Vivid Seats Inc.

Welcome to the Vivid Seats Q1 2022 Earnings Conference Call. My name is Richard, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press 01 on your touch-tone phone. As a reminder, the conference is being recorded. I will now turn the call over to Kate Copples, Head of Investor Relations. Ms. Copples, you may begin.

Good morning and welcome to Vivid Seats first quarter 2022 earnings conference call. I am Kate Copples, head of investor relations at Vivid Seats. Joining me today to discuss Vivid Seats results are Stan Chia, chief executive officer, and Larry Fay, chief financial officer. By now, everyone should have access to the company's first quarter earnings press release filed earlier this morning. We have also provided supplemental earnings slides. The press release and earnings slides are available on the investor relations page of Vivid Seats website at investors.vividseats.com. During the course of this call, management may make forward-looking statements within the meaning of federal securities laws. These forward-looking statements are subject to the risks and uncertainties as described in the company's earnings press release and other filings with the SEC. On today's call, we will refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures that we believe provide useful information for our investors. You will find a historical reconciliation of adjusted EBITDA and adjusted EBITDA margin to the corresponding GAAP measure in the earnings press release, supplemental earnings slides, and other filings with the SEC. And now, I would like to turn the call over to Stan.

Good morning, everyone, and thank you for joining us today. I'm excited to speak with you about our strong record setting first quarter and the continued momentum we are seeing across our business. In the first quarter of 2022, we achieved our highest ever Q1 marketplace, GOV and revenue. The results we delivered in the first quarter demonstrate growing consumer demand over the last year and our outpaced performance in that environment. Fans are eager to attend live events, and we are well-positioned to capitalize on that demand. As such, we have raised our 2022 guidance. Today, I'll share an update on the progress we made in the first quarter and discuss how we are continuing to position Vivid Seats to win as a differentiated technology marketplace with multiple products and platforms that facilitate engaging and memorable experiences for fans. Then I'll turn it over to Larry to share our financial results in more detail. Heading into this quarter, we were well positioned after finishing 2021 with record revenue in each of the second, third, and fourth quarters as live events rapidly returned. I'm proud of our team, which continued delivering awesome results in the first quarter of 2022, including $742 million in Marketplace Gross Order Value, or GOVs, $131 million in revenues, and $21 million in adjusted EBITDA. As a technology platform and marketplace, we sit at the intersection of supply and demand. From this vantage point in Q1, we continue to see the strong and growing consumer demand that we saw in the fourth quarter. And it's been exciting to witness the energy of fans connecting with each other and their favorite artists or sports teams through live event experiences. During March Madness, we saw the most in-demand college basketball single game ticket that we've ever tracked with Duke versus UNC. And in advance of the fall 2022 football season, we've seen excitement from consumers building since early March when our website traffic spiked with fans looking for tickets, even without an NFL schedule. Additionally, even with the MLB season delay, we're seeing much stronger demand for baseball tickets compared to 2019, which was the last baseball season not impacted by the pandemic. It's clear that there is a strong drive from consumers for connection, and we are seeing the fulfillment of this desire happen through live experiences, which is reflected in purchasing patterns. Specifically, the percentage of concert ticket orders for more than four tickets has increased since pre-pandemic 2019. As consumers continue to seek out this kind of connection, we remain committed to empowering and enabling these moments. We are also seeing success with the investments we've made in our marketplace that continue to bring differentiated value to our customers, whether they are fans or sellers. For fans, our superior technology powers a marketplace that delivers an extensive breadth and depth of tickets at a competitive value along with an industry-leading rewards program. On the seller side, our superior technology powers Skybox, the leading ERP for sellers. And both sides are supported by our excellent customer service as recognized by Newsweek for the last three years. These factors collectively give us the confidence that we truly have a right to win. We are not alone in this belief. Recent sentiment from both fans and sellers alike who have used our product or our frequent ticket buyers show that our efforts have earned us some of the industry's highest net promoter scores. We've seen this reflected in both the data we track as well as independent sources such as the Harris Poll where we had the highest recommendation percentage among peers. As a growing and innovative technology company with validated customer sentiment, Brand awareness is an important pillar for us to build upon our momentum and draw more users onto our platform. Alongside our brand investments, we will also continue to invest in performance marketing channels to further grow our marketplace GOV. Amplifying our message to maximize awareness of what differentiates us continues to be an opportunity that we believe will have long-term benefits. While we are still early in these efforts and live events are a low frequency category, we ultimately believe strategic investments here will drive lifetime customer value through acquisition efficiency and retention benefits. That said, we view the ROI profile as a J curve with at least several quarters before results appear in our margin profile. We also continue to innovate, evolve, and expand our offerings to engage with and reach new live event fans. As I said last quarter, user engagement within our product ecosystems remains central to our long-term strategy. We continue to quickly grow users of Betcha, our daily fantasy sports app, and those users are highly engaged, continuing to place more than 10 entries per month on average. Also, we have started surfacing cross-platform content and are pleased to note that customers who are active on both the Vivid Seats and Betcha platforms play more frequently, place larger entries, and deposit more than those who solely use the Betcha app. Betcha is currently in a hyper-growth phase off a small base, and we are investing in infrastructure to scale our offering. While our core business remains a live events marketplace, we view Betcha as TAM additive, and the high overlap between sports fans' interests in live events and daily fantasy sports will allow us to leverage profitable customer acquisitions and drive increased engagement through a more relevant and differentiated platform ecosystem. While we continue to make progress building and integrating our products and brand, we are still early in unlocking Vetch's potential and remain excited about its future prospects. We are also leveraging partnerships that amplify brand awareness while delivering incremental reach and revenue. We will continue to drive brand efforts with category-endemic leaders who reach a significant share of the live event-going population, and we have seen our year-to-date GOV generated by key brand partners outpace 2019 by a wide margin. With longtime partner ESPN, we recently launched Hot Ticket, a Vivid Seats-branded and exclusive segment which spotlights the most in-demand matchups across all mediums, audio, digital, and television. Additionally, in March, we strengthened our partnership with Capital One with the launch of Capital One Entertainment, a new ticketing platform for Capital One rewards cardholders. Built and powered by Vivid Seats, this digital-first booking experience unlocks exclusive access to unforgettable experiences across sports, music, and more for Capital One rewards cardholders. We created this new experience by leveraging our marketplace inventory, technology, fulfillment, and customer service capabilities. We will continue to seek out mutually beneficial partnerships in our existing ecosystem, as well as in other categories that improve the experience for our customers while leveraging our existing brand, traffic, and reputation. Before I turn the call over to Larry, I wanted to congratulate and thank both Riva Bacall, who has been promoted to the new role of Chief Product and Strategy Officer, and Ted Pickus, who has been promoted to Chief Accounting Officer for their dedication and leadership. Both Riva and Ted are tremendous proven leaders who have been integral to VividSeed's success over the past few years. As we continue to invest in talent and support our proven leaders, these promotions were natural choices. All of us at VividSeeds are proud of their accomplishments and privileged to work alongside them, and I'm confident that their talents will continue to move our business forward and deliver shareholder value. Again, congratulations and a sincere thanks to both Riva and Ted. With that, I will turn it over to Larry.