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What changed in Eventbrite, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Eventbrite, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+546 added−580 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-28)

Top changes in Eventbrite, Inc.'s 2023 10-K

546 paragraphs added · 580 removed · 345 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThis competitive landscape provides creators and attendees with many channels to promote or engage with live experiences. 2 Table of Contents We believe that our competitors fall into four broad groups: internally-developed ad hoc systems that creators cobble together on their own; event management software vendors, who are typically dedicated to a particular category of events in a limited number of countries; smaller niche or regional providers, who are typically smaller in scale and have limited technology and feature functionality; and large technology companies who have added products in the events space and whose userbases have substantial event-related activity, such as Facebook, LinkedIn, Spotify and Zoom.
Biggest changeCompetition for Creators We believe that our competitors for creators fall into three broad groups: (1) creator-developed ad hoc systems; (2) event marketplaces with planning solutions, which are typically dedicated to a particular category of events in a limited number of geographies; and (3) ticketing providers, who are usually far smaller in consumer scale and have more limited technology and feature functionality.
Information about Geographic Revenue Information about geographic revenue is set forth in Note 15 of our Notes to Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Corporate Information Eventbrite, Inc. was incorporated in Delaware in March 2008.
Information about Geographic Revenue Information about geographic revenue is set forth in Note 14 of our Notes to Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Corporate Information Eventbrite, Inc. was incorporated in Delaware in March 2008.
See Part I, Item 1A, Risk Factors - “If we fail to adequately protect our intellectual property rights, our competitive position could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights.” Government Regulations We are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business.
See Part I, Item 1A, Risk Factors - “If we fail to adequately protect our intellectual property rights, our competitive position could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights.” 3 Table of Contents Government Regulations We are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business.
We believe that a competitive compensation program with both short-term and long-term award opportunities tied to the achievement of meaningful performance metrics, allows us to align employees with stockholders interests.
We believe that a competitive compensation program with both short-term and long-term award opportunities, tied to the achievement of meaningful performance metrics, allows us to align employees with our stockholders' interests.
Therefore, we encourage investors, the media and others interested in our company to review the information we make available on our investor relations 3 Table of Contents website. Visitors to our website can also register to receive automatic email and other notifications alerting them when new information is made available on the investor relations website.
Therefore, we encourage investors, the media and others interested in our company to review the information we make available on our investor relations website. Visitors to our website can also register to receive automatic email and other notifications alerting them when new information is made available on the investor relations website.
We further support Britelings' wellness through our BriteBreak program, which was established in 2020 to increase productivity, mitigate burnout, and drive increased engagement and retention with designated days off once per month.
We further support Britelings' wellness through our BriteBreak program, which was established in 2020 to increase productivity, mitigate burnout, and drive increased engagement and retention with designated global time off one day per month.
Our corporate headquarters are located at 535 Mission Street, 8th floor, San Francisco, California 94105. Our website address is www.eventbrite.com. Information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K.
Our corporate headquarters are located at 95 Third Street, 2nd Floor, San Francisco, California 94103. Our website address is www.eventbrite.com. Information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K.
With respect to each of these competitor types, we seek to differentiate ourselves by being an event technology platform first and foremost, and by leveraging the scale of our event discovery platform to more effectively connect creators with consumer demand to help fuel them sell more tickets and fuel the success of their businesses Intellectual Property Our ability to protect our intellectual property, including our technology, is an important factor in the success of our business.
With respect to each of these competitor types, we seek to differentiate ourselves by being an event marketplace first and foremost, and by leveraging the scale of our event discovery platform to more effectively connect creators with consumer demand to help sell more tickets and fuel the success of their businesses.
We also support employee “BriteBelonging'' groups, an important component of our culture, which help to build an inclusive culture through company events and education, networking and mentorship opportunities, participation in our recruitment efforts, and input into our hiring strategies.
