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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2022

 

 

Vivid Seats Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-40926	86-3355184
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
111 N. Canal Street Suite 800
Chicago, Illinois				60606
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 312 291-9966

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.0001 per share		SEAT		The NASDAQ Stock Market LLC
Warrants to purchase one share of Class A common stock		SEATW		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02. Results of Operations and Financial Condition

The following information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On May 10, 2022, Vivid Seats Inc. issued a press release providing financial results for the first quarter ended March 31, 2022.

The press release, attached as an exhibit to this report, includes "safe harbor" language pursuant to the Private Securities Litigation Reform Act of 1995, as amended, indicating that certain statements contained in the press release are "forward-looking" rather than historic. The press release also states that these and other risks relating to Vivid Seats are set forth in the documents filed by Vivid Seats with the Securities and Exchange Commission.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

Exhibit No.		Description
99.1		Press release issued by Vivid Seats Inc., dated May 10, 2022

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			Vivid Seats Inc.
Date:	May 10, 2022	By:	/s/ Lawrence Fey
			Lawrence Fey Chief Financial Officer

 

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Exhibit 99.1

 

Vivid Seats Raises Guidance after Record First Quarter 2022 Marketplace GOV and Revenues

First Quarter 2022 Marketplace GOV of $742 million and Revenues of $131 million

 

CHICAGO, IL – May 10, 2022 – Vivid Seats Inc. (NASDAQ: SEAT) (“Vivid Seats”, “we” or the “Company”), a leading marketplace that utilizes its technology platform to connect millions of buyers with thousands of ticket sellers across hundreds of thousands of events each year, today provided financial results for the first quarter ended March 31, 2022.

 

“At Vivid Seats, as a marketplace and technology platform, we sit at the intersection of supply and demand, and it is apparent from our record-setting first quarter Marketplace GOV and Revenues that fans are eager to attend live events,” said Stan Chia, Vivid Seats CEO. “As our business continues to accelerate, our impressive first quarter performance is a testament to the strength of our platform, as well as strong consumer demand. We will continue to invest in our business as we believe the live event industry is well positioned for long-term secular growth, and we are confident that our differentiated offering, leadership, and scale will allow us to continue to drive meaningful growth and to capitalize on opportunities that create shareholder value.”

 

First Quarter 2022 Key Operational and Financial Metrics:

 

Live events substantially returned in the second quarter of 2021, affecting year-over-year comparisons for the first quarter of 2022. First quarter 2022 financial results were impacted by higher-than-expected cancellations, comprised of a mix of both COVID-19 and non-COVID related items. Cancellations above normalized historical levels from 2019 reduced Net income and Adjusted EBITDA by roughly $4 million in the first quarter.

 

“Our marketplace flywheel is gaining momentum on the other side of the pandemic with first quarter Marketplace GOV, Total Marketplace orders and Revenues all well above comparable 2019 pre-pandemic levels,” said Lawrence Fey, CFO. “The strength of our performance in the first quarter, despite the Omicron variant, speaks to robust underlying demand and gives us the confidence to raise our 2022 guidance so early in the year. Our strong cash flow generation and healthy balance sheet allow us to pursue multiple exciting growth levers in our core, as well as TAM additive areas, such as Betcha. We believe secular trends are in our favor and Vivid Seats has the product, technology and scale to win in the long-term.”

 

Key Performance Indicators ('000s)

 

		Three Months Ended March 31,
		2022				2021
Marketplace GOV(1)		$	742,138			$	116,473
Total Marketplace orders(2)			2,019				293
Total Resale orders(3)			68				13
Adjusted EBITDA(4)		$	21,012			$	4,187

 

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2022 Financial Outlook

Vivid Seats now anticipates Marketplace GOV, Revenues and Adjusted EBITDA for the year ending December 31, 2022 to be:

Additional detail around the 2022 outlook will be available on the first quarter 2022 earnings call.

 

Webcast Details

The Company will host a webcast at 8:30 a.m. Eastern Time today to discuss the first quarter 2022 financial results. Participants may access the live webcast and supplemental earnings presentation on the events page of the Vivid Seats Investor Relations website at https://investors.vividseats.com/events-and-presentations.

