[Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements regarding future events and results, which are subject to various risks and uncertainties that may cause actual outcomes to differ materially - This report contains forward-looking statements regarding future events and results of Vivid Seats Inc. and its subsidiaries, identified by words like "anticipate," "believe," "expect," and "will"[9](index=9&type=chunk) - These statements are based on current expectations and projections but are subject to risks, uncertainties, and assumptions, meaning actual results may differ materially[11](index=11&type=chunk) - Important factors that could cause differences include supply and demand of live events, economic conditions, ability to maintain relationships, competition, platform improvements, extraordinary events, acquisitions, regulatory compliance, legal proceedings, the Reverse Stock Split, and cybersecurity risks[12](index=12&type=chunk)[14](index=14&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for Vivid Seats Inc., including balance sheets, statements of operations, comprehensive income (loss), equity, and cash flows, along with detailed notes. The financial statements reflect a significant net loss for the six months ended June 30, 2025, primarily driven by impairment charges and a decrease in revenues, contrasting with a net income in the prior year period [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, showing significant decreases in total assets, liabilities, and equity, primarily driven by reductions in goodwill and TRA liability Table: Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $1,149,268 | $1,636,096 | $(486,828) | -29.8% | | Total Liabilities | $803,109 | $1,022,061 | $(218,952) | -21.4% | | Redeemable Noncontrolling Interests | $128,822 | $352,922 | $(224,100) | -63.5% | | Total Shareholders' Equity | $217,337 | $261,113 | $(43,776) | -16.8% | | Cash and Cash Equivalents | $153,007 | $243,482 | $(90,475) | -37.1% | | Goodwill – net | $649,418 | $943,119 | $(293,701) | -31.1% | | Intangible assets – net | $198,152 | $233,116 | $(34,964) | -15.0% | | TRA liability | $795 | $155,720 | $(154,925) | -99.5% | - Total assets decreased by **$486.8 million**, or **29.8%**, from December 31, 2024, to June 30, 2025, primarily due to significant reductions in goodwill and TRA liability[16](index=16&type=chunk) - Total liabilities decreased by **$219.0 million**, or **21.4%**, largely driven by a substantial reduction in TRA liability from **$155.7 million** to **$0.8 million**[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's operational performance, highlighting a significant net loss for the period, primarily due to decreased revenues and substantial impairment charges Table: Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenues | $143,566 | $198,316 | $307,589 | $389,168 | | Total costs and expenses | $475,291 | $190,434 | $643,635 | $360,614 | | Income (loss) from operations | $(331,725) | $7,882 | $(336,046) | $28,554 | | Net income (loss) | $(263,327) | $(1,221) | $(273,115) | $9,518 | | Net income (loss) attributable to Class A common stockholders | $(139,675) | $(1,061) | $(145,617) | $5,013 | | Basic EPS | $(1.07) | $(0.01) | $(1.11) | $0.04 | | Diluted EPS | $(1.27) | $(0.01) | $(1.31) | $0.04 | - Revenues decreased by **28%** for the three months and **21%** for the six months ended June 30, 2025, compared to the prior year, primarily due to lower Marketplace orders[19](index=19&type=chunk) - The company reported a significant net loss of **$(263.3) million** for the three months and **$(273.1) million** for the six months ended June 30, 2025, largely driven by **$320.4 million** in impairment charges[19](index=19&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This section outlines the company's comprehensive income (loss), reflecting a net loss for the period, partially offset by an improvement in other comprehensive income Table: Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income (loss) | $(263,327) | $(1,221) | $(273,115) | $9,518 | | Total other comprehensive income (loss) | $858 | $(1,308) | $2,034 | $(3,081) | | Comprehensive income (loss) | $(262,469) | $(2,529) | $(271,081) | $6,437 | | Comprehensive income (loss) attributable to Class A common stockholders | $(139,133) | $(1,893) | $(144,328) | $3,051 | - Total other comprehensive income (loss) improved significantly, moving from a loss of **$(1.3) million** in Q2 2024 to a gain of **$0.9 million** in Q2 2025, primarily due to foreign currency translation adjustments[21](index=21&type=chunk) [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This section details changes in the company's equity, showing a decrease in redeemable noncontrolling interests and an increase in the accumulated deficit due to net losses Table: Condensed Consolidated Statements of Equity | Metric | Balances at January 1, 2025 (in thousands) | Balances at June 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------- | :------------------------------------- | :-------------------- | | Redeemable noncontrolling interests | $352,922 | $128,822 | $(224,100) | | Additional paid-in capital | $1,267,710 | $1,384,399 | $116,689 | | Treasury stock | $(75,568) | $(91,705) | $(16,137) | | Accumulated deficit | $(930,171) | $(1,075,788) | $(145,617) | | Accumulated other comprehensive income (loss) | $(880) | $409 | $1,289 | | Total Shareholders' Equity | $261,113 | $217,337 | $(43,776) | - Redeemable noncontrolling interests decreased substantially by **$224.1 million**, primarily due to subsequent remeasurement[26](index=26&type=chunk) - Accumulated deficit increased by **$145.6 million**, reflecting the net loss attributable to Class A common stockholders during the period[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash flow activities, indicating a shift from cash generation to cash usage in operations and a significant change in financing activities Table: Condensed Consolidated Statements of Cash Flows | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Net cash provided by (used in) operating activities | $(53,908) | $25,359 | $(79,267) | | Net cash used in investing activities | $(11,665) | $(10,548) | $(1,117) | | Net cash provided by (used in) financing activities | $(25,443) | $94,716 | $(120,159) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $(90,662) | $107,991 | $(198,653) | | Cash, cash equivalents, and restricted cash – end of period | $153,986 | $240,425 | $(86,439) | - Operating activities shifted from providing **$25.4 million** in cash in H1 2024 to using **$53.9 million** in H1 2025, primarily due to a net loss and changes in operating assets and liabilities[29](index=29&type=chunk) - Financing activities used **$25.4 million** in H1 2025, a significant change from providing **$94.7 million** in H1 2024, mainly due to Class A common stock repurchases and TRA payments, contrasting with prior year's loan refinancing proceeds[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes to the condensed consolidated financial statements, covering accounting policies, segment information, and specific financial instrument details [1. Background and Basis of Presentation](index=10&type=section&id=1.%20Background%20and%20Basis%20of%20Presentation) This section describes Vivid Seats Inc.'s business operations, including its Marketplace and Resale segments, and the basis for preparing its unaudited condensed consolidated financial statements - Vivid Seats Inc. operates an online ticket marketplace for live events and attractions, also facilitating hotel bookings and packages, with two segments: Marketplace and Resale[30](index=30&type=chunk) - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, and should be read with the 2024 Form 10-K[31](index=31&type=chunk) [2. New Accounting Standards](index=10&type=section&id=2.%20New%20Accounting%20Standards) This section details the adoption of new accounting standards and the evaluation of future pronouncements, noting their impact on financial reporting - The company adopted ASU 2023-07 (Segment Reporting) in 2024, which had no material impact other than on segment reporting disclosures[32](index=32&type=chunk) - ASU 2023-09 (Income Taxes) and ASU 2024-03 (Disaggregation of Income Statement Expenses) are not yet adopted but are being evaluated for future impact on financial statements, with effective dates in 2025 and 2026/2027, respectively[33](index=33&type=chunk)[34](index=34&type=chunk) [3. Revenue Recognition](index=11&type=section&id=3.%20Revenue%20Recognition) This section outlines the company's revenue recognition policies, detailing decreases in Marketplace revenue and slight increases in Resale revenue, along with deferred revenue balances - Marketplace revenue, primarily from processing ticket sales and hotel bookings, decreased by **33%** for the three months and **25%** for the six months ended June 30, 2025, compared to the prior year[37](index=37&type=chunk) Table: Marketplace Revenue Category | Marketplace Revenue Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Owned Properties revenues | $97,439 | $138,587 | $206,671 | $265,158 | | Private Label Offering revenues | $17,039 | $31,459 | $41,547 | $64,900 | | Total Marketplace revenues | $114,478 | $170,046 | $248,218 | $330,058 | | Concert revenues | $50,586 | $80,803 | $108,740 | $148,832 | | Sport revenues | $35,818 | $51,457 | $74,416 | $98,805 | | Theater revenues | $23,744 | $30,932 | $55,277 | $68,839 | | Other revenues | $4,330 | $6,854 | $9,785 | $13,582 | - Resale revenues increased slightly by **3%** for the three months and **0.4%** for the six months ended June 30, 2025, to **$29.1 million** and **$59.4 million**, respectively[37](index=37&type=chunk) - Deferred revenue, primarily from the rewards loyalty program, was **$20.0 million** at June 30, 2025, down from **$23.8 million** at December 31, 2024[38](index=38&type=chunk)[39](index=39&type=chunk) [4. Segment Reporting](index=11&type=section&id=4.