Q4 2023 Eventbrite Inc Earnings Call

Catherine Chen: The conference is now being recorded. Good afternoon, and welcome to Eventbrite's fourth quarter 2023 earnings call. My name is Catherine Chen, head of investor relations.

The conference is now being recorded.

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Catherine Chen: Good afternoon, and welcome to that breaks fourth quarter 2023 earnings call. My name is Catherine Chen head of Investor Relations with US today are Julia Hartz, co founder and Chief Executive Officer, and Lanny Baker, our Chief Financial Officer.

Catherine Chen: With us today are Julia Hartz, our co-founder and chief executive officer, and Lanny Baker, our chief financial officer. As a reminder, this conference call is being recorded and will be available for replay on Eventbrite's investor relations website at investor.eventbrite.com. Please also refer to our investor relations website to find our shareholder letter announcing our financial results, which was released prior to the call. Before I get started, I would like to remind you that during today's call, we'll be making forward-looking statements regarding future events and financial performance. We caution that such statements reflect our best judgment as of today, February 27th, based on the factors that are currently known to us, and that actual future events or results could differ materially due to several factors, many of which are beyond our control.

Catherine Chen: As a reminder, this conference call is being recorded and will be available for replay on evaporates Investor Relations website at Investor <unk> Com. Please also refer to our Investor relations website to find our shareholder letter announcing our financial results, which was released prior to the call.

Catherine Chen: Before I get started I would like to remind you that during today's call, we'll be making forward looking statements regarding future events and financial performance.

Catherine Chen: We caution that such statements reflect our best judgment as of today February 27 based on factors that are currently known to us and that actual future events or results could differ materially due to several factors many of which are beyond our control.

Catherine Chen: For a more detailed discussion of the risks and uncertainties affecting our future results, we refer you to the section titled Forward-Looking Statements in our Shareholder Letter and our filings with the SEC. We undertake no obligation to update any forward-looking statements made during the call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. During this call, we'll present Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and have limitations as an analytical tool.

Catherine Chen: For a more detailed discussion of the risks and uncertainties affecting our future results. We refer you to the section titled forward looking statements in our shareholder letter and our filings with the SEC.

Catherine Chen: We undertake no obligation to update any forward looking statements made during the call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law.

Catherine Chen: During this call will present, adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures.

Catherine Chen: These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and have limitations as an analytical tool.

Julia Hartz: You should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. A reconciliation to the most directly comparable GAAP financial measure is available in our shareholder letter. We encourage you to read our shareholder letter, which contains important information about GAAP and non-GAAP results.

Catherine Chen: You should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP.

Catherine Chen: A reconciliation to the most directly comparable GAAP financial measure is available in our shareholder letter.

Catherine Chen: We encourage you to read our shareholder letter, which contains important information about GAAP and non-GAAP results.

Catherine Chen: And with that I'll now turn the call over to Julia.

Julia Hartz: Thank you for joining us to review our fourth quarter and fiscal 2023 results. We took bold action this year to accelerate our two-sided marketplace model. Success meant delivering audience growth to our creators, tapping into new and vast consumer opportunities, and driving increased financial returns for our business. I'm proud of the team for making progress on these priorities.

Julia Hartz: Thank you to everyone joining us to review, our fourth quarter and fiscal 2023 results we.

Julia Hartz: We took bold action this year to accelerate our two sided marketplace model.

Julia Hartz: Success meant delivering audience growth to our creators tapping into new and vast consumer opportunities and driving increased financial returns for our business.

Julia Hartz: I'm proud of the team for making progress on these priorities.

Julia Hartz: Gross ticket sales totaled $3.6 billion in 2023 as we helped power the global experience economy. Our community grew to over 91 million people who love to go to events and nearly one million event creators who trusted Eventbrite to handle ticketing and promotion for over five million events last year. We democratized online advertising for our creators with the widespread release of our marketing tools. For consumers, we helped bring events to life with a richer and more personalized search and discovery experience. Our strong 25% top-line growth for the year reflects our ability to serve ticketing, marketing, and event discovery needs. Looking ahead to 2024, we remain focused on our goal of becoming the go-to marketplace for shared experiences. Thanks to our thoughtful product investments, the creator experience became more differentiated than ever in 2023.

Julia Hartz: Gross ticket sales totaled $3.6 billion in 2023, as we helped power of the global experience economy.

Julia Hartz: Our community grew to over 91 million people, who love to go to events and nearly 1 million event creators, who trusted eventbrite to handle ticketing and promotion for over 5 million events last year.

Julia Hartz: We democratized online advertising for our creators with the widespread release of our marketing tools.

Julia Hartz: For consumers, we helped to bring events to life with a richer and more personalized search and discovery experience.

Julia Hartz: Our strong 25% topline growth for the year reflects our ability to serve ticketing marketing and event discovery needs.

Julia Hartz: Looking ahead to 2024, we remain focused on our goal of becoming the go to marketplace for shared experiences.

Julia Hartz: Thanks to our thoughtful product investments the creator experience became more differentiated than ever during 2023.

Julia Hartz: Our focus on generating demand has been a key driver in our marketplace transition. We've become a demand generation partner by providing marketing tools to all Eventbrite users. Over 75% of creators we surveyed already consider us a partner in boosting their event success. We believe our brand equity, consumer presence, and ability to influence event marketing outcomes will set us apart from other solutions. We're happy with the progress made throughout the year on Eventbrite ads.

Julia Hartz: Our focus on generating demand has been a key driver in our marketplace transition.

Julia Hartz: We'd become a demand generation partner by providing marketing tools to all of them bright users.

Julia Hartz: Over 75% of creators, we surveyed rd consider as a partner and boosting their event success.

Julia Hartz: We believe our brand equity consumer presence and ability to influence that marketing outcomes will set us apart from other solutions.

Julia Hartz: We're happy with the progress made throughout the year on Eventbrite ads. Our team has worked tirelessly to support a record number of creators who are looking to promote their events in the marketplace.

Julia Hartz: Our team has worked tirelessly to support a record number of creators who are looking to promote their events in the marketplace. In response to feedback from our creators, we have introduced new ways to tailor event listings, resulting in better ad efficacy and accelerated sign-up rates. With the implementation of AI-powered event and marketing flows, we drastically decreased the time it takes to create an event listing and marketing campaign.

Julia Hartz: In response to feedback from our creators we have introduced new ways to tailor event listings, resulting in better ads efficacy and accelerated sign up rates.

Julia Hartz: With the implementation of AI powered event and marketing clothes, we drastically decrease the time it takes to create an event listing and marketing campaign.

Julia Hartz: We continue to find new ways to apply conversational AI to serve our customers' needs and generative AI to make hosting an event intuitive and successful. Each of these product areas focuses on addressing the most urgent needs of creators to sell more tickets and improve event success. In 2023, we better positioned our team to deliver that outcome for our customers by repurposing investment resources toward growth enablement. Earlier this year, we restructured our teams to reduce operations overhead.

Julia Hartz: We continue to find new ways to apply conversational AI to serve our customers' needs and generative AI to make hosting an event intuitive and successful.

Julia Hartz: Each of these product areas focuses on addressing the most urgent need of creators to sell more tickets and improve event success.

Julia Hartz: In 2023, we better positioned our team to deliver that outcome for our customers by Repurposing investment resources toward growth enablement.

Julia Hartz: Earlier this year, we restructured our teams to reduce operations overhead, we outsource customer support functions to the Philippines, just streamline operations and scaled our development capacity in Spain and India.

Julia Hartz: We outsourced customer support functions to the Philippines to streamline operations and scaled our development capacity in Spain and India. We believe this new operating mode will help us execute our proven ticketing playbook more efficiently. By doing this, we can focus on creating more value for our customers and also better target those creators in the future. We've already witnessed the advantages of this strategy in our financial performance.

Julia Hartz: We believe this new operating mode will help us execute our proven ticketing playbook more efficiently.

Julia Hartz: By doing this we can focus on creating more value for our customers and also better target those creators in the future.

Julia Hartz: We've already witnessed the advantages of this strategy and our financial performance.

