Vivid Seats Inc. Class A Common Stock 2026 Q2 Earnings Call

Good morning. Welcome to Vivid Seats' second quarter 2026 earnings conference call. I'm Austin Arnett, Vivid Seats' General Counsel. I'm joined today by Larry Se, Chief Executive Officer, and Joseph Thomas, Chief Financial Officer. By now, everyone should have access to the earnings press release we issued earlier this morning. The release and supplemental earnings slides are available on our investor relations website. Today's call will include forward-looking statements within the meaning of federal securities laws. These statements are subject to risks that could cause actual results to differ materially, including that as discussed in our earnings release, most recent annual report on Form 10-K and subsequent filings with the SEC. Today's call will also include references to adjusted EBITDA, a non-GAAP financial measure.

To the extent reasonably available, a reconciliation of adjusted EBITDA to net income or loss, its most directly comparable GAAP financial measure, can be found in our earnings release and supplemental earnings slides. Now I'll turn the call over to Larry.

Good morning, everyone. Thank you for joining us today. Two quarters into the year, we are encouraged by the progress we have made and believe our strategic actions are delivering measurable results. Our second quarter results exceeded expectations as we delivered sequential quarterly growth across GOV revenue and adjusted EBITDA. Q2 benefited from extraordinary demand surrounding the FIFA World Cup, with consumer engagement and transaction activity well above typical seasonal levels. Last quarter, we said that we expected the World Cup to generate demand somewhere between an A-list concert tour and Taylor Swift's record-breaking Eras Tour. The opportunity proved even more significant. The volume of activity was comparable to the entire Eras Tour, but largely concentrated into the second quarter rather than spread across two years.

We successfully capitalized on the World Cup opportunity through our unique customer value proposition that is led by our lowest price guarantee and Vivid Seats Rewards program. Perhaps more importantly, we met customer expectations throughout the tournament with a continued focus on operational excellence centered around a great customer experience. Customer stress levels were understandably elevated given the high price points and once-in-a-lifetime nature of World Cup matches. While the event organizers' newly implemented ticketing system introduced operational complexity, we maintained a greater than 99.7% successful fulfillment rate for World Cup orders sold through our marketplace. This achievement reflects the outstanding execution of our award-winning customer service and operations teams. As always, every purchase on our platform is backed by our 100% buyer guarantee, ensuring tickets are valid, accurate, and delivered before the event.

Although we don't expect every quarter to benefit from this same level of marquee event activity, these exceptional moments are an exciting part of the live events ecosystem. Whether it's a record-setting global concert tour, a long-awaited championship run, or a major cultural event, these demand catalysts will continue to create meaningful opportunities for our business. As we look ahead, we remain focused on building momentum across our core business, executing our long-term strategy, and preparing for other seminal events like the 2028 Olympics. At the beginning of the year, we outlined a strategy focused on delivering differentiated value propositions to buyers and sellers while returning the business to sustainable growth. We will achieve those objectives by building and expanding upon Vivid Seats' core strengths, a leading customer value proposition, industry-leading seller technology, differentiated marketplace data and insights, and operational excellence.

As we stated previously, we are focused on optimizing our core transaction funnel and improving the customer journey. Throughout the quarter, we deployed foundational enhancements across our app and web experiences designed to streamline event discovery, reduce friction, and improve conversion. We are excited about our robust product roadmap, which spans improved personalization, event discovery, seat selection, and transactional efficiency. With continued execution of this roadmap, we believe we remain on track to return to year-over-year growth in the second half of 2026. Shifting to the seller side of our business, we are proud that SkyBox remains the leading ERP for professional sellers. Vivid Seats has a proud history supporting the needs of sellers, and we are eagerly returning to our roots as we align with sellers and deploy new capabilities.

To that end, we recently launched our SkyBox broker-to-broker marketplace, which is designed to enable sellers to optimize inventory across the SkyBox network with minimal friction and expense. While we only just launched this product, we are encouraged by the positive reception to its seamless integration with our SkyBox ERP. As we look ahead, our priorities remain unchanged. We are focused on enhancing the buyer experience through a unique value proposition, supporting our sellers, growing market share, improving profitability, and investing with discipline. The progress we've made thus far this year reinforces our confidence in our ability to execute our strategy and deliver long-term value creation. With that, I'll turn it over to Joe to walk through our second quarter financial results in more detail Thank you, Larry, and good morning, everyone.

In the second quarter, we delivered sequential growth in GOV, revenue, and adjusted EBITDA, reflecting continued execution of our operational plan outlined at the beginning of the year. Q2 2026 Marketplace GOV was $659 million, compared to $612 million in Q1 2026, reflecting quarter-to-quarter growth of $47 million or 8%. Q2 2026 consolidated revenue was $130 million, compared to $126 million in Q1 2026, reflecting quarter-to-quarter growth of $4 million or 3%. Within consolidated revenue, private label revenue grew 16% quarter-to-quarter, highlighting continued growth in the channel from the start of the year. Marketplace take rate was 15.8% in Q2 2026, essentially flat to 15.9% in Q1 2026. We continue to expect take rates to remain around 16% on a consolidated basis for the remainder of fiscal year 2026.

Q2 2026 adjusted EBITDA was $12.6 million, compared to $9.5 million in Q1 2026. Adjusted EBITDA grew $3.1 million or 33%, showcasing the benefit of our operating leverage on an improved GOV and revenue base led this quarter by World Cup outperformance. We ended the second quarter with $137 million in cash. Alongside this cash balance, we are pleased to announce the renewal of our revolving credit facility, which includes an extended maturity date through August 2029. This extension reflects the continued long-term support of our banking syndicate and enhances our liquidity and financial flexibility as we pursue meaningful growth in 2027 and beyond. In terms of year-end outlook, we are encouraged by our first half results. For fiscal year 2026, we now expect Marketplace GOV in the range of $2.3 billion-$2.6 billion and adjusted EBITDA in the range of $34 million-$40 million.

Our outlook reflects continued execution of our operational plan and financial strategy alongside our current view of industry demand trends. As Larry mentioned, our results this quarter benefited from an unprecedented World Cup. We estimate that a mid-teens percentage of our Q2 GOV was generated by the World Cup, making it a significant driver of our quarterly performance. I will now turn the call back to Larry for closing remarks.

This quarter showcased what our platform can do when consumers have an extraordinary lineup of live events. We capitalized on the opportunity, supported our customers, and delivered strong results. At the same time, it's important to recognize that event cycles are inherently episodic. Our focus remains on growing our business and optimizing the elements we control to deliver long-term value creation. With that, operator, please open the call for questions.