Eventbrite(EB) - 2024 Q3 - Quarterly Report

Special Note Regarding Forward-Looking Statements This section provides a cautionary statement regarding forward-looking information and associated risks Part I. Financial Information This part presents Eventbrite's financial statements, management's discussion, and market risk disclosures Item 1. Unaudited Condensed Consolidated Financial Statements This section presents Eventbrite's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, restructuring activities, revenue recognition, and specific financial accounts for the periods ended September 30, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates | Item | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :-------------------------------- | :------------------------------- | | Cash and cash equivalents | $530,957 | $489,200 | | Short-term investments | $24,665 | $153,746 | | Total current assets | $611,284 | $711,851 | | Total assets | $817,373 | $913,330 | | Accounts payable, creators | $355,074 | $303,436 | | Long-term debt | $240,395 | $357,668 | | Total liabilities | $637,535 | $721,573 | | Total stockholders' equity | $179,838 | $191,757 | Condensed Consolidated Statements of Operations This statement details the company's revenues, expenses, and net loss over specific reporting periods | Item | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------ | :----------------------------------- | :----------------------------------- | :---------------------------------- | :---------------------------------- | | Net revenue | $77,801 | $81,544 | $248,604 | $238,370 | | Gross profit | $53,258 | $55,677 | $174,418 | $161,505 | | Loss from operations | $(8,952) | $(11,564) | $(22,976) | $(32,069) | | Net loss | $(3,768) | $(9,935) | $(7,195) | $(25,542) | | Net loss per share, basic and diluted | $(0.04) | $(0.10) | $(0.08) | $(0.26) | Condensed Consolidated Statements of Stockholders' Equity This statement tracks changes in the company's equity, including net loss, stock repurchases, and stock-based compensation | Item | As of December 31, 2023 (in thousands) | As of September 30, 2024 (in thousands) | | :---------------------------------- | :----------------------------------- | :------------------------------------ | | Total Stockholders' Equity | $191,757 | $179,838 | | Repurchase of common stock (9M 2024)| — | $(39,428) | | Stock-based compensation (9M 2024) | — | $41,087 | | Net loss (9M 2024) | — | $(7,195) | Condensed Consolidated Statements of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $85,628 | $101,800 | | Net cash provided by (used in) investing activities | $124,644 | $(68,516) | | Net cash used in financing activities | $(166,129) | $(3,990) | | Net increase in cash, cash equivalents and restricted cash | $41,757 | $28,369 | | Cash, cash equivalents and restricted cash, end of period | $530,957 | $568,543 | Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the financial statements, covering accounting policies and specific accounts Note 1. Overview and Basis of Presentation This note describes Eventbrite's business model, operating segment, and confirms no material changes to accounting policies - Eventbrite operates a two-sided marketplace connecting millions of creators and consumers for live experiences, offering highly-scalable self-service ticketing and marketing tools[20] - The Company operates as a single operating segment, with its CEO reviewing financial information on a consolidated basis[27] - There have been no material changes to the Company's significant accounting policies described in the 2023 Form 10-K[24] Note 2. Restructuring This note details the workforce reduction in August 2024 and the completion of the 2023 restructuring plan - In August 2024, Eventbrite approved a reduction in force, terminating approximately 11% of its workforce (100 employees) to reduce operating costs, incurring $5.4 million in related costs[28] | Category | Three Months Ended Sep 30, 2024 (in thousands) | | :------------------------- | :--------------------------------------------- | | Product development | $3,424 | | Sales, marketing and support | $535 | | General and administrative | $1,458 | | Total | $5,417 | - The 2023 restructuring plan, initiated in February 2023 to reduce operating costs and consolidate talent, was substantially completed as of September 30, 2024[31] Note 3. Revenue Recognition This note explains the sources of revenue, changes in organizer fee plans, and revenue presentation adjustments - Revenue is primarily derived from ticketing fees and payment processing fees, with additional revenue from organizer fees and advertising services[35] - In the third quarter of 2024, the Company discontinued the Flex plan for organizer fees, returning to a model that enables creators to publish events at no cost, while the Pro plan (subscription for enhanced marketing) remains[43] - Revenue is presented net of indirect taxes, customer refunds, payment chargebacks, estimated uncollectible amounts, creator royalties, and amortization of creator signing fees[39] Note 4. Cash, Cash Equivalents and Restricted Cash This note provides a breakdown of cash balances, including ticket sales proceeds held for creators - Cash and cash equivalents include $327.6 