Q2 2025 Eventbrite Inc Earnings Call
Greetings, and welcome to event brights. Second quarter 2025 earnings conference call.
At this time, all participants are on a listen-only mode.
And a question and answer session will follow the former presentation.
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I'm a no turn the conference over to your host. Megan manister investor relations mom. The floor is yours.
Into Eventbrite second quarter 2025 earnings call. My name is Megan manister investor relations with us today are Julia Hartz our co-founder and chief executive officer and on and Gandhi our Chief Financial Officer.
As a reminder, this conference call is being recorded and will be available for replay on event, brights, investor relations website at
Please also, refer to our investor relations website to find our press release announcing our financial results which was released prior to the call.
Before we 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. August 7th, 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.
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 press release 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 Ava and adjusted Eva 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.
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 investor presentation, which is available on our investor relations website.
We encourage you to read our investor presentation, which contains important information about gaap and non-gaap results. And with that, I'll now turn the call over to Julia.
Thanks Megan and good afternoon, everyone.
We delivered a strong second quarter outperforming on the bottom line and continuing to improve our core ticketing trends.
Net revenue came in at 72.8% of our Outlook.
Eventbrite ads, had another standout quarter accelerating from q1 and our paid ticket volume Trends, continue to improve.
At the same time, we kept a sharp focus on costs and delivered on an adjusted, ibaa margin of 8.8%, which was well above our expectations.
Together these results show that our strategy is working, and that we're making meaningful progress toward returning to growth.
We started the year focused on stabilizing our core ticketing business and in Q2 we made measurable progress.
Year-over-year declines in paid creators paid events and pay ticket volume. All improved compared to q1, which is evidence that the recovery is gaining momentum.
The positive Trends we saw in Q2 gained significant momentum as we entered Q3 while we will provide a more detailed update in our next call. We're by the initial signals. We saw in July
as a proof point of our stabilization, paid creators, and paid ticket, volume were very close to Flat year-over-year in July
This is a powerful signal that our recovery is taking hold. And it reinforces our confidence that we're on a clear path to resume pay ticket growth as we exit the year.
While pay transacting Creator, volume is improving in line with expectations. The average number of paid tickets sold per Creator is lower than we anticipated.
We've used this as a short-term mix issue. We're addressing this with product and go-to-market support to lift productivity and drive higher ticket volumes in the back half of the year.
on, on will cover in more detail, how this impacts full year Revenue expectations,
In addition to Growing ticketing Revenue to strengthen our business and sharpening our operating discipline to increase productivity. We're advancing the long-term strategy that will power durable momentum on both sides of our Marketplace and accelerate the flywheel between creators and consumers.
Starting with the Creator side of our Marketplace, we're continuing to deliver powerful tools that drive measurable value. For the supply side, helping creators, reach more fans, sell more tickets and grow their businesses on Eventbrite.
In late June, we launched a new tool built for music organizers and venues to better showcase their events and attract fans across top discovery platforms.
In places like Spotify fans in town and Google, making it easier for fans to find and connect with the events they love.
We're also seeing strong momentum with the bump, right ads, since launching in 2022. This product has become a key growth lever, not just for us, but also for our creators.
It's now a meaningful driver of high margin revenue, and a clear signal of the platform's ability to grow audiences, for both paid and free events.
Over the past year, we've dramatically reduced the cost of high intent, ad clicks and expanded the product beyond the US to the UK Canada and Australia.
Adoption continues to grow as more creators see, great results.
1 example is rum and music events a Caribbean organizer with events in New York and Miami.
They've used Eventbrite ads to build brand awareness, break into new markets and drive real ticket sales.
By shifting more of their marketing budget to Eventbrite ads, they saw a 19x return on ad spend.
That impact led them to double their investment and expand their campaigns, making ads a core part of their growth strategy.
On the consumer side of our business, we're raising the bar on Discovery, especially through our newly relaunched app. Our goal is simple: connect people to great live experiences in a way that feels intuitive, inspiring, and fun.
