Q1 2020 Earnings Call
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Thank you for bearing with US let me introduce run apart from message about the start of our earnings call.
Thanks, Jeff the and thanks for joining event right first quarter 2020 earnings conference call.
Unfortunately, we've just been notified that our 8-K filing has been delayed due to a Cody kogan related technical difficulty and as a result, the call is going to be delayed until June 30.
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Please use the styling to access the call at this time or continue to hold the line.
We'll have the calls begin shortly thank you.
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Ladies and gentlemen, such as the operator, Paul just for the delayed owing to technical difficulties to coal begin at 230 PM Pacific time, that's were approximately six minutes until the converts we can see what gets you to hear music. Thank you for your patience.
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Ladies and gentlemen, thank you for standing by welcome to the if I'm right first quarter 2020 earnings conference call.
At this time, all participants are I don't listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
If you're require any further assistance. Please press star zero I'd now like to hand, the conference over to your Speaker today Ronald Clark head of Investor Relations. Thank you can you may begin.
Good afternoon, and welcome to event Reits first quarter 2020 earnings conference call.
Leading providing our net revenue non-GAAP adjusted EBITDA outlook, the first quarter in full year 2020.
We caution that such statements reflect our best judgment as of today based on factors that are currently unknown to us and that actual future events or results could differ materially due to several factors many of which were beyond our control.
For a more detailed discussion of the risks and uncertainties affecting our future results. We refer you to the section titled forward looking statements in our shareholder letter and our filings with the FCC.
We undertake no obligation to update any forward looking statements made during the call to reflect events or circumstances after today, which reflect new information or the occurrence of unanticipated events, except as required by law.
During this call we will present, adjusted EBITDA and free cash flow most of which are non-GAAP financial measures.
These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and have limitations as analytical tools.
You should not consider them in isolation north substitutes for analysis of our results of operations as reported under GAAP.
Reconciliations to the most directly comparable GAAP financial measures are available in our shareholder letter.
We encourage you to read our shareholder letter as it contains important information about GAAP and non-GAAP results.
And with that I'll now turn the call over to Julie ours are co founder and Chief Executive Officer.
Thank you Ron.
Welcome everyone and thank you for joining us.
Let me first start with expressing our gratitude to the frontline workers and medical community for their heroic effort in keeping us all say.
My heart goes out to all of those directly affected by quite a bit 19.
It's in this crisis that were reaffirmed our mission to bring the world together through live experiences.
As we have witnessed event creators all over the world adopt their business to meet the needs of human connection even when we are forced to be apart.
The World is changed a lot since we last though.
The started the year our business is performing ahead of expectation and it would have been hard for US transaction. How the next 60 days would change the world so dramatically.
Cobiz 19 has affected everyone and had put many businesses on Pos.
This is especially true realize event, where social discussing mandates have curtailed almost all in person gathering for the time be.
I want to first emphasize that this is temporary and one speaking gather in real life safely the demand for any personal experiences will be strong.
It is a fundamental need for humans together.
I've been doing for thousands of years, and we will be there kept power that connection.
Let me take you want a journey through the last two months.
Within days of observing the demand side of the business start to decline our team mobilize quickly to address the most urgent needs of our creators.
We launched a cobot 19, and small business resource have for our global community, which helped to streamline information and for U.S. customers decode the TPP long process.
We integrated with third party providers, so that our creators could offer gift cards for future events as refund alternative locked in kind do nation by Sam and launch crowd funding campaign to support their staff members.
Creators like DAYBREAK or an early morning, Dan community of thousand started to immediately pivot their businesses to digital.
We followed our customers lead with enhancements to our existing online events functionality and discover ability, which resulted in over 8 million Hayden free ticket transactions in April alone.
We've seen gracious consumer appetite for connecting together and creators have message desire with compelling content, whether it's your virtual jam session by the music venue piano fight in San Francisco, a pop up disaster dining takeout experience would you be kitchen in New York.
Or virtual product boot camp my brain meat in Australia.
We also moved decisively to ensure the long term financial foundation of our business.
In early March we froze hiring direct marketing and other opex spending.
On April eight we implemented an expense reduction program expected to they'll they'll should deliver at least 100 million an annualized savings.
