Good morning. And welcome to the Vivid Seats Second Quarter 2023 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 Kate Africk.

Good morning. And welcome to Vivid Seats second quarter 2023 earnings conference call. I am Kate Africk, Head of Investor Relations at Vivid Seats. Joining me today to discuss Vivid’s results are Stan Chia, Chief Executive Officer; and Larry Fey, Chief Financial Officer. By now, everyone should have access to our second quarter earnings press release, which we released earlier this morning. The press release, as well as supplemental earnings slides are available on the Investor Relations page of Vivid Seats website at investors.vividseats.com. During the course of today’s call, management may make forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to risks and uncertainties, including those described in our earnings press release and other filings with the SEC. On today’s call, we will refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures that provide useful information for our investors. You will find a historical reconciliation of adjusted EBITDA and adjusted EBITDA margin to their corresponding GAAP measures in our earnings press release, supplemental earnings slides and SEC filings. And now I would like to turn the call over to Stan.

Good morning, everyone, and thank you for joining us today. I am excited to share our strong second quarter 2023 results with you. On top of excellent growth and profitability, our investments have continued to drive increased consumer affinity as demonstrated by increasing repeat rates and strong brand sentiment. We have also entered into several accretive and unique strategic partnerships that further differentiate our platform. And just yesterday, we announced our planned expansion into the Asia-Pacific region, entering into a definitive agreement to acquire Wavedash, the leading secondary ticketing marketplace in Japan. I will address each of these exciting developments after walking through highlights from the quarter. Then I will turn it to Larry who will walk through our financials and outlook in more detail. Building on a stellar first quarter, we delivered yet another record quarter in Q2, generating 954 million marketplace GOV, 17% higher year-over-year. We delivered $165 million of revenues and $31 million of adjusted EBITDA, also higher year-over-year. While we continue to invest to strengthen our product and brand to cultivate loyal users on both sides of our marketplace. With an outstanding performance in the first half, we are raising our 2023 guidance for the second time. After another quarter of record breaking GOV, it is clear consumers continue to prioritize live event experiences. Demand strength was widespread across categories and performers, but the Taylor Swift Eras Tour complete with unprecedented demand and fandom stands out. Furthermore, a number of large tours such as Aerosmith were announced outside of the typical window and contributed to additional upside in the quarter. Beyond the robust demand that we are seeing in 2023, secular trends for live events are strong and should provide tailwinds to the industry for years to come. To capture that strength, our strategic marketing campaigns…

Thanks, Stan. Our second quarter 2023 marketplace GOV of $954 million increased 17% year-over-year, with total marketplace orders increasing 9% year-over-year and average order size increasing 7%. Our second quarter marketplace GOV reflects a robust event calendar and continued strength in PAM demand. We saw particular strength in the concert category, led by Taylor Swift’s U.S. Eras Tour, supporting double-digit growth against a record Q2 2022. Our second quarter 2023 revenues of $165 million increased 12% year-over-year, driven by marketplace GOV growth. Our Q2 take rate was 14.6%, below historical levels due to an increase in loyalty accruals, coupled with select strategic targeted pricing decisions. As we go forward, Wavedash brings a lower take rate than Vivid Seats and we, therefore, expect our take rate to be roughly 15.5%. We generated $31 million of adjusted EBITDA in the second quarter, converting GOV to solid profitability despite a lower than normal take rate. We continue to see attractive marketing returns and are investing in accretive channels, such as incremental partnerships and influencer campaigns. Our cash balance of $306 million exceeded our debt principal outstanding by $35 million at quarter end. Our planned acquisition of Wavedash will utilize approximately $61 million of cash and is a clear example of the strategic opportunities we are able to pursue as a result of our strong balance sheet and cash flow profile. Turning to our updated outlook for 2023. We are raising our guidance to account for strong performance in the first half of the year, while including an estimated four months of contribution from Wavedash. We now anticipate 2023 marketplace GOV in the range of $3.4 billion to $3.6 billion, revenues in the range of $630 million to $650 million and adjusted EBITDA in the range of $125 million to $135 million. We expect…

Thanks, Larry. I am proud of the strong results that our team continues to deliver. Our team’s innovation and efforts to build valuable and differentiated products have continued to drive long-term stickiness on both sides of our marketplace, with higher buyer repeat rates and continuing seller Skybox adoption. Our disciplined execution has driven robust growth, profitability and cash flow, enabling us to pursue accretive opportunities such as Wavedash, and ultimately, drive long-term shareholder returns. With that, Operator, let’s open it up for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Ralph Schackart with William Blair. Your line is now open.

