Vividats Inc Class A Aktie

Good day, and thank you for standing by. Welcome to the Vivid Seats' Third Quarter 2026 Earnings Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Austin Arnett, Vivid Seats General Counsel. Please go ahead.

Good morning, and welcome to Vivid Seats Third Quarter 2026 Earnings Call. I'm Austin Arnett, Vivid Seats General Counsel. I'm joined today by Larry Fey, Chief Executive Officer; and Joe Thomas, Chief Financial Officer. By now, everyone should have access to our earnings press release issued earlier this morning. The release as well as supplemental earnings materials 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 the risks discussed in today's earnings release and our periodic 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 materials.

Now I'll turn the call over to Larry.

Good morning, everyone. Thank you for joining us today. Today marks a pivotal turning point for Vivid Seats as we enter our next chapter and work to unlock the full potential of our business.

This morning, we announced we have reached an agreement in principle with a substantial majority of our term loan lenders on the material terms of a comprehensive recapitalization and expect to sign a formal transaction support agreement with those lenders shortly. The contemplated transaction will strengthen our balance sheet by substantially reducing debt and enhancing liquidity while extending debt maturities to provide the company a durable capital structure that will support long-term growth. Closing is subject to customary conditions, and we will update the market and provide further details as we progress.

We are equally excited to announce we returned to year-over-year growth in the third quarter with $624 million of Marketplace GOV and $9 million of adjusted EBITDA. These results reflect continued progress in executing our strategy with disciplined execution as we pursue long-term value creation.

At the beginning of the year, we outlined a clear plan to strengthen our position by enhancing the buyer experience, deepening seller relationships, and improving operational efficiency. Three quarters in, we are encouraged by the measurable progress we have made thus far, and Joe will provide more details when discussing our financial results.

Our focus this year has been on the core elements of our business. On the buyer side, we continue to advance our product road map with foundational enhancements designed to simplify event discovery, streamline the purchase experience and drive stronger customer engagement. We have made steady progress optimizing our core transaction funnel with key upgrades slated for deployment throughout the fourth quarter. We also continue to focus on delivering an exceptional customer experience with our lowest price guarantee and Vivid Seats Rewards program as central elements supporting our differentiated value proposition.

On the seller side, we remain focused on strengthening our industry-leading SkyBox platform and expanding the capabilities that help professional sellers operate efficiently. Following its initial rollout last quarter, our SkyBox broker-to-broker marketplace officially launched in Q3, got positive reception. We believe continued innovation across our SkyBox offering will support a vibrant seller ecosystem and strengthen seller engagement.

As we enter the final quarter of the year, our priorities remain unchanged, delivering differentiated value to buyers and sellers, strengthening our competitive position, and improving profitability. Our third quarter performance demonstrates that our strategy is translating into measurable progress. With a return to growth and a reset capital structure, we look forward to launching Vivid Seats into a new era. We are eager to build on our momentum as we look to deliver even greater value to fans and partners.

With that, I'll turn it over to Joe, to walk through our financial results.

Thank you, Larry, and good morning, everyone. Our third quarter financial performance reflects continued progress against our operating plan, highlighted by year-over-year growth in Marketplace GOV and adjusted EBITDA. Third quarter Marketplace GOV was $624 million, up year-over-year compared to $618 million in the prior year period. This performance was driven by growth in our Vivid Seats Properties and Private Label business, partially offset by softness in Las Vegas and Japan.

Third quarter adjusted EBITDA increased 81% year-over-year to $9 million compared to $5 million in Q3 2025. This increase in adjusted EBITDA reflects our continued commitment to operating efficiency and financial discipline. In the past year, we have significantly reduced our fixed expenses and expect the redemption to provide lasting positive impact on our operating leverage.

As Larry mentioned, we have an agreement in principle with our term loan lenders. This comprehensive transaction will reduce our gross leverage by over $200 million through a debt for equity exchange, provide additional liquidity with $60 million of new capital, and meaningfully extend our debt maturities. We are excited about the positive impact this enhanced financial flexibility will have on our ability to accelerate our strategic growth initiatives.

Turning to our guidance. We are reaffirming our 2026 outlook. We continue to expect Marketplace GOV in the range of $2.3 billion to $2.6 billion and adjusted EBITDA in the range of $34 million to $40 million. As we look ahead, we remain focused on sustaining positive operating momentum, driving the cost efficiencies and maintaining a disciplined approach to capital allocation.

With our third quarter results, we have achieved a return to growth across GOV and adjusted EBITDA. We are confident in Vivid Seats foundational advantages and remain committed to executing our long-term strategy to drive profitable growth in the coming quarters and years.

I will now turn the call back to Larry, for closing remarks.

Today's results mark the start of a new era for Vivid Seats. With the support of our stakeholders, we are well positioned to execute on our long-term strategic priorities. We enter this new chapter with confidence in the strength of our platform, the value of our technology and data, and our ability to execute against the significant opportunities ahead.

Operator, please open the call for questions.

[Operator Instructions] Our first question comes from Ryan Sigdahl with Craig-Hallum Capital Group.

I want to start with the recapitalization. Just curious what other options were considered. While I'm sure you can't discuss exact terms, it does feel like it's going to be very, very dilutive from an equity standpoint, which might have been the only option on the table. But just any other kind of details you can or are able to share there?

And then secondly, from a balance sheet standpoint, accounts payable meaningfully reduced this quarter despite not a similar change, I guess, from a GOV standpoint. So curious if that's expected to reverse in Q4, if that was part of kind of the restructuring to get that paid down, but just from an AP standpoint.

Yes. Thanks, Ryan. I'll take them in reverse order. On accounts payable, I think folks know that often moves in opposite direction of our cash balance. And so when you roll forward from Q2 to Q3 -- I'm sorry, in tandem with our cash balance, same direction. The two major drivers, World Cup drove a significant amount of volume into the end of the second quarter with many of those transactions residing in both cash and accounts payable as the second quarter ended. Obviously, the World Cup has now ended and those amounts have been paid out. So that was a significant piece.

The second part, we pay our sellers once per week on Wednesdays. So when the quarter ends on a Tuesday, you get kind of peak weekly cash. When the quarter ends on a Wednesday, you get trough weekly cash and Q3 ended on a Wednesday. So that accounts for a majority of the change in both the cash and accounts payable balance that you saw.

In terms of the broader transaction, I think as folks know, we've been in discussions with our lender group for a number of months. Implied in that is that numerous different approaches and structures were discussed and contemplated, ultimately need to find a path that works for the various constituencies collectively. I think more details coming in the coming days that will kind of illuminate how everyone came to view this as a compelling and exciting path for everybody. But it's safe to assume that many paths were examined exhaustively over the prior 6 months.

Just on to the business, Live Nation called out good on sales in Q3. Any comments on that? And then potential read-throughs into 2027? And then if you're willing to -- I know a lot of things going on in the business, but if you're willing to share any kind of outlook from an industry standpoint or even just high level from -- as we think about into 2027?

Yes. I saw their announcements. I think our perspective on what we've seen as we approach kind of peak on sales season and setting the stage for 2027 has been a little more mixed than that commentary. Saw some nice announcements in September and into early October. It's been quite quiet back half of October and first week of November, almost to the point of being a clear outlier to how quiet it's been. As we always say, they know better than us what's coming next and so we tend to defer to their confidence. But if you were to tell me just based on observed on sales September through today, I would say it feels fairly muted.

And then as we look into '27, I think our base case has been and remains despite some hesitation given the on sale calendar to-date, that on an ex-World Cup basis, the industry will grow mid-single digits. And so then on an inclusive of World Cup basis, closer to flat, maybe down a smidge given the outsized performance we saw in World Cup.

Our next question comes from Thomas Forte with Maxim Group LLC.

So congratulations on the recap, Larry and Joe. I'll limit myself to one question. Muse has taken off from a download standpoint. Larry, I would appreciate your thoughts on agentic commerce, and if you're seeing any indication that it's being used for your category.

Yes. It's -- we all downloaded Muse, and we all tried to use it to buy tickets. And similar to a refrain you've heard from us a few times, it's not there yet. It's not to say it won't get there. But we are not seeing substantial traffic through personal agents. We are seeing even fewer transactions. And then when you use it yourself, you kind of understand why, especially for categories with dynamic inventory where a lot of personal preference is required, shopping is part of the experience. I think there's just a longer path. And I think Airbnb spoke to it directly and said it pretty well. It's one thing to buy a pack of batteries. It's another thing... In their case, where you're looking at 20 different options on where to stay and looking at 25 pictures for each. It's a very immersive experience. And frankly, the experience of the search is part of the process that people -- that resonates with people.

Our experience is a little bit different, but probably more similar than not. People want to consider the different days, the different prices, the different sections, the different views. And to fully outsource something as personal as how are you going to experience a meaningful entertainment event, I think is going to be further down the adoption curve.

Our next question comes from Cameron Mansson-Perrone with Morgan Stanley.

Larry, on the guide, you touched a little bit about on this maybe earlier in terms of the on sale activity. But the guide -- the updated guide or reiterated guide implies a fairly wide dispersion in outcomes for the fourth quarter, particularly on the GOV side. Any color you can provide there on the lower and upper bound outcomes and what factors are playing a role in each of those scenarios or outcomes?

And then separately, some focus as we approach here over the next month, the end of the MLB CBA. Just any color that you'd give in terms of update on sizing how much baseball activity contributes to GOV for you guys? Or if you don't want to get that specific, anything on kind of general league exposure as we try to think through or contextualize that situation within your overall sports GOV would be helpful.

Yes. Thanks, Cameron. I think the range of outcomes from here is almost entirely indexed to what the on sale calendar looks like with a non-negligible batch of competitor and competitive landscape considerations against what that backdrop looks like. And you can get some multiplicative effects. What we've seen sometimes is when there's sparse announcements relative to expectations, perhaps counter to intuition, people actually get a little more aggressive and put a little more pressure on limited economics to be had. And so you can get a little bit of amplification. And so given the relative uncertainty as we sit here around what the next 6, 7 weeks will bring in terms of on sales, wanted to give ourselves correspondingly broad aperture.

As we think about next year risks with MLB, I think of MLB as mid-single digits of full year GOV -- within that, you can -- you would be right to assume that the spring contribution is less than the peak summer contribution, which is less than the playoff contribution. And so as you think about cases, if there were to just be no season at all, 5%, 6% of GOV headwinds is probably a reasonable starting point. There are a number of scenarios contemplated. But if you assume there's, say, 1/3 of the season that goes away, but it's the first 1/3, I think you could assume slightly less than 1/3 of that number in terms of the headwind.

Our next question comes from Dan Kurnos with StoneX.

Congrats on the recap, guys. I guess just -- I know you said we're going to get more color on that. Can you just be clear, though, is the $200 million of less funded debt, is that net of the new money?

Yes. If you take the total debt when this is all done compared to the total debt before the transaction, the pro forma number will be $200 million less.

Okay. Perfect. And then one more housekeeping before I ask a more tactical question. Just on the World Cup tailwind, I know you've sized it generically over the 2 quarters. Can you give us a sense of how big it was in July? Obviously, there were bigger gains. So any sense of how much it was in Q3?

Yes. It was -- as you noted, it was sort of the culmination of the playoff bracket of fewer games, higher profile games, higher AOS, albeit not to the level of dispersion we would have anticipated coming in. It was about $2 million of EBITDA in July.

Got it. And then, I guess, Larry, you've made a big point of pushing everything into the app. I don't know if you could give us an update on repeat rates, what it looks like, how that initiative is going? And given sort of the landscape and now that you have the recap behind you, are there other actions you guys are going -- I'm sure that took a little bit of your time. So are there other actions you guys are contemplating to kind of continue forging ahead from here?

Yes. Thanks, Dan. That got a little chuckle out of the group. But, yes, I think as we approach and now actually lap the 1-year mark of first rolling out our app initiative, it's been a wonderful success. As you start to lap initial deployment, obviously, the bar goes up to continue delivering compounded gains. But I think we had said at the outset, our ambitions were to, in the near-term, continue to have app shares of GOV increase and then over the longer term, get it to that a majority of the business transact on the app. We haven't yet achieved the latter, but we continue to trend well on the former in terms of continuing to deliver higher share year-over-year in the app.

And when you look at the fundamental economics that we're seeing in the app, continuing to refine and drive incremental improvements, but there's always a balance between volume and contribution, and we're finding a really nice balance there where we're seeing profitable growth. So more volume, more profitable.

On the retention, that's ultimately the benchmark on if our collective efforts to keep customers coming back because they're enjoying their experience with us. That's the scoreboard. We actually saw some distortion throughout the summer, which time will confirm, but we think it was a lot of World Cup traffic and behavior that was different from typical. So we've seen the September cohort normalize. I don't want to declare victory just yet. But if you ignore those World Cup months, it looks like we continue to have nice growth year-over-year in all of our retention and repeat metrics.

All of that said, so where do we go from here? We're actively developing kind of the next phase of kind of reasons to come to the app. I think of it as a kind of refreshed and revamped take on our loyalty program. So more expansive with the ultimate objective being how do you give win-win reasons for folks to come back to your app, maintain connectivity so they keep it on their phone. And one of the challenges in a low-frequency category, if you're only buying once every 6 months, we need to give you a compelling reason just to keep awareness and not delete the app and then start the whole process over 6 months later. And so we got some exciting sticks in that fire from a timing standpoint, expect probably Q1 deployment of that initiative with -- it will be more of a framework and kind of ongoing indefinite opportunity to offer different items to customers and test and iterate on what works most effectively. But think of that app journey as one that we're pleased with our progress in year 1, plenty more to come.

Our next question comes from Andrew Marok with Raymond James.

Two, if I could, please. The first, it's on every TV commercial we've ever seen over the past 2 months or so, these kind of concerns around consumer affordability. Just wondering how that is trending into your business from a demand standpoint, how our AOS is holding up as a result of any shakiness in the consumer?

And then maybe a second question on the World Cup and the follow-through. I think some of your competitors maybe have some higher profile missteps in terms of customer service and experience and things like that, where you guys had much less of that. I know in the past, you've kind of called out that it can take a while for a customer to repeat because these are not necessarily the most frequent purchases. But with that goodwill, I think, that you've earned with consumers coming out of the World Cup, does that represent an opportunity for '27 to be able to monetize those customers?

Yes. Thanks, Andrew. Starting with the consumer health. I think on the Vivid Seats properties, we have continued to see what I would characterize as continued health. And when we see ebbs and flows, it's primarily tied to the underlying event calendar. The World Cup is the low-hanging fruit in that example, where huge event, high prices and stadiums overflowing. I think on the flip side, while the World Series and the run from a small market team was probably fun for the diehard baseball fans, it's probably not ideal from a ticketing standpoint, not necessarily because people suddenly weren't able to buy baseball tickets, but Tampa fan base just isn't as deep and passionate as the Yankees fan base.

