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Eventbrite Announces First Quarter 2020 Financial Results

05/11/2020

Eventbrite responds to COVID-19 with decisive action

Focuses business strategy around efficient and intuitive self-service model

Implemented expense reduction plan designed to deliver at least $100 million in annualized savings

Francisco Partners to provide up to $225 million in loan financing

------

Revenue of $49.1 million includes $19.1 million in reversals and provisions for refunds and bad debt

Ticket sales improved from March low-point driven by online events and small gatherings

SAN FRANCISCO--(BUSINESS WIRE)-- Eventbrite, Inc. (NYSE: EB), a global ticketing and experience technology platform, announced its financial results for the quarter ended March 31, 2020. You can find a detailed review of our financial results in the First Quarter 2020 Shareholder Letter posted on Eventbrite’s Investor Relations website at https://investor.eventbrite.com.

“While the world may not be gathering together today, the desire for human connection is stronger than ever, and we see this desire matched every day by the entrepreneurialism of event creators,” said Julia Hartz, co-founder and Chief Executive Officer. “We acted swiftly to respond to COVID-19 by supporting our creators and strengthening our financial foundation, while continuing to build great product. We are sharpening our focus to provide value to our most active creators through innovative solutions that enable creative control and agility, and by helping them drive demand for their events. While we can’t predict when this crisis will pass, we are confident in Eventbrite’s ability to best serve the event creators who will rebuild the live experience economy.”

First Quarter 2020 Summary

COVID-19 and social-distancing have severely impacted Eventbrite’s business, reducing paid ticket volumes and increasing event cancellations and postponements. The company’s swift response includes: 1) implementing a plan we expect will reduce annual expenses by at least $100 million; 2) accessing up to $225 million in term loans to strengthen the company’s financial position; and 3) focusing the strategy to deliver a self-service creator experience with strong unit economics.

Net revenue of $49.1 million in the first quarter included a $19.1 million increase in refunded ticket fees, refund reserves and bad debt for accounts receivable, and compared to net revenue of $81.3 million in the prior year. The balance of the reduction was primarily due to reduced March ticket sales largely related to COVID-19.

Net loss was $146.5 million for the first quarter, compared to a net loss of $10.0 million in the same period last year. First quarter net loss includes $113.7 million of charges and reserve increases largely related to the impact of COVID-19, including a $76.5 million increase in reserves in anticipation of potential future chargebacks and refunds.

Adjusted EBITDA¹ loss of $119.6 million for the first quarter included $113.7 million in charges and reserve increases largely related to the impact of COVID-19, and as a result, declined from Adjusted EBITDA of $4.1 million in the same period last year.

Ticket sales trends have shown improvement from the mid-March low-point, driven by online events and small gatherings; however, restrictions on live events and adherence to social-distancing guidelines are expected to constrain ticket sales for several quarters.

We are working to manage near-term exposure to ticket refunds and chargebacks with product, policy and communications initiatives. Since the start of March, event creators on Eventbrite have refunded more than $150 million to ticket buyers, while refunds and chargebacks funded by Eventbrite have totaled less than $3 million over the same timeframe.

We announced a financing with Francisco Partners for up to $225 million in term loans. The credit facility helps strengthen the company’s liquidity and provide flexibility to manage through a range of recovery scenarios and the return to live events. For more details, see our press release titled, “Eventbrite Announces Financing with Francisco Partners” available on our investor relations website: investor.eventbrite.com.


(1) Adjusted EBITDA is a financial measure that is not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). See the section in this press release titled “About Non-GAAP Financial Measures” for information regarding Adjusted EBITDA, including the limitations of such measures, and see the end of this press release for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure.

Conference Call and Webcast Information

Event: Eventbrite First Quarter 2020 Earnings Conference Call

Date: Monday, May 11, 2020

Time: 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)

Conference Call Dial-in: (877) 682-6650 or (647) 689-5426

Live Webcast Site: https://investor.eventbrite.com

An archived webcast of the conference call will be accessible on Eventbrite’s Investor Relations page, https://investor.eventbrite.com. A telephonic replay of the conference call will be available until Monday, May 18, 2020, by dialing (800) 585-8367 or (416) 621-4642 and entering the conference ID number 2694143.

