Q2 2023 Vivid Seats Inc Earnings Call
[music].
Good morning, and welcome to the vivid seats second quarter 2023 earnings conference call. Following management's prepared remarks, we will open the call for Q&A I would now like to turn the call over to Africa.
Good morning, and welcome to the <unk> second quarter 2023 earnings Conference call I'm, Kate Africa head of Investor Relations at visit fees.
Joining me today to discuss the results are fancier, Chief Executive Officer, and Larry Seay, Chief Financial Officer.
By now everyone should have access to our second quarter earnings press release, which we released earlier. This morning, the press release as well as supplemental earnings slides are available on the Investor Relations page of the the state's website at investors day activity.
Com.
During the course of todays call management may make forward looking statements within the meaning of federal Securities laws.
These forward looking statements are subject to risks and uncertainties, including those described in our earnings press release and other filings with the S E T.
On today's call, we will refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures provide useful information for our investors.
You will find the historical reconciliation of adjusted EBITDA and adjusted EBITDA margin to their corresponding GAAP measures in our earnings press release supplemental earnings slides in our SEC filings.
And now I would like to turn the call over to Stan.
Good morning, everyone and thank you for joining us today.
I'm excited to share our strong second quarter 2023 results with you.
On top of excellent growth and profitability. Our investments have continued to drive increased consumer affinity as demonstrated by increasing repeat rates and strong brand sentiment.
We have also entered into several accretive and unique strategic partnerships that further differentiate our platform and just yesterday, we announced our planned expansion into the Asia Pacific region entering into a definitive agreement to acquire wave dash, the leading secondary ticketing marketplace in Japan.
I'll address each of these exciting developments after walking through highlights from the quarter.
Then I'll turn it to Larry who will walk through our financials and outlook in more detail.
Building on our stellar first quarter, we delivered yet another record quarter in Q2 generating $954 million marketplace.
17% higher year over year, we delivered $165 million of revenues and $31 million of adjusted EBITDA also higher year over year, while we continue to invest to strengthen our product and brand to cultivate loyal users on both sides of our marketplace.
An outstanding performance in the first half we are raising our 2023 guidance for the second time.
After another quarter of record breaking G. O V. It is clear consumers continue to prioritize live event experiences demand strength was widespread across categories and performers, but the Taylor Swift Erez tour complete with unprecedented demand and fandom stands out.
Furthermore, a number of large tours, such as Aerosmith were announced outside of the typical window and contributed to additional upside in the quarter.
Beyond the robust demand that we're seeing in 2023 secular trends for live events are strong and should provide tailwind to the industry for years to come.
The capture that strength, our strategic marketing campaigns Foster targeted brand awareness of our differentiated brand experience that is underpinned by vivid seats rewards the only rewards program in our industry.
This unique and industry, leading platform offer spans more rewards the more they buy a win win for our loyal buyers and for us.
For frequent live event enthusiasts rewards accumulate to compelling value that drive them back to vivek seats to complete more purchases for tickets to their favorite live event.
The value of our loyalty program is so much more than the free 11th ticket. We are truly differentiating the live event experience itself with exclusive perks for our users like surprise upgrades and unique experiences rewarding fans with even more value one.
One way, we're accomplishing that is through a multifaceted partnerships with professional sports team through.
Through these partnerships, we craft unique and premium experiences that drive differentiation, while also increasing both targeted brand awareness and brand affinity with high value audiences.
Two exciting updates to this strategy focus on major League baseball teams.
First vivek seats is now the official ticket marketplace of the Los Angeles Dodgers as part of this partnership Dodgers fans now have access to the Vivek seats speakeasy and vivid seats elite seats. These.
These newly branded experiential areas are exclusively available on vivid seats and will offer fans premium experiences and perks, such as craft cocktail complementary food and beverage options and luxury seating.
We are now the official ticket marketplace that the Colorado Rockies. This partnership will feature naming rights to the vivid club level offering extensive opportunities to prominently display our brand and elevate the consumer experience for hundreds of thousands of fans each year.
Selected Vivek seeds club level fan will also have the once in a lifetime opportunity to throw the first pitch before select games throughout the season.