So I think that's been broadly our observation on the Vivid Seats Properties. I would contrast that with Vegas, where we are indexed just given the nature of the shows and the tickets we sell to a full spectrum of customers. And you'll hear and we've seen a number of Vegas operators talk about some pressure overall to Vegas traffic. And in particular, within that, you have a bit of a two different stories happening in parallel where the high-end consumer is hanging in there and the lower-end consumer has been under moderate, if not approaching severe pressure, at least specific to Vegas.

So we've seen that come through in the data. I think it's likely one part underlying pressure on the lower-end consumer, and one part, the Vegas value proposition needing a little bit of a refresh. And so you're seeing a number of Vegas shows either get canceled and going to be replaced, getting refreshed, reimagined. I think that new content slate will line up well. A lot of chatter around like the $15 waters and some of the value propositions that have become detached from Vegas's historical allure and appeal. But that's the area where we've really seen it and where we'll look for improvement on a cyclical basis as we head into '27.

On the customer experience side, I think that's you nailed what we think is a great opportunity, also a threshold obligation. I will say as a user myself, if I need to interact with customer service, it's probably not a great sign, right? I expect friction-free, no-touch transactions, whether that's buying something on Amazon or calling an Uber, if you're talking to customer service, something went wrong. And so that's our ultimate ambition to avoid customers having to interact at all. But if they do, you take care of folks because things do go wrong. I don't think we'll ever get to 100.0%, but make people feel like they've been treated the right way.

And so there's initiatives afoot on both of those. I think as you noted, we feel like we handled ourselves exceptionally well with the World Cup. That should pay dividends. But there's continued opportunity to remove friction from this space. And as we look at our initiatives as we head into '27, removing that friction and reducing the need for customers to contact us is actually one of our top priorities.

Our next question comes from Ralph Schackart with William Blair.

Larry, maybe sort of your last thought about removing friction from the process. You've talked about this historically, but maybe you could frame one or two initiatives in terms of how you're doing this and how you're focused on it? And then also, I think somewhere in the prepared remarks, you talked about an upgrade in the transaction funnel. I believe you might have said Q4. Just an update on this, or color on what you're looking to achieve there.

Yes. So -- on the friction side, a significant number of our contacts are anxiety around where are my tickets, when do I get my tickets. And if I were to contrast where I think we can get to versus where we are, I'd point to perhaps the airlines, like everybody just knows you get your boarding pass 24 hours before you're going to have to download the United app to get it. And as a result, I don't think people freak out when 3 days before the flight, they don't have their boarding pass. And I give them credit for having made that expectation clear and consistently enforced. I'm sure they get some for first-time flyers, where is my ticket, but as a general user base, I think people are very familiar with how and when to receive their ticket.

For numerous reasons, I think our space has some unique complications around how to get tickets fulfilled when they're fulfilled, the need to sometimes download a second half, usually Ticketmaster to get those tickets, which just introduces all of the baseline plus some incremental customer anxiety. And so through better messaging, better follow-up, better verification and validation that people when the tickets are sent have downloaded them, that they can locate them right away, do that as quickly as possible to avoid the need for a panic follow-up 8 minutes before the show starts, at which point things can get out of hand quickly. And that would be like the thematic focus, right, get people the tickets in a quick, efficient, stress-free way with as much distance from the event start as possible.

On the customer funnel, multidimensional in terms of what we've been pushing through. But the way we've come at it, almost think of starting at the end of the funnel and moving our way backwards. So our thought was if you have a leaky bucket, if you press buy and for whatever reason the transaction doesn't go through, your authorization rates aren't correct. You've got -- I mistype the ZIP code, but we don't tell you that you mistype the ZIP code, you just give up a lot of frustration. What you do before you get to that point, kind of move, you need the end of the funnel to be tight. And then the next step is your checkout process. And before that, you use your seat maps to select your listings. And before that, you use a performer or venue pages to figure out which event or which day you want to select. So that's kind of the end to beginning path.

A lot of improvements on the payment and authorization front that have been flowing through the numbers throughout the year. If folks are paying close attention, you'll see that what used to be a 4-step checkout is now one step. And now we're moving into the, call it, find the right feed at the right price space, and that will be multi-dimensional. The way we present our maps, the inventory we show, the way we score it, all of that is being refreshed in real-time. And then we'll turn attention to the preceding step. If you land on, let's say, you want to go to a show at the Sphere. Well, there's the everyday Wizard of Oz option, there's going to be Rocky Horror. There's also the one-off concerts. And there's a lot -- if you say I want to go to the Sphere to consume and how do you most thoughtfully and efficiently present those choices to get customers to the proper next step.

We look forward to, call it, sometime in Q1 be able to step back and say we completed the end-to-end product rebuild. So it's in flight. The analogy we're using on our side is a home renovation, where you have an old house, you redo the kitchen. When you finish the kitchen, you now have an old house with the new kitchen. Then you do the bathroom, then you do the family room, at some point, you have a new house. And so we're in the middle of that journey and excited to kind of hit that tipping point during Q1.

Our next question comes from Khadijah Gibson with RBC Capital Markets.

This is Khadijah on for Brad Erickson. A couple for me, if I may. The first one is on just a recap. Once it closes and you guys are operating with like a healthier balance sheet, how should we think about the priority stack for capital deployment? Is the focus purely on reinvesting in the business? Or does the extended maturity and lower debt service open the door to more offensive moves like M&A?

And then secondly, with S&M down 11% year-over-year and GOV growing, can you help us understand how much of the order volume decline is a deliberate pullback in lower ROI spend versus organic demand softness? And how should we think about that line going forward?

Yes. Thanks. I think the -- I'm starting with capital deployment, obviously, very excited to get back to having a fully durable capital structure, which I think over time will open up the full spectrum of opportunities. But in the near-term, it's going to be head down operating-centric. So we've got a number of initiatives that they're all funded within our budget and our existing capital plan. So it wouldn't bridge into the realm of capital allocation. But we think exciting growth opportunities from our continued product enhancement. Some of the things that get us really excited about the product rebuild that we've talked about, we're doing that in a way where the improvements to your checkout, the improvements to your seat maps, those will apply in the U.S., they would apply internationally. And if you build it properly, they can be extended to some of your private label partners.

So we started with some of these initiatives that will be extensible. And what we get very excited about heading into next year is with the kind of rebuilt approach and deployment concept, redoubling our efforts on international growth, reinvigorating pipeline pursuit across our private label business and get maximum bang for the buck on the product refresh and rebuild that we've been doing. And if we're successful in executing against that, I think that is the path to opening up kind of the right to pursue M&A, whether it's small-scale tuck-ins or something more meaningful.

On the sales and marketing, I think you nailed one of the core elements of our approach. The paid search portion of this industry has been and remains very competitive. We see oscillations from our largest competitor. We've seen continued increase from the relatively new entrant, and that has continued to put pressure on the paid search channel. And it's sort of the flip side of our app-centric approach. The majority of new customers do come through paid search. So I think you need to continue to play in that space, but doing so prudently and doing a better job of retaining folks once you acquire them through that quite expensive channel is core to building sustainable enterprise value. But what you are seeing is a correct assessment. We have pulled back on our unit economic spend in the paid search channel with a view on making sure it's kind of sustainable economics that would pass any corporate finance textbooks valuation of what is prudent.

This concludes the question-and-answer session and today's conference call. Thank you for participating. You may now disconnect.

Thank you. Good morning and welcome to VizSeat's second quarter 2026 Earnings Conference Call. Following management's prepared remarks, we will open the call for Q&A. I would now like to turn the call over to Austin Arnett.

Good morning and welcome to VividSeach's second quarter 2026 earnings conference call. Austin Arnett, the Vitsy's General Counsel. I'm joined today by Larry Fay, Chief Executive Officer, and Joe Thomas, Chief Financial Officer. 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 those discussed in our earnings release, most recent annual report on Form 10-K, and subsequent violence 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, it's most directly comparable gap financial measure, can be found in our earnings release and supplemental earnings slides. And now I'll turn the call over to Larry. Good morning, everyone, and 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's List record-breaking A-list tour. the opportunity proved even more significant.

The volume of activity was comparable to the entire ERA 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 Seat's core strengths, a leading customer value proposition, industry-leading seller technology, different 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 chainline 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 will 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. Good 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 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%. With a 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 outperforms. 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 to $2.6 billion and adjusted EBITDA in the range of $34 to $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. 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.

So, Bat operator, please open the call for questions. Thank you. At this time, we will conduct the question and answer session. To ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from Cameron Manson Perron from Morgan Stanley. Your line is now open.

Thanks. Morning. First, I wanted to ask just on the competitive backdrop and any color you'd be willing to provide on how that's been pacing this year, particularly through a recent period that between the NBA Finals and the World Cup, we've obviously seen a lot of you know, attractive GOV opportunity and resale. And then I was also hoping you could hit on take rate and how you view that as a competitive tool, particularly within these active periods. You know, if I look back to the ERIS tour, I think, you know, take rate kind of dropped to the 15% range as you, I think, leaned into trying to capture as much of that GOV as possible. So curious, you know, within the World Cup framework, kind of how you approach that and what your logic today is around take rate and policy going forward. Thanks.

Yes, thanks Cameron. On competitive landscape, I think there has been a continuation of the trend we've spoken to in the past that relative to peak levels, we've seen some amount of moderation from our largest competitor. I think moderate or modest is probably the operative word. There continues to be substantial activity and competitive intensity from them, even though it is off of peak levels. And I think this year, year to date, we've seen several others continue to seek to fill the gap that the largest competitor has left, particularly in performance marketing channels. And when you roll it up, I would say it is a little bit better than it was at its worst. But it is still at what I would consider elevated levels where it appears a priority is being placed on volume, scale, and share relative to whatever the optimal efficient frontier would be on a profitability basis. To a degree, that ties into the answer on the take rate question.

I think we've consistently seen when you have the largest events that have higher price points, there's a bit more pressure on take rate. Super Bowl's annual example of that. World Series, to a degree, is a recurring example where these large price points settled in an equilibrium with a lower percentage take rate, but still a healthy absolute dollar fee. I think in accordance, we continue to aspire to fulfill our broader ambition of delivering a unique and differentiated value proposition And so as market levels move, we need to adjust accordingly. And I think the World Cup, you can see it in the aggregate numbers to a degree. not quite as low as the Taylor Swift dynamic, and that's at least partially because there's more one-time customers in this World Cup group, so less, in our estimation, less lifetime value to be had. But the World Cup did come in a take rate below the call it average or the broader landscape as we sought to compete and offer a differentiated value.

Got it. That's helpful. Thanks, Larry. Thank you. One moment for our next question. Our next question comes from Dan Kournos from Benchmark.

Your line is now open. Great, thanks. Good morning. Larry, maybe let me ask the World Cup question a little bit differently. Seems like you obviously had a nice boost from it, but I, given what you guys are trying to accomplish and shifting traffic to an app and the differentiated brand proposition, like how much did that resonate? I understand your commentary on a lot of these guys are kind of one time, right? That may not be recurring. especially if they came from abroad, but just in terms of the messaging that you're trying to get out there, were you able to push that in the marketplace? Do you think it resonated? Were you able to shift incremental traffic as a result of this event? And do you think that you gained a little bit of momentum out of it?.

Yes, I think we were pleased with the overall results. I think we outpunched our weight by a bit on our share of the World Cup volume, which is exciting. And to your point, I think that implicitly indicates that we were reliant. reasonably successful in getting our message out and having folks find the value proposition in the app, or at least enough folks. I think that if everyone found it, we would have done even better. So there's still a balance of proliferating that message and turning it into broad awareness and transactions. I think the second part, not only did we outpace on the share of the event that we got, could to be more pleased with how we delivered against that massive event a lot of chatter a lot of eyeballs a lot of stories on social media postings and when I look at what we deliver from a customer experience standpoint It couldn't have gone better. On every metric, our World Cup performance was better than the average event despite it being a higher stress, higher complexity customer experience.

Now we need time to play out and hopefully all those folks who had a good experience will come back, but it's a good indicative example of how we see this flywheel working. If you can punch above your weight on the initial customer acquisition, deliver a differentiated customer experience,.

Unless you do something wrong in the future, you should get more than your share of folks coming back. Got it. That's helpful. And then I have to ask just on the flip side, Larry, obviously a lot of noise coming out of DC, you know, Some people think that there might be some expanded state-by-state type of regulation. Just any thoughts as that begins to roll out or if you have any kind of broader, higher-level thoughts would be helpful. Thank you.

Yes, I think there continues to be maybe a bit of elevated chatter. We talked about Maine, we talked about Vermont, now D.C., and the natural ebbs and flows that you'll often see across the regulatory landscape. In the near term, nothing that's happened makes us think there will be a meaningful impact due to a couple of reasons. I think the jurisdictions that have made changes are on the smaller side. There's delayed implementations. But maybe more importantly, the process and the frameworks that have been used, I think, leave some room for improvement. If you take DC specifically, they excluded primary, they excluded sports. That's an interesting starting point, right? Why sports and primary would be different than secondary theater shows as an example.

So we'll see where those move in the future. When we think at the longer term, we continue to be of the view that There will inevitably be events. World Cup is the perfect quintessential example where there are fundamentally more people who want to attend the event than there are seats. There are more people who want to sit in great seats than there are available seats. You need a mechanism to separate who are going to be the lucky folks who get to attend that event. When you have demand that outpaces supply, across the history of economics, price-based mechanisms have been demonstrated to be the most effective pathways. They're not the only pathways, but when you start doing other pathways, you tend to create these shadow markets, back alley markets, the demand will find its level, and so keeping Having legitimate, transparent pathways to us feels like the customer-friendly way to service this market, and I've yet to see a compelling alternative put forward.

Super helpful, Larry. Really appreciate it. Thank you. Thank you. One moment for our next question. Our next question comes from Brian Sejha from Craig Hollam Capital Group. Your line is now open.

Hey, good morning, Larry, Joe. I want to say on World Cup, I think I caught it right. Ninety nine point seven percent fulfillment rate in the prepared remarks. That's. very, very good. There have been a lot of public controversy, let's just say around one of your peers, around that fulfillment rate and some of the experiences consumers had. I guess, do you think a highly publicized event like this with some of that bad publicity can change the narrative in a bigger, faster way for you guys, as you guys highlight the value and user experience and fulfillment rate and everything else you guys provide? Or is it much of the same that everyone kind of forgets about it shortly after the event happens?.

Thanks, Ryan. It's a great question. The bet we are making is that in this world of increased communication transparency, word of mouth, social media connectivity, that it will spread, right? Your good deeds will become known and people have positive experiences. They will tell their friends, they will recommend accordingly, especially if you're stacking good experiences. Oh, I got, not only got the better experience and got taken care of when something went wrong, but I also did that while getting a better price. Okay. Hopefully that spreads. I think it would be a fair observation and statement that across the history of this industry, there have been components that have viewed it as a bit more transactional. And that makes some logical sense. It's a lower frequency category and the feedback is not nearly as immediate.

If you have a bad experience ordering for food delivery, three days later when you're ordering your next meal, you're going to see it in the numbers. In our instance, It can oftentimes be six, nine, 12 months later. And you already have a number of folks who just structurally are not repeating. And so it can be tougher to, in the near term, get your head around making that proper investment. But that's the bet we're making, and it is not the bet everyone's making. And so if we'll only time will tell, but we believe it's the right thing to do and that over time it will prove to be the economically right thing to do.

