Eventbrite, Inc.

Good afternoon, everyone, and welcome to the Eventbrite Inc. Second Quarter 2024 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Katie Pickett. Ma'am, the floor is yours.

Good afternoon, and welcome to Eventbrite's Second Quarter 2024 Earnings Call. My name is Katie Pickett, Investor Relations. With us today are Julia Hartz, our co-founder and chief executive officer, and Lani Baker, our chief operating and financial officer. As a reminder, this conference call is being recorded and will be available for replay on Eventbrite's investor relations website at investor.eventbrite.com. Please also refer to our investor relations website to find our shareholder letter announcing our financial results, which was released prior to the call. Before we get started, I would like to remind you that during today's call, we'll be making forward-looking statements regarding future events and financial performance. We caution that such statements reflect our best judgment as of today, August 8th, based on the factors that are currently known to us and that actual future events or results could differ materially due to several factors, many of which are beyond our control. For a more detailed discussion of the risks and uncertainties affecting our future results, we refer you to this section titled forward-looking statements in our shareholder letter and our filings with the SEC. We undertake no obligation to update any forward-looking statements made during the call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events except as required by law. During this call, we'll present adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and have limitations as an analytical tool. You should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. A reconciliation to the most directly comparable GAAP financial measure is available in our shareholder letter. We encourage you to read our shareholder letter, which contains important information about GAAP and non-GAAP results. And with that, I'll now turn the call over to Julia.