In addition to major League baseball teams. We have also expanded our list of National Football League team partners, joining our existing partnership roster with the Indianapolis Colts, Cleveland Browns and San Francisco 40, Niners, we are excited to become the proud partner of the Los Angeles Chargers innate.
Bling fans to access one of the most unique experiences and southern California sports the purchase suites at Tso five stadium complete with a private D J and surprise visits from Chargers legends.
Ultimately, we expect team partnerships such as these to be accretive to repeat rates as fans return to vivid seats seeking an elevated experience.
Lastly, we are excited to now offer fans additional payment options by partnering with Paypal pay later starting in September we look forward to integrating this new partnership as consumers continue to look for more flexibility and as we continue to focus on ways to make it even easier for them to attend.
Their favorite events.
As we have discussed all of our initiatives whether through strategic partnerships or marketing channels are designed to cultivate targeted brand awareness and lasting affinity for our platform.
Our results show that this is working.
Since our loyalty program refresh just two years ago more and more repeat buyers are getting to their free 11th ticket a key moment in their loyalty journey.
Loyal buyers then repeat on our platform are highly accretive to margins and we are proud to share that our repeat rates reached new highs in Q2.
Last quarter, we announced our first free to play product available within the vivid seats at the product now branded as game Center is fully live and fans are showing very strong engagement.
With game Center users played daily challenges and winners of these contests are rewarded with free tickets to events or ticket credits for future purchases.
Since soft launching our product in mid June we are proud to already have accumulated over 70000 unique players in the first 60 days games.
<unk> Centre is yet another example of the ways in which we are innovating and differentiating our product all while rewarding fans and increasing engagement between ticket purchases.
Our focus is also on continuing to innovate on behalf of our sellers.
Our industry, leading skybox ERP continues to onboard new sellers and give them access to best in class tools and technology.
Skybox is already the ERP of choice for the majority of professional sellers and we are excited to further differentiate our platform.
Skybox drive is continuing to ignite excitement as we progressed through our beta phase and we are looking to increase the number of beta users as we move towards a full launch later in the year.
Next I'll turn to our planned acquisition of wave dash.
We are excited to grow our Tam by expanding internationally with a market leading business.
Dash is the leader in the Japanese secondary ticketing market with a large and growing customer network supported by robust technology and compliance capabilities with approximately $35 million of revenues. During its last fiscal year ended March 31, 2023, and accretive EBITDA margins the acquisition of wave that.
As both financially and strategically compelling.
We expect to close the transaction in the third quarter utilizing approximately $61 million of balance sheet cash.
We are well equipped with a strong balance sheet and ongoing cash generation that will enable us to seize other accretive and Tam expanding opportunities both organically and inorganically.
As we expand our footprint internationally, we remain grounded in our core principles, which are to drive strong growth strong profitability and strong cash flow, while cultivating loyalty in our marketplace and innovating to be on the forefront of what's next.
Another recent example of this innovation is the launch of the first live events plug in for open AI chat GPT, which we announced just last month.
An industry first this plug and makes event discovery more exciting easier and faster.
After fans have all their live event questions answered by the Chatbot. This generate of AI shopping experience then links to our website for ticket purchase.
To conclude Q2 2023 was an exciting quarter for <unk> with strong financial results stacked with strategic partnerships and investments that further differentiate our marketplace and support continued momentum for our business.
With that I will turn it over to Larry.
Thanks, Dan.
Our second quarter 2023 marketplace <unk> at $954 million increased 17% year over year.
With total marketplace orders, increasing 9% year over year and average order size increasing 7%.
Our second quarter marketplace to year over year reflects a robust event calendar and continued strength in fan demand.
We saw particular strength in the concert category led by Taylor Swift U S Erez tour.
<unk> double digit growth against a record Q2 2022.
Our second quarter 2023 revenues of $165 million increased 12% year over year, driven by marketplace GOP growth.
Our Q2 take rate was $14, 6% below historical levels due to an increase in royalty accruals, coupled with select strategic targeted pricing decisions.
As we go forward wave that brings a lower take rate than debit seats and we therefore expect our take rate to be roughly 15, 5%.