Maybe transitioning that, you have some product enhancements in the roadmap. maybe talk through what you guys accomplished in Q2, what's coming to the back half of the year, or maybe into 2027?.

Yes, we talked about our core transaction funnel. And so when I say core transaction funnel, what I'm referring to is. Not someone who is coming to browse or explore, discover what event they want to attend, but someone who knows what they want to see. And the journey is arriving at the site, finding the show they want to see, and then having a journey that delivers the best seat for them at the best value relative to their preferences with no unnecessary friction in the process. No unnecessary friction while buying. No unnecessary friction while receiving the ticket and attending. So that's been the first focus is bringing through with as little friction as possible. You'll see changes on both our web and app properties.

I think app's a little bit ahead of some of the web improvements, but If you think about what are sources of friction? Well, unnecessary text on pages would be sources of friction. Unnecessary clicks, multiple steps. God forbid you click a button and it doesn't take you to the right place. A bunch of cleanup across those dimensions later in the buying process has been where we started. Where we get very excited heading into the second half of the year is the upper funnel journey, as you're actually identifying the seat that you want to choose, where there's multiple dimensions. We all know price is part of it, the view is part of it, the relative value is part of it, amenities and other features are a part of it. How can we better surface the requisite information to give customer the ultimate confidence that they're making the right purchase. And if you can do that effectively and efficiently, I think you'll see an uplift in conversion.

And then on the app side, it's really about how do you create reasons to stick around and come back. So we've been rolling out some upgraded options onboarding, so the first time you download the app, how do we have a better welcome experience? And then how do we create a future with many reasons to return and an ongoing engagement? It doesn't need to be daily, but, you know, if once a month you have a reason to pop in and see what Vivid Seats is offering, what perks they're giving, that's the... the maintenance of the relationship that when you are ready to buy you'll come back and give us a consideration and we have confidence that if you if you give us a shot By coming to the app, we'll deliver more times than not that we have a better offering than what's out there in the market. Good stuff. Thanks, Larry. Good luck, guys. Thanks.

Thank you. One moment for our next question. Our next question comes from Ralph Shackart from William Blair. Your line is now open.

Good morning. Thanks for taking the question. Larry, just maybe kind of piggyback on your last response there on the app. Can you maybe talk about the growth that you saw in app traffic in the quarter and just maybe more broadly remind us sort of of the strategies you have there to encourage more app traffic, maybe just an update you saw in Q2, and just kind of your thoughts going forward to just continue to drive more traffic to the app. Thank you.

Yes, thanks, Ralph. So we want to make sure people are aware that our app value proposition, we believe, is best in class. We will generally, if not always, have lower prices available in the app than on the website. Communicating that and building awareness. It's easy to say it, harder to build ubiquitous awareness. But as folks download the app, typically as part of the fulfillment journey. You've bought tickets to an event, to attend the event, you will need instructions on where to get your tickets. You'll often have questions on logistics the day of. Having the app be a clear repository of information that helps you through that fulfillment process.

And then while you're going to your prior event, start to plant seeds for why the app is the right destination for your future event. Because not just because it's better for us, but because it's better for you as a customer. a better value proposition, ability to engage, the ability to share information that will enable better personalization moving forward. So that's been the whole exercise. How do you create a... awareness building welcoming funnel so that folks know that their next journey starting on the app will lead to their optimal outcome. You know, we started that initiative Q3 of last year, we've continued to see compelling metrics across the board since we've rolled that initiative out. We've continued to see our app volume growth outpace the broader market, and we've continued We are about to start lapping those changes, and so the bar is going up as we move into this Q3, but we've continued to innovate and push out new upgrades, optimizations. If our bet is right, over time, have folks who had a good experience in Q3 of last year, Q4 of last year, Q1 of this year who are coming upon their next buying cycle and we should see more sessions and more orders coming through the app if we've delivered a quality experience.

Okay, great. Thanks, Larry. Thank you. One moment for our next question. Our next question comes from Brad Erickson from RBC. Your line is now open. Hi, this is Audrey Stewart on for Brad.

Your new private label partner ramped better than expected in Q1. Can you provide an update on kind of Q2 performance for this partner? walk us through what gives you confidence in this relationship and that your rebuilt onboarding stack will enable you to kind of add more partners from this pipeline in the near term. Thanks. Yes, thanks. We continue to see that partner.

outperform the expectations we had when they launched. And I think it's important to note that These weren't necessarily expectations that were just imagined with a new entrant to the space. This was a competitive win. a partner who had a volume baseline that our platform has been able to drive the material uplift against, which I think is a testament to the... both absolute and relative efficacy of our private label offering. We've continued to push a bunch of incremental upgrades throughout the year. There's more coming in the second half. A lot of them do center around how do you, as quickly as possible, bring someone online and give them the tools, features, and capabilities at their choice so they can create a bespoke experience relative to the journey they want to offer their customers. We have heard pretty notable shift in our customers view of not only the the pacing of our delivery, but the predictability of it and what that allows them to do in terms of planning on their side.

And so if step one is help your current customers business thrive and if you're doing that well, eventually that means you'll be offering a compelling opportunity for the next wave of folks, all of those leading indicators are flashing positively. So we're pretty excited about having the opportunity to build a pipeline, execute against it in an automated way, and the underlying data and private label is encouraging. Last thing I'd say, I think we've touched on the large private label customer loss that happened at the end of July last year. So as we sit here today, we have now lapped that customer loss. and are excited to see private label return from a substantial headwind into a growth driver moving forward.

Okay, great. Thank you. Thank you. One moment for our next question. Our next question comes from Thomas Fort from Maximin Group. Your line is now open.

Great. Thanks. So, Larry and Joe, congrats on the quarter. I have one question, one follow-up. I'll go one at a time. So, Larry, lots of great questions and comments in the World Cup. I have another. The World Cup was a great example of the universal appeal of live sports and fans' passion for their teams. The Tartan Army, in particular, was epic.

Can you provide your current thoughts on your international expansion efforts? Yes, thanks, Tom. It was a very fun event. Lots of fun. Great memorable moments. Mine was the Viking Row. I got a kick out of that. On the international front, we continue to see a lot of reasons to believe that the international opportunity is... getting bigger, will continue to get bigger, and that it's untapped potential on our side. We started our journey a couple years ago now. I think we paused some of the investment as we ended up entered or ended last year, entered this year to make sure that, um, you know, we focused sufficiently and a lot of the upgraded core transaction funnel optimizations that we're doing for our North American business will directly benefit the international business.

I think we are approaching a point in our product roadmap and the enhancement of our core transaction funnel. Probably by the end of this year, we'll be able to return to pushing out targeted international upgrades specific to those markets, which I think we're of the belief will re-accelerate growth in international. But sitting here today, it's been a good journey where we built a lot of GOV, we're contribution margin positive, well ahead of schedule. We continue to see that margin grow. We've had some nice events this year with World Cup, Celine Dion. So it continues to be an exciting opportunity and a vector that we're looking to deliver more against as we head into 27.

Excellent. All right, so my follow-up's more boring. I apologize. But can you give us your current thoughts on cash conversion for 26?.

I think it remains pretty consistent with the framework and the results are coming in accordingly. You know, if you look at our CapEx, interest expense, and taxes. Maybe interest expense has ticked up a little bit with rate expectations. offset by our CapEx coming in a little bit lighter than it had been running as a result of some of our efficiency initiatives. You sum those up and it ends up in that kind of high 30s to 40 million range. such that you need that level of EBITDA assuming flat GOV and then working capital growth or contraction linked to GOV growth or contraction will be the ultimate determinant. As we head into the back half, we've touched on our continued focus on returning to growth, which would put working capital as a source of cash So, on a recurring fundamental basis, the expectation would be if we deliver that GOV growth with the EBITDA guidance that we're putting forward, that this would be a cash generative year.

Thank you, Larry. Thank you. One moment for our next question. Our next question is from Stephen McDermott from Bank of America. Your line is now open.

Hi Larry, hi Joe, thank you for taking my questions. So World Cup and sports are getting a lot of focus this quarter, but if you look at the other verticals, it looked like concert improved, theater stayed somewhat soft. I was wondering if you could just provide some color on some of the dynamics you're seeing in the other verticals. Thank you. Thank you.

Yes, two dimensions. I'd say overall industry volumes in Q2 outside of where World Cup were softer. I think there's room for speculation. Is that because there is softness or is that because the World Cup s***** some of the oxygen out of the room? you can generally subscribe to the latter if you are Making plans and spending a significant amount of money to attend a World Cup game, it will come at the expense of some other event that you might have otherwise attended. We will see in Q3 and Q4 as we embark on the balance of the event calendar, things have been relatively quiet, a little bit softer post-World Cup. but the jury I think is still out on the back half of the year and in particular the, the fourth quarter on sale calendar, which will determine our ultimate levels as we finish this year and head into next. The second dimension against, you know, just the aggregate industry volume is competitive intensity. We have continued to see what I would describe as increasing competitive intensity in the fear category in particular. which is interesting, especially given the nature of the competition in that slice. That's part of what you're seeing in the theater results. the other part of the theater results, that's where a lot of our Vegas performance appears, because Vegas is a theater-heavy market.

And we have continued, I think if you follow the gambling operators in Vegas, you're seeing a number of folks talk about leisure travel being soft, continuing to be soft in Vegas this year. And in particular, the lower end consumer within the leisure market. overall Vegas stability you're seeing has been propped up by the high end and the conference attendees. So you are seeing some of that Vegas weakness come through that theater result.

Got you, that helps. Thank you. And then just for AOVs, I know the World Cup certainly helped AOVs in Q2. As we think about Q3, the World Cup obviously bleeds into July a little bit. So how are you thinking about AOV's... within this quarter or more broadly the back half of the year. That's it. Thank you.

It's a difficult metric to predict. I think your question highlighted why it's so difficult to predict when you have a large high profile event like the World Cup, I think it is reasonable to assume that even with only 19 days of it in the third quarter, it will have a positive effect and I would be surprised if AOV is not up year over year in Q3. When you look forward to Q4, pretty speculative, especially in Q4 where you have a lot of new concert on sales i don't have insight into who those will be but depending on that roster i think you have a fairly broad range of outcomes The other one I'd point to is World Series matchups, right? You have a bunch of that volume in October. If you have Dodgers-Yankees, it's a wonderful tailwind. If you have Royals-Brewers, not so much. And so predicting that, a lot of speculation. So we generally are of the view that AOVs over the long term are going to increase at inflation plus a couple hundred basis points over time.

But predicting any single year or any single quarter is a...

path filled with landmines. Thank you, I appreciate the color.

Thank you. One moment for our next question. Our next question comes from Maria Ripps at Cancord. Your line is now open. Hi, Maria. Would you like to ask a question? Thank you. This concludes the question and answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good morning, and welcome to Vivid Seats' First Quarter 2026 Earnings Conference Call. Following management's prepared remarks, we will open the call for Q&A.

I would now like to turn the call over to Austin Arnett.

Good morning, and welcome to Vivid Seats' First Quarter 2026 Earnings Call. I'm Austin Arnett, Vivid Seats' General Counsel. I'm joined today by Larry Fey, Chief Executive Officer; and Joe Thomas, Chief Financial Officer.

By now, everyone should have access to our earnings press release, which was issued earlier this morning. The release as well as supplemental earnings slides are available on our Investor Relations website at investors.vividseats.com.

Today's call will include forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our projections, including the risks discussed in our earnings release, our most recent annual report on Form 10-K and our subsequent filings with the SEC.

Today's call will also include references to adjusted EBITDA, a non-GAAP financial measure that provides useful information to our investors. To the extent reasonably available, a reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure can be found in our earnings release and supplemental earnings slides.

And now I'll turn the call over to Larry.

Good morning, everyone, and thank you for joining us today. We entered fiscal year 2026 with a clear focus and road map to enhance our market position and financial trajectory. With that focus, we delivered measurable progress in the first quarter, resulting in meaningful improvements across our business.

Our first quarter results came in at the high end or above guidance. On a sequential basis, we delivered growth in GOV, adjusted EBITDA and our cash balance relative to Q4 2025. This momentum and sequential improvement support our confidence in returning to year-over-year growth in the second half of fiscal year 2026 and beyond.

Our long-term strategy centers around Vivid Seats foundational strengths, leading technology and product innovation, operational excellence and a differentiated value proposition for our customers and partners. Pairing a seamless user experience with a differentiated value proposition is central to our mission. Vivid Seats strives to be the most rewarding ticketing company, and we are increasingly aligning our product, pricing and messaging around that core idea. We deliver value through competitive pricing, seamless user experiences and meaningful rewards that deepen customer loyalty over time.

We are currently focusing our product innovation efforts on the core customer journey. We are improving funnel efficiency, enhancing conversion and delivering a faster, more intuitive experience. We recently deployed an upgraded app checkout experience, delivering a streamlined flow to accelerate the customer journey while improving conversion rates. We are encouraged by the early results and are excited about the pipeline of enhancements to both our app and web properties that will be deployed in Q2 and Q3.

Our enhanced app value proposition continues to deliver encouraging results. In Q1 2026, Vivid Seats app GOV was up 20% year-over-year. This growth led to Vivid Seats app share of GOV exceeding 40% for the quarter. Increasing app adoption reflects the combined impact of the Vivid Seats Reward program, our lowest price guarantee and continued product improvements. Together, these investments represent a highly differentiated value proposition.

App users are more engaged, return more frequently, convert at higher rates and touch paid performance marketing channels less often. As volume shifts into the app over time, we anticipate more efficient customer acquisition alongside enhanced customer retention and growing lifetime value. Alongside our app progress, we are continuing to invest in innovation across customer acquisition by working closely with leading AI platforms. This includes our recently launched ads on ChatGPT. While still in the early stages, we believe these efforts will help us capitalize on the long-term opportunities AI presents within the ticketing ecosystem.

In tandem with the encouraging trends we are seeing with Vivid Seats branded properties, we were pleased to launch a significant new private label partner during Q1 with performance already exceeding our expectations. We also recently extended our agreement with a large existing private label customer, underscoring the value proposition we deliver to our private label partners. We are pleased to see the private label business deliver sequential revenue growth in Q1 2026 and believe this trend supports our expectation of a return to growth in the second half of the year.

With that, I'll turn it over to Joe to walk through our first quarter financial results in more detail.

Thank you, Larry, and good morning, everyone. As Larry mentioned, our first quarter performance landed at or above the top end of our guidance, underscoring strong execution across the business. We achieved meaningful sequential increases in GOV and adjusted EBITDA compared to Q4 2025. This improvement is encouraging as we pursue a return to growth in fiscal year 2026 and beyond.

Q1 2026 Marketplace GOV was $612 million compared to $581 million in Q4 2025, reflecting quarter-to-quarter growth of $31 million or 5.5%. This is particularly encouraging as the fourth quarter typically represents the highest GOV quarter each year due in part to robust sports volumes with all major leagues in the season.

