Core Insights - Vivid Seats Inc. operates as an online ticket marketplace but faces significant financial challenges, particularly in capital utilization efficiency [1][6] Financial Performance - Vivid Seats has a Return on Invested Capital (ROIC) of -61.41%, which is substantially lower than its Weighted Average Cost of Capital (WACC) of 5.00%, indicating inefficiencies in capital utilization [2][6] - In contrast, Sovos Brands, Inc. has a positive ROIC of 5.54% and a WACC of 5.21%, suggesting effective capital utilization and value creation for shareholders [3][6] - Bowlero Corp. and CareMax, Inc. also show negative ROICs of -114.39% and -117.47%, respectively, highlighting similar inefficiencies in capital utilization despite differing business models [4][6] - Stagwell Inc. presents a mixed financial picture with a positive ROIC of 3.11% but a WACC of 4.23%, indicating that while returns are generated, they are insufficient to cover the cost of capital [5][6]

Core Insights - Vivid Seats Inc. has launched an upgraded mobile app aimed at enhancing the event discovery experience for fans, focusing on personalization and ease of use [1][2][3] Group 1: App Features - The updated app includes a new interactive map for real-time event browsing, allowing users to filter by venue, event type, and price range [4] - Enhanced seat previewing provides hyper-realistic visuals of venue-specific views, addressing common consumer concerns about sightlines [4] - Users can connect their Spotify accounts for personalized concert recommendations based on their listening habits, and follow favorite teams and venues for tailored notifications [4] Group 2: Value Proposition - Vivid Seats emphasizes a customer-first approach with features like the Lowest Price Guarantee and All-in Pricing, ensuring transparency in ticket costs [6] - The Vivid Seats Rewards program allows fans to earn rewards on every purchase, offering exclusive perks such as surprise gifts and ticket upgrades [6] Group 3: Company Background - Founded in 2001, Vivid Seats is a leading online ticket marketplace that connects fans with a wide selection of live events across North America [7] - The company has been recognized for its customer service excellence, reinforcing its commitment to providing exceptional value in the ticketing industry [7]

Core Insights - Vivid Seats Inc. operates in a competitive online ticket marketplace but faces significant financial challenges, particularly in capital efficiency [1][5] Financial Performance - Vivid Seats has a Return on Invested Capital (ROIC) of -61.41%, which is substantially lower than its Weighted Average Cost of Capital (WACC) of 4.95%, indicating insufficient returns to cover capital costs [2][5] - The ROIC to WACC ratio for Vivid Seats is -12.41, further emphasizing its inefficiency in capital utilization [2] - In contrast, Sovos Brands, Inc. has a positive ROIC of 5.54% and a WACC of 5.21%, suggesting effective capital use and strong financial health [3][5] - Bowlero Corp. and CareMax, Inc. both report negative ROICs of -114.39% and -117.47%, respectively, indicating similar challenges in covering their capital costs as Vivid Seats [4][5] - Stagwell Inc. shows a slightly better scenario with a positive ROIC of 3.11%, although it still does not meet its WACC of 4.11%, indicating room for improvement [4]

Core Insights - Vivid Seats Inc. has announced a strategic collaboration with United Airlines to allow MileagePlus members to earn miles on live event ticket purchases through Vivid Seats [2][4] Group 1: Collaboration Details - United MileagePlus members can earn two miles per dollar spent on Vivid Seats purchases exclusively at united.vividseats.com [3] - Eligible United MileagePlus Chase Cardmembers can earn additional miles, with United Explorer Cardmembers earning three miles per dollar and United Quest Cardmembers earning four miles per dollar spent [3] - United Club and United Club Business Cardmembers will earn five miles per dollar spent [3] Group 2: Strategic Importance - The partnership aims to leverage United Airlines' extensive loyalty program, which has over 130 million members, to reach new audiences [4] - Vivid Seats will connect customers to personalized content through United's Kinective Media, enhancing the travel experience with integrated media [4] Group 3: Company Overview - Vivid Seats, founded in 2001, is a leading online ticket marketplace focused on connecting fans to live events [6][7] - The company offers a wide selection of events and tickets in North America and has been recognized for its customer service [7]

