SEAT Vivid Seats Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 01, 2024

 

 

Vivid Seats Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware			001-40926	86-3355184
(State or other jurisdiction of incorporation)			(Commission File Number)	(IRS Employer Identification No.)
24 E. Washington Street Suite 900
Chicago, Illinois				60602
(Address of principal executive offices)				(Zip Code)

 

Registrant’s telephone number, including area code: 312 291-9966

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.0001 per share		SEAT		The Nasdaq Stock Market LLC
Warrants to purchase one share of Class A common stock		SEATW		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02. Results of Operations and Financial Condition.

On August 6, 2024, Vivid Seats Inc. (the “Company”) issued a press release providing financial results for the second quarter ended June 30, 2024, a copy of which is attached as Exhibit 99.1 hereto.

The information set forth under this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 1, 2024, the Company’s Board of Directors (the “Board”) elected Adam Stewart as a director, contingent and effective immediately upon the resignation of a to-be-determined director that is expected to occur no later than November 3, 2024 in connection with the Company’s phased-in compliance with the rules of the Nasdaq Stock Market LLC (the “Nasdaq Rules”) applicable to a former “controlled company” (as defined in the Nasdaq Rules). Mr. Stewart will serve as a member of the class of directors of such resigning director. The Board expects Mr. Stewart to serve on its Nominating and Corporate Governance Committee upon the effectiveness of his election.

The Board has determined that Mr. Stewart qualifies as an “Independent Director” (as defined in the Nasdaq Rules). Upon the effectiveness of Mr. Stewart’s election, a majority of the Board will be comprised of Independent Directors.

Mr. Stewart was designated as a director by Hoya Topco, LLC pursuant to the Stockholders’ Agreement, dated October 18, 2021, among the Company, Hoya Topco, LLC and Hoya Sponsor, LLC. There are no transactions involving Mr. Stewart and the Company that would be required to be disclosed under Item 404(a) of Regulation S-K.

Mr. Stewart will receive compensation consistent with that received by the Company’s other non-employee directors, as described in the Company’s definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 24, 2024.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
99.1		Press release issued by Vivid Seats Inc., dated August 6, 2024
104		Cover Page Interactive Data File (embedded within the inline XBRL Document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Vivid Seats Inc.
Date:	August 6, 2024	By:	/s/ Lawrence Fey
			Lawrence Fey Chief Financial Officer

 

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Exhibit 99.1

Vivid Seats Delivers Strong Second Quarter Results

Q2 2024 Revenues of $198 Million (+20% YoY)

CHICAGO, IL – August 6, 2024 – Vivid Seats Inc. (NASDAQ: SEAT) (“Vivid Seats” or “we”), a leading marketplace that utilizes its technology platform to connect millions of buyers with thousands of ticket sellers across hundreds of thousands of events each year, today provided financial results for the second quarter ended June 30, 2024.

 

"In the second quarter we executed with discipline, delivering great results while opportunistically leveraging our unique assets and capabilities," said Stan Chia, Vivid Seats CEO. "20% year-over-year revenue growth and 42% year-over-year Adjusted EBITDA growth are a testament to the differentiated platform we have built. With our mix of buyer repeat orders continuing to trend higher in 2024, we continue to foster loyalty on both sides of our ecosystem and drive continued profitable growth."

 

Second Quarter 2024 Key Operational and Financial Metrics

 

"In the second quarter we delivered robust revenue and Adjusted EBITDA growth, demonstrating our ability to navigate varying competitive landscapes," said Lawrence Fey, Vivid Seats CFO. "In the second quarter, we also refinanced and up-sized our term loan and were able to reduce our interest rate while adding $125 million of cash to our balance sheet. We will continue to evaluate opportunities to deploy our cash balance across share repurchases and strategic M&A."

