Eventbrite reported yet another tough quarter in Q4 of 2024. Paid ticket volume was down 10%. Initial market reaction has been very negative with the stock down 23% in early trading on the morning after.
The company now has a market capitalization of only $228 Million. Down from an all time high near $2 Billion.
Growth Comparison with RunSignup
Here is the ticket volume and a comparison with RunSignup (Eventbrite is still 6.7 times our size in terms of paid ticket volume, although that delta continues to gradually close – maybe we will catch them in the next 10 years)
Using Customer Float
Eventbrite continues to use customer float (ticket sales they have not yet paid out to customers) to finance their operation, holding over $300 Million of money due to customers at the end of the quarter. Note that Eventbrite has bought $50 Million of their stock in the past year to support their stock price. They have also paid down $120 Million of their debt. Here is a summary (see the details in their customer letter):
This financial management is why some former Eventbrite customers are now using RunSignup so they can receive payments on a faster and more consistent basis.
Marketplace and Ads
Ad revenue was 8% of total revenue in Q4, and expanded at a 35% rate. Julia reported that ads customers sold 4 X the number of tickets that non-ad customers sold – although we do not understand the definition of that. From a RunSignup perspective, we believe they have a fundamental failed strategy in that they are not really a marketplace – they are simply looking to try to generate additional revenue by preferring some customers over others.
2025 Expectations
Julia Hartz, cofounder and CEO, expects paid ticket volume to continue to be down in the first half of 2025 and is expected to recover in the second half of 2025. She reports this is based on two factors. First, they are seeing ticket sales growth coming back after they rolled back some of the subscription fees in September. Second, they expect there to be favorable comparisons starting in Q3 as they had instituted subscription fees last year at that time so the comparison will be favorable.
Lanny Baker, the former CFO, has left. The new CFO, Andand Ghandi, reports that Adjusted EBITDA will be in the low single digits in 2025 due to compression of margins with the loss of about $20 Million of subscription fees they earned in 2024.
As the first graphic showing a 23% drop in share price the morning after their earnings call shows the market is not confident in the company.