Q4 2021 Vivid Seats Inc Earnings Call

March 10, 2022

Ladies and gentlemen, please standby your conference call will begin momentarily once again, ladies and gentlemen, please stay on the line.

Ladies and gentlemen, please stand by. Your conference call will begin momentarily. Once again, ladies and gentlemen, please stay on the line.

[music].

?Outro Music?

Speaker Change: Thank you.

Speaker Change: © transcript Emily Beynon

Okay.

Speaker Change: Good morning and welcome to the VividSeat's fourth quarter and full year 2021 earnings conference call. Following management's prepared remarks, we will open the call for today. I would now like to turn the call over to Kate.

Good morning, and welcome to the vivid seats fourth quarter and full year 2021 earnings conference call. Following management's prepared remarks, we will open the call for today I would now like to turn the call over to Kate couple this.

May begin.

Kate: Good morning, and welcome to VividSeats' fourth quarter and full year 2021 earnings conference call. I'm Kate Koppels, head of investor relations at VividSeats.

Good morning, and welcome to <unk> fourth quarter and full year 2021 earnings conference call.

<unk> head of Investor Relations at Fitbit joining.

Speaker Change: Joining me today to discuss VividSeat's results are Stan Chia, Chief Executive Officer, and Larry Fay, Chief Financial Officer. By now, everyone should have access to the company's fourth quarter and full year earnings press release filed earlier this morning.

Joining me today to discuss <unk> results are Stan Chia, Chief Executive Officer, and Larry <unk>, Chief Financial Officer by now everyone should have access to the company's fourth quarter and full year earnings press release filed earlier. This morning, we have also provided supplemental earnings slides.

Speaker Change: We have also provided supplemental earnings slides. The press release and earnings slides are available on the Investor Relations page of VividSeats website at investors.vividseats.com.

Yes release and earnings slides are available on the Investor Relations page of <unk> website at investors <unk> Dot com during.

Speaker Change: During the course of this call, management may make forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to the risks and uncertainties as described in the company's earnings press release and other filings with the SEC.

During the course of this call management may make forward looking statements within the meaning of federal Securities laws. These forward looking statements are subject to the risks and uncertainties as described in the company's earnings press release and other filings with the SEC on today's call, we will refer to adjusted EBITDA a non-GAAP .

Speaker Change: On today's call, we will refer to Adjusted EBITDA, a non-GAAP financial measure that we believe provides useful information for our investors.

The measure that we believe provide useful information for our investors, we will find a historical reconciliation of adjusted EBITDA to the corresponding GAAP measure in the earnings press release and other filings with the SEC and now I'd like to turn the call over to Sam.

Speaker Change: You will find a historical reconciliation of adjusted EBITDA to the corresponding GAAP measure in the earnings press release and other filings with the SEC. And now I'd like to turn the call over to Stan.

Good morning, everyone and thank you for joining us today.

Stan Chia: It was both a record-setting milestone year and a comeback year for VividSeats with the rapid return of live events that began during the second quarter.

It was both a record setting milestone year and to come back year for <unk> with a rapid return of live events that began during the second quarter.

Stan Chia: Our performance continues to build on our positive momentum and reflects the clear desire of fans to return to their favorite events.

Our performance continues to build on our positive momentum and reflects the clear desire of fans to return to their favorite events.

Stan Chia: Early in 2022, we reached our 100 millionth ticket milestone.

Early in 2022, we reached our $100 million ticket milestone.

Stan Chia: It is an accomplishment that reflects our profitable growth at scale and is another example of the incredible momentum we are seeing as a brand and as a business.

It is an accomplishment that reflects our profitable growth at scale and is another example of the incredible momentum we are seeing as a brand and as a business. We believe our marketplace delivers a seamless and trusted experience for fans to safely by ticket. So they can attend more of their favorite events I am proud that we have.

Stan Chia: We believe our marketplace delivers a seamless and trusted experience for fans to safely buy tickets so they can attend more of their favorite events. I'm proud that we have played a part in creating over 100 million customer memories.

A part in creating over 100 million customer memories.

Speaker Change: Larry will take you through the fourth quarter results and 2021 full year numbers in more detail, but first I want to comment on some highlights.

Larry will take you through the fourth quarter results and 2021 full year numbers in more detail, but first I want to comment on some highlights.

Larry Fay: For full year 2021, despite limited volume in the first quarter, we delivered our highest annual marketplace GOV ever of $2.4 billion, exceeding 2019's marketplace GOV of $2.3 billion. We delivered $443 million of revenues and $110 million of adjusted EBITDA.

For full year 2021, despite limited volume in the first quarter, we delivered our highest annual marketplace <unk> ever of $2 4 billion exceeding 2019 marketplace <unk> of $2 3 billion, we delivered $443 million of revenues and 110.

Adjusted EBITDA following record setting third quarter performance. We are pleased to have delivered another record setting quarter for marketplaces, <unk> and revenue in the fourth quarter. Despite the impact of omicron.

Larry Fay: Following record-setting third quarter performance, we are pleased to have delivered another record-setting quarter for marketplace GOV and revenue in the fourth quarter, despite the impact of Omicron.

Larry Fay: Throughout 2021, we not only rebuilt the business to its prior scale, but also pursued and executed on a number of strategic objectives that will enhance our long-term opportunities.

Throughout 2021, we not only rebuilt the business to its prior scale, but also pursued and executed on a number of strategic objectives that will enhance our long term opportunities.

Larry Fay: First, with the return of live events happening more quickly than originally anticipated, we pulled forward our brand launch into the fourth quarter of 2021.

First with the return of live events happening more quickly than originally anticipated we pulled forward our brand launch into the fourth quarter of 2021.

Larry Fay: Since the launch of our rebrand, we have seen a meaningful increase in awareness in the geographies we targeted with our brand effort.

Since the launch of our rebrand we have seen a meaningful increase in awareness and the geographies, we targeted with our brand efforts.

Larry Fay: We view brand awareness as an important pillar with meaningful long-term benefits, and our guidance reflects incremental brand investments for 2022.

We view brand awareness is an important pillar with meaningful long term benefits and our guidance reflects incremental brand investments for 2022.

Larry Fay: In parallel with these brand investments, we will continue to be aggressive with additional performance marketing spend that will grow in line with marketplace GOV.

In parallel with these brand investments, we will continue to be aggressive with additional performance marketing spend that will grow in line with marketplace Gov's as.

Larry Fay: As we see competitive marketing and pricing pressures continue to build, we remain armed with a strong balance sheet that we are poised to utilize aggressively to compete. We believe VividSeats comes from a place of strength, given that we are already scaled and highly profitable, even on the first transaction.

As we see competitive marketing and pricing pressures continue to build we remain armed with a strong balance sheet that we are poised to utilized aggressively to compete we believe vivek <unk> comes from a place of strength given that we're already scaled and highly profitable even on the first transaction.

Larry Fay: We also saw strong adoption on the seller side with over 100 new sellers added to Skybox since mid 2021.

We also saw a strong adoption on the seller side with over 100, new sellers added the skybox since mid 2021.

Larry Fay: Skybox, our proprietary ERP that we offer to sellers free of charge, was already one of the most widely adopted in the industry, and we continually upgrade this platform to support evolving seller needs.

Skybox or proprietary ERP that we offer to sellers free of charge was already one of the most widely adopted in the industry and we continually upgrade this platform to support evolving seller needs.

Larry Fay: Next, in December , we completed the acquisition of Betcha Sports, a real-money daily fantasy sports app with social and gamification features that allows fans to utilize their skills and engage with their favorite live sports.

Next in December we completed the acquisition of batch of sports a real money daily Fantasy sports App with social and gamification features that allow fans to utilize their skills and engage with their favorite live sports.

Larry Fay: The acquisition of Betcha will allow Vivid Seats to extend our marketplace technology into the online gaming sector, accelerating our journey into naturally adjacent areas.