 

Key Performance Indicators ('000s)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Marketplace GOV(1)		$	998,065			$	953,739			$	2,026,543			$	1,809,267
Total Marketplace orders(2)			3,097				2,627				5,974				4,902
Total Resale orders(3)			101				76				200				163
Adjusted EBITDA(4)		$	44,178			$	31,077			$	83,096			$	73,512

 

 

 

 

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2024 Financial Outlook

Vivid Seats now anticipates Marketplace GOV, Revenues and Adjusted EBITDA for the year ending December 31, 2024 to be:

 

Additional detail around the 2024 outlook will be available on the second quarter 2024 earnings call.

*We calculate forward-looking non-GAAP Adjusted EBITDA based on internal forecasts that omit certain information that would be included in forward-looking net income, the most directly comparable GAAP measure. We do not attempt to provide a reconciliation of forward-looking Adjusted EBITDA to forward-looking net income because the timing and/or probable significance of certain excluded items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable efforts. Such items could have a significant and unpredictable impact on our future GAAP financial results.

 

Webcast Details

Vivid Seats will host a webcast at 8:30 a.m. Eastern Time today to discuss the second quarter 2024 financial results, business updates and financial outlook. Participants may access the live webcast and supplemental earnings presentation on the events page of the Vivid Seats Investor Relations website at https://investors.vividseats.com/events-and-presentations.

About Vivid Seats

Founded in 2001, Vivid Seats is a leading online ticket marketplace committed to becoming the ultimate partner for connecting fans to the live events, artists, and teams they love. Based on the belief that everyone should “Experience It Live,” the Chicago-based company provides exceptional value by providing one of the widest selections of events and tickets in North America and an industry leading Vivid Seats Rewards program where all fans earn on every purchase. Vivid Seats has been chosen as the official ticketing partner by some of the biggest brands in the entertainment industry including ESPN, Rolling Stone, and the Los Angeles Clippers. Vivid Seats also owns Vivid Picks, a daily fantasy sports app. Through its proprietary software and unique technology, Vivid Seats drives the consumer and business ecosystem for live event ticketing and enables the power of shared experiences to unite people. Vivid Seats has been recognized by Newsweek as one of America’s Best Companies for Customer Service in ticketing. Fans who want to have the best live experiences can start by downloading the Vivid Seats mobile app, going to vividseats.com, or calling 866-848-8499.

 

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements in this press release relate to, without limitation: our future operating results and financial position, including our expectations regarding Marketplace GOV, revenues and Adjusted EBITDA; our expectations with respect to live event industry growth and our TAM and competitive positioning; our business strategy; share repurchases and M&A opportunities; and the plans and objectives of management for future operations. Words such as “anticipate,” “believe,” “can,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “may,” “plan,” “project,” “propose,” “seek,” “should,” “target,” “will” and “would,” as well as similar expressions which predict or indicate future events and trends or which do not relate to historical matters, are intended to identify such forward-looking statements. Forward-looking statements are not guarantees of future performance, conditions or results, and are subject to risks, uncertainties and assumptions that can be difficult to predict and/or outside of our control. Therefore, actual results may differ materially from those contemplated by any forward-looking statements. Important factors that could cause or contribute to such differences include, but are not limited to: our ability to generate sufficient cash flows or raise additional capital necessary to fund our operations; the supply and demand of live concert, sporting and theater events; our ability to maintain and develop our relationships with ticket buyers, sellers and partners; changes in internet search engine algorithms and dynamics, search engine disintermediation or mobile application marketplace rules; our ability to compete in the ticketing industry; our ability to maintain and improve our platform and develop successful new solutions and enhancements or improve existing ones; the impact of extraordinary events, including disease epidemics and pandemics; the impact of our acquisitions and strategic investments, including our integration of Wavedash Co., Ltd. and Vegas.com, LLC; the effects of any recession and/or heightened inflation; our ability to maintain the integrity of our information systems and infrastructure, and to identify, assess and manage relevant cybersecurity risks; and other factors discussed in the “Risk Factors” sections of our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts:

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Investors

Kate Africk

Kate.Africk@vividseats.com

Media

Julia Young

Julia.Young@vividseats.com

 

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data) (Unaudited)

 