 

About Vivid Seats

Founded in 2001, Vivid Seats is a leading online ticket marketplace committed to becoming the ultimate partner for connecting fans to the live events, artists, and teams they love. Based on the belief that everyone should “Experience It Live”, the Chicago-based company provides exceptional value by providing one of the widest selections of events and tickets in North America and an industry leading Vivid Seats Rewards program where all fans earn on every purchase. Vivid Seats has been chosen as the official ticketing partner by some of the biggest brands in the entertainment industry including ESPN, Rolling Stone, and the Los Angeles Clippers. Through its proprietary software and unique technology, Vivid Seats drives the consumer and business ecosystem for live event ticketing and enables the power of shared experiences to unite people. Vivid Seats is recognized by Newsweek as America’s Best Company for Customer Service in ticketing. Fans who want to have the best live experiences can start by downloading the Vivid Seats mobile app, going to vividseats.com, or calling 866-848-8499.

 

 

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Forward-Looking Statements

Certain statements made in this press release are "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this press release may be forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding our future results of operations and financial position, including our expectations regarding Marketplace Gross Order Value, revenues and Adjusted EBITDA and the impact of our investments; our expectations with respect to live event industry growth; our competitive positioning; our business strategy; and the plans and objectives of management for future operations. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include the continuing impact of the COVID-19 pandemic, the timing and manner of the resumption of large-scale sporting events, concerts and theater shows, our relationships with buyers, sellers and distribution partners, changes in Internet search engine algorithms or changes in marketplace rules, competition in the ticketing industry, the willingness of artists, teams and promoters to continue to support the secondary ticket market, and our ability to maintain and improve our platform and brand or develop successful new solutions and enhancements or improve existing ones, the impact of potential unfavorable legislative developments, the success of our acquisition of Betcha Sports, Inc., our ability to obtain subsequent debt refinancing, the impact of system interruption and the lack of integration and redundancy in our systems and infrastructure, the impact of cyber security risks, data loss or other breaches of our network security, our being a controlled company, and other risks and uncertainties described in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

Contacts:

 

Investors

Kate Copouls

Kate.Copouls@vividseats.com

 

Media

Julia Young

Julia.Young@vividseats.com

 

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data) (Unaudited)

 

		March 31,				December 31,
		2022				2021
Assets
Current assets:
Cash and cash equivalents		$	314,055			$	489,530
Restricted cash			280				280
Accounts receivable – net			53,978				36,124
Inventory – net			17,899				11,773
Prepaid expenses and other current assets			75,687				72,504
Total current assets			461,899				610,211
Property and equipment – net			1,705				1,082
Right-of-use assets – net			9,517				—
Intangible assets – net			79,944				78,511
Goodwill			718,204				718,204
Other non-current assets			2,949				787
Total assets		$	1,274,218			$	1,408,795
Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable		$	236,295			$	191,201
Accrued expenses and other current liabilities			272,705				281,156
Deferred revenue			28,233				25,139
Current maturities of long-term debt – net			2,750				—
Total current liabilities			539,983				497,496
Long-term debt – net			266,396				460,132
Long-term lease liabilities			8,387				—
Other liabilities			27,384				25,834
Total long-term liabilities			302,167				485,966
Commitments and contingencies
Redeemable noncontrolling interests			1,307,292				1,286,016
Shareholders' deficit
Class A common stock, $0.0001 par value; 500,000,000 shares authorized at March 31, 2022 and December 31, 2021; 79,166,943 and 79,091,871 issued and outstanding at March 31, 2022 and December 31, 2021, respectively			8				8
Class B common stock, $0.0001 par value; 250,000,000 shares authorized, 118,200,000 issued and outstanding at March 31, 2022 and December 31, 2021			12				12
Additional paid-in capital			166,291				182,091
Accumulated deficit			(1,041,535	)			(1,042,794	)
Total Shareholders' deficit			(875,224	)			(860,683	)
Total liabilities, Redeemable noncontrolling interests, and Shareholders' deficit		$	1,274,218			$	1,408,795

