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Eventbrite(EB) - 2019 Q4 - Earnings Call Transcript

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