Vivid Seats Inc. Q1 FY2026 Earnings Call

Good morning, and welcome to Vivid Seats' First Quarter 2026 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 Austin Arnett.

Good morning, and welcome to Vivid Seats' First 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, which was issued earlier this morning. The release as well as supplemental earnings slides are available on our Investor Relations website at investors.vividseats.com. Today's call will include forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our projections, including the risks discussed in our earnings release, our most recent annual report on Form 10-K and our subsequent filings with the SEC. Today's call will also include references to adjusted EBITDA, a non-GAAP financial measure that provides useful information to our investors. To the extent reasonably available, a reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure can be found in our earnings release and supplemental earnings slides. And now I'll turn the call over to Larry.

Good morning, everyone, and thank you for joining us today. We entered fiscal year 2026 with a clear focus and road map to enhance our market position and financial trajectory. With that focus, we delivered measurable progress in the first quarter, resulting in meaningful improvements across our business. Our first quarter results came in at the high end or above guidance. On a sequential basis, we delivered growth in GOV, adjusted EBITDA and our cash balance relative to Q4 2025. This momentum and sequential improvement support our confidence in returning to year-over-year growth in the second half of fiscal year 2026 and beyond. Our long-term strategy centers around Vivid Seats' foundational strengths, leading technology and product innovation, operational excellence and a differentiated value proposition for our customers and partners. Pairing a seamless user experience with a differentiated value proposition is central to our mission. Vivid Seats strives to be the most rewarding ticketing company, and we are increasingly aligning our product, pricing and messaging around that core idea. We deliver value through competitive pricing, seamless user experiences and meaningful rewards that deepen customer loyalty over time. We are currently focusing our product innovation efforts on the core customer journey. We are improving funnel efficiency, enhancing conversion and delivering a faster, more intuitive experience. We recently deployed an upgraded app checkout experience, delivering a streamlined flow to accelerate the customer journey while improving conversion rates. We are encouraged by the early results and are excited about the pipeline of enhancements to both our app and web properties that will be deployed in Q2 and Q3. Our enhanced app value proposition continues to deliver encouraging results. In Q1 2026, Vivid Seats app GOV was up 20% year-over-year. This growth led to Vivid Seats app share of GOV exceeding 40% for the quarter. Increasing app adoption reflects the combined impact of the Vivid Seats Reward program, our lowest price guarantee and continued product improvements. Together, these investments represent a highly differentiated value proposition. App users are more engaged, return more frequently, convert at higher rates and touch paid performance marketing channels less often. As volume shifts into the app over time, we anticipate more efficient customer acquisition alongside enhanced customer retention and growing lifetime value. Alongside our app progress, we are continuing to invest in innovation across customer acquisition by working closely with leading AI platforms. This includes our recently launched ads on ChatGPT. While still in the early stages, we believe these efforts will help us capitalize on the long-term opportunities AI presents within the ticketing ecosystem. In tandem with the encouraging trends we are seeing with Vivid Seats branded properties, we were pleased to launch a significant new private label partner during Q1 with performance already exceeding our expectations. We also recently extended our agreement with a large existing private label customer, underscoring the value proposition we deliver to our private label partners. We are pleased to see the private label business deliver sequential revenue growth in Q1 2026 and believe this trend supports our expectation of a return to growth in the second half of the year. With that, I'll turn it over to Joe to walk through our first quarter financial results in more detail.