%20Segment%20Reporting) This section provides an overview of the company's two reportable segments, Marketplace and Resale, and their respective contribution margins - Vivid Seats operates two reportable segments: Marketplace, acting as an intermediary for ticket sales and hotel bookings, and Resale, acquiring tickets for secondary market resale[41](index=41&type=chunk) - Contribution margin (revenues less cost of revenues and marketing/selling expenses) is the key metric used by the CEO to allocate resources and evaluate segment performance[42](index=42&type=chunk) Table: Segment Contribution Margin | Segment Contribution Margin | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Marketplace | $42,516 | $74,769 | $91,145 | $140,893 | | Resale | $4,821 | $4,668 | $11,578 | $12,066 | | Total | $47,337 | $79,437 | $102,723 | $152,959 | - Marketplace contribution margin decreased by **43%** for the three months and **35%** for the six months ended June 30, 2025, primarily due to lower order volumes and higher marketing investment[44](index=44&type=chunk) [5. Accounts Receivable - Net](index=13&type=section&id=5.%20Accounts%20Receivable%20-%20Net) This section details the company's accounts receivable, noting a slight increase in net receivables and a rise in the allowance for credit losses Table: Accounts Receivable - Net | Component | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------------- | :----------------------------- | :------------------------------- | | Accounts receivable – net | $49,530 | $48,315 | | Less: allowance for credit losses | $(12,449) | $(11,985) | - Accounts receivable – net increased slightly to **$49.5 million** at June 30, 2025, from **$48.3 million** at December 31, 2024[46](index=46&type=chunk) - The allowance for credit losses increased by **$0.5 million** to **$12.4 million**, mainly due to higher uncollectible amounts from distribution partners[46](index=46&type=chunk) [6. Prepaid Expenses and Other Current Assets](index=13&type=section&id=6.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This section outlines the decrease in prepaid expenses and other current assets, primarily due to a reduction in expected recoveries of future customer compensation Table: Prepaid Expenses and Other Current Assets | Component | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Prepaid expenses and other current assets | $28,796 | $32,607 | | Recovery of future customer compensation | $17,221 | $20,335 | - Prepaid expenses and other current assets decreased by **$3.8 million** to **$28.8 million** at June 30, 2025, from **$32.6 million** at December 31, 2024[48](index=48&type=chunk) - The decrease was primarily driven by a **$3.1 million** reduction in expected recoveries of future customer compensation, reflecting a decrease in estimated future event cancellations[48](index=48&type=chunk) [7. Goodwill – Net and Intangible Assets – Net](index=13&type=section&id=7.%20Goodwill%20%E2%80%93%20Net%20and%20Intangible%20Assets%20%E2%80%93%20Net) This section details significant impairment charges recognized for goodwill and indefinite-lived intangible assets due to declines in financial performance and stock price [Goodwill – Net](index=13&type=section&id=Goodwill%20%E2%80%93%20Net) This section details the qualitative impairment assessment of goodwill, leading to a significant non-cash impairment expense due to declining fair value - A qualitative impairment assessment at June 30, 2025, indicated that the fair value of the Marketplace Reporting Unit was likely less than its carrying value, triggered by declines in financial performance, near-term outlook, and stock price[50](index=50&type=chunk)[51](index=51&type=chunk) - Consequently, a non-cash goodwill impairment expense of **$297.4 million** was recognized during the three and six months ended June 30, 2025[53](index=53&type=chunk) Table: Goodwill – Net | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | | :---------------------------------- | :------------------------------- | :----------------------------- | | Goodwill – net balance | $943,119 | $649,418 | | Accumulated impairment charges | $377,100 | $674,512 | [Intangible Assets – Net](index=15&type=section&id=Intangible%20Assets%20%E2%80%93%20Net) This section outlines the decrease in net intangible assets, driven by increased amortization and impairment charges on indefinite-lived trademarks Table: Intangible Assets – Net | Intangible Asset Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Definite-lived intangible assets (gross) | $201,668 | $189,919 | | Accumulated amortization | $(91,062) | $(67,208) | | Indefinite-lived intangible assets (gross) | $110,538 | $110,538 | | Accumulated impairment charges (indefinite-lived) | $(23,037) | $0 | | Total Intangible assets – net | $198,152 | $233,116 | - Total intangible assets – net decreased by **$35.0 million**, or **15.0%**, primarily due to increased accumulated amortization and impairment charges on indefinite-lived intangible assets[66](index=66&type=chunk) - A non-cash impairment expense of **$23.0 million** was recognized for certain indefinite-lived trademarks during the three and six months ended June 30, 2025, following a qualitative impairment assessment[63](index=63&type=chunk)[65](index=65&type=chunk) - Amortization expense for definite-lived intangible assets increased to **$11.7 million** for the three months and **$22.7 million** for the six months ended June 30, 2025, from **$10.1 million** and **$20.1 million** in the prior year periods, respectively[61](index=61&type=chunk) [8. Investments and Fair Value measurements](index=16&type=section&id=8.%20Investments%20and%20Fair%20Value%20measurements) This section details the company's investments in a privately held company and the fair value measurements applied to financial assets and nonrecurring items [Investments](index=16&type=section&id=Investments) This section describes the company's investment in a privately held company through a convertible promissory note and a warrant, classified at fair value - In 2023, Vivid Seats invested **$6.0 million** in a privately held company via a convertible promissory note (Note) and a warrant (Warrant)[67](index=67&type=chunk) - The Note is classified as an available-for-sale security and recognized at fair value, while the Warrant is a derivative instrument recognized at fair value with changes recorded in Other expense (income) – net[68](index=68&type=chunk)[69](index=69&type=chunk) [Fair Value Measurements](index=17&type=section&id=Fair%20Value%20Measurements) This section explains the use of Level 3 inputs for determining the fair value of financial assets, goodwill, and trademarks, requiring significant judgment Table: Financial Asset Fair Value | Financial Asset | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------- | :----------------------------- | :------------------------------- | | Note | $3,922 | $3,604 | | Warrant | $2,752 | $3,325 | | Total | $6,674 | $6,929 | - The fair values of both the Note and Warrant are determined using Level 3 inputs, requiring significant judgment due to unobservable variables[71](index=71&type=chunk)[72](index=72&type=chunk) - Goodwill and Trademarks are also subject to nonrecurring Level 3 fair value measurements, with sensitivities to discount rates, long-term growth rates, and royalty rates[74](index=74&type=chunk) [9. Accrued Expenses and Other Current Liabilities](index=19&type=section&id=9.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This section details the decrease in accrued expenses and other current liabilities, primarily due to reductions in accrued future customer compensation and marketing expenses Table: Accrued Expenses and Other Current Liabilities | Component | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Accrued expenses and other current liabilities | $138,912 | $165,047 | | Accrued marketing expense | $21,542 | $30,573 | | Accrued customer credits | $54,439 | $55,785 | | Accrued future customer compensation | $21,461 | $26,614 | - Accrued expenses and other current liabilities decreased by **$26.1 million**, or **15.8%**, to **$138.9 million** at June 30, 2025, from **$165.0 million** at December 31, 2024[76](index=76&type=chunk) - Accrued future customer compensation decreased by **$5.2 million**, primarily due to a decrease in estimated future event cancellations[80](index=80&type=chunk) - Revenue recognized from customer credit breakage decreased to **$1.0 million** for the three months and **$2.6 million** for the six months ended June 30, 2025, compared to **$4.5 million** and **$6.5 million** in the prior year periods, respectively[77](index=77&type=chunk) [10. Long-Term Debt – Net](index=20&type=section&id=10.