Q2 2025 Vivid Seats Inc Earnings Call
Good morning and welcome to the Vivid Seats. Second quarter 2025 earnings conference call.
Following management. Prepare remarks, we will open the call for Q&A. I would now like to turn the call over to Kate aick
Good morning and welcome to Vivid Seats. Second quarter 2025 earnings conference call. I'm Kate aric head of investor relations at Vivid Seats.
Joining me today to discuss Vivid, Seats results are sanchia, chief executive officer and Larry Fey, Chief Financial Officer.
By now, everyone should have access to our second quarter earnings press release, which was issued earlier this morning, the press release as well as supplemental. Earnings slides are available on the investor relations page of our website at investors Vivid seats.com.
During the course of today's call, we may make forward-looking statements within the meeting of federal Securities laws.
These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially, including the risks and uncertainties described in our earnings press release our most recent annual report on form 10K and our other filings with the SEC.
On today's call, we will refer to address City Eva, which is a non-gaap financial measure that provides useful information for our investors.
A reconciliation of this non-GAAP financial measure to its corresponding GAAP financial measure can be found in our earnings press release and supplemental earnings slides.
And now, I would like to turn the call over to Stan.
Good morning, everyone. And thank you for joining us today.
Today I'll walk through our second quarter results, provide context on the broader industry, environment and detail a strategic cost Reduction Program that we are executing against.
Designed to right size our cost structure improve operating, leverage and better position Vivid Seats to capitalize on long-term growth opportunities.
Then I'll turn it over to Larry to share our financial results in more detail.
In the second quarter, we delivered 685 million of marketplace gov 144 million of revenues and 14 million of adjusted ebitda.
The industry and competitive landscape. Continue to present a challenging near-term, operating environment. But we nonetheless continued to have conviction in the Tailwind. Driving live event growth on a long-term basis,
Similar to q1 in Q2, we saw industry growth to start the quarter. That gave way to double digit industry declines across categories in June,
While some amount of monthly oscillation is to be expected due to event mix.
The degree of monthly volatility has been elevated thus far in 2025 which we attribute to a combination of economic uncertainty and the implementation of the ftc's all-in pricing mandate.
The sports category was particularly weak and down double digits in Q2 with underwhelming, playoff matchups, challenging comps and NFL schedule, release occurring. Just 2 days after the all-in pricing, roll up.
Meanwhile, the concerts category was up low—single digits in Q2—but down double digits in June.
Recent industry Trends, including the switch to all-in pricing, do not change. Our views that live events remain an attractive long-term opportunity supported by durable supply and demand Tailwind.
Despite this long-term confidence, the current operating environment is highly competitive. So we are taking deliberate action designed to enhance efficiency.
Strengthen our foundation for the future and most importantly to return to sustainable long-term growth.
Today we announced a cost Reduction Program targeting 25 million in annualized, operating expense savings to be actioned upon by year end.
We are focused on increasing efficiency without compromising the experience. We delivered to our fans or sellers
to date. We have realized over 5 million in annualized savings.
In line with our focus on operational efficiency, we have chosen to shut down Vivid picks with savings to come over the next several months. As that business winds down,
we expect to realize the remaining savings under the program as we finish the year through additional technology and AI enabled efficiencies as well as targeted reductions in GNA and marketing.
Following the execution of these efficiency efforts Vivid Seats will operate with greater agility, deliver more impact and drive durable growth.
Importantly, we do not believe these cost. Reductions will impact our ability to innovate across our core strategic initiatives.
As we've shared our industry-leading Erp. Skybox is utilized by over half of professional sellers, to run their businesses.
This quarter, we rolled out incremental analytical capabilities within Skybox that were well received and we are excited about additional Skybox functionality in our product pipeline.
Internationally. I'm pleased to share that we are now live in 4 European countries. Our international business is demonstrating strong growth albeit from a small base and is exceeding our margin expectations.
While our initial Target was to break even on a contribution basis. While growing International revenues, we have been net contribution positive thus far in 2025, we look forward to further diligent expansion abroad.