Core Strategy and Value Proposition - The company is increasing focus and investment in delivering a leading value proposition to customers, combining a loyalty program with a lowest price guarantee in the app, which is expected to enhance customer engagement and transaction volume [1][5] - The foundational advantages of the company, including leading technology and unique data, are seen as critical for returning to profitable growth, with a focus on building a loyal customer base [2][11] Leadership Transition - A leadership transition has occurred, with Lawrence C. Fey succeeding Stan Chia as CEO, who is credited with guiding the company through significant challenges [3][4] - The new CEO aims to take decisive actions to reverse recent trends and position the company for long-term success [3][4] Financial Performance and Outlook - In Q3, the company reported $618 million in Marketplace Gross Order Value (GOV), down 29% year-over-year, with revenues of $136 million, also down 27% [13][14] - The company anticipates 2026 Marketplace GOV to be between $2.2 billion and $2.6 billion, with an expected adjusted EBITDA of $30 to $40 million [15][16] Cost Reduction and Corporate Simplification - The company has doubled its fixed cost reduction target from $25 million to $60 million, with substantial progress already made [7][10] - A corporate simplification agreement has been executed, which is expected to yield significant savings and improve operational efficiency [8][9] Marketing and Customer Engagement - A national marketing campaign in partnership with ESPN aims to increase awareness of the app, reaching over 127 million global subscribers [6][39] - The company is focusing on personalized marketing efforts to engage existing users and drive app usage [41][42] Competitive Landscape - The competitive environment has shown signs of stabilization, with a noted shift in marketing aggressiveness from competitors like StubHub [30][56] - The company believes that its enhanced app value proposition will provide a competitive edge, particularly as it moves more transactions into the app [5][47] International Expansion and Market Position - The international business has reached a contribution margin positive status, with plans to continue investing in competitive supply across various countries [66] - The company is focused on defending its core business while exploring opportunities for future growth and potential consolidation in the industry [62][66]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported $618 million in marketplace Gross Order Value (GOV), down 29% year-over-year, and $136 million in revenues, down 27% year-over-year [12][14] - The adjusted EBITDA for Q3 was $5 million, significantly lower than the previous year due to reduced volume and lower take rates [13][14] - The marketplace take rate decreased to 17.0% from 17.5% in Q3 2024, with expectations of near-term take rates in the 16% range [13] Business Line Data and Key Metrics Changes - The private label business faced significant pressure, contributing to the overall decline in marketplace orders, which were also down 29% year-over-year [12] - Owned properties showed signs of stabilization with sequential GOV growth, while the Vivid Seats App experienced double-digit sequential growth and returned to year-over-year GOV growth [10][12] Market Data and Key Metrics Changes - The overall marketplace GOV was down 10% sequentially compared to Q2 2025, primarily due to private label headwinds [12] - The company ended Q3 with $391 million in debt and $145 million in cash, resulting in a net debt of $246 million [15] Company Strategy and Development Direction - The new CEO emphasized a strategy focused on enhancing the app's value proposition, including the launch of a Lowest Price Guarantee and a loyalty program [5][6] - The company plans to double its fixed cost reduction target from $25 million to $60 million, aiming for a more efficient operational structure [8][9] - Investments will be directed towards building a loyal customer base and improving the app's performance, which is expected to insulate the company from competitive pressures in performance marketing [6][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the intense competitive environment but expressed confidence in the company's path to recovery and growth through strategic investments [4][10] - The initial guidance for 2026 anticipates marketplace GOV in the range of $2.2 billion to $2.6 billion, assuming industry volumes remain flat year-over-year [14][15] Other Important Information - A leadership