We also support employee “BriteBelonging” groups, an important component of our culture, which help to build an inclusive culture through company events and education, networking and mentorship opportunities, participation in our recruitment efforts, and input into our hiring strategies. Further, we are using our platform and marketing channels to celebrate the diversity of our event creators and their communities.
Consumer Experiences We aspire to be the trusted choice for event discovery by helping consumers find new experiences and connect them with others who share their passions. When consumers come to Eventbrite, we want to deliver a personalized, easily navigable experience that will connect them with events that resonate.
Consumer Experiences We aspire to be the trusted choice for event discovery by helping consumers find new experiences and connect them with others who share their passions. When consumers come to Eventbrite, we are committed to delivering an engaging experience that feels personalized to their interests and location.
Item 1. Business Overview Our mission is to bring the world together through live experiences, and since inception, we have been at the center of the experience economy, helping to transform the way people organize and attend events.
Item 1. Business Overview Eventbrite’s mission is to bring the world together through live experiences. Since inception, we have been at the center of the experience economy, helping transform the way people discover and organize events. Our two-sided marketplace connects millions of creators and consumers every month to share their passions, artistry, and causes through live experiences.
We are committed to hiring and retaining a diverse, equitable and inclusive team through initiatives that ensure we consider a diverse slate of candidates for all mid-level and higher positions and conducting audits to ensure pay equity.
We are committed to hiring and retaining a diverse team through initiatives that ensure we consider a diverse slate of candidates for all mid-level and higher positions. We are committed to creating an inclusive and equitable environment where all of our employees can do their best work.
We are also focused on supporting Britelings across the full employee lifecycle and have implemented programs and practices designed to promote inclusion and diversity, employee engagement and employee wellness.
We are committed to fair pay practices and conduct audits to ensure pay equality, as well as practice pay transparency both internally and externally. We are also focused on supporting Britelings across the full employee lifecycle and have implemented programs and practices designed to promote inclusion and diversity, employee engagement, and employee wellness.
Our self-service approach has allowed us to pioneer a powerful business model that drives our go-to-market strategy and allows us to efficiently serve a large number and variety of creators with minimal training, support or professional services.
We offer a self-service approach that drives our business model and go-to-market strategy and we efficiently serve a large and broad creator base with minimal training, support, or professional services.
As more creators and consumers view Eventbrite as a trusted place for live events, we believe we can drive more ticket sales and enhance our market position as a leading live events marketplace. The Eventbrite platform empowers creators of free and paid events.
As more creators and consumers view Eventbrite as a trusted marketplace for live events, the Company believes it can drive more ticket sales and enhance its market position.
Our Technology Our platform operates on a global scale, and is designed to perform consistently, securely, efficiently and reliably at high loads. Our platform supports transaction volume associated with high-demand and peak volumes, and handles millions of events each year. We are continuing to strengthen our platform infrastructure as we shift from a monolithic architecture to one based on microservices.
Our Technology Our marketplace operates on a global scale and our technology platform is designed to perform consistently, securely, efficiently and reliably at high volume. Our platform must support transaction quantities associated with high-demand events and peak ‘on-sale’ transaction volumes, handling millions of events each year.
We rely on intellectual property laws, including trademarks, domain names, copyrights, trade secrets and patents laws, in the U.S. and abroad. We also use contractual provisions and restrictions governing access to our proprietary technology, including the use of confidentiality agreements and assignment of inventions agreements with employees, independent contractors, consultants, and companies with which we conduct business.
We also use contractual provisions and restrictions governing access to our proprietary technology, including the use of confidentiality agreements and assignment of inventions agreements with employees, independent contractors, consultants, and companies with which we conduct business. Despite our efforts to protect our intellectual property, unauthorized parties may still copy or otherwise obtain and use our technology.
Eventbrite is already a meaningful source of audience growth for many creators, and we believe that as we engage consumers and scale the consumer appeal and audience of our marketplace, we will be able to drive more demand for creators, drive more ticket sales as well as grow our marketing tools business.
