Eventbrite(US:EB)2023-05-08 16:00Financial Performance - Net revenue for the three months ended March 31, 2023, was $77,914 thousand, a 39% increase from $55,875 thousand in the same period of 2022 [150]. - Paid ticket volume increased to 23,178 thousand in Q1 2023, up 28% from 18,054 thousand in Q1 2022 [144]. - Gross profit margin improved to 66% in Q1 2023, compared to 64% in Q1 2022 [148]. - Net loss for Q1 2023 was $12,686 thousand, a decrease from a net loss of $18,185 thousand in Q1 2022 [148]. - Adjusted EBITDA for Q1 2023 was $2,142 thousand, slightly down from $2,375 thousand in Q1 2022 [146]. - Cost of net revenue increased to $26,395 thousand in Q1 2023, a 32% increase from $19,973 thousand in Q1 2022 [153]. - The percentage of cost of net revenue relative to total net revenue decreased to 34% in Q1 2023 from 36% in Q1 2022 [153]. - The company recorded an income tax expense of $0.6 million for Q1 2023, up from $0.2 million in Q1 2022 [133]. Cash and Liquidity - Cash and cash equivalents were $518.446 million as of March 31, 2023, compared to $539.299 million as of December 31, 2022 [51]. - The Company reported total cash, cash equivalents, and restricted cash of $519.3 million as of March 31, 2023, compared to $540.2 million as of December 31, 2022 [51]. - Funds receivable from third-party payment processors amounted to $23.7 million as of March 31, 2023, down from $39.9 million as of December 31, 2022 [55]. - Accounts receivable, net increased to $2.598 million as of March 31, 2023, from $2.266 million as of December 31, 2022 [56]. - Net cash provided by operating activities was $75.2 million in Q1 2023, down from $77.5 million in Q1 2022, primarily due to a net loss of $12.7 million [179]. - Net cash used in investing activities for the three months ended March 31, 2022 was $0.8 million, consisting of $0.5 million in capitalized software development costs and $0.3 million in purchases of property and equipment [182]. - Net cash used in financing activities during the three months ended March 31, 2023 was $1.4 million, primarily due to $1.8 million in taxes paid related to net share settlement of equity awards, offset by $0.5 million in proceeds from the exercise of stock options [183]. Restructuring and Costs - The Company incurred approximately $8.8 million in restructuring costs during the three months ended March 31, 2023, including $7.7 million for severance and other termination benefits [41]. - The Company has a total estimated cost of up to $20 million associated with the restructuring plan expected to be completed by the end of 2023 [38]. - The Company closed certain offices as part of the restructuring plan, leading to accelerated amortization of remaining right-of-use assets [39]. - The balance of restructuring-related liabilities was $4.97 million, down from $8.82 million accrued during the period [41]. - The Company incurred restructuring-related costs of approximately $8.8 million for the three months ended March 31, 2023, including $7.7 million in severance and $1.1 million in lease abandonment costs [41]. Debt and Financing - The carrying amount of long-term debt was $356,078,000 as of March 31, 2023, consistent with the previous quarter's amount of $355,580,000 [78]. - Total interest expense for the three months ended March 31, 2023, was $2,751,000, slightly higher than $2,733,000 in the same period of 2022 [78]. - The effective interest rate of the 2025 Notes is 5.8%, with cash interest recorded at $1.9 million and amortization of debt issuance costs at $0.3 million for the three months ended March 31, 2023 [82]. - The Company issued $212.75 million aggregate principal amount of 0.750% convertible senior notes due 2026, with net proceeds of $207.0 million after deducting debt issuance costs of $5.7 million [95]. - The effective interest rate of the 2026 Notes is 1.3%, with cash interest recorded at $0.4 million and amortization of debt issuance costs at $0.2 million for the three months ended March 31, 2023 [103]. - The 2025 Notes are redeemable at the Company's option at any time on or after June 1, 2023, under specific conditions related to the stock price exceeding 130% of the conversion price [89]. - The 2026 Notes will be redeemable at the Company's option on or after March 15, 2024, under similar conditions as the 2025 Notes [99]. Stock-Based Compensation - The total unrecognized stock-based compensation expense related to stock options outstanding was $19.5 million, to be recognized over a weighted-average period of 2.2 years [128]. - The total unrecognized stock-based compensation expense related to stock awards was $88.2 million, to be recognized over a weighted-average period of 3.0 years [129]. - Stock-based compensation expense for the three months ended March 31, 2023, totaled $12.094 million, compared to $12.836 million for the same period in 2022 [130]. - As of March 31, 2023, the balance of outstanding stock options was 12,690,003, with an aggregate intrinsic value of $3,554 thousand [127]. Operational Insights - The Company operates as a single reportable segment, with the CEO reviewing consolidated financial information for resource allocation [37]. - The Company recognized revenue from ticketing and payment processing, with a shift from upfront payment incentives to performance-based incentives [42][46]. - The Company recognized revenue from ticketing services when tickets are sold, with a fixed fee structure that includes a flat fee and a percentage-based fee per ticket [43]. - Revenue from marketing services is recognized ratably over the service term, which varies from one month to a year [48]. - The Company established a reserve for potential settlement of indirect tax matters amounting to $5.3 million as of March 31, 2023 [121]. Other Notable Events - The Company was awarded $14.9 million in damages from a jury verdict in a commercial contract litigation case [119]. - A material weakness in internal control over financial reporting was identified, related to the presentation of unrealized foreign currency transaction gains and losses, resulting in a restatement of previously filed financial statements [198]. - The Company approved a restructuring plan on February 27, 2023, expected to incur total estimated costs of up to $20 million, aimed at reducing operating costs and driving efficiencies [38].