The acquisition of better will allow <unk> to extend our marketplace technology into the online gaming sector accelerating our journey into naturally adjacent areas.

Larry Fay: Betcha has an intuitive and simple-to-use interface that allows both casual and superfans multiple ways to play and win together. We believe this acquisition can significantly increase our TAM and, more importantly, create a monetizable engagement platform that allows a unique ability to bi-directionally drive efficient customer acquisition.

Better Hasnt intuitive and simple to use interface that allows both casual and super fans multiple ways to play and win together. We believe this acquisition can significantly increase our Tam and more importantly, create a monetize able engagement platform that allows our unique ability to bi directionally.

Drive efficient customer acquisition.

Larry Fay: User engagement within our product ecosystem remains central to our long-term strategy, and Betcha users are highly engaged, placing on average more than 10 entries per month.

User engagement within our product ecosystem remains central to our long term strategy and better users are highly engaged placing on average more than 10 entries per month.

Larry Fay: While Betcha is still a small business, we are excited to continue building and integrating our products and brand to leverage engagement across all our categories. We've been incredibly impressed with Betcha's team and look forward to leveraging our collective expertise and passion for live events.

While <unk> is still a small business. We are excited to continue building and integrating our products and brands to leverage engagement across all our categories. We've been incredibly impressed with <unk> team and look forward to leveraging our collective expertise and passion for live events.

Larry Fay: Additionally, we continue to forge partnerships that will help us deliver exceptional experiences to our customers. We renewed our multi-year deal with ESPN as their official ticketing partner, and as part of this partnership, deployed an extensive media campaign across ESPN platforms to introduce our new brand and drive awareness to the more than 150 million fans ESPN reaches each month.

Additionally, we continue to forge partnerships that will help us deliver exceptional experiences to our customers, we renewed our multi year deal with ESPN as their official ticketing partner and as part of this partnership deployed an extensive media campaign across ESPN platforms to introduce our new brand and <unk>.

<unk> awareness to the more than 150 million fan ESPN reaches each month.

Larry Fay: Expanding partnerships with category leaders like ESPN bolsters our efforts to solidify VividSeats as the marketplace of choice.

Expanding partnerships with category leaders like ESPN bolsters, our efforts to solidify vivid seats as the marketplace of choice.

Larry Fay: Finally, we have continued to invest in our customer service.

Finally, we have continued to invest in our customer service in the fourth quarter. We officially opened our new customer experience facility in <unk>, Texas vivid seats has a track record of providing excellent customer service and for the last three years has been recognized by Newsweek as one of America's Best Company.

Larry Fay: In the fourth quarter, we officially opened a new customer experience facility in Coppell, Texas.

Larry Fay: Vivid Seats has a track record of providing excellent customer service and for the last three years has been recognized by Newsweek as one of America's best companies for customer service.

As for customer service, we remain.

Larry Fay: we remain committed to continually raising the bar and increasing customer satisfaction.

Committed to continually raising the bar and increasing customer satisfaction.

Larry Fay: Our success this year is a testament to the strength and dedication of our team.

Our success. This year is a testament to the strength and dedication of our team.

Larry Fay: In January , we were proud to once again be recognized by BuiltIn as one of the best places to work in Chicago. I am also proud that we have continued to support and raise awareness of important causes.

In January we were proud to once again be recognized by built in as one of the best places to work in Chicago.

Also proud that we have continued to support and raise awareness of our important causes.

Larry Fay: To celebrate our 100 million ticket milestone, we donated $100,000 to Music Cares, the leading music charity in the United States, to help strengthen Music Cares relief efforts, supporting those in the music community and their families.

To celebrate our $100 million ticket milestone, we donated $100000 to music cares the leading music charity in the United States to help strengthen music cares relief efforts supporting those in the music community and their families. Additionally.

Larry Fay: Additionally, in light of the current humanitarian crisis, we are joining all those calling for peace in the Ukraine and lending our support during this horrific time.

Additionally in light of the current humanitarian crisis, we are joining all of those calling for peace in the Ukraine and lending our support during this horrific times.

Larry Fay: Through our charitable organization, Vivid Cheers, we will be donating $100,000 to help those most in need. With that, I will turn it over to Larry.

Through our charitable organization vivid shares we will be donating $100000 to help those most in need.

That I will turn it over to Larry.

Thank you Sam.

Larry Fay: I am pleased that our second earnings call once again aligns with record results despite the ongoing impact of COVID-19 and most recently the Omicron variant.

I am pleased that our second earnings call once again aligns with record results. Despite the ongoing impact of COVID-19, and most recently the omicron variant.

Larry Fay: As Stan mentioned, we sent company records for Marketplace, GOV, and revenues in the fourth quarter.

As Stan mentioned, we set company records for marketplace, <unk> and revenues in the fourth quarter.

Larry Fay: In addition, we exceeded the high-end of full-year guidance across each of Marketplace GOV, Revenues, and Adjusted EBITDA.

In addition, we exceeded the high end of full year guidance across each of marketplace E revenues and adjusted EBITDA.

Larry Fay: Our record Q4 Marketplace GOV of $876 million was fueled by the continued return of live events and represents a 23% sequential increase from Q3's record-setting Marketplace GOV.

Our record Q4 marketplace <unk> of $876 million was fueled by the continued return of live events and represents a 23% sequential increase from Q3 s record setting marketplace.

Larry Fay: Our Q4 GOV benefited from a meaningful increase in average order size from roughly $300 in Q3 to nearly $400 in Q4.

Our Q4 <unk> benefited from a meaningful increase in average order size from roughly $300 in Q3 to nearly $400 in Q4.

Larry Fay: The increase in average order size is partially attributable to typical seasonal mix, but also reflected in improving demand environment throughout most of the quarter.

The increase in average order size is partially attributable to typical seasonal mix, but also reflected an improving demand environment throughout most of the quarter.

Larry Fay: That said, it is worth noting that the latter part of the quarter was negatively impacted by Omicron.

That said it is worth noting that the latter part of the quarter was negatively impacted by Amazon.

Larry Fay: The impact was most pronounced in theater, with numerous Broadway productions cancelling, along with noticeable impacts across the NBA, NHL, and college football.

The impact was most pronounced in theater with numerous Broadway productions, canceling along with noticeable impacts across the NBA NFL and college football.

Larry Fay: Our record-setting quarterly revenues of $164 million were primarily driven by our strong marketplace GOV performance.

Our record setting quarterly revenues of $164 million were primarily driven by our strong marketplace GOP performance.

Larry Fay: Our take rate, which we calculate by dividing our marketplace revenues by our marketplace GOV, decreased 60 basis points to 16.3% from 16.9% in Q3.

Take rate, which we calculate by dividing our marketplace revenues by our marketplace GOP.

Decreased 60 basis points to 16, 3% from 16, 9% in Q3.

Larry Fay: This is consistent with typical seasonality due to event mix in Q4.

This is consistent with typical seasonality due to mix in Q4.

Larry Fay: our underlying take rates remain largely consistent with historical levels.

Our underlying take rates remained largely consistent with historical levels.

In the fourth quarter, we generated $28 million of adjusted EBITDA, which represents an approximate 17% adjusted EBITDA margin.

Larry Fay: In the fourth quarter, we generated $28 million of adjusted EBITDA, which represents an approximate 17% adjusted EBITDA margin.

Larry Fay: Adjusted EBITDA and Adjusted EBITDA margin declined sequentially as we invested significant amounts in our new brand.

Adjusted EBITDA and adjusted EBITDA margin declined sequentially as we invested significant amounts in our new brand.

Larry Fay: These investments drove meaningful improvements in brand awareness and target markets, which we believe will generate meaningful long-term benefits.

These investments drove meaningful improvements in brand awareness and target markets, which we believe will generate meaningful long term benefits.

