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Date

Thursday, Nov. 6, 2025, at 8:30 a.m. ET

Call participants

  • Chief Executive Officer — Lawrence C. Fey
  • Interim Chief Financial Officer and Chief Accounting Officer — Ted Pikus

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Risks

  • Marketplace Gross Order Value declined 29% year over year, with both marketplace orders and revenues also down 29%, and 27%, respectively, year over year, due to increased competition and the loss of a major private label partner.
  • Marketplace Take Rate dropped to 17% from 17.5% in 2024, with near-term expectations for marketplace take rates in the 16% range, as management anticipates pressure from strategic investments and competition.
  • Adjusted EBITDA fell to $5 million in Q3 2025 from substantially higher levels in the prior year, reflecting lower volume, lower take rates, and negative operating leverage.
  • Private Label Headwinds contributed to a 10% sequential decline in Marketplace GOV compared to Q2 2025, with management indicating continued pressure in this channel and a flat overall industry environment, as reflected in their commentary and initial 2026 outlook.

Takeaways

  • Leadership transition -- Lawrence C. Fey was appointed Chief Executive Officer, while Ted Pikus took on the role of Interim Chief Financial Officer, effective immediately.
  • Marketplace GOV -- $618 million in Marketplace GOV reported for Q3 2025, down 29% year over year, and down 10% sequentially from Q2 2025, driven primarily by private label softness and the loss of a key partner.
  • Revenue -- $136 million in revenues generated in Q3 2025, reflecting a 27% year-over-year decline.
  • Marketplace take rate -- 17% reported, down from 17.5% in 2024; management expects near-term marketplace take rates to be around 16% amid increased investment and competition.
  • Adjusted EBITDA -- $5 million in adjusted EBITDA achieved in Q3 2025, reflecting a substantial decline from the previous year, due to lower volume, take rate declines, and negative operating leverage.
  • Fixed cost reduction target -- Increased from $25 million to $60 million, spanning fixed marketing, G&A, and stock-based compensation, with meaningful progress already made.
  • Corporate simplification actions -- Terminated cash receivable agreement and dual-class share structure, resulting in approximately $1 million annual compliance cost savings, and avoidance of $6 million in TRA payments, plus up to $180 million in lifetime tax savings, subject to generating sufficient profitability.
  • Cash and debt position -- Ended the quarter with $145 million in cash, $391 million in debt, and net debt of $246 million.
  • Marketplace user trends -- App-based users delivered double-digit sequential GOV growth, and achieved a year-over-year return to GOV growth—a direct result of investments in value proposition.
  • 2026 initial guidance -- Management projects Marketplace GOV of $2.2 billion to $2.6 billion for 2026, and adjusted EBITDA of $30 million to $40 million for 2026, assuming flat industry volumes as the core concert on-sale season has yet to occur.
  • Brand marketing initiatives -- Renewed ESPN partnership and launched a national campaign on Disney streaming, targeting more than 127 million global subscribers, and over 700 live sports events monthly as part of an app awareness campaign.
  • Lowest price guarantee -- Launched within the app in late Q3 to reinforce differentiation alongside the loyalty program.
  • Working capital usage -- Cash consumption moderated compared to the first half of 2025, with working capital continuing to consume cash, but at a substantially lower level.
  • TRA share issuance -- Issued approximately 400,000 Class A shares as part of the TRA termination, unlocking immediate and long-term tax and compliance cost savings.

Summary

The earnings call highlighted a pivotal management transition, significant declines in revenue and Marketplace GOV due to private label challenges, and intensive competitive pressures impacting financial metrics. Leadership emphasized a strategic pivot toward app-based transactions, aiming to insulate the business from rising customer acquisition costs and performance marketing headwinds. Structural cost reductions, including an expanded $60 million fixed cost reduction program, reflected in initial 2026 guidance and corporate simplification moves, are expected to equip Vivid Seats (SEAT 13.10%) for improved performance and reinvestment into customer-facing value propositions.

