highest order volume ever.
Q: Can you provide more details on the competitive landscape and performance marketing channels?
A: Performance marketing remains a key channel for us. We focus on winning customers who stay loyal to our platform long-term, leveraging our rewards program and differentiated capabilities. While some competitors focus on buying temporary volume, we prioritize sustainable customer acquisition and retention.
Q: How is the acquisition of Vegas.com progressing, and how are you leveraging it?
A: The acquisition is performing well. We are leveraging the customer base acquired through Vegas.com to drive cross-sell campaigns and integrate inventory with Vivid Seats. This has resulted in significant customer acquisition and engagement, particularly in cross-border travel and sports events.
Q: Can you discuss the balance between driving GMV, higher take rates, and overall profitability?
A: We maintain a balance between volume and profitability. Our take rate improvement is driven by accretive benefits from acquisitions, lower take rates on high average order sizes last year, and a focus on protecting unit economics. This approach supports solid unit economics and profitability.
Q: Any updates on international expansion and customer acquisition strategies?
A: We remain on track to launch our international platform by the end of the year. Our investments are focused on a scalable platform with minimal fixed expenses. We expect international volumes to contribute to our overall growth, with a focus on efficient customer acquisition and leveraging our existing capabilities.
Q: How are you planning to utilize the increased cash balance from the recent refinancing?
A: Our primary vehicles for capital deployment are strategic M&A and share repurchases. We aim to strike a balance between these opportunities while maintaining financial discipline. Our strong cash generation allows us to fund operational projects and maintain flexibility for strategic investments.
Q: Can you elaborate on the first-party ticket strategy and its impact on future sales and profits?
A: Our acquisition of Vegas.com has enhanced our capabilities in integrating with venues. We are excited about our new model with the college basketball tournament, where we are the official ticketing partner. This model has potential for rapid scaling and profitability.
Q: What are your thoughts on the growth potential of women's sports and soccer?
A: Women's sports, including WNBA and soccer, are showing strong growth and consumer interest. We see potential for these categories to drive long-term sustainable growth. Soccer, in particular, has had a phenomenal year with significant year-over-year GMV growth, driven by secular trends and major tournaments.
Q: How are you managing customer acquisition costs and leveraging your loyalty program?
A: Our loyalty program continues to evolve, allowing us to target and retain the most loyal users. This drives higher repeat behavior and profitability. We focus on efficient customer acquisition through promotions and our loyalty program, which acts as a permanent promotion yielding strong economic benefits.
Q: What is the outlook for the resale business and its impact on gross margins?
A: The resale business has seen some idiosyncratic event mix impacts, particularly in the concert supply side. While margins have deflated slightly from robust levels last year, they remain consistent with our sustainable steady-state expectations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