Thank you, Larry, and good morning, everyone. As Larry mentioned, our first quarter performance landed at or above the top end of our guidance, underscoring strong execution across the business. We achieved meaningful sequential increases in GOV and adjusted EBITDA compared to Q4 2025. This improvement is encouraging as we pursue a return to growth in fiscal year 2026 and beyond. Q1 2026 Marketplace GOV was $612 million compared to $581 million in Q4 2025, reflecting quarter-to-quarter growth of $31 million or 5.5%. This is particularly encouraging as the fourth quarter typically represents the highest GOV quarter each year due in part to robust sports volumes with all major leagues in season. Q1 2026 consolidated revenue was $126 million, essentially flat with $127 million in Q4 2025. Within consolidated revenue, private label revenue grew 20% quarter-to-quarter, highlighting a meaningful growth trend in the channel despite continued year-over-year private label declines as we lap the 2025 loss of a large customer as previously disclosed. Marketplace take rate was 15.9% in Q1 2026 compared to 16.8% in Q4 2025. The lower take rate primarily reflects mix shift as private label revenue tends to come with lower take rates. We continue to expect near-term take rates to remain around 16% on a consolidated basis. Q1 2026 adjusted EBITDA was $9.5 million compared to $1 million in Q4 2025. Adjusted EBITDA grew $8.5 million, marking substantial improvement on a sequential basis and highlighting the benefit of a material reduction in operating costs relative to a growing GOV and revenue base. Cash increased over $40 million in the first quarter to $144 million. Cash flow benefited from improved profitability alongside seasonally strong working capital dynamics. Our first quarter results show significant progress across our operational and financial goals. Accordingly, we are reaffirming our 2026 outlook. For fiscal year 2026, we continue to expect marketplace GOV in the range of $2.2 billion to $2.6 billion and adjusted EBITDA in the range of $30 million to $40 million. This outlook reflects continued execution of our operating plan and financial profile. I will now turn the call back to Larry for closing remarks.

Our first quarter results indicate our strategy is working, and we are moving in the right direction. We are excited about our momentum in the Vivid Seats app, where improving conversion and increasing engagement are supporting double-digit GOV growth. We are also encouraged by the sequential trends in our private label business as we seek to return to year-over-year growth later in the year. As we move through the year, we are confident that our core strengths, leading technology and data, operational excellence and a differentiated customer value proposition will shine through. We are excited to continue executing against our strategy and to deliver long-term value to all stakeholders. With that, operator, please open the call for questions.

Your first question comes from the line of Cameron Mansson-Perrone with Morgan Stanley.

Larry, last quarter, you highlighted that you're seeing some encouraging trends in terms of the competitive environment rationalizing. Wondering if you're continuing to see that and whether there's any event category where you're seeing more or less industry competition for activity and whether competitive intensity from an event-specific angle is — whether the rate of change is better or worse in any specific category? I appreciate it.

Yes. Thanks, Cameron. I think the moderation that we saw starting in Q4 from StubHub on the paid search side has continued. That's been somewhat counterbalanced by continued aggressiveness in that channel by some other players. But no question, they've stepped back from their peak spend that we saw early to middle of 2025. On the marketing spend side, perhaps a little surprisingly to us in the last few weeks, we've seen some shift to price testing and price competitiveness. So we continue to see particularly in sports across the ecosystem competitiveness around pricing, while the marketing landscape seems to have stabilized and moderated a bit.

Got it. Anything to follow up on that? I think the benefits of the push to drive activity in-app probably make you a little more insulated in terms of the vagaries of competitive intensity in the industry. Any additional color on how you think about that and what the opportunity could be as more activity shifts to in-app?

Yes. I think that's exactly right in terms of the goal and the strategy. We're happy to have exceeded 40%. Implicitly though, at 40% we still have exposure to paid search and marketing expense. The objective is very much to control our own future: bring folks into the ecosystem once and then focus on building a long-term relationship with those customers versus continually needing to reacquire them. But we do benefit when competitive intensity moderates, given the remaining piece of the business that's still exposed. The surface area of that exposure has shrunk quite a bit relative to two years ago.

Your next question comes from the line of Ryan Sigdahl with Craig-Hallum.

Larry, Joe, nice job on the sequential improvements and stabilization. I want to start on industry volume and am curious what you guys saw in Q1 and then Q2 quarter-to-date, acknowledging April was a very tough comp, but just curious to try and compare your results relative to the industry and what you saw there.

