Exhibit 99.1 Vivid Seats Delivers Strong First Quarter Results Q1 2024 Marketplace GOV of >$1 Billion (+20% YoY) CHICAGO, IL – May 7, 2024 – Vivid Seats Inc. (NASDAQ: SEAT) ("Vivid Seats" or "we"), a leading marketplace that utilizes its technology platform to connect millions of buyers with thousands of ticket sellers across hundreds of thousands of events each year, today provided financial results for the first quarter ended March 31, 2024. "We are proud to deliver another strong quarter, showcasing the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 r FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-40926 Vivid Seats Inc. (Exact Name of registrant as specified in its charter) Delaware 86-3355184 (State or ot ...

Vivid Seats Inc. (NASDAQ:SEAT) Q4 2023 Earnings Conference Call March 5, 2024 8:30 AM ET Company Participants Stan Chia - CEO Larry Fey - CFO Kate Africk - Head of IR Conference Call Participants Ralph Schackart - William Blair Maria Ripps - Canaccord Genuity Curt Nagle - Bank of America Securities Jason Bazinet - Citi Matt Farrell - Piper Sandler Cameron Mansson-Perrone - Morgan Stanley Benjamin Black - Deutsche Bank Brad Erickson - RBC Capital Markets Ryan Sigdahl - Craig-Hallum Capital Group Dan Kurnos - ...

| --- | --- | --- | |------------------------------|-------|-------| | | | | | | | | | Q4 2023 Financial Results | | | | March 5, 2024 (Nasdaq: SEAT) | | | Business Highlights & Updates Stan Chia, Chief Executive Officer Investments Delivering Powerful Results Marketplace GOV and Revenues Net Income and Adjusted EBITDA $45,000 40% $3,138 $24,060 $18,747 $24,834 $30,272 $38,326 $16,018 $22,429 2% 16% 12% 15% 19% 23% 9% 11% 0% 5% 10% 15% 20% 25% 30% 35% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,00 ...

Executive Summary & Business Highlights [Full Year 2023 Performance Overview](index=1&type=section&id=Full%20Year%202023%20Performance%20Overview) Vivid Seats achieved significant top and bottom-line growth in 2023, with Marketplace GOV up 23% and revenues up 19%. Net income surged by 51%, and Adjusted EBITDA increased by 25%. The company also expanded its Total Addressable Market (TAM) through strategic acquisitions and improved repeat order mix Full Year 2023 Financial Highlights | Metric | 2023 (Millions) | 2022 (Millions) | YoY Change | | :--- | :--- | :--- | :--- | | Marketplace GOV | $3,920.5 | $3,184.8 | +23% | | Revenues | $712.9 | $600.3 | +19% | | Net income | $107.0 | $70.8 | +51% | | Adjusted EBITDA | $142.0 | $113.3 | +25% | - Expanded Total Addressable Market (TAM) through strategic acquisitions[3](index=3&type=chunk)[4](index=4&type=chunk) - Mix of accretive repeat orders increased by **300 basis points**[3](index=3&type=chunk) [Fourth Quarter 2023 Performance Overview](index=1&type=section&id=Fourth%20Quarter%202023%20Performance%20Overview) In Q4 2023, Vivid Seats continued its growth trajectory with Marketplace GOV increasing by 31% and revenues by 20%. Adjusted EBITDA also saw a 4% increase, though net income experienced a 10% decrease compared to Q4 2022 Fourth Quarter 2023 Financial Highlights | Metric | Q4 2023 (Millions) | Q4 2022 (Millions) | YoY Change | | :--- | :--- | :--- | :--- | | Marketplace GOV | $1,112.3 | $846.0 | +31% | | Revenues | $198.3 | $165.0 | +20% | | Net income | $22.4 | $24.8 | -10% | | Adjusted EBITDA | $35.1 | $33.7 | +4% | [Strategic Initiatives and 2024 Outlook](index=1&type=section&id=Strategic%20Initiatives%20and%202024%20Outlook) Vivid Seats is accelerating investments for international expansion and M&A, targeting a $63 billion global ticketing TAM. The company also authorized a new $100 million share repurchase program and provided a positive financial outlook for 2024, anticipating continued double-digit growth - Targeting a growing **$63 billion** global ticketing Total Addressable Market (TAM)[3](index=3&type=chunk) - Accelerating investments to launch in new markets, support international expansion, and M&A[3](index=3&type=chunk)[4](index=4&type=chunk) - Newly authorized **$100 million** share repurchase program[4](index=4&type=chunk) - Anticipates sustained double-digit growth and long-term value[3](index=3&type=chunk) Key Performance Indicators [Marketplace Gross Order Value (GOV)](index=1&type=section&id=Marketplace%20Gross%20Order%20Value%20(GOV)) Marketplace GOV showed strong growth, increasing 23% year-over-year to $3,920.5 million for the full year 2023 and 31% to $1,112.3 million for Q4 2023. Event cancellations had a reduced negative impact in 2023 compared to 2022 Marketplace GOV (in thousands) | Period | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Full Year | $3,920,526 | $3,184,754 | +23% | | Q4 | $1,112,326 | $845,965 | +31% | Impact of Event Cancellations on Marketplace GOV (in millions) | Period | 2023 Impact | 2022 Impact | | :--- | :--- | :--- | | Full Year | $(43.6) | $(80.3) | | Q4 | $(9.8) | $(17.0) | [Total Orders (Marketplace & Resale)](index=1&type=section&id=Total%20Orders%20(Marketplace%20%26%20Resale)) Total Marketplace orders grew by 18.7% for the full year 2023 and 36.3% for Q4 2023. Total Resale orders also increased, with a 21.4% rise for the full year and 21.6% for Q4. Event cancellations for both segments significantly decreased in 2023 Total Marketplace Orders (in thousands) | Period | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Full Year | 10,898 | 9,183 | +18.7% | | Q4 | 2,974 | 2,182 | +36.3% | Total Resale Orders (in thousands) | Period | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Full Year | 380 | 313 | +21.4% | | Q4 | 107 | 88 | +21.6% | - Marketplace event cancellations decreased to **99,078** in 2023 from **199,595** in 2022[8](index=8&type=chunk) - Resale event cancellations decreased to **2,910** in 2023 from **5,205** in 2022[16](index=16&type=chunk) [Adjusted EBITDA](index=1&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for the full year 2023 increased by 25% to $142.0 million, and for Q4 2023, it grew by 4% to $35.1 million, demonstrating expanding profit margins Adjusted EBITDA (in thousands) | Period | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Full Year | $141,982 | $113,325 | +25% | | Q4 | $35,103 | $33,700 | +4% | Consolidated Financial Statements [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, total assets increased significantly to $1,550.1 million from $1,151.4 million in 2022, primarily driven by increases in goodwill and intangible assets due to acquisitions. Total liabilities also rose, while shareholders' equity shifted from a deficit to a positive balance Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2023 | Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $1,550,099 | $1,151,431 | +$398,668 | | Total Liabilities | $963,340 | $671,269 | +$292,071 | | Shareholders' Equity (Deficit) | $105,017 | $(382,698) | +$487,715 | | Cash and cash equivalents | $125,484 | $251,542 | -$126,058 | | Goodwill | $947,359 | $715,258 | +$232,101 | | Intangible assets – net | $241,155 | $81,976 | +$159,179 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the full year 2023, revenues increased by 19% to $712.9 million, and net income grew by 51% to $107.0 million. However, Q4 2023 saw a 10% decrease in net income despite a 20% revenue increase, mainly due to higher operating expenses, particularly marketing and selling, and general and administrative costs Consolidated Statements of Operations Highlights (in thousands) | Metric | FY 2023 | FY 2022 | YoY Change (FY) | Q4 2023 | Q4 2022 | YoY Change (Q4) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $712,879 | $600,274 | +19% | $198,303 | $164,990 | +20% | | Income from operations | $81,338 | $78,105 | +4.1% | $10,096 | $24,757 | -59.3% | | Net income | $107,045 | $70,779 | +51% | $22,429 | $24,834 | -10% | | Marketing and selling (FY) | $274,096 | $248,375 | +10.4% | | | | | General and administrative (FY) | $159,081 | $127,619 | +24.7% | | | | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to $147.3 million in 2023 from $14.4 million in 2022. However, cash used in investing activities surged to $225.6 million, primarily due to business acquisitions, leading to a net decrease in cash, cash equivalents, and restricted cash for the year Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | FY 2023 | FY 2022 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $147,320 | $14,375 | +$132,945 | | Net cash used in investing activities | $(225,641) | $(15,415) | -$210,226 | | Net cash used in financing activities | $(43,430) | $(236,480) | +$193,050 | | Net decrease in cash, cash equivalents, and restricted cash | $(119,856) | $(237,520) | +$117,664 | | Acquisition of business, net of cash acquired | $(206,865) | $(8) | -$206,857 | 2024 Financial Outlook [Financial Guidance](index=3&type=section&id=Financial%20Guidance) Vivid Seats provided its financial outlook for the year ending December 31, 2024, projecting continued growth across Marketplace GOV, Revenues, and Adjusted EBITDA. The Adjusted EBITDA outlook reflects a revision from previous guidance 2024 Financial Outlook | Metric | Range | | :--- | :--- | | Marketplace GOV | $4.2 billion to $4.5 billion | | Revenues | $810.0 million to $840.0 million | | Adjusted EBITDA | $160.0 million to $170.0 million | - The Adjusted EBITDA outlook reflects a revision from the initial outlook provided in November 2023[10](index=10&type=chunk) Corporate and Strategic Updates [Chief Technology Officer Appointment](index=3&type=section&id=Chief%20Technology%20Officer%20Appointment) Vivid Seats announced the appointment of Stefano Langenbacher as the new Chief Technology Officer, replacing Jon Wagner in March 2024. Langenbacher brings extensive experience in e-commerce technology leadership, which will be crucial for optimizing global platforms and supporting international expansion - Stefano Langenbacher appointed as Chief Technology Officer, effective **March 2024**[11](index=11&type=chunk) - Jon Wagner, the outgoing CTO, will serve in a technical advisor role for a smooth transition[11](index=11&type=chunk) - Langenbacher's expertise in optimizing global platforms and international tech stacks is expected to be invaluable for international expansion[12](index=12&type=chunk) [Share Repurchase Program](index=1&type=section&id=Share%20Repurchase%20Program) Vivid Seats authorized a new $100 million share repurchase program, demonstrating the company's commitment to returning value to shareholders and strategically deploying cash flow - A new **$100 million** share repurchase program has been authorized[4](index=4&type=chunk) - Approximately **three million shares** were repurchased in 2023[4](index=4&type=chunk) Company Information [About Vivid Seats](index=3&type=section&id=About%20Vivid%20Seats) Founded in 2001, Vivid Seats is a leading online ticket marketplace connecting fans to live events. It offers a wide selection of tickets, an industry-leading rewards program, and is the official ticketing partner for major entertainment brands. The company also owns Vivid Picks, a daily fantasy sports app - Leading online ticket marketplace connecting millions of buyers with thousands of ticket sellers[2](index=2&type=chunk)[14](index=14&type=chunk) - Offers one of the widest selections of events and tickets in North America and an industry-leading Vivid Seats Rewards program[14](index=14&type=chunk) - Official ticketing partner for brands including ESPN, Rolling Stone, and the Los Angeles Clippers[14](index=14&type=chunk) - Owns Vivid Picks, a daily fantasy sports app[14](index=14&type=chunk) [Webcast Details](index=3&type=section&id=Webcast%20Details) Vivid Seats hosted a webcast on March 5, 2024, to discuss its full year and Q4 2023 financial results, business updates, and financial outlook - Webcast held on **March 5, 2024**, at **8:30 a.m. Eastern Time**[13](index=13&type=chunk) - Discussed full year and fourth quarter 2023 financial results, business updates, and financial outlook[13](index=13&type=chunk) - Access to the live webcast and supplemental earnings presentation available on the Vivid Seats Investor Relations website[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements regarding future operating results, financial position, industry growth, TAM, business strategy, and the share repurchase program. These statements are subject to various risks and uncertainties, and actual results may differ materially - Forward-looking statements relate to future operating results, financial position, industry growth, TAM, business strategy, and the share repurchase program[17](index=17&type=chunk) - Statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions, which may cause actual results to differ materially[17](index=17&type=chunk) - Important factors that could cause differences include ability to generate cash flows, supply/demand of events, relationships with partners, search engine algorithms, competition, acquisitions, economic conditions, and cybersecurity risks[17](index=17&type=chunk) - Financial results in this press release are preliminary and subject to change prior to the filing of the Annual Report on Form 10-K[17](index=17&type=chunk) Non-GAAP Financial Measures [Explanation of Adjusted EBITDA](index=9&type=section&id=Explanation%20of%20Adjusted%20EBITDA) Adjusted EBITDA is presented as a non-GAAP financial measure to provide investors with useful information for evaluating operating results and making period-to-period comparisons. It is used internally by management for operational decisions and excludes items not reflective of core business performance - Adjusted EBITDA is a non-GAAP financial measure used by analysts, investors, and management to evaluate operating results and make period-to-period comparisons[25](index=25&type=chunk)[26](index=26&type=chunk) - It excludes items outside of company control or not reflective of ongoing core business performance, such as interest expense, equity-based compensation, and changes in fair value of warrants/derivatives[25](index=25&type=chunk)[27](index=27&type=chunk) - Adjusted EBITDA is not a substitute for GAAP measures and may not be comparable to similarly titled measures used by other companies[27](index=27&type=chunk) [Reconciliation of Adjusted EBITDA to Net Income](index=9&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20Net%20Income) A detailed reconciliation is provided, showing the adjustments made to net income to arrive at Adjusted EBITDA for both the three months and years ended December 31, 2023 and 2022. Key adjustments include income tax benefit, interest expense, depreciation and amortization, equity-based compensation, and transaction costs Adjusted EBITDA Reconciliation (in thousands) | Adjustment | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income | $22,429 | $24,834 | $107,045 | $70,779 | | Income tax benefit | $(14,498) | $(1,784) | $(36,103) | $(1,590) | | Interest expense – net | $4,909 | $3,316 | $13,505 | $12,858 | | Depreciation and amortization | $8,575 | $2,463 | $17,178 | $7,732 | | Sales tax liability | $3,172 | $0 | $3,172 | $2,814 | | Transaction costs | $5,545 | $555 | $12,779 | $4,840 | | Equity-based compensation | $7,126 | $5,071 | $27,614 | $19,053 | | Loss on extinguishment of debt | $0 | $0 | $0 | $4,285 | | Litigation, settlements and related costs | $(45) | $1,393 | $215 | $2,477 | | Change in fair value of warrants | $20 | $(1,609) | $(971) | $(8,227) | | Change in fair value of derivative asset | $(619) | $(2,065) | $(536) | $(2,065) | | Change in fair value of contingent consideration | $0 | $1,589 | $(998) | $(2,065) | | Loss on asset disposals | $634 | $(63) | $685 | $369 | | Foreign currency revaluation gain | $(2,719) | $0 | $(2,177) | $0 | | Tax Receivable Agreement liability adjustment | $574 | $0 | $574 | $0 | | **Adjusted EBITDA** | **$35,103** | **$33,700** | **$141,982** | **$113,325** | - Footnotes provide detailed explanations for each adjustment, including sales tax liability, transaction costs related to acquisitions and offerings, and equity-based compensation[28](index=28&type=chunk)[29](index=29&type=chunk)