Good morning. Thanks for taking the question. First question, just on Wavedash, maybe provide some perspective, if you could please, on the overall TAM opportunity, maybe what attracted you to the Japanese market and is this your first international expansion opportunity that may broaden out going forward?

Hey. Good morning, Ralph. Thanks for the question. Yeah. Again, I think, we are -- we have always been looking at the landscape for favorable opportunities for expansion in TAM growth, and as we have been looking, I think, the appeal and the strength of the asset in Wavedash was really favorable against what we were assessing, being able to enter a market with an industry leader, both profitable, as well as strong in terms of share there. I think was an excellent way for us to look to begin some of our international efforts where we can learn where the backdrop is favorable and so I think as we continue to look, I think, our strong balance sheet is going to allow us to be aggressive when we find opportunities such as Wavedash in the future.

Perfect, Stan. Maybe just a follow-up. Maybe can you just speak to the competitive environment, how that trended during the quarter and sort of Vivid Seats positioning within the sort of competitive dynamic? Thank you.

Sure. Look, I think, we have continued to see stable but strong competitive pressure, and really, what we are focused on is the innovation that we drive in the platform, whether that’s through our loyalty program, which continues to yield results in really high repeat rates, whether that’s in our engagement platform, the combination of Vivid Seats, as well as now Game Center driving over 70,000 new users in the first 60 days. We think we have got a lot of great innovation driving long-term value in the platform and I think really what you are going to see us do is continue to focus on that. And as we announced, I think, during this call also, we have got a lot of great experiential partnerships that we have launched with the Chargers, with the Dodgers, with the Rockies that we believe are real differentiators in both the short- and long-term.

Great. Thanks, Stan.

One moment for our next question. Our next question comes from the line of Curt Nagle, Bank of America. Your line is now open.

Good morning. Thanks for taking the question. Yes. I guess the first one, maybe an obvious one, why not raise the back half of the year a little bit more, right, I mean, two very, very strong quarters. We have got four months of Wavedash in now. I know you guys are typically conservative. But just as far as I can see the look like there’s any let-up in demand. Live Nation sounded like they are more positive on the outlook for the next couple of years. So aside from just like basic conservatism, what’s going into the outlook and why not be up -- why not raise a little bit more?

Yeah. Hey, Curt. So I think we have tried to reflect what we believe is continued healthy outlook for the balance of the year. Certainly, as we move forward through the quarters, we have increasing visibility on the balance of the year, particularly the concert calendar. And so that all resets as we shift into the next year and wait for the Q4 on sales. But I’d say, in particular, I think what drove some unique weighting this year is what’s the Taylor Swift. I think we would generally say no single event, no single performer. We will have a demonstrable or meaningful impact on our aggregate results. I don’t think that would be a true for this year. I think you can just steal the phenomenon that it was, right? When you see the videos and the excitement and the passion from her fans, it was just an outlier And that tour ends this week or next week with our last shows in the state for this year in L.A. And so essentially, we are assuming that without Taylor Swift in the numbers, there’s a bit of a gap to fill and that balances out. Not to say that it’s not plausible that there’s more opportunity, but we wanted to make sure that we reflected that there’s only one Taylor Swift and she will not be performing in the back half of the year.

Okay. Fair enough. And then just as a quick follow-up, Larry, just take rate. So I understand drivers for this quarter. I think you said the go-forward rate of 15.5%, would that be a reasonable rate for 3Q and 4Q?

I think that is a -- yeah, that’s a good number going forward. And my usual caveat, we are not 10 basis points or 20 basis points smart. So you will see some modulation, but I think over time, that’s a good midpoint that we should revolve around.

Okay. Thanks very much.

One moment for our next question. Our next question comes from Cameron Mansson-Perrone with Morgan Stanley. Your line is now open.

Hey. Thanks for taking the questions. One on the resale business. I am assuming the really strong growth here in 2Q. I am assuming that there’s also an advantage of that is also going to be Taylor Swift, but any expectations with regard to the resale business through the back half of the year? And then one on the TRA liability, I think, the Q says, the payments there expected to happen in 2025. Just any color on, will that going to be -- will that flow through is just one lump statement, will that be multiple payments kind of just how to think about modeling that for now? Thanks.