In Q1, the industry was up a smidge, so low single-digits. It started strong in January and then moderated into February and March. Net growth was single-digits. In Q2 thus far, it's roughly flat; it got off to a slower start with Easter timing, but April picked up with a couple of meaningful concert onsales in the last two weeks. So we're back to roughly flattish. At the moment, we generally continue to expect modest industry growth for the year. We've seen an increase in some cancellations of certain tours in the last few weeks — for example, The Pussycat Dolls, Zayn Malik, and a couple of others, and some postponements like Post Malone delaying dates. On some level, that may reflect mispricing or a cap on potential growth for the year.

Then just on market share, how that looked for you guys looking at SkyBox data on a sequential basis for the marketplace? And then secondly, on the market share, what you guys are seeing from SkyBox from your ERP customers?

Our share has been sequentially steady in our data when we look at Q4 into Q1 into Q2. As we've started to lap our most difficult comps last year, which started around now with peak spending in paid performance marketing channels, we've seen in our data our share shift to being up year-over-year, not dramatically but up, which is refreshing. We are well situated to return to growth in the back half of the year, and those are the types of metrics you like to see flipping green in advance of that. Regarding ERP customers, there continues to be competition for those customers, but we have not seen any meaningful defections in recent months. We're vigilant and continuing to reinvest and refocus on upgrading the platform to defend those relationships. Alongside our stabilizing and improving share in volumes, we've seen improvement in dialogue and discourse with all of our sellers, so we're excited about the outlook on the SkyBox front.

Your next question comes from the line of Ralph Schackart with William Blair.

Two, if I could. First on the macro environment and reads on the consumer now that we have some elevated oil prices. Larry had said that maybe there's some cap on prices. I'm not sure if those are related, but any comments as it relates to that? And then I have a follow-up.

We don't see a clear kink in demand that coincides with the Iran conflict or the move in oil prices where we can point to a discernible shift in purchasing. As we mentioned earlier, some concert tour cancellations may reflect that a subset of the market is tapped out, but it may also be part of natural oscillation where some artists misprice tours. We have seen some weakness; the lower end of the Vegas market has been the most palpable place where we've seen impact. Local operators have reinforced that. We're looking ahead to 2027 in Vegas when supply tailwinds arrive with the reopening of the Mirage. For this year, it's more of a blocking and tackling type year in Vegas.

Okay. Great. Switching gears to the app and some of the improvements you talked about in conversion rates. I think you said you're above 40% traffic now on the app. Maybe just a sense how that's trended over the last year or so, and any thoughts on where you think you could take that rate over time?

We've seen strong increases in share of GOV coming through the app. Ultimately, the GOV function is how you get more people into the app and drive higher conversion. Our activities focus on both. A lot of effort in the back half of last year went into making folks who see the app want to download and keep it through better messaging and reinforcing the value proposition. This year the focus has shifted to conversion: how to optimize the product experience and collect more data to show better personalized information. We have an exciting deployment calendar over Q2 and Q3 for the app. We're north of 40% in Q1. The ambition is for a majority of the business to come through the app. A realistic timetable for that would be at some point in 2027 on a run-rate basis, and that's what we're aspiring to deliver.

Your next question comes from the line of Brad Erickson with RBC Capital Markets.

So in terms of the return to growth, you pointed to the new private label partner giving you some added confidence for the second half. Can you remind us of any other items that could go right this year that get you back to growth in the second half or toward the high end of the guide? What would those drivers be?

As we frame why the second half is when we expect to flip back to growth, remember we lost a large private label customer in July of last year, so July and August are the first clean months without that customer. Subsequent to losing that customer, we brought a new meaningful private label customer on in Q1, which enabled sequential growth from Q4. Within private label, the path to incremental upside is twofold: winning additional customers and enabling existing customers to maximize their organic performance. We're making product enhancements configurable and available to partners quickly so they can benefit from upgrades we build for the Vivid Seats marketplace. Some upgrades that excite us on the Vivid side will be pushed to our private label platform, which provides opportunity for organic outperformance in the second half, and more prominently into 2027 for full-year impact. Beyond that, the concert calendar and supply slate is largely baked at this point, so upside will be driven by fundamental performance: product releases in Q2 and Q3 delivering conversion uplift and event mix. The World Cup is a potential tailwind if matchups are compelling.