Julia Hartz: Although monetization has increased, we've been able to maintain moderate operational expense growth by improving efficiency and cost management on a daily basis. We aim to continue these gains this year and strive to achieve even better results. Our decisions reflect our thoughtful transition to the two-sided marketplace model that we believe best serves creators and consumers and creates long-term value for our business.

Julia Hartz: Although monetization has increased we've been able to maintain moderate operational expense growth by improving efficiency and cost management on a daily basis.

Julia Hartz: We aim to continue these gains this year and strive to achieve even better results.

Julia Hartz: Our decisions reflect our thoughtful transition to the two sided marketplace model that we believe best serves creators and consumers and creates long term value for our business.

Julia Hartz: We've made strong progress on our product roadmap to support our marketplace repositioning over the past year. Where we now see the biggest opportunities are in honing our go-to-market strategy and continuing to improve our consumer product experience. This means attracting and winning creators who value and amplify our differentiation. It also means enhancing personalization and search and discovery to delight consumers and increase engagement.

Julia Hartz: We've made strong progress on our product roadmap to support our marketplace repositioning over the past year.

Julia Hartz: Where we now see the biggest opportunities are in honing our go to market strategy and continuing to improve our consumer product experience. This.

Julia Hartz: This means attracting and winning creators who value and amplify our differentiation. It also means enhancing personalization and search and discovery to delight consumers and increase engagement.

Julia Hartz: These are our immediate priorities as we address paid ticket growth and ensure each lever of our business positively reinforces our growth model. As we look forward, we plan to evolve our sales and marketing in 2024 to target the events we know our most valuable consumers seek, starting with nightlife. We plan to supplement our value proposition to win this inventory and increase our total addressable market by building new tools that our creators want, like timed entry and better business empowerment tools. To make discovering events even easier, we plan to lean into distribution partnerships to put the right event in front of the right person at the right time, wherever they are.

Julia Hartz: These are our immediate priorities as we address paid ticket growth and ensure each lever of our business positively reinforces our growth model.

Julia Hartz: As we look forward, we plan to evolve our sales and marketing in 'twenty 'twenty four to target. The events. We know are most valuable consumers seek starting with nightlife.

Julia Hartz: We plan to supplement our value proposition to witness inventory and increase our total addressable market by building new tools that are creators want like timed entry and better business empowerment tools.

Julia Hartz: To make discovering events, even easier we plan to lean into distribution partnerships to put the right event in front of the right person at the right time wherever they are.

Charles C. Baker: To encourage repeat purchasing, we plan to evolve how consumers interact with our brand across all critical surfaces, starting with the consumer mobile app. We plan to continue building trust in our marketplace for both creators and consumers by anticipating and protecting against fraud, as well as modernizing our support channels to deliver rapid problem resolution for more customers. We believe that our focus on driving demand for creators, coupled with our consumer roadmap, will yield great benefits for both sides of our marketplace and result in increased ticket growth. Leaning into our scale, trusted brand, and powerful operating model, we are confident that we can chart a path forward that enriches live events, brings the world together through live experiences, and creates value for all stakeholders. With that, I'll turn the call over to Lani to discuss our financial performance and outlook. Thank you, Julia.

Julia Hartz: To encourage repeat purchasing we plan to evolve how consumers interact with our brand across all critical surface areas, starting with the consumer mobile app.

Julia Hartz: We plan to continue building trust in our marketplace for both creators and consumers by anticipating and protecting against fraud as well as modernizing our support channels to deliver rapid problem resolution for more customers.

Julia Hartz: We believe that our focus on driving demand for creators coupled with our consumer roadmap will yield great benefits for both sides of our marketplace and result in increased ticket growth.

Julia Hartz: By leaning into our scale trusted brand and powerful operating model. We are confident that we can try to pass board, which enriches live events brings the world together through live experiences and creates value for all stakeholders with that I'll turn the call over to Lanny to discuss our financial performance and outlook.

Charles C. Baker: Thank you Julia I'll address financial highlights from the fourth quarter and full year before providing more detail on paid ticket performance and our actions there and then I'll turn to our outlook.

Charles C. Baker: I'll address financial highlights from the fourth quarter and full year before providing more detail on paid ticket performance and our actions there, and then I'll turn to our outliers. Shifting toward becoming a two-sided marketplace has led to meaningful changes in our financial results over the past year. First, we've grown non-ticketing revenue from 2% to more than 10% of our revenue as of the fourth quarter of 2023. We've done this by deliberately delivering and extracting value associated with the demand generation we provide to creators. Subscription and per-event organizer fees totaled $6.6 million in the fourth quarter.

Charles C. Baker: Shifting toward becoming a two sided marketplace has led to meaningful changes in our financial results over the past year.

Charles C. Baker: First we have grown non ticketing revenue from 2% to more than 10% of our revenue as of the fourth quarter of 2023, we've.

Charles C. Baker: We've done this by deliberately delivering and extracting value associated with the demand generation, we provide to creators.

Charles C. Baker: Subscription and per event organizer fees totaled $6.6 million in the fourth quarter.

Charles C. Baker: As creators brought 1.4 million events to be ticketed in our marketplace during the quarter, Eventbrite's ads revenue was 2.3 million in the fourth quarter, up 28% quarter over quarter, as the number of advertisers and spend per advertiser both grew to new highs. Collectively, demand generation, embodied by marketing tools, organizer fees, and Eventbrite ads revenue, helped us reach a new revenue record in the fourth quarter, and we expect to build on this in 2024. Second, we updated our ticketing and service fees in early 2023 to reflect prior product investments and align with industry norms. As a result... We have increased our ticketing take rate and enhanced revenue per ticket by more than 10% during 2023. These gains strengthen our ability to further invest in the consumer side of our marketplace. And third, the changes in monetization arising from our marketplace strategy have helped our margins reach new highs. Gross margin exceeded 70% for the first time during Q4, compared to 66% a year ago.

Charles C. Baker: As creators brought 1.4 million events to be ticketed in our marketplace. During the quarter of upright ads revenue was $2.3 million in the fourth quarter up 28% quarter over quarter.

Charles C. Baker: The number of advertisers and spend per advertiser, both grew to new highs.

Charles C. Baker: Collectively demand generation embodied by marketing tools organizer fees and Eventbrite ads revenue.

Charles C. Baker: Opt us reach a new revenue record in the fourth quarter and we expect to build on this in 2024.

Charles C. Baker: Second we updated our ticketing and service fees in early 'twenty, two 'twenty three to reflect prior product investments and align with industry norms.

Charles C. Baker: As a result.

Charles C. Baker: We have increased our ticketing take rate and enhanced revenue per ticket by more than 10% during 2023.

Charles C. Baker: These games strengthen our ability to further invest in the consumer side of our marketplace.

Charles C. Baker: And third the changes in monetization arising from our marketplace strategy have helped our margins reached new highs.

Charles C. Baker: Gross margin exceeded 70% for the first time during Q4 compared to 66% a year ago.

Charles C. Baker: Our adjusted EBITDA margin also improved. Excluding restructuring costs, reserve adjustments, and other items, we more than doubled our adjusted EBITDA margin year over year, reaching 12% for the full year 2023, with 40% of year-to-year revenue growth flowing through to adjusted EBITDA. These encouraging financial benefits arising from our marketplace strategy have to be considered in the overall context of our business, however, and we've seen a near-term impact on paid ticket volume from the changes we've introduced. Pay tickets were down 4% in the fourth quarter versus the prior year, even as total revenue was up 23% year to year to $88 million, which was the midpoint of our Q4 Business Outlook range.

Charles C. Baker: Our adjusted EBITDA margin also improved.

Charles C. Baker: Excluding restructuring costs reserve adjustments and other items, we more than doubled our adjusted EBITDA margin year over year, reaching 12% for the full year 2023, with 40% of year to year revenue growth flowing through to adjusted EBITDA.

Charles C. Baker: These encouraging financial benefits arising from our marketplace strategy has to be considered in the overall context of our business. However.

Charles C. Baker: And we've seen a near term impact on paid ticket volume from the changes we've introduced.

