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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): March 07, 2023

 

 

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.)
24 E. Washington Street Suite 900
Chicago, Illinois				60602
(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 March 7, 2023, Vivid Seats Inc. issued a press release providing financial results for the fiscal year ended December 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 March 7, 2023

 

 

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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:	March 7, 2023	By:	/s/ Lawrence Fey
			Lawrence Fey Chief Financial Officer

 

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Exhibit 99.1

Vivid Seats Wraps Record 2022 and Drives Marketplace Affinity

Full Year 2022 Marketplace GOV of $3.2 billion and Revenues of $600 million

 

CHICAGO, IL – March 7, 2023 – 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 fourth quarter and full year ended December 31, 2022.

 

“2022 was a stellar year for live events and an exceptional year for Vivid Seats. Our team capitalized on strong demand, navigated the competitive landscape with agility and delivered on financial and strategic objectives that strengthen our business for 2023 and beyond,” said Stan Chia, Vivid Seats CEO. “Both 2022 Marketplace GOV and Revenues exceeded our prior records from 2021 by more than 30% and exceeded our initial guidance midpoint by 10%. Even with substantial competitive pressures in the second half, we delivered Adjusted EBITDA within our guidance range, while making deliberate investments to drive higher customer lifetime value. Momentum from our brand is building and we are steadfast in our strategy – delivering a differentiated product with a compelling value proposition that fosters value in the long term. Innovation and affinity on both sides of our marketplace is key and this quarter we are excited to announce Skybox Drive - an intelligent automation that optimizes revenue for our sellers on Skybox.”

 

Fourth Quarter 2022 Key Operational and Financial Metrics:

 

Full Year 2022 Key Operational and Financial Metrics:

 

“We are proud of the operational and financial performance we demonstrated in 2022 in our first full year as a public company," said Lawrence Fey, Vivid Seats CFO. “We continued to build long-term value for stakeholders while capturing robust demand and navigating a highly competitive environment. While we anticipate muted industry growth in 2023, we see meaningful opportunity for Vivid Seats to push our advantage and continue to cement the foundation for strong long-term strategic and financial performance.”

 

Key Performance Indicators ('000s)

 

		Three Months Ended								Years Ended
		December 31,								December 31,
		2022				2021				2022				2021
Marketplace GOV(1)		$	845,965			$	876,467			$	3,184,754			$	2,399,092
Total Marketplace orders(2)			2,182				2,277				9,183				6,637
Total Resale orders(3)			88				78				313				199
Adjusted EBITDA(4)		$	33,700			$	27,522			$	113,325			$	109,869

 

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2023 Financial Outlook

Vivid Seats anticipates Marketplace GOV, Revenues and Adjusted EBITDA for the year ending December 31, 2023 to be:

 

Additional detail around the 2023 outlook will be available on the fourth quarter 2022 earnings call.

 

Webcast Details

The Company will host a webcast at 8:30 a.m. Eastern Time today to discuss the fourth quarter 2022 financial results, business updates and financial outlook. 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. Vivid Seats also owns Vivid Picks, a daily fantasy sports app. 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 has been recognized by Newsweek as one of America’s Best Companies 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.

 

 

 

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

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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. and rebranding of Betcha as Vivid Picks, the effects of a recession and inflation, 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.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

		December 31,				December 31,
		2022				2021
Assets
Current assets:
Cash and cash equivalents		$	251,542			$	489,530
Restricted cash			748				280
Accounts receivable – net			36,531				36,124
Inventory – net			12,783				11,773
Prepaid expenses and other current assets			29,912				72,504
Total current assets			331,516				610,211
Property and equipment – net			10,431				1,082
Right-of-use assets – net			7,859				—
Intangible assets – net			81,976				78,511
Goodwill			715,258				718,204
Other non-current assets			4,391				787
Total assets		$	1,151,431			$	1,408,795
Liabilities and equity (deficit)
Current liabilities:
Accounts payable		$	161,312			$	191,201
Accrued expenses and other current liabilities			181,970				281,156
Deferred revenue			31,983				25,139
Current maturities of long-term debt			2,750				—
Total current liabilities			378,015				497,496
Long-term debt – net			264,898				460,132
Long-term lease liabilities			14,911				—
Other liabilities			13,445				25,834
Total long-term liabilities			293,254				485,966
Commitments and contingencies
Redeemable noncontrolling interests			862,860				1,286,016
Shareholders' deficit
Class A common stock, $0.0001 par value; 500,000,000 shares authorized, 82,410,774 issued and outstanding at December 31, 2022; 79,091,871 shares issued and outstanding at December 31, 2021			8				8
Class B common stock, $0.0001 par value; 250,000,000 shares authorized, 118,200,000 issued and outstanding at December 31, 2022 and December 31, 2021			12				12
Additional paid-in capital			663,908				182,091
Treasury stock, at cost, 4,342,477 shares at December 31, 2022; no shares at December 31, 2021			(32,494	)			—
Accumulated deficit			(1,014,132	)			(1,042,794	)
Total Shareholders' deficit			(382,698	)			(860,683	)
Total liabilities, Redeemable noncontrolling interests, and Shareholders' deficit		$	1,151,431			$	1,408,795

 

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VIVID SEATS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

 