Got it. And then bigger picture, as you continue conversations with the large language model companies, have you seen any indications or updates on their desire or ability to potentially capture economics by bringing the booking closer to the LLM? And when you think about the risks related to that, what do you point to as the specific points of insulation where the ticketing sector can maintain its economics within an LLM booking environment?

On the AI journey broadly, to date we've seen little progress on top-of-funnel disruption and much more progress on optimizing how we operate the business. Most of what we've seen is in the category of tools that allow us to be more efficient and deliver a better customer experience — building software more quickly, automating processes and improving customer service. Nothing we've seen indicates that a fully captive transaction where the marketplace is boxed out is likely or the near-term focus of LLMs. The biggest barrier is dynamic inventory in a deep vertical search category: you need aggregated inventory, seat maps and dynamic real-time pricing. LLMs don't have that data across every subcategory and are reliant on marketplaces like Vivid Seats that have aggregated inventory and built those capabilities. It will be incumbent on us in the industry to ensure we are properly compensated if we share that information. This is a multiyear journey and not one where we've seen LLMs disintermediate the marketplace so far.

Your next question comes from the line of Steven McDermott with Bank of America.

I was wondering if we could shift a little to your partnership with United — any updates there? Is that really driving any incrementality that you're seeing? And then as a follow-up, after your recent cost reductions, do you feel you're in a comfortable position to return to growth? Can we expect a more aggressive OpEx spend in the second half of this year?

United is a great example of the many partnerships we have across the ecosystem. It's been a nice tailwind throughout the year, but it's not an explicit needle mover for the results you saw in Q1. It's been great to add them and we're excited to continue to grow the partnership and iterate on maximizing it, but I would not consider it a primary influence on Q1 results. On the cost side, the reductions we've actioned are flowing through and are real. We have not seen any loss in productivity or capability; productivity and deployment rates have increased alongside efficiency gains, driven by having the right people in the right seats and using AI capabilities. Our objective is operating leverage: as we grow, a disproportionate amount of that growth should flow through to the bottom line. We have more opportunity to capture efficiency on the expense side as we move into next year. There are some variable costs tied to transactions, but our objective is that as we return to growth, G&A expenses remain steady.

Your next question comes from the line of Thomas Forte with Maxim Group.

Great. First off, Larry and Joe, congrats on the quarter. Larry, sorry about the Illini — at least OKC is playing the Lakers in this round. My first question is more exciting: what gives you confidence you can maintain your share and capitalize on the World Cup this year? If you're able to do that, how might World Cup contribute to your numbers this year? My second question is a bit more boring: now that we're a quarter in, do you want to give updated thoughts on cash conversion for adjusted EBITDA for 2026?

World Cup has been a meaningful tailwind. It's larger than a typical A-list concert tour but less than Taylor Swift. The World Cup went on sale in November, so we've been selling for six to seven months with a couple of months to go. It's tracking to those levels. If a typical A-list tour is about 1% of GOV for the year and Taylor Swift is high single-digits, the World Cup looks like it will be low to mid-single digits as a percentage of full-year GOV. We've seen strong performance to date; these are high average order size events, and our value proposition matters with high AOS events. It's incumbent on us to continue messaging that our app is the place to purchase these high AOS tickets. If we do that, we should get our fair share as we enter the playing phase of the tournament.

Great. And for my boring one, now that we're a quarter in, do you want to give updated thoughts on cash conversion for adjusted EBITDA for 2026?

Directionally, CapEx and capitalized software may come in a bit lower than previously estimated. Net interest expense is in the low $20 million range, CapEx and cap software in the low to mid-teens, and a bit of taxes related to international operations. If adjusted EBITDA is in the $35 million to $40 million range, you'll be cash flow positive before considering working capital. We expect that working capital will be a source of cash on balance over the course of the year. Assuming we deliver against our guidance, we believe we're tracking toward a cash flow positive year.