And today, we announced a financing with Francisco partners that secures, our company's access for up to $225 million and flexible financing.
With deep expertise in high volume trends actual platform I feel they're an excellent partner for us.
This financing will give us the flexibility to manage through the effects of cobot 19, well also reinvesting in our self service platform.
With decisive action to assist our creators serve attendees and strengthen our pfenex financial wherewithal, we plan to execute on a near and long term strategy to emerge from this crisis.
In a position of even greater leadership.
Looking ahead, we believe the cobot 19 pricing will accelerate change in the live events industry.
We believe smaller local events that are core to our business will resume earlier and we think they will happen more frequently to satisfy pent up demand.
When it's safe to gather again, we think that consumers will favor these local events over a larger more expensive episodic event.
Especially during a period of depressed consumer discretionary spend.
We believe creators will continue to rely on us as a cost effective and easy to use platform to help them rebuild their businesses.
In moments like this company, that's right are those who aren't afraid to swiftly and decisively sharp sharpen and simplify their strategic focus.
We have recently heard our internal efforts around three important area.
Delivering an intuitive self service experience that offers creative control and agility our creators.
Adding value for our most active frequent creators and driving demand to their businesses.
To better serve creators of all types, we're focusing on or intuitive yet powerful self service model. The ease of use an attractive pricing of self service features are perfect match for creator seeking efficient solutions to manage their business.
With that self service experience readers are empowered through direct access to their event and ticket buyer data marketing performance and reporting tools to make informed decision.
They are better able to react quickly to the changing landscape of consumer behavior as our platform can flex to meet their needs.
And they are empowered to grow their business as we help them unlock how to reach a broader audience of attending.
Focusing on a self service driven model also has a significant economic benefit, which lanny will discuss in greater detail in a moment.
Last year nearly two thirds of all sell side on ticket fees came from a core a highly active creators to hosted five times more paid event and the average sell fine on creator.
They represent only one third of cell sign on T. creators today and drive over 60% of hate ticket.
We see a significant opportunity to grow the ranks at these creator, particularly by retaining more of them on our platform, which in turn generates attractive returns for again right.
Our product efforts will be to strengthen the experience of publishing frequent events on the platform managing relationships with attendees more effectively and leveraging data and insights to help inform better business decision.
Building, an audience and engaging ticket buyers is critical to mark reader success.
Last year and that might help creators transact over 300 million free and paid ticket to 4.7 million event with over 4.5 billion in cumulative gross ticket sale.
This scale and expertise allows us to really lean and helping creators extend their reach I think age attendees online event as well as grow their businesses when in person events are allowed to resume.
Recently, we launched new features to help drive demand, including improved email campaign tools and better online marketing through third party partnership.
We've also strengthen the consumer search and discovery experience with features like the ability for anyone to follow their favorite creators and receive updates when new events are published.
We believe that demand generation tools, such as these will help our creators grow their businesses and in turn keep them coming back to event right.
The steps, we're taking today will enable us to emerge from this crisis stronger than ever reinforced financial Foundation, we put in place supports the focus that execution of our simplified strategic goals, which we believe will allow us to build upon our leadership in the live events industry for years to come.
More over the ingenuity resilience and adaptability of our creators is a clear signal that the experience economy will endure and if that's right. We'll continue to rise to the challenge and match their passion with agility and commitment.
Before I turn it over to Lanny I want to thank each and every one of our employees across the globe for their dedication and perseverance over the last several months.
I would also like to thank our many talented and loyalty members, who recently departed in April any company, it's lucky to hire them.
Our team has risen to the challenges presented by Cobot 19, with decisive action and deep empathy for our creators and for each other.
I'm truly inspired by the strength and compassion they have shown and sincerely appreciate the sacrifices DAF need to ensure a bright future for our company.
And with that I'll turn it over to Atlantic.
Thanks, Julie I'll discuss the potential implications of our strategy and then turn to the first quarter results and the steps we've taken to solidify our position.
I was junior just described we're focused on or self service platform, which powers event right overall economics.
Nope signed on critters accounted for slightly less than half of about price paid ticket volume in 2019.