To conclude the second quarter was challenging but we remain confident that better industry conditions will return. We are keenly focused on reigniting sustainable growth through best-in-class, efficiency and depreciation on both sides of our marketplace with that. I will turn it over to Larry for a more detailed financial review of the quarter.
Thank you, Stan.
We generated 685 million of marketplace gov and Q2 which was down 31% year-over-year.
To Marketplace orders. We're down to approximately 30% year-over-year while average order size was down 2%.
We generated 144 million of revenues in Q2, which was down 28% year-over-year.
To Marketplace take rate with 16.7% down slightly year-over-year.
While we expect some degree of continued. Take rate variability. We anticipate near-term. Take rate will remain in the 16% range.
Adjusted Eva was 14 million down substantially from the prior year. Due primarily to lower volume and negative operating Leverage
Performance Marketing intensity continues unabated and will continue to pressure results.
Despite this pressure, we remain focused on creating a path to return to sustainable growth.
We will drive additional efficiency through our cost Reduction Program and will utilize a portion of these savings to offer a leading value proposition to buyers.
while remaining competitive across relevant marketing channels, as we look to stabilize Top Line in 2026 and Beyond
We ended Q2 with 392 million of debt and 153 million of cash with net debt of 239 million.
In the quarter, we utilized approximately 9 million in cash to purchase approximately 4 million shares of our class, a common stock at an average price of $2.34.
As Stan, noted Judith industry volumes were quite soft, even relative to typical seasonality.
Our quarter-end cash balance is driven by volume trends as we exit the quarter, which resulted in continued pressure on cash balance in Q2.
We anticipate positive cash flow in Q3 due to a combination of typical seasonality improvements and a belief that the degree of June softness was atypical.
Lastly, please note that our planned 1 for 20 reverse stock split which was announced yesterday will become effective after market close today.
Our second quarter financial statements reflect share accounts, and per share amounts before the reverse stock split. But subsequent periods will be reported on a post split basis.
We believe the reverse stock, split will among other things, enhance, the market ability of our common stock.
I'll now hand it back to Stan for concluding remarks.
Thank you, Larry.
While industry challenges continue in the second quarter, our long-term thesis on live events persists.
Our aim is to remain lean agile and well positioned to capture opportunity as the environment evolves, and ultimately returns to sustainable long-term growth and with that operator set up the line 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 1 1 1 on your telephone and wait for your name to be announced. She withdraw your question. Please. Press star 1 1 1. Again also, we are only allowing 2 questions please stand by while we compile the Q&A. Bye.
Our first mission comes from Dan kernels as a benchmark company.
Yeah, uh, good morning guys. Um, couples for me. Um, maybe just kind of high level thoughts on you take care is a little higher in the quarter. Um, I don't know if that was just you know, in anticipation of you guys implementing the cost controls. So I guess, you know do we think that you guys are looking at
The way the market is transpiring right now and going, okay, there's maybe smaller Tam on gov but we can be more profitable and more Nimble within that or once these cost savings get implemented. Um, you know, I know you talked in the prepared remarks saying about, you know, being more competitive in the back half of the year. Um, but you know, there's obviously an intelligent way to do it. So maybe kind of just walk us through threading that needle.
Yeah. Hey Dan, thanks for that. I'll take the first part and then certainly, uh, Larry can talk a little bit more about the take rate, um, move. But yeah, I think when you look at certainly in the environment and how we are positioning ourselves, we are still continue to be really focused and and honing our unit. Um, economics and really plan on emerging much leaner and using that as a mechanism. Um, to drive sustainable growth really you know, into 2026, lots of activity. Now, as we continue to optimize our cost structure that we think will you know, allow us to um really push that growth.
uh as we drive acquisition and to have lots of Leverage on that kind of moving again forward with our eyes towards 206 uh post some of these cost reductions
And, and Dan on the the pay rate itself. Um, I I would not read into that that we actually increased pricing, there's some mixed shifts across some of our different.
uh,
Relationship types, right? Namely Marketplace. And, and the private label. Um, and so, if anything, if you think about the 2 competitive, levers, the 2 primary competitive, levers out there, with marketing expense and, and take great. Um, I think the intent and focus is on sustaining, if not increasing competitiveness across both of those levers this year, moving forward,
Got it and and Larry can, can you just give us some color on the buckets of the, uh, annualized Savings Plan?
