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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 09, 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 May 9, 2023, Vivid Seats Inc. issued a press release providing financial results for the first quarter ended March 31, 2023.

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

(d) Exhibits

Exhibit No.		Description
99.1		Press release issued by Vivid Seats Inc., dated May 9, 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:	May 9, 2023	By:	/s/ Lawrence Fey
			Lawrence Fey Chief Financial Officer

 

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Exhibit 99.1

Vivid Seats Strengthens Position with Excellent Start to 2023

Q1 2023 Revenues of $161mm (+23% YoY) and Adjusted EBITDA of $42mm (+102% YoY)

Raising Guidance for 2023 Marketplace GOV, Revenues and Adjusted EBITDA

CHICAGO, IL – May 9, 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 first quarter ended March 31, 2023.

 

“We are off to an excellent start in 2023. The live event environment was robust in the first quarter with exciting event supply meeting exuberant fan demand,” said Stan Chia, Vivid Seats CEO. “It is clear sustained gains stem from providing differentiated product, service and value and we are thrilled to see our investments yielding results. Driven by our investments in our loyalty program and a differentiated buyer experience, repeat orders as a percentage of total orders placed on Vivid Seats have increased to 56% in 2022 from 47% in 2018. As part of our continued focus on innovating the buyer experience, we are excited to announce free-to-play games in the Vivid Seats app, powered by Vivid Picks, offering our users daily challenges with the chance to win free tickets.”

 

First Quarter 2023 Key Operational and Financial Metrics

 

“We delivered an exceptional quarter and we are raising our 2023 guidance to account for our strong performance and improving visibility into the remainder of the year," said Lawrence Fey, Vivid Seats CFO. “Q1 2023 Revenue was up 23% year-over-year as we benefitted from a robust March event calendar. Q1 Adjusted EBITDA of $42 million was up over 100% versus last year as a result of robust topline growth, loyalty efficiencies and timing of marketing investments. We are also pleased that our profitability converted into strong cash flow in Q1 with our cash balance growing $52 million relative to our year-end balance despite purchasing the remaining $8 million of shares available under our share repurchase authorization. Our robust profitability and cash flow continues to provide us numerous pathways to build long-term value.”

 

Key Performance Indicators ('000s)

 

		Three Months Ended March 31,
		2023				2022
Marketplace GOV(1)		$	855,528			$	742,138
Total Marketplace orders(2)			2,275				2,019
Total Resale orders(3)			87				68
Adjusted EBITDA(4)		$	42,435			$	21,012

 

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2023 Financial Outlook

Vivid Seats now 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 first quarter 2023 earnings call.

 

Form 10-K Technical Amendment

Today, the Company filed a technical amendment to its annual report on Form 10-K and, as a result, it will also update its Form S-3 registration statement to Form S-1. There is no substantive change to the Company’s disclosure as a result of these two updates. The 10-K amendment corrected an inadvertent omission of the Company’s internal controls report without changing its previously disclosed conclusion on internal control over financial reporting.

Webcast Details

The Company will host a webcast at 8:30 a.m. Eastern Time today to discuss the first quarter 2023 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 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 supply and demand 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

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improve existing ones, the impact of potential unfavorable legislative developments, the success of our integration of Vivid Picks, the effects of any recession and inflation, ongoing and future effects of pandemics, 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,
		2023				2022
Assets
Current assets:
Cash and cash equivalents		$	303,319			$	251,542
Restricted cash			675				748
Accounts receivable – net			46,531				36,531
Inventory – net			24,153				12,783
Prepaid expenses and other current assets			33,329				29,912
Total current assets			408,007				331,516
Property and equipment – net			10,308				10,431
Right-of-use assets – net			7,710				7,859
Intangible assets – net			81,800				81,976
Goodwill			715,258				715,258
Other non-current assets			4,432				4,391
Total assets		$	1,227,515			$	1,151,431
Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable		$	218,138			$	161,312
Accrued expenses and other current liabilities			183,765				181,970
Deferred revenue			25,920				31,983
Current maturities of long-term debt			2,750				2,750
Total current liabilities			430,573				378,015
Long-term debt – net			264,384				264,898
Long-term lease liabilities			14,850				14,911
Other liabilities			13,118				13,445
Total long-term liabilities			292,352				293,254
Commitments and contingencies
Redeemable noncontrolling interests			901,866				862,860
Shareholders' deficit
Class A common stock, $0.0001 par value; 500,000,000 shares authorized at March 31, 2023 and December 31, 2022; 82,902,276 and 82,410,774 issued and outstanding at March 31, 2023 and December 31, 2022, respectively			9				8
Class B common stock, $0.0001 par value; 250,000,000 shares authorized, 118,200,000 issued and outstanding at March 31, 2023 and December 31, 2022			12				12
Additional paid-in capital			644,759				663,908
Treasury stock, at cost, 5,291,497 and 4,342,477 shares at March 31, 2023 and December 31, 2022, respectively			(40,106	)			(32,494	)
Accumulated deficit			(1,001,950	)			(1,014,132	)
Total Shareholders' deficit			(397,276	)			(382,698	)
Total liabilities, Redeemable noncontrolling interests, and Shareholders' deficit		$	1,227,515			$	1,151,431