Charles C. Baker: Pay tickets were down 4% in the fourth quarter versus the prior year, even as total revenue was up 23% year to year to $88 million, which was the midpoint of our Q4 business outlook range.

Charles C. Baker: Pay ticket volume is expected to be lower year to year in the first quarter of 2024 as well, and this has been factored into our business outlook for the quarter and the full year. When organizer fees were widely implemented in September-October of 2023, this was the first time Eventbrite had imposed any charge associated with accessing our marketplace and our audience reach. The larger objective here was to shift our model and our go-to-market and to reposition Eventbrite as a marketplace delivering attendees for creators and serving up great live experiences for consumers. We continue to have conviction in this strategy, and we are focusing on attracting creators of high-quality events who seek audience growth and showcasing the appealing events that feed strong consumer demand in order to improve pay ticket volume in 2024. Nonetheless, we see recent paid ticket volume trends having a near-term impact. And I want to turn to what this means for our immediate operating priorities and then our business outlook for the coming year. We are pursuing three main levers to improve paid ticket growth. And in a marketplace mode, these efforts play on and reinforce each other. First,

Charles C. Baker: Paid ticket volume is expected to be lower year to year in the first quarter of 2024 as well.

Charles C. Baker: And this has been factored into our business outlook for the quarter and the full year.

Charles C. Baker: When organizer fees were widely implemented in September October of 2023. This.

Charles C. Baker: This was the first time event bright had imposed any charge associated with accessing our marketplace and our audience reach.

Charles C. Baker: The larger objective here was to shift our model and our go to market and to reposition eventbrite as a marketplace delivering attendees for creators and serving up great live experiences for consumers.

Charles C. Baker: We continue to have conviction in our strategy and we are focusing on attracting creators of high quality events, who seek audience growth.

Charles C. Baker: And showcasing the appealing events the beads strong consumer demand in order to improve paid ticket volume in 2024.

Charles C. Baker: Nonetheless, we see recent paid ticket volume trends, having a near term impact.

Charles C. Baker: And I want to turn to what this means for our immediate operating priorities and then our business outlook for the coming year.

Charles C. Baker: We are pursuing three main levers to improve paid ticket growth.

Charles C. Baker: And in a marketplace mode. These efforts play on and reinforce each other.

Charles C. Baker: First highly visible high volume in demand events are central to our marketplace.

Charles C. Baker: Highly visible, high volume, in demand events are central to our market, and we have focused inbound and outbound sales to target these strategic accounts. Our sales team closed 24% more new accounts in the second half of 2023 than in the same period last year, and that momentum remained strong in early 2024. With changes we've made to monetization, we can be very competitive and profitable in the sales channel today, and we're leaning in there.

Charles C. Baker: And we have focused inbound and outbound sales to target these strategic accounts.

Charles C. Baker: Our sales team closed 24% more new accounts in the second half of 2023 than in the same period last year.

Charles C. Baker: Enough momentum remained strong in early 2024.

Charles C. Baker: With changes we've made to monetization, we can be very competitive and profitable in the sales channel today and we're leaning in here.

Charles C. Baker: Next we're focused on the self sign on channel and making adjustments to move past, what we believe is a temporary disruption and creator acquisition tied to the implementation of organizer fees.

Charles C. Baker: Next, we're focused on the self-sign-on channel and making adjustments to move past what we believe is a temporary disruption in creator acquisition tied to the implementation of organizer feeds. We intend to improve landing pages and sign-up flows, better explain and simplify our new pricing tiers through product marketing, and in some cases, adjust pricing, for instance, by introducing annual plans for institutions that prefer to be billed in advance, and new rates for nonprofits. On the consumer side, our near-term priorities are elevating the visibility of top events, either via Eventbrite ads or through algorithm updates. We're also steering users to the personalization and ease of our mobile app and investing in SEO and distribution partnerships to expand top-of-funnel traffic. Combined, these actions are expected to improve paid ticket volume growth as the year unfolds. Based on current information, we anticipate revenue of $359 million to $372 million for full year 2024.

Charles C. Baker: We intend to improve landing pages and sign up flows.

Charles C. Baker: <unk> explained and simplify our new pricing tiers through product marketing and in some cases adjust pricing for instance, introducing annual plans for institutions that prefer to be billed in advance.

Charles C. Baker: New rates for nonprofits.

Charles C. Baker: Then on the consumer side, our near term priorities are elevating the visibility of top events.

Either via Eventbrite ads or through algorithm updates.

Charles C. Baker: We're also staring users to the personalization and ease of our mobile App and investing in S. E T O and distribution partnerships to expand top of funnel traffic.

Charles C. Baker: Combined these actions are expected to improve paid ticket volume growth as the year unfolds.

Charles C. Baker: Based on current information, we anticipate revenue of 359 million to 372 million for full year 2024.

Charles C. Baker: The midpoint of that range would equate to 12% revenue growth over 2023. For the first quarter of 2024, our business outlook anticipates revenue in a range of $84 to $87 million, or 10% year-to-year revenue growth at the midpoint for the first quarter. There are a number of assumptions reflected in our quarterly and full-year revenue outlook, including the following. Paid ticket volume is expected to be lower year-over-year in the first half and down slightly to up modestly for the full year.

Charles C. Baker: The midpoint of that range would equate to 12% revenue growth over 2023.

Charles C. Baker: For the first quarter of 2020 for our business outlook anticipates revenue in a range of $84 million to $87 million.

Charles C. Baker: Or 10% year to year revenue growth at the midpoint for the first quarter.

Charles C. Baker: There are a number of assumptions reflected in our quarterly and full year revenue outlook, including the following.

Charles C. Baker: Paid ticket volume is expected to be lower year to year in the first half.

Charles C. Baker: And down slightly to up modestly for the full year.

Charles C. Baker: As comparisons become easier, we move beyond the initial marketplace changes, and we execute on our product marketing and sales priorities. Average ticket prices are expected to increase by low single digits year over year, providing a similar size benefit to ticketing revenue on top of the volume dynamics just described. Organizer fees will cycle fully into revenue for the first time in Q1, Q2, and Q3 of 2024 and are anticipated to contribute to revenue growth for the full year in the process. And Eventbrite ads revenue is expected to scale further as we improve reach, targeting, and efficiency, and realize higher adoption rates among creators. We plan to manage expenses tightly to focus on improving paid tickets and executing the marketplace strategy. We anticipate adjusted EBITDA margins in the low to mid-teens for the year 2024, again, excluding potential impact from reserve adjustments and other items.

Charles C. Baker: As comparisons become easier we move beyond the initial marketplace changes and we execute on our product marketing and sales priorities.

Charles C. Baker: Average ticket prices are expected to increase low single digits year over year.

Charles C. Baker: Providing a similar sized benefit to ticketing revenue on top of the volume dynamics just described.

Charles C. Baker: Organiser fees will cycle fully into revenue for the first time in Q1, Q2, and Q3 of 2024.

Charles C. Baker: And are anticipated to contribute to revenue growth for the full year in the process.

Charles C. Baker: And event bright ads revenue is expected to scale further as we improve reach targeting an efficiency and realize higher adoption rates among creators.

Charles C. Baker: We plan to manage expenses tightly to focus on improving paid tickets and executing the marketplace strategy.

Charles C. Baker: We anticipate adjusted EBITDA margins in the low to mid teens for the year 2024.

When excluding potential impact from reserve adjustments and other items.

Charles C. Baker: Product and development expenses, which are the percentage of revenue, are already in line with our long-term model, and are expected to grow faster than revenue for the full year as we build out consumer and marketplace functionality. Sales, marketing, and support expenses, which grew rapidly in the second half of 2023 in support of the marketplace shift, are expected to grow modestly quarter over quarter during 2024. And we plan to manage general and administrative expenses as tightly as possible in order to drive operating leverage.

Charles C. Baker: Product and development expenses, which as a percentage of revenue are already in line with our long term model.

Charles C. Baker: Are expected to grow faster than revenue for the full year as we build out consumer and marketplace functionality.