			Three Months Ended December 31,								Years Ended December 31,
			2022				2021				2022				2021
Revenues			$	164,990			$	163,888			$	600,274			$	443,038
Costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)				38,305				36,231				140,508				90,617
Marketing and selling				68,412				76,610				248,375				181,358
General and administrative				31,898				4,684				127,619				92,170
Depreciation and amortization				2,463				816				7,732				2,322
Change in fair value of contingent consideration				(845	)			—				(2,065	)			—
Income from operations				24,757				45,547				78,105				76,571
Other (income) expense:
Interest expense – net				3,316				7,702				12,858				58,179
Loss on extinguishment of debt				—				35,828				4,285				35,828
Other (income) expense				(1,609	)			1,389				(8,227	)			1,389
Income (loss) before income taxes			$	23,050			$	628			$	69,189			$	(18,825	)
Income tax expense (benefit)				(1,784	)			304				(1,590	)			304
Net income (loss)				24,834				324				70,779				(19,129	)
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization				—				6,617				—				(12,836	)
Net income (loss) attributable to redeemable noncontrolling interests				14,749				(3,010	)			42,117				(3,010	)
Net income (loss) attributable to Class A Common Stockholders			$	10,085			$	(3,283	)		$	28,662			$	(3,283	)

 

 

 

 

 

 

 

 

 

 

 

 

 

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VIVID SEATS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

		Years Ended December 31,
		2022				2021
Cash flows from operating activities
Net income (loss)		$	70,779			$	(19,129	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			7,732				2,322
Amortization of deferred financing costs and interest rate cap			1,052				4,472
Loss on asset disposals			369				—
Equity-based compensation expense			19,053				6,047
Loss on extinguishment of debt			4,285				35,828
Interest expense paid-in-kind			—				25,214
Change in fair value of warrants			(8,227	)			1,389
Amortization of leases			2,170				—
Change in fair value of contingent consideration			(2,065	)			—
Changes in operating assets and liabilities:
Accounts receivable			(329	)			(874	)
Inventory			(1,010	)			(4,311	)
Prepaid expenses and other current assets			42,894				7,623
Accounts payable			(30,779	)			128,160
Accrued expenses and other current liabilities			(94,415	)			14,196
Deferred paid-in-kind interest paid on May 2020 First Lein Loan			—				(44,141	)
Deferred revenue			6,844				19,183
Other assets and liabilities			(3,978	)			(189	)
Net cash provided by operating activities			14,375				175,790
Cash flows from investing activities
Cash acquired (paid) in acquisition			(8	)			301
Purchases of property and equipment			(3,558	)			(1,132	)
Purchases of personal seat licenses			(165	)			(76	)
Investments in developed technology			(11,684	)			(8,438	)
Net cash used in investing activities			(15,415	)			(9,345	)
Cash flows from financing activities
Proceeds from February 2022 First Lien Loan			275,000				—
Payments of February 2022 First Lien Loan			(2,062	)			—
Distributions to non-controlling interests			(5,245	)			—
Repurchase of Common Stock as Treasury Stock			(32,494	)			—
Cash paid for milestone payments			(1,111	)
Proceeds from PIPE Financing			—				475,172
Proceeds from the Merger Transaction			—				277,738
Redemption of Redeemable Senior Preferred Units			—				(236,026	)
Payments of May 2020 First Lien Loan			—				(260,000	)
Payments of June 2017 First Lien Loan			(465,712	)			(153,009	)
Prepayment penalty on extinguishment of debt			—				(27,974	)
Payment of reverse recapitalization costs			—				(20,175	)
Dividends paid to Class A Common Stock Shareholders			—				(17,698	)
Payments of deferred financing costs and other debt-related costs			(4,856	)			—
Net cash (used in) provided by financing activities			(236,480	)			38,028
Net increase (decrease) in cash, cash equivalents, and restricted cash			(237,520	)			204,473
Cash, cash equivalents, and restricted cash – beginning of period			489,810				285,337
Cash, cash equivalents, and restricted cash – end of period		$	252,290			$	489,810

 

 

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Use of Non-GAAP Financial Measures

We present Adjusted EBITDA, which is not a measure defined under 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								Years Ended
		December 31,								December 31,
		2022				2021				2022				2021
Net income (loss)		$	24,834			$	324			$	70,779			$	(19,129	)
Income tax expense (benefit)			(1,784	)			304				(1,590	)			304
Interest expense – net			3,316				7,702				12,858				58,179
Depreciation and amortization			2,463				816				7,732				2,322
Sales tax liability(1)			—				(25,605	)			2,814				8,956
Transaction costs(2)			555				4,015				4,840				12,852
Equity-based compensation(3)			5,071				2,576				19,053				6,047
Loss on extinguishment of debt(4)			—				35,828				4,285				35,828
Litigation, settlements and related costs(5)			1,393				173				2,477				2,835
Severance related to COVID-19(6)			—				—				—				286
Change in value of warrants(7)			(1,609	)			1,389				(8,227	)			1,389
Change in fair value of contingent consideration(8)			(845	)			—				(2,065	)			—
Loss on asset disposals(9)			306				—				369				—
Adjusted EBITDA		$	33,700			$	27,522			$	113,325			$	109,869

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