Larry Fay: Turning to our 2022 financial guidance, we anticipate 2022 marketplace GOV to be in the range of $2.7 to $3.0 billion, with revenues in the range $510 to $550 million.

Turning to our 2022 financial guidance, we anticipate 2022 marketplace <unk>.

To be in the range of $2 seven to $3 8 billion with revenues in the range $510 million to $550 million.

Larry Fay: At the midpoint of guidance, we are forecasting nearly 20% year-over-year growth for both marketplace GOB and revenue.

At the midpoint of guidance, we are forecasting nearly 20% year over year growth for both marketplace and revenues.

Larry Fay: Moreover, our 2022 Marketplace GOE guidance is 21% higher than our Analyst A projections, with our 2022 Revenue Guidance also 15% above previously projected budget.

Moreover, our 2022 marketplace <unk> guidance is 21% higher than our analyst day projections with our 2022 revenue guidance also 15% above previously projected levels.

Larry Fay: Please note, our guidance assumes that roughly one quarter of the MLB season does not occur due to the ongoing lockout.

Please note our guidance assumes that roughly one quarter of the MLB season does not occur due to the ongoing lockout.

Larry Fay: Our guidance also assumes that our gross take rates remain in line with historical levels, while cancellation rates normalize over the course of the year.

Our guidance also assumes that our growth take rates remain in line with historical levels, while cancellation rates normalize over the course of the year.

Larry Fay: We launched our loyalty program in late 2019, and as a reminder, the cost of that program is recorded as a contra revenue, thereby causing some take rate compression when comparing to full year 2019.

We launched our loyalty program in late 2019, and as a reminder, the cost of that program is recorded as a contra revenue, thereby causing some take rate compression when comparing the full year 2019.

Larry Fay: We anticipate generating $110 to $115 million of adjusted EBITDA.

We anticipate generating $110 million to $115 million of adjusted EBITDA.

Larry Fay: This guidance reflects continued investment in our brand, investments to scale our new daily fantasy sports offering, and the build-out of our public company infrastructure.

This guidance reflects continued investment in our brand investments to scale, our new daily fantasy sports offering and the build out of our public company infrastructure.

Larry Fay: Relative to 2019, the aggregate spend in these categories collectively represents $33 million of incremental expense.

Relative to 2019, the aggregate spend in these categories collectively represents $33 million of incremental expense.

Larry Fay: We are pleased that the growth of our business is enabling exciting long-term investments. Position us well to continue delivering.

We are pleased that the growth of our business is enabling exciting long term investments.

<unk> as well to continue delivering robust growth.

Larry Fay: Our marketing budget contemplates continued investment in building our brand while maintaining our historical strength in performance marketing channels.

Our marketing budget contemplates continued investment in building our brand, while maintaining our historical strength in performance marketing channels.

Larry Fay: If we see additional or perhaps even a rational spend from competitors, we will defend our share as necessary and leverage our differentiated scale and cost structure to win over the long term.

If we see additional or perhaps even a rational spend from competitors, we will defend our share as necessary and leverage our differentiated scale and cost structure to win over the long term.

Larry Fay: On the gaming front, bet your revenues and expenses will be captured in our marketplace segment.

On the gaming front that your revenues and expenses will be captured in our marketplace segment.

Larry Fay: Betcha is currently in a hypergrowth phase, but off of a small base.

<unk> is currently in a hyper growth phase, but off of a small base.

Larry Fay: As such, Betch's current contribution is not material to our financial...

As such as current contribution is not material to our financials.

Larry Fay: That said, we do anticipate several million dollars of net investment between marketing and GNA in 2022 to properly scale this off.

That said, we do anticipate several million dollars of net investment between marketing and G&A in 2022 to properly scale this offering.

Larry Fay: We are excited about the significant enhancement to our TAM that Betcha brings through a category with high relevance to our customers.

We are excited about the significant enhancement to our Tam that that should bring through a category with high relevance to our customers.

Larry Fay: We continue to believe our adjusted EBITDA margins will be north of 30% in the long-term as we reap the benefits of these near-term investments. With that, I will hand it back to…

We continue to believe our adjusted EBITDA margins will be north of 30% in the long term as we reap the benefits of these near term investments.

With that I will hand, it back to stand for closing remarks.

Thanks, Larry.

Larry Fay: To conclude, we close out our first fiscal year as a public company with another record-setting quarter.

To conclude we closed out our first fiscal year as a public company with another record setting quarter.

Larry Fay: Our strong financial results and robust balance sheet, combined with our strategic investments, position us well for 2022 and beyond.

Our strong financial results and robust balance sheet combined with our strategic investments position us well for 2022 and beyond we believe nothing beats the thrill of lives and it's clear that there is a strong and growing consumer demand for experiences.

Larry Fay: We believe nothing beats the thrill of live, and it's clear that there is a strong and growing consumer demand for experience.

Larry Fay: Indeed, already in 2022, Vivid Seats had a record-breaking Super Bowl with both Marketplace GOV and Marketplace orders more than double our previous record for the big game.

Indeed already in 2022 vivid seats had a record breaking Super Bowl with both marketplace <unk> and marketplace orders more than double our previous record for the big game.

Larry Fay: We remain focused on creating exceptional experiences for our customers and identifying opportunities to drive sustained growth and shareholder value. And with that, operator, I will open it up for questions.

We remain focused on creating exceptional experiences for our customers and identifying opportunities to drive sustained growth and shareholder value and with that operator, I will open it up for questions.

Speaker Change: Ladies and gentlemen, if you have a question or a comment at this time, please press the star then the one key on your touch-down telephone.

Ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone. If your question has been answered or you wish to move yourself from the queue. Please press the pound key and we also ask that you limit yourself to two questions and feel free to get back into queue for any follow ups.

Speaker Change: If your question has been answered or you wish to move yourself from the queue, please press the pound key. And we also ask that you limit yourself to two questions and feel free to get back in the queue for any follow-ups. Our first question comes from Steven Ju with Credit Suisse.

First question comes from Stephen Ju with credit Suisse.

Okay. Thank you so that I wanted to.

Stephen Ju: Digging in a little bit on your commentary regarding Betcha, do you think the top of the funnel for Betcha to be longer term of similar size or larger than Vivid Seeds and just try to figure out which property will serve as a source of lead?

Dig into a little bit on your commentary regarding betcha.

So do you think.

The top of the funnel for Bette Jo to be longer term of similar size or larger than <unk>. So I'm, just trying to figure out like which property will serve as a source of leads for the other was the aim here to just layer in a service that may perhaps be a little bit more rapid fire.

Stephen Ju: For the other, was the aim here to just layer in a service that may perhaps be.

Stephen Ju: or a little bit more rapid fire in terms of consumer visits.

Consumer visits.

Speaker Change: Also, Larry, in your prepared remarks, you talked about the potential for rational marketing spend from competitors. Can you talk about how often that has happened?

Also in your prepared remarks.

You talked about the potential for rational marketing spend from competitors that can you talk about how often that has happened.

Speaker Change: a vivid seat, I guess, pre-pandemic operating history. I mean, it might be irrational to you, but it might be rational to them. So just kind of talk about what might've happened before and how you operated through such a challenge. Thanks.

David seats, I guess pre pandemic operating history, I mean, it might be irrational to you, but it might be irrational to them. So just kind of talk about what might've happened before.

<unk> operated through such a challenge thanks.

Yeah.

Thanks, Steve and good morning to hear from you.

Speaker Change: You know, on the Betcha front, I think Betcha is still, for us, small, hyper-growth, but we're really excited about the signs that we've seen there, you know, as we talked about both in the prepared remarks and prior, as we think about building out an ecosystem of products that really, you know, allow consumers to experience the thrill of live in multiple ways, the engagement components.

On the <unk>.

I think that just still for us small hyper growth, but we're really excited about the signs that we've seen there.

