Eventbrite, Inc. (NYSE:EB) Q2 2020 Earnings Conference Call August 6, 2020 5:00 PM ET Company Participants Ron Clark – Head of Investor Relations Julia Hartz – Co-Founder and Chief Executive Officer Lanny Baker – Chief Financial Officer Conference Call Participants Nate Mitchell – SunTrust Securities Ryan Sundby – William Blair Ryder Cleary – JPMorgan Heath Terry – Goldman Sachs Operator Good afternoon. My name is Christine, and I'll be your conference operator today. At this time, I would like to welcome e ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________________________ FORM 10-Q __________________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...

Eventbrite, Inc. (NYSE:EB) Q1 2020 Results Earnings Conference Call May 11, 2020 5:00 PM ET Company Participants Ron Clark - Head, IR Julia Hartz - Co-Founder, CEO & Director Lanny Baker - Chief Financial Officer Conference Call Participants Ryan Sundby - William Blair Youssef Squali - SunTrust Mark Mahaney - RBC Heath Terry - Goldman Sachs Doug Anmuth - JP Morgan Operator Ladies and gentlemen, thank you for standing by and welcome to the Eventbrite First Quarter 2020 Earnings Conference Call. At this time ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________________________ FORM 10-Q __________________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________________________ FORM 10-K ____________________________________________________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | |------ ...

Financial Data and Key Metrics Changes - Total company revenue for 2019 grew 12% year-over-year, reaching $327 million [9] - Fourth quarter revenue grew 9% year-over-year, with net revenue of $83 million [18][19] - Gross profit for the fourth quarter grew 9% year-over-year to $49 million, maintaining a gross margin of 59% [21] - Operating expenses for the fourth quarter increased by 27% year-over-year, but adjusted for unusual items, the increase was 11% [21][22] - The adjusted EBITDA outlook for the first quarter is projected to be between negative $3 million to positive $1 million, with a full-year outlook of negative $4 million to breakeven [25] Business Line Data and Key Metrics Changes - The Self-Sign On channel generates half of ticket fees and is the fastest-growing channel, achieving mid-single-digit year-over-year paid ticket growth [9][10] - In 2019, paid tickets in the Self-Sign On channel grew 21%, with international growth rates exceeding that of the U.S. [37] - The music business, a significant category within the Self-Sign On channel, is experiencing 20% to 30% growth [41] Market Data and Key Metrics Changes - The company served nearly 1 million creators who organized approximately 4.7 million live events across 180 countries [8] - Approximately 10% of events on the platform draw more than half of their attendance from over 100 miles away, indicating potential impact from travel restrictions [27] - Roughly 10% of paid tickets come from events with more than 5,000 attendees, which may face cancellations due to health concerns [27] Company Strategy and Development Direction - The company prioritizes four key growth pillars: serving frequent event creators, strengthening global music presence, building consumer demand tools, and investing in platform infrastructure [10][15] - The focus on frequent creators is seen as a critical financial lever for driving revenue growth [11] - Significant investments are planned for product development and sales organization to enhance growth and profitability [25][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the potential impact of the coronavirus on live events and attendance, but believes the industry will rebound as conditions improve [16][27] - The outlook anticipates stronger revenue growth in the second half of 2020 compared to the first half due to resource realignment and increased investments [23][24] - The company aims for sustained double-digit revenue growth in the long term, with a focus on scaling its presence across categories and geographies [28][56] Other Important Information - The company became a large accelerated filer, adopting new lease accounting guidance that affects previously reported adjusted EBITDA [26] - The music business is now viewed on a global multichannel basis following the completion of the Ticketfly customer migration [20] Q&A Session All Questions and Answers Question: Can you provide more context for the full year guidance? - The guidance reflects material investments in product and sales hiring, with expectations for improved sales revenue growth throughout the year [33] Question: What is the retention rate among frequent creators? - Super creators represent roughly 60% of paid tickets sold, with high lifetime values compared to less frequent creators [34] Question: What is behind the deceleration in Self-Sign On? - Paid tickets in the Self-Sign On channel grew 21% for the full year, with a slight deceleration in the fourth quarter due to a larger base from the prior year [37][38] Question: What are the assumptions regarding the coronavirus in the forward-looking guidance? - The company anticipates some impact on business, particularly in terms of reduced live events and attendance, but quantifying the exact impact is challenging [44][45] Question: Can you elaborate on the plan to expand the go-to-market sales and marketing strategy? - The company is centralizing its sales teams in Europe for operational efficiencies and expanding the number of sales reps without increasing operating expenses [51][53] Question: What is the long-term vision for the mix between Self-Sign On and the sales channel? - The vision is for both channels to be symbiotic, leveraging strengths in music and international markets to drive growth [57][59]