Charles C. Baker: Sales marketing and support expenses, which grew rapidly in the second half of 2023 in support of the marketplace shift are expected to grow modestly quarter over quarter during 2024.

Charles C. Baker: And we plan to manage general and administrative expenses as tightly as possible in order to drive operating leverage.

Charles C. Baker: Stock-based competition is a focus as we make progress toward profitability. As we've shifted more teams to new locations and substituted other forms of incentive and reward, FBC's percentage of revenue declined by three percentage points in 2023 versus 2022. And we plan to take more steps to continue that progress in 2024 and beyond. In summary, we had a solid 2023 in which we achieved our overall financial objective as we made significant strides in our marketplace strategy.

Charles C. Baker: Stock based compensation as a focus as we make progress towards profitability as.

Charles C. Baker: As we've shifted more teams to new locations and substituted other forms of incentive and reward.

Charles C. Baker: SBC as a percentage of revenue declined by three percentage points in 2023 versus 2022.

Charles C. Baker: And we plan to take more steps to continue that progress in 2024 and beyond.

Charles C. Baker: In summary, we had a solid 2023 in which we achieved our overall financial objectives as we made significant strides in our marketplace strategy.

Operator: In the process, we introduced changes in our go-to-market that we believe are both necessary and appropriate to unlock Eventbrite's full potential. That potential lies in doing more for creators than ticketing and payment processing, and it centers on leveraging our unmatched scale, our brand recognition, and technical capabilities to attract consumers and drive demand for creators' events. We are fully focused on returning to paid ticket volume growth as we execute our strategy. I'll now turn the call over to the operator for Q&A. Thank you, ladies and gentlemen.

Charles C. Baker: In the process, we introduced changes in our go to market that we believe are both necessary and appropriate to unlock eventbrite full potential that.

Charles C. Baker: That potential lies in doing more for creators, then ticketing and payment processing and it centers on leveraging our unmatched scale, our brand recognition and technical capabilities to attract consumers and drive demand for creators events.

Charles C. Baker: We are fully focused on returning to paid ticket volume growth as we execute our strategy.

Speaker Change: I'll now turn the call to the operator for Q&A.

Speaker Change: Thank you, ladies and gentlemen, we will now conduct the question and answer session. If you have a question. Please press star followed by the number one on you touched on phone.

Operator: We will now conduct the question and answer session. If you have a question, please press star followed by the number one on your touchtone phone. If you wish to cancel your request, please press star two.

Speaker Change: If you wish to cancel your request please press star two.

Naved Khan: Your first question comes from... Naved Khan from Be Riley Securities, your line is now open. Thank you very much. A couple of questions from me, maybe one on creative retention. Um, and is that the metric that's being affected, or is it the new creator sign-ups that are more affected because of the increase in take rate? And the other is a related question.

Speaker Change: First question comes from.

Speaker Change: <unk> gone from B Riley Securities. Your line is now open.

Speaker Change: Yes.

Speaker Change: Thank you very much.

Speaker Change: Couple of questions from me.

Speaker Change: Maybe one on the on clean and retention.

Speaker Change: Hum.

Speaker Change: <unk> got is that the metric that's being affected.

Speaker Change: Or is it just nuclear nuclear sign ups.

Speaker Change: That is more affected because of the increase in take rate.

Speaker Change: And the other is is that a metric question. So.

Julia Hartz: So, you know, with your efforts focused on sort of getting, you know, the paid creators that have the more in-demand events, how long do you think that effort has to be in place for it to kind of start showing up in the numbers and moving the needle? Thanks for your question. I'll address the first one, which is around retention and the impacts of the introduction of organizer fees. Sorry. When we introduced the organizer fees, we anticipated that there would be some near-term impact on the marketplace. We did this in mind, recognizing that there was a likely near-term opportunity cost to ticket volume and greater growth, but on the other side of that, there was the long-term benefit of extracting value for the investments we've made, significant investments, in the performance of the product, in the strength of the brand, the trust and safety of our marketplace, and, really, most importantly, the demand generation that we bring to events on the platform. And we've seen that.

Speaker Change: It will be our efforts focused on sort of getting paid creative that have the.

Speaker Change: More in demand and events.

Speaker Change: How long do you think that has to be in place for it to kind of start showing up in the numbers.

Speaker Change: Moving the needle.

Speaker Change: Thanks for your question I'll address the first one which.

Speaker Change: Which was which was around retention and the impacts of the introduction of organizer phase sorry.

Speaker Change: When we introduced the organizer piece, we anticipated that there would be some near term impact in the marketplace.

Speaker Change: We did this in mind recognizing that there was a likely near term opportunity cost to ticket volume and greater growth, but on the other side of that there was the long term benefit of extracting value for the investments we've made significant investments in the performance of the product and the strength of the brand the trust and safety of <unk>.

Speaker Change: Place and really most importantly, the demand generation that we bring to events on the platform and we've seen that and the impact in the short term has been some churn of creators who for the first time a faced fees to list their events on Eventbrite, it's impacted our self sign on acquisitions.

Julia Hartz: And the impact in the short term has been some churn among creators who, for the first time, have faced fees to list their events on Eventbrite. It's impacted our self-sign-on acquisition funnel. And as we talked about, we're taking steps to improve the clarity of our messaging and the marketing on the self-sign-on side. And in time, we believe we'll return to the kind of growth that we've seen in the past.

Speaker Change: Final.

Speaker Change: And as we talked about we're taking steps to improve the clarity of our messaging the marketing on the self sign on side and in time, we believe will return to the kind of growth that we've seen in the past I want to point out that we.

Julia Hartz: I want to point out that we certainly have seen the vast majority of creators embrace our organizational fees, our organizer fees. And, you know, one surprise for us has been that there has been stronger adoption of the subscription version of those organizer fees than the a la carte event-by-event organizer fees. And we take that to be a reflection of the partnership that has been established between Eventbrite and those creators of events on our platform.

Speaker Change: We certainly have seen the vast majority of creators embrace our organizational feat our organizer fees and no one's surprise for US has been that there has been stronger adoption of the subscription version of those organizer fees than the Ala carte event by event.

Speaker Change: Organisers phase and we take that to be a reflection of the partnership that is established between eventbrite and those craters of events on our pipeline on.

Julia Hartz: On the strategic inventory side, in terms of the paid creators with more in-demand events, this is really seen through both channels, so self-sign-on and sales. And while, you know, our sales efforts are focused on a smaller number of creators who are hosting larger events in top-tier metros, based on aggregate consumer data that we can mine to look for things that we know people will want to do. The beauty of this business is that we also see high-quality consumer popular inventory coming through our self-sign-on channel, which is a much lower cost-of-acquisition channel.

Speaker Change: On the strategic inventory side in terms of the paid creators it tomorrow in demand events. This is really seen through both channels, our self sign on and sales and well you know our sales efforts are focused on a smaller number of creators who are hosting larger events in top tier metros based on.

Speaker Change: Aggregate consumer data that we can mine to look for things that we know people won't will want to do.

Speaker Change: The beauty of this business is that we also see high quality consumer popular inventory coming through our self sign on channel, which is a very much lower cost of acquisition channel and so combined when we think across both of those channels and then we look at the market through metros and again through the consumer data that we have we're star.

Julia Hartz: And so combined, when we think across both of those channels, and then we look at the market through metros, and again, through the consumer data that we have, we're starting to get better at merchandising those events, making sure they are highly listed on any discovery or browse surface, and then also engaging those customers to be buying ads on the site, so that those promoted listings are, again, front and center. This is a flywheel approach to the marketplace, so it's not uncommon, but it's pretty early days for us to be oriented this way, and so I would say that we will get better and better at finding that signal throughout the year. And then we also see a latency of about 45 days on average between when a customer puts their tickets on sale and when that event happens. So, roughly speaking, across all of our events, it's a pretty fast feedback loop, and what we found is that we can then take the data of what's selling and what's working and reorient our sales and our marketing efforts towards finding more of those creators in, again, the metros that we Thank you. Your next question comes from Youssef Squali from ShowBizSecurities. Your line is now open. Okay, thank you so much.