As we talked about both in the prepared remarks in Pryor.

As we think about building out an ecosystem of products that really.

Consumers to experience the thrill of live in multiple ways.

The engagement components of bets have been really promising so far right as we take what has historically been a lower order frequency category in live events and combine that now with an asset that is showing US 10, 10 plus entries per month.

Speaker Change: of Becsa have been really promising so far, right, as we take what's historically been a lower order frequency category in live events and combine that now with an asset that is showing us, you know, 10 plus entries per month, you know, I think we remain really excited about that as a channel to drive enhanced...

I think we remain really excited about that as a channel to drive enhanced engagement from consumers and then forthcoming from that I think our ability to then use the two categories and monetize both of the channels, whether it's the live event ticketing space or in engagements are daily fantasy remained really exciting so.

Speaker Change: engagement from consumers. And then forthcoming from that, I think our ability to then use the two categories and monetize both of the channels, whether it's the live event ticketing space or in engagement for daily fantasy, remain really exciting. So as we look at customer acquisition in the future, I think we're excited to have this as a weapon in our arsenal, that we can continue to really drive efficient customer acquisition where the consumer also has a fantastic experience while doing it.

As we look at customer acquisition in the future I think we're excited to have this.

As a weapon in our Arsenal that we can continue to really drive efficient customer acquisition, where the consumer also has a fantastic experience while doing it.

Speaker Change: Yeah, and on the competitor question, I'd say as a general rule, it's been a pretty

Yeah and on the competitor question.

A general rule, it's been a pretty.

Speaker Change: a consistent competitive landscape. There have been moments in time that are exceptions. You know, I'd probably point to when StubHub was for sale and they were eager to show that the business was growing. They may have been more aggressive than the spreadsheet would otherwise tell you for that type of intangible reason. But for the most part, other than, you know, brief windows of time, it's been a well-functioning landscape.

Consistent competitive landscape there have been moments in time that are exceptions.

I'd probably point to win.

When stubhub, what's for sale and they are eager to show that the business was growing.

And more aggressive than the spreadsheet would otherwise tell you for that type of intangible reason, but for the most part other than brief windows of time, it's been a while ordering.

Functioning.

Landscape.

Speaker Change: As you think about the comments that we made, you know, when we talk about irrational, we hear you, right? Different people, different objectives.

As we think about the comments.

When we talk about irrational.

Here, you're right different people different objectives.

Speaker Change: different paradigm. When we say that we have a pretty good ability to infer what the lifetime value of customers is based on what we know about repeat rates across the industry, what we see with repeat rates. And so when you triangulate around what people are charging

It's different paradigm, when we say that we have a pretty good ability for what the lifetime value of customers is based on what we know about repeat rates across the industry, what we see with repeat rates.

And so when you can triangulate around what people are charging.

Speaker Change: which we have very good visibility into what that turns into in terms of their take rate and map that against what we're seeing them spend. If you come to a view that there are negative lifetime value decisions being made, that's where we see them.

<unk>, which we have very good visibility into what that turns into in terms of their take rate and mapped that against what we are seeing them spend if you come to a view that theyre negative lifetime value decisions being made that's where we say it's irrational.

Speaker Change: not necessarily just losing money in the current period to set up future success.

Not necessarily just losing money in the current period.

Set up future success.

Okay.

Thank you.

Our next question comes from Ralph <unk> with William Blair.

Speaker Change: Good morning. Thanks for taking the question. First question, I guess, would be for Larry. Talked about sort of the impact in Q4 for the Omicron variant and guessing that spilled obviously in the Q1 as well, but maybe if you could sort of help us think about and quantify the impact as it relates more specifically to 2022 and then maybe if you could sort of lump in there with the MLB season and the other headwinds that you might be seeing in 2022 guide as it relates either end market or the variant. Be helpful. Thanks.

Good morning. Thanks for taking my question first question I guess would be for Larry talked about sort of the impact in Q4 for omicron variance Im guessing thats spilled, obviously in the Q1 as well, but maybe if you could.

Sort of help us think about it and quantify the impact as it relates more specifically to 2022, and then maybe if you could sort of lump them there with the MLP.

And the other headwinds that you might be seeing in 2022 guide as it relates to either end market or the variance would be helpful. Thanks.

Larry Fay: Yeah, so it was interesting. I think in a lot of ways, with hindsight, Omicron was a less potent variant than certainly Delta was, but probably had a more meaningful impact to our business than Delta did, just given the sheer number of people that came down with Omicron. And the form that it really took was less about cancelling events because of

Yes. So it was interesting I think in a lot of ways with hindsight omicron.

Less potent variant than search.

Delta was.

But probably had a more meaningful impact to our business than Delta did just given the sheer number of people that came down with AMR crime and the form that it really took was less about canceling events because of health concerns or regulator concerns and more about the performers right whether it was players in college.

Larry Fay: health concerns or regulator concerns, and more about the performers, right? Whether it was players in college football, NBA players, theater performers, them getting.

Paul NDA.

NBA players theater performers.

Larry Fay: COVID via Omicron and needing to postpone or cancel the production because they themselves had it. Saw a very meaningful ramp, or better defined as a spike, starting in mid-December.

Im getting TV via omicron, and needing to postpone or cancel the production because they themselves had it.

So very meaningful ramp.

Better refinements or a spike starting in mid December .

Larry Fay: And that continued almost to the day for like a month to mid-January and was pretty meaningful impact throughout. Now, it happens to be the case that Christmas to New Year's window is a pretty slow period for our business in a normal year, so probably

And that continued almost to the pay for like a month to mid January and was pretty meaningful impact throughout now happens to be the case that Christmas to new year's window is a pretty slow period for our business in a normal year so probably.

Larry Fay: less damage on an absolute basis in December than you see in January when things start to resume.

Less damage on an absolute basis in December than you see in January January when things start to resume.

I will say it has recovered so that's now in the past but.

Larry Fay: recovered. So that's now in the past, but it will be an impact that sticks with us for the balance of the year given it did seep into January .

It will be impacted fixed with us.

Balance of the year given it slip into January .

Larry Fay: And then to the question on baseball, we all wish we had a crystal ball.

And then to the question on baseball, Yes, we are.

Wish we had a crystal ball.

Larry Fay: We were really hoping to get a positive surprise last night, but that didn't happen. So we've built our guidance assuming.

We're really hoping to get a positive surprise.

Last night, but that didn't happen. So we've built our guidance assuming a quarter. If the season doesn't occur as you can imagine we are generally back half weighted right as the game starts to matter more and if you get into the playoffs, it's more impactful to us on both the <unk> and margin front.

Larry Fay: that a quarter of the season doesn't occur. As you can imagine, we are generally back half-weighted, right, as the game starts to matter more. If you get into the playoffs, it's more impactful to us on both the GLD and margin front. That said, it's still painful. And so hopefully our quarter of the season estimate proves conservative, but with where things currently stand, it's an unknown.

Thanks, Phil.

Painful and so hopefully we are quarter over season estimate prove conservative.

But with where things currently stand it's an unknown.

Great one more Larry will have you can you just remind me of the seasonality that you would typically see.

Speaker Change: Great. One more, Larry, while I have you. Can you just remind me of the seasonality that you would typically see?

Larry Fay: I'm guessing 2022 isn't sort of a normalized environment, but sort of walk through the puts and takes of what you would normally see in terms of seasonality in 2022. And on one side, you've got the consumer, people really wanting to get out to events, but there might be some capacity constraints, which sort of help us think through that for the year. Thank you.

In 2022 isn't sort of a normalized environment, but sort of walk through the puts and takes of what you would normally see in terms of seasonality in 2022.

One side, you've got the consumer are people really wanted to be able to advance, but there might be some capacity constraints. So help us think through that for the year. Thank you.

Speaker Change: Yeah, so in a normal year, we generally see about 30% of our GOV happen in Q4.