Q1 2026 consolidated revenue was $126 million, essentially flat with $127 million in Q4 2025. Within consolidated revenue, private label revenue grew 20% quarter-to-quarter, highlighting a meaningful growth trend in the channel despite continued year-over-year private label declines as we lap the 2025 loss of a large customer as previously disclosed. Marketplace take rate was 15.9% in Q1 2026 compared to 16.8% in Q4 2025. The lower take rate primarily reflects mix shift as private label revenue tends to come with lower take rates. We continue to expect near-term take rates to remain around 16% on a consolidated basis.

Q1 2026 adjusted EBITDA was $9.5 million compared to $1 million in Q4 2025. Adjusted EBITDA grew $8.5 million, marking substantial improvement on a sequential basis and highlighting the benefit of a material reduction in operating costs relative to a growing GOV and revenue base. Cash increased over $40 million in the first quarter to $144 million. Cash flow benefited from improved profitability alongside seasonally strong working capital dynamics.

Our first quarter results show significant progress across our operational and financial goals. Accordingly, we are reaffirming our 2026 outlook. For fiscal year 2026, we continue to expect marketplace GOV in the range of $2.2 billion to $2.6 billion and adjusted EBITDA in the range of $30 million to $40 million. This outlook reflects continued execution of our operating plan and financial profile.

I will now turn the call back to Larry for closing remarks.

Our first quarter results indicate our strategy is working, and we are moving in the right direction. We are excited about our momentum in the Vivid Seats app, where improving conversion and increasing engagement are supporting double-digit GOV growth. We are also encouraged by the sequential trends in our private label business as we seek to return to year-over-year growth later in the year.

As we move through the year, we are confident that our core strengths, leading technology and data, operational excellence and a differentiated customer value proposition will shine through. We are excited to continue executing against our strategy and to deliver long-term value to all stakeholders.

With that, operator, please open the call for questions.

[Operator Instructions] Your first question comes from the line of Cameron Mansson-Perrone with Morgan Stanley.

Larry, last quarter, you highlighted that you're seeing some encouraging trends in terms of the competitive environment kind of rationalizing. Wondering if you're continuing to see that and whether there's any event category where you're seeing more or less industry competition for activity and whether competitive intensity from an event-specific angle is -- whether the rate of change is better or worse in any specific category? I appreciate it.

Yes. Thanks, Cameron. I think the moderation that we saw started in Q4 from StubHub on the paid search side has continued. That's been somewhat counterbalanced by continued aggressiveness in that channel by some other players. But no question, they've stepped back from their peak spend that we saw early middle of 2025.

On the marketing spend side, I think perhaps a little surprising to us in the last few weeks, we've seen them shift to some price testing, price competitiveness. And so we continue to see, particularly in sports across the ecosystem, competitiveness across pricing, while the marketing landscape seems to have really stabilized and moderated a bit.

Got it. Anything to follow-up on that, anything that you could add on. I think the benefits on the push to kind of drive activity in-app probably makes you a little bit more insulated in terms of the vagaries of competitive intensity in the industry. Any additional color on kind of how you think about that and what the opportunity could be as more activity shifts to in-app?

Yes. I think that's exactly right in terms of the goal and the strategy. We're happy to have exceeded 40%. I think implicitly though, at 40%, we still have exposure to the wins of paid search and marketing expense. But the objective is very much to control our own future, bring folks into the ecosystem once and then have it more about building a long-term relationship with those customers versus continually needing to go back into the pond and acquire folks. But we do benefit when things moderate, right, given the remaining piece of the business that's still out there. So we're pleased to see that. But the surface area of that exposure has shrunk quite a bit relative to what it was 2 years ago.

Your next question comes from the line of Ryan Sigdahl with Craig-Hallum.

Larry, Joe, nice job on the sequential improvements and stabilization. I want to start on industry volume and curious what you guys saw in Q1 and then Q2 quarter-to-date, acknowledging I know April was a very tough comp, but just curious to try and compare your results relative to the industry and what you saw there.

Yes. In Q1, the data we're seeing was -- industry was probably up a smidge, so low single-digits, started pretty nice in January and then it moderated a bit into February and March. So net growth, but single-digits. And then Q2 thus far, I'd say, is roughly flat, got off to a slower start with Easter timing, but April picked up with a couple of meaningful concert on sales in the last 2 weeks. So we're back to roughly flattish.

I think at the moment, generally continue to subscribe to what we had put forward at the outset of the year of modest industry growth. I think we've all seen the increase in some cancellations of certain tours over the last few weeks. I think most recent was The Pussycat Dolls, we also saw Zayn Malik, a couple of others Post Malone delayed, which I think on some level is reflecting either mispricing or some cap on potential for growth for the year.

Then just on market share, how that looked for you guys looking at SkyBox data on a sequential basis for the marketplace? And then secondly, on the market share, what you guys are seeing from SkyBox from your ERP customers?

Yes. So our share has been sequentially steady in our data when we look at Q4 into Q1 into Q2. As we've started to lap our most difficult comps last year, which started around now with the, call it, peak spending in the performance marketing channels, we've seen in our data, our share shift to being up year-over-year, not dramatically, but up, which is refreshing. And as you probably heard our theme throughout the call, I think we're well situated to return to growth in the back half of the year, and those are the types of metrics that you love to see flipping green in advance of that.

Great. Then maybe just on SkyBox too, if you're willing to comment specifically to the ERP customer market share?

Yes. There continues to be competition for those customers, but we have not seen any meaningful defections in recent months. So we're vigilant. We're continuing to reinvest and refocus on upgrading the platform to defend those relationships. But we've seen alongside our stabilizing and improving share in volumes, improvement in that dialogue and discourse with all of our sellers. So excited about the outlook on the SkyBox front.

Your next question comes from the line of Ralph Schackart with William Blair.

Two, if I could. Just first on the macro environment and sort of the reads on the consumer now that we have some elevated oil prices. Larry had said that maybe there's some cap on prices. I'm not sure if those are related, but just any comments as it relates to that? And then I have a follow-up.

Yes. We -- there's nothing we could point to in terms of the kink in the curve where the Iran conflict started, oil prices moved and you can see a discernible shift in demand or purchasing in any clear way. As we touched on earlier, with some of the concert tours being canceled, perhaps that's a reflection of at least some subset of the market being tapped out. It also may just be part of the natural oscillation of some artists misprice the tours, which is, I think, the leaning at the moment.

We have seen some weakness. The lower end of the Vegas market has probably been the most palpable place where we've seen the impact of potential consumer weakness. I think that's a comment I've really seen a number of the local operators reinforce, and we have continued to see that continue into the year. So in Vegas, we're really looking ahead to 2027 when supply tailwinds arrive with the reopening of the Mirage. But I think for this year, it's going to be more of a blocking and tackling type year in Vegas.

Okay. Great. And just maybe kind of switching gears to the app and some of the improvements you talked about in conversion rates. I think you said you're above 40% traffic now on the app. Maybe just kind of a sense how that's trended over the last year or so? And just any thoughts on where you think that you could take that rate over time?

Yes. We've seen really nice increases in the share of GOV coming through the app. And ultimately, the GOV function is how do you get more people into the app and how do you drive higher conversion. So our activities are centered on both of those. A lot of effort in the back half of last year on how do we make folks who see the app want to download and keep it through better messaging, the better value proposition, reinforcing the value proposition. The focus this year has shifted to the conversion side of things, how do you optimize the product experience? How do you collect more data to have better personalized information appear in front of folks, have a pretty exciting deployment calendar over Q2 and Q3 on the app side of things.

So we're north of 40% in Q1. I think the ambition is for a majority of the business to come through the app. I think realistic timetable for that would be at some point in 2027 to achieve that on a run rate basis, but that's what we're aspiring to deliver.

Your next question comes from the line of Brad Erickson with RBC Capital Markets.

So in terms of the return to growth, you pointed to, I think, the new private label partner giving you some added confidence there for the second half. Can you remind us any other items that could go -- kind of go right this year that gets you back to that growth in the second half of the year or at a high end of the guide type scenario? What would those drivers be?

Yes. I think as we frame why second half is where we draw the line for when we expect to flip back to growth. We lost the large private label customer in July of last year. So July and really August will be the first true clean month without that customer in there. Subsequent to losing that customer, as we noted, we brought a new meaningful private label customer on in Q1, which enabled sequential growth from Q4. I think within private label, the path to incremental upside is twofold. There's always the option of winning and bringing additional customers on. There's an interesting stick or 2 in the fire on that front.

And then the other piece that we've redoubled efforts is how do we make sure our product and our support of our partners to maximize their organic performance is where it needs to be, and we're seeing encouraging progress on that front as well. With one of the big changes being any product enhancement that we are developing for the Vivid Seats marketplace, we want to make sure we make it configurable and available to our partners in short order. And some of the upgrades that get us excited on the Vivid side that they get pushed to our private label platform, I think provide an opportunity for organic outperformance in the second half of this year, but probably more prominent as you think about growth into 2027 and full year impact.

Beyond that, I think the concert calendar and supply slate is largely baked at this point. So upside from here, I think, will largely be driven by fundamental performance, right? So can these new product releases that we have upcoming in Q2 and Q3 deliver the type of conversion uplift that we anticipate or event mix. And I think the World Cup is probably the elephant in the room. If you get some great matchups in the quarter finals, semifinals, finals and you have a series of Super Bowl size events, that would be a wonderful tailwind. We'll see.

Got it. And then just bigger picture, as you continue to have conversations presumably with the LLM companies, I don't know, have you seen any indications or just any updates you can give us on how you're thinking about their desire, ability, et cetera, to potentially grab economics of bringing the booking kind of closer to the 4 walls of the LLM. And then just generally, when you think about the risks related to that, remind us like what do you point to as kind of the specific points of insulation where the ticketing sector can maintain all of its economics within kind of an LLM booking environment?

Yes. I'd say on the AI journey broadly, we've actually seen to date, quite little progress on the top of the funnel disruption and quite a bit of progress on optimizing the way we operate the business on our side. So not to say it can't change, but everything we've seen to date has been more in the camp of the tools and capabilities allow us to be much more efficient and effective on a series of parameters to deliver a better customer experience, whether that's building the software more quickly, automating processes, better information sharing. It really has been a nice tailwind on the operational side, including specifically our customer service experience.

If you look longer-term, nothing that we've seen indicates that the premise of like a fully captive transaction where the marketplace is boxed out is likely in the near-term or the focus of the LLMs in the near-term. I think the biggest barrier is this idea of when you have dynamic inventory in a deep vertical search category where you have a ton of individual preference. You need a lot of data. And they don't have -- the LLMs don't have that data across every subcategory that they service. So they're ultimately reliant on the folks like Vivid Seats or our competitors who have aggregated the inventory, have built the seat maps, have the dynamic real-time pricing.

And so unless we compile all that information and provide to them, they won't have it. And then it's incumbent on us in the industry to make sure that we don't just give away the farm without being properly compensated. But that, I think, is at least what we're seeing today. That's a multiyear journey and not one we're seeing progress being made on the LLM front at the moment.

Your next question comes from the line of Steven McDermott with Bank of America.

I was wondering if we could shift a little bit to your partnership with United, kind of any updates there? And is that really driving any incrementality that you're seeing? And then I have a follow-up after.

Yes. United is a great example of one of the, call it, many partnerships and partners we have across the ecosystem. It's been a nice tailwind throughout the year. It's not an explicit needle mover of results. So it's been great to add them, excited to continue to grow the partnership and iterate on how to maximize it, but I would not consider that a primary influence on the results that you're seeing in Q1.

Got you. And then as we look at your cost position after your recent reductions, do you feel as though you're kind of in a comfortable position to return to growth? And to that, can we expect a more aggressive OpEx spend in the second half of this year?

Yes. I think the cost side of the equation continues to be a bright spot. I think first and foremost, the cost reductions that we've actioned are flowing through. So they are real. Second, we have not seen any loss in productivity or capability. And in fact, I think I've actually seen our productivity and deployment rates increase alongside the efficiency gains, and that's one part optimizing and getting the right people in the right seats and one part utilizing some of these AI capabilities I was alluding to earlier.

So as we sit here today, our objective is operating leverage. So as we grow, disproportionate amount of that growth flows through to the bottom line. And I think we have more opportunity to capture on the expense side as we move into next year. So there are some variable costs, right, as you complete transactions, even including in our G&A line, right, some software that's per dip and that type of thing. But I think our objective is even as we return to growth, our expenses remain steady on the G&A side.

Your next question comes from the line of Thomas Forte with Maxim Group.

Great. So first off, Larry and Joe, congrats on the quarter. Larry, sorry about the Illini and at least OKC is playing the Lakers in this round. My first question is more exciting. My second question is a little boring. On the more exciting front, what gives you confidence you can maintain your share and capitalize on World Cup this year? And if you're able to do that, how might World Cup contribute to your numbers this year?

Yes. I think World Cup has been a pretty meaningful tailwind. I think broadly consistent with what we've touched on in prior quarters where we framed the opportunity as something larger than an A-List concert tour, but perhaps less than Taylor Swift. What we've seen in terms of volume flowing through to date, the World Cup first went on sale in November. So we've been selling for 6, 7 months now with a couple of months to go as we approach the start of the games. It's tracking to those levels, right?

So if a typical A-List tour is 1% of GOV for the year, Taylor Swift, more like high single-digits, it looks like overall, the event will be low to mid-single digits as a percentage of full year GOV. So we've had really nice performance and strength to date. These are high AOS events. And what we've generally found is that value proposition matters quite a bit when you're talking about these high AOS events. And so incumbent on us to continue to get the message out that our app is the place to purchase these high AOS tickets. And if we're able to continue doing that, I think we'll get our fair share a little bit better as we enter the playing phase of the tournament.

Great. And then for my boring one, now that we're a quarter in, do you want to give your updated thoughts on cash conversion for adjusted EBITDA for '26?

Yes. I think largely consistent where if anything, our CapEx is maybe coming in a little bit lower than we had previously estimated. But directionally, net interest expense in the $20-ish million range, CapEx, cap software in the low to mid-teens and then a smidge of taxes relating to our international operations. So if you get to EBITDA in the $35 million to $40 million range, you'll be cash flow positive before considering working capital. And as we have outlined, we feel pretty good about our volume trajectory and that overall working capital will be a source of cash on balance over the course of the year. And so believe that we're tracking, assuming we continue to deliver against the numbers and guidance for a cash flow positive year.

Your next question comes from the line of Kunal Madhukar with DB.

A couple, if I could. One, on the app side, I wanted to understand how the app user demographics differs from the regular customers that you have on the website in terms of maybe age, in terms of their interest, in terms of engagement, in terms of geography, in terms of the type of tickets, concert versus sports that they are buying? And then I have a follow-up.

Yes. I think the biggest delineation between app and web users tends to be that the most frequent live event attendees, those who repeat most often are the ones intuitively, who would download an app for buying live event tickets. And that generally corresponds to the categories that have the highest recurrence, which would be sports, right? The highest recurrence example would be Major League Baseball, right? There's 81 home games. If you go to baseball game a year, there's a decent chance you'll consider going to 2 or 3.