Speaker Change: To get better at merchandising those events, making sure. They are highly listed in any discovery or browse surface and then also engaging those customers to be in to be buying ads on the site. So that those promoted listings are again front and center. This is a flywheel approve.

Speaker Change: <unk> to a marketplace, that's not uncommon, but it's pretty early days for us to be.

Speaker Change: To be oriented this way and so I would say that we will get better and better at finding that signal throughout the year and then we also see a latency of about 45 days on average.

Speaker Change: Between when a customer puts their tickets on sale and when that event happens so roughly speaking across all of our events, it's a pretty fast feedback loop and what we found is that we can then take the data of what selling and what's working and reorient, our sales and our marketing efforts towards finding more of those creators.

Speaker Change: And again, the metros that we really care about.

Speaker Change: Thank you.

Speaker Change: Your next question comes from useful Pasquale from Shaw with Securities. Your line is now open.

Pasquale: Okay. Thank you so much so let me just follow up.

Youssef Squali: So let me just follow up on that line of questioning about paid tickets. If you can just help us try to reconcile the growth that you saw in paid events, I think that was up 2%, growth in paid creators was up 3%, but paid tickets were down 4%. Does that imply that you guys saw a bigger churn among the maybe larger creators and maybe larger events and then maybe even as you added more events, maybe smaller events and maybe smaller venues, etc. So maybe just help us, um, maybe work through that or understand that better, and then Lynn, in the past, you had spoken about Adjusted EBITDA margins being north of 20% by the fourth quarter and by the end of 2024, I think Does that guide still hold?

Pasquale: <unk> got line of questioning but a ticket maybe you can just help us try to reconcile the growth that you saw in paid events I think that was up 2% growth in paid creators that was up 3%.

Pasquale: Tickets were down 4% does that imply that you guys saw a bigger churn.

Pasquale: <unk>, maybe larger creators and maybe larger events and then maybe.

Pasquale: Even as you added more events may be smaller and Benson.

Pasquale: May be smaller venues et cetera, So maybe just help us.

Pasquale: Maybe work through that to understand that better and then learning in the past you had spoken about.

Pasquale: Adjusted EBITDA margins.

Pasquale: <unk> been north of 20% by the fourth quarter by end of 2020, who I think.

Charles C. Baker: Is that still contemplated in your annual guide as we look at linearity of margin improvements throughout the year? Thank you. Youssef Squali, Mark Mahaney, Douglas Anmuth, Sarah Henderson, Stacey Finerman, Ryan Sundby, Yes, I can start from the pay ticket side.

Pasquale: Does that guide still.

Pasquale: Hold is that contemplated in your annual guide as we look at the linearity of margin improvement throughout the year. Thank you.

Pasquale: Okay.

Speaker Change: Yes, I can start from that pay ticket side. So you know when we rolled out our new market place fees, we expected that there would be some shift in that and the size of events that are happening on the platform actually we haven't seen as much change as we had originally anticipated and we're really.

Julia Hartz: So, you know, when we rolled out our new marketplace fees, we expected that there would be some shift in the size of events that are happening on the platform. But actually, we haven't seen as much change as we had originally anticipated, and we're really, you know, tightly wired to understand the changes and be able to react accordingly. But I do think that we have seen some, right now, as we're speaking, there is this adjustment or transition that's happening because we are, for the first time, charging a fee for the marketing tools and demand generation tools that we offer to our customers. And we're continuing to build momentum behind that demand generation value proposition as we go to market more explicitly with it.

Speaker Change: Tightly wired to understand that the changes and be able to react accordingly, but I do think that we have.

Speaker Change: Seen some bright now as we're speaking there is this.

Speaker Change: Adjustment our transition that's happening because we are for the first time charging a fee for the marketing tools and demand generation tools that we offer to our customers and we're continuing to build momentum behind that demand generation value prop as we go to market more explicitly with it so we're dedicating our.

Julia Hartz: So, we're dedicating our go-to-market efforts toward the popular and in-demand events that I just spoke about, and we're also taking actions to increase the trust and safety in our marketplace. So, making sure that fraudulent events aren't in the marketplace, really building the well-lit marketplace that we know we want to scale. So, what are we doing about the obvious, you know, pay ticket differences or slowdown right now?

Speaker Change: Our go to market motions toward the popular and in demand events that I just spoke about and we're also taking actions to increase the trust and safety on in our marketplace and making sure that fraudulent events arent in the marketplace, making it really building the well lit marketplace that we know we want to scale. So what are we doing.

Speaker Change: About the the obvious yeah paid ticket differences are slow down right now, we're rolling out marketing tools and really focusing on making sure that all of our creators now that they have access to these marketing tools no the benefits and are adopting the tools. We're in about mid teens percentage of creators used.

Julia Hartz: We're rolling out marketing tools and really focusing on making sure that all of our creators, now that they have access to these marketing tools, know the benefits and are adopting the tools. We're in about the mid-teens percentage of creators using these tools, and we continue to see that creators using the marketing tools are significantly outperforming on a same-store basis. Roughly a 60% or so increase.

Speaker Change: These tools and we continue to see that creators using the marketing tools are significantly outperforming on a same store basis.

Speaker Change: Roughly 60% or so increase we're also making strides in our demand generation messaging to our customers. We recently ran a survey across our customer base and 75% of creators we surveyed view us as a demand generation partner. So that's great on positioning.

Julia Hartz: We're also making strides in our demand generation messaging to our customers. We recently ran a survey across our customer base, and 75% of creators we surveyed view us as a demand generation partner. So, that's great for positioning.

Julia Hartz: And then now we're focusing on heightened emphasis on head inventory. So, we expanded our sales team by 50% in the second half of last year, and that sales team closed 24% more customers in the second half year over year. And we're seeing that momentum continue into the early part of this year.

Speaker Change: And then now we're focusing on heightened emphasis on the head inventory. So we expanded our sales team by 50% in the second half of last year and that sales team has closed 24% more customers in the second half year over year, and we're seeing that momentum continue into the early part of this year. So.

Julia Hartz: So, deals that we have targeted and closed are, again, focused on top metros, so San Francisco, New York, London, LA, et cetera. And these deals are, on average, 15% larger already than the prior three quarters of the year. So, there's some good momentum. We can definitely lean in there more.

Speaker Change: Deals that we have targeted and closed our again our focus on top metros, So San Francisco, New York, London, L. A et cetera, and these deals are on average 15% larger already than the prior three quarters of the year. So there are some good momentum we can definitely lean in there more we can run.

Charles C. Baker: We can remain disciplined and close profitable sales deals because we have the benefit of this demand generation capability, because we have scale, and because we can show these customers that we can help them sell more tickets. So, I have a lot of confidence in us being able to increase paid ticket sales on Eventbrite by doing two things really well. First, creating a better opportunity for this highly popular event content to sell out, and second, being able to increase our retention and engagement of consumers. And that's an area of investment for us, particularly through the mobile app. Youssef, in respect to EBITDA margins, our long-term target is 20% or better. And we can control the EBITDA margin. And we do believe that it's in our future. We've made considerable progress over the last year and, really, over the last three years on the profitability of the company. Our current outlook on 2024 does not anticipate us getting to that 20% target during this year.

Speaker Change: Main disciplined and closed profitable sales deals because we have the benefit of this demand generation capability, because we have the scale and because we can show. These customers that we can help them sell more tickets. So I have a lot of confidence in us being able to increase pay.

Speaker Change: He'd ticket sell through on Eventbrite by doing two things really well.

Speaker Change: Creating better opportunity for this highly popular event content to sell out and second being able to increase our retention and engagement of consumers and that's an area of investment for us, particularly through the mobile app.

Speaker Change: Yes.

Speaker Change: With respect to the EBITA margins, our long term target is 20% or better and we can control the EBITDA margin and we do believe that's in our future. We've made considerable progress over the last year and really over the last three years on the profitability of the company our current outlook on 'twenty 'twenty four does.