Your next question comes from the line of Kunal Madhukar with DB.

On the app side, how does the app user demographic differ from regular customers on the website in terms of age, interest, engagement, geography, and type of tickets (concert versus sports)? And a follow-up after that.

The biggest delineation is frequency: the most frequent live event attendees are more likely to download an app for buying tickets. That corresponds to categories with the highest recurrence, which tends to be sports. For example, Major League Baseball has many home games, and fans may attend multiple games per season. So app users repeat more often and over-index to sports because of inherent recurrence. Beyond that, there is not a lot to flag across geography or demographics. It's primarily the frequency profile with a sports orientation.

Given app GOV grew 20% and is now over 40% of Vivid Seats properties' GOV, that suggests non-app GOV declined materially. You mentioned that by 2027 app GOV on a run-rate basis should be a majority. What kind of growth rate should we expect on the app side versus the non-app side for the remainder of the year?

Definitionally, when we reference app GOV, that's of our Vivid Seats properties — it does not include other parts of the business like Vegas, Wavedash or private label. So be careful decomposing the math. We are not forecasting by device type explicitly, but implicitly we expect the app to grow disproportionately. As we start lapping some of the most competitively intensive periods, we expect web to get back to growth. Aggregate GOV numbers must be decomposed: pull private label out, remember the lost private label partner is different than competitiveness between marketplaces. It's true that app was up while other parts were down, but decomposition is important.

Your next question comes from the line of Andrew Marok with Raymond James.

With this quarter's results coming in nicely and the reiteration of the guide, is the business becoming more visible? Are you able to have more forecasting confidence than in the past? And a follow-up after that.

Overall, yes. As we move through the year, particularly by Q4 when the concert on-sale calendar solidifies, we have a clearer sense of supply. Tightening our expense base lowers the bar and helps mute impact from negatives. Reducing the surface area and exposure to paid search also helps diminish volatility from exogenous factors like competitor behavior. There will still be variance from event mix and exogenous events, but on controllables, we've dialed them in much more and feel better about putting outlooks in place.

As it relates to the app business, there's a perception that older people do big purchases on desktop for things like tickets, hotels and flights. How do you combat that to drive app growth? Is it demographic or are there nudges to get consumers to buy on the app?

When in discovery mode, some users prefer a larger screen. We want to make sure people know there's a better value proposition available in the app. If someone wants to transact on desktop, we will deliver a great experience. But if they discover on desktop and then download the app, we will message that the lowest price guarantee and typically our lowest prices are available in the app. Our rewards program will be more prominent in the app, providing inducement to transact there, while supporting transactions wherever a customer's workflow leads them.

Your last question comes from the line of Maria Ripps with Canaccord.

First, a follow-up on private label. You mentioned a new customer addition which is encouraging. How should we think about that segment going forward beyond returning to growth? Do you think it can return to the run rate you had a year or two ago? And a quick follow-up on international after that.

In absolute size, it's unlikely we'll reclaim the levels before the large customer loss in the near term. Our aspiration is for the segment to grow at or above the broader marketplace and industry rates. The two paths are enabling existing customers to organically outpace the industry and adding new customer wins. We're seeing signs pointing in the right direction where both can happen in parallel, which could lead to sequential growth and set us up in Q3 for sustained year-over-year growth. But returning to pre-loss levels from 2024 or early 2025 is not a near-term target. Regarding international, we're encouraged by the opportunity. We achieved positive contribution margin in 2025 and grew GOV triple-digits in 2025, continuing into 2026. In the spirit of focusing on highest-impact priorities, we're focusing on upgrades that benefit both international and North America, like checkout improvements. The near-term road map focuses on universal improvements. We have an international upgrade roadmap queued up; it's a matter of timing for when we can implement it.

Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.