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Vivid Seats Raises Guidance while Reporting Record Marketplace Orders

·16-min read
Vivid Seats LLC
Vivid Seats LLC

Second Quarter 2022 Marketplace GOV of $815 million and Revenues of $148 million

CHICAGO, Aug. 09, 2022 (GLOBE NEWSWIRE) -- Vivid Seats Inc. (NASDAQ: SEAT) (“Vivid Seats”, “we” or the “Company”), a leading marketplace that utilizes its technology platform to connect millions of buyers with thousands of ticket sellers across hundreds of thousands of events each year, today provided financial results for the second quarter ended June 30, 2022.

“We are pleased to deliver another exceptionally strong quarter and one in which we delivered record-setting Q2 Marketplace GOV which was driven by a record-setting number of Marketplace Orders across all quarters,” said Stan Chia, Vivid Seats CEO. “Our performance is a testament to the power of our business model, the success of our strategy, and the long-term secular growth that we expect from the live event industry. As we continue to focus on the fan experience and innovate and execute against our strategic priorities, we are committed to sustained and profitable growth, disciplined investment and maximizing shareholder value.”

Second Quarter 2022 Key Operational and Financial Metrics:

  • Marketplace GOV of $814.8 million – up 18% from $693.1 million in Q2 2021

  • Revenues of $147.7 million – up 28% from $115.5 million in Q2 2021

  • Net income of $24.1 million – up 810% from $2.6 million in Q2 2021

  • Adjusted EBITDA of $30.3 million – down 16% from $36.2 million in Q2 2021

“Our second quarter results exceeded expectations and we believe reflect the combination of pent-up demand and the strength of our differentiated offering,” said Lawrence Fey, Vivid Seats CFO. “With focused execution, topline growth flowed through to profitability, even as we continued to make longer-term growth investments. On the back of a strong first half of 2022, we are raising our full-year 2022 guidance for each of Marketplace GOV, Revenues and Adjusted EBITDA.”

Key Performance Indicators ('000s)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace GOV(1)

 

$

814,817

 

 

$

693,090

 

 

$

1,556,955

 

 

$

809,563

 

Total Marketplace orders(2)

 

 

2,410

 

 

 

1,713

 

 

 

4,429

 

 

 

2,006

 

Total Resale orders(3)

 

 

67

 

 

 

35

 

 

 

135

 

 

 

48

 

Adjusted EBITDA(4)

 

$

30,329

 

 

$

36,195

 

 

$

51,341

 

 

$

40,382

 


(1)

Marketplace Gross Order Value ("Marketplace GOV") represents the total transactional amount of Marketplace segment orders placed on our platform in a period, inclusive of fees, exclusive of taxes, and net of event cancellations that occurred during that period. Marketplace GOV was negatively impacted by event cancellations in the amount of $14.7 million and $49.5 million during the three and six months ended June 30, 2022, respectively, and $18.5 million and $37.0 million during the three and six months ended June 30, 2021, respectively.

(2)

Total Marketplace orders represent the volume of Marketplace segment orders placed on our platform during a period, net of event cancellations that occurred during that period. During the three and six months ended June 30, 2022, our Marketplace segment experienced 35,916 and 127,316 event cancellations, respectively, compared to 48,319 and 100,094 event cancellations during the three and six months ended June 30, 2021, respectively.

(3)

Total Resale orders represent the volume of Resale segment orders sold by our Resale team in a period, net of event cancellations that occurred during that period. During the three and six months ended June 30, 2022, our Resale segment experienced 711 and 3,270 event cancellations, respectively, compared to 772 and 1,913 event cancellations during the three and six months ended June 30, 2021, respectively.

(4)

Adjusted EBITDA is not a measure defined under GAAP. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business performance. Refer to the Adjusted EBITDA section below for a reconciliation to its most directly comparable GAAP measure.

2022 Financial Outlook
Vivid Seats now anticipates Marketplace GOV, Revenues and Adjusted EBITDA for the year ending December 31, 2022 to be:

  • Marketplace GOV in the range of $2.95 billion to $3.15 billion (increased from $2.80-$3.05 billion)

  • Revenues in the range of $540.0 million to $570.0 million (increased from $520.0-$555.0 million)

  • Adjusted EBITDA in the range of $110.0 million to $117.0 million(5) (increased from $110.0-$115.0 million)

Additional detail around the 2022 outlook will be available on the second quarter 2022 earnings call.