Yeah. It's I would think of all of the numbers that were referencing when we talk about savings as fixed expense. So we're not taking credit for
Anything that would be variable. So you know, volume goes down, you spend less on credit cards, volume goes down, you spend less on paid search that that is not being captured in there. Uh, so what is in there though is, uh, what, I'd call fixed marketing, um, IE like longer duration, uh, brand type marketing, it's on the Block. And then GNA, our GNA is primarily people and software expense. Um, so you can think of this as as additional efficiency across those 2 categories. Um, as we look at the targets, the majority is expected to come out of GNA.
Got it. Thanks guys. Appreciate it.
Our next question comes from Ralph Shack art at William Blair.
Uh, good morning. Thanks for taking the question. Um, just in terms of, you know, kind of looking back at the quarter. I think you called out consumer spending obviously, as well as competitive pressures. Anyway, you could split that out and give a sense, you know, maybe which 1 was having a bigger impact uh during the quarter, I know it's difficult but just any color there then I have a follow
Well, it's hard to be precise that the best proxy. I think that we are recognizing that Vegas isn't directly analogous to all of our markets. You do get, I think, the cleanest read on.
Underlying uh, Trends with the transient nature of Vegas. And we we saw uh, kind of throughout the first half consistent year-over-year declines. Um yeah, I think in the the mid to high single digits in terms of some combination of visitors Hotel, occupancy, price points. Um I think there was a fair amount of chatter recently on the either June or July day to coming out showing Vegas was down double digits. Um,
So I I think the headline is certainly the competitive intensity, uh, but the consumer softness, um, you know, is probably a couple hundred basis points of of underlying headwind.
Great. And just in terms of Europe, sounds like, you know, obviously off a small basis you noted but it's exceeding, your margin expectations. I know you have, you know, mo on right now but just as you sort of get through this period of transition is that sort of reshape your, your thoughts on, you know, your rollout plan, uh, or the number of countries, maybe kind of speak to, you know, what you're thinking about that market as a calendar turns into 2026. Uh, you know, what it, you know, allow you to potentially, uh, accelerate that growth, uh, any perspective that would be great. Thank you. Yeah. Hey Ross. Yeah, I think we've been pretty pleased by what we've seen internationally. You know, as we've talked about probably
Ahead of schedule in terms of number of countries that we're in and ahead of schedule in terms of what we're seeing from a contribution margin perspective. So I think as we continue to see that Dynamic, you know, I think we are, um, excited and continue to be thoughtful, but willing to accelerate investment, as we see that as certainly Tam, a creative and margin a creative um in the future, and will continue to, I think, look to make investments to grow that part of our business.
Okay, great. Thanks Dan. Thanks sir.
Hi, our next question comes from Cameron. Manson Peroni at Morgan Stanley.
Thank you morning team. Um, first I wanted to ask, you know, Google on their earnings call this quarter, you talked a bit about activity, search activity, shifting into more towards AI mode. I was wondering, you know, if I could get your thoughts or thinking about how as search activity changes in that regard, how that might impact your SEO, and Performance Marketing channels, and any read through as you're thinking about it in terms of, you know, how that impacts the secondary ticketing industry, more broadly, uh, and then second on the savings opportunity. Larry, I was wondering if uh, just a housekeeping question, but is the 25th that in Period savings? Is it an annualized kind of exit rate at year end. 25 which is a little bit more specificity there would be helpful.
Thanks.