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Financial Data and Key Metrics Changes - The company reported a Marketplace Gross Order Value (GOV) of $999 million for Q3 2023, reflecting a 28% year-over-year growth, accelerating from 16% growth in the first half of 2023 [24][40] - Revenues for Q3 2023 reached $188 million, up 20% year-over-year, while adjusted EBITDA was $33 million, an 18% increase year-over-year [33][24] - The take rate for Q3 2023 was 15.5%, consistent with expectations, and is projected to increase to a range of 15.5% to 16% due to the acquisition of Vegas.com [33][90] Business Line Data and Key Metrics Changes - Repeat rates have significantly increased and are trending ahead of expectations, indicating successful brand and loyalty initiatives [25][26] - The company has seen a 19% year-over-year increase in total Marketplace orders and a 9% increase in average order size [40] Market Data and Key Metrics Changes - The acquisition of Vegas.com is expected to expand the total addressable market (TAM) by over $6 billion, focusing on shows, tours, and attractions in Las Vegas [30][88] - The Las Vegas market is benefiting from multiple tailwinds, including new venues and major events like the Formula 1 Las Vegas Grand Prix and the Super Bowl in 2024 [37][62] Company Strategy and Development Direction - The company is focused on driving brand awareness and loyalty through strategic partnerships and marketing investments, which are expected to yield long-term returns [12][44] - The integration of Vegas.com is seen as a strategic move to enhance market presence and customer acquisition, leveraging its comprehensive event inventory [29][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for live events, raising 2023 guidance for the third time, anticipating Marketplace GOV between $3.75 billion and $3.9 billion [5][43] - The company expects 2024 Marketplace GOV to be in the range of $4.2 billion to $4.5 billion, nearly double the GOV from 2019, indicating robust growth prospects [45][88] Other Important Information - The company has generated over $110 million in cash from operations year-to-date, maintaining a healthy cash balance post-acquisition [41][42] - The company is committed to investing in partnerships that enhance brand visibility and customer engagement, with a focus on long-term growth [34][98] Q&A Session Summary Question: Contribution of M&A to growth expectations - Management indicated that the growth expectations include both M&A contributions and underlying category growth, with high single-digit growth anticipated excluding Vegas.com [52] Question: Competitive environment stability - Management characterized the competitive environment as stable, with confidence in their investments yielding positive results [53] Question: Investment priorities for next year - Management is focused on strategic investments that will drive long-term returns, with a keen eye on the macro environment [55] Question: Partnership with PayPal - Management highlighted the positive engagement with PayPal's Pay Later functionality, which is expected to enhance transaction frequency and average order value [57] Question: Rationale behind the Vegas.com acquisition - Management emphasized the strategic fit of Vegas.com, citing its market authority and comprehensive event inventory as key factors for the acquisition [62] Question: Current buyback authorization thoughts - Management noted that while there is no current buyback authorization, they are always considering it as a form of capital return [68] Question: YOLO vs. FOMO in consumer spending - Management acknowledged the relevance of both YOLO and FOMO in driving demand for live events, with strong average order sizes indicating robust consumer interest [73] Question: Marketing spend and competitive landscape - Management indicated that while the competitive environment is stable, they are seeing increased marketing activity across the industry, reflecting overall demand strength [96]

[Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking statements contained in the report, emphasizing that they are based on current expectations and are subject to risks and uncertainties [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements%20Content) This section outlines the forward-looking statements contained in the report, emphasizing that they are based on current expectations and are subject to risks and uncertainties - Forward-looking statements are based on current expectations and projections, but are not guarantees of future performance and are subject to difficult-to-predict risks, uncertainties, and assumptions[9](index=9&type=chunk) - Key topics for forward-looking statements include future financial performance, ability to raise financing, success in retaining key personnel, ability to pay dividends, and factors related to business operations like competition, customer relationships, platform improvement, economic conditions, acquisitions, regulatory compliance, litigation, cybersecurity, and pandemics[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, deficit, and cash flows, along with detailed notes - Total assets increased by **20.3% to $1,385,076 thousand** at September 30, 2023, from $1,151,431 thousand at December 31, 2022, driven by increases in current assets, intangible assets, and goodwill[16](index=16&type=chunk) - Net cash provided by operating activities for the nine months ended September 30, 2023, was **$114,386 thousand**, a substantial increase from $1,389 thousand in the prior year, primarily due to higher net income and changes in operating assets[28](index=28&type=chunk)[194](index=194&type=chunk) - The company acquired Wavedash for approximately **$74.3 million** and invested **$6.0 million** in a privately held company during the nine months ended September 30, 2023[34](index=34&type=chunk)[57](index=57&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a summary of the company's financial position, highlighting changes in total assets, liabilities, and shareholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | Change | % Change | | :-------------------------------- | -----------: | -----------: | -------: | --------: | | Total Assets | $1,385,076 | $1,151,431 | $233,645 | 20.3% | | Total Current Assets | $405,503 | $331,516 | $73,987 | 22.3% | | Goodwill | $759,971 | $715,258 | $44,713 | 6.3% | | Total Liabilities | $864,648 | $671,269 | $193,379 | 28.8% | | Tax Receivable Agreement liability | $98,977 | $0 | $98,977 | N/A | | Shareholders' Deficit | $(120,289) | $(382,698) | $262,409 | 68.6% | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's financial performance, detailing revenues, income from operations, and net income for the periods presented Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Revenues | $188,133 | $156,818 | $514,576 | $435,284 | | Income from operations | $20,119 | $21,701 | $71,242 | $53,348 | | Net income | $16,018 | $18,747 | $84,616 | $45,945 | | Net income attributable to Class A Common Stockholders | $6,677 | $7,663 | $49,571 | $18,577 | | Basic EPS | $0.07 | $0.09 | $0.57 | $0.23 | | Diluted EPS | $0.07 | $0.09 | $0.43 | $0.23 | - Income tax expense for the three months ended September 30, 2023, was **$2,595 thousand**, a significant increase from $118 thousand in the prior year, contributing to the decrease in net income[19](index=19&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section outlines the company's comprehensive income, including net income and other comprehensive income components Condensed Consolidated Statements of Comprehensive Income Highlights (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :---------------------------------------------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Net income | $16,018 | $18,747 | $84,616 | $45,945 | | Foreign currency translation adjustment | $(374) | $0 | $(374) | $0 | | Comprehensive income, net of taxes | $15,644 | $18,747 | $84,242 | $45,945 | | Comprehensive income attributable to Class A Common Stockholders | $6,511 | $7,663 | $49,405 | $18,577 | [Condensed Consolidated Statements of Deficit](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Deficit) This section details the changes in shareholders' deficit, including the impact of net income and additional paid-in capital Shareholders' Deficit Evolution (in thousands) | Metric | Balances at Jan 1, 2023 | Balances at Sep 30, 2023 | | :------------------------------------ | -----------------------: | -----------------------: | | Total Shareholders' Deficit | $(382,698) | $(120,289) | | Net income | $84,616 (9 months) | $84,616 (9 months) | | Additional paid-in capital | $663,908 | $884,523 | | Accumulated deficit | $(1,014,132) | $(964,561) | - The establishment of liabilities under the Tax Receivable Agreement, net of tax and other tax impact of Secondary Offering, resulted in a reduction of additional paid-in capital by **$46,132 thousand** during the nine months ended September 30, 2023[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change | | :---------------------------------------------------- | ----------------------------: | ----------------------------: | -------: | | Net cash provided by operating activities | $114,386 | $1,389 | $112,997 | | Net cash used in investing activities | $(71,032) | $(11,888) | $(59,144) | | Net cash used in financing activities | $(26,696) | $(204,911) | $178,215 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $17,444 | $(215,410) | $232,854 | | Cash, cash equivalents, and restricted cash – end of period | $269,734 | $274,400 | $(4,666) | - The significant increase in cash from operating activities in 2023 was driven by higher net income and net cash inflows from changes in net operating assets, particularly an increase in amounts payable to ticket sellers[194](index=194&type=chunk) - Investing activities in 2023 were heavily impacted by the acquisition of Wavedash (**$55,935 thousand**) and investments in a convertible promissory note and warrant (**$6,000 thousand**)[28](index=28&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes supporting the condensed consolidated financial statements [1. Background and Basis of Presentation](index=11&type=section&id=1.