As a meaningful source of audience growth for many creators, we believe that further enhancing the consumer appeal and scale of our marketplace will help us drive more demand and ticket sales on behalf of creators. In 2023, we invested in tools that deliver on our commitment to improve reliability and usability for creators.
Diversity, Equity and Inclusion We believe progress as a society and as a company comes from proactively fostering diversity, equity and inclusion with tangible, evidence-based practices that we believe are key to attracting and retaining top talent.
We aim to create a highly coordinated working culture, and as such, will continue to promote ways to keep employees highly engaged and connected, as well as curating employee collaboration sessions either in the office or at off-site locations. 2 Table of Contents Diversity, Equity and Inclusion We believe progress as a society and as a company comes from proactively fostering diversity, equity and inclusion with tangible, evidence-based practices that we believe are key to attracting and retaining top talent.
As of December 31, 2022, we had a total of 881 full-time employees, of which 508 were in the United States and 373 were outside the United States.
We strive to offer competitive compensation and a benefits program tailored to our employees' needs across our global locations. We also work to foster a diverse workforce and inclusive culture. As of December 31, 2023, we had a total of 866 full-time employees, of which 433 were in the United States and 433 were outside the United States.
We believe the microservices infrastructure we are building will improve our platform's overall velocity, scalability and availability and ultimately benefit our event creators. Human Capital Eventbrite is committed to bringing the world together through live experiences, and we like to think about working at Eventbrite as the ultimate live experience.
As we continue to evolve our platform technology, we are focused on investments in machine-learning approaches to search and discovery, fraud protection and generative AI to reduce creator effort in the event creation process. Human Capital Eventbrite is committed to bringing the world together through live experiences, and we think about working at Eventbrite as the ultimate live experience.
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Eventbrite connects event creators - the people who bring others together to share their passions, artistry and causes through live experiences - with their audiences. Through our highly-scalable self-service platform, we enable event creators to plan, promote and sell tickets to their events.
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Creators use our highly-scalable self-service ticketing and marketing tools to plan, promote, and sell tickets to their events and event seekers use our website and mobile application to discover and purchase tickets to experiences they love.
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Our consumer-facing experiences enable event seekers to find experiences they love and serve as a demand generating engine for event creators. In 2022, more than 800,000 creators held over five million free and paid events using Eventbrite, issuing nearly 285 million tickets to consumers on our global marketplace.
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In 2023, Eventbrite creators hosted over 5 million free and paid events, issuing over 300 million tickets on our global marketplace which resulted in over $3.5 billion dollars in gross ticket sales for the year.
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Our event creators are entrepreneurs who express their passions and skills through live events. To meet creators’ most pressing needs, we are focused on delivering products that grow their audience reach and generate demand for their events. We are also investing in an enhanced event discovery experience for consumers.
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Our Strategy As a global live events marketplace, we seek to provide consumers with a breadth of relevant, local live events and to enable creators to host successful events that draw upon access to Eventbrite’s consumers worldwide.
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Creators of free events currently use our ticketing features for free, and we charge creators of paid events on a per-ticket basis when an attendee purchases a ticket for an event. Today, we derive substantially all of our revenues from ticketing services.
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Our strategy to build an indispensable marketplace for live events is centered around our key strengths: Strengthening our trusted brand: We will continue to focus on being a valued and trustworthy two-sided marketplace for creators and consumers.
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We also offer premium marketing tools to help event creators sell more tickets, build their audiences and grow their businesses. The global COVID-19 pandemic tested our mission, our company and event creators in unprecedented ways.
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We believe that brand trust in our market arises from providing access to relevant and highly popular live experiences, creating a ticket purchasing experience that is regarded as efficient and safe, and engaging with creators and consumers in manners that inspire continued affiliation with Eventbrite.