In contrast, Taylor Swift goes on tour once every 5 or 6 years. So the fact that you bought a Taylor Swift ticket might mean that you're interested in buying a Sabrina Carpenter ticket. But the fact that you bought a Cubs ticket means you're really likely to be interested in buying another Cubs ticket. So the biggest element that we see across the app is folks repeat more often, right? So if you buy on our app, the prospect for you buying again is higher.

The second is that you over-index to sports because of the inherent recurrence within sports. Beyond that, there is not a lot to flag across our geography or demographics that I would say is of note. It's really more the frequency profile with a bit more sports orientation.

Got it. And then when I was doing basic back of the envelope math, given app grew 20% and is now over 40% of the overall GOV, that suggests that the non-app GOV probably declined about 40%. And then you mentioned that we should expect that by 2027, app GOV on a run rate basis should be a majority of the business. So what kind of growth rate should we expect on the app side versus the non-app side for the remainder of the year?

Yes. First, definitionally, when we reference app GOV, that's of our Vivid Seats properties. So we're not speaking across the entire GOV footprint of the business, namely Vegas and Wavedash and our private label would not be part of that definition. So I would tweak the math a bit. I don't think we're in the business of forecasting or projecting by device type explicitly. But I think implicitly, we're expecting the business to grow, app to grow disproportionately.

As we start lapping some of the most competitively intensive periods, I think we expect that we can get web back to growth. But whenever you're looking at these aggregate GOV numbers, you just have to fully decompose it, right? You have to pull private label out. We lose private label partner that is different than competitiveness in the web, competitive landscape lens us versus StubHub versus SeatGeek. So yes, it's an implicitly true statement that app was up and other parts of the business were down, but decomposing is pretty important.

Your next question comes from the line of Andrew Marok with Raymond James.

One, with this quarter's results coming in nicely and the reiteration of the guide, is the business just kind of becoming a bit more visible in your view? Are you able to maybe have a little bit more forecasting confidence than you have had in the past? And then I have a follow-up.

Yes. Thanks, Andrew. I think I would agree with the statement overall. Certainly, as we move through a year, right, as we get to Q4 where the concert on sale calendar solidifies and crystallizes it through the back half of Q4, first half of Q1, we sit here with a pretty good sense of what the supply side of the calendar will look like. I think the fact that we've really tightened up our expense base lowers the bar, if you will, which helps mute impact. And then the last piece is we've reduced the surface area and exposure to paid search.

It's still present, but we've reduced it. I think that helps diminish volatility from things that are exogenous, namely competitive or competitor posture. So there will still be variance, right? Event mix is still a real thing, right? If we have great World Cup matchups or bad World Cup matchups, long series, short series, more concert cancellations, right? Those are all exogenous and can introduce volatility. Competitor behavior, competitor posture can still introduce some volatility. But in terms of the controllables, I think we've dialed them in quite a bit and feel better about putting outlooks in place.

Appreciate that. And then maybe as it relates to the app business, I think you mentioned this a little bit in your prepared remarks, but I just kind of want to ask it directly. There's kind of this meme out there for older people, especially where big purchases are done on the desktop, right, like ticketing, hotel bookings, flights, et cetera. How do you sort of combat that to drive app growth? Is it purely demographic? Or are there kind of nudges that you can give your consumers to get them to buy on the app?

Yes. Thanks, Andrew. It's a great question because I guess this probably reveals where I sit on the age bucket. But I will do that as well, right? When you're in discovery mode, you want to be able to either consider a bunch of different events or a bunch of different seating areas. Sometimes I'll actually do some searching on the bigger screen. But I think the objective we have is to make sure folks know that there's a better value proposition available in the app.

And so if you want to transact on desktop, that's great. And we're going to deliver the optimal experience for that. But if you also wanted to discover on desktop and then download the app, properly messaging that the lowest price guarantee and typically our lowest prices will be available in the app. Increasingly, we're going to have our rewards program prominently appear in the app and less so on web. So there will be material inducement to transact in the app, but we, of course, want to support people wherever their workflow wants them to transact.

Your last question comes from the line of Maria Ripps with Canaccord.

First, I just wanted to follow-up on your private label business. So you mentioned a new customer addition there, which is encouraging. But how should we think about that segment going forward beyond sort of returning to growth? Do you think sort of it can return to the run rate you had the business at about a year or 2 ago?

I think in absolute size, it's unlikely that we'll in the near-term, reclaim where we had been before the large customer loss. What I think we aspire to deliver is that the segment will grow at or above the broader marketplace and at or above industry rates. And so I think the 2 paths there would be enabling our existing customers to organically outpace the industry. And then what gets exciting is you have the option and the opportunity to add new customer wins on top of that organic growth.

And so we're seeing all of those signs pointing in the right direction where we can have both happening in parallel, which could lead to some nice sequential growth and starting in Q3 set us up for delivering sustained year-over-year growth. But from an absolute standpoint, I don't think returning to the pre-customer loss levels that we saw in 2024 or early 2025 is a near-term target that we think we can deliver.

Got it. That's helpful. And then just a quick follow-up. Can you maybe update us on your international strategy? And how important is it kind of on the list of your investment priorities at this point?

Yes. We continue to be encouraged by the international opportunity. I think we mentioned in our last call or 2 that we've achieved -- we're positive on the contribution margin standpoint in 2025. We grew GOV triple-digits in 2025. We've continued to see GOV grow into 2026. But in the spirit of focusing our efforts on the highest impact priorities, what we're focusing on are upgrades that benefit not only international, but also North America.

And so as you think about things like our checkout, irregardless of your location or your geography, that will benefit the business. So the near-term road map is really focused on that type of improvement. And then as we get through these universal upgrades that will benefit international, but also benefit North America. We do have an interesting road map of international upgrades queued up. It's just a matter of if we can get to it in the next quarter or the next couple of quarters.

Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Vivid Seats Fourth Quarter 2025 Earnings Webcast and Conference Call. [Operator Instructions]. I would now like to introduce your host for today's presentation, [ Mr. Austin Arnett ]. Sir, please begin.

Good morning, and welcome to the Vivid Seat's Fourth Quarter 2025 Earnings Call. I'm Austin Arnett, Vivid Seat's General Counsel. I'm joined today by Larry Fey, Chief Executive Officer; and Joe Thomas, Chief Financial Officer.

By now, everyone should have access to the earnings press release we issued earlier this morning. The release as well as supplemental earnings slides are available on our Investor Relations website at investors.vividseats.com. Today's call will include forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including those discussed in our earnings release, our annual report on Form 10-K and our other filings with the SEC.

Today's call will also include references to adjusted EBITDA and net debt, which are non-GAAP financial measures that provide useful information to investors. To the extent reasonably available, A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures can be found in our earnings release and supplemental earnings slides. And now I'll turn the call over to Larry.

Good morning, everyone, and thank you for joining us today. I'm excited to share what we are working on as we chart a refreshed course for Vivid Seats in 2026 and beyond. We believe we have the right team and the right strategy to drive innovation, thought leadership and profitable growth in the coming quarters and years. I'd like to begin with an update on our leadership team.

Austin Arnett who provided opening remarks for this call was named General Counsel in December. Austin previously led our corporate legal team after prior roles at Latham & Watkins and McDonald's. Austin steps into the GC role with extensive legal expertise and substantial familiarity with our business.

I'd also like to introduce Joe Thomas, our new Chief Financial Officer. Joe, who joined us in January is an accomplished executive with a strong track record of driving financial discipline through data-driven decisions while supporting long-term growth initiatives. I'm excited to join forces with both of them as we embark on this new chapter for Vivid Seats.

I'd also like to thank Ted Pikes, who served as our interim CFO during this transition. Ted's deep institutional knowledge and steady hand were critical during a pivotal period for the company. I'm grateful for his continued partnership as our Chief Accounting Officer. With our new team in place, we have refined our long-term strategy and have quickly begun executing against it. Our strategy builds and expands upon visits foundational strength, our leading technology our unique data, a relentless focus on efficiency and an increasingly compelling and differentiated value proposition to customers.

I will spend a few minutes touching on our efforts across each of these foundational elements. Starting with our technology and product, we are redoubling our focus on product innovation and efficiency and expect this to benefit our results as we move through 2026. Across both our web and app properties, we are bringing a renewed focus on our core customer funnel to ensure a seamless user experience. Beyond this foundational focus, we are continuing to innovate in an increasingly AI world.

In 2023, Vivid Seats became the first company in the live events industry to launch a live events plug-in for open AI's ChatGPT. That early partnership underscored our commitment to innovating at the intersection of technology and live entertainment. Building on that foundation, we recently introduced a dedicated Vivid Seats app within ChatGPT, further advancing our AI-driven shopping capabilities. This new app is designed to capture real-time consumer intent and transform event discovery by making it more personalized, intuitive and efficient while reinforcing our position as a leader, shaping the future of how fans discover and access live events.

This launch is an example of our continuous efforts to evolve our platform in a highly dynamic environment. Our path forward will combine innovation with a disciplined focus on efficiency. As previously announced, we significantly expanded our cost reduction program increasing our initial fixed cost savings target from $25 million to $60 million. We have now achieved our increased target of $60 million of annualized savings with reductions in spanning marketing, G&A and stock-based compensation. These savings position us to reinvest selectively in growth initiatives such as our enhanced app value proposition while improving our operating leverage as we return to growth.

We also executed our corporate simplification early in the fourth quarter, which included the termination of our tax receivable agreement and the collapse of our dual-class share structure. This meaningfully reduces complexity, improves transparency and generates both immediate and long-term financial benefits. Taken together, our cost reduction program and corporate simplification are creating a more efficient, agile organization that can invest strategically for growth, while maintaining financial discipline.

Moving to the compelling and differentiated value proposition we present to customers. Vivid Seats is the most rewarding ticket company. We are centering the Vivid Seats message and experience around that simple but powerful fact. No one rewards fans more than we do. We're sharpening our messaging to highlight how Vivid Seats delivers more value at every step of the journey from rewarding prices to a seamless, stress-free shopping experience to tangible rewards that deepen loyalty over time. By delivering the most rewarding experience in ticketing, we seek to build long-term relationships with our customers and our app ecosystem.

App users return more frequently, convert at higher rates and rely less on paid performance marketing channels. We believe the combination of our rewards program and our lowest price guarantee represents the most compelling value proposition in ticketing. We are seeing encouraging trends as we pursue this strategy. App GOV is up over 20% year-over-year through the first 2 months of 2026. Since launching our enhanced app value proposition during Q3 of last year, we have seen app share of GOV increase by more than 500 basis points.

We also remain confident that information transparency will only increase as AI continues to reshape how consumers discover and evaluate offerings across the Internet. We believe we are well positioned to benefit as AI-guided consumers increasingly gravitate towards platforms that are delivering the most value to consumers. While we are early in our execution journey, the trends we are seeing thus far in Q1 indicate we are making substantial progress and that our strategy is gaining traction.

Accordingly, we are reaffirming our 2026 outlook. We continue to expect marketplace GOV in the range of $2.2 billion to $2.6 billion and adjusted EBITDA in the range of $30 million to $40 million. In addition, we are providing Q1 2026 guidance of $570 million to $620 million of GOV, $8 million to $10 million of adjusted EBITDA and a cash balance of $125 million to $135 million. Turning to the fourth quarter. While our results were challenging, they were largely in line with what we anticipated as we work through a transitional period for the business. As we shared last quarter, a softer Q4 industry backdrop, private label declines and ongoing execution of our strategic realignment were expected to pressure results.

While these pressures played out as expected, we were encouraged by emerging momentum across our own properties. In particular, our app performance remained a bright spot, reflecting the impact of our ongoing product investments and enhanced value proposition. The trends we are seeing thus far in the first quarter confirm the actions taken by this new team are translating to tangible progress. These indicators reinforce our belief that the path forward we have put in place is the right one. and that the investments we are making will enable us to return to growth in the second half of 2026 and deliver sustainable, profitable growth for many years to come.

With that, I'll turn it over to Joe to walk through our fourth quarter financial results and outlook in more detail.

Thank you, Larry, and good morning, everyone. I'm excited to join Vivid Seats and help shape the company's next phase of growth. The business is a strong foundation and significant opportunity. I look forward to working closely with Larry and the leadership team to deliver long-term value.

Turning to the results. In Q4 2025, we generated $581 million of marketplace GOV compared with $994 million in the prior year period. Q4 2025 total marketplace orders were down 32% year-over-year with average order size down to $329 from $380 in Q4 2024. According to our SkyBox data, industry volumes were down double digits in Q4, primarily due to less content on sales and a difficult world series comparison, which pressured results when combined with the loss of a large private label customer that occurred in early Q3 2025. Q4 2025 revenues were $127 million, compared to prior year revenues of $200 million.

Our Q4 2025 marketplace take rate was 16.8%, up slightly from 16.6% in Q4 2024. We expect our near-term take rates to stay in the 16% range. Adjusted EBITDA for the quarter was $1 million, reflecting the impact of lower volume and negative operating leverage. Importantly, we achieved our annualized cost reduction target of $60 million during the quarter. While we saw a partial benefit from these efforts in Q4 2025, we anticipate full benefit starting in Q1 2026 and with a more agile cost structure, allowing for improved operating leverage moving forward. We ended the fourth quarter with $103 million of cash and $390 million of debt resulting in net debt of $287 million.

As a reminder, the fourth quarter brings seasonally lower working capital flow with that flood reduction accounting for a majority of our cash outflows in the quarter. Q1 2026 is seasonally stronger in terms of cash inflow, which supports our guidance for a cash balance range of $125 million to $135 million by the end of Q1 2026. We expect Q1 2026 marketplace GOV in the range of $570 million to $620 million. This GOV level is consistent with Q4 2025 and despite the fourth quarter traditionally being the strongest volume quarter of the year, which reflects sequential improvement in share.

We expect Q1 2026 adjusted EBITDA in the range of $8 million to $10 million. This represents a substantial improvement relative to Q4 2025 EBITDA and reflects consistent volumes, improved unit economics and the full impact of our cost reduction efforts. For fiscal year 2026, we continue to expect marketplace GOB in the range of $2.2 billion to $2.6 billion and adjusted EBITDA in the range of $30 million to $40 million. This outlook reflects an expectation of modest industry growth and continued competitive pressures, but also benefits from our cost reduction program and strategic investments and an enhanced customer value proposition. Back to you, Larry.

In closing, the positive trends we are seeing in the first quarter support our belief that we are now on the right path. We are seeing encouraging progress across numerous leading indicators. Pointing to a return to volumetric growth across the business outside of private label. We are particularly excited about the app trajectory and believe the combination of a return to growth, a streamlined cost structure and more efficient tax profile positions us to deliver growing profitability and cash flow as we execute our strategy.

We are confident that visits foundational advantages our leading technology, unique data, best-in-class efficiency and the differentiated customer value proposition remains. And with disciplined execution, will support our return to profitable growth. With that, operator, please open the call for questions.

[Operator Instructions]. Our first question or comment comes from the line of Ryan Sigdahl from Craig-Hallum Capital Group.