About Eventbrite

Eventbrite is a global self-service ticketing and experience technology platform that serves a community of nearly one million event creators in over 180 countries. Since inception, Eventbrite has been at the center of the experience economy, transforming the way people organize and attend events. The company was founded by Julia Hartz, Kevin Hartz and Renaud Visage, with a vision to build a self-service platform that would make it possible for anyone to create and sell tickets to live experiences. The Eventbrite platform provides an intuitive, secure, and reliable service that enables creators to plan and execute their live and online events, whether it’s an annual culinary festival attracting thousands of foodies, a professional webinar, a weekly yoga workshop or a youth dance class. With over 300 million tickets distributed to more than 4 million experiences in 2019, Eventbrite is where people all over the world discover new things to do or new ways to do more of what they love. Learn more at www.eventbrite.com.

About Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided here.

Forward-Looking Statements

This press release contains forward-looking statements, including but not limited to statements regarding the company’s liquidation position and plans to execute its long-term growth strategy and investment plans. These forward-looking statements reflect the company’s views regarding current expectations and projections about future events and conditions and are based on currently available information. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict, including risks related to the COVID-19 pandemic and resulting worldwide cancellation of live events, which had been the cornerstone of the company’s business, and related uncertainty regarding the duration of the shutdown of live events and the possibility that future shutdowns will occur, whether as a result of the COVID-19 pandemic, other public health concerns or epidemics or other factors adversely affecting the live event market, the company’s ability to achieve the expected operating expense savings from its global workforce reduction, and the Risk Factors identified in the company’s most recently filed annual report on Form 10-K; therefore, the company’s actual results could differ materially from those expressed, implied or forecast in any such forward-looking statements. Expressions of future goals and expectations and similar expressions, including "may," "will," "should," "could," "aims," "seeks," "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," and "continue," reflecting something other than historical fact are intended to identify forward-looking statements. Unless required by law, the company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, readers should carefully review the reports and documents the company files or furnishes from time to time with the Securities and Exchange Commission, particularly its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Consolidated Statements of Operations

 

 

($ in thousands, except per share data)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended
March 31,

 

2020

 

2019

 

 

 

 

Net revenue

$

49,086

 

 

$

81,326

 

Cost of net revenue(1)

28,005

 

 

30,565

 

Gross profit

21,081

 

 

50,761

 

Operating expenses(1):

 

 

 

Product development

16,171

 

 

14,597

 

Sales, marketing and support

99,915

 

 

21,725

 

General and administrative

42,109

 

 

25,380

 

Total operating expenses

158,195

 

 

61,702

 

Loss from operations

(137,114)

 

 

(10,941)

 

Interest expense

(12)

 

 

(1,092)

 

Other income (expense), net

(9,285)

 

 

2,180

 

Loss before income taxes

(146,411)

 

 

(9,853)

 

Income tax provision

65

 

 

100

 

Net loss

$

(146,476)

 

 

$

(9,953)

 

Net loss per share, basic and diluted

$

(1.71)

 

 

$

(0.13)

 

Weighted-average shares outstanding used to
compute net loss per share, basic and diluted

85,879

 

 

78,670

 

 

 

 

 

(1) Includes stock-based compensation as follows:

 

 

 

Cost of net revenue

$

423

 

 

$

244

 

Product development

3,689

 

 

2,038

 

Sales, marketing and support

1,431

 

 

1,223

 

General and administrative

5,279

 

 

4,622

 

Total

$

10,822

 

 

$

8,127

 

 
 
Consolidated Balance Sheets

($ in thousands)

 

(Unaudited)

 

 

 

 

 

March 31,
2020

 

December 31,
2019

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

372,962

 

 

$

420,712

 

Funds receivable

 

 

54,896

 

Accounts receivable, net

1,892

 

 

2,932

 

Creator signing fees, net

6,347

 

 

9,597

 

Creator advances, net

13,868

 

 

22,282

 

Prepaid expenses and other current assets

14,089

 

 

14,157

 

Total current assets

409,158

 

 

524,576

 

Property, plant and equipment, net

19,393

 

 