%20Background%20and%20Basis%20of%20Presentation) This note describes the company's business operations and the basis for preparing the financial statements - The Company operates an online secondary ticket marketplace for concert, sporting, and theater events in the United States, Canada, and Japan[29](index=29&type=chunk) - Business is divided into two segments: Marketplace (online platform connecting buyers and sellers) and Resale (acquires tickets to resell on secondary marketplaces)[29](index=29&type=chunk) [2. New Accounting Standards](index=11&type=section&id=2.%20New%20Accounting%20Standards) This note details the adoption and impact of new accounting standards on the financial statements - Adopted ASU 2016-13 (Credit Losses) and ASU 2020-04 (Reference Rate Reform) on January 1, 2023[31](index=31&type=chunk)[32](index=32&type=chunk) - The adoption of these new accounting standards had no material impact on the consolidated financial statements[31](index=31&type=chunk)[32](index=32&type=chunk) [3. Business Acquisition](index=11&type=section&id=3.%20Business%20Acquisition) This note provides details on the acquisition of Wavedash, including the purchase price and preliminary fair values of acquired assets - Acquired **100%** of WD Holdings Co., Ltd. ("Wavedash"), an online ticket marketplace in Tokyo, Japan, on September 8, 2023[33](index=33&type=chunk)[34](index=34&type=chunk) - Purchase price was approximately **$74.3 million**, financed with cash on hand[34](index=34&type=chunk) Wavedash Acquisition - Preliminary Fair Values (in thousands) | Asset/Liability | Amount | | :-------------------------------- | -------: | | Net assets acquired | $74,325 | | Goodwill | $45,351 | | Intangible assets | $31,846 | Identifiable Intangible Assets Acquired (in thousands) | Asset Type | Cost | Estimated Useful Life | | :---------------------- | -------: | :------------------ | | Tradename | $2,173 | Indefinite | | Supplier relationships | $19,963 | 5 years | | Customer relationships | $5,500 | 4 years | | Developed technology | $4,210 | 3 years | | **Total** | **$31,846** | | [4. Revenue Recognition](index=13&type=section&id=4.%20Revenue%20Recognition) This note explains the company's revenue recognition policies and presents revenue breakdowns by source and event category Marketplace Revenues by Source (in thousands) | Source | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Owned Properties | $122,778 | $106,597 | $329,006 | $288,827 | | Private Label | $31,610 | $23,945 | $101,113 | $82,145 | | **Total** | **$154,388** | **$130,542** | **$430,119** | **$370,972** | Marketplace Revenues by Event Category (in thousands) | Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Concerts | $87,142 | $63,802 | $239,762 | $188,291 | | Sports | $52,169 | $52,812 | $143,118 | $143,012 | | Theater | $14,788 | $13,526 | $45,705 | $37,997 | | Other | $289 | $402 | $1,534 | $1,672 | | **Total** | **$154,388** | **$130,542** | **$430,119** | **$370,972** | Resale Revenues (in thousands) | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Resale Revenues | $33,700 | $26,300 | $84,500 | $64,300 | - Deferred revenue, primarily from the Vivid Seats Rewards loyalty program, was **$34.4 million** at September 30, 2023, expected to be recognized over the next seven years[41](index=41&type=chunk) [5. Segment Reporting](index=14&type=section&id=5.%20Segment%20Reporting) This note provides financial information by reportable segment, including contribution margin - Reportable segments are Marketplace (online secondary ticket marketplace intermediary) and Resale (acquires tickets for resale)[44](index=44&type=chunk) - Contribution margin is a key performance metric, calculated as revenues less cost of revenues and marketing and selling expenses[44](index=44&type=chunk) Segment Contribution Margin (in thousands) | Segment | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Marketplace | $53,459 | $46,269 | $166,400 | $138,097 | | Resale | $7,206 | $6,609 | $20,368 | $15,021 | | **Consolidated** | **$60,665** | **$52,878** | **$186,768** | **$153,118** | [6. Accounts Receivable - Net](index=14&type=section&id=6.%20Accounts%20Receivable%20-%20Net) This note details the composition of accounts receivable and the allowance for credit losses Accounts Receivable - Net (in millions) | Category | Sep 30, 2023 | Dec 31, 2022 | Change | | :---------------------------------------------------- | -----------: | -----------: | -------: | | Accounts receivable – net | $64.8 | $36.5 | $28.3 | | Uncollateralized payment processor obligations | $42.2 | $18.9 | $23.3 | | Amounts due from marketplace ticket sellers | $7.8 | $1.0 | $6.8 | | Allowance for credit losses (marketplace sellers) | $4.0 | $0.1 | $3.9 | | Amounts due from distribution partners | $12.1 | $11.7 | $0.4 | | Allowance for credit losses (distribution partners) | $5.0 | $3.6 | $1.4 | - The allowance for credit losses for marketplace ticket sellers increased significantly from **$0.1 million to $4.0 million**, reflecting greater risk due to certain sellers generating balances in excess of existing payables[49](index=49&type=chunk) [7. Prepaid Expenses and Other Current Assets](index=15&type=section&id=7.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note outlines the components of prepaid expenses and other current assets Prepaid Expenses and Other Current Assets (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | Change | | :-------------------------------- | -----------: | -----------: | -------: | | Total prepaid expenses and other current assets | $49,407 | $29,912 | $19,495 | | Recovery of future customer compensation | $42,421 | $23,311 | $19,110 | - The increase in recovery of future customer compensation is due to a higher reserve for future cancellations, driven by increased sales volume for future events[52](index=52&type=chunk) [8. Goodwill and Intangible Assets](index=15&type=section&id=8.%20Goodwill%20and%20Intangible%20Assets) This note provides information on changes in goodwill and intangible assets, including amortization expense Goodwill and Intangible Assets Changes (in thousands) | Category | Jan 1, 2023 | Wavedash Acquisition | Sep 30, 2023 | | :-------------------- | -----------: | -------------------: | -----------: | | Goodwill | $715,258 | $45,351 | $759,971 | | Definite-lived Intangible Assets | $17,310 | $29,673 | $47,064 | | Trademark | $64,666 | $2,173 | $66,809 | - Amortization expense on definite-lived intangible assets increased by **50%** for the nine months ended September 30, 2023, to **$7.5 million**, compared to $5.0 million in the prior year[56](index=56&type=chunk) [9. Investments](index=16&type=section&id=9.%20Investments) This note describes the company's investments, including a convertible promissory note and warrant - Invested **$6.0 million** in a privately held company in July 2023 via a convertible promissory note and a warrant[57](index=57&type=chunk) - The convertible promissory note is classified as an available-for-sale security and recorded at fair value, with an amortized cost of **$2.5 million** at September 30, 2023[58](index=58&type=chunk) - The warrant is accounted for as a derivative instrument at fair value, with changes recognized in Other (income) expense[59](index=59&type=chunk) [10. Fair Value Measurements](index=17&type=section&id=10.