Yeah, hey Cameron, I'll I'll take the first part and then um fund it over to Larry on the on the savings. But
Yeah. Look. I mean
and and spend based, um,
um, funneling of traffic. I think certainly, as AI overviews is coming through. You know, I think you see, I think expected Behavior there where I think you're getting, you know, a lot of perhaps, um, relevancy over spend, that's showing up and certainly, as we think about that, um, adaptation of how consumers Discovery AI overviews as it pertains to search and other evolving. Um, and emerging channels, we we can continue to look at that and really position our platform to be discoverable. Um, and and ready to take advantage of those channels. So, lots of stuff. I think. Changing in that world, I think certainly on the Google front. We're paying close attention and deeply in in partnership with them as as some of that search experience evolves.
And on the cost reduction. Question the number we put forward think of that is a
Full year, annualized figure, that we will expect to have fully actioned by the end of this calendar year. Uh and so incremental to 2026 results in full. But as you look at the back half of 25, uh, I I'd say they are in-flight and they will layer in over the coming months and so not
not a particularly significant immediate benefit but it'll, it'll scale quickly as we we fully action, the identified savings
Got it, that's helpful. Thank you both.
Our next question comes from Ryan sigdal at Craig Hallam.
Hey thanks. This is Matthew Rob on for Ryan. Um, on issue, volume Larry, you gave a little color on the Cadence of the quarter. Give a little insight into June. Um, can you maybe talk a little bit more about the all-in pricing change and how that's changed the market from a consumer perspective. And then I don't know if I caught it did the June softness continue into Q3
yeah, so um, I'd say the
The story is not yet fully written on all in pricing. Um, you know, we've seen this
Before the National Rollout. Play out at several States so Maryland, California.
uh, Tennessee had
previously moved to all-in pricing.
And what we did see was a
Uh, decline in those States in conversion that persisted for a couple months and then largely normalized.
Uh, which would generally foot with what we've seen.
uh, across
Various testings where um, conversions generally higher, if you do utilize, you know, lower price upfront with fees shown in the checkout versus an all-in price.
I think the part that's
you know, we have the data points from the prior State examples, but now we have a lot more States flowing through and it's TBD on, will that
Uh, you know, recovery that we saw in those other states fully flow through uh at the national level. Uh
But broadly, it's tracking. Uh, and I think there is a digestion period that we're certainly working through and and we'll see as we approach kind of next year's calendar. Um, if the the flow through and Cascade properly works with its way through the system or if there's a another kind of digestion period as as the industry recalibrates kind of up and down the chain.
Okay, and then on, just the June softness. Did that continued into Q3?
Yeah, so I think we noted on q1 month-to-month volatility noted again in Q2 month month volatility. Um I'd say volatility continues. So we've actually seen July revert to being uh up year-over-year on July as a softer period. So uh all of the caveats that I would put on a already volatile year where that volatility continues, but we are seeing July return deposit.
Okay, thanks guys.
Our next question comes from Andrew Morrow at Raymond James.
I thanks for taking my question. Um, on the cost savings. Uh again you mentioned shutting down Vivid picks, but are there any other of those kind of emerging areas or investment initiatives that might come under review in the cost Reduction Program? Or is that kind of mostly aimed? Like you said at the at the core of the Legacy business in the Opex involved in that and then I have a follow-up.
Portfolio of Investments I think is is completely under review. But certainly our focus is on, you know, I think our large GNA base, which I think we believe we can significantly streamline by the end of the year.
I appreciate it and then maybe a quick 1 on, on 2 Q. So, I heard that, uh, the poor playoff matchups were 1 of the reasons that Sports came in a bit below. In the quarter, is there any way to quantify the contribution of a poor? Playoff slate versus a good 1 or just kind of the range of outcomes that we should be thinking about in like a, typical playoff season? Thank you.