transition was announced, with Lawrence Fey becoming the new CEO and Ted Pickus serving as interim CFO [3][11] - The company is focusing on corporate simplification to yield substantial savings and improve operational efficiency [9] Q&A Session Summary Question: What gives confidence in issuing 2026 guidance early? - Management indicated that the guidance assumes a flat year-over-year industry outlook and is based on recent stabilization trends and cost reduction initiatives [18][20] Question: Can you elaborate on the leadership transition? - The transition was deemed necessary to prepare the business for an efficiency push, with the new CEO focusing on enhancing the app's value proposition [26][28] Question: Are competitors focusing more on profitability? - There has been a notable shift in competitive posture, with some competitors reducing marketing aggressiveness, which has positively impacted Vivid Seats' market share [32][34] Question: What assumptions are built into the 2026 outlook regarding the World Cup? - The company has not assumed a meaningful impact from the World Cup due to a lack of precedent data and aggressive monetization strategies from FIFA [52][53] Question: How is the company driving awareness of the app? - A brand marketing surge via ESPN is planned, focusing on targeted performance-based metrics rather than broad brand marketing [47][48] Question: What are the capital allocation priorities? - The company will prioritize reinvesting in the core business and maintaining capital for strategic initiatives, with a cautious approach to cash outflows [70][71] Question: What signals are seen in the international business? - The international business has reached contribution margin positivity, and the company plans to continue investing in competitive supply areas [73][75]

Q3 2025 Financial Performance - Marketplace GOV reached $618 million[15] - Revenues totaled $136 million[15] - Adjusted EBITDA was $5 million[15], while the net loss was $19.7 million[17] - The company is increasing its annualized cost reduction program target to $60 million[18] Financial Trends - Marketplace revenues decreased by 31% year-over-year, from $152.653 million in Q3 2024 to $104.807 million in Q3 2025[35] - Concert revenues decreased by 36% year-over-year, from $67.701 million to $43.072 million[35] - Sports revenues decreased by 33% year-over-year, from $50.378 million to $33.900 million[35] - Theater revenues decreased by 22% year-over-year, from $28.705 million to $22.439 million[35] Future Outlook - The initial outlook for 2026 projects Marketplace GOV between $2.2 billion and $2.6 billion[25] - Adjusted EBITDA for 2026 is projected to be between $30 million and $40 million[25] Corporate Actions - A corporate simplification was executed on October 31, 2025, potentially leading to $180 million in lifetime tax savings and $1 million in annual reporting cost savings[12]

Financial Performance - Total revenues for Q3 2025 were $136.4 million, a decrease of 27% compared to $186.6 million in Q3 2024[19]. - Net loss for Q3 2025 was $19.7 million, compared to a net income of $9.2 million in Q3 2024[21]. - For the nine months ended September 30, 2025, Vivid Seats Inc. reported a net loss of $292.828 million, compared to a net income of $18.716 million for the same period in 2024[29]. - Net income for the quarter was $5,296,000, showing a significant increase compared to the previous period[24]. - The company reported a loss from operations of $22.8 million for the three months ended September 30, 2025, compared to income from operations of $10.8 million for the same period in 2024[53]. - For the three months ended September 30, 2025, Vivid Seats reported a net loss of $19.713 million compared to a net income of $9.196 million in the same period of 2024, representing a significant decline[164]. - The net income attributable to Class A common stockholders for the nine months ended September 30, 2025, was a loss of $154.143 million, down from a profit of $10.311 million in 2024[164]. Assets and Liabilities - Total current assets decreased to $233.9 million as of September 30, 2025, down from $345.2 million as of December 31, 2024[16]. - Total liabilities decreased to $771.6 million as of September 30, 2025, compared to $1.0 billion as of December 31, 2024[16]. - The company’s total assets decreased to $1.1 billion as of September 30, 2025, down from $1.6 billion as of December 31, 2024[16]. - Cash and cash equivalents decreased to $145.1 million as of September 30, 2025, from $243.5 million as of December 31, 2024[16]. - The company’s