Due to assess those superior revenue per ticket and modest operating expenses generated more than 50% of net revenue nearly 60% gross profit.
No sign on gross margins were 69% in 2019.
Compared to a bed bugs blended overall gross margin of 60%.
Gross profit per ticket.
60% higher insult signed on then in the remainder of our doesn't.
Looking forward, we expect our strategy to drive a larger proportion of total revenue from self service creators.
And this improvement will enhance the overall margin structure of the business in the future.
Self service plays a significant role in our customer acquisition engine.
Last year, 98% of the new creators on event bright garnes themselves on it'd be good ticketing advance on their own.
Most of this growth is purely organic.
In total we spent approximately 4 million on so so acquisition in 2019.
Figure equal to 2% Oh, so so revenue last year.
Over the last two years the lifetime revenue up self fund on creators has exceeded 30 times good acquisition cost.
Beyond acquisition, we're applying a self service approach throughout our business.
Including all this stuff from greater Onboarding to product education to event marketing.
The most valuable events like creators or entrepreneurial self sufficient frequency band creators.
And we are tailoring, our product marketing and support to provide the intuitive services. These creators expect.
This means we will de emphasized services.
Where costs are higher operating leverage is lower and our competitive advantages or not it's clear we will focus instead on automation and improving popcorn functionality and deficiency.
As Joe said earlier record creators generated the majority of cell phone on revenue in 2019, and we're strengthening our platform to serve frequent graders needs.
To put the opportunity here in context, if each frequent creator that published a paid event in 2019.
Most didnt want additional event on it but right now.
The ticket fees from those events would generate nearly 20 million in incremental annual revenue.
A substantial portion of which would drop to the bottom line.
Turning now to the first quarter Kobin pandemic impacted our results in two primary ways.
First limitations ones gatherings sharply curtailed ticket sales from early March onward.
Second.
You bet cancellations and ticket refunds led to higher Contra revenue increases to reserves, which further reduced reported noted net revenue and adjusted EBITDA in the first quarter.
He ticket volume was down 18% year to year to 22 million in the first quarter of 2020.
Net revenue prior to the Contra revenue impact of refund was down 16% in the quarter.
However, he ticket volume was down roughly 90% year to year in March.
We've seen improvement off the March flows with paid ticket volume pacing, 85% lower year to year in early may.
As stated in our shareholder letter, we reported first quarter 2020 revenue of $49 billion.
Adjusted EBITDA loss of $120 million.
Reported net revenue of 49 million for the first quarter was reduced by 19 million in Contra revenue.
Actually related to a rise in ticket refund activity.
Likewise, it's important to note that excluding 140 million in Contra revenue and reserves related to the pandemic adjusted EBITDA would've been a loss of 6 million in the first quarter.
In our shareholder letter we've provided a detailed table the breaks out the first quarter cobrand related costs and reserves.
The line by line basis.
The most significant kobin related item in the first quarter, what's the 77 million dollar increase in reserves in anticipation of potential future ticket refunds or chargebacks associated with our advance payout program.
Since early March we've experienced less than $3 million Incharge dark and on funded ticket refunds.
However, due to the nature of the Cobra 19 situation and the limited amounts of currently available data. There's a high degree of uncertainty in this area and we have increased our reserves accordingly.
The background.
But the best payout or a P.O. program allows creators in good standing to apply to receive a portion of ticket proceeds in advance of there have been completion dates.
Graders I remembered critters have typically utilize this program to fund event related expenses, such as permits and artist fees.
If an event does not occur and a greater with a P.O. funds fails to provide ticket holders a reimbursement.
That's right may elect to reimbursed attendees or potentially be subject to a credit card charge back for the face value of the ticket plus charged back these.
Historically annual losses associated with the P.O. program have been managed cure rate of approximately 3% of the total balance on average.
However, given the unprecedented shot unprecedented shocked to global life events, we are taking precautions in anticipation of higher refunds in charge backs.
To manage it deal exposure in light of the Pandemics effect on live events, we suspended the program on March 11 2020.
We instituted new policies and risk models to assess and manage our exposure.
We are also helping creators redeposit funds received through the ATM program into the event bright accounts in order to refund credit or compensate ticket purchasers.