Yeah. The the sports comp I would characterize as a
A pile of issues summed up to the headwinds. Um, you know, last year you had the Copa América. That drove pretty significant volume in soccer. This year, we did have the FIFA World Cup, but that came in considerably smaller than the Copas. You had a tough soccer comp. Uh, you know, last year, I'd say Caitlin Clark fever was at its peak, so we saw some headwinds on all things women's basketball on a year-over-year basis.
uh, and then as you noted, some some match up uh, softness
That if I were to put a rough number, um, you know, call it an NBA Finals between 2, small Market teams versus the NBA Finals between, you know, the Lakers and Celtics. Uh, I I would probably say in the quarter, that type of series guard rails are, like, a percent of govt. Uh, so a fraction of a percent. When you think of it on full year basis, there's just such such diversity and events any 1 won't make or break. But when it's part of a contributing series of of issues, we we like to call it out.
Understood, thank you.
Our next question comes from Curtis Nagel at Bank of America.
Uh great. Just a quick 1 for me um on the the 25 million expense reductions. Um, could we just go through? I guess the balance of
Uh, flow through versus reinvestment and and you know, where were those reinvested dollars primarily go.
Yeah, I think some some level of reserved judgment on exactly what what the ratios will be based on what we see in the competitive landscape. But
Hey, I think we've we've touched on the the 2 major uh you call it competitive, levers in the p&l are, you know, the value proposition. You're offering customers on the top line and then uh,
The marketing expense on, on the the cost side.
I, I
Will reiterate our view that the incremental yield on marketing. Spend in this current environment is difficult to put it politely.
Uh, and so you can imagine reinvestment focusing on the other lever with exact form and and channel to be uh, you know, fully resolved as as we continue to.
Uh, evaluate exactly where we want to go and how. But, you know, if you think about
Base pricing loyalty, you know that promo is that portfolio of offers uh I think is is where you would most likely reinvested and and really if you think about a you know call it LTD to cap Paradigm. Focus on enhancing LTV uh in a world where CAC is
under severe pressure.
Okay. Understood. Thank you very much.
Our next question comes from Maria Ritz at Kord.
Uh, great morning, thanks for taking my questions. Uh, sort of understanding competitive intensity on the marketing side. Uh are there any alternatives sort of customer acquisition channels that you may be exploring? Where competition is uh, is more manageable.
Yeah, thanks. I remember you were always looking. Um there are complimentary channels uh to be had but they are all
A fraction of what the paid search, uh, and performance channels are.
Today. Uh, you know, so if you think about
Paid social as an example. A lot of time spent on meta, on Reddit on Tik Tok. Um,
But the transactional mindset is less, you're scrolling through pictures. You're having a chat versus you. Go into Google and you say, I want tickets to X event. Um, so we continue to find paid searches, you know, today by
In by far, the largest channel, uh, pens. The comments earlier where, uh,
Term uh Focus that will pursue and then you know we have the the broader questions on the the longer term top of funnel that I think that's a question that spans not only our industry but many others.
Got it. That's very helpful. And then can you maybe help us understand some of the Dynamics between our own properties versus private label Revenue in Q2, I guess, what's driving? This accelerated pressure within the private label segment
Yeah, hey Maria, yeah, you know, when you think about our private label business, you know, I think it it's, it's made up of a multitude and of numerous distribution Partners. Um, and as you can imagine some, uh, they vary largely in size as well, you know, I'd say, um, for us as you look at the, the disproportionate decline in private label, you know, I think, unfortunately, 1 of our largest Partners uh, made a change and it resulted in us seeing uh, some substantially smaller volume from that partner and thus, the accelerated or sort of disproportionate decline in in that segment of our business.
Great. Thanks so much.
Our next question comes from Benjamin black at dish Bank.
Great, thank you for taking my questions. Um, can you give me talk uh, about the decision to to invest, um, internationally instead of sort of supporting the US market with more Capital? Just given the, the, the challenges that you're seeing here as well. You talked a little about the rationale there.
And, um, maybe on the other side of the marketplace, you know, how is the the competition evolved on the seller side of the equation? You know, have you seen any impact in your supply at all? You know, how how how professional Brokers is wanting to sort of the challenging and Market? Thank you.
