Eventbrite appoints new CFO following Q2 results

Ticketing and event technology platform Eventbrite has appointed Lanny Baker as chief financial officer, following mixed second quarter financial results.

Baker joins Eventbrite from Yelp, succeeding Randy Befumo in the role. Befumo, who has served as the company’s chief financial officer since 2016, will move into the role of chief strategy officer.

Eventbrite chief executive officer Julia Hartz says she “cannot think of a better partner […] to help lead the company in its next phase of growth” than Baker.

The announcement follows the release of Eventbrite’s Q2 financial report, which showed total revenue for the quarter at $80.8 million, a 19.6% increase compared to Q2 2018. Paid ticket sales were also up from the same period last year, growing 15% to $26.5m.

In a letter to shareholders, the company attributed revenue rise to ticket sales and the introduction of its add-ons feature, which allows event organisers to promote premium and ancillary offerings to customers.

However, the results showed an operating loss of $14.5m for the quarter, up from the $13.2m from Q2 2018.

“I cannot think of a better partner than Lanny [Baker] to help lead the company in its next phase of growth”

Adjusted EBITDA (earning before interest, tax, depreciation and amortisation) was down from the previous year, from $1.2m to $900,000.

In Wednesday’s earnings call, chief strategy officer Befumo stated the company expected EBITDA for the next quarter to be down further, “in the range of minus $9m to minus $5m”. The bulk of this loss, explained Befumo, would be related to the impact of the failed Roxodus festival.

Eventbrite pledged to refund all ticketholders out of its own pocket, following the last minute cancellation of Roxodus festival in Canada. MF Live, the company behind the festival, has since filed for bankruptcy.

The upcoming quarter will also be affected by “migration impact as we sunset the Ticketfly platform”. However, the company states it is “encouraged by the progress” it has made with the Ticketfly integration, with fewer than 100 clients left to migrate. The intention is to have all tickets sold on the Eventbrite platform by October 1.

In the earnings call, Befumo told investors that there was “no easy quantification” of how many customers would remain with Eventbrite after migrating from Ticketfly.

The company put its modest growth in Q1 down to issues relating to the integration of Ticketfly, which it acquired in 2017.

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Eventbrite grows revenue, profit and sales in first public financials

Eventbrite’s first financial quarter as a public company saw big increases in all key performance indicators, with double-digit growth in turnover, gross profit and ticket sales.

The San Francisco-based ticketing/event management business, which launched on the New York Stock Exchange earlier this year, posted year-on-year growth in revenue of 45.1% (US$73.6m), paid ticket sales of 32.2% ($23.9m) and gross profit of 41.7% ($42.2m), as well as increasing adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) from $1m to $11.2m.

While operating loss widened, from $10.4m to $13.1m, MarketWatch notes that “nearly half” of Eventbrite’s losses “were credited to stock-based compensation, which can be especially heavy in the first quarter after an initial public offering” (IPO).

Its net loss was $35.5m, which also included a one-off $17.2m loss on extinguishing debt.

Despite the positive headline figures, the Q3 report sent Eventbrite’s share price tumbling more than 8%, reports CNBC, after the company missed earnings expectations: Analysts predicted a loss equivalent to 47¢ share, rather than the $1.24 reported.

The picture is also complicated slightly by amortisation (or regular payments) related to the company’s $200m acquisition of Ticketfly last September, with another $2.8m in amortised losses forecast for the fourth quarter of 2018.

“We’ve tapped into a large, under-served global opportunity”

However, it beat revenue expectations by nearly $2m – reporting $73.6m against a predicted $71.7m – and, at the time of writing, its ~$31 share price is still up more than 30% above the IPO price of $23.

“Eventbrite is succeeding, even as its stock price is retreating,” summarises the Motley Fool analyst Rick Munarriz.

Speaking to investors during the company’s Q3 earnings call, Eventbrite CEO Julia Hartz (pictured) highlighted its recent Eventbrite Music launch, integration with YouTube and continued “efficient creator acquisition and predictable revenue retention” as positive indicators for Q4 and beyond.

“We’ve tapped into a large, under-served global opportunity in the mid-market of live experiences, and our goal is to help fuel this large and growing market,” she said.

Eventbrite CFO Randy Befumo added the company expects net revenue of $72–74m in Q4, “representing 16.4% year-over-year growth”. He also revealed that 2019 will likely see the business “taking targeted pricing actions in particular markets, in order to drive greater volume” of ticket sales.

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