Financial Data and Key Metrics Changes - Total company revenue for Q3 2019 was $82 million, representing an 11% year-over-year growth, which was better than expected [11][19] - Adjusted EBITDA loss was in line with expectations, including $3.8 million in expenses related to resource realignment [13][25] - Gross profit grew 16% year-over-year to $49 million, with gross margins rising by 2 points year-over-year [19] Business Line Data and Key Metrics Changes - The Self Sign-On channel experienced a 23% growth in paid ticket volume, contributing significantly to revenue growth [11][19] - The international markets showed strong growth, with events outside the U.S. accounting for 37% of total paid tickets and 28% of net revenue, up from 35% and 24% respectively in the prior year [12] Market Data and Key Metrics Changes - The U.K., Canada, Australia, and Brazil were highlighted as key international markets driving growth [12] - Self Sign-On in international markets saw a 30% increase in paid ticket volume, indicating strong demand and market penetration [36] Company Strategy and Development Direction - The company is focused on enhancing its platform to support event creators and is executing a realignment plan to operate more efficiently [8][15] - There is a commitment to building a platform that enables event creators to run their businesses efficiently, with new functionalities being added to attract and retain customers [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth prospects and the opportunity to build on their leadership position in the ticketing and events mid-market [16][26] - There is caution regarding customer retention in the music category due to recent migrations, but management is focused on earning loyalty from these customers [28][30] Other Important Information - The company has nearly completed the migration of Ticketfly customers to Eventbrite Music and is focused on strengthening relationships with these new customers [15] - The balance sheet remains strong with $186 million in available liquidity and no debt [26] Q&A Session Summary Question: How did churn play out in Q3 and what are the expectations for Q4? - Management indicated that customer retention in the music category was in line with expectations, but they are cautious about retention in the near term due to recent migrations [28][29] Question: What is the outlook for potential losses in 2020? - Management is focusing on the total music landscape and is committed to helping transitioned customers find their footing on the new platform [30] Question: Can you quantify the annual revenues of Ticketfly's larger customers? - Management did not provide specific annual revenue figures but noted that the majority of migrations occurred before Q3 2019 [34][35] Question: What is driving the strong growth in Self Sign-On? - Self Sign-On is the core business, and the growth is attributed to the platform's ability to meet the needs of various creators [36][37] Question: What are the implications of the relationship with Square? - Management views Square as a valuable partner and is exploring opportunities to integrate their solutions into the Eventbrite platform [40][41] Question: How is the uptake of add-ons impacting revenue? - Management reported positive adoption of add-ons, which allow event creators to sell additional products, contributing to revenue growth [43]

PART I. FINANCIAL INFORMATION [Item 1. Unaudited Interim Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Eventbrite's unaudited interim condensed consolidated financial statements detail financial position, operational results, and cash flows, highlighting revenue growth, net loss, and debt repayment Condensed Consolidated Balance Sheet Data (in thousands) | Account | September 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total current assets** | $576,865 | $545,704 | | **Total assets** | $866,808 | $836,884 | | **Total current liabilities** | $401,546 | $308,204 | | **Total liabilities** | $445,628 | $421,662 | | **Total stockholders' equity** | $421,180 | $415,222 | Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net revenue** | $82,052 | $73,628 | $244,136 | $215,696 | | **Gross profit** | $48,707 | $42,151 | $149,200 | $126,272 | | **Loss from operations** | $(22,906) | $(13,054) | $(47,584) | $(29,365) | | **Net loss** | $(30,176) | $(35,516) | $(55,007) | $(51,096) | | **Net loss per share** | $(0.36) | $(1.24) | $(0.68) | $(2.15) | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $42,759 | $23,786 | $100,491 | $72,785 | | **Net cash provided by (used in) investing activities** | $(3,538) | $(5,395) | $(11,375) | $1,439 | | **Net cash provided by (used in) financing activities** | $(52,768) | $231,633 | $(41,101) | $244,848 | - The company adopted ASC Topic 606 on January 1, 2019, with no material impact on net revenues[44](index=44&type=chunk)[47](index=47&type=chunk) - In September 2019, the company fully repaid its **$62.2 million** term loans, incurring a **$1.7 million** loss on debt extinguishment, and has no outstanding debt as of September 30, 2019[89](index=89&type=chunk)[90](index=90&type=chunk) - The company is involved in securities class action lawsuits and a lawsuit against MF Live, Inc. for the cancelled Roxodus festival, for which **$4.0 million** in refunds were issued, with the company believing claims are without merit[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights Q3 2019 revenue growth driven by increased paid ticket volume, a net loss, rising operating expenses, and the full repayment of outstanding debt Paid Ticket Volume (in thousands) | Period | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30** | 26,897 | 23,896 | 12.6% | | **Nine Months Ended Sep 30** | 80,461 | 70,593 | 14.0% | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net loss** | $(30,176) | $(35,516) | $(55,007) | $(51,096) | | **Adjusted EBITDA** | $(6,517) | $11,214 | $(629) | $21,238 | - Q3 2019 net revenue increased by **$8.4 million (11.4%)** year-over-year, driven by a **12.6%** growth in paid ticket volume, while net revenue per paid ticket slightly decreased[166](index=166&type=chunk)[167](index=167&type=chunk) - Q3 2019 sales, marketing, and support expenses increased by **$7.4 million (34.8%)** year-over-year, primarily due to **$4.6 million** in creator-related expenses, including **$4.0 million** for the Roxodus festival refunds[171](index=171&type=chunk)[190](index=190&type=chunk) - In September 2019, the company fully repaid its **$62.2 million** outstanding principal on New Term Loans, resulting in no outstanding debt as of September 30, 2019[159](index=159&type=chunk)[206](index=206&type=chunk) - As of September 30, 2019, the company held **$485.2 million** in cash and cash equivalents, including **$367.3 million** due to creators[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk disclosures indicate minimal interest rate risk due to no variable-rate debt and immaterial foreign currency impact from exchange rate fluctuations - The company's interest rate risk is low due to no outstanding variable-rate debt as of September 30, 2019, with a **10%** interest rate change having no material effect[234](index=234&type=chunk) - Eventbrite faces foreign currency risk from significant ticket sales in foreign currencies, but a **10%** exchange rate fluctuation is not expected to materially impact consolidated results[235](index=235&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[236](index=236&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the quarter[237](index=237&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Eventbrite faces consolidated securities class action lawsuits and seeks to recover **$4.0 million** in Roxodus festival refunds, believing all claims against it are without merit - The company is defending against putative securities class action complaints in federal and state courts, alleging misrepresentations in IPO documents, and believes these actions are without merit[241](index=241&type=chunk) - Eventbrite filed lawsuits against MF Live, Inc. and its principal to recover **$4.0 million** in refunds issued for the cancelled Roxodus music festival[241](index=241&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) The company outlines key business risks including international expansion, payment processor reliance, live event market vulnerability, chargebacks, legal proceedings, and privacy law compliance - International expansion risks include currency fluctuations, compliance with diverse local laws, and platform adaptation to local preferences[244](index=244&type=chunk) - The company relies on third-party payment providers and is re-evaluating its partnership with Square, a primary online payment processing partner[246](index=246&type=chunk) - The business is susceptible to chargebacks and losses from fraudulent or cancelled events, exemplified by the **$4.0 million** Roxodus festival refunds[251](index=251&type=chunk) - The business will be subject to the California Consumer Privacy Act (CCPA) starting January 1, 2020, potentially increasing compliance costs and liability[255](index=255&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued **369,140** restricted shares of Class A common stock in July 2019 for an asset purchase and confirms no material change in IPO proceeds use - In July 2019, the company issued **369,140** restricted shares of Class A common stock for an asset purchase agreement[258](index=258&type=chunk) - There has been no material change in the planned use of proceeds from the company's IPO[259](index=259&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications - The report includes an index of filed exhibits, such as CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002[261](index=261&type=chunk)[265](index=265&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________________________ FORM 10-Q ____________________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Securities registered | --- | --- | --- | --- | ...