(5)

We calculate forward-looking non-GAAP Adjusted EBITDA based on internal forecasts that omit certain information that would be included in forward-looking GAAP net income (loss), the most directly comparable GAAP measure. We do not attempt to provide a reconciliation of forward-looking non-GAAP Adjusted EBITDA guidance to forward-looking GAAP net income (loss) because forecasting the timing or amount of items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable efforts.

Webcast Details
The Company will host a webcast at 8:30 a.m. Eastern Time today to discuss the second quarter 2022 financial results, business updates and financial outlook. Participants may access the live webcast and supplemental earnings presentation on the events page of the Vivid Seats Investor Relations website at https://investors.vividseats.com/events-and-presentations.

About Vivid Seats
Founded in 2001, Vivid Seats is a leading online ticket marketplace committed to becoming the ultimate partner for connecting fans to the live events, artists, and teams they love.  Based on the belief that everyone should “Experience It Live,” the Chicago-based company provides exceptional value by providing one of the widest selections of events and tickets in North America and an industry leading Vivid Seats Rewards program where all fans earn on every purchase.  Vivid Seats has been chosen as the official ticketing partner by some of the biggest brands in the entertainment industry including ESPN, Rolling Stone, and the Los Angeles Clippers. Through its proprietary software and unique technology, Vivid Seats drives the consumer and business ecosystem for live event ticketing and enables the power of shared experiences to unite people.  Vivid Seats is recognized by Newsweek as one of America’s Best Companies for Customer Service in ticketing. Fans who want to have the best live experiences can start by downloading the Vivid Seats mobile app, going to vividseats.com, or calling 866-848-8499.

Forward-Looking Statements
Certain statements made in this press release are "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this press release may be forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding our future results of operations and financial position, including our expectations regarding Marketplace Gross Order Value, revenues and Adjusted EBITDA and the impact of our investments; our expectations with respect to live event industry growth; our competitive positioning; our business strategy; and the plans and objectives of management for future operations. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include the continuing impact of the COVID-19 pandemic, the timing and manner of the resumption of large-scale sporting events, concerts and theater shows, our relationships with buyers, sellers and distribution partners, changes in Internet search engine algorithms or changes in marketplace rules, competition in the ticketing industry, the willingness of artists, teams and promoters to continue to support the secondary ticket market, and our ability to maintain and improve our platform and brand or develop successful new solutions and enhancements or improve existing ones, the impact of potential unfavorable legislative developments, the success of our acquisition of Betcha Sports, Inc., our launch of Vivid Picks, the effects of a recession and inflation, our ability to obtain subsequent debt refinancing, the impact of system interruption and the lack of integration and redundancy in our systems and infrastructure, the impact of cyber security risks, data loss or other breaches of our network security, our being a controlled company, and other risks and uncertainties described in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts:

Investors
Kate Copouls
Kate.Copouls@vividseats.com

Media
Julia Young
Julia.Young@vividseats.com


VIVID SEATS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) (Unaudited)

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

287,811

 

 

$

489,530

 

Restricted cash

 

 

219

 

 

 

280

 

Accounts receivable – net

 

 

44,373

 

 

 

36,124

 

Inventory – net

 

 

21,202

 

 

 

11,773

 

Prepaid expenses and other current assets

 

 

59,306

 

 

 

72,504

 

Total current assets

 

 

412,911

 

 

 

610,211

 

Property and equipment – net

 

 

3,293

 

 

 

1,082

 

Right-of-use assets – net

 

 

8,806

 

 

 

 

Intangible assets – net

 

 

80,067

 

 

 

78,511

 

Goodwill

 

 

715,258

 

 

 

718,204

 

Other non-current assets

 

 

2,717

 

 

 

787

 

Total assets

 

$

1,223,052

 

 

$

1,408,795

 

Liabilities and shareholders’ deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

191,454

 

 

$

191,201

 

Accrued expenses and other current liabilities

 

 

246,157

 

 

 

281,156

 

Deferred revenue

 

 

32,657

 

 

 

25,139

 

Current maturities of long-term debt – net

 

 

2,750

 

 

 

 

Total current liabilities

 

 

473,018

 

 

 

497,496

 

Long-term debt – net

 

 

265,902

 

 

 

460,132

 

Long-term lease liabilities

 

 

9,386

 

 

 

 

Other liabilities

 

 

17,414

 

 

 

25,834

 

Total long-term liabilities

 

 

292,702

 

 

 

485,966

 

Commitments and contingencies

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

882,954

 

 

 

1,286,016

 

 

 

 

 

 

 

