Vivid Seats Inc. (SEAT) Q3 2026 Earnings Report, Transcript and Summary

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.