Yes, so sort of in a normal year.

We generally see about 30% of our <unk> happen in Q4.

Speaker Change: which is a result of all the sports being in season, holiday shows like the Nutcracker, and then a lot of concert on sales for the following summer.

As a result of all the sports being in season holiday shows like the Nutcracker and then a lot of concert on sales for the following summer.

Speaker Change: The remaining 70% roughly splits evenly across quarters.

The remaining 70%.

Roughly split evenly across quarters.

Speaker Change: one year Q1 might be higher than Q2, the next it'll invert and that'll often be determined by was it a good Super Bowl matchup, was it a good NBA playoff matchup, were there game sevens in the NBA and NHL playoffs. So hard to...

One year Q1 might be higher than Q2 over the next it will invert.

Often be determined by was it a good Super Bowl matchup was it a good NBA playoffs, Matt.

Match up where theyre gains sevens.

NBA and NHL playoffs.

So hard to.

Speaker Change: predict with precision beyond Q1 through Q3 are generally similar to one another. I think given what we saw in Q1 coming out of the gate, all else equal, you'd assume that to be a little bit less than normal. But for – we now have a reason for Q2 to be a little bit less than normal with the slow MLB start. Okay. That's helpful.

Predict with precision beyond Q1 through Q3 are generally similar to one another.

I think given what we saw.

In Q1 coming out of the gate.

All else equal you would assume that to be a little bit less than normal.

We now have a reason for Q2 to be a little bit less than normal.

The slow MLB start.

Okay. That's helpful. Thanks, Larry.

Our next question comes from Jason Bazinet with Citi.

Speaker Change: Thanks. I appreciate the guidance and the MLB commentary.

Thanks.

I appreciate that.

And there'll be commentary.

Speaker Change: I just had a question about how you thought about higher energy.

I just had a question about how you thought about higher energy prices as it relates to demand for secondary tickets just because I think it's been 15 years since we've seen energy prices is higher so we probably don't have a lot of analog.

Speaker Change: 15 years since we've seen energy prices this high, so we probably don't have a lot of analogs. So just curious, like, how...

Just curious like how if at all have you incorporated that into your outlook and what impact do you think it might have.

Speaker Change: Yeah, hey Jason, it's Stan. You know, I think it's a really interesting question, right? And I...

Yeah, Hey, Jason it's Dan.

Yes, I think it is and it's a really interesting question right.

Stan Chia: I tell you, I think what we've continued to see in this world is that live events continues to elicit a lot of excitement from fans and fans tend to travel to their events. I think what we've seen is, on average, fans this year, as we project out, are probably traveling about 15% to 20% more than they ever have in the past. As you think about, perhaps...

I would tell you I think what we've continued to see in this world is that live events continues to elicit a lot of excitement from fans and fans.

<unk> tend to travel to their events right I think what we've seen as an average fans. This year as we project out or probably traveling about 15% to 20% more than they ever have in the past so.

As you think about perhaps.

Stan Chia: The impact of this, again, I would think about it as where we see average order size landing being that, you know, we serve as almost that perfect barometer for the intersection of demand and supply. Now, I think if you think about where we've modeled guidance, and I think Larry talked about that here, I think you can imply certainly where we've been fairly conservative in terms of where the average order size is. So, I think in terms of where we see the business, I think we are...

The impact of this again I would I would think about it as where we see average order size landing being that we serve is almost that perfect barometer for the intersection of demand and supply and I think as you think about where we've modeled guidance and I think Larry talked about that here.

Here I think you can imply certainly where we've been fairly conservative in terms of where the average order sizes. So I think in terms of where we see the business I think we are.

Stan Chia: I'm continuing to be excited about the prospect of live events for fans, and I don't think we've modeled too much impact from, I'd say, energy prices and the impacts on us. Okay. Thank you.

Continuing to be excited about the prospect of live events for fans and.

I don't think we've modeled too much impact from from I'd say energy prices and the impacts on us.

Okay. Thank you.

Our next question comes from shoots ERCOT jewelry with Evercore ISI.

Speaker Change: Okay, thank you. Could you please provide just some context on the average order size and marketplace orders? I understood your commentary on inflationary pressure, but you do face some tough comps when you think about average order size. So, how should we think about it for 2022?

Okay. Thank you could you please provide.

Just some context on that.

The average order size and marketplace orders I understood your commentary on inflationary pressure, but you do face a tough comp when you think about average order size. So.

How should we think about it for 2022.

<unk>.

Speaker Change: even for the full year, that context would be helpful. Thank you.

Even for the full year that that context would be helpful. Thank you.

Speaker Change: Yeah, so we're assuming some regression to the mean after what was, as you pointed out, a pretty strong 2021, especially in Q2 relative to historical levels.

Yes, so so we're assuming some regression to the mean.

After what was as you pointed out.

Pretty strong 2021.

Especially in Q2 relative to historical levels.

Yes.

Speaker Change: I think there's a lot of comments out there, whether it's Live Nation foolishness.

I think theres a lot of comments out there, whether it's wide nations bullishness or just general inflationary commentary that could.

Speaker Change: or just general inflationary commentary that could make you think that.

Make you think that.

Speaker Change: There's reason for 2021 to occur or even more than that. When you start stacking up broader inflation, live nation bullishness, pent up demand hypotheses, there's good reasons for that. We did not.

There's reason for 2020 wonder occur or even more than that.

When you start stacking up broader inflation live nation bullishness pent up demand hypotheses. There's good reasons for that we did not take that approach. So it should play out in that way, we will have some nice cushion built in.

Speaker Change: take that approach, so if it should play out in that way, we'll have some nice cushion built in. I think we tried to stick to our knitting a bit more, so closer to what we had put forward in our analyst-aid projections around.

We tried to stick to our knitting a bit more.

So closer to what we had put forward in our.

Analyst day projections around start from historical levels and assume consistent moderate growth from there to establish the baseline and if we get a pleasant positive surprises that will be good news.

Speaker Change: start from historical levels and assume consistent, moderate growth from there to establish the baseline. And if we get a pleasant, positive surprise, that'll be good news.

Okay. Okay.

Our next question comes from Dan <unk> with benchmark.

Speaker Change: Great, thanks. A couple for me first. Stan, just obviously, you know...

Great. Thanks.

Just a couple for me first Stan just obviously.

Speaker Change: Pulling forward that the brand spends you guys clearly or striking while Aaron is hot, it sounds like your competitors are.

Pulling forward the brand spend you guys clearly are striking while the iron is hot and it sounds like your competitors are.

Speaker Change: having some difficulties on their process to market. How do you think about the spend this year given some of the headwinds that were mentioned? And frankly, I mean, look, your guidance actually implies share gains because you gave a guide that was probably in line with what most of us were thinking despite all of these headwinds.

Having some difficulties on their process to market.

How do you think about the spend this year given some of the headwinds that were that were mentioned and frankly I mean your guidance actually implies share gains because you gave guide that was probably in line with what most of US were thinking despite all of these headwinds.

Speaker Change: and your AOS kind of in line with our thoughts. So, you know, just how do you think about balancing that, knowing that LTV calc and then your incremental commentary, obviously, that it might be LTV negative for them, but that doesn't necessarily mean that it's LTV negative for you. Maybe start there.

And youre kind of in line with our thoughts.

Just how do you think about balancing that knowing that LTV talc and then your incremental commentary, obviously that it might be LTV negative for them, but that doesn't necessarily mean.

That its LTC negative for you maybe start there.

Yeah, Hey, Dan Yes, sure, Yes, I think we've been really excited and continue to be about brand efforts being a really strategic and long term pillar for us.