Since mid March creators and the funds that we hold on their behalf of covered more than 99%.
Hey, PEO refunds requested.
As of early Mary the outstanding balance of advanced payouts stood at approximately 293 million.
And many of these graders or actively working to postpone reschedule or refund piece of that.
The financing, we announced today strengthens our liquidity position in the event that a bureau losses occur at a higher rate than we've experienced to date.
Turning to our balance sheet, we ended the first quarter with $373 million in cash cash equivalents down from 421 million at the end of 220 Nike.
Two real to fully evaluate event breaks liquidity separate from creator ticket sale proceeds in payables.
We begin with cash and cash equivalents of 373 million.
Oh God funds receivable from ticket sales as well as creator advances totaling 15 million.
And then we reduce that balance by funds payable of 3 million.
As well as creator payables of 233 million.
On that basis are available liquidity at March 31 was 151 million compared to 190 million at December 31 2019.
Finally, let me discuss additional steps we've taken to put this position the company to endure the crisis and to thrive as live events return.
In early April less than a month after the pandemic began to impact live events.
We announced the restructuring that is on track to deliver at least 100 million.
Annualized cost savings.
We will start to see the benefit of these auctions in the second quarter of 2020.
Specifically, we expect the cash costs, excluding processing fees.
Which totaled $57 million in the first quarter.
Well decline to less than 40 million in the second quarter.
And then to between 33 35 million by the fourth quarter of this year.
The restructuring will reduce the company's adjusted EBITDA breakeven revenue level by 45% versus the plan in place at the start of 2020.
We will also see variable expenses, including processing fees.
Come down with revenue in the near term.
No. This is not included in the 100 million dollar plus savings referenced here.
Finally, the credit facility with Francisco partners provides about right with access to term loans of up to $225 million.
The funny thing consists of an initial $125 million <unk>.
To be funded during May 2020.
As long as the ability to draw a second term loan of an additional $100 million during the period beginning December twentytwenty until September 2021 subject to certain conditions.
We will also issue 2.6 million shares of class a common stock for Francisco partners.
This important additional funding and partnership helps strengthen our liquidity and provides enhanced flexibility to manage through a range of recovery scenarios and the return to live events.
In summary, we made our cost structure significantly more efficient and we've capitalized the company with attractive flexibility.
We believe these decisive actions completed in the last 60 days along with our refocused strategy.
Will help prevent bright navigate the current crisis leads the life events industry into a recovery and emerge with a stronger more profitable business model for the long term.
Without without well now open the line for your questions.
Thank you as a reminder to ask a question you will need to press Star then the number one on your telephone to withdraw your question.
Press the pound Keith.
Please stand by what we compiled accuen roster.
Your first question comes from a line of frying some <unk> with William Blair Flare. Please go ahead. Your line is open.
Hi, Thanks for taking my question.
Hmm Manny I think in your remarks, he said he called taking bottom out in March and then I think it's big down 85% here in May.
One does that include the virtual events or was this just the life events and then two long I guess more of a longer term question here with some states starting to open backdrop past week or so just wondering if you're starting to see you I could think creation start to turn back on and then what kind of lead time do we typically need to see here between when you know that can go up.
And they go on selling land what actually happens thanks.
Sure. Thanks Ryan.
Or the numbers that we talked about do include online to that.
And Ah we have recently seen online events pacing.
Slightly more than 50% of total paid ticket volume on a daily and weekly basis.
One events are up.
20 fold from a year ago in our mix and we've seen many of our longstanding isn't real life creators host life harvest online events in this environment sort of attesting to the resilience and entrepreneurship of the core that bright creator base.
Your second question was about states and opening up and at this point as we look across our business in United States or it's really hard to discern much of a.
Or sort of opening of the market of Oh the.
Restart of the life events industry. It would typically a there would be a little bit of lead time by which we usually see critters post the Ben.
A few weeks two a month plus an advanced to the event and nobody would watch ticket sales advance so we've seen a.
General improvement from the from the lows as I said, it's been largely are very importantly powered by the strength church traders moving to online events, but at this time, we haven't seen any big discernible trend.
Got it and then just help us understand each you're referring to try expects a little bit more with c.
76 million dollar number.
And then to saying the program back in March.