Hey, Cameron. It’s Stan. I will take the first one and then pass to Larry for the TRA. But Cameron, as we have always talked about, resale is a great R&D center for us. I wouldn’t really expect anything different than what we put forth there. Where you see the fluctuations in the quarter. I think, they represent more fluctuations in the industry versus anything else. So I wouldn’t read anything more than that’s just industry strength into what you are seeing in the first half of the year.

Got it.

And then on the TRA at the risk of restating things that already are known. The amount that we will owe and thus the amount on our balance sheet is reflective of amounts that we are not paying in federal income tax. And instead, we are taking those savings, sharing them with our TRA holders and then we retain 15% of that benefit. An incremental quirk in them is that there is a year delay and so I would think of the cash outflows is generally being a year after the payment obligation is generated. And so we will have rolling quarterly tax obligations and then you will have rolling a year later, the money actually going out the door.

Got it. That’s helpful. Thanks, guys.

One moment for our next question. Our next question comes from the line of Stephen Ju with Credit Suisse. Your line is now open.

Great. Thank you. So, Stan, just a follow-up question on Wavedash. It does look like it has multiple businesses outside tickets. So maybe it’s early to comment on here, but what do you think you will do with the things that are probably a more -- bit more distant from your core ticketing business? And secondarily, what can you tell us about the Japanese market environment that’s different or the same as the one here in the United States? Thank you.

Hey, Stephen. Thanks for the question. Yeah. I think we -- when we looked at the asset, I mean, I focus it first on we are obviously excited about our core business and continue to look for ways where we can leverage what we do well into a broader landscape, i.e., the international one and certainly where we can learn, I think, Wavedash was really exciting. So, yeah, there are a few other components, I think, of the business there, but we are really focused on the ticketing side of it, excited to see what else potentially learn about those other avenues, but I would say, you are going to see us laser focused on, again, the things that we do well that are core to our business and where we can potentially leverage things that we do here over there and vice versa as we learn a little bit more. As it pertains to the Japanese market is also one, I think, that we are excited about, right? I think broadly, live events are booming around the world. I think Japan is no exception to that. I think what we saw there was a favorable backdrop where we could go in with a market leader and learn more and potentially use that as a launching off point for other markets as we continue to develop our knowledge and hone our processes to be a larger international organization.

And Stephen, just to add two small things. One, the other businesses, the three of them sum up to about 10% of the company’s revenue. So the vast majority is the core ticketing business. So we are very excited about that alignment. The other difference I might call out between the North American and Japanese market is that, sports are just a little bit less popular over there. I think North America in many ways is the global leader in terms of our passion for sports, the number of professional sports. So you will see a slightly heavier concert teeter weighting in that market that you will see here.

Thank you.

One moment for our next question. Our next question comes from the line of Maria Ripps with Canaccord. Your line is now open.

Great. Good morning. Thanks for taking my questions. First on Wavedash, how should investors interpret this acquisition as it relates to your appetite for further international expansion? And what are your thoughts on any potential synergies here? Is it fair to assume that those are likely to be on the back end on the expense side or any color you can share on that?

Yeah. Hi, Maria.

Hi.

I think the right thing for folks interpreted is, certainly, we are always going to be on the lookout for ways to expand. And as we have looked at Wavedash, I think, again, we found a great opportunity for us to launch internationally with an asset that is accretive and profitable. And so I think as we look at the broader landscape, anytime we find a favorable backdrop where I think we can either move in organically or inorganically with strength, I think, we are going to do that. I think on the synergies question, I think, we are certainly excited to continue to learn more as we move towards closing the deal. But, certainly, you can expect us to be managing for both where we see front-end and back-end opportunities.

Got it. That’s very helpful. And then, secondly, many advertisers and brands are increasingly leveraging AI to optimize their marketing mix. Do you think you have any room for further efficiency gains by investing or leveraging in investing in AI tools kind of on the marketing side? And then relatedly, could you maybe just touch on whether you have seen any easing on the competitive pressures on the advertising side?

I will start. I think we are at the forefront, certainly, of all the AI opportunity that’s there. I think embedded in much that we do is already, what I would say, a lot of advanced data science and algorithms powering some of our proprietary marketing in particular. I think we are always excited to be on the forefront, whether that’s in our partnership with OpenAI and ChatGPT, whether that’s in looking at new opportunities to self-develop AI on the marketing side. But I think we are early days there, if we have anything to share, we will be happy to. We continue to look for ways to be really efficient and aggressive on the marketing front as well.