Thanks Ben. Yeah, I'll speak to International sellers. Um
Yeah, on the international business. I I would think of it as an analysis around the incremental contribution uh that we can realistically get in the near term. Um, and you know, I we talked about the J curve in getting International off the ground. Uh, we incurred, most of that in 2024. And then, uh, I think in 2025 while the Top Line in absolute figures, and as a percentage of our total business for me,
small we are now through that contribution, margin curve and and our our positive on contribution margin, there's some incremental GNA but as we look at the landscape and the ability to generate volume at structurally, sound economics, from what we've seen to date the opportunity internationally uh remains
Healthy and robust and more consistent with what we would have seen in North America prior to the behavior of the last few years. Uh, and so it continues to feel like an attractive Pursuit, um, where, you know, it's still going to be a much smaller piece of the business for any reasonable time frame in North America, but can still be a positive needle, mover with absolute impact, on, on our, uh, gov and profitability.
On the South Side been, you know, I think sellers look for you know both a combination of um distribution channels as well as I think technology providers that allow them to efficiently and effectively run and grow their businesses, you know, on the distribution side and I think we remain a significant source of um volume from them. And so I think we continue to look at better ways to serve that. And then certainly on the infrastructure and Technology side, our our Marketplace continues to build out components on Skybox, that we believe are, are quite retentive and accretive to Sellers as we talked about in the prepared, remarks launching analytics. Um,
Tool sets for them. You know this quarter as well as you know I think enhancing some of the mobile user experiences we have for our for our sell side, continue to be ways that we build and innovate on behalf of the sell side of the marketplace.
Great, thank you very much.
Our next question comes from Brad Erickson at RBC Capital markets.
Hey guys. Thanks um.
I guess first just as you think about all this competitive intensity happening, you keep talking about
Uh, it would be curious if you could just maybe break that down for us a bit more what's actually going on, kind of industry-wide now.
Uh why is that so persistent and kind of what levers? You think, you can pull there to help, try and address and then second just on the supply environment. Maybe just any anything you can share in terms of what you're embedding and you're thinking for the second half of the year, thanks?
Yeah, on competitive landscape. Um,
Meaningful increase.
in aggressiveness and performance channels, and think of that as
you know, to Google or a bang auction, where
Someone when you, when you type in a search right for Toronto, Blue, Jays tickets. Someone is showing up in the first second, third spot. That's an open auction and the price people are willing to pay will influence who shows up at the top of that search. Uh, and you know, there's data out there across industries that most often customers will click on the first link if they're going to click on any link.
uh, and so as folks are
Willing to bid more for that first link. Uh, they can really
take, uh, a meaningful portion of the, um,
available surface area.
and if, if they're able to, you know, effectively monopolize, customer awareness by consistently showing up at the top spot uh
They will get disproportionate traffic flow and whether they're value proposition is the most compelling or not, they'll continue to see that traffic. Um,
By our math.
that incremental bid is uneconomic and I think you've seen
Across several industry players or, you know, if you you kind of follow the industry chatter, um, that has proven out that this incremental spend is on economic, uh, but different Folks at different strategic objectives and I think some folks are really focused on demonstrating Topline growth, uh, even if that's destructive to the Industry profitability pool.
Frankly coming into 2025, we thought that that's story was a, you know, unfortunate but perhaps constrained to 2024 story. And and to our disappointment uh, it seems to continue
Unabated. Uh, the why? And the endgame and all of this uh is less clear. Um,
Because it seems like we're well past the bounds of any reasonable Corporate Finance framework that you could employ.
And then supply, uh, for the back half of the year. Um,
Yeah. I think from from our side we had touched on last quarter, you know, saying that we think at the industry level.