We generated $31 million of adjusted EBITDA in the second quarter, converting <unk> to solid profitability, despite a lower than normal take rate.
We continue to see attractive marketing returns and are investing in accretive channels, such as incremental partnerships and influencer campaigns.
Our cash balance of $306 million exceeded our debt principal outstanding by $35 million at quarter end.
Our planned acquisition of wave dash will utilize approximately $61 million of cash and it's a clear example of the strategic opportunities. We are able to pursue as a result of our strong balance sheet and cash flow profile.
Turning to our updated outlook for 2023, we are raising our guidance to account for strong performance in the first half of the year.
While including an estimated four months of contribution from wave Josh.
We now anticipate 2023 marketplace <unk> in the range of $3 four to $3 6 billion Rep.
Revenues in the range of $630 million to $650 million and adjusted EBITDA in the range of $125 million to $135 million.
We expect our 2023 results will be more first half weighted than normal due to significant contribution in the first half from Taylor Swift.
It is abnormal for a single tour or event to move the needle for our full year results, but the arrows to our has proven to be a positive outlier.
With continued industry strength and encouraging results from our marketing efforts, we are leaning into select additional brand investments that we believe can drive compelling long term returns.
This includes our recently announced strategic partnerships, along with an increasing use of influencers to share our differentiated value proposition to high value customers.
We believe these channels will drive incremental customers, while supporting repeat rates.
Accordingly, additional marketing investment is reflected in our adjusted EBITDA guidance.
We originally anticipated a digestion year for the industry with flat year over year and adjusted EBITDA in 2023.
This view has proven overly conservative as widespread strength in live events supply and demand has continued such that we now expect double digit growth in <unk> adjusted EBITDA once again.
To wrap it was another strong quarter and an excellent first half.
We are excited to integrate wave dash and complement our differentiated growing and highly profitable business.
Back to your experience.
Thanks, Larry.
I'm proud of the strong results that our team continues to deliver our team's innovation and efforts to build valuable and differentiated products have continued to drive long term stickiness on both sides of our marketplace with higher buyer repeat rates and continuing seller skybox adoption.
Our disciplined execution has driven robust growth profitability and cash flow, enabling us to pursue accretive opportunities such as waived ash and ultimately drive long term shareholder returns.
With that operator, let's open it up for questions.
Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one one.
Again, we ask participants to limit their questions to two questions per participant please standby, while we compile the Q&A roster.
Our first question comes from the line of Ralph Shakur with William Blair. Your line is now open.
Good morning, Thanks for taking the question first question just on wave Dash, maybe provide some perspective, if you could please.
The overall Tam opportunity, maybe what attracted you to the Japanese market.
Your first international expansion.
Opportunity that broadened out going forward.
Hey, good morning, Ralph Thanks for the question, Yes, well again I think we're we've always been looking at the landscape for favorable opportunities for expansion of Tam growth as.
As we've been looking I think the appeal and the strength of the asset and wave dash.
Favorable against what we were assessing being able to enter a market.
With an industry leader, both profitable as well as strong in terms of share. There I think was an excellent way for us to look to begin some of our international efforts.
We can learn where the backdrop is favorable and so I think as we continue to look and I think our strong balance sheet is going to allow us to be.
Aggressive when we find opportunities such as wave dash in the future.
Great. Thanks, Dan maybe just a follow up maybe can you just speak to the competitive environment, how that trended during the quarter and sort of better seats positioning within the sort of competitive dynamic. Thank you.
Sure.
No I think we've continued to see stable, but strong competitive pressure and really what we're focused on is the innovation that we drive in the platform whether that's through our loyalty program, which continues to yield results in really high repeat rate whether that's in our engagement platform is the combination of if it picks as well as now game center dry.
With over 70000, new users and.
In the first 60 days, we think we've got a lot of great innovation driving long term value in the platform I think really what youre going to see US do is continue to focus on that and as we announced I think during this call also we've got a lot of great experiential partnerships that we've launched with the Chargers with the Dodgers, but the Rockies that we believe are our real.
Leaders in both the short and long term.
Great. Thanks, Dan.
