Eventbrite shares drop 30% after weak Q1 report

Eventbrite shares dipped from US$24.15 to $17.2 last night (May 1), following the release of the company’s Q1 financial report, which showed widening losses and slower growth.

Although the event management and ticketing company experienced growth in revenue (9.1% to $81.3 million), paid tickets (14.5% to 27m) and gross profit (9.4% to $50.8m), the rate of growth has slowed down considerably since the company first went public in November 2018.

Eventbrite recorded an operating loss of $10.1m, compared to $3.1m in the same period of 2018. Net loss per share was $0.13 and adjusted EBITDA was down to $5m, from $8.8m last year.

The company put its modest growth down to issues related to integrating Ticketfly to the Eventbrite platform, following its acquisition of the ticketing company in 2017. Eventbrite aims to retire the Ticketfly brand later this year, following November’s launch of Eventbrite Music, a ticketing solution for independent promoters, venues and festivals.

“We took on a challenge when we acquired Ticketfly, as it marked a significant expansion in our commitment to their main customers, music venues,” explains the Q1 shareholder letter.

“While we remain committed to this endeavour, we believe we may see meaningful migration loss as we move to shut down the Ticketfly platform in the second half of the year”

“We have spent significant time and resources over the past year to build a product that serves these creators. While we remain committed to this endeavour, as we have noted in the past, we believe we may see meaningful migration loss as we move to shut down the Ticketfly platform in the second half of the year.

“While unfortunate in the short run, this move positions the company best for the future, allowing us to continue to improve capabilities for all creators on the platform and ensuring we are sufficiently investing beyond North American music sales to support both our self sign-on and sales channels.”

Eventbrite states it will continue to increase investment in the business in Q2 and expects to remain EBITDA positive for the full year.

The company notes that while it expects these platform migration-related issues to continue into Q2, continued growth from self sign-on and international channels ought to bolster performance. Eventbrite recently opened its first European development centre in Spain and launched a localised platform Singapore, its first in an Asian market.

The company also announced that its chief financial officer, Randy Befumo, will transition into the role of chief strategy officer, to focus on ways to enable the Eventbrite business to grow.

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