%20Long-Term%20Debt%20%E2%80%93%20Net) This section outlines the company's long-term debt, detailing the refinancing of its first lien loans and the payoff of the Shoko Chukin Bank Loan [2022 First Lien Loan](index=20&type=section&id=2022%20First%20Lien%20Loan) This section describes the initial refinancing of the company's first lien debt in February 2022, including a term loan and revolving credit facility - In February 2022, the company refinanced its former first lien debt with a **$275.0 million** term loan and a **$100.0 million** revolving credit facility[83](index=83&type=chunk) [2024 First Lien Loan](index=20&type=section&id=2024%20First%20Lien%20Loan) This section details the refinancing of the 2022 First Lien Loan in June 2024 with a new term loan maturing in February 2029 - On June 14, 2024, the 2022 First Lien Loan was refinanced with a **$395.0 million** term loan (2024 First Lien Loan) maturing February 3, 2029, carrying an interest rate of SOFR (0.5% floor) plus 3.00%[84](index=84&type=chunk)[85](index=85&type=chunk) [2025 First Lien Loan](index=20&type=section&id=2025%20First%20Lien%20Loan) This section outlines the February 2025 refinancing of the 2024 First Lien Loan, including its interest rate, payment terms, and the resulting loss on debt extinguishment - On February 5, 2025, the 2024 First Lien Loan was refinanced with a **$393.0 million** term loan (2025 First Lien Loan) maturing February 3, 2029, with an interest rate of SOFR (0.5% floor) plus 2.25% (potentially 2.00% based on corporate rating)[87](index=87&type=chunk)[89](index=89&type=chunk) - The effective interest rate on the 2025 First Lien Loan was **6.8%** per annum at June 30, 2025, and the loan requires quarterly principal payments of **$1.0 million**[88](index=88&type=chunk)[89](index=89&type=chunk) - The refinancing resulted in a **$0.8 million** loss on extinguishment of debt for the six months ended June 30, 2025[94](index=94&type=chunk) [Shoko Chukin Bank Loan](index=21&type=section&id=Shoko%20Chukin%20Bank%20Loan) This section notes the full repayment of the Shoko Chukin Bank Loan in April 2024, which was assumed during the Wavedash acquisition - The Shoko Chukin Bank Loan, assumed during the Wavedash acquisition, was fully paid off on April 4, 2024[95](index=95&type=chunk) [11. Financial Instruments](index=21&type=section&id=11.%20Financial%20Instruments) This section describes the various financial instruments, including Public, Private, Exercise, and Intermediate Warrants, and their terms [Public Warrants](index=21&type=section&id=Public%20Warrants) This section details the Public Warrants issued in connection with the Merger Transaction, including their exercise price and outstanding quantity - **18,132,776** Public Warrants were issued in connection with the Merger Transaction, exercisable at **$11.50** per share, with **6,766,853** outstanding as of June 30, 2025[96](index=96&type=chunk)[99](index=99&type=chunk) [Private Warrants](index=22&type=section&id=Private%20Warrants) This section describes the Private Warrants issued to Horizon Sponsor, noting their similar terms to Public Warrants but non-redeemable nature - **6,519,791** Private Warrants were issued to Horizon Sponsor, with similar terms to Public Warrants but not redeemable by the company, and remain outstanding[100](index=100&type=chunk) [Exercise Warrants](index=22&type=section&id=Exercise%20Warrants) This section outlines the Exercise Warrants issued to Horizon Sponsor, specifying their different exercise prices and non-redeemable status - **34,000,000** Exercise Warrants were issued to Horizon Sponsor, with different exercise prices (**$10.00** and **$15.00**), a 10-year term, and are not redeemable[101](index=101&type=chunk)[102](index=102&type=chunk) [Mirror Warrants](index=22&type=section&id=Mirror%20Warrants) This section describes the Mirror Warrants issued by Hoya Intermediate to Vivid Seats, which mirror other warrant terms and eliminate in consolidation - **47,286,644** Mirror Warrants were issued by Hoya Intermediate to Vivid Seats, mirroring the terms of Public, Private, and Exercise Warrants, and eliminate in consolidation[103](index=103&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) [Intermediate Warrants](index=22&type=section&id=Intermediate%20Warrants) This section details the Intermediate Warrants issued to Hoya Topco, which allow for cash redemption and resulted in a recognized gain from fair value changes - **4,000,000** Intermediate Warrants were issued to Hoya Topco, allowing for cash redemption at the holder's option, and are recorded in Other liabilities[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - The fair value of Intermediate Warrants decreased by **$4.8 million** for the six months ended June 30, 2025, resulting in a recognized gain[110](index=110&type=chunk) [12. Equity](index=23&type=section&id=12.%20Equity) This section details the company's equity, including its share repurchase program and changes in accumulated other comprehensive income (loss) [Share Repurchase Program](index=23&type=section&id=Share%20Repurchase%20Program) This section outlines the Board-authorized share repurchase program for Class A common stock, detailing the shares repurchased and remaining availability - The Board authorized a **$100.0 million** share repurchase program for Class A common stock on February 29, 2024, with **$61.2 million** remaining available as of June 30, 2025[111](index=111&type=chunk)[113](index=113&type=chunk) - During the six months ended June 30, 2025, the company repurchased **6.3 million** shares for **$15.7 million** under the program[112](index=112&type=chunk) [Accumulated Other Comprehensive Income (Loss)](index=23&type=section&id=Accumulated%20Other%20Comprehensive%20Income%20%28Loss%29) This section details the shift in accumulated other comprehensive income (loss) from a deficit to a gain, primarily due to foreign currency translation adjustments Table: Accumulated Other Comprehensive Income (Loss) | Component | Balances at January 1, 2025 (in thousands) | Balances at June 30, 2025 (in thousands) | | :------------------------------------ | :--------------------------------------- | :------------------------------------- | | Accumulated Unrealized Gain on Note | $181 | $157 | | Accumulated Foreign Currency Translation Adjustment | $(1,061) | $252 | | Total Accumulated Other Comprehensive Income (Loss) | $(880) | $409 | - Accumulated other comprehensive income (loss) shifted from a loss of **$(0.9) million** at January 1, 2025, to a gain of **$0.4 million** at June 30, 2025, primarily due to a positive foreign currency translation adjustment[114](index=114&type=chunk) [13. Commitments and Contingencies](index=24&type=section&id=13.%20Commitments%20and%20Contingencies) This section outlines the company's commitments and contingencies, including liabilities for litigation, uncollected indirect taxes, and a written-off sponsorship loan [Litigation](index=24&type=section&id=Litigation) This section details the company's litigation matters, including a remaining liability for a Canadian class action settlement and the resolution of an Illinois BIPA lawsuit - A **$0.9 million** liability for expected claim submissions and credit redemptions related to a Canadian class action lawsuit settlement remains as of June 30, 2025[116](index=116&type=chunk) - A lawsuit related to the Illinois Biometric Information Privacy Act was settled, with **$0.3 million** paid (covered by insurance) on March 28, 2025, and no accrued liability remaining[117](index=117&type=chunk) [Indirect Taxes](index=24&type=section&id=Indirect%20Taxes) This section outlines the liability for uncollected indirect taxes and the company's ongoing monitoring of tax collection regulations - A liability of **$3.4 million** for uncollected indirect taxes (including sales taxes) was recognized at June 30, 2025, down from **$7.5 million** at December 31, 2024[120](index=120&type=chunk) - The company continuously monitors state, local, and foreign regulations regarding tax collection obligations, particularly for marketplace facilitators and event ticket sales[118](index=118&type=chunk)[119](index=119&type=chunk) [Sponsorship Loan](index=25&type=section&id=Sponsorship%20Loan) This section details the full write-off of a $2.0 million Sponsorship Loan due to the counterparty's bankruptcy, resulting in a recognized loss - A **$2.0 million** Sponsorship Loan disbursed in August 2024 was fully written off during the three and six months ended June 30, 2025, due to the counterparty's bankruptcy, resulting in a loss recorded in Other expense (income) – net[123](index=123&type=chunk)[124](index=124&type=chunk) [14. Related-Party Transactions](index=25&type=section&id=14.%20Related-Party%20Transactions) This section describes transactions with related parties, including marketing services from Viral Nation, a strategic partnership with the Los Angeles Dodgers, and the Tax Receivable Agreement [Viral Nation](index=25&type=section&id=Viral%20Nation) This section notes that no expenses were incurred for Viral Nation's marketing services during the current reporting period - No expenses were incurred for Viral Nation's marketing services during the three and six months ended June 30, 2025, compared to **$0.3 million** in the prior year period[125](index=125&type=chunk) [Los Angeles Dodgers](index=25&type=section&id=Los%20Angeles%20Dodgers) This section indicates that no expenses were incurred for the strategic partnership with the Los Angeles Dodgers during the current reporting period - No expenses were incurred for the strategic partnership with the Los Angeles Dodgers during the three and six months ended June 30, 2025, compared to **$1.1 million** in the prior year period[126](index=126&type=chunk) [Tax Receivable Agreement](index=25&type=section&id=Tax%20Receivable%20Agreement) This section outlines the Tax Receivable Agreement, which provides for payments of 85% of realized tax savings to Hoya Intermediate unitholders - The Tax Receivable Agreement (TRA) with Hoya Intermediate unitholders provides for payments of **85%** of realized tax savings[127](index=127&type=chunk) [15. Income Taxes](index=25&type=section&id=15.