  • Pikus confirmed that the 2026 outlook—Marketplace GOV of $2.2 billion to $2.6 billion, and $30 million to $40 million in adjusted EBITDA (non-GAAP)—assumes a flat industry given unfinalized concert on-sale schedules.
  • Fey stated, "we are now more than doubling our fixed cost reduction target from $25 million to $60 million," highlighting operational discipline, and the company's strategic emphasis on efficiency.
  • The company reported that "app users return more often, convert at a higher rate, and touch performance marketing channels less," framing the app strategy as an avenue for lower customer acquisition cost and higher retention.
  • Fey attributed the recent reversal of market share loss by a key competitor, StubHub, to a "shift in marketing aggressiveness," resulting in StubHub being "down year over year" in market share for September and October.
  • The ESPN partnership and Disney streaming campaign were used to build awareness of Vivid Seats' enhanced app value proposition, with anticipated future upside as adoption scales.
  • Fey noted no meaningful impact from the 2026 World Cup is embedded in guidance, with management citing lack of precedent and "FIFA be let's say, quite aggressive in seeking monetize, optimize their monetization."
  • Fey highlighted app-centric customer cohorts as being "fundamentally stickier," expecting compounding returns over time as each new cohort adopts the enhanced app proposition.
  • The simplification and TRA termination are structured to deliver "up to $180 million of lifetime tax savings" if sustained profitability is achieved, and annual compliance savings of $1 million.
  • Management ruled out near-term M&A, or broad-based share repurchases, prioritizing core investment and stabilization before broadening capital allocation.
  • Lawrence C. Fey stated, "at the midpoint or better of our 2026 guidance, we expect to be cash generative," conditional on sequential GOV growth and working capital trends.

Industry glossary

  • Marketplace GOV: Marketplace Gross Order Value—the total value of tickets sold through the company’s platform before fees or deductions, a key industry volume metric.
  • Take rate: The percentage of Marketplace GOV retained as net revenue by the marketplace operator.
  • TRA: Tax Receivable Agreement—a contractual arrangement intended to provide certain stakeholders with tax benefit compensation; its termination can reduce ongoing cash and compliance burdens.
  • Private label: Ticketing business operated under partners’ brands, distinct from directly owned customer-facing platforms.
  • App-based transactions: Sales completed within Vivid Seats' mobile application ecosystem, a focal growth area highlighted by management.

Full Conference Call Transcript

This morning, we also announced a leadership transition that is effective today. Lawrence C. Fey, who has served as Chief Financial Officer since 2020, will succeed Stan Chia as Chief Executive Officer. Additionally, Ted Pikus, who has served as Chief Accounting Officer since 2022, has been appointed as Interim Chief Financial Officer until a successor is identified. Accordingly, Larry and Ted are joining me today on the call. With Larry's extensive history with Vivid Seats Inc., dating back to 2017, the Vivid Seats Inc. Board believes he is uniquely qualified to navigate the evolving industry environment and steer the company back to growth. Larry will share more detail on his vision for Vivid Seats Inc.'s next chapter today.

And now I would like to turn the call over to Larry.

Lawrence C. Fey: Good morning, everyone, and thank you for joining us today. First, I would like to discuss the leadership transition and express my gratitude to Stan for his leadership and service over the last seven years. His accomplishments include successfully leading Vivid Seats Inc. through a global pandemic, bringing Vivid Seats Inc. to the public markets, and launching key innovations such as the Vivid Seats Inc. reward program, which provides a foundation on which we will continue to build as we deliver a unique and leading value proposition to our customers. I recognize the responsibility of this role and will look to take decisive action to reverse recent trends and build a resilient business well-positioned for long-term success.

The core pillars of our strategy start with the foundational advantages that have been in place at Vivid Seats Inc. for years and build from there. There is much work to be done, but the foundation to return to profitable growth is in place, and our path forward is clear. Vivid Seats Inc. has long been known for its leading tech capabilities, unique data, and focus on efficiency. In recent years, as paid search has become more competitive, customer acquisition economics have become strained, Vivid Seats Inc. is increasingly invested in its path. With a focus on building a loyal and recurring customer base.

We are now increasing our focus and investment in delivering a leading value proposition to our customers. Alongside our loyalty program, with rewards redeemable in the app, late in the third quarter, we launched our lowest price guarantee also in the app. We believe the combination of our lowest price guarantee and our loyalty program represents the most compelling value proposition in the industry, and we are already seeing positive responses from our customers. With our enhanced value proposition, we expect to see a growing number of app users and resulting transactions. Our app users return more often, convert at a higher rate, and touch performance marketing channels less.

Over time, as our volume increasingly moves into the app, our performance will be increasingly insulated from the heightened competitiveness we have seen in performance marketing channels in recent years. Further, we believe that information transparency will only increase as AI proliferates and impacts the way consumers interact with brands across the Internet. It will take time to build comprehensive awareness of our enhanced app value proposition. But we are confident we will disproportionately benefit as AI reshapes consumer discovery and decision-making as we match consumer demand with the most compelling value in the industry. One of our initial efforts to build awareness of our app value proposition is our recently renewed partnership with ESPN.