 

Shareholders' deficit

 

 

 

 

 

 

Class A common stock, $0.0001 par value; 500,000,000 shares authorized at June 30, 2022 and December 31, 2021; 79,241,032 and 79,091,871 issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

8

 

 

 

8

 

Class B common stock, $0.0001 par value; 250,000,000 shares authorized, 118,200,000 issued and outstanding at June 30, 2022 and December 31, 2021

 

 

12

 

 

 

12

 

Additional paid-in capital

 

 

606,238

 

 

 

182,091

 

Accumulated deficit

 

 

(1,031,880

)

 

 

(1,042,794

)

Total Shareholders' deficit

 

 

(425,622

)

 

 

(860,683

)

Total liabilities, Redeemable noncontrolling interests, and Shareholders' deficit

 

$

1,223,052

 

 

$

1,408,795

 


VIVID SEATS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands) (Unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

$

147,694

 

 

$

115,498

 

 

$

278,466

 

 

$

139,612

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization shown separately below)

 

 

32,422

 

 

 

19,986

 

 

 

64,586

 

 

 

23,911

 

Marketing and selling

 

 

59,412

 

 

 

46,422

 

 

 

113,640

 

 

 

54,377

 

General and administrative

 

 

36,207

 

 

 

29,106

 

 

 

65,482

 

 

 

44,977

 

Depreciation and amortization

 

 

1,726

 

 

 

500

 

 

 

3,111

 

 

 

795

 

Income from operations

 

 

17,927

 

 

 

19,484

 

 

 

31,647

 

 

 

15,552

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense – net

 

 

2,699

 

 

 

16,839

 

 

 

6,641

 

 

 

33,158

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

4,285

 

 

 

 

Other income

 

 

(8,832

)

 

 

 

 

 

(6,553

)

 

 

 

Income (loss) before income taxes

 

 

24,060

 

 

 

2,645

 

 

 

27,274

 

 

 

(17,606

)

Income tax expense

 

 

 

 

 

 

 

 

76

 

 

 

 

Net income (loss)

 

 

24,060

 

 

 

2,645

 

 

 

27,198

 

 

 

(17,606

)

Net income (loss) attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization

 

 

 

 

 

2,645

 

 

 

 

 

 

(17,606

)

Net income attributable to redeemable noncontrolling interests

 

 

14,405

 

 

 

 

 

 

16,284

 

 

 

 

Net income attributable to Class A Common Stockholders

 

$

9,655

 

 

$

 

 

$

10,914

 

 

$

 


VIVID SEATS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (Unaudited)

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

Net income (loss)

 

$

27,198

 

 

$

(17,606

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

3,111

 

 

 

795

 

Amortization of deferred financing costs and interest rate cap

 

 

575

 

 

 

2,680

 

Equity-based compensation expense

 

 

8,909

 

 

 

2,274

 

Loss on extinguishment of debt

 

 

4,285

 

 

 

 

Change in fair value of warrants

 

 

(6,553

)

 

 

 

Interest expense paid-in-kind

 

 

 

 

 

16,164

 

Amortization of leases

 

 

1,177

 

 

 

 

Change in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(8,171

)

 

 

(16,943

)

Inventory

 

 

(9,429

)

 

 

(14,250

)

Prepaid expenses and other current assets

 

 

13,412

 

 

 

(38,154

)

Accounts payable

 

 

(638

)

 

 

174,978

 

Accrued expenses and other current liabilities

 

 

(38,014

)

 

 

62,070

 

Deferred revenue

 

 

7,518

 

 

 

10,661

 

Other assets and liabilities

 

 

(1,974

)

 

 

327

 

Net cash provided by operating activities

 

 

1,406

 

 

 

182,996

 

Cash flows from investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,392

)

 

 

(250

)

Purchases of personal seat licenses

 

 

(137

)

 

 

(76

)

Investments in developed technology

 

 

(5,394

)

 

 

(3,886

)

Cash adjustment in acquisition

 

 

(8

)

 

 

 

Net cash used in investing activities

 

 

(6,931

)

 

 

(4,212

)

Cash flows from financing activities

 

 

 

 

 

 

Payments of June 2017 First Lien Loan

 

 

(465,712

)

 

 

(3,206

)

Proceeds from February 2022 First Lien Loan

 

 

275,000

 

 

 

 

Payments of deferred financing costs and other debt-related costs

 

 

(4,856

)

 

 

 

Payments of February 2022 First Lien Loan

 

 

(687

)

