Eventbrite’s Earnings Call: Growth Amid Challenges

Eventbrite ((EB)) has held its Q3 earnings call. Read on for the main highlights of the call.

Eventbrite’s latest earnings call reveals a mixed sentiment, highlighting both significant achievements and ongoing challenges. The company has shown substantial growth in its advertising segment and improved EBITDA margins, yet it faces hurdles with declining revenue and a slower recovery in ticket sales per creator. Despite these immediate challenges, Eventbrite’s strategic progress positions it for future growth.

Eventbrite Ads Revenue Growth

Eventbrite’s advertising segment has been a bright spot, with revenue from Eventbrite Ads growing by 38% year-over-year. This growth has significantly contributed to the company’s gross margin improvements, showcasing the potential of their advertising initiatives to bolster financial performance.

Improved Adjusted EBITDA Margin

The company’s adjusted EBITDA margin reached 11.7%, surpassing the guidance of 7%. This improvement is attributed to structural cost actions, indicating effective cost management strategies that have enhanced profitability despite revenue challenges.

Increase in New Paid Creator Acquisition

Eventbrite has seen a nearly 4% increase in new paid creator acquisition in the third quarter. This uptick reflects the company’s efforts to attract and retain creators, which is crucial for sustaining long-term growth and diversifying revenue streams.

Strong Consumer Engagement

Consumer engagement remains robust, with consumer paid orders driven by performance marketing growing 28% quarter-over-quarter. This indicates successful marketing strategies that are effectively driving consumer interest and transactions on the platform.

Net Revenue Decline

Despite the positive developments, Eventbrite’s net revenue for the third quarter was $71.7 million, marking an 8% decline year-over-year. This decrease is primarily due to lower ticketing revenue and the elimination of organizer fees, highlighting areas that require strategic attention.

Slow Recovery in Average Tickets Sold per Creator

The recovery in average tickets sold per creator has been slower than anticipated, posing a modest headwind for the company. This trend underscores the challenges in fully regaining pre-pandemic levels of ticket sales.

Ongoing Revenue Headwind from Smaller Creators

The shift towards smaller creators continues to present a modest revenue headwind. While this mix shift diversifies the creator base, it also impacts overall revenue generation, necessitating a balanced approach in supporting both large and small creators.

Forward-Looking Guidance

Looking ahead, Eventbrite is focused on driving growth in 2026 by enhancing premium tools for large creators, leveraging AI for creator success, boosting consumer engagement and personalization, and expanding into global markets. CFO Anand Gandhi provided guidance for the fourth quarter, projecting net revenue between $71.5 million and $74.5 million and an adjusted EBITDA margin of 8% to 9%. The company plans to capitalize on its improved structural economics to support future revenue growth and margin expansion.

In summary, Eventbrite’s earnings call reflects a company navigating through a mixed landscape of growth opportunities and revenue challenges. While the advertising segment and improved EBITDA margins are promising, the decline in net revenue and slower ticket sales recovery remain areas of concern. However, with strategic initiatives in place, Eventbrite is poised to leverage its strengths for future growth.