With ESPN, we have launched a national marketing campaign on Disney streaming, which is reaching more than 127 million global subscribers across over 700 live sports events monthly. We are excited to see how fans respond to our new offering as awareness continues to build. We believe our investments in delivering a leading value proposition will drive order volume but reduce our take rates. Funding these investments in a sustainable manner will require a commitment to operating the most efficient platform in ticketing. We will focus on operating as a lean and agile organization enabled by powerful technology and unique data.

We announced the cost reduction program last quarter, and we are now more than doubling our fixed cost reduction target from $25 million to $60 million. We have made substantial progress towards our updated target with savings spanning fixed marketing, G&A, and stock-based compensation. Both these savings and our considerable reinvestment in our app value proposition are reflected in our initial 2026 guidance. Continuing with our theme of driving efficiency through clear focus, we executed our corporate simplification agreement, which included the termination of our cash receivable agreement and the collapse of our dual-class share structure early in the fourth quarter. The corporate simplification will yield substantial immediate and ongoing savings.

As part of the termination, we issued approximately 400,000 Class A shares to the former TRA parties. In return, we will avoid $6 million of cash TRA payments otherwise due in Q1 2026 while capturing up to $180 million of lifetime tax savings subject to generating sufficient profitability. In addition, by simplifying our structure, we expect to save approximately $1 million per year from reduced financial reporting and compliance costs while also removing tax inefficiencies in our structure. At current levels of profitability, we anticipate our annual cash income taxes to be approximately $3 million.

The savings between our cost reduction program and corporate simplification will create a more focused and agile organization, one that can invest strategically for growth while maintaining discipline and profitability. Next, I'll address trends in our third quarter results, which we believe validate our path forward and underpin our initial 2026 outlook, which Ted will provide. While private label remains under pressure, we are encouraged to see stabilization and early signs of momentum across our owned properties. Against the flat sequential industry backdrop, Vivid Seats Inc. and vegas.com delivered sequential GOV growth while the Vivid Seats Inc. app delivered double-digit sequential growth and returned to year-over-year GOV growth.

This is a direct result of our ongoing investment in product development and our enhanced value proposition. As we look to the fourth quarter and into 2026, there are no quick fixes, but our priorities are clear. We are committed to improving our financial performance by leveraging Vivid Seats Inc.'s foundational advantages, including leading technology, unique data, best-in-class efficiency, and continued investment into a unique and differentiated value proposition. Now I'll turn it to Ted to discuss the quarter and financial outlook in more detail. As we mentioned earlier, Ted, our Chief Accounting Officer, will take on the role of Interim Chief Financial Officer. Ted has been at Vivid Seats Inc. leading our accounting function for more than a decade.

I have full confidence in Ted, and I'm glad to have him step into the interim CFO role as we manage our leadership transition.

Ted Pikus: Thank you, Larry, and hello, everyone. I am honored to be with you today and to assume this role during a transformational time for the business. Turning to our results, in the third quarter, we delivered $618 million of Marketplace GOV, $136 million of revenues, and $5 million of adjusted EBITDA. These results reflect an intense competitive environment that impacted our private label business, which was also impacted by the loss of a large partner. We generated $618 million of Marketplace GOV in Q3, which was down 29% year over year. Total marketplace orders were also down 29% with average order size flat.

Looking at sequential trends, compared to Q2 of this year, overall Marketplace GOV was down 10% due to private label headwinds, while owned property GOV increased in a flat sequential industry environment. We generated $136 million of revenues in Q3, down 27% year over year. Our Q3 marketplace take rate was 17%, down from 17.5% in Q3 2024. We expect near-term take rates in the 16% range. Our third quarter adjusted EBITDA was $5 million, down substantially from the prior year due to lower volume, lower take rates, and negative operating leverage. We expect improved operating performance as we enter 2026 with the full benefit of our recent cost reductions. Next, I'll address our 2026 initial outlook.

With stabilizing owned property volumes, we expect 2026 Marketplace GOV in the range of $2.2 billion to $2.6 billion. At the midpoint, this assumes Marketplace GOV roughly in line with our third quarter run rate. We intend to reinvest cost savings into our enhanced customer value proposition and, as such, currently anticipate $30 to $40 million of 2026 adjusted EBITDA. Our 2026 initial outlook assumes industry volumes are flat year over year as the core concert on-sale season, which provides supply visibility for the coming year, has yet to occur. We ended Q3 with $391 million of debt, $145 million of cash, and net debt of $246 million.

