Vivid Seats' Private Label Growth and Cash Conversion Outlook Clash With Prior 2026 Guidance

Date of Call: Aug 4, 2026

Financials Results

• Revenue: $130M, up 3% quarter-to-quarter

Guidance:

• Marketplace GOV for fiscal year 2026 expected in the range of $2.3B-$2.6B.
• Adjusted EBITDA for fiscal year 2026 expected in the range of $34M-$40M.

Business Commentary:

World Cup Impact and Revenue Growth:

• Vivid Seats reported Q2 2026 Marketplace GOV of $659 million, reflecting an 8% sequential increase from Q1 2026.
• The company's Q2 2026 consolidated revenue was $130 million, up 3% sequentially.
• The significant increase in GOV and revenue was primarily driven by the unprecedented demand from the FIFA World Cup, which accounted for a mid-teens percentage of Q2 GOV.

Adjusted EBITDA Growth and Operational Leverage:

• The company's adjusted EBITDA for Q2 2026 was $12.6 million, a 33% sequential increase from Q1 2026.
• This growth was attributed to improved GOV and revenue, showcasing the benefit of operational leverage, particularly from the World Cup's outperformance.

Private Label Revenue and Market Strategy:

• Vivid Seats' private label revenue grew 16% sequentially in Q2 2026.
• The growth is attributed to the company's focus on optimizing its core transaction funnel, enhancing the customer journey, and expanding its private label offerings, which have shown material uplifts against competitive baselines.

International Expansion and Core Funnel Optimization:

• The company is seeing increasing opportunities in international markets, with plans to re-accelerate growth by implementing targeted upgrades specific to those markets.
• The pause in investment and focus on core transaction funnel enhancements for the North American business will benefit international expansion efforts.

Competitive Landscape and Pricing Strategy:

• There has been a continuation of competitive intensity, with several competitors seeking to fill the gap left by the largest competitor.
• Vivid Seats continues to face pressure on take rates during large events with higher price points but aims to deliver a unique value proposition, adjusting its pricing strategy as market conditions change.

Sentiment Analysis:

Overall Tone: Positive

• CEO stated 'Two quarters into the year, we are encouraged by the progress we have made and believe our strategic actions are delivering measurable results' and 'We successfully capitalized on the World Cup opportunity... with a greater than 99.7% successful fulfillment rate'.

Q&A:

• Question from Cameron Mansson-Perrone (Morgan Stanley): Could you provide color on the competitive backdrop and how you view take rate as a competitive tool, particularly during active periods like the World Cup?
  Response: Competitive intensity remains elevated but moderated from peak levels. Take rate faces pressure during large, high-price-point events like the World Cup, and the company adjusted its take rate lower to compete and offer differentiated value.

• Question from Dan Kurnos (Benchmark): Did the World Cup resonate with your messaging and shift traffic to in-app, helping gain momentum?
  Response: The company outpaced its share of the World Cup volume, indicating successful messaging and app traffic shifts, and delivered superior customer experience metrics.

• Question from Dan Kurnos (Benchmark): What are your thoughts on potential expanded state-by-state regulation?
  Response: Near-term impact is not expected due to small jurisdictions, delayed implementations, and frameworks that leave room for questions. Long-term, price-based mechanisms are seen as the most effective and customer-friendly way to manage demand exceeding supply.

• Question from Ryan Sigdahl (Craig-Hallum Capital Group): Can a highly publicized event with positive experiences change the narrative for your marketplace faster than negative publicity fades?
  Response: The company bets that positive experiences, especially when combined with better prices and service, will spread through word-of-mouth and social media over time, proving economically right.

• Question from Ryan Sigdahl (Craig-Hallum Capital Group): What product enhancements were accomplished in Q2 and what's coming in the back half of the year?
  Response: Focus in Q2 was on reducing friction in the core transaction funnel. In the second half, the focus shifts to improving the seat selection journey and app engagement to increase conversion and customer retention.

• Question from Ralph Schackart (William Blair): Can you talk about app traffic growth in Q2 and strategies to drive more app traffic?
  Response: App volume growth continues to outpace the broader market. The strategy centers on communicating the app's best-in-class value proposition, improving onboarding, and leveraging the fulfillment process to build customer awareness and loyalty.