Welcome, Joe. Larry, I want to start, you've dealt with unfavorable competitive dynamics for the better part of 2 years now. We've heard from that may appear that they plan to focus more on customer acquisition efficiency in 2026, nice change, a fairly big change, I guess, in statement versus the user acquisition Blitz Creek, that they've been going under. I guess curious if you've seen any of that and then how you think about the competitive dynamics heading into 2026 or as we start and how you plan to balance your customer acquisition efficiency versus the value proposition, the app, direct traffic, et cetera, et cetera?

Yes. Thanks, Ryan. In terms of competitive landscape and competitive intensity, I think we have seen a degree of moderation, particularly as it relates to some of the peak intensity from StubHub in particular. I think others in the space continue to be pretty aggressive, and I think there continues to be a meaningful priority placed on GOV and volume across a number of our competitors relative to fundamental unit economics and profitability. But I think we continue to see that over time economics play out, financial realities ultimately win.

And so I think we will stay the course that we've been on for the last couple of years where -- there is certainly inherent tension between volume and profitability, but we're going to stay true to our unit economics. And in particular, the focus on the app ecosystem, the focus on the app value proposition is trying to enhance our lifetime value which enables you -- if you know you are keeping people in your ecosystem longer with a longer relationship with more repeat rates, you can still solve your unit economic question while being more aggressive on the customer acquisition front.

So we think we can try to accomplish both, right, stay true to our unit economic frameworks and enable ourselves to drive better volumetric performance as we continue to execute against that.

Very good. Then just you mentioned ChatGPT plug-in in '23. Your main competitor press released, I guess, a relationship and partnership with ChatGPT a few months ago. So I guess curious kind of how you fit with your competitive set within there. I think you also have perplexity that you didn't mention, but just talk broadly speaking about LLM if you're willing to quantify kind of the percentage of whether it's customers or GMV or anything there, that would be helpful.

Yes. AI, as you can imagine, top of mind an incredibly dynamic space. We haven't yet seen consumer behavior in our space reflects the height, right? It's still a pretty small percentage, very small percentage, probably 1% is the best estimate I would put out there for what we're seeing in terms of direct traffic through the AI channel today. That said, I think we are fundamentally of the belief that this is a one-way street where AI will have more, not less impact and that there are fundamental unlocks that AI can bring for the benefit of consumers in our space, the benefit of consumers across e-commerce with better information transparency.

And so we've been in a space where, for many years, being at the top of a search was critical to driving customer awareness and you could charge in many instances, premium pricing to facilitate that. So it hasn't changed yet, but we are making the bet that there will be evolution there where customers will be better able to surface differentiated value propositions over time, better able to research and compare. We do think there's still a place in ticketing where the seat you're in, the angle of your view, the size of the stadium there's a lot of deeply personal preferences.

So the desire to do detailed shopping, detailed comparisons in an app, we think will be a longer-term home for a lot of customers, but AI at the top of the funnel when people are researching their options, understanding the choices out there we think will be meaningfully disruptive over the coming quarters.

Our next question comment comes from the line of Cameron Mansson-Perrone from Morgan Stanley.

One follow-up on the industry trends. Just curious, there's a competitive dynamic, but then there's also been some potentially favorable dynamics happening as well. Wondering if you've seen any benefit or seen anything in the marketplace in conjunction with the changes that Ticketmaster has made around its resale platform and activity. And then as we look forward to 2026, wondering what -- how you guys are framing your thinking about the World Cup and any expectations around participating in that resale activity this summer.

Yes. Thanks, Cameron. On the industry front, Q4, not a great quarter. We saw it down double digits I think we mentioned tough MLP comp, but in particular, concert on sales were down dramatically year-over-year. Those on sales picked back up in Q1, whether that was just normal variation in timing or something reflective of some other planning or considerations on the Ticketmaster side, not clear to us. We haven't seen any meaningful impact beyond that in terms of Ticketmaster's overall posture level of aggressiveness in the space.

So I'd say those kind of rumored changes or adjustments not to a degree that we could say we've seen, felt or can measure, but we'll continue to keep an eye on it. for broader industry overall, the last time when we gave guidance, we had pointed to expectations of flat over the year. I think with the Q1 on sales, we continue to feel equally as good, if not a little bit better with World Cup volumes equally as good, if not a little bit better. So I think stable to slight growth in the industry is our new estimate.

And as we look at the World Cup, I think if you think of the benchmarks or the goalpost -- goalpost as a typical A-List tour would be 1% of GOV for the year. Taylor Swift be the other side of that, that's ever mid- to high single digits as a percentage of I think World Cup is an event will end up somewhere in between. Where in between will be, I think, dictated by do you have great matchups, does the U.S. play Mexico and the semifinals. So that would be a dream. But we think it will be substantial, a couple of hundred basis points of GOVs our best guess.

Our next question comment comes from the line of Dan Kurnos from Benchmark.

Great. Thanks. Good morning. Welcome, Joe. For -- I guess, Larry, just as we think about your customer acquisition strategy around app, I know we've talked about it a little bit, but I don't know if you want to take a second to kind of maybe flesh out obviously, without giving away any trade secrets, how you're thinking about driving incremental traffic beyond just pointing to the value prop? Like are you thinking about different marketing channels, you thinking about better more efficient ways to kind of get people to understand the message there? And then I have a follow-up for you.

Yes. I think the last thing you said, having people clearly understand the value prop is a critical threshold element where if we don't do that successfully, we have no reason to believe people will come back more often. We'll build a lifetime relationship. So we're mid-flight on it, but you should see continued improvements in the journey as an app customer. So your onboarding experience. How do we build that initial report if you make it feel like a win-win where you're providing us your information, and we're providing you something of value and return to kick off on the right foot.

Well-situated messaging to drive home not only the everyday pricing, but this idea of ongoing rewards, ongoing benefits for loyalty and repeat purchasers, such that if you are a customer who has intentions of going to multiple live events per year for presumably decades to come, you can get peace of mind that you've completed your research, right? You'll do the research and depth, you'll compare the pricing, you'll validate the claims and once that validation is complete, you can with peace of mind buy from us. I think the second dimension beyond making sure that once you arrive at the app, it's very clear what we're doing and why we are making claims about our value proposition.

We have a very large database of people who have purchased from us over the years. And so really thoughtfully targeting and messaging that database of folks continuing to use growing AI capabilities to have personalized messages that could resonate right message at the right time. I think that's the second major dimension. And then over time, I think we'll continue to explore complementary marketing channels that are outside of that core paid search funnel, right, whether it's social or other adjacencies. There continues to be an opportunity there, but it has been a relatively long-term play to build that awareness. And so that will be a steady as she goes element.

Got it. That's super helpful. And then I'll just ask if you care to opine on -- I know we've already had sort of the competitive question, but clearly, while you guys aren't in primary, we've had movement from DOJ and live now, and there's always knock-on effects to the competitors that are maybe hybrid or trying to get in there. Into that space, you guys have tested the waters in primary and small doses in the past.

Just curious if how you think about regulatory either from that perspective or the bulk seller stuff might just impact overall industry dynamics, consolidation, just anything that you would like to opine on how you think kind of the broader group adjusts to some of the regulatory stuff.

Yes. I mean, we've certainly been through the term sheet. I think devil in the details is probably the operative phrase here. So we'll wait for more to come out and probably premature for us to comment in too much depth given the lack of detail on some pretty important provisions in the term sheet. From everything we've seen, I can't see anything that would be deemed or even considered potentially adverse to our position in the marketplace. And at least from our position, I don't see a lot that will change anything meaningfully. But put the [indiscernible] for devil in the details, and we'll see if there's more to it.

Our next question comment comes from the line of Maria Ripps from Canaccord.

Welcome, Joe. First, I just wanted to follow up on your within. Can you maybe just talk about sort of the type of consumer that you're attracting within ChatGPT and sort of conversion rate? And then do you maintain sort of the customer profile or customer data after that initial engagement?

Yes. Thanks, Maria. I think the ChatGPT app is a good example of you need to play in traffic while this world situates itself. As it sits today, finding apps in the LOM journey requires someone who's looking for the app or you need to come in with a targeted search and seek out, whether it's ours or a competitor's app and that open up a different use case, but I don't think it's gone mainstream. I don't think most people have unlocked how to access apps within the LLM journey.

And so as a result, what you do see is folks who come through LLM and folks who come through that app convert at structurally higher rates. What is probably too early to tell. Is that because you have a selection bias or the folks who are doing that are the most intent thoughtful tech savvy users and thus you're just revealing that their intent versus tool is fundamentally changing their behavior journey. So we're looking at all the data with eager anticipation. But I don't think we have clear answers yet on that. separately to the broader question on customer personalization, the more interactions you have with someone, right, where you can see if they're logging in, in Chicago, and they're searching cubs tickets.

And then 6 months later, they search their tickets, you can start to create a profile of a Chicago-based sports fan and make sure that they see content aligned with those sports preferences and you perhaps deemphasize comedy shows, if they've never shown any interest and over time, figuring out ways to round out that profile, right? There's numerous sources that I think we're increasingly focused on capturing more customer information to create a more bespoke experience. And one of the exciting elements over the intermediate term that we think AI offers aside from the top of the funnel, as you ingest more of this customer information, how do you create a fundamentally better experience for your users. And at the core of that, I think is thoughtful personalization built around a growing dataset.

Got it. That's very helpful. And then can you maybe give us a little bit more color on what you're seeing on the supply side in concert sort of this year? And to what extent that's a factor for sort of improving trends and returning to growth in the second half of the year?

Yes. Yes. Pretty nice lineup of on sales that has come out in Q1. BTS was -- is probably the highest profile of those, but steady stream of meaningful artists coming out in January and February, Harry Styles, Noah Khan, et cetera, which was welcome because the Q4 lineup was underwhelming. When you sum up Q4 and Q1, and we've seen this before where timing moves a little bit between the quarters. It was a solid concert lineup. And so I think maybe consistent with what we've heard Auto Live Nation, where they continue to point to steady growth perhaps double digits for them across their global footprint, but still continued growth in North America on the lower end of that range. I think everything we've seen from the supply side continues to support that perspective. And we had a little bit of hesitation based on how Q4 industry trends were shaping up, and it's been refreshing to see Q1 strengthen from there.

Our next question comment comes from the line of Thomas Forte from Maxim Group.

So I also want to welcome Joe to the call. One question, one follow-up. Can you talk about your ability to capitalize record recurring sporting events that are not always held on an annual basis, including World Cup, Olympics and World Baseball Classic, in particular, when this type of event is in 1 of your geographies, how confident are you in your ability to get a similar share of GOV as in other sports, baseball, football, et cetera?

Yes. Thanks, Tom. Those intermittent sporting events. They're really interesting hybrid because as a general statement, if you were to look at sports versus our concert and theater customer journey, sports. If you're a Cubs fan, you're a Cub's fan, right? You're going to a Cub's game this year, you're probably going to Cub's next year, you'll probably go in the year after that. Same with baseball, football, pick your sport a preference. And so the proclivity for repeat is just higher on sports, whereas concerts are more episodic.

Even if you're a lifelong die hard Taylor Swift fan. She's in town once every 5 years, right? And maybe you're going to take it one time and you're not a town the next time so you see our once in a lifetime, right, once every 10 years. And the interest in Taylor Swift may or may not map to Sabrina Carpenter or Pop Star X. And so it's a different relationship, right? It's a bit more intermittent on all things concert comedy theater relative to that more continuous sports relationship.

And these intermittent events kind of straddle those. It's pretty hard to say like what on any individual customer basis, their soccer preferences or their World Cup preferences in particular, would be. And whatever we learn about them, it's probably not going to be that valuable going forward as what is going to be 30 years before we get the World Cup here again. But we can leverage folks who are MLSs are soccer fans and target those folks in a thoughtful way. But we actually see the nits of World Cup folks who it ends up being more new customers than you would see in a typical sports league because there is that intermittent element. But less so than concerts because you do have that stable base of sports fans who knows where they want to come and buy a ticket from.

And then for a follow-up, can you give your thoughts on cash conversion and free cash flow generation for full year '26?

Yes. I appreciate that question. So our major cash obligations or CapEx, interest expense and taxes. The sum of those, we think, will fall between $35 million and $40 million. And so a majority of that amount would be our net interest expense. Our CapEx and cap software we think will be in the $15-ish million range. And then post tax simplification, taxes will be quite a bit lower to low single-digit millions.

And thus, we need $35 million to $40 million of EBITDA before considering working capital to be cash flow neutral to generative. And then I think as we've demonstrated in spades this past few quarters, if you are growing GOV, working capital can be a source of cash, the inverse is also true. So as we project a return to growth, which we're feeling quite good about as we approach the second half of the year on a year-over-year basis and equally good earlier in the year on a sequential basis. Within working capital shift to being a source of cash and thus, we expect to be modestly but cash generative in 2026. Thank you.

Our next question comes from the line of Andrew Marok from Raymond James.

One on the comps. I know you called out a difficult world series. This year as a headwind. I guess as we're looking forward into the 2026 trajectory, how are the 2025 championships and maybe special events and sports playing out from a comp perspective as we look into the model?

Yes. Great question, Andrew. I think if we were to just go through the calendar, we've already seen some benefit when you had the, call it, up down up in the Super Bowl. So 2024 sort of peak experience with Vegas 2025 with the kind of repeat participants in New Orleans was been underwhelming, much stronger performance, Super Bowl in 2026. As we look at the rest of the year, I'd say there's nothing daunting. I'd say, it ranges from, call it, slightly below -- slightly above average matchups.

NCAA tournament was relatively strong last year. We'll see how that goes in the next few weeks. Nothing I would say of note in terms of NDA or NHL I love that Oklahoma City has 47 traffics over the next couple of years, except for the fact that Oklahoma City is not the most dynamic market from a secondary standpoint. So we'll see if anyone topples them on the MBA side. And MLB was off of the peak Yankees Dodgers levels, but Yankee Blueray wasn't bad. So I'd say that was still above average last year. So the MLB comp is probably the most daunting of the remaining major championships coming through the rest of the year.

Our next question comment comes from the line of Benjamin Black from Deutsche Bank.

This is Jeff on for Ben. Can you just talk a little bit about the puts and takes to getting to the high and the low end of your guidance, particularly in GLD, would you need to see the competitive dynamics kind of continue to soften from here? Or could you get to the high end with just better performance from events in the industry?

Yes, it's a great question. Our presumption is that we can get to the high end of our GOV and EBITDA range. through our own execution. So steady performance from industry volumes consistent with current competitive intensity and continued delivery of a pipeline of product enhancements that we're really excited about that we think will start coming out over the next couple of months and have a meaningful portion of the year to benefit in terms of the back half contribution. And if we deliver in those enhancements flow through as expected. That's the path to the top end of the range. cure if there's better industry volume and/or a further shift in competitive landscape that would make it easier and/or create a path to outperforming.

Understood. Got it. And then maybe just one quick follow-up on sort of the app share growth in the gains. You talked about the increase in the FPD. Is that more driven by bringing new customers to the app? Or is it sort of just increasing the velocity or the repeat purchases of existing customers already using the app.