Yeah, I was just to understand how you get a better view on this this is kind of get cleared up and that's month or two months or or somebody's expense extending deeper into the year aurizon into 2021.
Yeah. That's a good question, we do believe that the summertime the festival season, which is.
One of their is where the A.P.O.
That's payouts tend to be bigger or will you know that that'll come to pass in the next probably two months and it'll give us a very good read on the overall resolution of the of the IPO portfolio.
Goes and not a husband considered and we continued carefully all the different events by date by size by category as we assess the reserve that was appropriate to take at this time and all that's been been considered in our estimates that is reflected behind that 77 million dollar a reserve increase taking the.
Corridor.
And then just one last one from me he just talking about decision to partner with print Francisco partners and the and then I guess just any more details around.
Rate structure term or was it that would be great and then what what kind of conditions need to be not to pull down that second piece alone and 21.
And ours, it's hard to 2.6 million shares are they issue today for some of that tied to point here and then second piece a woman [laughter] setting for the year or 2021 things.
Yeah sure I'll chime in here and lot of my any follow on.
Choosing a partner for US was a very important decision because we've had the benefit of having some really Paralympic long term in bastards in our story and so you know this next chapter for US is different I don't want as we had continued to lean into our strength and ROE the platform and so.
Anything that was indicative of both you know and alignment and philosophy around the strength of the secular business and the business model itself as well as their ability to provide a structure that have flexibility given a there you know remains to be some varying recovery scenario is that.
We've modeled as well as they've looked at and consider themselves. So that's a possibility with he and the structure and all that maybe talk a little bit more about that structure.
Sure. The startup alone is two parts as we said an initial <unk> hundred $25 million, which will be funded during the month to month of may that as a five year alone and there are conditions under which we can repay that loan earlier yeah.
If we are positioned to do that the loan has a.
Interest rate in the low double digits, a it has a combination of cash pay and a pick option.
So that we're able to manage cash during the current period or which is very important the or the second draw of another $100 million.
Available to the company, assuming certain conditions that relate to the expense structure of the business and the operating results for the business during that period of time that we would be potentially accessing the second draw I would add one thing to what Julie said is that in choosing.
Francisco partners, we were really fortunate to have opportunity to meet with a broad number of financing options and as we worked at all the way through we've done a partner, who we felt really understood our business and offered the exactly the kind of flexibility that the fits the situation that that were currently trying to finance.
You had a question about the shares issued to Francisco partner and partners and yes, those will be issued in the coming days.
Hi, Thanks for taking my question.
Your next question comes from the line of uses Squali with Suntrust. Please go ahead. Your line is open.
Great. Thank you very much Lenny just a quick follow up to the a the terms of that.
Oh funding the a 100 million dollar traunch is that subject to the same interest rate.
Same term that's different.
Then who you spoke to.
<unk> prepared remarks around.
Ah about the impact of Covidien, how it's likely to accelerate change.
Particularly for smaller events I think he said something to the fact that smaller banks would bounce back earlier grew faster maybe can you just flesh that out a little bit for Illinois. Thank you.
Oh it used to thanks the.
Yes, the terms on the second $100 million are the same as on the first.
And you step on my prepared remarks around our thoughts and you know viewing that the changes in the industry and potentially what may happen I would.
Point to a few I aspects there one would be that you know that price business models advantageous because we're flexible affordable and tech for platform, which is quite unique in this industry and so we can.
Yes, it can track to meet the needs of our creators.
Our creators our entrepreneurial they're finding opportunities left and right you really lean into this moment through online events sent through hybrid experiences, we seen folks like craft breweries send out there beer I choose their their tasters an in house the online tasting experience said it really is.
Interesting hybrid model and we're seeing things like fancy old concerts, where sands as a bands are getting together and playing their favorite songs and videos together and even you know that the ban Bts and keep our eye attracted tens of thousands of fans around the world for 48 hour.
I've been listening party. So I think that's what I'm trying to I outlined here is just the fact that.
Actually want to gather it's a neat need and creators want to create those experiences and they're able to do so quickly and efficiently on event right.