 

 

 

Net cash used in financing activities

 

 

(196,255

)

 

 

(3,206

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

(201,780

)

 

 

175,578

 

Cash, cash equivalents, and restricted cash – beginning of period

 

 

489,810

 

 

 

285,337

 

Cash, cash equivalents, and restricted cash – end of period

 

$

288,030

 

 

$

460,915

 

Use of Non-GAAP Financial Measures 

We present Adjusted EBITDA, which is not a measure defined under U.S. Generally Accepted Accounting Principles (“GAAP”), because it is a measure frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. Further, we believe this measure is helpful in highlighting trends in our operating results, because it excludes the impact of items that are outside the control of management or not reflective of ongoing performance related directly to the operation of our business segments.

Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. Moreover, we believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business performance and highlighting trends in our operating results.

Adjusted EBITDA is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Further limitations of Adjusted EBITDA are that it does not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring, such as interest expense, equity-based compensation, litigation, settlements and related costs and change in value of warrants. In addition, other companies may calculate Adjusted EBITDA differently than us, thereby limiting its usefulness as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from Adjusted EBITDA.

The following is a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net income (loss) (in thousands):

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

24,060

 

 

$

2,645

 

 

$

27,198

 

 

$

(17,606

)

Income tax expense

 

 

 

 

 

 

 

 

76

 

 

 

 

Interest expense - net

 

 

2,699

 

 

 

16,839

 

 

 

6,641

 

 

 

33,158

 

Depreciation and amortization

 

 

1,726

 

 

 

500

 

 

 

3,111

 

 

 

795

 

Sales tax liability(1)

 

 

2,010

 

 

 

10,726

 

 

 

2,932

 

 

 

12,987

 

Transaction costs(2)

 

 

2,345

 

 

 

3,863

 

 

 

3,747

 

 

 

7,409

 

Equity-based compensation(3)

 

 

5,312

 

 

 

1,184

 

 

 

8,909

 

 

 

2,274

 

Loss on extinguishment of debt(4)

 

 

 

 

 

 

 

 

4,285

 

 

 

 

Litigation, settlements and related costs(5)

 

 

1,009

 

 

 

438

 

 

 

995

 

 

 

1,079

 

Severance related to COVID-19(6)

 

 

 

 

 

 

 

 

 

 

 

286

 

Change in fair value of warrants(7)

 

 

(8,832

)

 

 

 

 

 

(6,553

)

 

 

 

Adjusted EBITDA

 

$

30,329

 

 

$

36,195

 

 

$

51,341

 

 

$

40,382

 


(1)

We have historically incurred sales tax expense in jurisdictions where we expected to remit sales tax payments but were not yet collecting from customers. During the second half of 2021, we began collecting sales tax from customers in all required states. The sales tax liability presented herein represents the exposure for sales tax prior to the date we began collecting sales tax from customers reduced by abatements received, inclusive of any penalties and interest assessed by the jurisdictions. Discussions with jurisdictions regarding our liability for uncollected sales taxes continued during the period ended June 30, 2022.

(2)

Transaction costs consist of legal; accounting; tax and other professional fees; personnel-related costs, which consist of retention bonuses; and integration costs. Transaction costs recognized in 2022 were related to the merger transaction with Horizon Acquisition Corporation (the "Merger Transaction"), the acquisition of Betcha Sports, Inc. ("Betcha"), refinancing of the remaining June 2017 First Lien Loan with a new February 2022 First Lien Loan and our offering to the holders of our outstanding public warrants to receive shares of Class A Common Stock in exchange for each outstanding public warrant tendered by the holder. Transaction costs recognized in 2021 were related to the Merger Transaction, to the extent they were not eligible for capitalization.

(3)

We incur equity-based compensation expenses for profits interests issued prior to the Merger Transaction and equity granted according to the 2021 Incentive Award Plan ("2021 Plan"), which we do not consider to be indicative of our core operating performance. The 2021 Plan was approved and adopted in order to facilitate the grant of equity incentive awards to our employees and directors. The 2021 Plan became effective on October 18, 2021.

(4)

Losses incurred resulted from the extinguishment of the June 2017 First Lien Loan in February 2022.

(5)

These amounts relate to external legal costs, settlement costs and insurance recoveries, which were unrelated to our core business operations.

(6)

These charges relate to severance costs resulting from significant reductions in employee headcount due to the effects of the COVID-19 pandemic.

(7)

This relates to the revaluation of Hoya Intermediate Warrants following the Merger Transaction.