Speaker Change: Yeah, I think, you know, we've been really excited and continue to be about, you know, brand efforts being a really strategic and long-term pillar for us, you know. And we saw positive indicators, you know, in our pull forward in the fourth quarter where, you know, if you think about brand, again, primary objective being driving awareness up such that long-term value from consumers holds. We certainly saw on average double-digit awareness increases in the markets where we tested multiple channels. So I think bullish on that.

Positive indicators in our pull forward in the fourth quarter, where if you think about brand again primary objective being driving awareness up such that long term value from consumers hold we certainly saw on average double digit awareness increases and the markets, where we tested multiple channels. So I think bullish on that.

Speaker Change: And as we then think through, I mean, weaving the story all together, the opportunity to drive a brand message that's actually distinguished because the proposition of Betcha allows some immediacy in engaging with us. And then from that immediate engagement, a higher frequency channel that we can then cross sell into ticketing. I think you'll see what we do this year reflects a lot of that strategy.

As we then think through I mean, leaving the story altogether the opportunity to drive our brand message that actually distinguish because the proposition of better allows some immediacy and engaging with us and then from that immediate engagement.

A higher frequency.

Channel that we can then cross sell into ticketing I think youll see what we do this year reflect a lot of that strategy.

Speaker Change: Then when we look across the competitive landscape, you know, I think the way I think about.

And then when we look across the competitive landscape I think the way I think about.

Speaker Change: the landscape and some of the comments around irrationality. I mean, two things, one specific to our industry. As you mentioned, you know, perhaps last year, I think, thanks to our nimbleness, our scale, and some of our technology prowess, you know, we were certainly able to go to market very quickly as events came back, and that's a real testament to the team and the technology that we have.

The landscape and some of the comments around irrationality I mean, two things one specific to our industry.

As you've mentioned, perhaps last year I think thanks to our nimbleness.

Our our scale and some of our technology prowess, we were certainly able to go to market very quickly as events came back and Thats, a real testament to the team and the technology that we have as Steve look at this year.

Speaker Change: As we look at this year, I think we make no assumptions that our competitors are not ready, right? And I think we are ready to go compete with all of them. I think for consumers, confident that we have, you know, a great product that's differentiated with economic value as well as, you know, experiential value.

I think we make no assumptions that our competitors are not ready right and I think we are ready to go compete with all of them.

For consumers confident that we have.

Great product, that's differentiated with economic value as well.

The experiential value.

Speaker Change: And then, I think even tying it back to the other comment on irrationality in the industry, I think that the goal for us has always been, look, every industry faces a new entrance who are going to try to establish scale. And for us, as we look at that landscape here, there are certainly those players that exist.

And then I think even tying it back to the other comment on irrationality in the industry I think.

<unk> for US has always been look every industry faces.

And new entrants, who are going to try to establish scale and for us as we look at that landscape here. There are certainly those players that exist subscale need to prove themselves need to come out.

Speaker Change: subscale, need to prove themselves, need to come out. You know, we're here with a great product. We're here with a great balance sheet. And so should people try to establish themselves, I think our point here is, look, we're gonna fight that fight and we're stronger and we're doing this to win. So I think that's how I'd certainly look at the competitive landscape and how we're assessing that in line with how we're looking at deploy dollars this year.

Here with a great product, we're here with a great balance sheet and so should we see people trying to establish themselves I think our point here is look we're going to fight that fight and we are stronger and we are doing this to win so I think that's how I would certainly look at the competitive landscape in our assessed that in line with how we are looking at deploy dollars. This year.

Speaker Change: Got it. That's helpful. And then just, I do want to touch on the experiential part. Obviously, Stan, that's been a huge component to the differentiation strategy. I know you talked about, I think Larry gave the number several, $7 million in investment.

Got it that's helpful. And then just I did want to touch on the experiential part obviously stand that's been a huge component to the differentiation strategy. I know you talked about I think Larry gave the number of several $7 million in investment and to scale. The virtual offering can you just give us some more granularity on some of the things you might be rolling out obviously.

Speaker Change: to scale the Betcha offering, can you just give us some more granularity on some of the things you might be rolling out, obviously?

Speaker Change: reasons, not all of them, but just how you think about continuing to build out either whether it's social engagement as a chat functionality between people and games, you know, some of the other things that you're going to work on on the platform that will, you know, again highlight that user engagement differentiation that you've been building out.

Competitive reasons, not all of them, but just how you think about continuing to build out either whether it's social engagement chat functionality between people games. Some of the other things that youre going to work on on the platform that will again highlight that user engagement differentiation you've been building out relative to the peer set.

Speaker Change: Yeah, sure, Dan. Yeah, I think, you know, there's maybe a few buckets, I think, about this, right? I think we've talked about the first one, I think.

Yes, sure Dan Yeah, I think there's maybe two buckets I think about this right I think we've talked about the first one I think.

Speaker Change: The brand integration, maybe that is thematically how I would think about what we're doing there. I think the proposition for us becomes different, right, as we think about two categories that I think have appealed to consumers, but certainly with a lot of affinity and synergy. So we're certainly going to be working hard to make sure that how we drive our brand elements is integrated across those categories. Absolutely.

The brand integration, maybe that it's dramatically how I would think about what we're doing there and I think the proposition for us becomes.

Different right as we think about two two categories that.

<unk> has appealed to consumers, but certainly with a lot of affinity and synergies. So we're certainly going to be working hard to make sure that how we drive our brand elements is integrated across those categories. Similarly.

Speaker Change: Our product teams are really hard at work to think what is the right way to present the opportunity to engage with us in Ibecha while also presenting the opportunity to go to a live event, you know, provide where the

Our product teams are really hard at work to think what is the right way.

To present, the opportunity to engage with us.

While also presenting the opportunity to go to a live event.

Provide.

The.

Speaker Change: offerings and kind of that cross sell comes from our marketplace, right? So, I think I would frame it those two ways as we continue to work hard on the integration and the product strategy. I think that's where you're going to see us make investments to ensure the experience is right and that the channels we use to acquire customers continues to be one that is long-term LTV positive for us. Got it. Super helpful. Thanks, guys.

Offerings and kind of that cross sell comes from our marketplace right. So I think I would frame it those two ways as we continue to work hard on the integration.

And the product strategy, I think thats, where youre going to see us make investments to ensure experiences right in that the channels. We use to acquire customers continues to be one that is.

Long term LTV positive for us.

Got it Super helpful. Thanks, guys.

Our next question comes from Stefan <unk> with D. A Davidson.

Speaker Change: Good morning, thank you for taking my question. I just have one for you today. Today, how is your rewards effort contributing to your sales compared to your expectations?

Good morning, Thank you for taking my question.

One for you today.

How is your rewards for contributing to yourselves compared to your expectations.

Speaker Change: Yeah, so I'd say a few things. One, we rolled out the revamped loyalty program in the summer. So we're still pretty early days in evaluating the program.

Yes, so I'd say a few things one we rolled out the.

Our revamped loyalty program.

The summer so we're still pre.

Early days and evaluating the program.

Speaker Change: In particular, in our industry, we've touched on this before, but it's a low-frequency industry. You'll often see folks that place one, two, maybe three orders per year. It's a fairly standard distribution. So to get through that repeat cycle takes some time, and we're still fairly early in that process.

In particular in our industry, we've touched on this before but so low frequency industry, you'll often see folks at place one two maybe three orders per year.

Fairly standard distribution.

To get through that repeat cycle takes some time, it's still fairly early in that process.

Speaker Change: You know, that said, I'd say we are seeing some pretty encouraging.

That said I would say we are seeing some pretty incredible.

<unk>.

Speaker Change: signs in our repeat rate data with a caveat and an important one that all of our time that we are looking at to test this was COVID impacted. So you had the pent-up demand playing out in the summer. You had events getting postponed and canceled. You had a lot of

In our repeat rate data with a caveat and an important one that all of our time that we are looking at to test. This with Covid impacted so you had the pent up demand playing out in the summer you had events getting postponed or canceled.

<unk> had a lot of.