%20Income%20Taxes) This section details the company's income tax expense, deferred tax assets, and the significant adjustment to the Tax Receivable Agreement liability [Income Tax Expense](index=25&type=section&id=Income%20Tax%20Expense) This section highlights a significant increase in income tax expense, primarily due to an increased valuation allowance and reductions in TRA liability - Income tax expense significantly increased to **$76.1 million** for the three months and **$79.3 million** for the six months ended June 30, 2025, compared to **$0.6 million** and **$2.9 million** in the prior year periods, respectively[128](index=128&type=chunk)[129](index=129&type=chunk) - The increase was primarily due to an increase in valuation allowance, reduction in TRA liability, and impairment charges in foreign jurisdictions[128](index=128&type=chunk) [Deferred Tax Assets – Net](index=26&type=section&id=Deferred%20Tax%20Assets%20%E2%80%93%20Net) This section details the increase in the valuation allowance against deferred tax assets, driven by significant impairment charges and cumulative domestic losses - A valuation allowance of **$76.5 million** was increased against deferred tax assets at June 30, 2025, due to significant goodwill and intangible asset impairment, cumulative losses, and a negative earnings trend in the U.S. federal tax jurisdiction[131](index=131&type=chunk) [Tax Receivable Agreement](index=26&type=section&id=Tax%20Receivable%20Agreement) This section outlines the income recognized from the change in TRA liability, reflecting a significant reduction due to the improbability of sufficient future taxable income - The company recorded income of **$149.2 million** for the change in TRA liability during the three and six months ended June 30, 2025, as it is no longer probable that sufficient future taxable income will be generated to support a significant portion of the previously recorded TRA liability[133](index=133&type=chunk) - As of June 30, 2025, the estimated probable TRA liability is **$6.5 million**, with **$5.8 million** due within the next 12 months, a significant reduction from the total obligation of **$155.7 million**[133](index=133&type=chunk) [16. Equity-Based Compensation](index=26&type=section&id=16.%20Equity-Based%20Compensation) This section details the company's equity-based compensation, including RSU and stock option activity, and the total compensation expense recognized [RSUs](index=27&type=section&id=RSUs) This section details the RSU activity, including grants to employees and directors, and the total unvested RSUs at period-end - **12.9 million** RSUs were granted to employees and **0.9 million** to directors during the six months ended June 30, 2025, at weighted average grant date fair values of **$2.79** and **$1.52** per share, respectively[136](index=136&type=chunk)[137](index=137&type=chunk) Table: RSU Activity | RSU Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Unvested at December 31 | 11,777 | 3,866 | | Granted | 13,826 | 10,940 | | Forfeited | (508) | (225) | | Vested | (4,723) | (1,486) | | Unvested at June 30 | 20,372 | 13,095 | [Stock Options](index=27&type=section&id=Stock%20Options) This section outlines the stock option activity, noting a slight decrease in outstanding options and their weighted average exercise price Table: Stock Option Activity | Stock Option Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Outstanding at December 31 | 8,102 | 8,807 | | Forfeited | (15) | (114) | | Expired | 0 | (148) | | Outstanding at June 30 | 8,087 | 8,545 | | Vested and exercisable at June 30 | 6,833 | 4,622 | - Stock options outstanding decreased slightly to **8.1 million** at June 30, 2025, with a weighted average exercise price of **$8.11**[141](index=141&type=chunk) [Hoya Topco Profits Interests and Phantom Units](index=28&type=section&id=Hoya%20Topco%20Profits%20Interests%20and%20Phantom%20Units) This section notes the redemption, repurchase, and cancellation of all outstanding profits interests and phantom units held by current employees - All outstanding profits interests and phantom units held by current employees were redeemed, repurchased, and cancelled by Hoya Topco on June 10, 2024, with no unrecognized equity-based compensation expense remaining as of June 30, 2025[143](index=143&type=chunk)[144](index=144&type=chunk) [Equity-Based Compensation Expense](index=28&type=section&id=Equity-Based%20Compensation%20Expense) This section details the total equity-based compensation expense for the period and the unrecognized expense for unvested RSUs and stock options Table: Equity-Based Compensation Expense | Expense Type | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | RSUs | $10,400 | $8,400 | $19,200 | $13,900 | | Stock options | $1,500 | $2,900 | $3,700 | $5,800 | | Profits interests | $0 | $3,100 | $0 | $3,300 | | Total (excluding capitalized development costs) | $11,900 | $14,400 | $22,900 | $23,000 | - Total equity-based compensation expense (excluding capitalized development costs) for the six months ended June 30, 2025, was **$22.9 million**, consistent with **$23.0 million** in the prior year period[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) - Unrecognized equity-based compensation expense for unvested RSUs and stock options was **$67.6 million** and **$3.6 million**, respectively, as of June 30, 2025, both expected to be recognized over approximately one year[145](index=145&type=chunk)[146](index=146&type=chunk) [17. Earnings per Share](index=29&type=section&id=17.%20Earnings%20per%20Share) This section presents the basic and diluted net loss per Class A common stock, noting the anti-dilutive effect of certain securities during the net loss periods Table: EPS Metric | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic Net income (loss) per Class A common stock | $(1.07) | $(0.01) | $(1.11) | $0.04 | | Diluted Net income (loss) per Class A common stock | $(1.27) | $(0.01) | $(1.31) | $0.04 | | Weighted average Class A common stock outstanding (basic) | 130,537,970 | 131,802,620 | 131,712,573 | 132,935,446 | | Weighted average Class A common stock outstanding (diluted) | 206,962,634 | 208,027,620 | 208,137,237 | 209,937,710 | - Basic and diluted net loss per Class A common stock significantly increased to **$(1.07)** and **$(1.27)** for the three months, and **$(1.11)** and **$(1.31)** for the six months ended June 30, 2025, respectively, compared to near-zero or positive EPS in the prior year[154](index=154&type=chunk) - Potentially dilutive securities, including RSUs, stock options, and various warrants, were excluded from diluted EPS computation due to their anti-dilutive effect during the periods of net loss[155](index=155&type=chunk) [18. Subsequent Events](index=30&type=section&id=18.%20Subsequent%20Events) This section details significant subsequent events, including the approved Reverse Stock Split and the potential impact of the One Big Beautiful Bill Act [Reverse Stock Split](index=30&type=section&id=Reverse%20Stock%20Split) This section outlines the approved 1-for-20 reverse stock split, its uniform effect on stockholders, and the pro forma impact on earnings per share - On July 21, 2025, stockholders approved a 1-for-5 to 1-for-30 reverse stock split, with the Board subsequently approving a **1-for-20** split, effective August 5, 2025[156](index=156&type=chunk) - The Reverse Stock Split will uniformly affect all common stock holders, not altering percentage ownership or voting power (except for fractional shares), and will not change authorized shares or par value[157](index=157&type=chunk) Table: Pro Forma EPS Metric (1-for-20 split) | Pro Forma EPS Metric (1-for-20 split) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic Net income (loss) per Class A common stock | $(21.40) | $(0.16) | $(22.13) | $0.75 | | Diluted Net income (loss) per Class A common stock | $(25.47) | $(0.18) | $(26.24) | $0.71 | [OBBB Act](index=31&type=section&id=OBBB%20Act) This section describes the recently signed One Big Beautiful Bill Act, detailing its tax reform provisions and the company's ongoing evaluation of its potential financial impact - The One Big Beautiful Bill Act (OBBB Act), signed July 4, 2025, includes tax reform provisions such as elective deductions for R&D, **100%** bonus depreciation, and modifications to interest expense limitations[159](index=159&type=chunk) - The company is evaluating the impact of the OBBB Act, which could affect its effective tax rate and deferred tax assets in 2025 and future periods, though a material impact is not currently anticipated given the recorded valuation allowance[159](index=159&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Vivid Seats Inc.'s financial condition and operational results for the three and six months ended June 30, 2025, compared to the prior year. It highlights a challenging environment with declining Marketplace GOV and orders, leading to a significant net loss primarily due to impairment charges. The company is implementing a cost reduction program and has undertaken a reverse stock split to address these challenges [Overview](index=32&type=section&id=Overview) This section provides an overview of Vivid Seats' online ticket marketplace business, highlighting significant decreases in Marketplace GOV, revenues, and Adjusted EBITDA, leading to a net loss - Vivid Seats operates an online ticket marketplace connecting fans with live events and facilitating hotel bookings, aiming to provide an extensive breadth and depth of ticket listings at competitive value[161](index=161&type=chunk) Table: Overview Metrics | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Marketplace GOV | $685,488 | $998,065 | $1,505,847 | $2,026,543 | | Revenues | $143,566 | $198,316 | $307,589 | $389,168 | | Net income (loss) | $(263,327) | $(1,221) | $(273,115) | $9,518 | | Adjusted EBITDA | $14,356 | $44,178 | $36,077 | $83,096 | - Marketplace GOV decreased by **31%** for the three months and **26%** for the six months ended June 30, 2025, reflecting challenging industry trends and economic uncertainty[162](index=162&type=chunk) [Our Business Model](index=32&type=section&id=Our%20Business%20Model) This section describes the company's business model, distinguishing between its Marketplace segment, which acts as an intermediary, and its Resale segment, which acquires tickets for secondary markets [Marketplace Segment](index=32&type=section&id=Marketplace%20Segment) This section details