Against a flat industry environment, we saw working capital continue to consume cash but at a substantially lower level than seen in the first half of the year. I'll now hand it back to Larry for concluding remarks.

Lawrence C. Fey: Thanks, Ted. Despite challenging year-over-year trends, the third quarter offered signs of stabilization, including sequential growth in owned property GOV, year-over-year growth in AFG OB, and substantial cost reduction progress. From here, diligent execution is crucial, but we believe our investment into our app value proposition provides a clear path to return to growth. With that, operator, let's open it up for questions.

Operator: And if you would like to withdraw your question, press 1 again. We do request for today's session that you please limit to two questions only. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Cameron Mansson-Perrone with Morgan Stanley. Your line is open.

Cameron Mansson-Perrone: Thanks. Good morning. Thanks for taking the questions. And Ted, welcome to the call. I guess the first question is really just I'd like to hear a little bit more about what gives you confidence in issuing 2026 guidance this early, given the pressures that have existed in the business recently. I heard you on the stabilization front, but just a little bit more on what gives you kind of that increased visibility relative to the past? I think would be helpful.

And then if you could just kind of try and help contextualize what is reflected in the high and low end of the guide for next year with regard to the competitive environment and expectations and any other gating factors around what would determine whether you shake out on the high or low end?

Lawrence C. Fey: Yes. Thanks, Cameron. Yes, I think you've heard us say in the past that we prefer to give guidance on our Q4 call once the Q4 on-sale calendar has run its course, as you'll have more industry visibility. And so the important caveat in the guidance we put forward is it presumes a flat year-over-year industry outlook. And I think to your question on what would govern the low end versus the high end, I would start with the industry under indexes to flat that would push you towards the low end. If it over indexes or grows, that would push you towards the higher end.

We certainly saw the Live Nation commentary, which if you interpolate what they said, it feels like they're pointing towards another positive growth year in North America. So hopefully, there is some conservatism built in. We'll learn more over the coming months. Exactly where the industry settles out to try to put a baseline that we think is reasonably skewed to the cautious side of the spectrum on the industry performance. Why do we put guidance out? Why do we have confidence? I'd point to a few elements. One, we obviously pulled 2025 guidance. So it's been a while since there's been a flag or a stake in the ground for folks to look at.

You can see a number of changes playing out in Q3, where we talked about our cost reduction initiatives. We talked about some of our reinvestment in our value proposition. And lots of puts and takes. And rather than having there be a vacuum where people are waiting in suspense for four months on what the net of all of those are. We wanted to distill it down to a target probably goes with is without saying, if competition or competitive intensity reaches new highs that will pressure and if they abate that will be a release valve relative to the range we put forward. But we've assumed essentially broad continuation of the competitive intensity. We've seen in 2025.

Cameron Mansson-Perrone: Thanks, Larry.

Operator: Next question comes from the line of Daniel Louis Kurnos with Benchmark Company.

Daniel Louis Kurnos: Dan had a lot of Larry, I guess, maybe just to double click on the leadership transition. Obviously, digital, experience from his history. So I guess maybe why now? Make this move? If you could just give us some color on the thought process. And, obviously, to be clear here, I think you're eminently qualified to leave the company, Larry. I just know, would be helpful to get sort of some of the thought process on the timing. And then, you know, in an agentic world, you talked about this discovery with OpenAI. If you're gonna push apps, which is fine, everyone else is putting their app into OpenAI for discoverability.

So know, I don't know what your thoughts are about that, given some of the puts and takes on DemandGen and OpenAI potentially becoming the source of DemandGen. But just help us think about your willingness to increase visibility via that channel and other ways that you might increase the visibility of the value prop. Thank you.

Lawrence C. Fey: Yeah. Thanks, Dan. Yeah. I'd I'd start with it. The thanks to Stan, of course, were sincere. Seven years was a great run. Think it was just reaching a time for a shift. And preparing the business for efficiency push that we're embarking on in the near term. To the second question, I think you touched on a theme that is spot on. Yes, we're pushing on app, and I almost think of the customer universe as two buckets. There's the new customer acquisition, and there's a competitive dynamic around that.

And then there's the folks who have already done their research and made informed decisions around which marketplaces they buy from or which marketplaces they consider and that generally occurs in the app. Where I think, there could be a really interesting blurring of those lines or fusion of the two as we move forward. If one of the fundamental tenants of AI is increasing information synthesis, increasing information transparency, as we increasingly place the best value proposition out into the ether. We then of course have an obligation to make sure that value proposition is digestible. By these new AI platforms that are looking for all of the best information to synthesize and distill for customers.