• Question from Audrey Stewart (RBC): Can you provide an update on the new private label partner's Q2 performance and confidence in adding more partners?
  Response: The partner continues to outperform expectations, representing a competitive win. Upgrades to the onboarding stack and positive leading indicators give confidence in the pipeline and ability to add more partners.

• Question from Thomas Forte (Maxim Group): What are your current thoughts on international expansion efforts?
  Response: International opportunity is seen as large and untapped. The company paused investment to focus on core funnel upgrades, which will benefit international, with targeted upgrades expected to re-accelerate growth in 2027.

• Question from Thomas Forte (Maxim Group): What are your current thoughts on cash conversion for 2026?
  Response: Cash conversion remains consistent with the prior framework, expecting high $30M-$40M in CapEx, interest, and taxes. If GOV growth is returned, working capital would be a source of cash, making it a cash generative year.

• Question from Steven McDermott (Bank of America): Can you provide color on dynamics in verticals outside of sports, like concerts and theater?
  Response: Overall industry volumes outside of World Cup were softer, potentially due to World Cup cannibalization. Competitive intensity increased in theater, and Vegas theater performance reflects softness in leisure travel.

• Question from Steven McDermott (Bank of America): How are you thinking about AOVs in Q3 and the back half of the year?
  Response: AOV is expected to be up year-over-year in Q3 due to World Cup bleed-over. Q4 is speculative, depending on the concert roster and World Series matchups, but long-term AOV growth is expected at inflation plus a couple hundred basis points.

Contradiction Point 1

App Traffic Growth and Strategy

It presents differing strategies and performance metrics for app traffic growth, affecting expectations for future market share and business volume.

Ralph Schackart (William Blair) - Ralph Schackart (William Blair)

2026Q2: The app offers best in class value... Since initiating the app promotion in Q3 2025, the company has seen compelling metrics with app volume growth outpacing the broader market. - Larry Se(CEO)

What were the Q2 app traffic growth results and the strategies to drive more traffic? - Ralph Schackart (William Blair)

2026Q1: App GOV share is up 20% year-over-year and exceeded 40% in Q1. The ambition is for a majority of business to come through the app, realistically aiming for a run-rate basis by some point in 2027. - Lawrence Fey(CEO)

Contradiction Point 2

Private Label Partner Performance and Outlook

It frames the target and outlook for the private label segment's growth differently, impacting expectations for the channel's profitability and contribution.

Audrey Stewart (RBC, on for Brad Erickson) - Audrey Stewart (RBC, on for Brad Erickson)

2026Q2: The partner outperformed expectations and represents a competitive win... The private label channel is now contribution margin positive and ahead of schedule... The channel is now a growth driver. - Larry Se(CEO)

Can you provide an update on the new private label partner's Q2 performance and what factors give confidence in the relationship and the ability to add more partners? - Maria Ripps (Canaccord)

2026Q1: Returning to the absolute size pre-large-customer-loss levels seen in 2024/2025 is not a near-term target. The goal is for the segment to grow at or above broader marketplace and industry rates... - Lawrence Fey(CEO)

Contradiction Point 3

Cash Conversion for 2026

It provides inconsistent guidance on 2026 cash conversion and free cash flow, affecting investor expectations regarding the company's financial health and cash management.

Thomas Forte (Maxim Group) - Thomas Forte (Maxim Group)

2026Q2: The cash conversion framework remains consistent. The company expects 'high $30 million-$40 million' in cash outflows... Cash generation for the year will depend on working capital movement... - Larry Se(CEO)

What are your current thoughts on the international expansion strategy and cash conversion expectations for 2026? - Thomas Forte (Maxim Group)

2025Q4: ...the company expects to be modestly cash generative in 2026. - Lawrence Fey(CEO)

Contradiction Point 4

Competitive Landscape Assessment

It contradicts the current state of competitor aggressiveness and market share dynamics, influencing the strategic approach to competition and pricing.

Cameron Mansson-Perrone (Morgan Stanley) - Cameron Mansson-Perrone (Morgan Stanley)

2026Q2: The competitive landscape shows **'moderation'** from the largest competitor but remains **'elevated'** with others prioritizing volume and share. - Larry Se(CEO)

How has the competitive landscape evolved this year, and what was your approach to using take rate as a competitive tool during the World Cup, including future strategy? - Maria Ripps (Canaccord Genuity)

2025Q3: There has been a **shift in competitive posture**, with StubHub's market share reversing year-over-year in September and October, tied to a **change in marketing aggressiveness**. - Lawrence Fey(CEO)

Contradiction Point 5

World Cup Impact on Guidance and Business Outlook

It contradicts whether the World Cup is assumed to have a material impact on 2026 performance, affecting the company's event-driven growth strategy and forecasting.