PART I [Item 1. Unaudited Interim Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Eventbrite's unaudited interim condensed consolidated financial statements for Q1 2019 and 2018 are presented, detailing balance sheets, operations, equity, cash flows, and accounting notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------------- | :------------- | :------------------ | | Total Assets | $931,005 | $836,884 | | Cash and cash equivalents | $533,363 | $437,892 | | Accounts payable, creators | $353,389 | $272,201 | | Total Liabilities | $506,092 | $421,662 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net revenue | $81,326 | $74,526 | | Gross profit | $50,808 | $46,442 | | Total operating expenses | $60,953 | $49,533 | | Loss from operations | $(10,145) | $(3,091) | | Net income (loss) | $(9,998) | $9,023 | | Net loss per share attributable to common stockholders, basic and diluted | $(0.13) | $— | [Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Equity%20%28Deficit%29) Stockholders' Equity (Deficit) Highlights (in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------------- | :------------- | :------------------ | | Total Stockholders' Equity | $424,913 | $415,222 | | Stock-based compensation (Q1) | $8,330 | $3,016 | | Net loss (Q1) | $(9,998) | $9,023 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $86,734 | $86,306 | | Net cash used in investing activities | $(3,390) | $(2,992) | | Net cash provided by (used in) financing activities | $11,129 | $(4,872) | | Net increase in cash, cash equivalents and restricted cash | $94,473 | $78,442 | [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) - Eventbrite's platform enables creators to plan, promote, and produce live events, reducing friction and costs, increasing reach, and driving ticket sales[33](index=33&type=chunk) - The company completed its Initial Public Offering (IPO) in September 2018, issuing **11,500,000 shares** of Class A common stock at **$23.00 per share**, generating **$246.0 million** in net proceeds[34](index=34&type=chunk) - Adopted ASU 2017-01 (Business Combinations) and ASC Topic 606 (Revenue from Contracts with Customers) effective January 1, 2019, with no material impact on net revenues for Q1 2019[41](index=41&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk) - Cash and cash equivalents include **$302.6 million** (Mar 31, 2019) and **$217.4 million** (Dec 31, 2018) of creator cash, which is legally unrestricted but not utilized for company financing or investing activities[49](index=49&type=chunk) - Revenue is primarily derived from service fees and payment processing fees charged at the time of ticket sale, and is recognized on a net basis for ticketing and a gross basis for payment processing[53](index=53&type=chunk) Key Financial Balances (in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------------- | :------------- | :------------------ | | Accounts receivable, net | $5,174 | $4,069 | | Creator signing fees, net | $8,068 | $7,324 | | Creator advances, net | $24,124 | $21,255 | | Property, plant and equipment, net | $45,024 | $44,219 | | Acquired intangible assets, net | $57,174 | $59,973 | | Term loan outstanding principal | $73,594 | $73,584 | | Indirect tax reserves | $17,600 | $19,200 | - A class action complaint was filed on April 15, 2019, alleging misrepresentations in the IPO registration statement and Q3 2018 earnings; the company believes it is without merit and intends to vigorously defend the action[91](index=91&type=chunk) Stock-based Compensation and Net Loss Per Share | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Stock-based compensation expense (Q1) | $8,127k | $2,860k | | Net loss per share attributable to common stockholders, basic and diluted | $(0.13) | $— | | Weighted-average shares outstanding | 78,670k | 20,711k | Net Revenue by Geography (in thousands) | Geography | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :---------- | :-------------------------------- | :-------------------------------- | | United States | $59,780 | $55,815 | | International | $21,546 | $18,711 | | Total | $81,326 | $74,526 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Eventbrite's financial condition and operational results, detailing its business model, performance drivers, Q1 2019 vs Q1 2018 analysis, non-GAAP measures, and contractual obligations [Our Business](index=28&type=section&id=Our%20Business) - Eventbrite's technology platform enables creators to plan, promote, and produce live events, reducing friction and costs, increasing reach, and driving ticket sales[119](index=119&type=chunk) - In 2018, the company helped over **790,000 creators** issue approximately **265 million tickets** across **3.8 million