When we think about the future it's important to note, but we're not in the business are predicting but we are in the business have preparing and we're looking at how we can better support our frequent creators due to the fact that we're seeing need much more frequent experience. It online. We think will also be ninex offline in smaller.
Our experience is where are you have a trusted and safe environment, you all have pent up demand for human connection.
We you know he what's happening on our platform will be sure day share. It with you all but I'd leave you with the idea that these creators are professionals, they're small businesses and again, our entrepreneurial so there really leading the way.
Okay. Thank you.
Your next question comes from a line of Mark Mahaney with RBC. Please go ahead. Your line is open.
Thanks, Good try Oh two questions. One is and you may have said this but the the curve Oh, the recovery and that the ticket volume I think you said it was down 60% in the middle for the month of March and Where's that now tracking to did you do you provided an update on that or can you is it down like 40% to 50%.
I don't like what's the curve look like and secondly, when you stress tested the the model and trying to figure out how much you [noise] needed to race in this.
I don't know if you came up with the scenario. We know if we have unfortunate events like a recurrence of the virus or whatever we go back and we keep down 60% for the full year like where does that leave your cash position and I know you you you correctly, a you know offer that kind of the pure cash that's rolling stays with the company I think it's like 180 million or something like that is in your press.
Released but what does that number look like if you want Unfortunately have to deal with this situation where lives event ticket tickets are down 60% between now and the ended the year. Thank you.
Sure Mark I'll take both those.
They are on the ticket volume in March or volume was down about 90% year to year for the first quarter ticket volume was down about 18% or we were running nicely up double digits in January and February or head of our plan and really powered by the self signed on channel, but March was down 90%.
Year to year.
In early May we're pacing down about 85% from where we were a year ago. So we have seen a bit of an improvement off of the bottom ER and as we said earlier a portion of its been propelled by the strength of online events alongside the in real life events.
Like the financing the company our primary objective was to make sure that event right was capitalized to.
We'd be.
Since industry through an out of this very stressful period for for the industry research, we looked at a range of scenarios. Both in terms of the duration of the period in which might gatherings are really heavily restricted the steepness of potential recoveries or.
Or not steepness scenarios in which there was a recovery in the fall back and considered all those things in raising the amount of capital there that we raised no. As you know those are hard to project and hard to be very hard to have certainty and conviction around all those things and one of the things that we thought.
To do a and achieve was developed a financing structure that is flexible that gives us the capital that we believe we need today as well as access to additional capital down the road I just had one other point, which is we made very significant and very decisive changes in the company's expense.
Structure pulling down operating cost by over $100 million in the space the.
Really literally weeks and we think that as well sets us up very strongly to endure the whatever scenario may come.
And plenty good like do one follow up. Please I know you said this a 90% down volume and you refer to 60% down volume in terms of pay tickets <unk>.
What would you just explain why that the difference between the two thinking and work.
I'd like for the pay ticket volume.
I apologize.
I don't know, where I said, 60% or in March or I don't know that that was in our prepared remarks and Ah that's not accurate.
Okay I'll follow what do you think.
Maybe the misread on my part thank you.
Sorry.
[noise] again, if you would like to ask a question Press Star then the number one on your telephone. Your next question comes from a line of Heath Terry with Goldman Sachs. Please go ahead. Your line is open.
Your next question comes from the line of Heath, Terry with Goldman Sachs. Please go ahead. Your line is open.
Thanks, Sorry, I was on mute Julia Lenny I was wondering if there's anything that you're seeing in your international markets you know for sure.
Obviously, moving at a different pace than the U.S. some of which maybe.
Further along the curve in terms of in terms of recovery that tells you anything about sort of what you know what we might expect or what we should expect.
About the about the pace of pace of things if you are.
There are any insights there that you can you know that you can share and then you know to the extent that that you're doing anything from a proactive perspective around online events going out to some of your biggest event creators to try and drive them to to fall in light of answer.
Specifically to your online event tools.
We'd be interested in that and then finally <unk> to the extent that we're going to be able to kind of use this time to prepare for what the world's gonna look like on the other side and then creators doing life events that with yeah.
More the need for social distancing the need for testing the need for you know maybe prequalification. The passport model that's being used in Italy is is there any sort of technology investments are models that you're looking at in this this sort of interim period.