But you better have something that's compelling. Right? If they do their job and put forward the best value proposition, you better be front of the line. And so that's where we're going with the app. I think in near term while we wait for the commerce portion of the AI disruption to fully arrive, We're going to continue focusing on retaining our customers in the app ecosystem then we think there's opportunity coming on that customer acquisition as the technology format evolves.

Daniel Louis Kurnos: Great. Thanks, Larry. Appreciate the color.

Operator: Next question comes from the line of Maria Ripps with Canaccord Genuity. Your line is open.

Maria Ripps: Great. Good morning, and thanks for taking my questions. And Larry and Ted, congrats on the transition. Can you maybe share a little bit more color on the competitive backdrop right now? Are you seeing any early signs maybe some of the competitors in this space are starting to focus more on profitability?

Lawrence C. Fey: Yes. Thanks, Maria. We've talked in the past a bit about ebbs and flows, and it can be a little dangerous to extrapolate short-term behavior and assume it continues indefinitely. But I would say broadly aligning with call it, changes in corporate status, we have seen a shift in competitive posture. It was a fairly methodical increase in share that we saw from StubHub over the last couple of years. Would come in waves, but it kind of went one direction. And we've actually seen that reverse and rollover in September and October. Where they're now down year over year. On share. And I think that is directly tied to what we perceive as a shift in marketing aggressiveness.

The magnitude, obviously, was enough to reverse that trend. But it wasn't like a reversion to 2022 or 2023 levels. And we of course know that they reserve the right to change their mind and posture as we embark into 2026. But a notable change over the last call it six to eight weeks.

Maria Ripps: Got it. That's very helpful. And then any early thoughts you can share sort of on quality of concert lineup in 2026?

Lawrence C. Fey: Yes. We I'd say continue to be looking to Live Nation for the perspective views on what's coming. I heard pretty positive commentary. When I read the release, I think they touched on what clearly looks like positive North American growth is skewed towards larger venues. Thus far in the year, you get into these year-year comparisons where timing just varies slightly year over year. But we're in the midst this year. Morgan Wallen just announced that I think will be one of the top tours of the year. We've seen several others. So at this point, I would say, other than week to week variance, it looks like the Live Nation commentary is flowing through in what we're seeing.

Maria Ripps: Got it, that's very helpful. Thank you so much.

Operator: Next question comes from the line of Ryan Sigdahl with Craig Hallum. Your line is open.

Ryan Sigdahl: Hey. Good morning, Larry, Ted. Response to the FTC lawsuit, Ticketmaster shutting down trade desk for concerts. They're also limiting Ticketmaster accounts even further as it appears. As they take more action on pricing. Curious your perspective on this. Know, does this present an opportunity for Vivid Seats Inc. to take share on the POS side? But at the same time, I guess, the negative would be you know, how much contraction and negative do you see from a supply standpoint in the secondary ticketing? Yes. Thanks, Ryan. I think you framed it.

Properly in that any disruption to Trade Desk, I think, can only be a tailwind And we think Skybox will be waiting with open hours with its best in class capabilities to support any customers who no longer have the full suite that they need to run their business. And can only help our position. And then, as you said, counterbalance, if there is additional pressure.

I'd start from our fundamental view is that the vast majority of what drives this industry is fundamental financial well financial market, right, where you have artists and teams who are looking to diversify risk, you have artists and teams who are looking to offload risk well in advance of shows and that there is a healthy vibrant financial instrument via the secondary market that facilitates and benefits all parties.

To the extent folks are violating the rules of the game we have always said this, we continue to say it, We can, should, will, support, anything and everything that needs to be done to ensure folks do play by the proper rules as defined by the artists and the primary ticketing platforms. The extent there are folks that are I'm sure there are, right? There's got to be bad actor out there. To the extent those folks' behaviors are forced to modify, I think what will be unknown, right, and we'll find out as you all find out, does that contract the secondary market?

Or does it just change the form, where you now have increased fragmentation where new smaller sellers fill in the gap in the overall market opportunity remains the same. So we'll keep a close eye on it. But I do think it yes, there's a positive tailwind on Trade Desk, a potential headwind, but maybe not the change to Ticketmaster policies. Thanks, Larry. Then just the other hot topic kind of from an industry standpoint, direct issuance. Vivid Seats Inc. has a smaller DI type offering with the college basketball crown, but curious what you think about the ambitions of some of your peers in the space on this model specifically?

