Vivid Seats Inc.

Good day and thank you for standing by. Welcome to the Vivid Seats fourth quarter 2023 earnings webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kate Africk. Please go ahead.

Good morning, and welcome to Vivid Seats' fourth quarter 2023 earnings conference call. I'm Kate Africk, 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 our fourth quarter earnings press release, which we released earlier this morning. The press release, as well as supplemental earnings slides, are available on the Investor Relations page of Vivid Seats' website at investors.vividseats.com. During the course of today's call, management may make forward-looking statements within the meaning of federal securities laws. these forward-looking statements are subject to risks and uncertainties, including those described in our earnings press release, our most recent annual report on Form 10-K, and our other filings with the SEC. On today's call, we will refer to adjusted EBITDA, adjusted EBITDA margin, and cash generation, which are non-GAAP financial measures that provide useful information for our investors. To the extent reasonably available, a reconciliation of these non-GAAP financial measures to their corresponding GAAP measures can be found in our earnings press release and supplemental earnings slides. And now, I would like to turn the call over to Stan.

Good morning, everyone, and thank you for joining us today. 2023 was a transformational year for Vivid Seats, which we were pleased to wrap with a strong fourth quarter. After great years in 2021 and 2022, the North American live event market continues with robust and durable supply and demand. Throughout 2023, we seized upon market strength while furthering our strategic objectives that lay the foundation for our growth for years to come. We drove innovation, launching new products for both buyers and sellers and continue to cultivate awareness and affinity for our marketplace as demonstrated by our mix of repeat orders climbing to almost 60%. Importantly, we completed two strategically and financially accretive acquisitions that drove substantial TAM expansion and unlocked additional avenues for durable double-digit growth. All of this was accomplished while we generated very strong cash flow, which will enable future capital deployment and value creation for shareholders. Today, I'll walk you through our financial highlights and then discuss the progress we delivered on our long-term strategic objectives. Then, Larry will walk through our financial results in more detail. Starting with the financial highlights for 2023, we are proud to have delivered $3.9 billion of marketplace GOV, $713 million of revenues, and $142 million of adjusted EBITDA, driving nearly 25% top and bottom line growth and substantially outperforming our original forecast and guidance for the year. As we look at the live event industry, the North American market continues to hum with healthy growth and secular trends that we expect will drive growth for years to come. As we've discussed previously, consumers crave and prioritize live experiences and artists are eager to tour as their primary source of income, creating a robust environment for both demand and supply. Our 2023 results reflect industry strength that we amplified with our strategy. Encouraging repeat behavior is fundamental to our strategy, whether that is through our loyalty program, engagement initiatives, differentiated experiences, or excellent customer service is validated by Newsweek once again this year. The most telling KPI for this strategy is our mix of repeat orders versus new, which stood at 47% repeat orders in 2018 before these initiatives. After climbing to 56% in 2022, we've now reached 59% repeat mix in 2023, shifting 300 basis points towards sticky, and more profitable repeat orders. As we continue cultivating brand awareness and affinity, we expect to mix even higher into repeat orders and drive substantial marketing leverage over the next several years. Our focus on engagement initiatives contributes to this shift, and we made substantial progress this year with our launch of Game Center within the Vivid Seeds app. We introduced Game Center at mid-year and rapidly gained users who play daily games and score points towards promo codes or drawings for free tickets. Game Center users engage frequently, opening the Vivid Seats app multiple times per month on average and almost always browse tickets before or after playing in Game Center. We are already seeing Game Center use translating to purchases. Game Center now has more than 260,000 users, and those users purchase tickets at a faster rate than non-Game Center app users, which is the exact behavior we seek to drive. In 2023, we expanded our roster of team partnerships across multiple leagues to offer unique and exciting forms of engagement with our buyers. Through team partnerships, we offer premium game day experiences and unique opportunities like exclusive early access to pregame batting practice at stadiums, all-inclusive upscale suites, guaranteed jumbotron time, and surprise appearances from Hall of Famers, all exclusively available through Vivid Seats. Our industry-leading loyalty program, Vivid Seats Rewards, offers compelling value and reason to choose Vivid Seats. The message, buy 10 tickets, get one free, along with our excellent customer service, resonates with buyers. In fact, our latest NPS data shows that an unbiased panel of consumers is substantially more likely to recommend Vivid Seats than any other scaled ticketing marketplaces. An equally important element within our broader strategy is maintaining our leading position with sellers. Skybox is the ERP of choice for the majority of professional sellers, and in 2023, we continue to improve our best-in-class seller product lineup. Skybox Drive is nearing the end of its beta phase, during which we have continued to onboard beta users and incorporate vital feedback into the product we plan to bring to market. We are excited to fully launch Skybox Drive and are on track to do so later this year. With our Vivid Seats flywheel spinning in 2023, we also substantially increased our TAM and enhanced the financial profile of our business with two compelling strategic acquisitions. First, with our acquisition of Wavedash in Japan, we began to unlock an estimated incremental $40 billion of global ticketing TAM. Then, with our acquisition of Vegas.com, we unlocked another $6 billion of venue direct TAM. in the entertainment capital of the United States. As we integrate these businesses, the pathways to driving synergistic upside from each have become even more clear and compelling. While it's still early days for Vegas.com, we see great potential and multiple avenues for synergies. We've begun optimizing inventory selection across our sites and anticipate generating revenue synergies this year. Another exciting intermediate term opportunity is the use of Vegas.com as a profitable customer acquisition vehicle that also funnels live event enthusiasts into the VividSeats ecosystem. Since last quarter, we've become incrementally excited about the international opportunity ahead of us and have begun building the infrastructure to go live in new markets. Secular tailwinds driving growth in North America are echoing abroad. We see exciting opportunity to deliver incremental growth and profitability for years to come as we expand into additional geographies. Because of this growing excitement, we are accelerating our investment into international expansion this year and believe these investments provide additional pathways to delivering double-digit growth for years to come. Before Larry turns to the financial results, I want to reflect on what we achieved this year and where we are going in 2024 and beyond. In 2023, we grew top and bottom line by nearly 25%, significantly expanded our TAM and furthered our objective to be the marketplace of choice for both sellers and buyers. We also added incremental capabilities such as Game Center and Skybox Drive, continue to enhance our loyalty program, and we're once again recognized by Newsweek as having one of the best customer service experiences. We believe that the foundation we laid in 2023 reinforces our ability to deliver sustained double-digit growth. We enter 2024 with a 63 billion global ticketing cam and multiple levers to continue driving durable growth and long-term value. Our growth opportunity is compelling, our value proposition is resonating, and our ample cash flow affords us the ability to continue delivering value to shareholders, including through both strategic M&A and share repurchases. With that, I will turn it over to Larry.