accumulated deficit increased to $1.1 billion as of September 30, 2025, compared to $930.2 million as of December 31, 2024[16]. Impairment and Expenses - The company reported a significant impairment charge of $320.4 million for the nine months ended September 30, 2025[19]. - The company incurred impairment charges of $320.449 million during the nine months ended September 30, 2025[29]. - Goodwill, net, decreased to $648.6 million as of September 30, 2025, from $943.1 million at the end of 2024, primarily due to a non-cash impairment expense of $297.4 million recognized in Q2 2025[62]. - A non-cash impairment expense of $23.0 million was recognized for certain indefinite-lived trademarks during the three and nine months ended September 30, 2025, following a quantitative impairment test[72]. Revenue Breakdown - For the three months ended September 30, 2025, Marketplace revenues were $104.8 million, a decrease of 31.3% from $152.7 million in the same period of 2024[43]. - Resale revenues for the three months ended September 30, 2025, were $31.5 million, down from $34.0 million in the same period of 2024, representing a decline of 7.4%[44]. - The contribution margin for the three months ended September 30, 2025, was $36.1 million, down from $67.7 million in the same period of 2024, representing a decline of 46.6%[53]. Stock and Equity - Issuances of Class A common stock totaled 16,563 shares during the quarter[24]. - The company experienced a repurchase of Class A common stock amounting to $2,929,000, demonstrating a commitment to shareholder value[24]. - The company repurchased Class A common stock amounting to $18.292 million during the nine months ended September 30, 2025[29]. - The company authorized a share repurchase program for up to $100.0 million of Class A common stock on February 29, 2024[116]. - As of September 30, 2025, $59.1 million remained available for future repurchases under the Share Repurchase Program[118]. Tax and Compliance - For the nine months ended September 30, 2025, Vivid Seats recorded an income tax benefit of $9.2 million and an income tax expense of $70.1 million[134]. - The total Tax Receivable Agreement (TRA) payment obligation was estimated at $155.7 million as of September 30, 2025, with $5.9 million deemed probable[139]. - The company was in compliance with all debt covenants related to the 2025 First Lien Loan and the 2024 First Lien Loan as of September 30, 2025[97]. Corporate Structure and Changes - The company entered into a Corporate Simplification Agreement on October 19, 2025, aimed at simplifying its corporate structure, which included the merger of three Blocker Corporations into wholly owned subsidiaries[166]. - The Corporate Simplification involved the exchange of all Class B common stock for Class A common stock, resulting in the cancellation of all outstanding Class B shares[168]. - The company issued an aggregate of 403,022 shares of Class A common stock to the TRA Parties as part of the Corporate Simplification[168].

Financial Performance - Marketplace Gross Order Value (GOV) for Q3 2025 was $618.1 million, down 29% from $871.7 million in Q3 2024[7] - Revenues for Q3 2025 were $136.4 million, down 27% from $186.6 million in Q3 2024[7] - Net loss for Q3 2025 was $19.7 million, compared to net income of $9.2 million in Q3 2024[7] - Adjusted EBITDA for Q3 2025 was $4.9 million, down from $34.1 million in Q3 2024[7] - Total revenues for the three months ended September 30, 2025, were $136,373,000, a decrease of 27% compared to $186,605,000 for the same period in 2024[21] - Net loss for the nine months ended September 30, 2025, was $292,828,000, compared to a net income of $18,716,000 for the same period in 2024[23] - Adjusted EBITDA is presented as a key measure for evaluating operating performance, although it is not based on U.S. GAAP[26] - For the three months ended September 30, 2025, the net loss was $19.713 million compared to a net income of $9.196 million for the same period in 2024[29] - Adjusted EBITDA for the three months ended September 30, 2025, was $4.905 million, a decrease of 85.6% from $34.077 million in the same period of 2024[29] Cost Management - The company is targeting annualized cost savings of $60 million, more than doubling its previous target[4] - The corporate simplification agreement is expected to eliminate $6 million in cash payments due in Q1 2026 and result in up to $180 million in lifetime savings[11] - Total costs and expenses for the nine months ended September 30, 2025, were $802,854,000, compared to $536,451,000 for the same period in 2024, reflecting an