And then kind of to your point on rules of the game, I guess, contractually, etcetera, I guess, your thoughts on direct issuance and the viability of doing that in an accelerated way going forward? And what that potentially means from a secondary marketplace standpoint if that further limits the supply of brokers play.

Lawrence C. Fey: Yeah. I think obviously strategies are subject to change. And so just reacting to the way we have seen the direct issuance opportunity defined to date. And maybe they changed this, but to date it's been primarily focused, as we understand it, on sold inventory. And so you can imagine where you have you're well past the event going on sale. regular season baseball games, less popular theater shows. Substantial available inventory available from the primary. And if that gets piped directly into a second marketplace that would represent incremental supply. is this a supply or demand constrained I think the threshold question for industry?

And does the fact that you took an event at already had a decent amount of supply and made more available will that stimulate incremental demand? Or will it cannibalize the eyeballs that you already getting on the site? And to sell more, you still need to get additional eyeballs and spend the marketing dollars to bring them in. I think Our viewpoint has been that generally this is a demand constrained exercise not supply constrained. All but the most rarified air You could see Taylor Swift tickets really selling out, but most events including World Series, Super Bowl, right? There are tickets available all the way up until the event starts, even for the highest profile events.

So I'd say we're a bit more muted on our belief of the impact that could have. But we certainly have heard that the ambitions are big, and so we'll keep a close eye. Thanks, Larry. Good luck, guys.

Operator: Next question comes from the line of Ralph Edward Schackart with William Blair. Your line is open.

Ralph Edward Schackart: Good morning. Thanks for taking the question. Larry, I just kind want to circle back on the, sort of driving more awareness of the app. And sort of the efforts there. I know you talked about having ESPN as a partner do that, which, obviously a great partner to have there. But maybe you could just sort of provide a little bit more color how you drive more direct traffic here and build more awareness? And would you be contemplating you know, potentially, like, marketing campaign or other efforts to, grow more awareness to go direct to that. Thank you.

Lawrence C. Fey: Yes. Thanks, Ralph. I think we're doing what I would call our brand marketing surge via ESPN. That is going to be concentrated in the near term. Kind of throughout Q4, which is peak sports season. I think this is an industry where there's been many attempts to do broad based brand marketing. And it is challenging to prove compelling ROI from that. I don't think we're going to reverse course and jump headfirst back into broad brand marketing. We're going to continue to focus on thoughtful different slices of, call it, more targeted performance based metrics. One of the advantages we have foundational strengths we have, is we've been one of the leading market for a long time.

And as a result, we sold a lot of tickets to a lot of people and we have a really robust existing user base, really robust CRM database. So a lot of our effort has been increasing our personalization, improving the nature of our messaging, now when we're delivering a message with a fundamentally improved value proposition, I think that leads to more engagement across that existing user base. And then continuing as people we acquire them on the web, making them immediately aware of what awaits. If they trusted us enough to buy on the web, that's wonderful.

And we have perks that would compel them to come back to the app and making sure that hyper addressable audience gets made fully aware of the proposition. Those are the two major buckets I think we'll be focusing on in the near term.

Ralph Edward Schackart: Great. Thanks, Larry.

Operator: Next question comes from the line of Steven McDermott with Bank of America. Your line is open.

Steven McDermott: Hey, good morning. Thank you for taking my question. Just two quick ones. Firstly, for 2026, what World Cup assumptions are kind of built into that outlook?

Lawrence C. Fey: Yeah. We essentially have not assumed a meaningful impact from World Cup. I think that is primarily due to two things. One, there's not a lot of precedent that we can rely on. The U.S. World Cup in an era with online secondary ticketing has zero precedent data points. When we look at the last two World Cups, they're in markets that we basically don't operate in. In Russia and Qatar. And so trying to strike a cautious tone given a lack of conviction beyond that. The second observation, I think it's fairly well documented But we've seen FIFA be let's say, quite aggressive in seeking monetize, optimize their monetization of the event.

I think it's safe to assume there will be incremental volume. We will benefit from it. But between those two factors, we've opted to essentially disregard it. As we've contemplated our outlook for next year, and it would purely represent upside.

Steven McDermott: Got it. Thank you. Appreciate that color. And then my second question, just it sounds like you said StubHub pulled back on marketing spend a bit. Is it fair to say that the Q3 exit rate improved on a year over year basis?

