Revenue for Q1 2024 was $86.3 million, with marketplace revenue making up 13% of total revenue.
Revenue per paid ticket increased to $4.07, a 21% rise from Q1 2023.
Operating expenses saw a decline from Q4 2023 to Q1 2024, and adjusted EBITDA margin was 12% for the quarter.
Paid ticket volume was 21.2 million, an 8% decrease from the previous year, aligning with expectations.
Strategic Initiatives and Product Developments
Focused on transitioning to a consumer marketplace for live events.
Increased sales team size and productivity, leading to an 80% increase in the aggregate value of new sales bookings in Q1 2024 compared to Q1 2023.
Introduced instant payouts and tap-to-pay features in Q1 for faster access to funds and convenience at the door.
Launched a new creator dashboard for improved reporting clarity.
Brought 28 million ticket buyers together with 345,000 creators, issuing 66 million tickets across 1.4 million events worldwide in Q1.
Eventbrite ads reached a record number of creators promoting their events, with ad targeting and performance improvements.
Average monthly active users across Eventbrite’s site and app rose to 85 million in the first quarter, with notable increases in mobile app users and mobile purchases.
Financial Performance and Outlook
Q1 revenue was driven by strong growth in marketplace revenue, including organizer fees and advertising.
Gross margins reached a new record of 71% in the first quarter, benefiting from reduced fixed costs of revenue.
Adjusted EBITDA was $10.4 million in Q1, with a net loss of $4.5 million for the quarter.
Cash and cash equivalents totaled $580 million at the end of Q1, with $358 million in long-term debt outstanding.
Full year 2024 revenue is expected to be between $360 million and $371 million, representing a 12% growth over 2023.
Paid ticket volume for the full year is projected to be slightly down to modestly up from 2023.
Share Repurchase and Liquidity
Repurchased 2.6 million shares for $15 million under a $100 million buyback program authorized in March 2024.
Excluding ticket sale proceeds payable to creators, available liquidity was $378 million at the end of Q1.
Question and Answer
Competitive Intensity and Paid Ticket Growth
Question
How does the current competitive landscape compare to a year ago, and what factors contribute to the confidence that paid ticket growth is driven by internal changes rather than external market dynamics? Additionally, can you provide insight into the paid ticket trends observed in April?
Answer
Eventbrite operates in a dynamic and fragmented market, but the company is shifting its focus from a commoditized ticketing platform to a demand generation driver, leveraging its scale advantage with 20 million ticket buyers and 345,000 creators.
While competition remains a factor, there is no single player disrupting Eventbrite’s market position, and the company is actively monitoring for potential challenges.
Early indications in the second quarter show improved paid ticket trends, particularly driven by higher-value creators and larger events, with bookings through the sales channel up 80% year-over-year.
Attracting Larger Creators and Mobile App Enhancements
Question
How is Eventbrite attracting larger creators, and how does the cost of service for these creators compare to smaller ones? Additionally, what steps are being taken to enhance the mobile app and increase consumer transactions through that platform?
Answer
Eventbrite uses consumer data from its app and web product to identify popular events and then deploys its sales force to acquire larger creators, offering competitive financial terms due to a low customer acquisition cost from smaller creators.
The value proposition for larger creators focuses on product features, reputation, and increasingly, demand generation through Eventbrite ads and marketing tools.
The mobile app has seen a 15% increase in users and a 35% increase in purchases, indicating higher engagement. Future plans include a redesign to align with the vision of consumers using Eventbrite for personalized event discovery and social connections.
Take Rate Trends and Free Creator Engagement
Question
How should we think about take rate expansion throughout 2024, and are there potential headwinds to take rate growth, particularly with the focus on regaining creators who have left the platform and attracting larger creators? Additionally, what strategies are being implemented to bring back free creators and mitigate potential impacts on the ads business?
Answer
The take rate has significantly increased over the past few years due to platform performance improvements and the early stages of the marketplace strategy, focusing on demand generation and monetization through Eventbrite ads.
There are no major headwinds expected for the rest of the year, and the growth of demand generation and Eventbrite ads will determine the long-term take rate trajectory.
Free creators have shown a greater reaction to the new pricing and packaging, and Eventbrite is taking steps such as offering discounts and promotions to encourage their return.
While free creators are an important part of Eventbrite’s franchise, the company believes it is well-positioned to drive user growth and support the demand generation strategy through a combination of high-value creators, overall traffic, and the early-stage nature of Eventbrite ads.
Sales Team Impact and Share Buyback Program
Question
When will the new sales team start impacting creator growth, and what is the pace of future share buybacks and the prioritization of cash usage?
Answer
The sales team’s primary focus is on acquiring high-value creators, particularly those organizing larger events, rather than driving overall creator volume.
The share repurchase program, initially announced in March, has seen 2.5 million shares repurchased during the quarter and an additional 2.5 million shares since the end of the quarter, totaling more than 5 million shares and approximately $30 million deployed. The $100 million program aims to manage the balance sheet, support the company’s strategy, and return capital to shareholders.
Consumer Engagement Strategy
Question
Can you provide an overview of the current consumer engagement strategy and how it may evolve as Eventbrite continues to build its two-sided marketplace?
Answer
The current strategy involves a granular, category-by-category approach with an emphasis on data-driven feedback loops and generative AI to engage consumers programmatically.
Eventbrite is leveraging consumer data to curate event collections and promote them through SEO channels, as well as driving targeted acquisition through sales and performance marketing strategies.
Future plans include a focus on social and network effects to increase consumer engagement, measured by frequency of visits and ticket purchases. The long-term strategy aims to amass consumer intelligence and drive demand generation for the two-sided marketplace.
Gross Margin Trends and New Paid Creator Stats
Question
Given the consistent outperformance of gross margins, are there any updated thoughts on how they should trend going forward? Additionally, could you provide more details about the new paid creators added in Q1, such as the number of events they are organizing and their traction on the platform?
Answer
While there is no updated long-term target for gross margins, the current level is expected to be consistent for the coming quarters. The structural shift to higher gross margins is attributed to the increasing contribution of the marketplace to revenue and the management of fixed cost elements within cost of revenue.
The 92,000 new creators added in Q1 align with the overall nature of the creator base, but Eventbrite has observed momentum among larger, high-value creators who organize larger events.
Consumer Behavior and Paid Ticket Volume Expectations
Question
How are actual consumers on the platform behaving, particularly in terms of repeat purchases and their reaction to higher ticket fees? Additionally, can you clarify the expectations for paid ticket volume growth later in the year?
Answer
Consumer behavior has remained consistent over the past quarter, with steady ticket purchase volume and category preferences. The 2023 price increase for consumers (averaging $0.50 per ticket) was absorbed well, with 80% of ticket fees paid by consumers.
No significant shifts have been observed in consumer behavior, and the company continues to see growth in various event categories.
For the full year 2024, Eventbrite expects paid ticket volume to be down slightly to up modestly compared to 2023, with the second quarter expected to show a year-over-year decline at a lower rate than the first quarter.
Marketplace Revenue Growth and Required Investments
Question
Given the impressive traction in marketplace revenues, is there an upper limit to how high they can grow as a percentage of total revenues, and are there any required investments to scale this business further?
Answer
Eventbrite is focused on increasing the coverage and engagement of Eventbrite ads within the marketplace, with the ultimate goal of a vast majority of creators participating in the program.
The company believes there is significant opportunity for further growth in marketplace revenues through increased ad coverage and improved ad performance, leading to higher spending and enhanced economics for creators.
While there are required investments in various areas, Eventbrite is purposeful about capital allocation and will manage investments within a reasonable envelope that aligns with long-term profit margin targets.
