Eventbrite Q2 Earnings

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We have always eagerly studied Eventbrite since they are a company with a business model very similar to ours – earning money based solely on processing fees for events (and for us nonprofit donations). During their Q1 report, we learned how COVID-19 was impacting their business. And we have been awaiting these numbers as we had released our own Q2 (down 35%) as well as July reports (down 27%).

Eventbrite reflects about what we are seeing in the real race business – down about 80%. We are fortunate that virtual races and challenge events are allowing us and our customers to get thru these difficult times with much less impact.

Eventbrite paid tickets fell 82%:

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Revenue fell to $8.4M, but that includes includes a $3.4 million impact from COVID-19 related expenses: a $3.0 million increase in reserves for expected refunds and a $0.4 million increase in reserves for uncollectible services revenue. Removing those charges, the Net Revenue was closer to $15.2M, which is more in line with the 82% drop in Q2.

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Eventbrite also had some encouraging news that has been the basis for their stock rebound today.

First, the number of paid tickets grew in each month from 1.1M in April to 1.5M in May to 2.1M in June. In the earnings call they stated that July paid ticket sales were down only 71% from the year earlier period.

Second, they reported expected cash costs of around $33-36M per quarter for the remainder of the year. They have taken a couple of rounds of debt in the past couple of months (up to $225M in May and $130M in June) which provides them plenty of cash on their balance sheet to fund those losses.

Third, they have had fairly minimal chargeback losses – about $4M in Q2.

Finally, they are on track to have over $100M in annual costs savings after their 45% reduction in staff.

As Lanny Baker, CFO, said “We’ve sharpened our focus on self-serve, made our operating model leaner and strengthened our financial resources. We believe Eventbrite is ready to emerge from the pandemic, a stronger company and a trusted partner to creators everywhere.”

It is likely that in the 2022 timeframe they will get back to previous ticket level volume, they will be much more efficient with their self-serve strategy and become profitable (they had lost $68M in 2019).

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