million in ticket sales proceeds held on behalf of creators as of September 30, 2024, up from $259.2 million at December 31, 2023[45] | Item | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | September 30, 2023 (in thousands) | | :----------------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | | Cash and cash equivalents | $530,957 | $489,200 | $567,646 | | Restricted cash | — | — | $897 | | Total cash, cash equivalents and restricted cash | $530,957 | $489,200 | $568,543 | Note 5. Short-term Investments This note describes the composition and accounting treatment of the company's short-term investments - Short-term investments consist of U.S. Treasury bills with original maturities less than one year, classified as held-to-maturity and recorded at amortized cost[48] | Description | Amortized Cost (in thousands) | Aggregate Fair Value (in thousands) | | :------------------------- | :---------------------------- | :---------------------------------- | | US Treasury securities | $24,665 | $24,675 | Note 6. Funds Receivable This note explains funds receivable as cash-in-transit from payment processors, including creator proceeds - Funds receivable represents cash-in-transit from third-party payment processors, typically received within approximately five business days[52] - The balance of funds receivable, including ticket sales proceeds for creators, was $27.5 million as of September 30, 2024, a decrease from $44.2 million at December 31, 2023[52] Note 7. Accounts Receivable, Net This note details accounts receivable from customers and the allowance for credit losses - Accounts receivable, net, is comprised of invoiced amounts to customers who use third-party facilitated payment processors or advertising services[53] | Item | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------ | :-------------------------------- | :------------------------------- | | Accounts receivable, customers | $4,144 | $3,524 | | Allowance for credit losses | $(920) | $(710) | | Accounts receivable, net | $3,224 | $2,814 | Note 8. Creator Signing Fees, Net This note explains the accounting for incentives paid to creators and their amortization as a revenue reduction - Creator signing fees are incentives paid to secure exclusive ticketing and payment processing rights, with amortization recorded as a reduction of revenue[55] - As of September 30, 2024, the balance of creator signing fees, net, was $8.3 million, amortized over a weighted-average remaining contract life of 4.0 years[56][59] - Write-offs and other adjustments for the nine months ended September 30, 2024, include a reserve release reflecting losses recovered from a litigation settlement in June 2024[56] Note 9. Creator Advances, Net This note outlines the process and balances of funds provided to creators in advance of events - Creator advances provide funds to creators in advance of events, which are subsequently recovered by withholding amounts from ticket sales[60] | Item | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Balance, beginning of period | $2,804 | $721 | | Creator advances paid | $4,502 | $822 | | Creator advances recouped | $(2,222) | $(528) | | Balance, end of period | $6,157 | $1,664 | Note 10. Accounts Payable, Creators This note details unremitted ticket sale proceeds owed to creators and outstanding advance payouts - Accounts payable, creators, consists of unremitted ticket sale proceeds, net of Eventbrite service fees, remitted to creators within five business days post-event[62] - Advance payouts outstanding to qualified creators prior to events were $131.5 million as of September 30, 2024, an increase from $115.3 million at December 31, 2023[63] Note 11. Chargebacks and Refunds Reserve This note explains the company's reserves for estimated refunds, chargebacks, and advance payout losses - The Company records estimates for refunds and chargebacks as contra-revenue and reserves for estimated advance payout losses as an operating expense[64] - The chargebacks and refunds reserve was $9.1 million as of September 30, 2024, primarily including $5.9 million for estimated advance payout losses[65] - Actual losses could materially differ from current estimates, especially concerning advance payouts, due to factors like event cancellations, fraud, or creator insolvency[66][67] Note 12. Property and Equipment, Net This note provides details on capitalized internal-use software development costs and other property and equipment | Item | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------------------------ | :-------------------------------- | :------------------------------- | | Capitalized internal-use software development costs | $71,182 | $62,615 | | Property and equipment, net | $13,549 | $9,384 | | Item | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Amortization of capitalized internal-use software development costs | $4,344 | $2,493 | Note 13. Leases This note outlines the company's operating lease obligations, primarily for office space - The Company has operating leases primarily for office space, with right-of-use assets and liabilities recognized based on the present value of lease payments[70] - As of September 30, 2024, operating leases had a weighted-average remaining lease term of 1.5 