One moment for our next question.
Our next question comes from the line of Kurt Nagle with Bank of America. Your line is now open.
Good morning, Thanks for taking the question.
Yes, sorry, I was just the first one.
Maybe in August one.
Why not raise the back half of the year, a little bit more right I mean, two very very strong quarters.
We've got four months where version there now I know you guys are typically conservative but.
As far as I can see doesn't look like there's any let up in demand lost nation sounded like there.
On the outlook for the next couple of years. So aside from just like basic conservatism.
Whats going into the outlook and whatnot.
Yeah, why not raise a little bit more.
Hey, Kurt.
So I think we've tried.
Tried to reflects what we believe is continued healthy outlook for the balance of the year certainly as we move forward through the quarters, we have increasing visibility on the balance of the year, particularly the concert calendar.
So that all resets as we shift into the next year and wait for the Q4 on sales.
But I would say in particular I think what drove some unique waving this year.
It is once the Taylor Swift tour.
Yes, I think we would generally say no single event no single performer.
<unk>.
A demonstrable or meaningful impact on our aggregate results.
I don't think that would be a true.
This year I think.
If you can just feel the phenomenon that it was right when you see the.
The videos and the excitement and the passion from the from her fan.
Just an outlier and that tour and this week.
Next week I will ask Jos.
States for this year.
And so essentially were assuming that.
Without Taylor Swift and the numbers there is a bit of a gap to fill.
And that balances out.
Not to say, it's not plausible.
There is more opportunity, but we wanted to make sure that we reflected that.
There is only one Taylor swift and she will not be performing the back half of the year.
Okay Fair enough and then just as a quick follow up.
Take rate so.
So I understand the drivers this quarter.
Kind of a go forward rate of 15, five would that be.
It leaves more rate for three and four.
I think that is.
Yes.
Good number going forward.
My usual caveat we're not.
10, or 20 basis points, Mark So youll see some oscillation, but I think over time that sir.
Mid <unk>.
That we should revolve around.
All right cool thank you very much.
Sure.
One moment for our next question.
Yeah.
Okay.
Our next question comes from Cameron Manson Crown with Morgan Stanley . Your line is now open.
Yes.
Hey, thanks for taking the questions.
One on the on the retail business I'm assuming.
Really strong growth year in <unk>, assuming that.
Theyre going to advance into that is also going to be Taylor swift, but any expectations with regard to the retail business through the back half of the year.
And then one on the TRA liability I think in the Q says the payments Theyre expected to happen in 'twenty five just any color on is there.
It's going to be for that flow through is just one lump statement or that be multiple payments.
Kind of just how to think about modeling that for now thanks.
Hey, Cameron, it's Dan I'll take the first one and then pass it to Larry for the TRA, but.
<unk> always talked about resales are great R&D center for us and I wouldn't really expect.
Anything different than what we put forth there whether you see the fluctuations in the quarter I think they represent more fluctuations in the industry versus anything else I wouldn't I wouldn't read anything more than that's just industry strength into what youre seeing in the first half of the year.
Yes.
Got it.
And then on the PRA.
<unk>.
At the risk of.
Repaving things that already are known.
The amount that we will owe.
And thus the amount on our balance sheet is reflective of amounts that we are not paying.
Federal income tax and instead, we are taking those savings.
Sharing them with our.
TRA holders and then we retain 15% of that benefit.
And incremental Cork.
There is a year delay and so I would think of the cash outflows as generally being a year after that.
Okay.
Our payment obligation is generated and so we will have rolling quarterly.
Tax obligations.
I'll have rolling a year later, the money actually going out the door.
Okay.
Got it that's helpful. Thanks, guys.
One moment for our next question.
Our next question comes from the line of Stephen Ju with Credit Suisse. Your line is now open.
Okay, great. Thank you so just.
Follow up question on wave.
It does look like it has multiple businesses outside tickets.
So maybe it's too early to comment on here, but what do you think you will do with the things that are probably a more a bit more distant from your core ticketing business.
And secondarily, what can you tell us about the Japanese market environment.
Fred.
Or the same.
As to one here in the United States. Thank you.
