EVENTBRITE, INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 (2020 Form 10-K) filed with theUnited States Securities and Exchange Commission (SEC) onMarch 1, 2021 . In addition to historical condensed consolidated financial information, the following discussion and analysis contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" in our 2020 Form 10-K, our Quarterly Reports on Form 10-Q for the quarters endedMarch 31, 2021 andJune 30, 2021 , and this Quarterly Report on Form 10-Q. References herein to "Eventbrite ," "the Company," "we," "us" or "our" refer toEventbrite, Inc. and its subsidiaries, unless the context requires otherwise. OverviewEventbrite is a global self-service ticketing and experience technology platform that serves event creators and empowers their success. Our mission is to bring the world together through live experiences, and since inception, we have been at the center of the experience economy, helping to transform the way people organize and attend events. For more than a decade,Eventbrite has been meeting this core need and sparking human connection in nearly 180 countries. TheEventbrite platform was built as a self-service platform to make it possible for anyone to create and sell tickets to live experiences. Creators-the people who bring others together to share their passions, artistry and causes through live experiences-are ourNorth Star , and we have built, and continue to build, our platform to provide them with an intuitive, secure and reliable way to plan and execute their in-person and online events and scale their operations. We have a creator-aligned business model: we succeed when our creators succeed. We allow hosts of free events to use our platform for free and we charge creators of paid events on a per-ticket basis when an attendee purchases a ticket for an event. Our platform integrates seamlessly with internally-developed and third-party features designed to help our creators sell more tickets and scale their businesses. We began to see increases in in-person events and ticket sales during the nine months endedSeptember 30, 2021 , and strong usage of the platform by frequent creators who hold multiple events per quarter. To support the needs of frequent creators we are reframing theEventbrite product experience around the creator rather than the event. This means simplifying the event-creation workflow, introducing enhancements to the creator dashboard, and streamlining multiple-event management and reporting, making analysis easier and more actionable. As creators rebuild their businesses, we have introduced new tools and services like fully integrated Zoom capabilities and a new Calendar tool that we believe have increased event awareness. InMay 2021 , we launched Eventbrite Boost which provides tools to event creators to increase their following on social networks, like Instagram and Facebook, create branded emails and marketing materials, track ticket sales, and optimize and automate their advertising. Eventbrite Boost helps creators make informed marketing decisions to grow their businesses. Real-time dashboards deliver personalized recommendations on the best marketing campaigns to run and also provide direct insight into how their campaigns are performing. The global COVID-19 pandemic has tested our mission, our company and event creators in unprecedented ways. While our net revenue and paid ticket volume improved during the nine months endedSeptember 30, 2021 , we continue to experience a significant impact due to the COVID-19 pandemic and the social distancing and government mandates to restrict gatherings of people. Due to the COVID-19 pandemic, creators with published events in the remainder of 2021 may postpone or cancel these or other events. The COVID-19 pandemic is ongoing and significant uncertainty remains regarding the extent and duration of the impact that the COVID-19 pandemic will have on our business. The full extent to which COVID-19 impacts our business, results of operations and financial condition cannot be predicted at this time, and the impact of COVID-19 may persist for an extended period of time or become more pronounced. InMarch 2021 , we issued$212.75 million aggregate principal amount of 0.750% convertible senior notes due 2026 (2026 Notes) in a private offering, inclusive of the initial purchaser's exercise in full of its option to purchase additional notes. We used$153.2 million of the proceeds from this offering to repay in full the outstanding indebtedness under ourMay 2020 credit agreement and$18.5 million of the net proceeds from this offering to pay the cost of the 2026 Capped Calls transactions. We intend to use the remainder of the net proceeds from this offering for general corporate purposes. 27 -------------------------------------------------------------------------------- Table of Contents Key Business Metrics and Non-GAAP Financial Measures We monitor key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. In addition to revenue, net loss, and other results under GAAP, the following tables set forth key business metrics and non-GAAP financial measures we use to evaluate our business. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business. We believe that the use of Adjusted EBITDA is helpful to our investors as this metric is used by management in assessing the health of our business and our operating performance. This measure, which we refer to as our non-GAAP financial measure, is not prepared in accordance with GAAP and has limitations as an analytical tool, and you should not consider this in isolation or as substitutes for analysis of our results of operations as reported under GAAP. You are encouraged to evaluate the adjustments and the reasons we consider them appropriate. Paid Ticket Volume Our success in serving creators is measured in large part by the number of tickets sold on our platform that generate ticket fees, referred to as paid ticket volume. We consider paid ticket volume an important indicator of the underlying health of the business. The table below sets forth the paid ticket volume for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Paid Ticket Volume 19,091 9,190 45,339 36,118 Our paid ticket volume for events outside ofthe United States represented 34% and 48% of our total paid tickets in the three months endedSeptember 30, 2021 and 2020, respectively, and 35% and 45% for the nine months endedSeptember 30, 2021 and 2020 respectively. Adjusted EBITDA Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities. We calculate Adjusted EBITDA as net loss adjusted to exclude depreciation and amortization, stock-based compensation expense, interest expense, loss on debt extinguishment, employer taxes related to employee equity transactions, other income (expense), net, which consisted of interest income, foreign exchange rate gains and losses, and income tax provision (benefit). Adjusted EBITDA should not be considered as an alternative to net loss or any other measure of financial performance calculated and presented in accordance with GAAP. The following table presents our Adjusted EBITDA for the periods indicated and a reconciliation of our Adjusted EBITDA to the most comparable GAAP measure, net loss, for each of the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Net loss$ (16,813) $ (19,427) $ (122,244) $ (204,487) Add: Depreciation and amortization 4,428 5,363 14,492 17,272 Stock-based compensation 12,300 10,107 35,985 30,541 Interest expense 2,814 10,284 13,200 13,921 Loss on debt extinguishment - - 49,977 - Employer taxes related to employee equity transactions 400 218 1,875 912 Other (income) expense, net 2,460 (2,837) 2,882 5,262 Income tax provision (benefit) 311 243 885 307 Adjusted EBITDA$ 5,900 $ 3,951 $ (2,948)$ (136,272) Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital spending that occurs off of the income statement or account for future contractual commitments, (ii) although depreciation and 28
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Table of Contents amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures and (iii) Adjusted EBITDA does not reflect the interest and principal required to service our indebtedness. Our Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider Adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results. Results of Operations The following tables set forth our consolidated results of operations data and such data as a percentage of net revenue for the periods presented (in thousands):
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