Expect flat, maybe down a little bit for the year. Uh, you know, we saw Q2 come in, roughly flat, albeit, volatile Q3 off to a positive start with, you know, relatively easy comps, year-over-year Q4, probably tougher, comps year-over-year. Um, so at this point, not really changing that perspective that, you know, flat-ish is probably the right Paradigm for from an industry standpoint. Uh, but to make a call on, call it, the Q4 on sale calendar, and what that'll mean for 2026, uh, bit premature. Uh, but for the next, you know, quarter and a half,
The Contra calendar is pretty locked. I think we feel fine about it. Um, not too much volatility there. Yeah, yeah, I think the only other one thing, you know, Brad, kind of circling back as you think about the broad.
industry Dynamics, you know, certainly very aligned sort of with
What we look to position, you know, ourselves to be able to do is you certainly got a lot of marketing pressure and I think the, um, structural changes that we are certainly embarking on will better position us to um, be aggressive on that front as as things return to, I think a period of growth for us. But certainly, you know, when you look at the industry profit pool, it's not just the C Dynamic, from a marketing perspective that's under pressure. There's certainly take rate pressure um as well that exists. You know, I think as we continue to see broadly um you know I think what we believe to be financially irrationally irrational move.
On that front. And so, as we look at again, positioning ourselves for the future, you know, I think our goal is to be able to compete whether it's on marketing or the take rate pressures that we're seeing um, with a lot of nimbleness and Agility that we believe we can get as we lean out our cost structure.
Helpful. Thanks guys.
Our last question comes from Tom Ford at maximum Group LLC.
Great thanks. So first Dan Larry best of luck, navigating, a challenging environment. Uh 1 question 1 follow up on shuttering Vivid picks. Um, why shutter Vivid picks? It wasn't driving engagement as expected competitive set relative margin versus remainder of business regulatory environment.
Um, just
Additional thoughts, there would be appreciated.
we, we certainly
Had great aspirations and saw, you know, great early reads on potential engagement vehicles for um the product that we had, you know, I think as we look to focus in, you know, I think certainly that that was an area that took Focus away from from The Core Business. And we wanted to make sure as we, you know, thought about again, the platform and the cost structure that allowed us to really move nimbly, that, that was 1 that fell a little bit outside the bounds, um, of that. Um, similarly, as you talked about, you know, I think there were in that space and continue to be increasing regulatory, um, components that are unique and distinct from our Core Business. And so, as we looked at the overall impact, you know, made the decision that, um, it was more of a distraction than it was something that would enable the business and so decided to to shut that down.
Yeah, great great. We just really quick.
We, we tried our darn is to craft the the Cap Code.
and and we just weren't able to do it at scale and so we we sort of became to stop as a
Sub-scale provider uh with unit economics, it just didn't create a pathway to becoming something other than a subscale provider, um, you know, gave it a multi-year effort, tried, a bunch of different approaches and once it came evident that we weren't able to unlock a more sustainable unit economic profile, decided to to call it.
Thanks Larry. All right, so for my follow-up, uh, can you give your current thoughts on adjusted Eva cash? Conversion for the remainder of the year and then to the extent, you're able to provide your thoughts on your cash flow expectations for 2025 and 2026.
Yeah, I think, um,
you know, continues to be a, uh,
cash generation story driven primarily by um, 2 things 1, you know what where Eva shakes out of into if we're able to return to to sequential gov growth
Um, so year-over-year trends are likely to remain under pressure for the next several quarters. But if we can get sequential improvement, that will show up in the balance sheet. Um, so I do think we expect to be.
cash flow positive in Q3. Um, you know, there's seasonal strength, uh, in Q3 relative to Q2 particularly, if you compare September to June uh which determines the the end of quarter cash balance, uh you know, our resale business, we we spend money in the first half, acquiring inventory generally. Move that inventory in the second half, so some Tailwinds there as well. Um, and then moving into next year. Yeah, I think that the, the core objectives is to or are to 1 return to growth and 2 generate sustainable positive, cash flow. Uh and those 2 statements are very closely linked um, you know, especially with
Where you are even though it's been running relative to our interest expense and our cap cap Act without positive working capital contribution, significant positive cash, generation will be difficult to deliver in this environment. Uh so getting back to to Topline growth is is key and and is the focus as we head into 2026.
Great. Thanks Dan. Thanks Larry.
This concludes the question and answer session. Thank you for your participation. In today's conference, you may now disconnect