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While in 2022, events in our core geographies largely occurred without federal, state or local COVID-19 restrictions, our operations were notably impacted during periods of accelerating case counts, which led to temporary shifts in creator and consumer confidence and behavior.
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We seek to inspire trust along the consumer journey by providing personalized event recommendations, enhancements to customer support, and protection from fraudulent events. We will continue to inspire trust along the creator journey by providing a premier product experience, driving demand to their events, and offering reliable and timely payout options.
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The ongoing effects of COVID-19 and its variants, along with other geopolitical and macroeconomic events, including but not limited to shifts in consumer behavior, inflation, labor challenges, increased labor costs, rising interest rates, economic recession and other factors, may cause creators to scale back events which could materially and adversely affect our paid ticket volume, and consequently our net revenue and financial results.
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We will also continue to amplify the voices and advance the interests of event creators and consumers with policymakers. Delivering superior search and discovery: We are focused on delivering a superior live events search and discovery experience for consumers that provides the right events at the right time, inspiring further sales and consumer satisfaction.
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We may implement mitigation actions in response to these factors, including further modifications to our operating strategies, which may have an adverse impact on our business. Our Platform We leverage technology to connect live experience creators with consumers looking to discover new things to do or do more of what they love.
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We seek to understand our consumers’ live event desires and preferences, in aggregate and on a personal level, in order to anticipate and inspire their future live event experiences.
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Our creator and consumer experiences are purpose-built to engage each audience and, collectively, connect them in ways to help maximize the business opportunity for creators and satisfy consumer demand. Creator Experiences Event creators are the heart and soul of Eventbrite, and we build our platform with their success in mind.
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We plan to use a combination of artificial intelligence, machine learning, and human curation to further personalize the search experience and enable consumers to more easily browse, filter, and discover events that are relevant to their interests.
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We are committed to continuing to enhance the performance of our platform for frequent creators who drive the majority of ticketing activity and launching tools that help them grow their ticket sales and audience reach, which we believe will propel long-term growth.
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Expanding geographic reach and breadth of events catalog: We intend to attract new consumers and creators to the Eventbrite marketplace, while also engaging our existing community in new ways. We seek to provide relevant and appealing experiences for our consumers by leaning into localized and relevant event discovery.
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In 2022, we released new functionality to deliver improved reliability and usability for creators while positioning our platform for marketing and demand generation expansion. Eventbrite Boost, our suite of marketing tools, and Eventbrite Ads, our promoted listings feature, help creators drive audience growth and attract incremental creator spend to our platform beyond ticketing fee revenue.
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We also plan to invest in the growth of highly-popular event offerings, events hosted in highly populated metropolitan areas, as well as expanding our events catalog to new cities and countries. Our Marketplace We leverage technology and the Eventbrite brand to engage audiences and connect them in ways that help maximize business opportunities for event creators and satisfy consumer demands.
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Powering additional ticket sales for creators via products like Boost and Ads strengthens the overall demand generation value proposition of our platform. As we continue to build features that drive ticket sales and help consumers find their preferred events, we believe demand generation will remain a key differentiator that draws both creators and ticket buyers to our platform.
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We believe that initiatives such as improving our machine learning-based personalization models, enabling consumer vitality, and refreshing the mobile application experience, including increased express payment options, will continue to position Eventbrite as the leading consumer destination for live events.
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To help us build the demand side of our marketplace, we are 1 Table of Contents investing in enhancing event discovery, building consumer trust and optimizing checkout conversion.
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In 2023, we strengthened our consumer presence and elevated the appeal of our marketplace for consumers seeking niche live events and experiences. We invested to create a richer browsing experience by introducing videos, enhanced imagery, and updated design for event listings that make events more attractive to the highest-intent consumers.
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In order to continue building on our innovative self-service ticketing and experience technology platform, it is important that we attract, engage and retain talented employees. We strive to offer a competitive compensation and benefits program tailored to our employees' needs across our global locations. We also work to foster a diverse and inclusive culture.