Speaker Change: moving pieces that we don't normally see. That gives us some hesitation to declare victory too early, but the indicators.

Moving pieces that we don't normally see that gives us some hesitation to declare victory too early.

The indicators are encouraging.

Speaker Change: Yeah, the other thing I'd add to that, I mean, certainly we've seen early signs on repeat rates, which is which is really encouraging to us.

The other thing I would add to that I mean, certainly we've seen early signs on repeat rates, which is which is really encouraging to us and the other piece is we talk about brand and bill.

Speaker Change: I mean, other pieces, we talk about brand, you know, and building that message. You know, I think a key part of our brand proposition is the fact that we are the only one out there with a rewards program. And I think as we've...

That message I think a key part of our brand proposition is the fact that we are the only one out there with the with our rewards program and I think as we've tested the brand channels I think we've seen some fairly.

Speaker Change: tested the brand channels. I think we've seen some fairly resounding success in terms of awareness going up. And as you go lower into the funnel from awareness to intensive value, I think that rewards message has continued to move downstream in that path.

<unk> kind of success in terms of awareness going up.

And as you go lower into the funnel from awareness to intensive value I think that rewards message just continued to move downstream in that path. So I think.

Speaker Change: excited about the prospects on how it allows us to acquire consumers as well as ultimately drive the repeat behavior that we're looking to drive out of them. Excellent. Thank you for taking the time.

Excited about the prospects on how it allows us to apply our consumers as well as ultimately drive repeat behavior.

We're looking to drive out of them.

Excellent. Thank you for taking my question.

Our next question comes from Richard Canaccord.

Speaker Change: Thanks for taking my questions. I appreciate all the color around your forward outlook, but I just wanted to follow up on that. With incremental marketing and other investments this year, to what extent some of the benefits of those are embedded in your outlook in the latter part of the year, or could that be sort of incremental to what you're currently expecting?

Great. Thanks for taking my questions I appreciate all the color around your forward outlook, but just wanted to follow up on that.

Incremental marketing and all the investments this year to what extent some of the benefits of those embedded in your outlook into latter part of the year or could that be sort of incremental to what you're currently expecting.

Speaker Change: I'd say for the most part, we continue to take a fairly cautious posture around putting hard numbers alongside the brand investment and continue to take the view that this is a long game. So I think similar to the answer on loyalty,

Yes, I would say for the most part we continue to take a fairly cautious posture around.

Putting hard numbers alongside the brand investment.

And continue to take the view.

A long game.

And so I think similar to the answer on loyalty.

Speaker Change: You're seeing a lot of the indicators you would hope to see as you build awareness and move folks through a funnel. So we're encouraged, but I have refrained from putting stakes in the ground and putting that into projections in a meaningful way at this point.

Youre seeing a lot of the indicators you would hope to see as you build awareness and move folks through our funnel.

So we're encouraged.

But I have refrained from putting stakes in the ground and putting that into projections in a meaningful way at this point.

Speaker Change: That's helpful. And then just following up on Vecha, sort of what are some of the key milestones for integrating that into your sort of vivid platform? I know you mentioned sort of brand integration. Is there anything else you highlight there? And then more broadly, how are you thinking about the opportunity in the gaming sort of between fantasy, daily fantasy and online sports betting?

Got it that's helpful and then.

And then just following up on that you sort of what are some of the key miles for integrating.

Thank you.

This platform I know you mentioned sort of <unk>.

Brand integration is there anything else to highlight there.

Then more broadly how are you thinking about the opportunity in the gaming side of between fantasy Daily Fantasy and online sports betting.

Okay.

Speaker Change: Hey, Maria. You know, I think the first thing is on the milestones, you know, I think certainly we we are aspiring to drive, you know, a holistic consumer experience there. And we're testing all sorts of ways to understand where.

Hey, Maria.

First thing is on the milestones I think certainly we are aspiring to drive.

A holistic consumer experience, there and where.

Testing all sorts of ways to understand where the consumer appreciates the ability to engage in both and where again, we can truly enhance the frequency and engagement there.

Speaker Change: the consumer appreciates the ability to engage in both and where, again, we can truly enhance the frequency and engagement there. I think the milestone you'll look for is when you see certainly some of the integrated components show up in the products that we have. I'd say that would be a significant milestone, although already we are testing multiple channels through our CRM capabilities to drive some of that integration and to learn from what we've got there. On the other question on landscape, look, I think...

I think the milestone you'll look for is when you see.

Certainly some of the integrated components show up in the products that we have I would say that would be a significant milestone although already we are testing multiple channels through our CRM capabilities to drive.

Some of that integration and learned from <unk> to learn from what we've got there.

On the other question on landscape look I think.

Speaker Change: foremost. Right. And I think.

We are first and foremost right and I think we are ultimately.

Speaker Change: We are ultimately, you know, a marketplace that is looking to drive engagement.

Marketplace that is looking to drive engagement.

Speaker Change: into our consumers, and therefore I think with FECHA, the play was certainly, you know, an option on TAM expansion and something that we're really excited about, but that sliver in terms of

Into our consumers and therefore, I think with better the play was certainly.

Option on on Tam expansion and something that we're really excited about but that sliver in terms of daily fantasy serves as a monetize mobile channels for us to drive acquisition into our core ticketing marketplace and that remains kind of our view on that but we're certainly going to be opportunistic as we look at other things and how we define adjacencies.

Speaker Change: Daily Fantasy serves as a monetizable channel for us to drive acquisition into our core ticketed marketplace. And that remains kind of our view on that, but we're certainly going to be opportunistic as we look at other things and how we define adjacencies as kind of our maturity in the sector evolves. Got it. That's very helpful. Thank you.

As kind of our maturity in the sector evolves.

Got it that's very helpful. Thank you Stan Thank you Larry.

Our next question comes from Andrew <unk> with Raymond James.

Speaker Change: Thanks for taking my question. I wanted to dig in on one of the stats that you gave in your prepared remarks on Skybots with the addition of the new sellers. Is that from incremental capabilities or functionality added or is that just increasing network effects? What feedback are you receiving from sellers that's getting them into Skybots? Thank you.

Thanks for taking my question I wanted to dig in on one of the stats that you gave in your prepared remarks on Sky box with the addition of the new sellers is that.

Incremental capabilities or functionality added or is that just increasing network effects. What do you. What feedback are you receiving from sellers that getting them into skybox. Thank you.

Speaker Change: Yeah. Andrew. Yeah. You know, I think Skybox continues to be, I think, the leading ERP in the platform, right? We've got wonderful in the space. We've got fantastic technology, I think, that sellers appreciate. And we continue to enhance.

Yes, Andrew.

Thank skybox continues to be I think the leading ERP and the platform right. We've got wonderful.

In the space, we've got fantastic technology, I think that sellers appreciate and we continue to enhance the offerings there whether it's our data capabilities that allows sellers to grow their business.

Speaker Change: the offerings there, whether it's our data capabilities that allow sellers to grow their business.

Speaker Change: better, our fulfillment offerings that we've talked to folks around. I think if folks look at the combination

Better our fulfillment offerings that we've talked to folks around.

As folks look at the combination.

Speaker Change: of the technology ability, the data that allows them to grow their business, our

The technology ability of the data that allows us to grow their business, our public offerings like fulfillment that allowed it to run their business at a better cost structure than they would be without it.

Speaker Change: call it offerings like fulfillment that allow them to run their business at a better cost structure than they would be without. And then combined again with the fact that it's economically free to them, I think that value proposition, you know, in all those three dimensions has truly.

And then combined again with the fact that it's economically free to them I think that value proposition you know in all those three dimensions is truly.

Speaker Change: help differentiate us and therefore we continue to see lots of interest and continuing adoption of the platform.

Help differentiate us and therefore, we continue to see lots of interest and continuing adoption of the platform.

Great. Thank you.