Yeah. On a competitive environment, I would generally think the rate word is stable. Relative to what we may characterize as peak competitive intensity. I think we referenced, perhaps, Q3 of last year, a competitor or two maybe went particularly outside the normal balance. I’d say that has come back within more normal ranges. So I would -- I think this is a stable level amongst particularly the larger players in the space. I think there’s still a very open question on if this is a sustainable level for some of the folks that haven’t broken the profitability barrier and just continue to reiterate when you are in your 11 or 12 of operations and haven’t quite cracked the code on being profitable, I think, that’s indicative of a perhaps unsustainable model.

Great. Thanks so much for the color.

One moment for our next question. Our next question comes from Brad Erickson with RBC. Your line is now open.

Hey. Good morning. This is Logan on for Brad. Thanks for taking the question. Last quarter on the full-year guide, I think, you guys had mentioned, you were baking in some sort of a macro slowdown for the full year. Just given what you guys have seen this past quarter. I just wanted to see if there’s any update to your thinking there for the full year. And then, additionally, just given where competitive pressures are in the advertising side and to your comment of maybe on sustainable levels, any expectation to those normalizing further in the back half of the year? Thanks.

Yeah. I think on the macro point. I think two things have both pushed in the same direction in terms of not projecting as much impact in the balance of the year. One, 15, now seven months in and knowing the answer on seven months with only five months remaining, I think, removes a fair bit of the speculation. And then the second part, I think, would not be controversial to say that the general mood on the macro has improved relative to where it was at the beginning of the year with more talks about soft landing versus hard landing and so we are certainly intending to play macroeconomists with precision. But I do think our view is for the balance of the year, we feel like the outlook is pretty stable in our guidance. We are not forecasting a quicker sudden degradation in macro. I think we will evaluate as we prepare our 2024 outlook and continue to keep an eye on how market sentiment evolves, but with the current sentiment, I think, we would continue to have some degree of awareness that there is still concern around possible future slowdown. But that concern does appear to be softening. On the competitive question, yeah, I would not -- I don’t have any reason to believe there’s going to be a meaningful shift in the back half relative to what we have been seeing in Q1 and Q2, not to say it won’t happen, maybe certainly see competitors pivot and adjust behavior for reasons that we wouldn’t be able to precisely explain. But no obvious shift that we have seen subsequent to the quarter end and no obvious reason why we would expect it to happen in the near future.

Okay. Thanks.

One moment for our next question. Our next question comes from the line of Thomas Forte of D.A. Davidson. Your line is now open.

Great. So, Stan and Larry, congrats on the quarter. Just one question for me. So with Wavedash representing your first international foray, can you talk about the international total addressable market and compared to drastic growth rate for the secondary market inside and outside the U.S?

Yeah. I think, in aggregate, we would estimate that the total international ticketing market roughly approximates the North American ticketing market, maybe a little bit smaller in aggregate. Obviously, you need to then decompose into individual countries that will have each of their own cultural considerations. So I don’t think it’s quite as simple as entering the U.S. and you need out double your addressable market. It will be a bit more piecemeal. But, overall, I would think that we view the growth rates at similar, perhaps, a slightly positive been as you contemplate that international has a slightly heavier concert theater SKU. I think Japan is somewhat reflective of a number of countries where the North American waiting on sports is just going to be heavier than others, and as we pointed to, I think, stronger growth in concerts and sports that can be a slight tailwind for overall international opportunity.

Thanks, Larry.

One moment for our next question. Our next question comes from the line of Matt Farrell of Piper Sandler. Your line is now open.

Thanks, guys. My first one is just on the impact of the student loan repayments coming back up in Q4. I guess how are you thinking about that as an impact of the guide and maybe just thinking a little bit beyond just this year is those repayments coming back up, do you see that as maybe a headwind of consumers willing to spend broadly on live events in 2024?

Hey, Matt. I think what we continue to see is just resiliency in the strength of consumer demand here against the -- especially against the macro on backdrop. So I think we will continue to see how that trends and factor that in accordingly, but we certainly haven’t seen anything there that would cause us to think about that any differently.

And then maybe for my second question, how has Vivid Picks been performing over the last couple of months and how should we be thinking about engagement trends as we head into the football season, which tends to be a heavier DFS time of year? Thanks.