the Marketplace segment's operations, revenue sources, associated costs, and the role of its proprietary Skybox ERP tool - The Marketplace segment acts as an intermediary for ticket sales and hotel bookings through Owned Properties (Vivid Seats, Wavedash, Vegas.com, and formerly Vivid Picks) and Private Label Offering partners[164](index=164&type=chunk) - Revenue is primarily derived from service and delivery fees, with costs mainly related to platform development, customer service, payment facilitation, and substantial online advertising[165](index=165&type=chunk)[166](index=166&type=chunk) - Skybox, a proprietary ERP tool, is a key component of the online platform, used by ticket sellers to manage inventory, pricing, and orders across multiple marketplaces[167](index=167&type=chunk) [Resale Segment](index=33&type=section&id=Resale%20Segment) This section describes the Resale segment's primary activity of acquiring tickets for resale on secondary marketplaces and its internal R&D support for Skybox - The Resale segment primarily acquires tickets for resale on secondary marketplaces, including its own, and provides internal R&D support for Skybox[168](index=168&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) This section outlines recent significant developments, including the approved Reverse Stock Split, the initiation of a cost reduction program, and the impact of the OBBB Act [Reverse Stock Split](index=33&type=section&id=Reverse%20Stock%20Split) This section details the stockholders' approval of a 1-for-20 reverse stock split, which will uniformly affect all common stock holders without altering percentage ownership - Stockholders approved a 1-for-5 to 1-for-30 reverse stock split on July 21, 2025, with the Board approving a **1-for-20** split, effective August 5, 2025[169](index=169&type=chunk) - The split will combine every **20** shares of Class A and Class B common stock into one, affecting all holders uniformly without changing percentage ownership or voting power (excluding fractional shares)[169](index=169&type=chunk) [Current Environment and Cost Reduction Program](index=33&type=section&id=Current%20Environment%20and%20Cost%20Reduction%20Program) This section addresses the challenging industry trends and economic uncertainty, leading to the initiation of a cost reduction program to enhance long-term efficiency - The company faces challenging industry trends, including economic uncertainty and competitive intensity, leading to pressure on Marketplace Order volumes in 2025[171](index=171&type=chunk) - In response, a cost reduction program was initiated during Q2 2025 to right-size the business and enhance long-term efficiency[171](index=171&type=chunk) [OBBB Act](index=33&type=section&id=OBBB%20Act) This section describes the One Big Beautiful Bill Act, outlining its tax reform provisions and the company's ongoing evaluation of its complex financial impact - The One Big Beautiful Bill Act (OBBB Act), signed July 4, 2025, introduces tax reform provisions, including elective R&D deductions, **100%** bonus depreciation, and modifications to interest expense limitations[172](index=172&type=chunk) - The company is evaluating the OBBB Act's impact on its effective tax rate and deferred tax assets, noting that a quantitative estimate is not yet reasonably determinable due to complexity[172](index=172&type=chunk) [Key Business Metrics and Non-U.S. GAAP Financial Measure](index=34&type=section&id=Key%20Business%20Metrics%20and%20Non-U.S.%20GAAP%20Financial%20Measure) This section presents key business metrics and non-U.S. GAAP financial measures, including Marketplace GOV, orders, and Adjusted EBITDA, highlighting their significant declines [Marketplace GOV](index=34&type=section&id=Marketplace%20GOV) This section details the significant decrease in Marketplace Gross Order Volume (GOV), primarily attributed to lower order volumes and challenging industry trends - Marketplace GOV decreased by **$312.6 million** (**31%**) for the three months and **$520.7 million** (**26%**) for the six months ended June 30, 2025, primarily due to lower order volumes[179](index=179&type=chunk) Table: Marketplace GOV and Event Cancellations Impact | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Marketplace GOV | $685,488 | $998,065 | $1,505,847 | $2,026,543 | | Event cancellations impact | $(20,300) | $(21,200) | $(35,800) | $(39,400) | [Marketplace Orders](index=35&type=section&id=Marketplace%20Orders) This section outlines the decrease in Marketplace orders, reflecting reduced activity within the Marketplace segment - Marketplace orders decreased by **0.9 million** (**30%**) for the three months and **1.5 million** (**25%**) for the six months ended June 30, 2025, reflecting lower activity in the Marketplace segment[181](index=181&type=chunk) Table: Marketplace Orders and Event Cancellations | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Marketplace orders | 2,173 | 3,097 | 4,469 | 5,974 | | Event cancellations | 47,845 | 52,392 | 90,198 | 102,441 | [Resale Orders](index=35&type=section&id=Resale%20Orders) This section details the changes in Resale orders, noting a slight decrease for the three months and a slight increase for the six months - Resale orders decreased by less than **0.1 million** (**4%**) for the three months ended June 30, 2025, but increased by less than **0.1 million** (**1%**) for the six months ended June 30, 2025[183](index=183&type=chunk) Table: Resale Orders and Event Cancellations | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Resale orders | 97 | 101 | 202 | 200 | | Event cancellations | 1,276 | 1,211 | 2,161 | 2,083 | [Adjusted EBITDA](index=35&type=section&id=Adjusted%20EBITDA) This section highlights the significant decrease in Adjusted EBITDA, driven by impairment charges and adjustments related to Tax Receivable Agreement liabilities - Adjusted EBITDA decreased significantly by **67.5%** to **$14.4 million** for the three months and **56.6%** to **$36.1 million** for the six months ended June 30, 2025, compared to the prior year periods[175](index=175&type=chunk) Table: Adjusted EBITDA Reconciliation | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Adjusted EBITDA | $14,356 | $44,178 | $36,077 | $83,096 | | Net income (loss) | $(263,327) | $(1,221) | $(273,115) | $9,518 | | Impairment charges | $320,449 | $0 | $320,449 | $0 | | Adjustment of liabilities under TRA | $(149,172) | $0 | $(149,172) | $0 | - Key adjustments to reconcile net income (loss) to Adjusted EBITDA include significant impairment charges (**$320.4 million**) and a large income adjustment from the remeasurement of TRA liabilities (**$(149.2) million**) in 2025[187](index=187&type=chunk) [Key Factors Affecting Our Performance](index=37&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) This section notes that no material changes to the key factors affecting performance were observed during the reporting period - No material changes to the key factors affecting performance were noted during the six months ended June 30, 2025, compared to those discussed in the 2024 Form 10-K and Q1 2025 10-Q[188](index=188&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's operational results for the current and prior year periods, analyzing revenue, costs, and expenses [Comparison of the Three and Six Months Ended June 30, 2025 and 2024](index=37&type=section&id=Comparison%20of%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the financial performance for the three and six months ended June 30, 2025, highlighting significant decreases in revenues and substantial increases in total costs and expenses Table: Comparison of Financial Performance | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | Revenues | $143,566 | $198,316 | $(54,750) | -28% | | Total costs and expenses | $475,291 | $190,434 | $284,857 | 150% | | Income (loss) from operations | $(331,725) | $7,882 | $(339,607) | -4309% | | Net income (loss) | $(263,327) | $(1,221) | $(262,106) | -21467% | | Net income (loss) attributable to Class A common stockholders | $(139,675) | $(1,061) | $(138,614) | -13064% | - Total revenues decreased by **28%** for the three months and **21%** for the six months ended June 30, 2025, compared to the prior year, primarily due to lower Marketplace orders[189](index=189&type=chunk) - Total costs and expenses increased by **150%** for the three months and **78%** for the six months, largely driven by **$320.4 million** in impairment charges in 2025[189](index=189&type=chunk) [Revenues](index=38&type=section&id=Revenues) This section provides a detailed analysis of the company's total revenues, breaking down performance by Marketplace and Resale segments and event categories [Total Revenues](index=38&type=section&id=Total%20Revenues) This section details the overall decrease in total revenues, primarily driven by reduced Marketplace orders Table: Total Revenues by Segment | Segment | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :---------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | Marketplace | $114,478 | $170,046 | $(55,568) | -33% | | Resale | $29,088 | $28,270 | $818 | 3% | | Total | $143,566 | $198,316 | $(54,750) | -28% | - Total revenues decreased by **$54.8 million** (**28%**) for the three months and **$81.6 million** (**21%**) for the six months ended June 30, 2025, primarily due to a decrease in Marketplace orders[191](index=191&type=chunk) [Marketplace Revenues](index=38&type=section&id=Marketplace%20Revenues) This section outlines the decrease in Marketplace revenues across all event categories, reflecting lower order volumes and the impact of cancellation charges Table: Marketplace Revenues by Event Category | Event Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | Concert | $50,586 | $80,803 | $(30,217) | -37% | | Sport | $35,818 | $51,457 | $(15,639) | -30% | | Theater | $23,744 | $30,932 | $(7,188) | -23% | | Other | $4,330 | $6,854 | $(2,524) | -37% | | Total | $114,478 | $170,046 | $(55,568) | -33% | - Marketplace revenues decreased by **33%** for the three months and **25%** for the six months ended June 30, 2025, driven by corresponding decreases in Marketplace orders across all event categories[192](index=192&type=chunk) - Marketplace cancellation charges negatively impacted revenues by **$4.2 million** for the three months and **$9.5 million** for the six months ended June 30, 2025[193](index=193&type=chunk) [Resale Revenues](index=39&type=section&id=Resale%20Revenues) This section details the slight increase in Resale revenues, attributed to higher average revenue per order, despite increased cancellation charges - Resale revenues increased by **$0.8 million** (**3%**) for the three months ended June 30, 2025, due to higher average revenue per order despite fewer orders[197](index=197&type=chunk) - Resale revenues increased by **$0.3 million** (**0.4%**) for the six months ended June 30, 2025, consistent with a **1%** increase in Resale orders[197](index=197&type=chunk) - Resale cancellation charges increased to **$0.7 million** for the three months and **$1.2 million** for the six months ended June 30, 2025, due to a higher number of cancelled orders[198](index=198&type=chunk) [Cost of Revenues](index=39&type=section&id=Cost%20of%20Revenues) This section analyzes the company's cost of revenues, detailing changes in both Marketplace and Resale segments [Total Cost of Revenues](index=39&type=section&id=Total%20Cost%20of%20Revenues) This section details the overall decrease in total cost of revenues, primarily consistent with lower Marketplace orders Table: Total Cost of Revenues by Segment | Segment | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :---------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | Marketplace | $18,162 | $25,163 | $(7,001) | -28% | | Resale | $24,267 | $23,602 | $665 | 3% | | Total | $42,429 | $48,765 | $(6,336) | -13% | - Total cost of revenues decreased by **$6.3 million** (**13%**) for the three months and **$11.4 million** (**12%**) for the six months ended June 30, 2025, primarily due to lower Marketplace orders[199](index=199&type=chunk) [Marketplace Cost of Revenues](index=39&type=section&id=Marketplace%20Cost%20of%20Revenues) This section outlines the decrease in Marketplace cost of revenues, consistent with the decline in Marketplace Gross Order Volume - Marketplace cost of revenues decreased by **$7.0 million** (**28%**) for the three months and **$12.1 million** (**24%**) for the six months ended June 30, 2025, consistent with the decrease in Marketplace GOV[200](index=200&type=chunk) [Resale Cost of Revenues](index=39&type=section&id=Resale%20Cost%20of%20Revenues) This section details the increase in Resale cost of revenues, consistent with the corresponding increases in Resale revenues - Resale cost of revenues increased by **$0.7 million** (**3%**) for the three months and **$0.7 million** (**2%**) for the six months ended June 30, 2025, consistent with the increases in Resale revenues[201](index=201&type=chunk) [Marketing and Selling](index=40&type=section&id=Marketing%20and%20Selling) This section analyzes the company's marketing and selling expenses, distinguishing between online and offline advertising costs [Total Marketing and Selling](index=40&type=section&id=Total%20Marketing%20and%20Selling) This section details the overall decrease in total marketing and selling expenses, primarily due to lower Marketplace orders, partially offset by increased digital performance marketing Table: Total Marketing and Selling Expenses | Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | Online advertising | $48,630 | $63,905 | $(15,275) | -24% | | Offline advertising | $5,170 | $6,209 | $(1,039) | -17% | | Total | $53,800 | $70,114 | $(16,314) | -23% | - Total marketing and selling expenses decreased by **$16.3 million** (**23%**) for the three months and **$19.9 million** (**14%**) for the six months ended June 30, 2025, primarily due to lower Marketplace orders, partly offset by higher investment in digital performance marketing[202](index=202&type=chunk) [Online Advertising](index=40&type=section&id=Online%20Advertising) This section outlines the decrease in online advertising costs, driven by lower Marketplace orders but partially offset by increased investment in digital performance marketing - Online advertising costs decreased by **$15.3 million** (**24%**) for the three months and **$18.0 million** (**14%**) for the six months ended June 30, 2025, due to lower Marketplace orders, partially offset by increased investment in digital performance marketing[203](index=203&type=chunk) [Offline Advertising](index=40&type=section&id=Offline%20Advertising) This section details the decrease in offline advertising costs, reflecting reduced spending in traditional brand marketing channels - Offline advertising costs decreased by **$1.0 million** (**17%**) for the three months and **$2.0 million** (**16%**) for the six months ended June 30, 2025, reflecting reduced spending in traditional brand marketing channels[204](index=204&type=chunk) [Contribution Margin](index=40&type=section&id=Contribution%20Margin) This section analyzes the company's contribution margin, detailing performance for both the Marketplace and Resale segments [Total Contribution Margin](index=40&type=section&id=Total%20Contribution%20Margin) This section details the overall decrease in total contribution margin, primarily driven by a lower contribution from the Marketplace segment Table: Total Contribution Margin by Segment | Segment | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :---------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | Marketplace | $42,516 | $74,769 | $(32,253) | -43% | | Resale | $4,821 | $4,668 | $153 | 3% | | Total | $47,337 | $79,437 | $(32,100) | -40% | - Total contribution margin decreased by **$32.1 million** (**40%**) for the three months and **$50.2 million** (**33%**) for the six months en

Executive Summary [Second Quarter 2025 Highlights](index=1&type=section&id=1.1%20Second%20Quarter%202025%20Highlights) Vivid Seats reported significant Q2 2025 declines in key financial metrics and initiated a **$25 million** cost reduction program **Q2 2025 Key Financial Metrics vs. Q2 2024 (in millions):** | Metric | Q2 2025 (millions) | Q2 2024 (millions) | Change | | :----------------- | :---------- | :---------- | :----- | | Marketplace GOV | $685.5 | $998.1 | -31% | | Revenues | $143.6 | $198.3 | -28% | | Net loss | $263.3 | $1.2 | -$262.1 | | Adjusted EBITDA | $14.4 | $44.2 | -$29.8 | - Announced a **$25 million** annualized cost reduction program, expected to be fully actioned by the end of 2025, to right-size the organization and drive long-term efficiency[1](index=1&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=1.2%20Management%20Commentary) Management noted challenging industry conditions, anticipating Q3 positive cash flow and strategic use of cost savings - CEO Stan Chia noted a "challenging industry backdrop" with "pressure on consumer spending coupled with continued competitive intensity in performance marketing channels"[3](index=3&type=chunk) - CFO Lawrence Fey stated the intention to "utilize a portion of the savings generated by our cost reduction program to be more competitive across key levers to stabilize top line as we look to 2026 and beyond"[4](index=4&type=chunk) - CFO anticipates "positive cash flow in the third quarter due to a combination of typical seasonality improvements and a belief that the degree of June's industry volume softness was atypical"[4](index=4&type=chunk) Key Operational and Financial Metrics [Q2 2025 Performance Overview](index=1&type=section&id=2.1%20Q2%202025%20Performance%20Overview) Vivid Seats experienced significant declines in key operational metrics for Q2 and H1 2025, reflecting challenging market conditions **Key Business Metrics (in thousands):** | Metric | Three Months Ended June 30, 2025 (thousands) | Three Months Ended June 30, 2024 (thousands) | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Marketplace GOV | $685,488 | $998,065 | $1,505,847 | $2,026,543 | | Marketplace orders | 2,173 | 3,097 | 4,469 | 5,974 | | Resale orders | 97 | 101 | 202 | 200 | | Adjusted EBITDA | $14,356 | $44,178 | $36,077 | $83,096 | [Key Business Metrics Definitions](index=1&type=section&id=2.2%20Key%20Business%20Metrics%20Definitions) This section defines key operational metrics like Marketplace GOV and orders, detailing event cancellation impacts - Marketplace GOV represents the total transactional amount of Marketplace orders processed, inclusive of fees, exclusive of taxes, and net of event cancellations[8](index=8&type=chunk) - Marketplace orders represent the total volume of Marketplace segment transactions processed on the online platform, net of event cancellations[8](index=8&type=chunk) - Resale orders represent the total volume of Resale segment transactions processed on a given platform, net of event cancellations[8](index=8&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Vivid Seats is not providing financial guidance for the year ending December 31, 2025, at this time - Vivid Seats is "not providing guidance for the year ending December 31, 2025 at this time"[10](index=10&type=chunk) Corporate Actions [Reverse Stock Split](index=2&type=section&id=4.1%20Reverse%20Stock%20Split) Vivid Seats' Board approved a **1-for-20 reverse stock split** for Class A and B common stock, effective August 5, 2025 - A **1-for-20 reverse stock split** of Class A and Class B common stock was approved[11](index=11&type=chunk) - The reverse stock split is effective at 5:00 p.m. Eastern Time on **August 5, 2025**[11](index=11&type=chunk) - Class A common stock will begin trading on