		June 30,				December 31,
		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	234,289			$	125,484
Restricted cash			6,136				6,950
Accounts receivable – net			68,628				58,481
Inventory – net			30,249				21,018
Prepaid expenses and other current assets			31,519				34,061
Total current assets			370,821				245,994
Property and equipment – net			9,663				10,156
Right-of-use assets – net			9,692				9,826
Intangible assets – net			227,054				241,155
Goodwill			941,507				947,359
Deferred tax assets			85,073				85,564
Investments			7,245				6,993
Other non-current assets			3,647				3,052
Total assets		$	1,654,702			$	1,550,099
Liabilities and equity
Current liabilities:
Accounts payable		$	266,502			$	257,514
Accrued expenses and other current liabilities			168,983				191,642
Deferred revenue			30,173				34,674
Current maturities of long-term debt			3,950				3,933
Total current liabilities			469,608				487,763
Long-term debt – net			386,506				264,632
Long-term lease liabilities			16,104				16,215
TRA liability			162,233				165,699
Other liabilities			26,146				29,031
Total long-term liabilities			590,989				475,577
Commitments and contingencies (Note 15)
Redeemable noncontrolling interests			438,294				481,742
Shareholders' equity
Class A common stock, $0.0001 par value; 500,000,000 shares authorized, 142,554,703 and 141,167,311 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			14				14
Class B common stock, $0.0001 par value; 250,000,000 shares authorized, 76,225,000 issued and outstanding at June 30, 2024 and December 31, 2023			8				8
Additional paid-in capital			1,164,240				1,096,430
Treasury stock, at cost, 10,750,153 and 7,291,497 shares at June 30, 2024 and December 31, 2023, respectively			(72,655	)			(52,586	)
Accumulated deficit			(934,580	)			(939,596	)
Accumulated other comprehensive income (loss)			(1,216	)			747
Total Shareholders' equity			155,811				105,017
Total liabilities, Redeemable noncontrolling interests, and Shareholders' equity		$	1,654,702			$	1,550,099

 

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands) (Unaudited)

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenues		$	198,316			$	165,380			$	389,168			$	326,443
Costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)			48,765				42,616				98,348				80,376
Marketing and selling			70,114				65,192				137,861				119,964
General and administrative			61,053				38,307				103,420				70,696
Depreciation and amortization			10,502				2,704				20,985				5,302
Change in fair value of contingent consideration			—				(1,052	)			—				(1,018	)
Income from operations			7,882				17,613				28,554				51,123
Other expense:											-
Interest expense – net			5,324				2,772				10,406				6,052
Other expense			3,202				1,000				5,784				673
Income (loss) before income taxes			(644	)			13,841				12,364				44,398
Income tax expense (benefit)			577				(24,485	)			2,846				(24,200	)
Net income (loss)			(1,221	)			38,326				9,518				68,598
Net income (loss) attributable to redeemable noncontrolling interests			(160	)			7,614				4,505				25,704
Net income (loss) attributable to Class A Common Stockholders		$	(1,061	)		$	30,712			$	5,013			$	42,894

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (Unaudited)