Hey, Stephen Thanks for the questions.
Yeah, I think when we when we looked at the asset focus it firsthand.
We're obviously excited about our core business and continue to look for ways, where we can leverage what we do well into a broader landscape Ied international one and certainly where we can learn I think waived ash is really exciting. So yes, yes. There are few other components of the business there, but we're really focused on that.
Ticketing side of it and excited to see what else essentially learn about those other avenues, but I would say you're going to see us laser focused on again, the things that we do well that are core to our business and where we can.
Leverage things.
That we do here over there and vice versa, as we as we learn a little bit more.
As it pertains to the Japanese market is also one that we're excited about right I think broadly live events are booming around the world.
I think Japan is no exception to that I think what we saw there was a favorable backdrop, where we could go in with a market leader.
And learn more and potentially use that as a as a launching off point for other markets as we continue to develop our knowledge and hone our processes to be.
Larger international organization.
Steven.
Got it.
Small things one the other businesses.
The three of them some up to about 10% of the.
The company's revenue so the vast majority is the core ticketing business. So we're very excited about that alignment.
The other difference I might call out between North American and Japanese market.
Sports or just a little bit less popular over there I think North America in many ways is the global leader in terms of our passion for sports and the number of professional sports. So youll see a slightly heavier concerts theater waiting in that market. Then you will see here.
Thank you.
One moment for our next question.
Okay.
Our next question comes from the line of Maria <unk> with Canaccord. Your line is now open.
Great. Good morning, Thanks for taking my questions first on with Dash, how should investors interpret this acquisition as it relates to your appetite for further international expansion and what are your thoughts on any potential sooner. Just here is is it fair to assume that those are likely to be set up on the backend and expense side or any color you can share.
I own that.
Yeah, Hey, Maria.
I think the right thing for folks interpreted certainly we are always going to be on the lookout for ways to expand and as we've looked at waived as you know I think again, we found a great opportunity for us to launch internationally.
With an asset that is accretive.
And profitable and so I think as we look at the broader landscape anytime we find a favorable backdrop, where I think we can either move in organically or inorganically with strength I think we're going to do that.
I think on the on the synergies question you know I think we're we're certainly excited to continue to learn more as we move towards closing the deal, but certainly you can expect us to be managing for both where we see front end back end opportunities.
Yeah.
Got it that's very helpful and then secondly.
Many advertisers and brands are increasingly leveraging AI to optimize their marketing mix do you think you have any room for further efficiency gains by investing or leveraging in AI investing in AI tools kind of on the marketing side and then Relatedly could you maybe just touch on whether you've seen any easing on the compare to.
It is precious and advertising side.
Im sorry.
I think we're at the forefront certainly have all the AI opportunity. That's there I think embedded in much that we do is already what I would say.
A lot of advanced data science and algorithms powering some of our proprietary marketing in particular.
We're always excited to be on the forefront whether thats in our partnership with open AI and chat GPT, whether thats in looking at new opportunities to self develop AI on the marketing side, but I think we're early days there if we have anything to share we'll be happy to.
Continue to look for ways to be really efficient and aggressive on the marketing front as well.
Yes, I'm competitive environment I would generally think the right word is stable.
Relative to what we may characterize as peak.
Competitive intensity I think we referenced.
Perhaps Q3 of last year.
<unk> to maybe win particularly outside the normal bounds I'd say that has come back within more normal ranges.
So I would I think this is acis.
So a stable level amongst particularly the larger players in the space I think there is still a very open question on if this is a sustainable level for some of the folks that haven't broken the profitability barrier just continue to reiterate when you are.
And your 11% or 12 of operations and haven't quite cracked the code on being profitable I think thats indicative of a.
Perhaps unsustainable model.
Great. Thanks, so much for the color.
One moment for our next question.
Yes.
Our next question comes from Brad Erickson with RBC. Your line is now open.
Hey, good morning, Longwall for Brad Thanks for taking the question.
Last quarter and the full year Guide I think you guys had mentioned you are baking in some sort of a macro slowdown for the full year.
Given what you guys are cool.
This past quarter, just wanted to see if there's any updated thinking there for the full year and then additionally, just given.