19,735

 

Operating lease right-of-use assets

20,403

 

 

22,160

 

Goodwill

170,560

 

 

170,560

 

Acquired intangible assets, net

46,548

 

 

49,158

 

Restricted cash

2,215

 

 

2,228

 

Creator signing fees, noncurrent

11,378

 

 

16,710

 

Creator advances, noncurrent

594

 

 

922

 

Other assets

1,768

 

 

1,966

 

Total assets

$

682,017

 

 

$

808,015

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities

 

 

 

Accounts payable, creators

$

232,542

 

 

$

307,871

 

Accounts payable, trade

2,143

 

 

1,870

 

Chargebacks and refunds reserve

89,734

 

 

2,699

 

Funds payable

3,381

 

 

 

Accrued compensation and benefits

6,377

 

 

6,347

 

Accrued taxes

2,661

 

 

5,409

 

Operating lease liabilities

9,202

 

 

9,115

 

Other accrued liabilities

12,757

 

 

16,997

 

Total current liabilities

358,797

 

 

350,308

 

Accrued taxes, noncurrent

15,381

 

 

15,173

 

Operating lease liabilities, noncurrent

13,812

 

 

16,162

 

Other liabilities

485

 

 

557

 

Total liabilities

388,475

 

 

382,200

 

 

 

 

 

Stockholders’ equity

 

 

 

Common stock, at par

1

 

 

1

 

Additional paid-in capital

812,843

 

 

798,640

 

Accumulated deficit

(519,302)

 

 

(372,826)

 

Total stockholders’ equity

293,542

 

 

425,815

 

Total liabilities and stockholders’ equity

$

682,017

 

 

$

808,015

 

 
 
Consolidated Statements of Cash Flows

($ in thousands)

 

(Unaudited)

 

 

 

 

 

Three Months Ended
March 31,

 

2020

 

2019

Cash flows from operating activities

 

 

 

Net loss

$

(146,476)

 

 

$

(9,953)

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

6,213

 

 

6,012

 

Amortization of creator signing fees

3,130

 

 

2,393

 

Noncash operating lease expense

1,881

 

 

1,971

 

Accretion of term loan

 

 

104

 

Stock-based compensation

10,822

 

 

8,127

 

Provision for chargebacks and refunds

98,936

 

 

4,568

 

Impairment charges

13,932

 

 

463

 

Provision for bad debt and creator advances

6,549

 

 

580

 

Loss on disposal of equipment

 

 

22

 

Deferred income taxes

(120)

 

 

(174)

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(70)

 

 

(1,507)

 

Funds receivable

54,896

 

 

4,302

 

Creator signing fees, net

(3,894)

 

 

(4,621)

 

Creator advances, net

(1,284)

 

 

(4,120)

 

Prepaid expenses and other current assets

68

 

 

718

 

Other assets

200

 

 

117

 

Accounts payable, creators

(75,329)

 

 

81,470

 

Accounts payable, trade

411

 

 

285

 

Chargebacks and refunds reserve

(11,901)

 

 

(4,501)

 

Funds payable

3,381

 

 

 

Accrued compensation and benefits

30

 

 

1,571

 

Accrued taxes

(2,748)

 

 

(1,331)

 

Operating lease liabilities

(2,387)

 

 

(1,855)

 

Other accrued liabilities

(5,619)

 

 

3,225

 

Accrued taxes, noncurrent

328

 

 

27

 

Other liabilities

1

 

 

(1,343)

 

Net cash (used in) provided by operating activities

(49,050)

 

 

86,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

Cash flows from investing activities

 

 

 

Purchases of property and equipment

(1,033)

 

 

(1,285)

 

Capitalized internal-use software development costs

(1,909)

 

 

(2,105)

 

Net cash used in investing activities

(2,942)

 

 

(3,390)

 

Cash flows from financing activities

 

 

 

Proceeds from exercise of stock options

4,654

 

 

12,427

 

Taxes paid related to net share settlement of equity awards

(364)

 

 

(175)

 

Payment of debt issuance costs

 

 

(457)

 

Payments of finance lease obligations

(61)

 

 

(69)

 

Payments of deferred offering costs

 

 