years and a weighted-average discount rate of 4.6%[72] | Item | Operating Leases (in thousands) | | :---------------------------------- | :------------------------------ | | The remainder of 2024 | $547 | | 2025 | $2,142 | | 2026 | $372 | | Total future operating lease payments | $3,061 | | Less: Imputed interest | $(95) | | Total operating lease liabilities | $2,966 | Note 14. Goodwill and Acquired Intangible Assets, Net This note details the balances and amortization of goodwill and acquired intangible assets - Goodwill remained at $174.4 million as of September 30, 2024, with no impairment recorded during the three or nine months ended September 30, 2024 and 2023[75] | Item | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------ | :-------------------------------- | :------------------------------- | | Developed technology | $97 | $717 | | Customer relationships | $6,920 | $12,597 | | Tradenames | — | — | | Acquired intangible assets, net | $7,017 | $13,314 | | Category | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cost of net revenue | $619 | $617 | | Sales, marketing and support | $5,677 | $5,862 | | Total amortization of acquired intangible assets | $6,296 | $6,479 | Note 15. Fair Value Measurement This note classifies financial assets and liabilities based on fair value hierarchy levels - Most financial assets and liabilities are classified as Level 1, except for the 2026 Notes and 2025 Notes (Convertible Notes), which are classified as Level 2 instruments[81] Note 16. Debt This note details the company's convertible senior notes and recent repurchase activities - The Company has 0.750% convertible senior notes due 2026 ($212.75 million principal) and 5.000% convertible senior notes due 2025 ($30.0 million principal outstanding as of September 30, 2024)[82][84] - In August 2024, the Company repurchased $120 million aggregate principal amount of the 2025 Notes for $120.5 million cash, resulting in a $0.3 million loss on extinguishment[89] | Item | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------------------------- | :-------------------------------- | :------------------------------- | | 2026 Notes | $210,670 | $209,886 | | 2025 Notes | $29,725 | $147,782 | | Carrying amount, long-term debt | $240,395 | $357,668 | Note 17. Commitments and Contingencies This note outlines the company's contractual obligations, litigation settlements, and tax reserves - The Company's principal commitments consist of obligations under the Convertible Notes (principal and coupon interest) and operating leases for office space[92] - In June 2024, Eventbrite received an $8.3 million settlement from commercial contract litigation, recognizing a $4.4 million loss recovery to general and administrative expenses and a $3.9 million gain to other income[98] - The Company has established a reserve of $0.5 million for potential settlement of indirect tax matters as of September 30, 2024[99] Note 18. Stockholders' Equity This note details the share repurchase program and available shares for grant under equity plans - The board approved a $100.0 million share repurchase program in March 2024; $39.4 million was used to repurchase 7,243,283 shares by September 30, 2024, with $60.6 million remaining[102] - As of September 30, 2024, 7,770,415 shares of Class A common stock were available for grant under the 2018 Plan[106] | Category | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cost of net revenue | $430 | $637 | | Product development | $17,766 | $15,143 | | Sales, marketing and support | $5,768 | $7,037 | | General and administrative | $15,520 | $18,344 | | Total | $39,484 | $41,161 | Note 19. Net Loss Per Share This note presents the calculation of basic and diluted net loss per share, excluding anti-dilutive securities | Item | Nine Months Ended Sep 30, 2024 (in thousands, except per share data) | Nine Months Ended Sep 30, 2023 (in thousands, except per share data) | | :------------------------ | :----------------------------------------------------------------- | :----------------------------------------------------------------- | | Net loss | $(7,195) | $(25,542) | | Weighted-average shares outstanding | 95,571 | 100,030 | | Net loss per share, basic and diluted | $(0.08) | $(0.26) | - Potentially dilutive securities, including Convertible Notes, stock options, RSUs, and ESPP, were excluded from diluted EPS calculation due to their anti-dilutive effect, totaling 34,703 thousand shares in 2024[113] Note 20. Income Taxes This note explains the income tax expense and factors contributing to differences in the tax provision - Income tax expense for the nine months ended September 30, 2024, was $1.3 million, a decrease from $1.8 million in 2023, primarily due to changes in taxable earnings mix[114][115] - Differences in the tax provision are mainly attributable to foreign taxes in profitable jurisdictions and the recording of a full valuation allowance on net deferred tax assets[115] Note 21. Geographic Information This note provides a breakdown of net revenue by geographic region and location of long-lived assets | Region | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------ | :-------------------------------------------- | :-------------------------------------------- | | United