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We debuted multiple search and discovery channels that better match consumer preferences, such as curated lists of top events by metro areas, which we 1 Table of Contents believe influence purchase behavior and increase favorable perception of our brand.
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Further, we are using our platform and marketing channels to amplify creators that promote racial and social justice, equality, equity and civic action. To strengthen the communities we work and live in, we advocated for national policies that promote gender and racial equity including paid family and medical leave and advancing voting rights in the United States.
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We also repositioned our consumer brand through new collaborations with leading content partners and with social media influencers on Instagram and TikTok.
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Competition The market for event management solutions is highly fragmented and is impacted by shifting creator and attendee needs and changing technology and consumer trends. We also compete with internally-developed systems.
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Creator Experiences Event creators are an integral part of the Eventbrite community, and we built our platform to provide a seamless event creation process, for both creators new to hosting events and for frequent creators with years of experience.
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Despite our efforts to protect our intellectual property, unauthorized parties may still copy or otherwise obtain and use our technology.
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With the launch of our new pricing and packaging plans beginning in June 2023, we expanded creators’ access to a comprehensive suite of event marketing tools which, in addition to Eventbrite Ads, helps creators drive audience growth. We enable creators to market events on third-party social media websites through our ad generation tools, and on Eventbrite-owned platforms via Eventbrite Ads.
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We also continue to deploy generative artificial intelligence across our creator products with features such as auto-completion during event creation, content generation for social media advertisements, and copywriting for email marketing campaigns. These products and investments are expected to strengthen the ease of use, marketing performance and overall demand generation value proposition of our marketplace.
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To strengthen our platform infrastructure, we continue to shift from a monolithic architecture to a more scalable one based on microservices. We believe the microservices infrastructure we are delivering will improve our innovation velocity and our platform's overall scalability and availability.
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We seek to create a special culture in which our employees, whom we refer to as Britelings, are motivated by helping people get together to explore their interests and pursue new passions. To fulfill our mission to become the leading live events marketplace, it is important that we attract, engage and retain talented employees.
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To strengthen the communities we work and live in, we advocated for national policies that promote diversity, equity, inclusion, and civic engagement. Competition The landscape of event marketplace and planning solutions is highly fragmented and is impacted by shifting needs, advancing technology, and consumer trends.
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We operate in a competitive landscape that provides consumers and creators with many channels to promote or engage with live experiences.
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Competition for Consumers We believe that our competitors for consumers fall into three broad groups: (1) social media platforms with large influencer presences that cater to audiences based on recent patterns and algorithms; (2) localized search platforms that pinpoint specific types of events in target geographical regions such as Tripadvisor, Viator and Airbnb Experiences; and (3) personal blogs and articles for activity recommendations that can be discovered via search engines such as Google or through community-interest engines such as Reddit.
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Some competitors, such as Google or TikTok, are also partners we rely on for consumer reach. We leverage these commercial relationships to proactively increase our position within strategic categories and high-population metropolitan areas.
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We intend to differentiate through our events catalog, a highly relevant and personalized consumer product experience, and personalized event recommendations based on knowledge of event-specific browse and purchase behavior.