Speaker Change: Not anticipate us getting to that 20% target during this year the way that we will get there is by resuming stronger core ticketing growth. We've built a much more efficient engine revenue per ticket gross profit per ticket is stronger today than it's ever been and then blending in more of the high margin non ticketing revenue from organizer.

Charles C. Baker: The way that we will get there is by resuming stronger core ticketing growth. We've built a much more efficient engine; revenue per ticket, and gross profit per ticket are stronger today than they've ever been. And then blending in more of the high-margin non-ticketing revenue from organizer fees and advertising and the like. We'll control corporate overhead, and we'll utilize the lower cost locations that we've built into our system around the world to continue to drive long-term margin. In the meantime, we will also continue to invest in our product, our marketing, and our sales. So that long-term target is still within our, you know, we have a line of sight to that. But it will not happen in 2024.

Speaker Change: Fees and advertising and the like will control corporate overhead and will utilize the lower cost locations that we've built into our system around the world to continue to drive long term margin expansion in the meantime, we will also continue to invest in our product in our marketing and our sales.

Speaker Change: So that long term target is still within within our you know we have a line of sight to that.

Speaker Change: But it will not happen in 2024.

Justin Patterson: Okay, thank you both. Your next question comes from Justin Patterson from KeyBank. The line is now open. Great, thank you. This is Sergio on behalf of Justin.

Speaker Change: Okay. Thank you both.

Speaker Change: Your next question comes from Justin Patterson from Keybanc. Your line is now open.

Speaker Change: Great. Thank you. This is sergio on for Justin So a few questions for us.

Operator: So a few questions for us on the 2024 guidance; the revenue growth on the guidance implies some deceleration there. So just hoping you could give us some detail on what gives you confidence in these demand generation products and the re-accelerating ticket growth. I think you mentioned the three priorities earlier in the prepared remarks. So maybe you could provide more color there and what gives you confidence. And then on the follow-up on the lower ticket volume, slower growth from the organized fees, just wondering how that has played out versus your expectations and anything you could maybe provide on how you plan to show the value and introduce these new tools to these advertisers either churned or are filling the friction to sign up to how you're just, you know, functionally putting the product in front of them for them to try. Thank you. Sure. Thank you for the questions.

Sergio: The 2024 guidance the revenue growth.

Sergio: On the guidance implies some deceleration there. So just hoping you could give us some detail on what gives you confidence in these demand generation products and to be accelerating ticket growth I think you mentioned the three priorities earlier.

Sergio: Prepared remarks, so maybe if you could provide more color there and what gives you confidence.

Sergio: And then on the follow up on the lower ticket volume and slower growth from the from the organized fees. Just wondering how that has played out versus your expectations and anything you could maybe provide on.

Sergio: How you plan to show the value and introducing these new tools.

Sergio: These advertisers advertising, even churned or are filling the friction define up to how you're just functionally putting the product in kind of them for them to try. Thank you.

Speaker Change: Sure. Thank you for the questions.

Julia Hartz: So on our demand generation proposition and really what we're focusing on for our creators. We come into this year with two very distinct value propositions that we really haven't had in the past. Think about marketing tools, the ability for creators to use our aggregate consumer data to build lookalike audiences and deploy social paid advertising effectively. And you imagine that we can increase the surface area options for those ads.

Speaker Change: So on our demand generation proposition and really what we're focusing on for our creators.

Speaker Change: We come into this year with two very distinct value propositions that we really haven't had in the past. If you think about our marketing tools the ability for creators to use our aggregate consumer data to build lookalike audiences and deploy social paid advertising effectively.

Speaker Change: Lee and you imagine that we can increase the surface area options for those ads were seeing five to six X R O a.

Julia Hartz: We're seeing 5 to 6x ROA on the product already, and much stronger adoption now that we are offering it across the board. We've seen mid-teens adoption so far, and we've only been in the market for a few months. So we think that there is some considerable upside in helping creators become better marketers and look to Eventbrite to help them spend their marketing budget, which is typically 40 to 50% of the face value of their ticket. We see the strengthening of our own gross margins in offering features like Eventbrite ads. We are targeting our highest-value creators, both with ticketing and advertising for the first time in the company's history. So as we improve things like consumer traffic, relevance, and personalization.

Speaker Change: On on the product already.

Speaker Change: And much stronger adoption now that we are offering it across the board we've seen mid teens adoption, so far and we've only been in market for a few months. So we think that there is some considerable upside in hell.

Speaker Change: Helping creators become better marketers and look to eventbrite to help them spend their marketing budget, which is typically 40% to 50% of the face value of their ticket.

Speaker Change: We see the strengthening of our own gross margins in <unk> and <unk>.

Speaker Change: <unk>.

Speaker Change: Features like a M. Bright adds you know we are.

Speaker Change: Targeting our highest value creators, both with ticketing and advertising for the first time in the Companys history, So as we improve things like.

Speaker Change: Consumer traffic and relevance and personalization, we improve consumer engagement and we expand the AD inventory options throughout the event bright discovery experience. That's also going to boost the adoption of Eventbrite ads, which is a much stronger.

Julia Hartz: We improve consumer engagement, and we expand the ad inventory options throughout the Eventbrite discovery experience. That's also going to boost the adoption of Eventbrite ads, which is a much stronger gross profit product for us. So all told, marketing tools and Eventbrite ads are already about 10% of our revenue mix. As we continue to scale paid ticketing, we think that combination is pretty killer, and that's what gives me confidence for this year and beyond. In thinking about the ticket volume impact and the introduction of organizer fees, we weigh carefully the short-term opportunity cost of some disruption to our ticket volume against, as I said earlier, the long-term value of extracting more for the investment we've made in our product and for the demand generation that we drive.

Speaker Change: Gross profit product for us So all told marketing tools and advent bright ads is already about 10% of our revenue mix as we continued to scale paid ticketing. We think that combination is pretty killer and that's what gives me confidence for.

Speaker Change: This year and beyond.

Speaker Change: And thinking about the the.

Speaker Change: The ticket volume impact and the introduction of organizer Pes, we weighed carefully the short term opportunity cost of some disruption to our to our ticket volume against as I said earlier, the long term value of extracting more further the investment we've made in our product and for the demand generation that we drive in the fourth quarter.

Julia Hartz: In the fourth quarter, that revenue balance, if you look at the paid tickets, perhaps the negative impact on paid tickets versus the additional revenue from organizer fees, it was a positive tradeoff for us on a revenue, dollar-for-dollar revenue in the fourth quarter, and it will be so again in the first quarter this year. And those organizer fees are higher-margin revenue than ticketing revenue.

Speaker Change: That revenue balance if you look at the paid tickets, perhaps the negative impact on paid tickets versus the additional revenue from organizer piece. It was a positive tradeoff for us on a revenue dollar for dollar revenue in the fourth quarter and it will be so again in the first quarter of this year and those organizer fees are higher margin revenues.

Speaker Change: The ticketing revenue now most importantly, we will rebuild the strength of the paid ticket volume and we will get paid ticket volume back to grow through the things that we talked about and as we do that will come with the improved monetization of the model overall.

Julia Hartz: Now, most importantly, we will rebuild the strength of the paid ticket volume, and we'll get paid ticket volume back to growth through the things that we talked about. And as we do, that will come with the improved monetization of the model overall that is earning us credit for the demand generation and the tools that we're providing that are helping creators grow. Okay, your next question comes from... Dae Lee from J.P. Morgan. Your line is now open. Great, thanks for taking the question back to I guess the first one. I don't know if you addressed this on the call already, but how far along are you guys in cycling through some of these?

Speaker Change: It is earning us credit for the demand generation and the tools that we're providing there helping creators with their success.

Speaker Change: Okay. Your next question comes from.

Daily: Daily from JP Morgan Your line is now open.

Daisy: Great. Thanks for taking the question back to I guess, the first one I'll, let you address the Thunder already about how far along are you guys.

Daisy: By going through some of these.

Dae K. Lee: and Organizer Fee introduction-based related headlines. And secondly, I mean, it feels like Organizer Fee, as long as the creators are using all of the features that come with it, it's good value for them. So, just wondering, like, why do you think some creators aren't fully utilizing some of the features that come along with it? Is it just a matter of not just realizing it's there, or is there something else related to that?