Did that potentially which could put event right and kind of a leadership position to work with then used to work with partners coming out the other side of this that you'd want to talk about now.
You know he told pick the first questions about international markets in terms of Julia other talk about.
Helping.
Hi, Chris has got on mine and some of the changes in technology, you know as we look around the world, but the a couple markets did go into the coated pandemic in crisis environment earlier than others, and we have seen them recover a bit already so, particularly if we were focused on Singapore.
Poor and Hong Kong, which are relatively small markets in the global footprint of event, but it's notable that in those markets. We are down more like 45% year to year, rather than 85%, where we are still across the majority of the business. So we have seen things.
Come back in those markets come back pretty quickly to that kind of level.
And on the online and then thanks Heath you know online events throughout 2010% in April and as I mentioned on the call. We transacted 8 million Hayden free tickets through online event. We're also seeing our creators returning creators on the platform that 10000 to San Fran.
Thousand 19 that we call frequent creators Hum she was on Friday and host online events. This year and actually in April alone. So I think that as as these creators and entrepreneurs pivoted their businesses quickly and this was really what we tried to see in March and hit that.
This new level on April continuing on into May.
We're looking for ways that we can make it easier for them to host many frequent event. So in that case of DAYBREAK or the advent creator I talked about their hosting more frequent events now weekly format versus a monthly format. We're seeing events for creator hi increased with its online event.
Population.
So we're looking for ways that we can apply the principles as efficiency Q, how they're interacting with the platform whether that's through an improved wait you.
Published series of events or could be able to integrate with third party partners like them to have more elegant elegant front door to their online hate event and we're also looking at ways in which we could extend the reach of these creator. So immediately upon seeing you know that activity.
On the platform again, we look for ways to you know observe what arc readers are doing then just remove the friction make it easier faster better and more efficient for them to do what they do we started to help these events he discovered by consumers by incorporating then and our distribution partner.
Your shifts as well as our destination on both lab and yeah. We've allowed for these I consumers to follow creators and get notifications when they're hosting a new online event.
And we started she really help our our online event creators understand how they can optimize their marketing through third party partnerships on the platform. So in some total most of what we're doing is what we would have been doing any ways to benefit and to drive.
Frequent creators growth on the platform. This crisis has been a great accelerator and it really honing in and focusing on that strategy and that benefits creators, whether they're hosting online event or in person event.
And then finally on that on the change it took a live events industry certainly safety is Paramount. It's it's you know the top of mind.
Small businesses that use if I'm right like like music venue. So we have partnered with the National Independent venue Association event safety Alliance on and other local government organization to start to pull together the best practices and medically as.
I see I, you know information that needs to be disseminated I might add that create or I think that as a platform that enables event creators to gather people unrealized what we need to do it's provide accurate real time knowledge to arc reader through our content to be able to help them.
The right decision for their then and when I think about it the reemergence of life event, it's going to be less about government regulations for these smaller events and more about consumer behavior and desire and the feeling I trust that they can be safe and so we want.
To support creators to be able to provide that safety and provide that reassurance after event whatever those needs and best practices, maybe in any given state and countries. Since we are global platform.
Great. Thank you both.
Thanks Heath.
Your next question comes from the line of Doug Anmuth with JP Morgan. Please go ahead. Your line is open.
Thanks for taking the questions Ive to first I know Julia you talked about a smaller local events coming back quicker I'm, just hoping to provide a little bit more color on how you're thinking about some of your big categories across festivals music registration and endurance.
And then Lanny just wanted to clarify on the financing the double digit interest rate that you mentioned that is indeed separate from from the stock that you're issuing just wanted to clarify that thanks.
Thanks, Sam so when we imagine what can occur on the platform and again this will be really up to our creators as they as they reinvent their businesses and rebuild the life experience economy, we imagine that consumers will desire smaller and more frequent events. So that they can cannot.
Act with other people around their passions or their interest, but also in a safe environment. The other thing that we haven't talked about that consumers are going to be price sensitive.
In terms of ticket price.
That's right average ticket value higher took how big was 40 dollarss and so we imagine it can see a world where at lower price tickets to events that are happening more frequently are going to be in vain with what I in the same they know what consumers are desiring in the next call all at 18 months.