Since the relaunch, the app's home feed has quickly become 1 of our most active Discovery surfaces. Second only to web search.
And that engagement is translating into results app. Conversion rates are up year-over-year. Giving us a strong Foundation to build on.
We'll continue investing in smarter event matching and deeper, personalization to keep improving the consumer experience.
We're also focused on attracting more consumers to the platform by expanding our inventory of large-scale. High-impact event series particularly immersive experiences. This type of Serial format attracts big audiences and sets of VP, right? Apart is the best place to discover what's next in live entertainment.
1, standout example is haunted Tavern and interactive cocktail experience where guests are guided through ghost stories and Spirits. Literally,
Over the past year, they've sold more than 150,000 tickets through Eventbrite and expanded to 380 cities.
That's the kind of magnetic experience that brings people back and we see a massive opportunity to grow this category as we advance our strategy with initiatives like these. We've also sharpened our focus on financial discipline and that focus is driving results in Q2 adjusted ibaa margin improved by 260 basis points from q1, reflecting sustained, cost control and more efficient execution.
We've reduced overhead across the business and are directing spending for the areas with the greatest leverage. These actions are creating lasting operating efficiencies and positioning us to expand margins as we return to growth.
That same discipline extends to how we manage Capital this quarter. We secured a new term loan that strengthens our liquidity and allows us to retire a significant portion of our outstanding convertible notes with cash.
Together these steps materially improve our balance sheet and increase our flexibility for the road ahead.
On on will share more details in just a moment.
I'll end here by reinforcing that we're exiting the first half of 2025 with real momentum.
The execution of our strategy is translating into stronger results.
Our disciplined approach is driving margin improvements and structural cost savings, and we're making progress that we believe will lead to sustained growth, stronger cash flow, and improved profitability.
I want to thank our entire team for their focus resilience and commitment to delivering on our goals and to our shareholders. Thank you for your continued support as we build lasting value. And with that, I'll turn it over to Anna.
Thanks Julia.
We delivered on our outlook for Q2 with net revenue at the top end of our guidance range and adjusted Eve at the margin significantly above expectations.
We also made important progress against our goals.
Including further reducing expenses to drive margin expansion.
And also strengthening our balance sheet.
Now, I'll go through our financials in more detail.
please note that all comparisons are year-over-year unless indicated otherwise
Net revenue declined, 14% to 72.8 million.
Out of the range.
The decrease is due to both a 10% decline in ticking Revenue.
And significantly reduced Marketplace Revenue, primarily due to the elimination of organized reviews.
This was partially offset by a strong performance from Eventbrite ads.
Which grew an impressive 50%.
Pay a ticket volume was 19.7 Million for the quarter.
A decline of 7% reflecting an improvement of 40 basis points compared to q1.
Importantly, as Julia mentioned in July, we saw trending Improvement accelerate significantly with paid ticket volume down. Only 1% year-over-year,
We're encouraged by this early signal and look forward to providing a complete update on the full quarter when we report Q3 earnings.
We've seen consistent sequential Improvement in year-over-year Trends in paid creators.
Paid events and paid tickets.
Since the eliminating organizer fees in September of 2024, this positive momentum has been partially offset by a shift in our Marketplace.
We're seeing a faster return of small-scale creators and events. Then with our larger higher volume creators, this is led to fewer tickets sold per Creator than we had initially anticipated. I'll provide more context on how these Trends impact, our Outlook in a moment.
Gross margin of 67.5% improved by 60 basis, points from q1.
This was driven by the strong performance of our high-margin ads revenue.
This is lower than last year's 70.9%.
Which had benefited from high-margin organizer fees.
That have since been eliminated for this quarter, our gross profit was a solid 49.1 million. Now, turning to operating expenses, we continue to focus on efficiency.
With Opex, declining 16% year-over-year to 55.4 million.
Q2 Opex, reduced even further by 22%. When excluding a 1-time 4.4 million litigation settlement benefit in the prior year, on a non-gaap basis.