(413)

 

Net cash provided by financing activities

4,229

 

 

11,313

 

Net increase (decrease) in cash, cash equivalents and restricted cash

(47,763)

 

 

94,473

 

Cash, cash equivalents and restricted cash

 

 

 

Beginning of period

422,940

 

 

439,400

 

End of period

$

375,177

 

 

$

533,873

 

Supplemental cash flow data

 

 

 

Interest paid

$

11

 

 

$

10

 

Income taxes paid, net of refunds

406

 

 

184

 

Noncash investing and financing activities

 

 

 

Vesting of early exercised stock options

$

61

 

 

$

92

 

Purchases of property and equipment, accrued but unpaid

305

 

 

572

 

Operating lease right-of-use assets obtained in exchange for operating lease
liabilities

 

 

137

 

 
 
Key Operating Metrics and Non-GAAP Financial Measures

 

($ in thousands)

 

(Unaudited)

 

 

 

 

 

Three Months Ended
March 31,

 

2020

 

2019

Paid ticket volume (in thousands)

22,237

 

 

27,026

 

Adjusted EBITDA

$

(119,600)

 

 

$

4,058

 

 
 
 

Free cash flow reconciliation

 

Three Months Ended
March 31,

 

2020

 

2019

Net cash provided by operating activities

$

(106,942)

 

 

$

7,406

 

Purchases of property and equipment and capitalized
internal-use software development costs

(13,150)

 

 

(13,048)

 

Free cash flow

$

(120,092)

 

 

$

(5,642)

 

 
 

Adjusted EBITDA reconciliation

 

(Unaudited)

 

Three Months Ended
March 31,

 

2020

 

2019

Net loss

$

(146,476)

 

 

$

(9,953)

 

Add:

 

 

 

Depreciation and amortization

6,213

 

 

6,012

 

Stock-based compensation

10,822

 

 

8,127

 

Interest expense

12

 

 

1,092

 

Direct and indirect acquisition related costs (1)

 

 

673

 

Employer taxes related to employee equity transactions

479

 

 

187

 

Other (income) expense, net

9,285

 

 

(2,180)

 

Income tax provision (benefit)

65

 

 

100

 

Adjusted EBITDA

$

(119,600)

 

 

$

4,058

 

 

 

 

 

(1) Direct and indirect acquisition related costs consist primarily of transaction and transition-related fees and expenses incurred within one year of the acquisition date, including legal, accounting, tax and other professional fees as well as personnel-related costs such as severance and retention bonuses for completed, pending and attempted acquisitions.

 
 
Pandemic’s Impact to Quarterly Results  
 

 

($ in millions) (Unaudited)

Actuals

Pandemic-related
Impact

Q1 2020

Q1 2020

 

Net revenue

$

49.1

 

($19.1

)

Cost of revenue

 

28.0

 

1.0

 

Gross profit

 

21.1

 

(18.1

)

 

Product development

 

16.2

 

0.0

 

Sales, marketing and support

 

99.9

 

76.5

 

General and administrative

 

42.1

 

19.1

 

Operating expenses

 

158.2

 

95.6

 

Operating Income

 

(137.1

)

(113.7

)

+ Stock-based compensation

 

10.8

 

0.0

 

+ Depreciation and amortization

 

6.2

 

0.0

 

+ Other adjustments

 

0.5

 

0.0

 

Adjusted EBITDA

($

119.6

)

($113.7

)

Commentary

Refund Impact on Net revenue

Refunded ticket fees: ($7.6)

Increase to ticket fee refund reserves: ($11.0)

Other Impact on Net revenue

Bad debt accounts receivable: ($0.5)

Total Impact on Net revenue: ($19.1)

Refund Impact on Cost of revenue

Refunded processing fees: $1.0

Total Impact on Gross profit: ($18.1)

Refund Impact on Sales and marketing

Increase to APO reserves: $76.5

Other Impact on General and administrative

Increase to upfront impairment charges and reserves: $19.1

Total Impact on Operating expenses: $95.6

Total Impact on Adjusted EBITDA: ($113.7)

Eventbrite Investor Relations
investors@eventbrite.com

Source: Eventbrite, Inc.

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