Yeah. Sure. I think we are excited about that as a platform. I think as we continue -- month-over-month, we continue to see user growth on Vivid Picks, we continue to see high double-digit daily for our active users, entries per month. So we continue to see that engagement there. And I think equally as exciting, we take that engine and we move that into our game center platform. So now ubiquitously across our app ecosystem, we have methods with which to engage consumers and we continue to see growing engagement and growing user acquisition through those channels and remain really bullish on their long-term value to the business.

One moment for our next question. Our next question comes from the line of Andrew Marok from Raymond James. Your line is now open.

Thanks for taking my questions. Given that the thought was for a digestion year in 2023 originally and that ended up proving conservative, does that expectation move out to 2024 or does that take the prospect for digestion maybe off the table or reduce its impact a little bit, obviously, being cognizant that you are not formally guiding for 2024 at this point?

Yeah. Thanks, Andrew. Yeah. As you noted, I think, the benefit of hindsight, the digestion premise and the concern around pent-up demand or event spending proved overly conservative, much to our pleasant surprise. As we look forward to next year, I think, we have no reason to believe that our general long-term growth trajectory for the industry wouldn’t hold, with perhaps the exception this year of the aforementioned Taylor Swift benefit this year, which fortunately, we are happy to report, we will have some recurring benefit next year since she announced some shows. But certainly a smaller footprint than she had this year. So it will be a net reduction and it’s given the size of that tour, I think, that will be perhaps a slight headwind relative to otherwise what feels like a really strong secular trend. And consistent with past practice, we look to Live Nation commentary. I think they have the best insight on that forward calendar and we continue to hear steady consistent bullish commentary that this is a secular and not transient trend.

Got it. So Taylor helped you shake it off. Understood.

Yeah.

For a follow-up with the Japanese expansion, not to be to what have you done for me lately. But looking into other specific markets lately, would you highlight some that are maybe better opportunities for the secondary side of ticketing and some that are maybe a little bit more constrained. I am thinking of countries or sports leagues like the Premier League where secondary ticketing isn’t really that big of a thing for them.

Yeah. Hey, Andrew. It’s Stan. Yeah. I think when we look at international, I think, literally the world is our oyster here and so I think we have the opportunity, so I think, look for -- versus, I think, giving you specific markets. I think, the criteria that we are going to look for are markets where certainly there’s a favorable regulatory environment where there is a favorable supply and demand opportunity. And then I think where there’s a favorable opportunity for us to move in either organically and inorganically, right? So I think as we continue to look at the world, we will look for things that meet our criteria and as those criteria are evaluated and assess, again, I think, we will have the balance sheet and certainly the platform to be able to do things, both inorganically and organically when those opportunities arise.

Thank you very much. Appreciate the color.

One moment for our next question. Our next question comes from the line of Dan Kurnos of Benchmark Company. Your line is now open.

Great. Thanks. Good morning. Nice quarter, guys, obviously. Maybe, Stan, just going back to the marketing mix question. Our checks suggest that most of the take rate pressures coming from the sports side not concert and you have announced obviously more strategic partnerships with sports teams. And I think the overall marketing spend was maybe a little bit less than we anticipated in the quarter. So can you just talk about your desire to continue to differentiate or maybe spend on more take rate or promotional activity rather than kind of pure brand spend or even performance-based spend in the marketplace given what’s going on with competitive environment?

Yeah. Sure. Hey, Dan. Yeah. I think we are excited to have found, I think, great opportunities on the partnership front. I think, I will frame for maybe reference. I think we have always looked at perhaps just raw brand spend as being a difficult thing to measure and drive value on. So I think we have always looked at how do we drive targeting towards high value audiences, as well as investments that will yield differentiated experiences for our consumers. So both in our digital mix as you look at what we do there. I think we continue to be intelligently programmatically buying towards high value audiences. And then on the partnership side, I think, especially the ones that we have announced today, when you look at whether it’s the Dodgers with the Vivid Seats Speakeasy, custom drinks, food and drinks acquired or our special section with the Chargers, which will go in this football season, where we have got unique areas with a DJ playing where, again, that’s fully branded and fully accessible only on Vivid Seats. I think those are areas where we look at the opportunity to invest is really differentiating on the platform, one that we think has long-term viability and staying power and that’s really what’s guiding our hands on our investments towards the marketing frontier.