Dan Kurnos (Benchmark) - Dan Kurnos (Benchmark)

2026Q2: The World Cup's take rate was influenced by... and the event demonstrates the **'flywheel'** effect: strong initial acquisition combined with a differentiated experience should drive future returns. - Larry Se(CEO)

Okay, let's tackle this. The user wants me to rewrite the input into one concise earnings-call question. The input has three parts: two about the World Cup's impact and one about state-by-state regulation.First, I need to combine the first two questions. They both ask if the World Cup affected the app's traffic and momentum. So maybe merge them into something like "Did the World Cup drive traffic to your app and build momentum?" That covers both points.Then, the third part is about expanded state-by-state regulation. The original asks for thoughts on potential expansion. So "What are your thoughts on potential expanded state-by-state regulation?" is already a question but needs to be combined.The challenge is to make it one question. Since the first two are related, combining them makes sense. The third is a separate topic. But the user wants exactly one question. Hmm. Wait, the input has three questions, but maybe the user expects two separate ones. But the instruction says to output exactly one line. So maybe combine the first two into one question and leave the third as a separate question? But the user says to make it one question. So perhaps merge all three into one? That might be too long.Wait, the input is three questions. The user wants to condense into one. Let me check the original input again: "Did the World Cup resonate with your messaging and shift traffic to your app? Did you gain momentum from the event? Also, what are your thoughts on potential expanded state-by-state regulation?" The first two are about the same event, so combining them into one question. The third is a separate topic. But the user wants one question. So maybe combine the first two and the third into one question? But that would be two separate topics. Maybe the answer is to combine the first two and leave the third as a separate question, but the user wants one. Hmm.Wait, the output must be exactly one line. So perhaps the user expects to merge the first two questions into one, and the third remains as a separate question? But the instruction says to output exactly one line. Therefore, the third part must be included in the same question. But that would be two topics. Maybe the answer is to create two questions, but the user says to output exactly one. Therefore, perhaps the third part is omitted. But the user might not want that. Alternatively, maybe the third part is included as a separate question, but the user wants one. So perhaps the answer is to merge the first two into one question and ignore the third? But the user's input includes three questions. The instruction says if the input is not a question or too vague, output as-is. But here, the input is three questions. The user wants one. So the correct approach is to combine the first two into one and the third as another, but the output must be one line. So perhaps the answer is to combine the first two and include the third as a separate question in the same line? But that would be two questions in one line, which is not allowed. The user's example shows that when multiple questions are present, they can be combined into one. For example, in the example input, two questions are merged into one. So maybe here, the first two can be combined into one question, and the third is left out. But the user's input includes three questions. However, the instruction says to output exactly one line. Therefore, the third question must be omitted. But that's not ideal. Alternatively, maybe the user wants all three combined into one question. But that would be a run-on. Let me check the example given. In the example, two questions are combined into one. So maybe here, the first two are combined into one, and the third is left out. So the answer would be: "Did the World Cup drive traffic to your app and build momentum?" and then the third question is omitted. But the user's input has three questions. The instruction says if the input is not a question, too vague, or lacks info, output as-is. But here, the input is three questions. The user wants one. So perhaps the correct approach is to combine the first two and ignore the third. But that's not ideal. Alternatively, maybe the third is included as a separate question, but the output must be one line. Therefore, the answer is two questions in one line, which is not allowed. Therefore, the correct approach is to combine the first two into one question and leave the third as a separate question, but the user wants one line. So perhaps the answer is to output the first two combined, and the third is omitted. Therefore, the final question would be "Did the World Cup drive traffic to your app and build momentum?" and the third question is left out. But the user's input includes three questions. However, the user's instruction says to output exactly one line. Therefore, the third question is omitted. So the answer is combining the first two - Steven McDermott (Bank of America)

2025Q3: No meaningful World Cup impact is assumed due to lack of precedent data and FIFA's aggressive monetization; any impact would be upside. - Lawrence Fey(CEO)