This marks our sixth consecutive quarter of operating expense reductions.
We sharpened our focus on the bottom line by pursuing, structural improvements to our cost base.
And we expect these actions will deliver sustainable benefits for the company.
Looking more specifically at our Opex buckets.
Product development was down, 30% from 26.1 million to 18.2 million.
Sales, marketing, and support was down 17% from 24.5 million to 20.4 million.
GNA of 16.9 million was up 7% due to a 1-time 4.4 million litigation settlement benefit in the prior year.
GNA decreased 16% when excluding this prior year, 1-time benefit.
Within our overall Opex. We also achieved a 51% reduction in stock based compensation
from 15.3 million to 7.5 million.
Through a deliberate and careful Equity management.
Q2 net loss of $2.1 million compares to a net income of $1.1 million in the prior year.
Primarily due to a 1-time 8.3 million litigation settlement gain recognized in Q2 2024.
Excluding this gain, Q2 net loss, improved year-over-year.
With 6.4 million in Q2, representing an 8.8 adjusted, Eva margin. Well, ahead of our Outlook.
This included a modest benefit from an adjustment to annual incentive compensation expense.
Now, turning to the balance sheet.
We ended the quarter with cash cash equivalents and restricted cash of 538.5 million.
Our available liquidity stood at 248 million and increase of 7 million from the end of q1.
We're also pleased to share 2 significant developments that further strengthen our financial position.
First, we've secured a new 60 million dollar Term Loan, to proactively, bolster our balance sheet and provide additional liquidity in preparation for fully retiring. Our convertible notes at standing, its September 2026,
This Term Loan provides us with greater Financial flexibility and security for the next 4 years, and an attractive cost of capital of sulfur plus 250 basis points.
Of our total 213.
Million September 2026 converts.
The low par at 94 cents on the dollar.
we also plan to retire the remaining 30 million as standing of our 2025 converts this December,
after which, the remaining 88 million of our 2026 is
the new 60 million Term Loan will represent our only debt outstanding
Now, I'll provide some context on how we're thinking about Outlook.
As Julia mentioned, we have seen consistent sequential trending Improvement in paid creators and pay tickets.
Which has accelerated significantly in July.
Our paid Creator volume is now recovering in line with our expectations.
However,
average tickets sold for creator has been slower to recover.
This shift towards smaller events and lower volume creators.
Returning ahead of larger ones has created a gap to our initial Revenue outlook for the year.
Despite this our recovery continues to build momentum.
And we view this as a short-term mix issue that we're proactively addressing.
Let me walk you through how we're executing here.
First on the marketing front.
We're prioritizing high-value self-signed creators.
We're driving quality traffic to the most compelling events.
Boosting visibility where we know demand is greatest.
Second.
In sales we're targeting large creators and key verticals.
And helping them scale by upselling ads.
This allows us to unlock incremental demand and monetize it more, effectively.
Third, our product team is helping creators better, leverage our Marketplace.
We're empowering our creators with Smarter Tools to grow Their audience and Revenue.
Things like demand generation marketing Automation and insights that help increase ticket sales.
We're also focused on increasing adoption to help more creators leverage. These tools to drive growth
Specifically we're investing in 3, high impact, product areas.
First consumer Discovery tools.
Second, as and premium email campaigns.
And third paid social advertising to extend reach Beyond Eventbrite.
Together these actions reinforce the unique value. We drive for our creators through the flywheel of our 2-sided Marketplace.
Now, with this context, I'll share more details on our Outlook.
For Q3.
We expect net revenue between $70 million and $73 million.
And an adjusted Evita margin of approximately 7%, excluding non-routine items.
Looking at the full year.
We expect to achieve monthly year-over-year growth and pay ticket volume by the end of the year.
Driven primarily by the strength we're seeing in page creators.
due to the mix shift, we described earlier
We're updating our full year Revenue Outlook to a range of 290 to 296 million.
And importantly.