I'm happy to say yes to that. So it is across both dimensions, we are seeing app sessions increasing year-over-year. We are seeing app repeat rates increased double digits when we're looking at our cohort subsequent to these changes. And one of the things we talk about a lot over here that when you're playing a longer game with trying to build lifetime relationships to drive long-term repeat, the toughest day of that journey is the first day because you feel all the pain on the enhanced value proposition. We haven't given folks an opportunity to come back and repeat. So we feel like we started the snowball down the hill, and now as we move through subsequent quarters and years, that benefit will compound.

And we're seeing all the underlying -- we talk about leading indicators that are flash and positive. That's a perfect example. These repeat rates, the growing size of the cohort and the growing proclivity to repeat within them. are the types of leading indicators that if you could stack over time, become a really powerful trend.

Next question or comment comes from the line of Ralph Schackart from William Blair.

Larry, you talked about sort of entering Q2 with a refined strategy. Maybe talk about, I guess, maybe your top 1 or 2 key priorities or adjustments to that strategy? I know you talked about the APRA new focus, I'm not sure if that's [indiscernible] two of them. But just maybe if you could sort of highlight or underscore what those are in progress to date and kind of how that progresses through 2026. That would be great.

Yes. Thanks, Ralph. I think as you noted, parts of the strategy were starting to be rolled out back half of last year, executed throughout Q4 and will continue. And so the efficiency, the cost reduction program was the starting point of that, reinvesting some of those savings into the structurally enhanced at value proposition was a part of that. I think when you look at what incrementally we're pursuing, I think there's a refreshed focus on the core customer journey, where you need -- when someone has decided that they want to attend an event, a relentless focus on making that journey as quick, efficient and pleasurable as possible for the customer. Don't distract them with superfluous information, but make sure all of the relevant information is in front of them, make sure every step of the journey works efficiently, you aren't introducing undue friction.

And that's been an area where I think we were pursuing a lot of different paths and distracting a little bit. So ultimately, that will manifest in, I think, an enhanced conversion profile, particularly on our web journey. We're very excited about that. I won't go into too much detail on this. I think there's some enhancements to our private label philosophy and approach that we're working on that get that business line returning to growth as we lap the tough comps starting in Q3. They're a little more operational in nature. But if I were to say it in a word, getting back to being operationally elite, it's the core focus in addition to the cost efficiency and the app value proposition, each which has their own sub elements where we'll continue to build on the early gains and wins.

I'm showing no additional questions in the queue at this time. Ladies and gentlemen, this concludes today's program. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.

Good morning, and welcome to the Vivid Seats Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Following management's prepared remarks, we will open the call for Q&A. I would now like to turn the call over to Kate Africk.

Good morning, and welcome to Vivid Seats' Third Quarter 2025 Earnings Conference Call. I am Kate Africk, Head of Investor Relations at Vivid Seats. This morning, we issued our third quarter financial results. The press release as well as supplemental earnings slides are available on the Investor Relations page of our website at investors.vividseats.com.

During the course of today's call, we may make forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks and uncertainties described in our earnings press release, our most recent annual report on Form 10-K, our subsequent quarterly reports on Form 10-Q and our other filings with the SEC.

On today's call, we will refer to adjusted EBITDA, which is a non-GAAP financial measure that provides useful information for investors. A reconciliation of this non-GAAP financial measure to its corresponding GAAP measure can be found in our earnings press release and supplemental earnings slides. This morning, we also announced a leadership transition that is effective today. Lawrence Fey, who has served as Chief Financial Officer since 2020, will succeed Stan Chia as Chief Executive Officer.

Additionally, Ted Pickus, who has served as Chief Accounting Officer since 2022, has been appointed as Interim Chief Financial Officer until a successor is identified.

Accordingly, Larry and Ted are joining me today on the call.

With Larry's extensive history with Vivid Seats dating back to 2017, the Vivid Seats Board believes he is uniquely qualified to navigate the evolving industry environment and steer the company back to growth.

Larry will share more detail on his vision for Vivid Seats next chapter today. And now I would like to turn the call over to Larry.

Good morning, everyone, and thank you for joining us today. First, I would like to discuss the leadership transition and express my gratitude to Stan for his leadership and service over the last 7 years. His accomplishments include successfully leading Vivid Seats through a global pandemic, bringing Vivid Seats to the public markets and launching key innovations such as the Vivid Seats Reward program, which provides a foundation on which we will continue to build as we deliver a unique and leading value proposition to our customers.

I recognize the responsibility of this role and we'll look to take decisive action to reverse recent trends and build a resilient business well positioned for long-term success. The core pillars of our strategy start with the foundational advantages that have been in place at Vivid Seats for years and build from there. There is much work to be done, but the foundation to return to profitable growth is in place, and our path forward is clear.

Vivid Seats has long been known for its leading tech capabilities, unique data and focus on efficiency. In recent years, as paid search has become more competitive and customer acquisition economics have become strained, Vivid Seats has increasingly invested in its app with a focus on building a loyal and recurring customer base.

We are now increasing our focus and investment in delivering a leading value proposition to our customers. Alongside our loyalty program with rewards redeemable in the app, late in the third quarter, we launched our lowest price guarantee also in the app. We believe the combination of our lowest price guarantee and our loyalty program represents the most compelling value proposition in the industry, and we are already seeing positive responses from our customers.

With our enhanced value proposition, we expect to see a growing number of app users and resulting transactions. Our app users return more often, convert at a higher rate and touch performance marketing channels less.

Over time, as our volume increasingly moves into the app, our performance will be increasingly insulated from the heightened competitiveness we have seen in performance marketing channels in recent years.

Further, we believe that information transparency will only increase as AI proliferates and impacts the way consumers interact with brands across the Internet. It will take time to build comprehensive awareness of our enhanced app value proposition, but we are confident we will disproportionately benefit as AI reshapes consumer discovery and decision-making as we match consumer demand with the most compelling value in the industry.

One of our initial efforts to build awareness of our app value proposition is our recently renewed partnership with ESPN. With ESPN, we have launched a national marketing campaign on Disney streaming, which is reaching more than 127 million global subscribers across over 700 live sports events monthly.

We are excited to see how fans respond to our new offering as awareness continues to build.

We believe our investments in delivering a leading value proposition will drive order volume but reduce our take rates. Funding these investments in a sustainable manner will require a commitment to operating the most efficient platform in ticketing. We will focus on operating as a lean and agile organization enabled by powerful technology and unique data.

We announced the cost reduction program last quarter, and we are now more than doubling our fixed cost reduction target from $25 million to $60 million.

We have made substantial progress towards our updated target with savings spanning fixed marketing, G&A and stock-based compensation. Both these savings and our considerable reinvestment in our app value proposition are reflected in our initial 2026 guidance.

Continuing with our theme of driving efficiency through clear focus, we executed our corporate simplification agreement, which included the termination of our tax receivable agreement and the collapse of our dual class share structure early in the fourth quarter.

The corporate simplification will yield substantial immediate and ongoing savings. As part of the termination, we issued approximately 400,000 Class A shares to the former TRA parties. In return, we will avoid $6 million of cash TRA payments otherwise due in Q1 2026, while capturing up to $180 million of lifetime tax savings, subject to generating sufficient profitability.

In addition, by simplifying our structure, we expect to save approximately $1 million per year from reduced financial reporting and compliance costs while also removing tax inefficiencies in our structure.

At current levels of profitability, we anticipate our annual cash income taxes to be approximately $3 million.

The savings between our cost reduction program and corporate simplification will create a more focused and agile organization, one that can invest strategically for growth while maintaining discipline and profitability.

Next, I'll address trends in our third quarter results, which we believe validate our path forward and underpin our initial 2026 outlook, which Ted will provide.

While private label remains under pressure, we are encouraged to see stabilization and early signs of momentum across our owned properties.

Against the flat sequential industry backdrop, Vivid Seats and Vegas.com delivered sequential GOV growth, while the Vivid Seats app delivered double-digit sequential growth and returned to year-over-year GOV growth. This is a direct result of our ongoing investment in product development and our enhanced value proposition.

As we look to the fourth quarter and into 2026, there are no quick fixes, but our priorities are clear. We are committed to improving our financial performance by leveraging Vivid Seats foundational advantages, including leading technology, unique data, best-in-class efficiency and continued investment into a unique and differentiated value proposition.

Now I'll turn it to Ted to discuss the quarter and financial outlook in more detail. As we mentioned earlier, Ted, our Chief Accounting Officer, will take on the role of Interim Chief Financial Officer. Ted has been at Vivid Seats leading our accounting function for more than a decade. I have full confidence in Ted, and I'm glad to have him step into the interim CFO role as we manage our leadership transition.

Thank you, Larry, and hello, everyone. I am honored to be with you today and to assume this role during a transformational time for the business.

Turning to our results. In the third quarter, we delivered $618 million of marketplace GOV, $136 million of revenues and $5 million of adjusted EBITDA. These results reflect an intense competitive environment that impacted our private label business, which was also impacted by the loss of a large partner.

We generated $618 million of marketplace GOV in Q3, which was down 29% year-over-year. Total marketplace orders were also down 29% with average order size flat.

Looking at sequential trends compared to Q2 of this year, overall marketplace GOV was down 10% due to private label headwinds, while owned property GOV increased in a flat sequential industry environment.

We generated $136 million of revenues in Q3, down 27% year-over-year. Our Q3 marketplace take rate was 17.0%, down from 17.5% in Q3 2024. We expect near-term take rates in the 16% range.

Our third quarter adjusted EBITDA was $5 million, down substantially from the prior year due to lower volume, lower take rates and negative operating leverage. We expect improved operating performance as we enter 2026 with the full benefit of our recent cost reductions.

Next, I'll address our 2026 initial outlook. With stabilizing owned property volumes, we expect 2026 marketplace GOV in the range of $2.2 billion to $2.6 billion.

At the midpoint, this assumes Marketplace GOV roughly in line with our third quarter run rate.

We intend to reinvest cost savings into our enhanced customer value proposition and as such, currently anticipate $30 million to $40 million of 2026 adjusted EBITDA.

Our 2026 initial outlook assumes industry volumes are flat year-over-year as the core concert on sales season, which provides supply visibility for the coming year has yet to occur.

We ended Q3 with $391 million of debt, $145 million of cash and net debt of $246 million. Against a flat industry environment, we saw working capital continue to consume cash, but at a substantially lower level than seen the first half of the year.

I'll now hand it back to Larry for concluding remarks.

Thanks, Ted. Despite challenging year-over-year trends, the third quarter offered signs of stabilization, including sequential growth in owned property GOV, year-over-year growth in app GOV and substantial cost reduction progress.

From here, diligent execution is crucial, but we believe our investment into our app value proposition provides a clear path to return to growth.

With that, operator, let's open it up for questions.

[Operator Instructions] Your first question comes from the line of Cameron Mansson-Perrone with Morgan Stanley.

Ted, welcome to the call. I guess the first question is really just -- I'd like to hear a little bit more about what gives you confidence in issuing '26 guidance this early given the pressures that have existed in the business recently. I heard you on the stabilization front, but just a little bit more on what gives you kind of that increased visibility relative to the past, I think, would be helpful.

And then if you could just kind of try and help contextualize what's reflected in the high and low end of the guide for next year with regard to competitive environment and expectations and any other gating factors around what would determine whether you shake out on the high or low end?

Yes. Cameron, yes, I think the you've heard us say in the past that we prefer to give guidance on our Q4 call once the Q4 on sale calendar has run its course as you'll have more industry visibility. And so the important caveat in the guidance we put forward is it presumes a flat year-over-year industry outlook.

And I think to your question on what would govern the low end versus the high end, I would start with if the industry under-indexes to flat, that would push you towards the low end. If it over-indexes or grows, that would push you towards the higher end. We certainly saw the Live Nation commentary, which if you interpolate what they said, it feels like they're pointing towards another positive growth year in North America.

So hopefully, there is some conservatism built in. We'll learn more over the coming months on exactly where the industry settles out, but try to put a baseline that we think is reasonably skewed to the cautious side of the spectrum on the industry performance.

Why do we put guidance out, why do we have confidence? I'd point to a few elements. I think one, we obviously pulled 2025 guidance. So it's been a while since there's been a flag or a stake in the ground for folks to look at. You can see a number of changes playing out in Q3, where we talked about our cost reduction initiatives. We talked about some of our reinvestment in our value proposition and lots of puts and takes. And rather than having there be a vacuum where people are waiting in suspense for 4 months on what the net of all of those are, we wanted to distill it down to a target probably goes without saying if competition or competitive intensity reaches new highs, that will pressure.

And if they abate, that will be a release valve relative to the range we put forward. But we've assumed essentially a broad continuation of the competitive intensity we've seen in the second half of 2025.

Next question comes from the line of Dan Kurnos with Benchmark Company.

Larry, I guess, maybe just to double-click on the leadership transition. Obviously, Stan had a lot of digital experience from his history. So I guess maybe why now make this move? If you could just give us some color on the thought process. And obviously, to be clear here, I think you're eminently qualified to lead the company, Larry. I just would be helpful to get sort of some of the thought process on the timing.

And then in an agentic world, you talked about discovery with OpenAI. If you're going to push app, which is fine, everyone else is putting their app into OpenAI for discoverability. So I don't know what your thoughts are about that, given some of the puts and takes on demand gen and OpenAI potentially becoming the source of demand gen, but -- just help us think about your willingness to increase visibility via that channel and other ways that you might increase the visibility of the value prop?

Yes. Thanks, Dan. I'd start with the thanks to Stan, of course, we're sincere 7 years was a great run. I think it was just reaching a time for a shift and preparing the business for the efficiency push that we're embarking on in the near term.

To the second question, I think you touched on a theme that is spot on. Yes, we're pushing on app. And I almost think of the customer universe as 2 buckets, right? There's the new customer acquisition and there's a competitive dynamic around that. And then there's the folks who have already done their research and made informed decisions around which marketplaces they buy from or which marketplaces they consider, and that generally occurs in the app.

Where I think there could be a really interesting blurring of those lines or fusion of the 2 as we move forward. If one of the fundamental tenets of AI is increasing information synthesis, increasing information transparency as we increasingly place the best value proposition out into the ether.

We then, of course, have an obligation to make sure that value proposition is digestible by these new AI platforms that are looking for all of the best information to synthesize and distill for customers. But you better have something that's compelling, right? If they do their job and put forward the best value proposition, you better be front of the line. And so that's where we're going with the app. I think in the near term, while we wait for the commerce portion of the AI disruption to fully arrive, we're going to continue focusing on retaining our customers in the app ecosystem.

And then we think there's opportunity coming on that customer acquisition as the technology format evolves.

Next question comes from the line of Maria Ripps with Canaccord Genuity.

Larry and Ted, congrats on the transition. Can you maybe share a little bit more color on the competitive backdrop right now? Are you seeing any early signs that maybe some of the competitors in the space are starting to focus more on profitability?