events** in over **170 countries**[120](index=120&type=chunk) - Revenue is primarily derived from service fees and payment processing fees charged on a per-ticket basis for paid ticket sales[121](index=121&type=chunk) [Our Business Model](index=28&type=section&id=Our%20Business%20Model) - The company efficiently acquires creators, with over **98% of 2018 creators** self-signing up and contributing **56% of net revenue**[122](index=122&type=chunk) - Eventbrite provides high-quality solutions at a cost advantage through a cloud-based architecture, reducing operating and support costs[123](index=123&type=chunk) Creator Retention Rate | Year | Retention Rate | | :--- | :------------- | | 2018 | 100% | | 2017 | 97% | | 2016 | 93% | - International revenue grew from **18% to 30%** between 2012 and 2017, and Eventbrite Payment Processing (EPP) supported approximately **90% of paid tickets** in 2018[126](index=126&type=chunk) [Key Factors Affecting Our Performance](index=29&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) - Attracting new creators and retaining existing ones is critical for revenue growth, requiring ongoing investment in brand, marketing, and platform development[129](index=129&type=chunk) - Continuous enhancement and expansion of the technical platform are necessary to meet evolving creator needs and maintain competitiveness[130](index=130&type=chunk) - Investments in complementary solutions (e.g., web presence, promoted listings) were **$5.1 million** in Q1 2019 and **$4.4 million** in Q1 2018, generating less than **five percent of net revenue**[132](index=132&type=chunk) - International expansion is a significant growth opportunity, with paid tickets outside the U.S. increasing from **30.8%** in Q1 2018 to **35.0%** in Q1 2019, and international net revenue at **26.5%** in Q1 2019[134](index=134&type=chunk) [Key Business Metrics](index=31&type=section&id=Key%20Business%20Metrics) Paid Tickets (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--------- | :-------------------------------- | :-------------------------------- | | Paid Tickets | 27,026 | 23,598 | [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) - Adjusted EBITDA and free cash flow are key non-GAAP performance measures used by management to assess business health and operating performance[140](index=140&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $(9,998) | $9,023 | | Adjusted EBITDA | $4,979 | $8,794 | Free Cash Flow Reconciliation (in thousands, trailing twelve-month) | Metric | Twelve Months Ended March 31, 2019 | Twelve Months Ended March 31, 2018 | | :-------------------------------------------------------------------- | :--------------------------------- | :--------------------------------- | | Net cash provided by operating activities | $7,476 | $38,977 | | Purchases of property and equipment and capitalized internal-use software development costs | $(12,934) | $(9,703) | | Free cash flow | $(5,458) | $29,274 | [Components of Results of Operations](index=33&type=section&id=Components%20of%20Results%20of%20Operations) - Net revenue is primarily from service fees and payment processing fees, recognized when tickets are sold or over the event period for account management services[151](index=151&type=chunk) - Cost of net revenue includes payment processing fees, platform operations, software amortization, and acquired developed technology amortization, expected to decrease as a percentage of net revenue long-term due to international growth[154](index=154&type=chunk) - Product development expenses are expected to increase in absolute dollars and near-term as a percentage of net revenue due to platform enhancements and integration of acquired businesses[157](index=157&type=chunk) - Sales, marketing and support expenses are expected to increase in absolute dollars but decrease as a percentage of net revenue long-term due to efficient customer acquisition channels[158](index=158&type=chunk) - General and administrative expenses are expected to increase in absolute dollars due to growth and public company maturity, but may fluctuate as a percentage of net revenue[159](index=159&type=chunk) - A **$17.0 million** gain on debt extinguishment was recorded in Q1 2018 from the repayment of promissory notes related to the Ticketfly acquisition; no debt was retired in Q1 2019[181](index=181&type=chunk) [Results of Operations - Comparison of Three Months Ended March 31, 2019 and 2018](index=35&type=section&id=Results%20of%20Operations%20-%20Comparison%20of%20Three%20Months%20Ended%20March%2031%2C%202019%20and%202018) Net Revenue Performance (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Net revenue | $81,326 | $74,526 | $6,800 | 9.1% | | Paid ticket volume | 27.0 