Thank you, Katie, and welcome everyone to our call. In the second quarter, we delivered results that were in line with our outlook. Revenue grew 7% year-over-year to $84.6 million. Excluding non-routine items, adjusted EBITDA was $8.5 million, representing just over 10% of revenue. While we've made good progress toward our consumer growth strategy, we've encountered some challenges with our new creator pricing model that are impacting our short-term performance. In Q2, we saw a 9% decline in paid tickets and a 16% drop in total tickets. Digging deeper into these challenges, we've identified that the pricing model and organizer fees introduced last year are the primary factors affecting our paid ticket performance. Specifically, these changes have led to a reduction in creator count and ticket volume. While our initial approach was based on thorough research, the real world results have provided valuable insights that are now shaping our response. We've learned that our creators are more willing to pay when they see a clear connection between our pricing and their event success on Eventbrite. In response, we're in the midst of refining our approach. This month, we're rolling out new pricing, packaging, and streamlined event creation flows that directly address the insights we've gathered. The latter of these improvements is already showing promise. Our new, more intuitive event creation process is making it easier for creators to get started on Eventbrite. Additionally, our recent win-back campaign demonstrates the effectiveness of our renewed focus on creator needs, bringing over 140,000 paid tickets back to the platform in Q2 alone. Looking ahead, we're taking a two-pronged approach to address our creators' diverse needs. Next month, we're reintroducing a free tier with no marketplace fees. We believe this change will help us attract new creators and reconnect with those who have left due to pricing concerns. While we anticipate these improvements will help stabilize our paid ticket volume, we recognize that this is just one step in our broader strategy. In parallel, we're developing a premium marketplace tier that will offer enhanced event visibility, incentives, and support tailored to driving growth for creators. With 35,000 creators currently subscribed to our pro plan, we've identified a solid base of customers who value and are willing to pay for premium features. We plan to reward these creators with increased visibility in our marketplace and demand generation tools. This data-driven adjustment aligns more closely with what our creators want and need. And we're making these changes with the goal of regaining momentum in ticket sales, improving creator retention, and driving sustainable growth. While we realize the impact of these changes will take time to materialize, we remain committed to continuously learning and adapting our approach to best serve our creator community. By listening to our users and adapting quickly, we're positioning Eventbrite for long-term success in our dynamic market. The revised revenue outlook for the year has led us to make a difficult but necessary decision to reduce our team size. We expect that this restructuring will result in annualized operating expense savings of $30 million by the end of the third quarter. While this decision was not taken lightly, it's a crucial step to maintain our profitability and position Eventbrite for agility as we work to revitalize ticket volume and revenue growth. We fully recognize the impact this has on our team members, and we deeply appreciate their dedication, especially during this phase of our transition. While recognizing these hurdles, we're also focused on the future. Our commitment to our long-term vision remains strong, allowing us to continue making progress on our core strategic priorities. Strengthening the consumer experience and growing the network, attracting and promoting events that drive audience engagement, and offering monetizable tools to our creators to help them grow their businesses. On the consumer front, we've seen strong growth and engagement. Our mobile app users increased by 22% year over year, contributing to a total of 93 million monthly average users across web and mobile platforms. Improved personalization led to a 17% increase in search and discovery usage, engaging 10 million more consumers in Q2. Our new TikTok partnership is already generating over 100 million daily impressions, expanding our reach beyond Eventbrite's own platforms. These consumer-side gains reinforce our strategy and validate our investments as they directly benefit our creators and strengthen our marketplace ecosystem. To bring more compelling event inventory into our marketplace, our sales team is focused on acquiring the right customers who attract bigger audiences, and our product team is driving innovation to expand the types of creators we can serve. Bookings of new large creators such as Mega Events and Unicorn World continue to pace well ahead of 2023, with nearly 60% growth in sales bookings in Q2. During the third quarter, we plan to move our timed entry tools out of beta into wide release, allowing creators of experiences with time slot ticketing, such as tours and museums, to participate in our marketplace and open up considerable new market opportunities. To drive audience growth and improve event discovery, we plan to introduce an improved mobile app experience this fall. The mobile app has proven to be the best tool to develop a relationship with Eventbrite consumer audiences as it offers a much more engaging experience. We've successfully diversified our revenue through Eventbrite Ads, which enables creators to expand their audience reach. In Q2, Eventbrite Ads revenue reached $2.9 million, more than doubling year over year. The service attracted over 19,500 advertisers, a 20% increase from Q1, marking record growth. Ads are proving valuable beyond direct revenue. About 25% of ads promote free events, which improves overall monetization. Creators using ads show 27% higher revenue per creator. And ads users demonstrate 10% to 20% higher retention rates and increased engagement. Given these positive trends, we see Eventbrite ads as a promising area for continued growth and enhancement of creator value. We're also announcing two key executive appointments to continue to drive our transformation. Lanny Baker, who has served as Eventbrite's Chief Financial Officer since 2019, will take on the expanded role of Chief Operating and Financial Officer. Lani will oversee Eventbrite's global sales, success, and support, as well as the operations teams, which are fundamental to the vibrance of our marketplace and the long-term growth of our business. Lani will continue to lead the company's global finance function, where he's helped build a highly capable and talented team. Also, I'm pleased to welcome Samantha Wu, who will join Eventbrite as our Chief Marketing Officer starting in early September. Samantha most recently served as chief marketing officer brain trust and previously held marketing leadership roles at Facebook visa and American express. She brings more than two decades of award winning full stack marketing experience to eventbrite and a fresh new perspective as we embark upon the next chapter of growth for the company. Finally, I want to thank our outgoing CMO Tamara Mendelson for her exceptional contributions over the past 15 years. Tamara's leadership has been instrumental in shaping Eventbrite's brand and fostering a vibrant company culture. Tamara's impact on Eventbrite's success and dedication to empowering customers all over the world will leave a lasting legacy. As we transition to Lani's remarks, I want to reaffirm our commitment to our core strategy and our confidence in Eventbrite's future. We operate in a large growing market with high intent, frequent users, and our platform delivers significant value to hundreds of thousands of creators. We believe our strategy is sound and adaptable to market dynamics. We have a talented, dedicated team driving our initiatives forward and our recent adjustments demonstrate our ability to listen, learn, and evolve. By focusing on creator success, consumer engagement, and continuous innovation, we're striving to position Eventbrite to capture the substantial opportunities in our market. We're not just navigating current headwinds. We believe we're building a stronger, more resilient company for the long term. We're energized by the opportunities before us and ready to realize Eventbrite's full potential. With that, I'll turn it over to Lani to walk you through our second quarter results in more detail and our outlook for the year. Lani?