Summing things up.
Our results. Demonstrate solid execution, delivering accelerated, trending, improvements and paid creators and paid events.
Along with greater operational efficiency.
Our continued progress in reducing operating. Expenses is driving. Structural improvements to our cost base and substantial margin expansion.
Positioning us to generate greater cash flow, as we return to growth.
This discipline execution combined with our strength and balance sheet, provide us with a solid foundation for sustained profitable growth, long term.
And now we'll open it up to your questions.
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1 moment, please while we pause for questions.
Thank you.
Our first question is coming from today. Lee with JP Morgan. Your line is live.
Cannot continue into the back half. Um, and then, secondly, on the next impact that you're talking about from, um, creators. Are there any changes in the competitive or overall event landscape? That might be affecting this as well outside of your focus on higher margin, um, self Simon creators.
Great, thanks Dave, and thanks so much. I appreciate you joining the call and uh, and for your, uh, for your question here. So, you know what we're seeing in the business is uh, in line with what we want to see in terms of recovery. Uh, you know, we're watching the July as we wanted to give confidence and inflecting, you know, the monthly year-over-year growth later in the year is in that it's being supported by the behavior of creators and consumers on the platform. Not just the volume. So we are, you know, seeing the trends moving in the right direction, uh, as you noted, um, and as we shared on our call, paid creators return, our about flat in July, uh, and paid ticket volume was down just 1% year-over-year, which is a sharp improvement from the Q2 run rate, and that's just not a projection that's actual performance. So, it tells us the recovery
Is progressing and the inflection point is approaching um second is that we're controlling what we can to drive that growth. So we've put focused effort behind acquiring larger higher volume creators through paid marketing.
Through brand development and an expanded sales team. That's now, more targeted and more productive, they're focused on vertical format and Metro. So we're we're seeing that increased the near-term performance of paid creators. And we expect to see that the lagging indicator, uh, pick up toward the back half of the year and paid ticket volume.
We're also seeing success with more consistent upselling motion, that's driving greater adoption of event, Brite ads, and that matters because it's helping creators sell more tickets while also increasing our monetization.
And the final thing I'll say is that our product Investments are designed to drive exactly, this kind of growth starting with the Creator and helping them expand their business. So we're improving consumer demand, through better Discovery and personalization. We're expanding marketing tools, that help creators, grow Their audience and we're delivering insights that help them optimize the performance of their marketing and promotion as well as as giving them insights into how their events are selling, especially for our repeat customers who are able to compare year-over-year. So these improvements
Movements that I just mentioned are already live and the adoption is building. I think while there's still work ahead the combination of this real-time Improvement that we're signaling for July and you know, the um and the proactive execution gives us the confidence that we'll reach that inflection and we're on a solid path to sustain it. Where we in, in the course of Q2, saw some Divergence in these, uh, main metrics is the recovery of creators, is the is, um, sorry. The recovery of tickets for creators Lobby lagging slightly behind the recovery of creators. And that's what I think is driving a bit of that delayed um uh Improvement than what we had originally anticipated.
And you also asked if there was a change in the overall landscape uh we don't see a massive shift in the landscape. We think that you know Eventbrite is well positioned within the mid-market and we are the you know number 2, largest traffic, live experience and ticketing uh destination out there. We think that we're able to compete against many smaller players as well as larger platforms with our product focusing on helping creators build their businesses on Eventbrite and sell more tickets our Marketplace helping to drive nearly 40% of the ticket volume.
Through our targeted consumer efforts and third through our, our brand affinity and the ubiquity that Eventbrite has with live experiences. We see some really interesting secular Tailwinds, in Live Events as people are wanting to get out more and be in real life together and we see the Clear Connection and opportunity. And we have a proven track record of using
Of getting together in real life and connecting uh, through experiences.
Got it. Thank you.
Thank you.
As we currently have no further questions on the lines at this time.
This will conclude today's call.
You may disconnect your lines at this time and have a wonderful day and we thank you for your participation.