 

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands) (Unaudited)

 

		Three Months Ended March 31,
		2023				2022
Revenues		$	161,063			$	130,772
Costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)			37,760				32,164
Marketing and selling			54,772				54,228
General and administrative			32,389				29,275
Depreciation and amortization			2,598				1,385
Change in fair value of contingent consideration			34				—
Income from operations			33,510				13,720
Other (income) expense:
Interest expense – net			3,280				3,942
Loss on extinguishment of debt			—				4,285
Other (income) expense			(327	)			2,279
Income before income taxes			30,557				3,214
Income tax expense			285				76
Net income			30,272				3,138
Net income attributable to redeemable noncontrolling interests			18,090				1,879
Net income attributable to Class A Common Stockholders		$	12,182			$	1,259

 

 

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VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (Unaudited)

 

		Three Months Ended March 31,
		2023				2022
Cash flows from operating activities
Net income		$	30,272			$	3,138
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			2,598				1,385
Amortization of deferred financing costs and interest rate cap			226				329
Equity-based compensation expense			5,530				3,597
Loss on extinguishment of debt			—				4,285
Change in fair value of warrants			(327	)			2,279
Amortization of leases			150				490
Loss on asset disposals			7				—
Change in fair value of contingent consideration			34				—
Change in assets and liabilities:
Accounts receivable			(10,000	)			(17,854	)
Inventory			(11,370	)			(6,126	)
Prepaid expenses and other current assets			(3,417	)			(3,252	)
Accounts payable			56,826				45,094
Accrued expenses and other current liabilities			444				(10,599	)
Deferred revenue			(6,063	)			3,094
Other assets and liabilities			201				(2,326	)
Net cash provided by operating activities			65,111				23,534
Cash flows from investing activities
Purchases of property and equipment			(215	)			(693	)
Investments in developed technology			(2,027	)			(2,748	)
Purchases of personal seat licenses			(365	)			—
Net cash used in investing activities			(2,607	)			(3,441	)
Cash flows from financing activities
Payments of February 2022 First Lien Loan			(688	)			—
Repurchase of common stock as treasury stock			(7,612	)			—
Cash paid for milestone payments			(2,500	)			—
Payments of June 2017 First Lien Loan			—				(465,712	)
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			(10,800	)			(195,568	)
Net increase (decrease) in cash, cash equivalents, and restricted cash			51,704				(175,475	)
Cash, cash equivalents, and restricted cash – beginning of period			252,290				489,810
Cash, cash equivalents, and restricted cash – end of period		$	303,994			$	314,335

 

 

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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 (in thousands):

		Three Months Ended March 31,
		2023				2022
Net income		$	30,272			$	3,138
Income tax expense			285				76
Interest expense – net			3,280				3,942
Depreciation and amortization			2,598				1,385
Sales tax liability(1)			—				922
Transaction costs(2)			456				1,402
Equity-based compensation(3)			5,530				3,597
Loss on extinguishment of debt(4)			—				4,285
Litigation, settlements and related costs(5)			300				(14	)
Change in fair value of warrants(6)			(327	)			2,279
Change in fair value of contingent consideration(7)			34				—
Loss on asset disposals(8)			7				—
Adjusted EBITDA		$	42,435			$	21,012

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