Daisy: Organize their fee introduction based related headwinds.

Daisy: And.

Daisy: And secondly, I mean, Kevin Horgan atrophy as long as the creator for using all of the future.

Daisy: Ed.

Speaker Change: Good volume predominance sort of wondering like why do you think some creators are fully utilizing.

Daisy: On some of the features that come along with it it's just a matter of.

Daisy: Not just realizing a thorough or is there something else related to that.

Julia Hartz: And in terms of the pay ticket volume growth trend, were you seeing any changes in the competitive landscape that's affecting that as well? Thank you. Grant.

Daisy: And in terms of the paid ticket volume growth trends are you seeing any changes in the competitive landscape. That's affecting that is law. Thank you.

Daisy: Gladys.

Charles C. Baker: Okay, with the introduction of organizer fees, yeah, I think from the creator's perspective, this is the first time that there's been a fee associated with listing your event on Eventbrite. And that has, you know, there's some natural market digestion with that. The vast majority of creators have, as you said, paid very affordable fees and stayed on the platform and continue to produce events and sell tickets. However, there has been some impact. It's been greater on the free ticket side, where Eventbrite was free in all respects in the past, but today we have a fee to list even free events.

Daisy: Okay.

Speaker Change: With the introduction of the organizer piece.

Gladys: Yes, I think from the Creator's perspective. This is the first time that there has been a fee associated with lifting your event on Eventbrite and that has theres. Some natural market digestion with that the vast majority of creators have as you said paid very affordable fees and stayed on the platform and continue to produce events and sell tickets.

Gladys: There has been some impact it's been it's been greater on the free ticket side, where.

Gladys: It's been free in all respects in the past and today, we have a fee to list even three events.

Charles C. Baker: And we believe we'll cycle through this introduction of the organizer. So, you know, I think it'll probably take us throughout the first quarter into the second quarter, and we'll be able to cycle past this disruption into the second half of this year. And then on the future side, in terms of adoption of marketing tools and Eventbrite ads, I really think that's a combination of us continuing to strengthen our demand-gen messaging and certainly with our recent creator survey showing that the vast majority of our creators surveyed agree that we help them sell tickets. We think that's a good leading indicator that we can continue to connect them with the tools that they need to not only become better marketers themselves because, frankly, they I think it's awareness, and then it's building trust by showing results. We are contemplating different ways to be able to allow our creators to test these tools.

Gladys: And we believe we will cycle through this introduction of of the organizer fees.

Gladys: So I think it'll probably take of or we think it will take throughout the first quarter into the second quarter.

Gladys: And we'll be able to cycle past this disruption into the second half of this year.

Gladys: And then on the on the feature side in terms of adoption of marketing tools and Eventbrite ads I really think that's a key.

Gladys: Combo of us continuing to strengthen our demand Gen messaging and certainly you know with our recent creator survey showing that the vast majority of our creator surveyed agreed that we help them sell tickets. We think that's a good leading indicator that we can continue to connect them with the tools that they need to not only become better marketers.

Gladys: Themselves because frankly, they know their communities. So they should be the ones has superheroes, but also to understand that they can unlock the value of buying a promoted listing space and essentially to eventbrite ads in the marketplace I think it's it's awareness and then.

Gladys: It's building trust by showing results and so we are contemplating different ways to be able to allow our creators to test. These tools. So we have a free trial today with our pro subscription will also look to see if we can incentivize our larger creators and the creators of popular consumer.

Julia Hartz: We have a free trial today with our pro subscription. We'll also look to see if we can incentivize our larger creators and the creators of popular consumer inventory to be leveraging these tools on a free trial basis to induce adoption of the tools. In terms of the ticket volume trends that we're seeing and any changes in the competitive landscape, no major changes have occurred other than us observing that some of the mid-market sales-driven companies continue to slow down and be challenged because the unprofitable nature of the deals they're closing is starting to wear their balance sheets. We are leaning in and being very thoughtful, very aggressive, but also disciplined. We run a profitable sales model. We think we have the best platform and technology out there.

Gladys: Inventory to be leveraging these tools.

Gladys: On a free trial basis to induce a adoption of the tools.

Gladys: In terms of the ticket volume trends that we're seeing and any any changes in the competitive landscape no major changes have occurred other than us observing that some of the mid market.

Gladys: Sales driven company has continued to slow down and be challenged because the unprofitable nature of the deals are closing are starting to where are you know they're there hum balance sheets, we are leaning in and being very thoughtful very aggressive but also discipline.

Gladys: And we run a profitable sales model, we think we have the best platform and technology out there, we think combined with our marketplace value proposition and ability to drive demand. We are the superior solution. So we're going back out and into the market to engage customers that we know well.

Julia Hartz: We think, combined with our marketplace value proposition and ability to drive demand, we are the superior solution. So we're going back out and into the market to engage customers that we know well, customers that we're new to, and I'm really excited about some of our wins. We recently partnered and closed Bar Pop in Perth, Australia, Ginger Line in London, and the Calgary Folk Festival, and this is all within the last few weeks. These are indicative of the customers that will continue to engage, and we're going to be fierce competition for entertainment, nightlife, and music in the metros we really care about. Andersta, thank you.

Gladys: Customers that were new to and I'm really excited about some of our wins we recently.

Gladys: Partnered and closed bar pop in Perth, Australia, Ginger line in London, and the Calgary Folk Festival and this is all within the last few weeks. These are indicative of the customers that will continue to engage and we're going to be fierce competition for especially entertainment night life and music.

Gladys: In the metros, we really care about.

Speaker Change: Understood. Thank you.

Cameron Manson-Perron: Your next question comes from Cameron Manson-Perron from Morgan Stanley. Your line is now open. Thanks.

Speaker Change: Your next question comes from Cameron mentioned, Iran from Morgan Stanley. Your line is now open.

Cameron: Thanks, Hi, everyone.

Cameron: If I can.

Operator: First, you haven't mentioned it, so I'm assuming that the answer is no to this. But I'm curious if consumer demand, if you're seeing any softness there reflected in the paid ticket growth. And then on the margin trajectory, as we think about into next year, I think as ads and organizer fees continue to scale, that take rate and growth margins wouldn't improve off of 4Q levels. You just did a 68% group margin on full year 23. So you have a couple basis points, I think, at least, or sorry, a couple hundred basis points of improvement, I think, year over year going into 24, to help you kind of deliver the 12% low to mid teens adjusted EBITDA guidance for the year. I just want to make sure I'm thinking about that, right?

Cameron: Firstly, you mentioned, it's on assuming that the answer is no to this but I am curious if consumer demand if youre seeing any softness there reflected in paid ticket growth.

Cameron: And then on.

Cameron: Margin trajectory as we think about into next year.

Cameron: I think as ads and organize their fees continue to scale that take rate and gross margins would improve off of <unk> levels, you just data at 68%.

Cameron: Margin on full year 2000, <unk>. So you have a couple of basis points I think at least a couple of hundred basis points.

Cameron: Proven and I think year over year going into 'twenty four to help you kind of deliver to 12% low to mid teens.

Cameron: Adjusted EBITDA guidance for the year I, just wanted to make sure I'm thinking about that right. It seems like even outside of Opex, there should be 200 bps of <unk>.

Charles C. Baker: It seems like even outside of OPEX, there should be 200 bits of tailwind on the margin trajectory. And then I was wondering if you could help contextualize the 91 million people buying on the platform this year. Sorry if I missed it, but I was curious how much that was up year over year. And then, as we think about your focus on demand generation, where do you think that can go over time? Thanks.

Cameron: Tailwind there.

Cameron: The margin trajectory and then I was wondering if you could help contextualize the 91 million people buying on the platform this year.

Cameron: Sorry, if I missed it but curious how much that was up year over year and then as we think about your focus on demand Gen.

Cameron: Where do you think that can go over time. Thanks.