%20Fair%20Value%20Measurements) This note details the fair value measurements of financial instruments, categorized by input levels Fair Value Measurements (in thousands) | Instrument | Level | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :---- | -----------: | -----------: | | Money market funds | 1 | $190,054 | $203,285 | | Investments: Note | 3 | $2,536 | $0 | | Investments: Warrant | 3 | $3,506 | $0 | | **Total** | | **$196,096** | **$203,285** | - The fair value of the Note is determined using the income approach, and the Warrant using the Black-Scholes model, both relying on Level 3 unobservable inputs such as expected terms, implied yield, estimated volatility, and risk-free rate[62](index=62&type=chunk)[63](index=63&type=chunk) [11. Accrued Expenses and Other Current Liabilities](index=18&type=section&id=11.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note presents the breakdown of accrued expenses and other current liabilities Accrued Expenses and Other Current Liabilities (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | Change | | :-------------------------------- | -----------: | -----------: | -------: | | Total accrued expenses and other current liabilities | $197,247 | $181,970 | $15,277 | | Accrued marketing expense | $44,709 | $26,873 | $17,836 | | Accrued customer credits | $63,754 | $88,167 | $(24,413) | | Accrued future customer compensation | $46,263 | $30,181 | $16,082 | | Accrued contingencies | $0 | $5,898 | $(5,898) | - Accrued customer credits decreased by **$24.4 million**, while revenue from breakage increased significantly to **$18.4 million** for the nine months ended September 30, 2023, compared to $5.0 million in the prior year[66](index=66&type=chunk) - Accrued contingencies decreased primarily due to **$6.0 million** in milestone payments to Betcha Sports, Inc. (Vivid Picks)[68](index=68&type=chunk) [12. Debt](index=19&type=section&id=12.%20Debt) This note provides details on the company's outstanding debt, including terms and compliance with covenants Outstanding Debt (in thousands) | Debt Type | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | -----------: | -----------: | | February 2022 First Lien Loan | $270,875 | $272,938 | | Shoko Chukin Bank Loan | $3,068 | $0 | | Total long-term debt, net | $265,875 | $264,898 | - The February 2022 First Lien Loan has a maturity date of February 3, 2029, a SOFR-based floating interest rate (**9.04%** at Sep 30, 2023), and requires quarterly amortization payments of **$0.7 million**[73](index=73&type=chunk) - The Shoko Chukin Bank Loan, assumed with the Wavedash acquisition, has a fixed interest rate of **1.27%** per annum and matures on June 24, 2026[78](index=78&type=chunk) - The company was in compliance with all debt covenants related to the February 2022 First Lien Loan as of September 30, 2023[76](index=76&type=chunk) [13. Financial Instruments](index=20&type=section&id=13.%20Financial%20Instruments) This note describes various financial instruments, including warrants and share repurchase programs - Various warrants (Public, Private, Exercise, Mirror, Hoya Intermediate) were issued in connection with the Merger Transaction, with different exercise prices and terms[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk) - Hoya Intermediate Warrants are classified as a liability due to cash redemption options and their fair value decreased by **$1.0 million** for the nine months ended September 30, 2023[86](index=86&type=chunk)[87](index=87&type=chunk) - The **$40.0 million** share repurchase program for Class A common stock was fully utilized by March 31, 2023, repurchasing **5.3 million shares**[89](index=89&type=chunk) - A secondary offering of **18.4 million** Class A common shares was completed in Q2 2023, but the company did not receive any proceeds from the sale by the Selling Stockholder[91](index=91&type=chunk) [14. Commitments and Contingencies](index=22&type=section&id=14.%20Commitments%20and%20Contingencies) This note outlines the company's legal commitments and contingencies, including class action lawsuits and tax obligations - Settled a class action lawsuit in Canada regarding undisclosed service fees, resulting in a **$0.9 million** liability for expected claim submissions and credit redemptions[93](index=93&type=chunk) - Settled class action lawsuits related to COVID-19 cancellations, with **$4.5 million** disbursed in 2022 for one and **$3.3 million** paid in August 2023 for another[94](index=94&type=chunk) - Facing a lawsuit alleging violation of the Illinois Biometric Information Privacy Act, but unable to reasonably estimate a possible loss[95](index=95&type=chunk) - Continuously monitors state regulations for sales tax collection obligations, particularly for marketplace facilitators and ticket sales, and does not believe risk of loss is probable on historical revenue activities where tax has not been remitted[97](index=97&type=chunk) [15. Related-Party Transactions](index=23&type=section&id=15.%20Related-Party%20Transactions) This note details transactions with related parties, including marketing expenses and the Tax Receivable Agreement - Incurred marketing and selling expenses with Viral Nation (**$0.1 million** for 3 and 9 months ended Sep 30, 2023) and Rolling Stone (**$0.2 million** for 3 months, **$0.7 million** for 9 months ended Sep 30, 2023), where a Board member has significant ownership[99](index=99&type=chunk)[100](index=100&type=chunk) - Incurred marketing and selling expenses of **$1.1 million** for the three and nine months ended September 30, 2023, with the Los Angeles Dodgers, where a Board member is a minority owner[103](index=103&type=chunk) - A Tax Receivable Agreement (TRA) obligates the company to pay **85%** of certain tax savings to Hoya Intermediate shareholders[104](index=104&type=chunk) - In Q2 2023, a **$99.0 million** liability was recorded under the TRA, and a **$52.8 million** deferred tax asset, due to Hoya Topco exchanging Intermediate Units in a secondary offering, with payments expected to begin in 2024[105](index=105&type=chunk) [16. Income Taxes](index=24&type=section&id=16.%20Income%20Taxes) This note provides information on income tax expense, deferred tax assets, and the Tax Receivable Agreement liability Income Tax Expense (Benefit) (in millions) | Period | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2022 | | :-------------------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Income tax expense (benefit) | $2.6 | $(21.6) | $0.1 | $0.2 | - A **$31.3 million** valuation allowance on U.S. deferred tax assets was released in Q2 2023, driven by achieving three years of cumulative pretax income in the U.S. federal tax jurisdiction[108](index=108&type=chunk) - A Tax Receivable Agreement liability of **$99.0 million** and a deferred tax asset of **$52.8 million** were established in Q2 2023, with payments expected to begin in 2024[111](index=111&type=chunk) [17. Equity-Based Compensation](index=25&type=section&id=17.%20Equity-Based%20Compensation) This note details the company's equity-based compensation plans, including grants and expense recognition - Granted **2.6 million RSUs** and **4.5 million stock options** in 2023 to employees, directors, and consultants, with most vesting over three years[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) Equity-Based Compensation Expense (in thousands) | Category | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2022 | | :-------------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | RSUs | $3,900 | $10,500 | $2,300 | $6,000 | | Stock options | $2,800 | $7,300 | $1,700 | $4,600 | | Profit interests | $1,000 | $3,000 | $1,100 | $3,400 | | **Total** | **$7,700** | **$20,800** | **$5,100** | **$14,000** | - Unrecognized compensation expense for unvested RSUs is **$35.8 million** and for unvested stock options is **$25.4 million**, both expected to be recognized over approximately two years[122](index=122&type=chunk)[123](index=123&type=chunk) [18. Earnings Per Share](index=27&type=section&id=18.