increase of 49%[21] - Cash paid for interest increased to $20,984,000 for the nine months ended September 30, 2025, compared to $16,728,000 for the same period in 2024[25] - Severance compensation costs were $1.239 million for the nine months ended September 30, 2025, as part of a strategic cost reduction program[30] Asset and Liability Changes - Total current assets decreased to $233,912,000 as of September 30, 2025, from $345,171,000 as of December 31, 2024, representing a decline of 32%[19] - Total liabilities increased to $771,583,000 as of September 30, 2025, compared to $1,022,061,000 as of December 31, 2024[19] - Cash and cash equivalents decreased to $145,108,000 as of September 30, 2025, from $243,482,000 as of December 31, 2024, a decline of 40%[19] Impairment and Expenses - The company incurred impairment charges of $320,449,000 during the nine months ended September 30, 2025[21] - The company reported impairment charges of $320.449 million during the nine months ended September 30, 2025, reflecting declines in financial performance and stock price[30] - Depreciation and amortization expenses increased to $37.689 million for the nine months ended September 30, 2025, up from $31.654 million in 2024[29] - Equity-based compensation costs were $33.886 million for the nine months ended September 30, 2025, compared to $38.284 million in the same period of 2024[29] - The company recognized a loss on extinguishment of debt amounting to $801 thousand during the nine months ended September 30, 2025[30] Market Projections - Marketplace GOV is projected to be in the range of $2.2 billion to $2.6 billion for the year ending December 31, 2026[13] - Adjusted EBITDA is expected to be in the range of $30.0 million to $40.0 million for the year ending December 31, 2026[13] Leadership Changes - The leadership transition includes Lawrence Fey as the new CEO, succeeding Stan Chia, who will remain in an advisory role[3] Event Cancellations - The company experienced 39,414 event cancellations in Q3 2025, compared to 77,012 in Q3 2024[13] Foreign Currency and Transaction Costs - Foreign currency losses for the nine months ended September 30, 2025, were $2.363 million, compared to a gain of $266 thousand in 2024[29] - Transaction costs for the nine months ended September 30, 2025, amounted to $8.816 million, an increase from $6.649 million in 2024[29]

Core Insights - Vivid Seats Inc. has appointed Lawrence Fey as the new Chief Executive Officer, succeeding Stan Chia, who will remain in an advisory role until December 1, 2025 [4][5] - The company has provided its financial results for Q3 2025, reporting a significant decline in key metrics, including a 29% drop in Marketplace Gross Order Value (GOV) and a 27% decrease in revenues compared to Q3 2024 [7][8] - Vivid Seats aims to enhance operational efficiency and has doubled its annualized cost savings target to $60 million, which will support reinvestment in its value proposition [5][9] Leadership Transition - Lawrence Fey, previously the Chief Financial Officer, is expected to leverage his extensive experience with the company to navigate the evolving industry landscape [5] - Stan Chia's leadership over the past seven years is acknowledged, particularly for guiding the company through the COVID-19 pandemic and launching the Vivid Seats Rewards program [5][4] Financial Performance - For Q3 2025, Vivid Seats reported a Marketplace GOV of $618.1 million, down from $871.7 million in Q3 2024, and revenues of $136.4 million, down from $186.6 million [7][8] - The company experienced a net loss of $19.7 million in Q3 2025, a decline from a net income of $9.2 million in the same quarter of the previous year [7][8] - Adjusted EBITDA for Q3 2025 was $4.9 million, down from $34.1 million in Q3 2024, indicating a significant decrease in operational profitability [7][8] Strategic Outlook - Vivid Seats anticipates Marketplace GOV for 2026 to be in the range of $2.2 billion to $2.6 billion, with Adjusted EBITDA projected between $30 million and $40 million [11][9] - The company is focused on maximizing operational efficiency through a simplified corporate structure and strategic cost reductions [5][11] Corporate Simplification - A corporate simplification agreement was executed to streamline the organizational structure, eliminating the dual-class stock structure and terminating the Tax Receivable Agreement [12][13] - This simplification is expected to result in significant tax savings, reducing annual cash tax payments to approximately $3 million and providing up to $180 million in lifetime savings [13][12]