StubHub Holdings, Inc. 2026 Q2 Earnings Call

Jonathan, please go ahead. Good afternoon, and thank you for joining us to discuss StubHub's second quarter 2026 results.

For reference, our second quarter earnings release and presentation are available under the quarterly results section of our investor relations website at investors.stubhub.com. Before we begin, please note that today's call will include forward-looking statements. These forward-looking statements are based on the company's current expectations and are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can make no assurance related to its expectations. We refer you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. We will also refer to non-GAAP measures on today's call.

Unless otherwise noted, our profitability and EBITDA discussions today refer to non-GAAP adjusted EBITDA. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are contained in today's earnings release available on our investor relations site. All financial comparisons, unless noted otherwise, are based on the prior year period. Joining me today are Eric Baker, our founder, chairman, and chief executive officer, and Constance James, our chief financial officer. They will provide prepared remarks before opening the call up to your questions. With that, I'll turn it over to Eric.

Eric, you may begin. Thanks, Jonathan, and welcome everyone joining us today.

We delivered a strong second quarter with GMS of $3.1 billion, up 34% year-over-year, and adjusted EBITDA nearly doubling to approximately $106 million. Adjusted EBITDA margin expanded to 18%, an increase of approximately 600 basis points. We also generated healthy cash flow, which enabled us to further de-leverage and strengthen our balance sheet. Our results reflect healthy demand for live events, the competitive advantages we've built through the scale of our marketplace, and strong execution by our team. The second quarter once again demonstrated the strength of our marketplace model and the indispensable role of the resale marketplace in the live events ecosystem. Starting with our core resale business, demand for live events remains healthy. Consumers continue to prioritize live experiences across sports, concerts, theater, and other entertainment categories, and the 2026 events calendar remains robust.

As the market has evolved, the resale market has become an increasingly important part of the live events ecosystem. Fans value flexibility in where they buy tickets and when they make purchasing decisions. The resale market provides liquidity for buyers and sellers while expanding access. Today, StubHub's marketplace brings together more than 1 million sellers with millions of fans around the world. That depth of supply, combined with our technology and marketplace data, allows us to create better outcomes for buyers and sellers alike. Fans choose StubHub because we offer broad selection, trusted transactions, and seamless purchasing experience. Sellers choose StubHub because we aggregate demand at a global scale. We put those advantages to work throughout the second quarter. Our marketplace continued to demonstrate the competitive strengths we've built through scale, liquidity, and global reach.

The World Cup was the standout event of the quarter and a phenomenal proof point of the value StubHub brings to fans and the broader live events ecosystem. The event also demonstrated the increasingly global nature of our business as people traveled from around the world to experience the tournament. Fans from over 150 countries attended matches with tickets purchased through StubHub, and approximately 1 in 7 World Cup tickets sold on our platform were purchased by buyers outside the U.S. and Canada. The World Cup reinforced what we've long believed about the value of a global marketplace. Buyers and sellers benefit from a platform that can efficiently connect global demand with deep liquid supply. This was evident throughout the tournament, providing further validation of our marketplace model. The World Cup created one of the largest and most dynamic ticketing environments our industry has ever experienced.

With over 75 matches played over the course of just 2 and a half weeks in the second quarter, we navigated unique operational challenges and delivered for fans. We believe that StubHub's ability to manage this complexity at a scale no one else can match is a clear differentiator for us. As with any event of this scale and complexity, a small subset of orders experienced fulfillment issues, and we chose to increase our investment in customer support and fulfillment to address them. As fans ourselves, we understand the disappointment when these issues occur. From a business standpoint, our interests are aligned with our customers as our marketplace only works when fans attend an event. I'd like to thank our team for successfully executing through such a monumental event.

Our objective has always been to take the friction and stress out of accessing live entertainment, and we will continue to invest in customer service, fulfillment, and operations to deliver on that commitment. The live events market remains healthy with positive consumer demand, and we anticipate a robust calendar in the second half of the year. Following the significant demand generated by the World Cup, we are watching closely how consumer entertainment spending patterns develop across the remainder of the calendar. Beyond our core resale business, we are also expanding the ways rights holders access StubHub's marketplace. We have discussed our belief that ticket distribution is moving away from exclusive distribution methods toward a more open model. Rights holders increasingly want greater flexibility in how inventory reaches consumers, expanding distribution, and improving pricing intelligence and insights.

We believe open distribution gives rights holders access to StubHub's global demand and pricing data and gives fans greater choice in where they discover and purchase tickets. Our objective is to make it as simple as possible for rights holders to access StubHub's marketplace. During the second quarter, we expanded our self-service capabilities and broadened category coverage while selectively adding new distribution partners such as the American Athletic Conference and the NCAA. These partnerships help us refine our product while demonstrating how open distribution creates values for rights holders of all sizes. We are also making progress with StubHub Distribution Manager, our AI-powered self-service platform introduced earlier this year. Since launch, we have onboarded additional venues and festivals looking for an easy-to-use solution to manage and distribute inventory through StubHub. These partners are helping us refine the product while demonstrating how self-service tools can simplify distribution for rights holders of all sizes.

It is still early, but we are encouraged by the momentum we are seeing and the opportunity to expand participation over time. Advertising represents another opportunity to build on the engagement across StubHub's marketplace. Sponsored listings provide sellers another lever to compete on the marketplace to sell their inventory, which by definition becomes more time sensitive as an event approaches. It also helps fans discover relevant inventory more effectively. Our focus is primarily on improving auction dynamics, increasing available advertising opportunities, refining placement and prominence, and expanding access to more sellers while maintaining a fan experience centered on helping consumers discover the right events and tickets. We are in the early stages with sponsored listings. Over time, we expect advertising to become another high-margin revenue opportunity built on the engagement already taking place across our marketplace.

Before I conclude my remarks, I want to take a minute to reiterate our view on the regulatory environment as we recognize it is an area of focus for investors. We share the interests of legislators who are looking to expand fan access to live experiences, making it easier, more transparent, and more trustworthy to buy and sell tickets. We believe that experience is only possible through a liquid, open market that gives buyers and sellers the most choice. That has always been StubHub's foundation, and we continue to operate within a generally favorable status quo that supports open, functioning resale markets across jurisdictions. The secondary market serves foundational needs across the live events ecosystem for fans, for rights holders, and for venues alike, and we believe that is why it has proven durable across markets and regulatory environments.

As we have discussed in the past, we believe public discussion tends to focus on a certain subset of the resale market. Resellers that list large quantities of inventory on marketplaces for very high-demand concerts at high prices significantly above the original sale price. Based on our internal data, we estimate that approximately 10% of our global GMS in 2025 was attributable to these types of high-demand concert ticket sales by resellers. Recent legislative developments are consistent with our view that regulatory focus is on high-demand concerts, not sports. For example, recently passed legislation in Washington, D.C., which is expected to go into effect in 2027, explicitly carves out sporting events. In addition, certain proposed price caps in other jurisdictions failed to advance during recent legislative sessions.