 

 

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands) (Unaudited)

 

		Three Months Ended March 31,
		2022				2021
Revenues		$	130,772			$	24,114
Costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)			32,164				3,925
Marketing and selling			54,228				7,955
General and administrative			29,275				15,871
Depreciation and amortization			1,385				295
Income (loss) from operations			13,720				(3,932	)
Other expenses:
Interest expense – net			3,942				16,319
Loss on extinguishment of debt			4,285				—
Other expenses			2,279				—
Income (loss) before income taxes			3,214				(20,251	)
Income tax expense			76				—
Net income (loss)			3,138				(20,251	)
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization			—				(20,251	)
Net income attributable to redeemable noncontrolling interests			1,879				—
Net income (loss) attributable to Class A Common Stockholders		$	1,259			$	—

 

 

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (Unaudited)

 

 

		Three Months Ended March 31,
		2022				2021
Cash flows from operating activities
Net income (loss)		$	3,138			$	(20,251	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			1,385				295
Amortization of deferred financing costs and interest rate cap			329				1,311
Equity-based compensation expense			3,597				1,091
Loss on extinguishment of debt			4,285				—
Change in fair value of warrants			2,279				—
Interest expense paid-in-kind			—				10,640
Amortization of leases			490				—
Change in assets and liabilities:
Accounts receivable			(17,854	)			(1,843	)
Inventory			(6,126	)			(1,420	)
Prepaid expenses and other current assets			(3,252	)			(1,398	)
Accounts payable			45,094				37,857
Accrued expenses and other current liabilities			(10,599	)			1,164
Deferred revenue			3,094				3,006
Other assets and liabilities			(2,326	)			309
Net cash provided by operating activities			23,534				30,761
Cash flows from investing activities
Purchases of property and equipment			(693	)			—
Investments in developed technology			(2,748	)			(1,726	)
Net cash used in investing activities			(3,441	)			(1,726	)
Cash flows from financing activities
Payments of June 2017 First Lien Loan			(465,712	)			(1,603	)
Proceeds from February 2022 First Lien Loan			275,000				—
Payments of deferred financing costs and other debt-related costs			(4,856	)			—
Net cash used in financing activities			(195,568	)			(1,603	)
Net increase (decrease) in cash, cash equivalents, and restricted cash			(175,475	)			27,432
Cash, cash equivalents, and restricted cash – beginning of period			489,810				285,337
Cash, cash equivalents, and restricted cash – end of period		$	314,335			$	312,769

 

 

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Use of Non-GAAP Financial Measures

We present Adjusted EBITDA, which is not a measure defined under U.S. Generally Accepted Accounting Principles (“GAAP”), because it is a measure frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. Further, we believe this measure is helpful in highlighting trends in our operating results, because it excludes the impact of items that are outside the control of management or not reflective of ongoing performance related directly to the operation of our business segments.

Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. Moreover, we believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business performance and highlighting trends in our operating results.

Adjusted EBITDA is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Further limitations of Adjusted EBITDA are that it does not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring, such as interest expense, equity-based compensation, litigation, settlements and related costs and change in value of warrants. In addition, other companies may calculate Adjusted EBITDA differently than us, thereby limiting its usefulness as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from Adjusted EBITDA.

The following is a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net income (loss) (in thousands):

		Three Months Ended March 31,
		2022				2021
Net income (loss)		$	3,138			$	(20,251	)
Income tax expense			76				—
Interest expense			3,942				16,319
Depreciation and amortization			1,385				295
Sales tax liability(1)			922				2,261
Transaction costs(2)			1,402				3,546
Equity-based compensation(3)			3,597				1,091
Loss on extinguishment of debt(4)			4,285				—
Litigation, settlements and related costs(5)			(14	)			641
Severance related to COVID-19(6)			—				285
Change in fair value of warrants(7)			2,279				—
Adjusted EBITDA		$	21,012			$	4,187

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