Lawrence C. Fey: Yes, think it would be fair to say that over the course of Q3, we saw a shift in their behavior and a corresponding shift in volumes across marketplaces. Yes, that happened closer to the end of Q3 than the beginning.

Steven McDermott: Gotcha. No. It's very helpful. Thank you.

Operator: Next question comes from the line of Bradley D. Erickson with RBC Capital Markets. Your line is open.

Bradley D. Erickson: Hey, thanks. I just follow-up on that last one actually, Larry. When you say when you look at kind of what's instructing the stabilization commentary on the owned property business, You mentioned competitive intensity easing. Several times. Is that kind of the main driver? Any other drivers you call out there either things in your control or other market forces?

Lawrence C. Fey: Yes. I think the biggest one is so yes, the competitive landscape, of course. Matters. But I'd say of similar, if not equal, if not slightly more, important in terms of what we see in the immediate term has been this value proposition push. And inherent in what we're trying to achieve as we get more volume in our app, I think that is a more protected ecosystem. You can bid whatever you want for a Google link But if someone already has our app, already trusts us, is already looking at us, they will likely look at us. If we have a structurally better offer, it doesn't matter who else is buying the top Google link.

And so there's control your own destiny more on app. That's why we're pushing, right? Reduce the surface area and exposure to competitive response. That's a long game play, right? You don't make that change and immediately have profound shift of volume from one channel to the other. But we have seen market increases in the volume that's moving into the app. And I think this is one of those layer cake dynamics, where every month it goes, where you bring in a new cohort of customers, who have done their research, seen the value prop They're going to be fundamentally stickier. And over time, that will compound and build into something pretty exciting.

Bradley D. Erickson: Got it. And then appreciate the 26 guide, and I'll give the EBITDA numbers. Any Thanks. color you can give maybe on cash conversion relative to that EBITDA guide?

Lawrence C. Fey: Yes. So appreciate that question. Yes, think if we look at our cash obligations moving forward, roughly $20 million of net interest expense We'll have a bit less than $20 million of ex cap software And then we mentioned in this release that pro forma for the TRA transaction will have about $3 million of cash taxes, primarily from international operations. So you sum those up, you consider working capital, You have a roughly $40 million set of cash obligations. As we've talked about quite a bit the last few quarters, when we're growing working capital as a source, we're shrinking it's a use of cash.

And so I didn't get epicenter of will cash balance grow next year is do you believe that we can sequentially grow GOV? I think it's reasonable to assume that, take Q1 as we lap the private label losses that we saw in Q3, continue to lap those. Overall year over year, GOV numbers will continue to be down. But if the sequential help, because the balance sheet kind of remark to market every quarter, is stable and growing. You can see working capital reverse course. And so the base case plan is at the midpoint or better of our guidance. We would expect to be cash generative next year.

Bradley D. Erickson: Understood. Thanks.

Operator: Next question comes from the line of Benjamin Thomas Black with Deutsche Bank. Your line is open.

Benjamin Thomas Black: Hi, thanks for taking the question. This is Kunal for Ben. Quick one on the outlook, and you just talked about the cash flow consequences that we could see. One thing with regard to, the assumption that underlie that So are you assuming that the competitive intensity remains at the September, October levels in 2026? Or are you assuming that maybe things go back to what we had seen earlier in this year? And that is what determines the market share. That you expect in '26.

And then the second one would be with regard to the traffic that you are getting and the traffic that you have on your app, what is different from, other providers that makes your value proposition so unique that people will not go anywhere else to shop. Thank you.

Lawrence C. Fey: Yeah. So let me let me start with the app value prop because I think that's a really compelling one. I think we talked about our loyalty program for a number of years. We continue to be on a journey to build awareness of that loyalty program. But those who find and use that program I think structurally buy more at a multiple of the typical user. And even before the more recent changes to our value proposition, I think resulted in kind of a clear best in class value prop. And then recently, what we've really pushed is base lower everyday pricing.

And then we're continually innovating on what kind of inducements and incentives we can provide as customers move through their through their journey their lifetime journey with us. So we think if you create an experience where someone comes in and realizes that you're pricing without paying consideration to any incentives, without paying consideration to loyalty, are the best in the industry relative to our largest competitors. You have a good experience. Right? You get great customer service. You enjoy the layout of the site. And then subsequent to that, you get thoughtful recommendations. You get incentives and inducements. You sign up for loyalty and that price advantage becomes even more significant. That's a really compelling lifetime experience.