		Six Months Ended June 30,
		2024				2023
Cash flows from operating activities
Net income		$	9,518			$	68,598
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			20,985				5,302
Amortization of leases			843				295
Amortization of deferred financing costs			453				453
Equity-based compensation expense			27,600				12,910
Change in fair value of warrants			(1,761	)			673
Loss on asset disposals			122				17
Deferred taxes			156				(24,577	)
Change in fair value of derivative asset			81				—
Non-cash interest income			(291	)			—
Foreign currency revaluation loss			5,798				—
Change in fair value of contingent consideration			—				(1,018	)
Change in assets and liabilities:
Accounts receivable – net			(10,644	)			(9,770	)
Inventory – net			(9,245	)			(15,227	)
Prepaid expenses and other current assets			2,541				(16,696	)
Accounts payable			10,084				42,905
Accrued expenses and other current liabilities			(25,803	)			13,586
Deferred revenue			(4,505	)			(1,913	)
Other non-current assets and liabilities			(573	)			7,132
Net cash provided by operating activities			25,359				82,670
Cash flows from investing activities
Purchases of property and equipment			(378	)			(606	)
Purchases of personal seat licenses			(737	)			(486	)
Investments in developed technology			(9,433	)			(4,491	)
Net cash used in investing activities			(10,548	)			(5,583	)
Cash flows from financing activities
Payments of February 2022 First Lien Loan			(689	)			(1,375	)
Repurchase of common stock as treasury stock			(20,069	)			(7,612	)
Tax distributions			(6,414	)			(11,016	)
Payments of Shoko Chukin Bank Loan			(2,655	)			—
Payments for taxes related to net settlement of equity incentive awards			(565	)			—
Proceeds from June 2024 First Lien Loan			125,500				—
Payments of deferred financing costs and other debt-related costs			(315	)			—
Payment of liabilities under Tax Receivable Agreement			(77	)			—
Cash paid for milestone payments			—				(2,500	)
Net cash provided by (used in) financing activities			94,716				(22,503	)
Impact of foreign exchange on cash, cash equivalents, and restricted cash			(1,536	)			—
Net increase in cash, cash equivalents, and restricted cash			107,991				54,584
Cash, cash equivalents, and restricted cash – beginning of period			132,434				252,290
Cash, cash equivalents, and restricted cash – end of period		$	240,425			$	306,874
Supplemental disclosure of cash flow information:
Cash paid for interest		$	16,108			$	7,261
Cash paid for income tax		$	3,285			$	401

 

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Use of Non-GAAP Financial Measures

We present Adjusted EBITDA, which is a non-GAAP financial measure, because it is a measure frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe this measure is helpful in highlighting trends in our operating results because it excludes the impact of items that are outside of our control or not reflective of ongoing performance related directly to the operation of our business.

Adjusted EBITDA is a key measure used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. Moreover, we believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for making period-to-period comparisons of our business performance and highlighting trends in our operating results.

Adjusted EBITDA is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Adjusted EBITDA does not reflect all amounts associated with our operating results as determined in accordance with GAAP and may exclude recurring costs such as interest expense – net, equity-based compensation, litigation, settlements and related costs, change in fair value of warrants, change in fair value of derivative assets and foreign currency revaluation (gains)/losses. In addition, other companies may calculate Adjusted EBITDA differently than we do, thereby limiting its usefulness as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from Adjusted EBITDA.

The following table provides a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net income (in thousands):

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net income (loss)		$	(1,221	)		$	38,326			$	9,518			$	68,598
Income tax expense (benefit)			577				(24,485	)			2,846				(24,200	)
Interest expense – net			5,324				2,772				10,406				6,052
Depreciation and amortization			10,502				2,704				20,985				5,302
Sales tax liability(1)			4,819				—				2,088				—
Transaction costs(2)			3,507				4,488				5,406				4,944
Equity-based compensation(3)			19,112				7,380				27,600				12,910
Litigation, settlements and related costs(4)			4				(66	)			7				234
Change in fair value of warrants(5)			(1,301	)			1,000				(1,761	)			673
Change in fair value of derivative asset(6)			43				—				81				—
Change in fair value of contingent consideration(7)			—				(1,052	)			—				(1,018	)
Loss on asset disposals(8)			20				10				122				17
Foreign currency revaluation loss(9)			2,792				—				5,798				—
Adjusted EBITDA		$	44,178			$	31,077			$	83,096			$	73,512

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v3.24.2.u1

Document And Entity Information	Aug. 01, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 01, 2024
Entity Registrant Name	Vivid Seats Inc.
Entity Central Index Key	0001856031
Entity Emerging Growth Company	true
Entity File Number	001-40926
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-3355184
Entity Address, Address Line One	24 E. Washington Street
Entity Address, Address Line Two	Suite 900
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60602
City Area Code	312
Local Phone Number	291-9966
Entity Information, Former Legal or Registered Name	Not Applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Ex Transition Period	false
Common Class A [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	SEAT
Security Exchange Name	NASDAQ
Warrants [Member]
Document Information [Line Items]
Title of 12(b) Security	Warrants to purchase one share of Class A common stock
Trading Symbol	SEATW
Security Exchange Name	NASDAQ

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