Sure. So we think that these.
Our frequent events will actually math to some of the category growth that we've seen on the platform in online event, that's it particularly in health and wellness classes and business in professional seminars workshops and talk we typically see that these warm ads are on a friendly to flat to a smaller I.
I attend the base and we also see the rise of these types of other than when the economies and threats such it in 2008 2009 as people want to gather to you know take care of themselves to improve their skills to network and so we're preparing for that future and.
In the case, though as music festivals in endorsement says.
And I think there'll be some really interesting innovations that come from this market and you know I think our job again its tend not.
Did not getting a wave creators as they flux their entrepreneurial muscles and they create new ways for people to connect in real life.
I don't think I'll say it that you know secular strength of our industry, it's really and connected to that human desire to gather and as I'm sure. You've seen there is pent up demand. During this time folks are really yearning to get out and connect with one another and if I probably won't be there to power are those in.
Like connections and those real life event, when it's safe to gather and will support our readers and making the right decision on how they rebuild their business it.
And Doug on the on the debt and the equity.
Yes, the issuance of stock is separate from the interest the borrowings that we've we've taken on and let me go back to quickly or Mark Mahaney I apologize. Yes. You are right you did hear US right in March ticket volume was down 60% year to year, we got as low.
As a 90% decline year over year and right now in the early part of May we're looking at it 85% decline jourdier.
I apologize.
And your next question comes from the line of Youssef Squali with Suntrust. Please go ahead. Your line is open.
Hi, Thank you guys for taking my follow up quickly Lenny it seems like well actually from a your prepared remarks, and Julien seems like there is a a doubling of emphasis on the silk served.
Is that basically.
Hi that the sales channel is being Deemphasized are most of the cost cuts that have happened 200 plus million impact in that business and how should we be thinking about you guys.
From a competitive standpoint, as we go you know post Cove. It as we come back is the focus still gonna be.
On self serve or would you kind of it back to certain degree we didn't feel channel, which I guess last year was almost have to business. Thank you.
Thanks, you say no I would start by saying that self service has been and we'll continue to be our eat that and that way. We will <unk> are now really strategically focused on building the best self service experience in our product, especially for frequent creators who are small businesses.
Isn't professionals that need our intuitive and reliable platform and so for US that you know the narrowing of that focus and the simplification of our strategy allowed us to make some really difficult decisions as we restructured the company, we said goodbye to 45%.
Of our team and that needed to be done with a lot of care and a lot of purpose.
And that was really aligned with this strategy of driving forward on it you know continuing to invest or self service platform through product in development and de emphasizing our high touch.
I can't managed services and some of our sales segment.
Now, we'll continue to grow our creator base with sales motion and we'll continue to offer customer service to our creators who need it what we'll do last did but so onsite services I attended call Center support and other high touch account managers.
Services that we've done in the past effectively when we think about what this future is going to bring that we think that creators are going to need a much more efficient tech enabled platform, that's low cost and that provide some flexibility and control over their event data and we know that if that's right is that solution.
So again, we were moving in this direction already and we're accelerating that announcement through this crisis.
Okay, that's clear extremely.
Thanks Heath.
There are no further questions at this time I turn the call back over to Trulia Hearts for closing remarks.
Thank you so much for joining the call today I'll close by reiterating our commitment to shareholders employees and our community of creators and attendees.
We are prudently reciting the business can match that demand environment and improved flexibility.
You're taking advantage at this moment to lean in Q and accelerate the best features of our business.
This will allow us to grow faster they'll just stronger product and deliver demand for our creators events as they worked tirelessly to rebuild the live experience economy.
Lastly, expanding our capital options proactively was valued partners reinforce our balance sheet and this is ever spot measure that we've taken.
It is a validation of our business prospects long term and we take stewardship of shareholder capital and all stakeholders very seriously.
Well, we cannot predict the future, it's our job to prepare for anything.
I personally never been so proud at the Breitling said, how everyone has responded they say nothing worthwhile, it's easy and I'm more confident than ever about our market position ecosystem and business economic.
Together with our creators we will enable an exciting new future of live experiences. Thank you.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating you may now disconnect.
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