Yes. Thanks, Maria. We've talked in the past a bit about ebbs and flows, and it can be a little dangerous to extrapolate short-term behavior and assume it continues indefinitely. But I would say, broadly aligning with, call it, changes in corporate status, we have seen a shift in competitive posture. It was a fairly methodical increase in share that we saw from StubHub over the last couple of years. It come in waves, but it kind of went one direction. And we've actually seen that reverse and roll over in September and October, where they're now down year-over-year on share.

And I think that is directly tied to what we perceive as a shift in marketing aggressiveness. The magnitude, obviously, it was enough to reverse that trend, but it wasn't like a reversion to 2022 or 2023 levels. And we, of course, know that they reserve the right to change their mind and posture as we embark into 2026, but a notable change over the last, call it, 6 weeks to 8 weeks.

Got it. That's very helpful. And then any early thoughts you can share sort of on quality of concert lineup in 2026?

Yes. We -- I'd say, continue to be looking to Live Nation for the prospective views on what's coming. I heard pretty positive commentary when I read the release, I think they touched on what clearly looks like positive North American growth, a skew towards larger venues. Thus far in the year, you get into these year-over-year comparisons where timing just varies slightly year-over-year. But we're in the midst of this year, Morgan Wallen just announced that I think will be one of the top tours of the year. We've seen several others.

So at this point, I would say, other than week-to-week variance, it looks like the Live Nation commentary is flowing through in what we're seeing.

Next question comes from the line of Ryan Sigdahl with Craig-Hallum.

In response to the FTC lawsuit, Ticketmaster shutting down TradeDesk for concerts. They're also limiting Ticketmaster accounts even further as it appears as they take more action on pricing.

Curious your perspective on this. Does this present an opportunity for Vivid to take share on the POS side. But at the same time, I guess the negative would be how much contraction and negative do you see from a supply standpoint in the secondary ticketing?

Yes. Thanks, Ryan. I think you framed it properly in that any disruption to TradeDesk, I think, can only be a tailwind, and we think SkyBox will be waiting with open as with its best-in-class capabilities to support any customers who no longer have the full suite that they need to run their business and can only help our position.

And then as you said, counterbalance, if there is additional pressure, I'd start from our fundamental view is that the vast majority of what drives this industry is fundamental financial well-functioning financial market, right, where you have artists and teams who are looking to diversify risk. You have artists and teams who are looking to offload risk well in advance of shows and that there is a healthy, vibrant financial instrument via the secondary market that facilitates and benefits all parties. To the extent folks are violating the rules of the game, we have always said this, we continue to say it, we can, should, will support anything and everything that needs to be done to ensure folks do play by the proper rules as defined by the artists and the primary ticketing platforms.

To the extent there are folks that are -- I'm sure there are right, there's got to be a bad actor out there. To the extent those folks' behaviors are forced to modify, I think what will be unknown, right? And we'll find out, as you all find out, does that contract the secondary market? Or does it just change the form where you now have increased fragmentation where new smaller sellers fill in the gap and the overall market opportunity remains the same.

So we'll keep a close eye on it. But I do think -- yes, there's a positive tailwind on TradeDesk, a potential headwind, but maybe not on the change to Ticketmaster policies.

Then just the other hot topic kind of from an industry standpoint, direct issuance. Vivid has a smaller DI type offering with college basketball crown. But curious what you think about the ambitions of some of your peers in the space on this model specifically? And then kind of to your point on rules of the game, I guess, contractually, et cetera, I guess, just your thoughts on direct issuance and the viability of doing that in an accelerated way going forward? And what that potentially means from a secondary marketplace standpoint if that further limits the supply of brokers play?

Yes. I think obviously, strategies are subject to change. And so just reacting to the way we have seen the direct issuance opportunity defined to date, maybe they change us. But to date, it's been primarily focused as we understand it, on unsold inventory. And so you can imagine regular season baseball games, less popular theater shows where you have well past the event going on sale substantial available inventory available from the primary.

And if that gets piped directly into a secondary marketplace, that would represent incremental supply. I think the threshold question for the robustness of that opportunity would start with, is this a supply or demand-constrained industry?

And does the fact that you took an event that already had a decent amount of supply and made more available, will that stimulate incremental demand? Or will it cannibalize the eyeballs that you were already getting on the site and to sell more, you still need to get additional eyeballs and spend the marketing dollars to bring them in. I think our viewpoint has been that generally, this is a demand-constrained exercise, not supply constrained in all but the most rarefied air, right?

Like you could see Taylor Swift tickets really selling out, but most events, including World Series, Super Bowl, right? There are tickets available all the way up until the event starts even for the highest profile events. So I'd say we're a bit more muted on our belief of the impact that could have. But we certainly have heard that the ambitions are big, and so we'll keep a close eye.

Next question comes from the line of Ralph Schackart with William Blair.

Larry, I just kind of want to circle back on sort of driving more awareness to the app and sort of the efforts there. I know you talked about having ESPN as a partner to do that, which is obviously a great partner to have there. But maybe you could just sort of provide a little bit more color how you drive more direct traffic here and build more awareness? And would you be contemplating potentially like a marketing campaign or other efforts to grow more awareness to go direct to the app?

Yes. Ralph, I think we're doing what I would call our brand marketing surge via ESPN. That is going to be concentrated in the near term kind of throughout Q4, which is peak sports season. I think this is an industry where there's been many attempts to do broad-based brand marketing, and it is challenging to prove compelling ROI from that. So I don't think we're going to reverse course and jump head first back into broad brand marketing. I think we're going to continue to focus on thoughtful different slices of, call it, more targeted performance-based metrics.

One of the advantages we have foundational strengths we have is we've been one of the leading marketplaces for a long time. And as a result, we sold a lot of tickets to a lot of people, and we have a really robust existing user base, really robust CRM database. And so a lot of our effort has been increasing our personalization, improving the nature of our messaging. And now when we're delivering a message with a fundamentally improved value proposition, I think that leads to more engagement across that existing user base. And then continuing as people -- we acquire them on the web, making them immediately aware of what awaits -- if they trusted us enough to buy on the web, that's wonderful. And I think we have perks that would compel them to come back to the app and making sure that, that hyper addressable audience gets made fully aware of the proposition. Those are the 2 major buckets I think we'll be focusing on in the near term.

Next question comes from the line of Steven McDermott with Bank of America.

Just 2 quick ones. Firstly, for 2026, what World Cup assumptions are kind of built into that outlook?

Yes. We essentially have not assumed a meaningful impact from World Cup. I think that is primarily due to 2 things. One, there's not a lot of precedent that we can rely on, right? The U.S. World Cup in an era with online secondary ticketing has 0 precedent data points. When we look at the last 2 World Cups, they are in markets that we basically don't operate in, in Russia and Qatar. And so trying to strike a cautious tone given a lack of conviction beyond that.

The second observation, I think it's fairly well documented, but we've seen FIFA be, let's say, quite aggressive in seeking to monetize, optimize their monetization of the event. I think it's safe to assume there will be incremental volume. We will benefit from it. But between those 2 factors, we've opted to essentially disregard it as we've contemplated our outlook for next year, and it would purely represent upside.

Got it. Appreciate that color. And then my second question, just -- it sounds like you said StubHub pulled back on marketing spend a bit. Is it fair to say that the Q3 exit rate improved on a year-over-year basis?

Yes. I think it would be fair to say that over the course of Q3, we saw a shift in their behavior and a corresponding shift in volumes across marketplaces. Yes, that happened closer to the end of Q3 than the beginning.

Next question comes from the line of Brad Erickson with RBC Capital Markets.

I just follow up on that last one, actually, Larry. When you say -- or when you look at kind of what's instructing the stabilization commentary on the owned property business, so you mentioned competitive intensity easing several times. Is that kind of the main driver? Any other drivers you'd call out there, either things in your control or other market forces?

Yes. I think the biggest one is -- so yes, the competitive landscape, of course, matters. But I'd say similar, if not equal, if not slightly more important in terms of what we've seen in the immediate term has been this value proposition push. And inherent in what we're trying to achieve, as we get more volume in our app, I think that is a more protected ecosystem, right?

You can bid whatever you want for a Google Link. But if someone already has our app, already trust us is already looking at us. they will likely look at us. And if we have a structurally better offer, it doesn't matter who else is buying the top Google Link. And so there's -- you control your own destiny more on app. That's why we're pushing, right, reduce the surface area and exposure to competitive response. That's a long game play, right?

You don't make that change and immediately have profound shift of volume from one channel to the other. But we have seen market increases in the volume that's moving into the app. And I think this is one of those like layer cake dynamics where every month that goes where you bring in a new cohort of customers who have done their research, seen the value prop, they're going to be fundamentally stickier.

And over time, that will compound and build into something pretty exciting.

Got it. And then I appreciate the '26 guide and all you gave the EBITDA numbers. Any color you can give maybe on cash conversion relative to that EBITDA guide?

Yes. So I appreciate that question. Yes, I think if we look at our cash obligations moving forward, you have roughly $20 million of net interest expense. We'll have a bit less than $20 million of ex cap software. And then we mentioned in this release that pro forma for the TRA transaction, we'll have about $3 million of cash taxes, primarily from international operations.

So you sum those up before you consider working capital, you have a roughly $40 million set of cash obligations. As we've kind of talked about quite a bit the last few quarters, when we're growing, working capital is a source when we're shrinking, it's a use of cash.

And so I think at the epicenter of will cash balance grow next year is do you believe that we can sequentially grow GOV. I think it's reasonable to assume that take Q1 as we lap the private label losses that we saw in Q3, continue to lap those. The overall year-over-year GOV numbers will continue to be down. But if the sequential help because the balance sheet kind of remark to market every quarter is stable and growing, you can see working capital reverse course.

And so the base case plan is at the midpoint or better of our guidance, we would expect to be cash generative next year.

Next question comes from the line of Ben Black with Deutsche Bank.

This is [ Kunal ] for Ben. Quick one on the outlook, and you just talked about the cash flow consequences that we could see. One thing with regard to the assumption that underlie that. So are you assuming that the competitive intensity remains at the September, October levels in 2026? Or are you assuming that maybe things go back to what we had seen earlier in this year, and that is what determines the market share that you expect in '26?

And then the second one would be with regard to the traffic that you are getting and the traffic that you have on your app. What is different from other providers that makes your value proposition so unique that people will not go anywhere else to shop?

Yes. So let me start with the app value prop because I think that's a really compelling one. I think we've talked about our loyalty program for a number of years. We continue to be on a journey to build awareness of that loyalty program. But those who find and use that program, I think, structurally buy more at a multiple of the typical user. And it -- even before the more recent changes to our value proposition, I think, resulted in kind of a clear best-in-class value prop.

And then recently, what we've really pushed is base lower everyday pricing. And then we're continually innovating on what kind of inducements and incentives we can provide as customers move through their journey -- their lifetime journey with us.

So we think if you create an experience where someone comes in and realizes that your pricing without paying consideration to any incentives, without paying consideration to loyalty are the best in the industry relative to our largest competitors, you have a good experience, right?

You get great customer service, you enjoy the way out of the site. And then subsequent to that, you get thoughtful recommendations, you get incentives and inducements, you sign up for loyalty and that price advantage becomes even more significant. That's a really compelling lifetime experience.

Now is that to say that others can't offer various elements of that. I don't think there's anything philosophically that would prevent folks from doing it. I think it's an economic question, right? If you're spending significant amounts bidding for the top keywords on search, can you do that and offer these lower price points? If you have very large partnership obligations, can you do those and offer these inducements and incentives.

So we'll see, right? I think our belief is that we can operate the leanest platform, and that uniquely enables us to sustainably deliver a best-in-class value prop and others will need to respond as they see fit.

As it relates to the first question on the competitive environment contemplated, it's difficult to be precise on this. we certainly have seen that it's been kind of an up into the right level of intensity over the last 2 years, and we are -- we want to make sure we don't just forget that. We also want to reflect that we have seen a change. And so I would characterize the midpoint as, call it, something in between what we've seen in September and October and what we saw at the worst of it kind of late Q1, early Q2. And so a little bit of reversion from the run rate, but not all the way back to the most extreme point that we saw.

Next question comes from the line of Thomas Forte with Maxim Group.

So first off, congratulations, Larry and Ted, on the new opportunities and best wishes to Stan for his future endeavors.

One question, one follow-up. So Larry, are you seeing any changes in consumer behavior when it comes to the secondary ticket market? For example, when you have a game 7 and a playoff series, are they still willing to pay premium prices for the experience as they have in the past?

Yes. Tom, I would say, as a broad aggregate statement, continues to feel like live events are a central piece of what consumers want to spend their money on. We had a tough World Series comp, right? You can't really get better than the Yankees and Dodgers. And so I think World Series volumes and average order size were down relative to that. But when we look at the World Series relative to every year post-COVID other than the Yankees and Dodgers, this was the second best year.

And so I think healthy, robust demand, we're seeing that across a lot of high-profile events. I think we alluded to this last quarter. To the extent we have seen softness, it's more been on the lower end of the market. And I think we actually see that manifest in Vegas more than in our core business.

The call it, weekday lower AOS shows have been feeling, I think, some of this much talked about consumer softness.

Excellent. And then I might be a little early in this one. But can you talk about your capital allocation priorities, including reinvesting in the business, international expansion, strategic M&A and buybacks?

Yes. I think for now, it's reasonable to assume that we won't be looking to complete acquisitive M&A that would be, call it, adjacencies. I think we've long believed that there could be a compelling consolidation in the space. And so we would be eager participants in that. But TAM expansion, I think we've got to batten the hatches and focus on the core business.

Given the performance on both EBITDA and cash flow this year, I think we'll display a lot of prudence on any cash leaving the system, including share repurchases in the near term. I think we think that there's a very compelling value at these prices, but step one is batten the hatches and assure that we have all of the capital we need to continue investing in all the initiatives that we see really compelling ROIs against such as international.

And so we'll keep doing the defend the core. And then once we have a little more of a proven track record of stabilization, return to growth, return to cash, we can open up the aperture a bit.

Next question comes from the line of Andrew Marok with Raymond James.

Maybe on the international part there, I guess, what signals are you seeing in kind of that what you call the core international business that give you the impetus to continue investing there as opposed to maybe rationalizing some incremental cost savings out of that business?

Yes. Andrew, I'd start with -- we've been pleasantly surprised at the quickness with which we've been able to bring the international business to be contribution margin positive. So we are there today already. I think we've had -- just to refresh on the context, Viagogo has a very substantial market position in Europe. And as a result, when we have shown up in pockets where we have fully competitive supply, and I would say that has initially been areas where it's either NFL comes to Europe, U.S. artists go on global tours or other events where U.S. sellers have meaningful positions. We immediately have fully competitive supply. When we have competed for traffic and eyeballs on those areas with competitive supply and competitive pricing, we have seen abundant success.

The task ahead then is to continue to add pockets across various countries, especially with a focus on local events where we can have that fully competitive supply and pricing. And from what we've seen, the ability to market profitably will follow quickly once you have that supply in place. That's some hand-to-hand knife fighting to get to that point. And so that's the journey we're on from here.

There are no further questions at this time. That concludes today's call. Thank you all for joining. You may now disconnect.