States | $181,431 | $175,836 | | International | $67,173 | $62,534 | | Total net revenue | $248,604 | $238,370 | - Net revenue for the United Kingdom represented 10% of the total consolidated net revenue for the three months ended September 30, 2024[116] - Substantially all of the Company's long-lived assets are located in the United States[117] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Eventbrite's financial condition, results of operations, and cash flows Overview This section provides a high-level description of Eventbrite's two-sided marketplace business model - Eventbrite operates a two-sided marketplace that connects millions of creators and consumers for live experiences, providing self-service ticketing and marketing tools[120] Key Business Metrics and Non-GAAP Financial Measures This section presents key operational metrics and non-GAAP financial measures used to assess business performance Paid Ticket Volume This metric tracks the total number of paid tickets processed, indicating transaction activity | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | 19,736 | 22,855 | (3,119) | (13.6%) | | Nine Months Ended Sep 30 | 62,195 | 69,342 | (7,147) | (10.3%) | - Paid ticket volume decreased by 13.6% for the three months and 10.3% for the nine months ended September 30, 2024, compared to the prior year[122] Adjusted EBITDA This non-GAAP measure reflects the company's operating performance before certain non-cash and non-recurring items - Adjusted EBITDA is a key performance measure used by management for business planning, assessing operating performance, and evaluating acquisition opportunities[123] | Item | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss | $(3,768) | $(9,935) | $(7,195) | $(25,542) | | Add: Depreciation and amortization | $3,946 | $3,226 | $11,189 | $9,934 | | Add: Stock-based compensation | $10,246 | $14,468 | $39,484 | $41,161 | | Add: Interest expense | $2,084 | $2,821 | $7,690 | $8,359 | | Less: Interest income | $(6,056) | $(7,569) | $(20,845) | $(19,948) | | Adjusted EBITDA | $5,337 | $6,403 | $28,586 | $19,858 | - Adjusted EBITDA for the nine months ended September 30, 2024, increased to $28.6 million from $19.9 million in the prior year[124] Results of Operations This section analyzes the company's financial performance across various revenue and expense categories Net Revenue This section discusses the drivers and changes in the company's total revenue streams | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $77,801 | $81,544 | $(3,743) | (5%) | | Nine Months Ended Sep 30 | $248,604 | $238,370 | $10,234 | 4% | - Net revenue decreased by 5% for the three months ended September 30, 2024, primarily due to lower paid ticket volume and changes to organizer fees (discontinuation of Flex plan and Pro plan pricing reduction)[130] - Net revenue increased by 4% for the nine months ended September 30, 2024, driven by an increase in marketplace revenue (organizer fees and advertising services), partially offset by lower paid ticket volume[131] Cost of Net Revenue This section analyzes the direct costs associated with generating revenue and their impact on gross margin | Period | Cost of Net Revenue 2024 (in thousands) | Cost of Net Revenue 2023 (in thousands) | Gross Margin 2024 | Gross Margin 2023 | | :-------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :---------------- | | Three Months Ended Sep 30 | $24,543 | $25,867 | 68% | 68% | | Nine Months Ended Sep 30 | $74,186 | $76,865 | 70% | 68% | - Cost of net revenue decreased for both the three and nine months ended September 30, 2024, primarily due to reduced processing fees and lower personnel costs from the 2023 restructuring[134] - Gross margin improved for the nine months ended September 30, 2024, primarily due to higher margins attributed to marketplace revenue streams[135] Operating Expenses This section details the trends and factors influencing the company's various operating expenditures Product development This expense category covers costs related to enhancing and developing the company's platform and features | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $22,586 | $23,041 | $(455) | (2%) | | Nine Months Ended Sep 30 | $75,327 | $73,091 | $2,236 | 3% | - Product development expenses for the nine months ended September 30, 2024, increased by 3% due to increased employee-related costs, including stock-based compensation, driven by headcount growth in product development and engineering[140] Sales, marketing and support This expense category includes costs for customer acquisition, brand promotion, and customer assistance | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $23,694 | $21,063 | $2,631 | 12% | | Nine Months Ended Sep 30 | $69,084 | $53,802 | $15,282 | 28% | - Sales, marketing and support expenses increased by 28% for the nine months ended September 30, 2024, primarily due to an $8.6 million increase in chargeback and fraud activity reserves and a $4.7 million change to advanced payouts reserve[143] General and administrative This expense category covers overhead costs not directly tied to product development or sales | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $15,930 | $23,137 | $(7,207) | (31%) | | Nine Months Ended Sep 30 | $52,983 | $66,681 | $(13,698) | (21%) | - General and administrative expenses decreased by 21% for the nine months ended September 30, 2024, primarily due to decreased personnel costs, including stock-based compensation, resulting from workforce reductions in 2023 and 2024[145] Interest Income This section discusses income earned from cash, cash equivalents, and short-term investments | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $6,056 | $7,569 | $(1,513) | (20%) | | Nine Months Ended Sep 30 | $20,845 | $19,948 | $897 | 4% | - Interest income increased by 4% for the nine months ended September 30, 2024, primarily due to higher interest rates in the current year[148] Interest Expense This section details the costs associated with the company's outstanding debt obligations | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $2,084 | $2,821 | $(737) | (26%) | | Nine Months Ended Sep 30 | $7,690 | $8,359 | $(669) | (8%) | - Interest expense decreased for both the three and nine months ended September 30, 2024, due to the repurchase of $120 million aggregate principal amount of the 2025 Notes in August 2024[150] Other Income (Expense), Net This section covers non-operating income and expenses, including foreign currency fluctuations and litigation settlements | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $1,420 | $(2,357) | $3,777 | 160% | | Nine Months Ended Sep 30 | $3,892 | $(3,230) | $7,122 | 220% | - Other income increased significantly for both the three and nine months ended September 30, 2024, driven by foreign currency rate measurement fluctuations and a $3.9 million gain from a litigation settlement in June 2024[152] Income Tax Provision This section explains the company's income tax expense and the factors influencing its calculation | Period | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Three Months Ended Sep 30 | $208 | $762 | $(554) | (73%) | | Nine Months Ended Sep 30 | $1,266 | $1,832 | $(566) | (31%) | - The decrease in income tax provision for both periods was primarily attributable to insignificant non-routine tax expenses recorded during both years and changes in taxable earnings mix[154] Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations - As of September 30, 2024, Eventbrite had $531.0 million in cash and cash equivalents, $24.7 million in short-term investments, and $30.2 million in funds receivable[155] - Approximately 25% of the Company's cash was held outside the United States, primarily to fund foreign operations and on behalf of creators[155] - The Company repurchased $120 million principal of 2025 Notes in Q3 2024 and $39.4 million of Class A common stock under a $100 million repurchase program, with $60.7 million remaining[157][158] - Management believes that existing cash, along with cash generated from operations, will be sufficient to meet anticipated cash needs for at least the next 12 months[159] Cash Flows This section analyzes the sources and uses of cash from operating, investing, and financing activities Comparison of Nine Months Ended September 30, 2024 and 2023 This section provides a detailed comparison of cash flow activities between the two reporting periods Cash Flows from Operating Activities This section details cash generated or used by the company's primary business operations - Net cash provided by operating activities decreased to $85.6 million in 2024 from $101.8 million in 2023, primarily due to changes in operating assets and liabilities[161][162] Cash Flows from Investing Activities This section outlines cash flows related to the purchase and sale of long-term assets and investments - Net cash provided by investing activities was $124.6 million in 2024 (compared to $68.5 million used in 2023), driven by $269.0 million in maturities of short-term investments, offset by $136.8 million in purchases[163][164] Cash Flows from Financing Activities This section describes cash flows from debt, equity transactions, and dividend payments - Net cash used in financing activities significantly increased to $166.1 million in 2024 (from $4.0 million in 2023), primarily due to the $120.5 million repurchase of 2025 Notes and $39.3 million repurchase of Class A common stock[165][166] Effect of exchange rate changes on cash, cash equivalents and restricted cash This section quantifies the impact of foreign currency fluctuations on the company's cash balances - A $2.4 million decrease in cash, cash equivalents, and restricted cash was recorded in 2024 due to the strengthening of the U.S. dollar, primarily impacting creator cash balances[167] Contractual Obligations and Commitments This section outlines the company's significant future payment obligations under debt and lease agreements - The Company's principal commitments consist of obligations under the Convertible Notes (including principal and coupon interest) and operating leases for office space[168] Off-Balance Sheet Arrangements This section discloses any material transactions, agreements, or other arrangements not recorded on the balance sheet - The Company does not currently have any off-balance sheet arrangements as of September 30, 2024[169] Critical Accounting Policies and Estimates This section highlights accounting policies requiring significant judgment