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, 2021 (2021 Form 10-K) filed with theUnited States Securities and Exchange Commission (SEC) onFebruary 18, 2022 . 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 2021 Form 10-K and our Quarterly Report on Form 10-Q for the quarter endedMarch 31, 2022 . References herein to "Eventbrite ," the "Company," "we," "us" or "our" refer toEventbrite, Inc. and its subsidiaries, unless the context requires otherwise.
Overview
Eventbrite 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. TheEventbrite platform was built as a self-service platform to make it possible for anyone to create and sell tickets to live experiences. 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 is designed to integrates seamlessly with internally-developed and third-party features designed to help our creators sell more tickets and scale their businesses. We designed our platform to produce consistent and reliable performance and to handle surges in traffic and transaction volume associated with high demand on sales and support millions of events each year. We are continuing to strengthen our platform infrastructure as we shift from a monolithic architecture to one based on microservices. We believe the microservices infrastructure we are building will improve our platform's overall velocity, scalability and availability and ultimately benefit our event creators. This approach gives creators a platform that can scale to their needs, offering everything from basic registration and ticketing to a fully-featured event management platform. To meet the varying needs of creators who come to our platform, we offer three different pricing packages for ticketing services. With Boost, we also offer three different paid monthly subscriptions for marketing services, each with corresponding levels of features to provide flexibility for each creator. Annual Boost subscriptions are available for a discounted rate. We also offer a Boost Pay As You Go email option. Furthermore, to provide creators with ways to promote their events to potential consumers, in the third quarter of 2022, we released Ads in ten US cities. The launch of Ads is expected to help creators expand their target market by fulfilling creators advertising demands through promoted listings on our website. The global COVID-19 pandemic has tested our mission, our company and event creators in unprecedented ways. In the early days of the pandemic, we adapted quickly to meet creators' urgent shift to online events, and over the past year, we pivoted back to powering in-person events as restrictions eased. We continue to be significantly impacted by the COVID-19 pandemic. The full extent and duration of the impact of the COVID-19 pandemic on our business, results of operations and financial condition remain uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the introduction and spread of new variants or mutant strains of the virus, the continuation of existing or implementation of new government restrictions, and the extent of containment actions taken on event gatherings in general, and the impact of these and other factors on our business in particular, which may result in a reduction in events and an increase in event cancellation losses. Furthermore, as a result of economic pressures, including inflation, labor challenges, rising interest rates, economic recession and other factors, creators may scale back events which could materially and adversely affect our paid ticket volume, and consequently our net revenue and financial results. 24
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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 performance. 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, making operating decisions, evaluating performance and performing strategic planning and annual budgeting. This 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,
2022 2021 2022 2021
(in thousands)Paid Ticket Volume 22,028 19,091 61,946 45,339 Our paid ticket volume for events outside ofthe United States represented 40% and 39% of our total paid tickets in the three and nine months endedSeptember 30, 2022 , respectively, compared to 34% and 35% in the three and nine months endedSeptember 30, 2021 , respectively.
Adjusted EBITDA
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,
2022 2021 2022 2021
(in thousands)
Net loss $ (21,124) $ (16,813) $ (59,397) $ (122,244)
Add:
Depreciation and amortization 3,810 4,428 11,059 14,492
Stock-based compensation 13,529 12,300 40,618 35,985
Interest expense 2,826 2,814 8,461 13,200
Loss on debt extinguishment - - - 49,977
Employer taxes related to employee equity
transactions 167 400 734 1,875
Other (income) expense, net 5,100 2,460 9,818 2,882
Income tax provision (benefit) (80) 311 (41) 885
Adjusted EBITDA $ 4,228 $ 5,900 $ 11,252 $ (2,948)
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
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
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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.
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