the Nasdaq Global Select Market on a split-adjusted basis under the existing ticker symbol "SEAT" on **August 6, 2025**[11](index=11&type=chunk) Company Information [Webcast Details](index=2&type=section&id=5.1%20Webcast%20Details) Vivid Seats hosted a webcast on **August 5, 2025**, to discuss Q2 2025 financial results and business updates - Vivid Seats hosted a webcast at 8:30 a.m. Eastern Time on **August 5, 2025**[12](index=12&type=chunk) - The live webcast and supplemental earnings presentation are available on the Vivid Seats Investor Relations website[12](index=12&type=chunk) [About Vivid Seats](index=2&type=section&id=5.2%20About%20Vivid%20Seats) Founded in **2001**, Vivid Seats is a leading North American online ticket marketplace leveraging proprietary technology and a rewards program - Vivid Seats, founded in **2001**, is a leading online ticket marketplace[13](index=13&type=chunk) - The company offers one of the widest selections of events and tickets in North America and an industry-leading Vivid Seats Rewards program[13](index=13&type=chunk) - Vivid Seats utilizes proprietary software and unique technology to drive the consumer and business ecosystem for live event ticketing[13](index=13&type=chunk) [Forward-Looking Statements](index=2&type=section&id=5.3%20Forward-Looking%20Statements) This section clarifies that the press release contains forward-looking statements subject to risks and uncertainties, with no obligation to update - The press release contains "forward-looking statements" subject to risks, uncertainties, and assumptions that can be difficult to predict and/or are outside of the company's control[14](index=14&type=chunk) - Important factors that could cause differences include the ability to generate cash flows, supply and demand of live events, adverse economic conditions, competition, and compliance with laws and regulations[14](index=14&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law[14](index=14&type=chunk) [Contacts](index=3&type=section&id=5.4%20Contacts) Contact information for investor relations and media inquiries is provided - Investors contact: Kate Africk, Kate.Africk@vividseats.com[15](index=15&type=chunk) - Media contact: Julia Young, Julia.Young@vividseats.com[15](index=15&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Balance Sheets](index=4&type=section&id=6.1%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from **$1,636,096 thousand** to **$1,149,268 thousand**, primarily due to reductions in goodwill and deferred tax assets **Condensed Consolidated Balance Sheets (in thousands):** | Item | June 30, 2025 (thousands) | December 31, 2024 (thousands) | | :------------------------------------ | :-------------- | :---------------- | | Total assets | $1,149,268 | $1,636,096 | | Total liabilities | $803,109 | $1,022,061 | | Total shareholders' equity | $217,337 | $261,113 | | Cash and cash equivalents | $153,007 | $243,482 | | Goodwill – net | $649,418 | $943,119 | | Deferred tax assets – net | $1,260 | $77,967 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=6.2%20Condensed%20Consolidated%20Statements%20of%20Operations) The statements show a substantial net loss for Q2 and H1 2025, driven by significant impairment charges and declining revenues **Condensed Consolidated Statements of Operations (in thousands):** | Item | Three Months Ended June 30, 2025 (thousands) | Three Months Ended June 30, 2024 (thousands) | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $143,566 | $198,316 | $307,589 | $389,168 | | Total costs and expenses | $475,291 | $190,434 | $643,635 | $360,614 | | Impairment charges | $320,449 | — | $320,449 | — | | Income (loss) from operations | $(331,725) | $7,882 | $(336,046) | $28,554 | | Net income (loss) | $(263,327) | $(1,221) | $(273,115) | $9,518 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=6.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$(53,908) thousand** for H1 2025, a significant decrease from the prior year **Condensed Consolidated Statements of Cash Flows (in thousands):** | Item | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(53,908) | $25,359 | | Net cash used in investing activities | $(11,665) | $(10,548) | | Net cash provided by (used in) financing activities | $(25,443) | $94,716 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $(90,662) | $107,991 | | Cash, cash equivalents, and restricted cash – end of period | $153,986 | $240,425 | Non-GAAP Financial Measures [Adjusted EBITDA Reconciliation](index=7&type=section&id=7.1%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA, a non-GAAP measure, significantly decreased in Q2 2025 to **$14,356 thousand**, primarily due to substantial impairment charges - Adjusted EBITDA is a non-U.S. GAAP financial measure used by analysts, investors, and management to evaluate operating results and make operating decisions, as it excludes items not reflective of ongoing business performance[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) **Adjusted EBITDA Reconciliation (in thousands):** | Item | Three Months Ended June 30, 2025 (thousands) | Three Months Ended June 30, 2024 (thousands) | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(263,327) | $(1,221) | $(273,115) | $9,518 | | Income tax expense | $76,165 | $577 | $79,320 | $2,846 | | Interest expense – net | $5,634 | $5,324 | $11,299 | $10,406 | | Depreciation and amortization | $12,341 | $10,502 | $23,966 | $20,985 | | Impairment charges | $320,449 | — | $320,449 | — | | Adjustment of liabilities under TRA | $(149,172) | — | $(149,172) | — | | Adjusted EBITDA | $14,356 | $44,178 | $36,077 | $83,096 | - Impairment charges of **$320,449 thousand** in Q2 2025 were non-cash and related to goodwill and certain indefinite-lived intangible assets, triggered by recent declines in financial performance, near-term outlook, and Class A common stock price[25](index=25&type=chunk)[26](index=26&type=chunk)

Core Viewpoint - Vivid Seats Inc. is implementing a $25 million cost reduction program to enhance long-term efficiency and adapt to current market challenges, while maintaining a positive outlook on the live events industry as a long-term opportunity [2][3]. Financial Performance - For Q2 2025, Vivid Seats reported a Marketplace Gross Order Value (GOV) of $685.5 million, a decrease of 31% from $998.1 million in Q2 2024 [6]. - Revenues for Q2 2025 were $143.6 million, down 28% from $198.3 million in Q2 2024 [6]. - The company experienced a net loss of $263.3 million in Q2 2025, compared to a net loss of $1.2 million in Q2 2024 [6]. - Adjusted EBITDA for Q2 2025 was $14.4 million, down from $44.2 million in Q2 2024 [6]. Operational Metrics - Marketplace orders totaled 2,173 in Q2 2025, down from 3,097 in Q2 2024 [5]. - Resale orders were 97 in Q2 2025, slightly down from 101 in Q2 2024 [5]. - The company faced 47,845 event cancellations in Q2 2025, compared to 52,392 in Q2 2024 [8]. Cost Reduction Strategy - The $25 million cost reduction program aims to right-size the organization and improve efficiency, with full implementation expected by the end of 2025 [2][3]. - A portion of the savings will be reinvested to stabilize revenue streams as the company looks towards 2026 and beyond [3]. Market Outlook - Despite current pressures on consumer spending and competitive intensity, the company views the live events sector as a durable long-term opportunity [2]. - The company anticipates positive cash flow in Q3 2025, driven by seasonal improvements and a belief that June's industry volume softness was atypical [3]. Stock Activity - A 1-for-20 reverse stock split of Class A and Class B common stock was approved, effective August 6, 2025, to enhance stock performance [10]. Company Overview - Vivid Seats, founded in 2001, is a leading online ticket marketplace focused on connecting fans with live events, offering a wide selection of tickets and a rewards program [12].

Core Points - Vivid Seats Inc. announced a 1-for-20 reverse stock split of its Class A and Class B common stock, effective at 5:00 p.m. Eastern Time on August 5, 2025, with trading on a split-adjusted basis starting on August 6, 2025 [1][2] - The reverse stock split was approved by stockholders on July 21, 2025, and will combine every 20 shares of common stock into one share, with fractional shares being compensated in cash [2] - The reverse stock split will not affect stockholders' percentage ownership or voting power, except for fractional shares, and all outstanding warrants and equity-based awards will be proportionately adjusted [2] Company Information - Vivid Seats, founded in 2001, is a leading online ticket marketplace that connects fans with live events, artists, and teams, emphasizing the belief that everyone should "Experience It Live" [5] - The company offers a wide selection of events and tickets in North America and features an industry-leading rewards program where fans earn on every purchase [5] - Vivid Seats has been recognized by Newsweek as one of America's Best Companies for Customer Service in ticketing [5]

Core Viewpoint - Vivid Seats Inc. is set to report its financial results for the second quarter of 2025 on August 5, 2025, before the U.S. stock market opens, with a management discussion scheduled for 8:30 a.m. ET [1]. Company Overview - Vivid Seats, founded in 2001, is a leading online ticket marketplace that connects millions of buyers with thousands of ticket sellers across a wide range of events in North America [3]. - The company emphasizes the belief that everyone should "Experience It Live," offering a broad selection of events and tickets, along with an industry-leading rewards program where fans earn on every purchase [3]. - Vivid Seats has been recognized by Newsweek as one of America's Best Companies for Customer Service in ticketing, highlighting its commitment to customer satisfaction [3].