And how do you think about economics of those deals and do you pick up any fan-to-fan in that -- in those deals?

Sorry, Dan, I didn’t hear the last part of your question.

I was just curious if you are able to penetrate any of the fan-to-fan market with any of these deals.

I got it. Yeah. I think on the horizon, I think, as with everything, I think, we only look at deals that we believe have long-term value to us over the period of a customer’s life cycle. When we look at some of those partnership investments, certainly, I think, the horizon is going to be longer than when we look at more of the immediate customer acquisition performance marketing elements. But certainly, we don’t have an infinite horizon and we are quite judicious in terms of how we assess goodness. When we look at the fan-to-fan inside, I think, we are certainly excited about the prospects of potentially broadening that component of our business as we look at partnership with teams that will certainly drive that. I think to the extent how much they drive it is what we will assess through the course of this period, but I think we are certainly excited about the prospects and the ability of growing that in partnership with the teams that we are working with.

Got it. Super helpful. And just quick for Larry, just housekeeping on the guide. I mean the check suggests that it’s been more order volume than price. So the price has been super healthy. So just on the thoughts on the back half of the year, you have talked about digestion a lot not really occurring, but I mean, should we see kind of similar orders slightly outpacing price with both of them above what you would think of as more normalized levels?

Yeah. I think if you look at this quarter orders up about 9%, AOS up about 7%. So strength across both, as you noted. I think if you look historically at our AOS trajectory, our 3% to 4% annualized CAGR really does play out with that always present caveat and it’s tough to be precise in a given quarter. So on the margin, I would guide to 7% higher than our normal 3% to 4%, so perhaps, a little bit less in price in the back half, and that, I think, helps put a little bit on the aggregate numbers. But we continue to see help, right? I think the --if you saw a price meaningfully moving in either direction from that long-term CAGR, it would tell you something about supply and demand mismatch and then we are seeing it very consistent, which I think indicates that there’s pretty solid alignment between the amount of supply and the demand out there. So we feel good that they will continue to move directionally and locked up on some sort of change in the environment.

Keep raising primary prices, Larry, and I think, there is still a double that consistently space there. So I think that’s what you are saying. Thanks for the color, guys. Really appreciate it.

One moment for our next question. Our next question comes from the line of Jason Bazinet with Citi. Your line is now open.

I just had a quick question on the loyalty program. Maybe this is a question for Larry. What council would you give the investment community in terms of metrics that they should focus on or analyze to assess the traction that you guys are getting on the loyalty program?

Yeah. Certainly, on an annual basis, I think, the most helpful albeit on an annual cadence will be that continued hopeful shift towards repeat orders. So we talked about the improvements from high 40s to 56% of orders coming from repeat customers. I think we expect that number to continue to move up over time and I think the will -- magnitude of that increase will be reflective of the traction we are getting with folks coming into our ecosystem and staying in our ecosystem. Yeah, I think, if you were to take a slightly longer time horizon, ultimately, we think that shift is what drives the operating leverage and the long-term return on the brand marketing and loyalty investments that we have made. Would you start to get more precise than that?

Yeah.

Oh! Sorry. Go ahead.

Yeah. No. No. Go ahead.

Okay. Sorry. As we start thinking about being more precise, there are other metrics that we look at internally. I’d say none of them are perfect, right, because it’s very difficult to understand with precision. Person repeat because of our loyalty or because of our improved engagement from Vivid Picks or because of the better experience from the partnerships or better awareness from our high value audience targeting. We will never really know, so it tends to be an aggregate impact. But we are generally looking to substantiate the ROI from the loyalty program on repeat rate alone and any other benefit would be ready and we feel like we are trending well in that regard.

Is the right metric then that the sales and marketing expenses as a percent of revenue should come down even if your take rate comes down in parallel, is that the right way to think about it?

Yeah. I think that’s exactly right. Over the intermediate term, if I step back and compare the pre-pandemic to post-pandemic profile of Vivid Seats, the big investments we made are adding the loyalty program and then some brand investment alongside that. I think we said we believe those are, call it, four-year, five-year, six-year investments to get to full ROI. We are now a year and a half, two years into that cycle. And so I think we are seeing all of the right trends to believe we are going to get to the positive ROI you would want to deliver, but we are not fully there yet and I think the place you will ultimately see that is in marketing efficiency.

Okay. Thank you.

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