Kevin.
Where competitive pressures on the advertising side.
Sure, maybe I'll historical level any sort of expectations in those normalizing further in the back half of the year.
Yes, I think on the macro point I think too.
Few things have pushed in the same direction in terms of not projecting as much impact in the balance of the year one.
Just being now seven months in and knowing the answer on seven months with only five months remaining.
I think removes a fair bit of the speculation and then the second part.
Would not be controversial to say that the general mood on the macro has improved relative to where it was at the beginning of the year with more talking about software versus hardware.
Thanks.
We're certainly not intending to play Mac.
Macroeconomic.
Economists with precision, but I do think our view is for the balance of the year, we feel like the outlook is pretty stable.
In our guidance, we're not <unk>.
Forecasting a quicker start.
The gradation in the macro.
I think we'll evaluate as we prepare our 24 outlook and continue to keep an island.
How market sentiment evolves.
The current sentiment I think we would continue to have some degree of awareness that there is still concern around possible future slowdown.
But that concerned us appear to be softening.
On the competitive question.
Yes, I would not I don't have any reason to believe there is a going to be meaningful.
Shift.
In the back half relative to what we've been seeing in Q1 and Q2.
Notwithstanding won't happen for every certainly see competitors pivot and adjust behavior.
Yes.
For reasons that we wouldn't be able to precisely explained.
But no obvious shift that we've seen.
Subsequent to the quarter end and no obvious reason why we would expect it to happen in the near future.
Okay. Thanks.
That's very helpful.
One moment for our next question.
Okay.
Okay.
Our next question comes from the line of Thomas Forte of D. A Davidson your line is now open.
Great So San Larry Congrats on the quarter just one question for me so with waived as representing our first international foray can you talk about the international total addressable market and compare and contrast, the growth rates for the secondary market inside and outside the U S.
Yeah.
Yes, I think.
In aggregate, we would estimate that the total international ticketing market.
Roughly approximates the north American ticketing market, maybe a little bit smaller in aggregate, obviously you mean.
Decomposing the individual countries that will have each have their own cultural.
Considerations.
So I don't think its quite.
Simple is entering the U S and we need to double your addressable market it will be a bit more piecemeal.
Overall.
Great.
We view the growth rates.
Similar perhaps a slightly positive bent.
As you contemplate that international has a slightly heavier concert in theater SKU.
I think Japan is somewhat reflective of a number of countries where the.
The North American waiting on sports and this is going to be heavier than others and as we pointed to I think stronger growth in concerts and sports that can be a slight tailwind for overall international opportunities.
Thanks, Larry.
One moment for our next question.
Okay.
Our next question comes from the line of Matt Farrell of Piper Sandler Your line is now open.
Thanks, guys. My first one is just on the impact of the student loan repayments coming back up in Q4, I guess, how are you thinking about that as an impact of the guide and maybe just thinking a little bit beyond just this year.
Those repayments coming back up do you see that as maybe a headwind of consumers willing to spend broadly on life events in 2024.
Hey, Matt I think.
I think what we continue to see us resiliency in and the strength of consumer demand here against the especially against the macroeconomic backdrop. So I think we'll continue to see that trends and factor that in accordingly, but we certainly haven't seen anything there that would.
Cause us to think about that any differently.
And then maybe for my second question, how is vivid pik pik spend performing over the last couple of months and how should we be thinking about engagement trends as we head into the football season, which tends to be.
The year DFS time of year.
Yes sure.
We're excited about that as a platform right I think as we continue a month over month to continue to see user growth on vivid fix we continue to see high double digit.
Daily active users entries per month. So we continue to see that engagement, there and I think equally as exciting we take that engine and we move that into our game Center platform. So now ubiquitously across our App ecosystem, we have methods with which to engage consumers and we continue to see growing engagement and growing.
User acquisition through those channels and remain really bullish on on their long term value to the business.
One moment for our next question.
Okay.
Our next question comes from the line of Andrew <unk> from Raymond James Your line is now open.