%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share for Class A common stock Net Income Per Class A Common Stock | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :---------------------------------------------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Net income attributable to Class A Common Stockholders—basic | $6,677 | $7,663 | $49,571 | $18,577 | | Basic EPS | $0.07 | $0.09 | $0.57 | $0.23 | | Diluted EPS | $0.07 | $0.09 | $0.43 | $0.23 | | Weighted average Class A common stock outstanding—basic | 96,407,327 | 81,996,447 | 86,403,617 | 80,145,329 | | Weighted average Class A common stock outstanding—diluted | 96,862,899 | 82,023,463 | 196,307,731 | 198,709,769 | - The dilution in diluted net income per share for the nine months ended September 30, 2023, is primarily attributed to the assumed conversion of noncontrolling interests to Class A common stock, which has a disproportionate effect on net income due to the valuation allowance release benefiting Vivid Seats Inc[132](index=132&type=chunk) - Potentially dilutive securities excluded from diluted EPS computation include RSUs, stock options, Public Warrants, Private Warrants, Exercise Warrants, Hoya Intermediate Warrants, and Noncontrolling Interests, if their effect would be anti-dilutive[133](index=133&type=chunk) [19. Subsequent Events](index=29&type=section&id=19.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, including the acquisition of Vegas.com - On November 3, 2023, acquired **100%** ownership of VDC Holdco, LLC (Vegas.com, LLC), a Las Vegas entertainment marketplace[134](index=134&type=chunk) - Purchase price was approximately **$243.8 million**, comprising **$153.6 million** in cash and approximately **15.6 million shares** of Class A common stock[134](index=134&type=chunk) - The cash portion of the acquisition was financed with cash on hand[134](index=134&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of Vivid Seats' financial condition and results of operations for the three and nine months ended September 30, 2023 - For the nine months ended September 30, 2023, revenues increased by **18% to $514.6 million**, and Marketplace Gross Order Value (GOV) increased by **20% to $2,808.2 million**[138](index=138&type=chunk)[145](index=145&type=chunk) - Adjusted EBITDA for the nine months ended September 30, 2023, was **$106.9 million**, representing a **34% increase** year-over-year[145](index=145&type=chunk) - Net cash provided by operating activities significantly improved to **$114.4 million** for the nine months ended September 30, 2023, compared to **$1.4 million** in the prior year[193](index=193&type=chunk) [Overview](index=30&type=section&id=Overview) This section introduces Vivid Seats' business model as an online ticket marketplace and highlights key financial and operational metrics - Vivid Seats is an online ticket marketplace connecting fans with ticket sellers for live events, differentiating itself with extensive breadth and depth of ticket listings at competitive value[138](index=138&type=chunk) Key Financial and Operational Metrics (in millions) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Revenues | $188.1 | $156.8 | $514.6 | $435.3 | | Marketplace GOV | $998.9 | $781.8 | $2,808.2 | $2,338.8 | | Net income | $16.0 | $18.7 | $84.6 | $45.9 | [Our Business Model](index=30&type=section&id=Our%20Business%20Model) This section describes the company's Marketplace and Resale segments, including revenue generation and the Skybox ERP tool - Marketplace segment acts as an intermediary, earning revenue from service/delivery fees and referral fees (event ticket insurance), and includes a daily fantasy sports offering[140](index=140&type=chunk)[141](index=141&type=chunk) - Resale segment acquires tickets for resale and provides internal R&D support for Skybox, a widely adopted ERP tool for professional ticket sellers[143](index=143&type=chunk)[144](index=144&type=chunk) - Skybox is a free-to-use proprietary ERP tool that helps ticket sellers manage inventory, adjust pricing, and fulfill orders across multiple resale marketplaces[143](index=143&type=chunk) [Key Business Metrics and Non-GAAP Financial Measure](index=31&type=section&id=Key%20Business%20Metrics%20and%20Non-GAAP%20Financial%20Measure) This section defines and presents key business metrics and the non-GAAP financial measure, Adjusted EBITDA Key Business Metrics (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Marketplace GOV | $998,933 | $781,834 | $2,808,200 | $2,338,789 | | Total Marketplace orders | 3,022 | 2,572 | 7,924 | 7,001 | | Total Resale orders | 110 | 90 | 273 | 225 | | Adjusted EBITDA | $33,367 | $28,284 | $106,879 | $79,625 | - Marketplace GOV was negatively impacted by event cancellations of **$10.1 million** and **$33.9 million** for the three and nine months ended September 30, 2023, respectively[148](index=148&type=chunk) - Adjusted EBITDA is a non-GAAP measure used by management to evaluate performance and trends, excluding items like income tax, interest, depreciation, equity-based compensation, and changes in fair value of warrants/derivatives[152](index=152&type=chunk)[154](index=154&type=chunk) [Key Factors Affecting our Performance](index=33&type=section&id=Key%20Factors%20Affecting%20our%20Performance) This section refers to the company's 2022 Form 10-K for a discussion of key factors affecting performance - No material changes from the "Key Factors Affecting Our Performance" discussed in the 2022 Form 10-K[159](index=159&type=chunk) [Recent Developments](index=34&type=section&id=Recent%20Developments) This section highlights recent significant events, specifically the acquisition of Wavedash - Acquired **100%** of Wavedash, a Japanese online ticket marketplace, on September 8, 2023, for approximately **$74.3 million** using cash on hand[160](index=160&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's revenues and expenses for the reporting periods [Revenues](index=34&type=section&id=Revenues) This section analyzes revenue trends by segment and event category, highlighting growth drivers Total Revenues by Segment (in thousands) | Segment | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | % Change (YoY) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | % Change (YoY) | | :-------------- | ----------------------------: | ----------------------------: | --------------: | ----------------------------: | ----------------------------: | --------------: | | Marketplace | $154,388 | $130,542 | 18% | $430,119 | $370,972 | 16% | | Resale | $33,745 | $26,276 | 28% | $84,457 | $64,312 | 31% | | **Total** | **$188,133** | **$156,818** | **20%** | **$514,576** | **$435,284** | **18%** | - Marketplace revenues increased primarily due to higher new orders and average order size, especially in the concerts category (**37% increase** for 3 months, **27% for 9 months**)[164](index=164&type=chunk) - Resale revenues increased by **28%** and **31%** for the three and nine months, respectively, primarily due to higher order volume[169](index=169&type=chunk) - Cancellation charges had a lower negative impact on revenue in 2023 compared to 2022, with a **$1.0 million** increase to revenue for the three months ended September 30, 2023, versus a **$3.0 million** reduction in the prior year, mainly due to higher store credit breakage[166](index=166&type=chunk) [Cost of Revenues (exclusive of Depreciation and Amortization)](index=36&type=section&id=Cost%20of%20Revenues%20(exclusive%20of%20Depreciation%20and%20Amortization)) This section details the cost of revenues by segment and explains changes in these costs Cost of Revenues by Segment (in thousands) | Segment | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | % Change (YoY) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | % Change (YoY) | | :-------------- | ----------------------------: | ----------------------------: | --------------: | ----------------------------: | ----------------------------: | --------------: | | Marketplace | $23,923 | $17,950 | 33% | $66,749 | $52,912 | 26% | | Resale | $26,539 | $19,667 | 35% | $64,089 | $49,291 | 30% | | **Total** | **$50,462** | **$37,617** | **34%** | **$130,838** | **$102,203** | **28%** | - Resale cost of revenues increased by **35%** for the three months ended September 30, 2023, which was higher than the **28%** increase in Resale revenues, attributed to event category mix[173](index=173&type=chunk) [Marketing and Selling](index=36&type=section&id=Marketing%20and%20Selling) This section analyzes marketing and selling expenses, identifying key drivers of changes Marketing and Selling Expenses (in thousands) | Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | % Change (YoY) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | % Change (YoY) | | :------- | ----------------------------: | ----------------------------: | --------------: | ----------------------------: | ----------------------------: | --------------: | | Online | $66,226 | $59,774 | 11% | $174,224 | $164,444 | 6% | | Offline | $10,780 | $6,549 | 65% | $22,746 | $15,519 | 47% | | **Total** | **$77,006** | **$66,323** | **16%** | **$196,970** | **$179,963** | **9%** | - The increase in marketing and selling expenses was driven by greater spending on online advertising (due to higher Marketplace GOV) and higher spending on offline advertising (for brand marketing and partnerships)[175](index=175&type=chunk) [General and Administrative](index=37&type=section&id=General%20and%20Administrative) This section details general and administrative expenses, explaining the factors contributing to their changes General and Administrative Expenses (in thousands) | Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | % Change (YoY) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | % Change (YoY) | | :-------------------- | ----------------------------: | ----------------------------: | --------------: | ----------------------------: | ----------------------------: | --------------: | | Personnel expenses | $27,740 | $22,251 | 25% | $78,791 | $64,685 | 22% | | Non-income tax expenses | $472 | $177 | 167% | $1,426 | $3,859 | (63)% | | Other | $9,013 | $7,811 | 15% | $27,704 | $27,177 | 2% | | **Total** | **$37,225** | **$30,239** | **23%** | **$107,921** | **$95,721** | **13%** | - The increase in general and administrative expenses was primarily due to higher personnel expenses, driven by increased equity-based compensation and employee headcount[176](index=176&type=chunk) [Depreciation and Amortization](index=37&type=section&id=Depreciation%20and%20Amortization) This section analyzes depreciation and amortization expenses, linking them to development activities and acquisitions Depreciation and Amortization Expenses (in thousands) | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | % Change (YoY) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | % Change (YoY) | | :----- | ----------------------------: | ----------------------------: | --------------: | ----------------------------: | ----------------------------: | --------------: | | Expense | $3,301 | $2,158 | 53% | $8,603 | $5,269 | 63% | - The increase in depreciation and amortization was primarily related to increased development activities for the platform and intangibles acquired from the Betcha (Vivid Picks) acquisition[177](index=177&type=chunk) [Change in Fair Value of Contingent Consideration](index=37&type=section&id=Change%20in%20Fair%20Value%20of%20Contingent%20Consideration) This section explains the changes in the fair value of contingent consideration, primarily related to earnouts Change in Fair Value of Contingent Consideration (in thousands) | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Change | $20 | $(1,220) | $(998) | $(1,220) | - The change in fair value is due to the remeasurement of Vivid Picks cash earnouts[158](index=158&type=chunk) [Other (Income) Expense](index=37&type=section&id=Other%20(Income)%20Expense) This section details other income and expenses, including interest and fair value remeasurements Other (Income) Expense Highlights (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | % Change (YoY) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | % Change (YoY) | | :-------------------------- | ----------------------------: | ----------------------------: | --------------: | ----------------------------: | ----------------------------: | --------------: | | Interest expense – net | $2,544 | $2,901 | (12)% | $8,596 | $9,542 | (10)% | | Loss on extinguishment of debt | $0 | $0 | 0% | $0 | $4,285 | (100)% | | Other income (expense) | $(1,038) | $(65) | (1,497)% | $(365) | $(6,618) | 94% | - The decrease in net interest expense was due to higher interest income[179](index=179&type=chunk) - The significant change in other income/expense for the nine months was primarily due to the fair value remeasurement of Hoya Intermediate Warrants and foreign currency revaluation losses[181](index=181&type=chunk)[182](index=182&type=chunk) [Income tax expense (benefit)](index=38&type=section&id=Income%20tax%20expense%20(benefit)) This section analyzes income tax expense or benefit, explaining the factors influencing tax outcomes Income Tax Expense (Benefit) (in thousands) | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----- | ----------------------------: | ----------------------------: | ----------------------------: | ----------------------------: | | Expense (benefit) | $2,595 | $118 | $(21,605) | $194 | - The **$21.6 million** income tax benefit for the nine months ended September 30, 2023, was primarily due to the release of a valuation allowance on U.S. net operating losses, interest limitations, and tax credit carryforwards, and the impact of noncontrolling interests[183](index=183&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity position, capital resources, and cash flow activities - Primary liquidity source is cash from operations, with **$268.7 million** in cash and cash equivalents as of September 30, 2023[185](index=185&type=chunk) - Existing cash and cash equivalents are deemed sufficient to fund liquidity needs for at least the next 12 months[185](index=185&type=chunk) [Loan agreements](index=38&type=section&id=Loan%20agreements) This section details the company's outstanding loan agreements, including terms and interest rates - Outstanding debt includes the **$275.0 million** February 2022 First Lien Loan (SOFR + **3.25%**, **9.04%** effective rate at Sep 30, 2023) and the **$3.1 million** Shoko Chukin Bank Loan (**1.27%** fixed rate)[186](index=186&type=chunk)[187](index=187&type=chunk) - The company had no outstanding borrowings under its **$100.0 million** Revolving Facility as of September 30, 2023[187](index=187&type=chunk) [Share Repurchase Program](index=38&type=section&id=Share%20Repurchase%20Program) This section provides an update on the company's share repurchase program - The **$40.0 million** share repurchase program was fully utilized by March 31, 2023, repurchasing **5.3 million shares** of Class A common stock[188](index=188&type=chunk) - No share repurchases were made during the three months ended September 30, 2023[188](index=188&type=chunk) [Distributions to non-controlling interests](index=38&type=section&id=Distributions%20to%20non-controlling%20interests) This section reports on distributions made to non-controlling interests Distributions to Non-Controlling Interests (in millions) | Period | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2023 | | :----- | ----------------------------: | ----------------------------: | | Distributions | $0 | $11.0 | [Tax Receivable Agreement](index=39&type=section&id=Tax%20Receivable%20Agreement) This section explains the Tax Receivable Agreement and its financial impact - The Tax Receivable Agreement (TRA) obligates the company to pay Hoya Intermediate shareholders **85%** of certain tax savings[191](index=191&type=chunk) - A **$99.0 million** TRA liability and a **$52.8 million** deferred tax asset were recorded in Q2 2023 due to a secondary offering, with payments expected to commence in 2024[192](index=192&type=chunk) [Cash Flows](index=39&type=section&id=Cash%20Flows) This section provides a detailed summary and analysis of cash flows from operating, investing, and financing activities Summary of Cash Flows (in thousands) | Category | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change | | :---------------------------------------------------- | ----------------------------: | ----------------------------: | -------: | | Net cash provided by operating activities | $114,386 | $1,389 | $112,997 | | Net cash used in investing activities | $(71,032) | $(11,888) | $(59,144) | | Net cash used in financing activities | $(26,696) | $(204,911) | $178,215 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $17,444 | $(215,410) | $232,854 | - Operating cash flow significantly improved due to higher net income and net cash inflows from changes in net operating assets, particularly an increase in amounts payable to ticket sellers[194](index=194&type=chunk) - Investing cash flow was primarily impacted by the Wavedash acquisition and investments in a privately held company[196](index=196&type=chunk) - Financing