Speaker Change: And I'm not showing any further questions at this time, so this also does conclude the conference for today. We thank you for your participation. You may all disconnect and have a wonderful.

And I'm not showing any further questions at this time. So this also does conclude the conference for today. We thank you for your participation you may all disconnect and have a wonderful day.

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You may begin.

Speaker Change: Good morning, and welcome to VividSeats' fourth quarter and full year 2021 earnings conference call. I'm Kate Koppels, Head of Industrial Relations at VividSeats.

Good morning, and welcome to the fourth quarter and full year 2021 earnings conference call I'm, Kate coupled head of Investor relations activity joining.

Joining me today to discuss <unk> result are Stan Chia, Chief Executive Officer, and Larry Seay, Chief Financial Officer by now everyone should have access to the company's fourth quarter and full year earnings press release filed earlier. This morning. We have also provided supplemental earnings slides the press release and earnings slides.

Speaker Change: The press release and earnings slides are available on the investor relations page of VividSeats website at investors.vividseats.com.

Well on the Investor Relations page of Davinci its website at investors that they could see dot com during.

Speaker Change: On today's call, we will refer to Adjusted EBITDA, a non-GAAP financial measure that we believe provides useful information for our investors.

One measure that we believe provide useful information for our investors will find a historical reconciliation of adjusted EBITDA to the corresponding GAAP measure in the earnings press release and other filings with the SEC and now I'd like to turn the call over to Stan.

Good morning, everyone and thank you for joining us today.

Stan Chia: It was both a record-setting milestone year and a comeback year for VividSeats with the rapid return of live events that began during the second quarter.

It was both a record setting milestone year and to come back year for <unk> with a rapid return of live events that began during the second quarter.

Stan Chia: Our performance continues to build on our positive momentum and reflects the clear desire of fans to return to their favorite events.

Our performance continues to build on our positive momentum and reflects the clear desire of fans to return to their favorite events.

Stan Chia: Early in 2022, we reached our 100 millionth ticket milestone.

Early in 2022, we reached our $100 million ticket milestone.

Stan Chia: It is an accomplishment that reflects our profitable growth at scale and is another example of the incredible momentum we are seeing as a brand and as a business.

A part in creating over 100 million customer memories.

Speaker Change: Larry will take you through the fourth quarter results and 2021 full year numbers in more detail, but first I want to comment on some highlights.

Larry will take you through the fourth quarter results and 2021 full year numbers in more detail, but first I want to comment on some highlights.

Adjusted EBITDA following record setting third quarter performance. We are pleased to have delivered another record setting quarter for marketplace GSV and revenue in the fourth quarter. Despite the impact of omicron.

Larry Fay: Throughout 2021, we not only rebuilt the business to its prior scale, but also pursued and executed on a number of strategic objectives that will enhance our long-term opportunities.

Throughout 2021, we not only rebuilt the business to its prior scale, but also pursued and executed on a number of strategic objectives that will enhance our long term opportunities.

Larry Fay: First, with the return of live events happening more quickly than originally anticipated, we pulled forward our brand launch into the fourth quarter of 2021.

First with the return of live events happening more quickly than originally anticipated we pulled forward our brand launch into the fourth quarter of 2021.

Larry Fay: Since the launch of our rebrand, we have seen a meaningful increase in awareness in the geographies we targeted with our brand efforts.

Since the launch of our rebrand we have seen a meaningful increase in awareness and the geographies, we targeted with our brand efforts.

Yes.

Larry Fay: We view brand awareness as an important pillar with meaningful long-term benefits, and our guidance reflects incremental brand investments for 2022.

We view brand awareness is an important pillar with meaningful long term benefits and our guidance reflects incremental brand investments for 2022.

Larry Fay: In parallel with these brand investments, we will continue to be aggressive with additional performance marketing spend that will grow in line with Marketplace GOV.

In parallel with these brand investments, we will continue to be aggressive with additional performance marketing spend that will grow in line with marketplace GSV.

As we see competitive marketing and pricing pressures continue to build we remain armed with a strong balance sheet that we are poised to utilize aggressively to compete we believe vivid seats comes from a place of strength given that we're already scaled and highly profitable even on the first transaction.

Larry Fay: We also saw strong adoption on the seller side with over 100 new sellers added to Skybox since mid 2021.

We also saw a strong adoption on the seller side with over 100, new sellers added the skybox since mid 2021, skybox or proprietary ERP that we offer to sellers free of charge was already one of the most widely adopted in the industry and we continually upgrade this platform to support evolving seller needs.

Larry Fay: The acquisition of Betcha will allow Vivid Seats to extend our marketplace technology into the online gaming sector, accelerating our journey into naturally adjacent areas.

The acquisition of better will allow <unk> to extend our marketplace technology into the online gaming sector accelerating our journey into naturally adjacent areas.

Betcha, Hasnt intuitive and simple to use interface that allows both casual and super fans multiple ways to play and win together. We believe this acquisition can significantly increase our Tam and more importantly, create a monetize able engagement platform that allows our unique ability to bi directionally.

Drive efficient customer acquisition.

Larry Fay: User engagement within our product ecosystem remains central to our long-term strategy, and Betcha users are highly engaged, placing on average more than 10 entries per month.

User engagement within our product ecosystem remains central to our long term strategy and better users are highly engaged placing on average more than 10 entries per month.

While still a small business. We are excited to continue building and integrating our products and brand to leverage engagement across all our categories. We've been incredibly impressed with <unk> team and look forward to leveraging our collective expertise and passion for live events.

<unk> awareness to the more than $150 million band ESPN reaches each month.

Larry Fay: Expanding partnerships with category leaders like ESPN bolsters our efforts to solidify VividSeats as the marketplace of choice.

Expanding partnerships with category leaders like ESPN bolsters, our efforts to solidify vivid seats as the marketplace of choice.

Larry Fay: Finally, we have continued to invest in our customer service.

Larry Fay: In the fourth quarter, we officially opened a new customer experience facility in Coppell, Texas.

As for customer service.

Larry Fay: we remain committed to continually raising the bar and increasing customer satisfaction.

We remain committed to continually raising the bar and increasing customer satisfaction.

Larry Fay: Our success this year is a testament to the strength and dedication of our team.

Our success. This year is a testament to the strength and dedication of our team.

In January we were proud to once again be recognized by built in as one of the best places to work in Chicago I Am also proud that we have continued to support and raise awareness of our important causes.

Larry Fay: To celebrate our $100 million ticket milestone, we donated $100,000 to Musicares, the leading music charity in the United States, to help strengthen Musicares' relief efforts, supporting those in the music community and their families.

Larry Fay: Additionally, in light of the current humanitarian crisis, we are joining all those calling for peace in the Ukraine and lending our support during this horrific time.

Additionally in light of the current humanitarian crisis, we are joining all of those calling for peace in the Ukraine and lending our support during this horrific times.

Through our charitable organization vivid shares we will be donating $100000 to help those most in need.

Larry Fay: Through our charitable organization, Vivid Cheers, we will be donating $100,000 to help those most in need. With that, I will turn it over to Larry.

That I will turn it over to Larry.

Thank you Stan.

Larry Fay: I am pleased that our second earnings call once again aligns with record results despite the ongoing impact of COVID-19 and most recently the Omicron variant.

I am pleased that our second earnings call once again aligns with record results. Despite the ongoing impact of COVID-19, and most recently the omicron variant.

Larry Fay: As Stan mentioned, we sent company records for Marketplace, GOV, and revenues in the fourth quarter.

As Dan mentioned, we set company records for marketplace <unk> revenues in the fourth quarter.

Larry Fay: In addition, we exceeded the high end of full-year guidance across each of Marketplace GOV, Revenues, and Adjusted EBITDA.

In addition, we exceeded the high end of full year guidance across each of marketplace GOP revenues and adjusted EBITDA.