Julia Hartz: Great. So on the consumer demand side, we are seeing steady, resilient growth in consumer interest. And I think that, you know, is indicative of the very broad nature of the inventory on our platform. We really benefit from being the largest mid-market ticketing marketplace that, you know, has multiple categories and multiple geos. And, you know, with 5 million events, there's a lot of variety there. And we still see the mid-market as strong and growing. Consumer purchasing power is resilient, with the average ticket price being about $40.

Cameron: Great. So on the consumer demand side, we are seeing steady resilient growth in consumer interests and I think that you know is indicative of the very broad nature of the inventory on our platform, we really benefit from being the largest mid market ticketing market.

Cameron: A place that has multiple categories multiple G OS and you know with 5 million events, there's a lot of variety in there and we still see the mid market as strong and growing consumer purchasing power is resilient with the average ticket price being about $40. We will continue to keep V.

Julia Hartz: We'll continue to keep a very close eye on consumer trends. We know that at the upper ends of the market, there are differences in how creators are thinking about driving demand, and they're looking for more efficient ways to sell tickets. So, we know that we have the right solution when creators are starting to feel the pinch because maybe producing their event might be marginally more expensive, or they're getting nervous about consumer demand. We're the perfect antidote to that.

Cameron: A close eye on consumer trends, we know that in <unk>.

Cameron: Upper ends of the market there are differences in how creators are thinking about driving demand and they're looking for more efficient ways to sell tickets. So we know that we have the right solution. When creators are starting to feel the pinch because may be producing their event might be marginally more <unk>.

Cameron: Pensive or they're getting nervous about consumer demand, we're the perfect antidote to that so what we're doing is focusing on the appeal of our marketplace on a local basis really driving home. The message that we have the events people want and showcasing them readily through search and discovery personalization distribution and Eventbrite ads.

Julia Hartz: So, what we're doing is focusing on the appeal of our marketplace on a local basis, really driving home the message that we have the events people want and showcasing them readily through search and discovery, personalization, distribution, and Eventbrite ads. And our consumer reach was at record levels in 2023; so over 92 million consumers transacted a free or paid ticket, which was up 7% year over year. On your question about margin trajectory, Cameron, you're right. As we layer in more of the non-ticketing revenue from advertising and organizer fees, those have a really favorable effect on gross margins. So as we've gone from 2% of revenue from those sources to now north of 10%, and we expect to continue to grow the share of revenue coming from those higher-margin demand generation related services, that will continue to have a very favorable effect on gross margins.

Cameron: And our consumer reach was at record levels in 2023, so over 92 million consumers transacted, a free or paid ticket.

Cameron: Which was up 7% year over year.

Speaker Change: On the on your question about margin trajectory Cameron.

Speaker Change: Youre right as a as we layer in more of the non ticketing revenue from advertising and organizer piece those of a really favorable effect on gross margins. So as we've gone from 2% of revenue from those sources to now north of 10% and we expect to continue to grow the share of revenue cut.

Speaker Change: <unk> from those higher margin demand generation related services that will continue to have a very favorable effect on gross margins and so I think the way we're thinking about it is similar to what we're contemplating in the outlook that we've provided.

Julia Hartz: And so I think the way you're thinking about it is similar to what we're contemplating in the outlook that we've provided. We have in the past talked about an incremental profitability range that goes from 25% to 50% of revenue growth flowing down to the bottom line. And our outlook for this year would be at the lower end of that range, but within that long-term target. And I think you understand the margin trajectory, in the same way that we're thinking about it as we described the outliers. Great. Thanks, guys. Your next question comes from Hamid Khorsan from BWS Financial. Your line is now open. Hi, thanks for taking the questions. Just a couple for me.

Speaker Change: In the past talked about a incremental profitability range that goes from 25% to 50% of revenue growth flowing down to the bottom line.

Speaker Change: And our outlook for this year would be at the lower end of that range, but within that long term target.

Speaker Change: I think youre understanding the margin trajectory.

Speaker Change: In the same way that we're thinking about it as we described the outlook.

Speaker Change: Great. Thanks, guys.

Speaker Change: Your next question comes from Amit <unk> from <unk> financial your line is now open.

Amit: Hi, Thanks for taking my questions. Just a couple for me one is why is product development costs still rising if you've gone to lower.

Hamid Khorsan: One is why are product development costs still rising if you've gone to lower cost markets as far as development goes? And the second is on the last earnings call, you made comments about churn, not seeing churn, or churn not being elevated. And then the theme of this call is that there was churn as far as organizers are concerned. And I'm just wondering how far along you are on the learning curve as to why those organizers left and how you're going about getting them back? And the competitive nature of the landscape as far as these prices go, these costs are concerned so that this doesn't happen when you go into your peak moment of the year.

Amit: Cost near markets as far as development goes and the second is on the last earnings call. You had made comments about the churn not seeing churn or churn not being elevated and then this theme of this call is that there was some churn as far as the organizers are concerned.

Amit: And I'm just wondering.

Amit: How far along are you from the.

Amit: A learning curve as to why.

Amit: Those organizers left.

Amit: How youre going about to get them back.

Speaker Change: And the competitive nature of the landscape as far as these prices go. These costs are concerned so that this doesn't happen when you go onto your peak.

Speaker Change: A moment of the year.

Charles C. Baker: Sure, on product development costs, we're continuing to invest in the consumer side of our product experience, particularly our mobile app, personalization, search, and discovery, leveraging data to bring to life a consumer experience that's really rich. Our mobile app users today are a little bit more than 10% of the total monthly usage, and we think there's a lot of room to drive that up, and we're excited to do that because users of the mobile app typically purchase 30 to 35% more tickets in a period because it's a superior experience. It's where Gen Z and Millennials and Gen X are, and we're driving folks in that direction with our product investment. So we are investing more in the consumer product experience, and we'll continue to do that because we think it drives repeat purchase volume, it drives consumer loyalty, it drives demand generation, and ultimately, those are the things that creators most want when they're looking for a partner like we want to be for them.

Speaker Change: Thank you.

Speaker Change: Sure.

Speaker Change: Product development costs were continuing to invest in the consumer side of our product experience, particularly our mobile app. The personalization search discovery leveraging the data to bring to life. Our consumer experience, that's really rich our mobile app users today are a little bit more than 10% of the total monthly usage and we think theres a lot of room to drive that.

Speaker Change: And we're excited to do that because the users of the mobile App typically purchased 30% to 35% more tickets in the period.

Speaker Change: It's a superior experience, it's the way, it's where gen Z and millennials Gen X are.

Speaker Change: And we're driving folks in that direction with our product investments so.

Speaker Change: We are investing more on the consumer product experience and we'll continue to do that because we think it drives repeat purchase volume that drives consumer loyalty drives demand generation and ultimately those are the things that creators most want when they're looking for a partner like we want to be for them.

Charles C. Baker: As we look at the impact of organizer fees, as we've come into the start of this year, recently, we've seen more impact from organizer fees, and that's been included and reflected in our outlook. I think you'll see pay ticket volume down in the probably high single digits in the first quarter of this year from where it was down about 4% in the prior quarter, and we'll begin a recovery from that point. So I think we have a pretty good sense of understanding what the issues have been. You can imagine that we're doing surveys and focus groups and research on that and have a pretty good idea of the things that we need to do to adjust. I described some of them earlier, and we'll be actually using them.

Speaker Change: As we look at the impact of the organizer fees as they're coming to the start of this year recently, we've seen more impact from the organizer fees and that's been in fact.

Speaker Change: Included reflected in our outlook I think you'll see paid ticket volume be down in the probably high single digits in the first quarter of this year from where it was down about 4% in the prior quarter.

Speaker Change: And we will begin recovery from that point so.

Speaker Change: I think we have a pretty good sense of understanding what the issues have been you can imagine that we're doing surveys and focus groups and research on that and have a pretty good bead on the things that we need to do to adjust to describe some of them earlier and we'll be executing on those.

Operator: Thank you. There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for joining us. You may now disconnect.

Speaker Change: Thank you.

Speaker Change: There are no further questions at this time, ladies and gentlemen. This concludes today's conference call. Thank you for joining you may now disconnect.