Now is that to say that others can't offer various elements of that? I don't think there's anything philosophically that would prevent folks from doing it. I think it's an economic question. Right? If you're spending significant amounts bidding for the top keywords on search, can you do that? Offer these lower price points? If you have very large partnership obligations, can you do those and offer these inducements and incentives? So we'll see. I think our belief is that we can operate leanest platform and that uniquely enables us to sustainably deliver others will need to respond as they see fit. a best in class value prop.

And As it relates to the first question on the competitive environment contemplated, difficult to be precise on this. We certainly have seen that it's been kind of an up into the right level of intensity over the last two years. And we are we want to make sure we don't just forget that. We also want to reflect that we have seen a change. And so I would characterize the midpoint as call it something in between what we've seen September and October. And what we saw at the worst of it kind of late Q1 early Q2.

And so a little bit of reversion from the run rate, but not all the way back to the most extreme point that we saw.

Benjamin Thomas Black: Thank you.

Operator: Next question comes from the line of Thomas Ferris Forte with Maxim Group. Your line is open.

Thomas Ferris Forte: Great. Thank you. So first off, congratulations, Larry and Ted, on the new opportunities. And best wishes to Stan for his future endeavors. One question, one follow-up. So, Larry, are you seeing any changes in consumer behavior when it comes to this secondary ticket market? For example, when you have a game seven in a playoff series, are they still willing to pay premium prices for the experience? As they have in the past?

Lawrence C. Fey: Yeah. Thanks, Tom. I would say as a broad aggregate statement, continues to feel like live events are central piece of what consumers want to spend their money on. Had a tough World Series comp, right? You can't really get better than the Yankees and Dodgers. And so I think World Series volumes and average order size were down relative to that. But when we look at the World Series relative to every year post COVID other than the Yankees and Dodgers, this was the second best. Year. And so healthy, robust demand, we're seeing that across a lot of high profile events I think we alluded to this last quarter.

To the extent we have seen softness, it's more been on the lower end of the market. And I think we actually see that manifest in Vegas more than in our core business. The call it weekday lower AOS shows, have been feeling, I think, some of this much talked about consumer softness.

Thomas Ferris Forte: Excellent. And then I might be a little early in this one. But can you talk about your capital allocation priorities? Including reinvesting in the business? International expansion, strategic M and A and buybacks.

Lawrence C. Fey: Yeah. I think for now, it's reasonable to assume that we won't be looking to complete acquisitive M and A that would be, call it, adjacencies. I think we've long believed that there could be compelling consolidation in this space. And so we would be eager participants in that. But TAM expansion, I think we've got batten the hatches and focus on the core. Business. Yeah, given the performance on both EBITDA and cash flow this year, I think will display a lot of prudence on any cash leaving the system, share repurchases in the near term. I think we think that there's a very compelling value at these prices.

But step one is batten the hatches and assure that we have all of the capital we need to continue investing and all of the initiatives that we see really compelling ROIs against. Such as international. And so we'll keep doing the defend the core. And then once we have we'll more of a proven track record of stabilization, return to growth, return to cash, we can open up the aperture of it.

Thomas Ferris Forte: Thank you, Larry. Thank you, Ted.

Operator: Next question comes from the line of Andrew Jordan Marok with Raymond James. Your line is open.

Andrew Jordan Marok: Thanks for taking my question. Maybe on the international part there, I guess what signals are you seeing in kind of that what you call the core international business that give you the impetus to continue investing there as opposed to maybe rationalizing some incremental cost savings out of that business? Thank you.

Lawrence C. Fey: Yes. Thanks, Andrew. I'd start with we've been pleasantly surprised at the quickness with which we've been able to bring the international business to the contribution margin positive. So we are there today already. And I think we've had just to refresh on the context, via GoGo has a very substantial market position. In Europe. And as a result, when we have shown up in pockets where we have fully competitive supply, And I would say that has initially been areas where it's either NFL comes to Europe, US artists go on global tours. Or other events where U. S. Sellers have meaningful positions. We immediately have fully competitive supply.

When we have competed for traffic and eyeballs on those areas with competitive supply and competitive pricing. We have seen abundant success The task ahead then is to continue to add pockets across various countries, especially with a focus on local events. We can have that fully competitive supply and pricing and from what we've seen, the ability to market profitably will follow quickly once you have that supply in place. That's some hand to hand knife fighting to get to that point. And so that's the journey we're on from here.

Operator: There are no further questions at this time. That concludes today's call. Thank you all for joining. You may now disconnect.