Hi, Thanks for taking my questions given the thought was for a digestion year in 'twenty three originally and that ended up proving conservative does that expectation move out to 'twenty four or does that take the prospect for digestion, maybe off the table or reduce its impact a little bit obviously being cognizant that youre not formal.
Guiding for 24 at this point.
Yeah.
Yes, Thanks, Andrew.
Yes, as you noted I think.
With benefit of hindsight.
Digestion premise and the concern around.
Pent up demand or have been spending proved overly conservative.
Much to our pleasant surprise.
As we look forward to next year I think we have no reason to believe that our general long term growth trajectory for the industry.
Wouldn't hold.
With perhaps the exception this year of.
The aforementioned Taylor Swift benefit this year, which.
Fortunately we are happy to report we will have some recurring benefit next year essentially announced from shows but certainly a smaller footprint. Vince you had this year, so it'll be a net reduction.
And it's given the size of that too I think that that will be here.
<unk>.
Slight headwind relative to otherwise what feels like a really strong secular trend.
Consistent with past practice, we went for <unk>.
<unk> nation commentary is I think they have the best insight on that forward calendar and we continue to hear step.
Steady consistent bullish commentary that this is a secular and not transient trends.
Got it.
Taylor helped you shake it off understood.
Okay.
For a for a follow up with the Japanese expansion.
Not to be too what have you done for me lately, but looking into other specific markets lately would you highlight some that are maybe better opportunities for the secondary side of ticketing and some that are maybe a little bit more constrained I'm thinking of countries or sports leagues like the Premier League.
Our secondary ticketing isn't really that big of a thing for them.
Yes, Andrew it's Dan Yeah look I think when we look at international I think.
Literally the world is our oyster here and so I think we have the opportunity to I think look for versus I think giving you specific markets I think the criteria that we're going to look for our markets were certainly there is a favorable regulatory environment, where there is a favorable kind of.
Apply in demand opportunity and then I think where there was a favorable opportunity for us to move in either organically and Inorganically right. So I think as we continue to look.
At the World, we will look for things that meet our criteria and.
As they as those criteria are evaluated and assessed again I think we will have the balance sheet and certainly the platform to be able to do things, both inorganically and organically when those opportunities arise.
Thank you very much I appreciate the color.
One moment for our next question.
Yeah.
Our next question comes from the line of Dan <unk> of Benchmark Company. Your line is now open.
Great. Thanks, Good morning, nice quarter guys obviously.
And just going back to the marketing mix question I mean, our checks kind of suggest that most of the take rate pressures coming from the sports side.
And you announced obviously.
More strategic partnerships with sports teams and I think the overall marketing spend maybe a little bit less than we anticipated in the quarter. So can you just kind of talk about your desire to continue to differentiate where maybe spend on more.
Take greater promotional activity rather than out of pure brand band or even performance base spend.
In the marketplace, given what's going on with competitive environments.
Yeah, sure Hey, Dan, Yes, I think we're excited to have found.
Great opportunities on the partnership front.
I'll frame for maybe referencing I think we've we've always looked at perhaps just raw brand spend as being a difficult thing to measure and drive value on so I think we've always looked at how do we drive.
Targeting towards high value audiences as well as investments that will yield I think differentiated experiences for our consumers. So both in our digital mix as you look at what we do there I think we continue to be intelligently programmatically buying towards high value audiences and then on the partnership side, especially.
Ones that we've announced today when you look at whether it's the Dodgers with vivid seats speak easy custom drinks food and drinks acquired or our special section with the Chargers, which will go in this football season.
<unk> areas with a DJ playing where again, that's fully branded and fully accessible only on <unk> I think those are areas, where if we look at the opportunity to invest is really differentiating on the platform. One that we think has long term viability and staying power and thats really whats guiding our hands on our investments towards the marketing.
Frontier.
And how do we think about kind of economics of those deals and do you pick up any and in that in.
And those deals.
Sorry, Dan didn't hear the last part of your question.
I was just curious if youre able to penetrate into the hands of band market deals.
Got it.
Yes, I think on the on the Horizon I think as with everything I think we I think we only look at deals that we believe have long term value to us over the.
Over.