and their potential impact on financial results - There have been no significant changes to the Company's critical accounting policies from the 2023 Form 10-K that have had a material impact on the unaudited condensed consolidated financial statements[171] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses Eventbrite's exposure to market risks, including interest rate sensitivity and foreign currency risk Interest Rate Sensitivity This section assesses the impact of interest rate changes on the company's financial instruments - The Company is exposed to market risk for changes in interest rates primarily related to its cash, cash equivalents, and short-term investments, but a 10% change in market interest rates is not expected to have a material effect[173] - The Convertible Notes are subject to fixed annual interest charges and are not exposed to financial risk from interest rate changes, though their fair value may fluctuate[173] Foreign Currency Risk This section evaluates the exposure to fluctuations in foreign currency exchange rates from international operations - Significant ticket sales denominated in foreign currencies (British Pound, Euro, Canadian Dollar, Australian Dollar) expose the Company to foreign currency exchange rate fluctuations[174] - A 10% increase or decrease in individual currency exchange rates is not expected to have a material impact on the consolidated results of operations[174] Item 4. Controls and Procedures This section details management's evaluation of the effectiveness of disclosure controls and internal control over financial reporting - Management concluded that the Company's disclosure controls and procedures were effective as of September 30, 2024, providing reasonable assurance for timely and accurate financial reporting[176] - There have been no material changes in internal control over financial reporting during the quarter ended September 30, 2024[177] Part II. Other Information This part covers legal proceedings, risk factors, equity sales, and other regulatory disclosures Item 1. Legal Proceedings This section refers to Note 17 for detailed information regarding the company's legal proceedings and loss contingencies - Information regarding legal proceedings is detailed in Note 17, 'Commitments and Contingencies,' within the unaudited condensed consolidated financial statements[180] Item 1A. Risk Factors This section highlights new or updated risks related to pricing model changes, third-party reliance, and personnel retention - The Company updated its pricing model in September 2024 to remove upfront fees, enabling creators to publish events for free, but its business still depends on creators selecting and renewing subscription plans[184][185] - Reliance on third-party distribution partners (e.g., Meta, Bandsintown, TikTok) poses a risk if these partners terminate relationships, limit integration functionality, or change their platforms, impacting Eventbrite's ability to reach consumers[186][187] - The recent reduction in force (approximately 11% of workforce) may negatively impact the employer brand, making it more difficult to attract and retain highly skilled personnel, particularly engineers[193][194] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This section reports on unregistered equity sales and details the company's share repurchase activities - There were no sales of unregistered equity securities during the three months ended September 30, 2024[197] | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet be Purchased (in thousands) | | :------------------------ | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------ | | July 1, 2024 - July 31, 2024 | 455,314 | $4.94 | $60,704 | | August 1, 2024 - August 31, 2024 | — | — | $60,704 | | September 1, 2024 - September 30, 2024 | — | — | $60,704 | | Total | 455,314 | $4.94 | $60,704 | - As of September 30, 2024, approximately $60.7 million remained available and authorized for future repurchases under the $100 million share repurchase program[197] Item 3. Defaults Upon Senior Securities This section confirms that there were no defaults on senior securities during the reported period - No defaults upon senior securities were reported[198] Item 4. Mine Safety Disclosures This section states that mine safety disclosure requirements are not applicable to the company - This item is not applicable to the Company[198] Item 5. Other Information This section reports on the absence of changes to Rule 10b5-1 trading plans by directors or officers - No written trading arrangements under Rule 10b5-1 were adopted, terminated, or modified by directors or officers during the three months ended September 30, 2024[199] Item 6. Exhibits This section lists all exhibits filed or incorporated by reference in the Quarterly Report on Form 10-Q - The report includes an Exhibit Index listing various documents filed or incorporated by reference, such as the Amended and Restated Certificate of Incorporation, Bylaws, and certifications[201][203] Signatures This section contains the official signatures of the company's authorized officers - The report was duly signed on November 7, 2024, by Julia Hartz (Chief Executive Officer) and Charles Baker (Chief Operating and Financial Officer)[206]