cash flow decreased substantially due to the absence of large debt repayments that occurred in the prior year[198](index=198&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there have been no material changes to the company's critical accounting policies and estimates - No material changes to critical accounting policies and estimates during the nine months ended September 30, 2023[199](index=199&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on recently adopted and issued accounting pronouncements - Refer to Note 2, New Accounting Standards, for details on recently adopted and issued accounting pronouncements[200](index=200&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily focusing on interest rate risk associated with its floating-rate debt - The company's primary market risk is interest rate risk associated with its floating-rate debt, specifically the February 2022 First Lien Loan[202](index=202&type=chunk)[203](index=203&type=chunk) - A hypothetical **1%** increase in interest rates (above the floor) would increase interest expense by **$2.1 million** based on outstanding amounts for the nine months ended September 30, 2023[203](index=203&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls and procedures, noting a material weakness in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective at reasonable assurance levels as of September 30, 2023[208](index=208&type=chunk) - Identified a material weakness in internal control over financial reporting due to inadequate segregation of duties, undefined roles in finance/accounting, and insufficient personnel with technical accounting and SEC reporting experience[209](index=209&type=chunk) - Remediation efforts include a full review of internal control procedures, implementation of new controls, hiring additional qualified personnel, and establishing robust processes with clearly defined roles and segregation of duties[210](index=210&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part contains other information not included in the financial statements, such as legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 14, Commitments and Contingencies, for detailed information regarding the company's legal proceedings - Legal proceedings information is detailed in Note 14, Commitments and Contingencies[213](index=213&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's 2022 Form 10-K - No material changes to the risk factors disclosed in the 2022 Form 10-K[215](index=215&type=chunk) - Readers should consider the risk factors as they could materially adversely affect the business, financial condition, liquidity, results of operations, and capital position[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) There were no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities to report for the period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities to report[216](index=216&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report[218](index=218&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[221](index=221&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended September 30, 2023 - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended September 30, 2023[223](index=223&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including transaction agreements, certificates of incorporation, warrant agreements, certifications of principal officers, and Inline XBRL documents - The exhibits include various legal and corporate documents such as transaction agreements, certificates of incorporation, warrant agreements, and certifications of principal executive and financial officers[225](index=225&type=chunk)[226](index=226&type=chunk) [Signatures](index=44&type=section&id=Signatures) This section contains the signatures of the principal executive and financial officers, certifying the report [Signatures](index=44&type=section&id=Signatures%20Content) The report is duly signed on behalf of Vivid Seats Inc. by Stanley Chia, Chief Executive Officer, and Lawrence Fey, Chief Financial Officer, on November 7, 2023 - The report was signed by Stanley Chia (CEO) and Lawrence Fey (CFO) on November 7, 2023[230](index=230&type=chunk)

Q2 2023 Financial Highlights - Marketplace GOV reached $954 million[3] - Revenues totaled $165 million[3] - Adjusted EBITDA amounted to $31 million[3] - Net income was $38326 thousand[3, 21] Q2 2023 Performance Analysis - Concert revenues increased by 18% to $77741 thousand compared to $65816 thousand in Q2 2022[29] - Theater revenues increased by 31% to $15527 thousand compared to $11856 thousand in Q2 2022[29] - Sports revenues decreased by 12% to $45349 thousand compared to $51285 thousand in Q2 2022[29] Financial Guidance Update - Marketplace GOV guidance revised upwards to $34 billion to $36 billion from the previous $30 billion to $33 billion[13] - Adjusted EBITDA guidance increased to $125 million to $135 million from $110 million to $115 million[13] Balance Sheet and Strategic Initiatives - The company has a cash balance exceeding debt by $35 million[25] - The company is acquiring Wavedash, a Japanese secondary ticket marketplace, for approximately $61 million in cash[25]

Financial Data and Key Metrics Changes - The second quarter 2023 marketplace Gross Order Value (GOV) was $954 million, a 17% increase year-over-year, with total marketplace orders increasing by 9% and average order size increasing by 7% [99][113][124] - Revenues for Q2 2023 reached $165 million, reflecting a 12% year-over-year growth driven by marketplace GOV growth [100][113] - Adjusted EBITDA for the second quarter was $31 million, also higher year-over-year, despite a lower than normal take rate of 14.6% [100][124] Business Line Data and Key Metrics Changes - The company reported strong performance in the concert category, particularly driven by the Taylor Swift Eras Tour, which significantly contributed to the overall growth [114][124] - The loyalty program has seen increased engagement, with repeat rates reaching new highs in Q2, indicating a successful strategy in retaining customers [119] Market Data and Key Metrics Changes - The acquisition of Wavedash, a leading secondary ticketing marketplace in Japan, is expected to expand the company's total addressable market (TAM) and enhance its international presence [112][121] - The international ticketing market is estimated to be roughly comparable to the North American market, with specific cultural considerations affecting individual country dynamics [138] Company Strategy and Development Direction - The company is focused on expanding its international footprint through strategic acquisitions like Wavedash, while maintaining a strong emphasis on its core ticketing business [112][121][122] - Partnerships with Major League Baseball teams and the National Football League are designed to enhance brand awareness and customer loyalty through unique fan experiences [91][92][116] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of consumer demand for live events, despite potential macroeconomic challenges [136][145] - The company has raised its 2023 guidance, anticipating double-digit growth in GOV and adjusted EBITDA, reflecting a more favorable outlook than previously expected [102][104] Other Important Information - The company plans to utilize approximately $61 million of its cash balance for the acquisition of Wavedash, highlighting its strong financial position [126] - The introduction of the Game Center product has seen strong engagement, with over 70,000 unique players in the first 60 days since launch [120] Q&A Session All Questions and Answers Question: What is the overall TAM opportunity and what attracted the company to the Japanese market? - The company views the international ticketing market as a significant opportunity and is excited about the potential for growth through the acquisition of Wavedash, which is a market leader in Japan [131][121] Question: How is the competitive environment trending? - The competitive pressure remains stable but strong, with the company focusing on innovation and customer engagement to maintain its market position [75][149] Question: How does the company view the impact of student loan repayments on consumer spending? - Management acknowledged that while there may be a slight headwind from student loan repayments, the overall sentiment regarding consumer spending remains stable and positive [155][156]