The period of the customers' lifecycle when we look at some of those partnership investments certainly I think the horizon is going to be longer than when we look at more of the immediate customer acquisition performance marketing elements, but certainly we don't have an infinite horizon and we're quite judicious in terms of how we assess.
Goodness.
When we look at the sand event that I think we're certainly excited about the prospects of potentially broadening that component of our business as we look at partnership with teams that will.
Certainly drive that I think to to the extent how much. They drive it is what will assess through the through the course of this period, but I think we're certainly excited about the prospects and the ability of growing that in partnership with.
The teams that were working with.
Got it Super helpful and just a quick for Larry just sort of housekeeping on the guide.
The checks suggest that it's been more.
Order volume than price or the price has been super healthy. So just on the thoughts on the back half of the year.
You've talked about digestion, a lot not really occurring but I mean should we see kind of similar order slightly outpacing price with both of them above what you would think of as more normalized levels.
Yes, I think yes.
If you look at.
This quarter.
Orders up about 9% Pos up about 7% so strength across both as you noted.
I think if you look.
Historically at our Pos trajectory or three years to 4% annualized CAGR.
It really does play out with that.
Always present caveat that it's tough to be pre.
Precise in that given quarter.
So on the margin I would guide to seven is higher than our normal three to four so perhaps a little bit less.
And price in the back half.
And that I think helps foot a little bit on the aggregate numbers.
But we continue to see.
Health right I think.
If you saw price meaningfully moving in either direction from that long term CAGR would tell you something about a supply and demand mismatch.
And it's better seeing it very consistent which I think indicates that there is there is pretty solid alignment between the.
Amount of supply and the demand out there. So we feel good that they'll continue to move.
Directionally in lockstep barring some sort of.
Changes to the environment.
They keep raising primary prices Larry secondary still over double that consistently state there. So I think that fits with what youre, saying thanks for the color guys really appreciate it.
Hi.
One moment for our next question.
Our next question comes from the line of Jason Bazinet with Citi. Your line is now open.
I just had a quick question on the loyalty program.
Maybe just a question for Larry What Council would you give the investment community in terms of metrics that they should focus on or annualized two.
Assess the traction that you guys are getting a loyalty program.
Yeah.
Yes, certainly on an annual basis I think.
The.
Most helpful, albeit on an annual cadence will be that continued.
Hi.
Hopeful shift towards repeat orders.
Talked about the improvements from high <unk> to 56% of orders coming from repeat customers and we expect that number to continue to.
To move up over time, and I think that will.
The magnitude of that increase will be reflective of.
The traction, we're getting with boats coming into our ecosystem in Spain and our ecosystem.
<unk>.
Yes, I think if you were to.
Take a slightly longer time horizon ultimately, we think that shift is what drives the <unk>.
Operating leverage in the <unk>.
Long term return on the brand marketing and loyalty investments that we've made.
When you start to get more precise than that.
Oh I'm sorry go ahead.
No no go ahead.
Alright.
As we start thinking about being more precise there are other metrics that we look at internally.
I'd say, none of them are perfect right, because it's very difficult to understand with precision.
The person repeat because of our royalties are because of our improved engagement from vivid picture because of the better experience from the partnerships or better awareness from our high value audience targeting.
We will never really know so it tends to be an aggregate impact.
But we are generally looking to substantiate the ROI from the loyalty program on repeat rate alone and any other benefit would be.
And we feel like we're trending well in that regard.
Sure.
Yes.
Is the right metric than with the sales and marketing expenses as a percent of revenue should come down even if your take rate comes down in parallel.
Is that the right way to think about it.
Yes, I think thats exactly right.
Intermediate term step back in.
Compare kind of the pre pandemic for post pandemic profile of David fleets. The Big investments. We made are adding the loyalty program and then some brand investment alongside that.
I think we said we believe those are call. It 456 year investments to get the ROI. We're now.
A year and a half two years into that cycle.
And so I think we're seeing all of the right trends to believe we're going to get to the positive ROI you'd want to deliver.
But we're not fully there yet.
The place you will ultimately see that Doosan.
Marketing efficiency.
Okay. Thank you.
I'm showing no further questions at this time. Thank you all for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
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