million | 23.6 million | 3.4 million | 14.5% | | Net revenue per paid ticket | $3.01 | $3.16 | $(0.15) | (4.7%) | Operating Expense Performance (in thousands) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Cost of net revenue | $30,518 | $28,084 | $2,434 | 8.7% | | Product development | $14,264 | $8,834 | $5,430 | 61.5% | | Sales, marketing and support | $21,170 | $20,472 | $698 | 3.4% | | General and administrative | $25,519 | $20,227 | $5,292 | 26.2% | | Interest expense | $(1,933) | $(2,909) | $976 | (33.6%) | | Change in fair value of redeemable convertible preferred stock warrant liability | $— | $(1,321) | $1,321 | * | | Gain on debt extinguishment | $— | $16,995 | $(16,995) | * | | Other income (expense), net | $2,180 | $(281) | $2,461 | * | | Income tax provision | $100 | $370 | $(270) | (73.0%) | - Product development expense increased primarily due to a **$4.5 million** increase in personnel costs, including **$1.3 million** in stock-based compensation, from organic hiring and acquisitions[174](index=174&type=chunk) - General and administrative expenses increased due to a **$5.9 million** rise in personnel costs (including **$3.1 million** stock-based compensation) and insurance, partially offset by a **$3.0 million** decrease from sales tax reserve adjustments[177](index=177&type=chunk) - Other income (expense), net, increased due to foreign currency rate measurement gains resulting from the weakening of the U.S. dollar[182](index=182&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity and Capital Resources (in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------------- | :------------- | :------------------ | | Cash and cash equivalents | $533,400 | $437,900 | | Funds receivable | $54,400 | $58,700 | | Accounts payable, creators | $353,400 | $272,200 | | Creator advances, net | $24,100 | $21,300 | | Creator advances, noncurrent | $2,600 | $1,900 | - The company received **$246.0 million** in net proceeds from its IPO in September 2018[187](index=187&type=chunk) - A senior secured credit facility was entered into in September 2018, consisting of **$75.0 million** in New Term Loans (fully funded, **$73.6 million** cash proceeds) and a **$75.0 million** New Revolving Credit Facility (no draw as of March 31, 2019)[188](index=188&type=chunk)[189](index=189&type=chunk) - Management believes existing cash, cash from operations, and the New Revolving Credit Facility will be sufficient to meet anticipated cash needs for at least the next 12 months[192](index=192&type=chunk) - Approximately **41.8% of cash** was held outside the United States as of March 31, 2019, primarily for creators and foreign operations, with no expectation of significant taxes on these amounts[193](index=193&type=chunk) [Cash Flows - Comparison of Three Months Ended March 31, 2019 and 2018](index=40&type=section&id=Cash%20Flows%20-%20Comparison%20of%20Three%20Months%20Ended%20March%2031%2C%202019%20and%202018) Cash Flow Activities (in thousands) | Activity | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $86,734 | $86,306 | | Net cash used in investing activities | $(3,390) | $(2,992) | | Net cash provided by (used in) financing activities | $11,129 | $(4,872) | | Net increase in cash, cash equivalents and restricted cash | $94,473 | $78,442 | - Net cash provided by operating activities in Q1 2019 was primarily due to a net loss of **$10.0 million**, adjusted for non-cash items and an **$81.2 million** increase in accounts payable to creators[197](index=197&type=chunk) - Net cash used in investing activities in Q1 2019 was **$3.4 million**, mainly for capitalized internal-use software development costs (**$2.1 million**) and property and equipment purchases (**$1.3 million**)[198](index=198&type=chunk) - Net cash provided by financing activities in Q1 2019 was **$11.1 million**, primarily from **$12.4 million** in proceeds from stock option exercises, partially offset by debt issuance and IPO offering costs[199](index=199&type=chunk) [Contractual Obligations and Commitments](index=42&type=section&id=Contractual%20Obligations%20and%20Commitments) Contractual Obligations as of March 31, 2019 (in thousands) | Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :----------------------------------------- | :------ | :--------------- | :-------- | :-------- | :---------------- | | Term loans | $73,594 | $7,031 | $15,000 | $51,563 | $— | | Future creator signing fees and advances | $14,987 | $9,017 | $5,787 | $183 | $— | | Build-to-suit lease obligation | $11,945 | $5,645 | $6,300 | $— | $— | | Operating leases | $20,477 | $3,835 | $7,134 | $5,802 | $3,706 | | Sublease income | $8,526 | $4,113 | $4,413 | $— | $— | | Capital Leases | $593 | $254 | $339 | $— | $— | | Purchase