Summary of Vivid Seats Conference Call Company Overview - **Company**: Vivid Seats - **Industry**: Online marketplace for secondary ticket sales, primarily in North America with international expansion efforts underway [2][3] Core Points and Arguments - **Market Position**: Vivid Seats is a data-driven online marketplace for live events, focusing on the secondary ticket market. The company is experiencing long-term favorable trends as consumers prioritize spending on live events [3][4] - **Expansion Strategy**: The company has begun international expansion, acquiring WaveDash in Japan and launching operations in the UK, with plans to expand further into Europe [4][26][27] - **Inventory and Sales**: Vivid Seats has sold over 175 million cumulative tickets across more than 375,000 unique events, showcasing a broad inventory across concerts, sports, and theater [4][5] - **Technology and Services**: The company offers a leading ERP system, Skybox, which serves about 60% of professional sellers in North America, facilitating inventory management and pricing [5][39] - **Loyalty and Engagement**: Vivid Seats has a unique rewards program and gamification features to enhance customer engagement and retention [6][10] Financial Performance - **Recent Trends**: The company has faced increased competitive intensity, particularly from StubHub, leading to a decline in growth metrics such as Gross Order Value (GOV) and EBITDA [11][12] - **Cash Flow Dynamics**: The cash conversion model has been negatively impacted due to organic declines, reversing the previously favorable cash flow dynamics [12][13] - **Customer Acquisition**: Approximately 40% of GOV comes from new customers, indicating room for improvement in customer retention and loyalty [16] Industry Insights - **Market Dynamics**: The live events industry has seen fluctuating growth, with concert revenues declining while sports events have performed well. The overall demand remains stable despite economic pressures [18][19] - **Competitive Landscape**: The ticketing industry is dominated by a few players, with StubHub and Ticketmaster holding significant market shares. Vivid Seats aims to differentiate itself through its asset-light model and focus on unit economics [50][51] International Growth - **Market Entry**: The international market presents opportunities due to less competition compared to North America. Vivid Seats is focusing on building supply and demand in new markets [26][27][30] - **Brand Strategy**: The marketing strategy emphasizes rewards, pricing, and customer service to attract users in international markets [31][32] Future Outlook - **Long-term Growth**: The company remains optimistic about the long-term growth potential in the live events space, despite current competitive challenges [51][52] - **Adaptability**: Vivid Seats positions itself as nimble and asset-light, ready to adapt to changes in consumer behavior and market dynamics [52] Additional Important Points - **Consumer Behavior**: There is a noted shift in consumer spending patterns, with discretionary items like live events being prioritized over other expenses during economic downturns [19][20] - **Technological Advancements**: The company continues to invest in technology to enhance its platform and improve seller and buyer experiences [41][45] This summary encapsulates the key insights and strategic directions discussed during the Vivid Seats conference call, highlighting the company's current position, challenges, and future opportunities in the ticketing industry.

Core Insights - The WNBA is experiencing a significant rise in fan interest and ticket demand, with a 49% year-over-year increase in average ticket prices, indicating a growing relevance and reach for women's basketball [2][3] Ticket Demand and Pricing - The average ticket price for WNBA games has increased by 49% year-over-year, reflecting heightened demand for women's basketball [2] - The most in-demand tickets for the 2025 season include the WNBA All Star Game priced at $533, followed by the Indiana Fever's game against the Golden State Valkyries at $519 [5][7] Fan Engagement and Travel - Fans are traveling an average of 346 miles to attend WNBA games, which is a 12% increase compared to the previous year [3] - The Las Vegas Aces lead the league in average travel distance, with fans traveling an impressive 578 miles to see them play [10][14] Team Popularity - The Indiana Fever have emerged as the most favored team in the U.S., dominating in 13 states, followed by the Las Vegas Aces in 8 states and the Connecticut Sun in 6 states [6][8] - The Indiana Fever are featured in four of the top five most in-demand games for the 2025 season, highlighting their strong fan engagement [4][6] Impact of New Talent - The Dallas Wings experienced a 920% spike in website traffic after winning the 2025 WNBA Draft Lottery and selecting Paige Bueckers as the No. 1 overall pick, indicating a significant boost in fan interest [9] - The average ticket prices for Dallas Wings games have increased by 74% year-over-year, showcasing the impact of new talent on franchise popularity [9]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported $820 million in Marketplace Gross Order Value (GOV), a decrease of 20% year-over-year [13] - Total revenues for Q1 were $164 million, down 14% year-over-year, with owned property revenues also declining by 14% and private label revenues down 27% [13] - Adjusted EBITDA for Q1 was $22 million, a significant drop from $39 million in the prior year, attributed to lower volume and higher marketing expenses as a percentage of revenue [14] Business Line Data and Key Metrics Changes - Marketplace orders decreased by 20% compared to Q1 2024, while the average order size remained flat year-over-year [13] - The marketplace take rate increased to 16.3%, up 70 basis points from 15.6% in Q1 2024, with expectations for near-term take rates to be in the range of 15.5% to 16% [14] Market Data and Key Metrics Changes - The company noted robust competitive intensity and softening industry trends amid consumer uncertainty, impacting how artists and rights holders approach the market [6] - The concert landscape has shown volatility, with year-over-year volume trends fluctuating significantly, while sports events have seen a decline due to tough comparisons from previous years [35] Company Strategy and Development Direction - The company is focused on cost discipline while making strategic investments in marketing and technology to enhance product development and customer experience [7] - Plans for international expansion are underway, with a focus on building out capabilities and scaling the platform in favorable markets [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term resilience of the industry despite current economic pressures, emphasizing the importance of live experiences over goods [6] - The company has suspended guidance for the remainder of 2025 due to increased variability in the global economy and potential consumer softness [15] Other Important Information - The company repurchased $7 million worth of shares at an average price of $2.89 during the quarter [15] - The company is committed to its Corporate Responsibility and Governance Strategy, highlighting progress in sustainability goals [11] Q&A Session Summary Question: Can you elaborate on the performance marketing changes and competitive intensity? - Management noted changes in the Google channel affecting data reporting, leading to increased bidding and decreased efficiency across the industry [19][20] Question: Have you seen any changes in industry expectations? - Management indicated a softening in expectations due to broader economic conditions, despite some bounce-back in April [25] Question: Are artists delaying tours due to macro uncertainty? - Management acknowledged volatility in the industry, with a seasonal low in market activity observed [28] Question: What are your thoughts on cash conversion to EBITDA and capital allocation? - Management expects limited cash generation for the year due to declining EBITDA and working capital pressures [37] Question: How do you view market share dynamics in a flat to down industry? - Management indicated that GOV being down 20% could reflect share impact, primarily from performance marketing channels [42] Question: What is the impact of regulatory changes on the industry? - Management supports regulations aimed at transparency and believes their lean cost structure positions them favorably [62] Question: How is the company addressing marketing channel mix? - Management is focusing on diversifying away from competitively pressured channels and leveraging partnerships to drive growth [70]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported $820 million in Marketplace Gross Order Value (GOV), a decrease of 20% year-over-year [12] - Total revenues for Q1 were $164 million, down 14% year-over-year [12] - Adjusted EBITDA for Q1 was $22 million, down from $39 million in the prior year [13] - The marketplace take rate increased to 16.3%, up 70 basis points from 15.6% in Q1 2024 [12] Business Line Data and Key Metrics Changes - Owned property revenues decreased by 14%, while private label revenues declined by 27% [12] - Marketplace orders were down 20% compared to Q1 2024, with average order size remaining flat year-over-year [12] Market Data and Key Metrics Changes - The company noted robust competitive intensity and softening industry trends amidst consumer uncertainty [5] - There was a bounce back in April after a softening in February and March, but overall consumer sentiment remains volatile [26] Company Strategy and Development Direction - The company is focused on cost discipline while making strategic investments in marketing and technology [6] - Upcoming app enhancements will aim to improve customer experience and engagement [6] - The company is committed to expanding its Total Addressable Market (TAM) and international capabilities [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term resilience of the live events industry despite current pressures [5] - The company is suspending guidance for the remainder of 2025 due to increased variability in the global economy and potential consumer softness [14] - Management emphasized the importance of operational discipline and strategic investments for long-term success [10] Other Important Information - The company repurchased $7 million worth of shares at an average price of $2.89 during the quarter [14] - The partnership with United Airlines is expected to contribute positively in the second half of 2025 [9] Q&A Session Summary Question: Can you elaborate on the competitive environment and performance marketing changes? - Management noted changes in the Google channel affecting data reporting, leading to increased bidding and decreased efficiency across the industry [20][21] Question: Have you seen any changes in industry expectations? - Management indicated a conservative approach due to broader economic conditions, with expectations for a flat to down industry [24][26] Question: Are artists delaying tours due to macro uncertainty? - Management acknowledged volatility in the industry, with some seasonal lows in market activity [29] Question: What are your thoughts on cash conversion to EBITDA and capital allocation? - Management expects limited cash generation for the year due to declining EBITDA and working capital pressures [38] Question: How do you view market share dynamics? - Management indicated that GOV being down 20% could reflect share impact, particularly from performance marketing channels [42][43] Question: Can you provide insights on the marketing channel mix? - Management is focusing on diversifying marketing channels and leveraging partnerships to mitigate competitive pressures [71][74] Question: What is the impact of regulatory changes on the industry? - Management supports regulations aimed at price transparency and believes it will create a level playing field [65][66]

Q1 2025 Financial Results May 6, 2025 (Nasdaq: SEAT) Agenda Business Highlights & Updates Stan Chia, Chief Executive Officer 2 Financial Results & Outlook Lawrence Fey, Chief Financial Officer Important Disclaimers Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "can," "continue," "could," "design," "estimate," "expect," "f ...