commitments | $6,625 | $3,625 | $3,000 | $— | $— | | **Total** | **$136,747** | **$33,520** | **$41,973** | **$57,548** | **$3,706** | [Critical Accounting Policies and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - No material changes to critical accounting policies and estimates were made, other than the adoption of ASC Topic 606[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Eventbrite's exposure to market risks, including interest rate sensitivity and foreign currency risk, is assessed, concluding that a 10% fluctuation would not materially impact operations - Interest expense on outstanding debt and the build-to-suit lease is not sensitive to interest rate movements; a **10% increase or decrease** would not materially affect interest expense[215](index=215&type=chunk) - Despite significant ticket sales denominated in foreign currencies (e.g., GBP, EUR, CAD, AUD, BRL, ARS), a **10% fluctuation** in exchange rates would not have a material impact on consolidated results of operations[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of disclosure controls and procedures as of March 31, 2019, concluding they were effective, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of March 31, 2019[217](index=217&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by this report[218](index=218&type=chunk) - Management acknowledges the inherent limitations of control systems, which provide reasonable, not absolute, assurance against errors and fraud[219](index=219&type=chunk) PART II [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section details a class action complaint filed on April 15, 2019, alleging misrepresentations in Eventbrite's IPO registration statement and Q3 2018 earnings, which the company intends to vigorously defend - A class action complaint (Gomes v. Eventbrite, Inc., et al.) was filed on April 15, 2019, alleging violations of the Securities Act and Exchange Act due to material misrepresentations in the IPO registration statement and Q3 2018 earnings[222](index=222&type=chunk) - The company believes the complaint is without merit and intends to vigorously defend the action, but cannot predict the outcome or estimate the possible loss[222](index=222&type=chunk) - Litigation, regardless of merit, can be expensive, divert management resources, and potentially cause substantial harm to business, results of operations, and public reputation[225](index=225&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new or updated risks, including potential negative impacts of unfavorable legal outcomes and the risk of stock price decline due to substantial sales of Class A common stock - Unfavorable outcomes in legal proceedings, such as the recently filed class action, may harm the business and results of operations due to defense costs, diversion of management, and potential monetary damages[225](index=225&type=chunk) - Sales of substantial amounts of Class A common stock in the public markets, particularly by insiders, or the perception of such sales, could cause the market price of the stock to decline[226](index=226&type=chunk) - As of March 31, 2019, there were **34,425,590 shares** of Class A common stock and **46,009,533 shares** of Class B common stock outstanding[226](index=226&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered sales of equity securities occurred during Q1 2019 and no material change in the planned use of IPO proceeds - No unregistered sales of equity securities occurred during the three months ended March 31, 2019[227](index=227&type=chunk) - There has been no material change in the planned use of proceeds from the September 2018 Initial Public Offering[228](index=228&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference as part of this Quarterly Report on Form 10-Q, including corporate governance documents, executive agreements, and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Form of Class A Common Stock Certificate, Executive Severance and Change in Control Agreement, and certifications from the CEO, CFO, and Chief Accounting Officer[231](index=231&type=chunk) - XBRL Instance Document and Taxonomy Extension documents are also filed as part of the report[231](index=231&type=chunk) [Signatures](index=48&type=section&id=Signatures) This section contains the official signatures of Eventbrite, Inc.'s principal executive, financial, and accounting officers, certifying the due authorization and filing of this Quarterly Report on Form 10-Q - The report is signed by Julia Hartz (Chief Executive Officer), Randy Befumo (Chief Financial Officer), and Shane Crehan (Chief Accounting Officer) on May 1, 2019[234](index=234&type=chunk)[235](index=235&type=chunk)[239](index=239&type=chunk)