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Intellectual Property Our ability to protect our intellectual property, including our technology, is an important factor in the success of our business. We rely on intellectual property laws, including trademarks, domain names, copyrights, trade secrets and patents laws, in the United States (U.S.) and abroad.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition to risks related to our focus on self-service creators and changes to our organizational structure and priorities as we transition to a global marketplace, we may fail to attract new creators, retain existing creators and drive consumer demand due to a number of factors outlined in this section, including: • COVID-19 and other global health conditions and related government prohibitions, limitations or recommendations on in-person gatherings, and creators’ and consumers’ perceived safety of in-person gatherings; • our ability to maintain and continually enhance our platform and provide products and services that are valuable and helpful to creators, which maintenance and enhancements may take place at a slower pace because of our reduced workforce and if we are unable to attract and retain a sufficient number of highly qualified engineering and development personnel; • our ability to drive consumers to our platform and to generate consumer demand; • our decisions to sunset or replace features that some creators and consumers find valuable and helpful; • our ability to offer requisite levels of customer support to creators and consumers, which may be impacted as we move our customer support function outside the United States; • competitive factors, including the actions of new and existing competitors in our industry, such as competitors buying exclusive ticketing rights or entering into or expanding within the market in which we operate; • our ability to convince creators to migrate to our platform from their current practices, which include online ticketing platforms, venue box offices and do-it-yourself spreadsheets and forms; • changes in our relationships with third parties, including our partners, developers and payment processors, that make our platform less effective for and attractive to creators and consumers; • the quality and availability of key payment and payout methods; • our ability to manage fraud risk that negatively impacts creators and consumers; and • our ability to adapt to changes in market practices or economic incentives for creators, including larger or more frequent signing fees.
Biggest changeOur ability to achieve these objectives may be impacted by a number of factors, some of which are outside of our control, including: • our ability to drive consumers to our platform and provide quality consumer-facing interactions, including strong event search functionality, clear event listings and relevant event recommendations; • the navigability and reliability of our consumer-facing interactions, such as our mobile application and website; • competitive factors, including the actions of new and existing competitors in our industry, such as competitors buying exclusive ticketing rights or entering into or expanding within the market and regions in which we operate; • the composition of our pricing packages, our ability to effectively and competitively price our packages and solutions, our ability to clearly communicate the value of our packages and solutions, and the perceived value of our packages and solutions; • the quality of the events in our marketplace, which may not be sufficiently compelling to attract consumers or which may be disappointing to consumers who may not have the experience they expect at an event; • public perception of the values underpinning our community guidelines and our decision to enforce these guidelines by removing or promoting certain events that might lead creators, consumers or other third-parties to disagree with such decisions; • our ability to offer requisite levels of customer support to creators and consumers, which may be impacted by our customer support function outside the United States; • the implementation of certain policy initiatives to increase consumer confidence and transparency of recourse options when transacting on our platform, such as notifying consumers when they are eligible to request a refund and enforcing response times for refund requests; • the introduction of marketplace management initiatives, such as developing a system for creator verification and consumer feedback; • our ability to maintain and continually enhance our platform and provide products, features and services that are valuable and helpful to creators and consumers, which maintenance and enhancements depend on our ability to attract and retain a sufficient number of highly qualified engineering and development personnel; • our decision to sunset or replace features that some creators and consumers find valuable and helpful; • our ability to inspire creators to migrate to our platform from their current practices, which include online ticketing platforms, venue box offices and do-it-yourself spreadsheets and forms; • changes in our relationships with third parties, including our partners, developers and payment processors, that make our platform less effective for and attractive to creators and consumers; • outages or delays in our marketplace and other services, including delays in getting into events; • compatibility with our network of distribution partners; • the quality and availability of key payment and payout methods; • our ability to provide consumers with an efficient and safe purchasing experience; • breaches and other security incidents that could compromise the data of consumers; • our ability to manage fraud risk that negatively impacts events, creators and/or consumers; and • our ability to adapt to changes in market practices or economic incentives for creators.
If we are unable to effectively manage these risks as they occur, creators and consumers may seek other solutions and platforms and we may not be able to retain them or acquire additional creators or consumers to offset any such departures, which would harm our business, results of operations and financial condition.
If we are unable to effectively manage these risks as they occur, creators and consumers may seek other solutions and platforms and we may not be able to retain them or acquire additional creators or consumers to offset any such departures, which would harm our business, financial condition and results of operations.
Even if unsuccessful, a claim brought against us by any creators would likely be time-consuming and costly to defend and could harm our business, results of operations and financial condition. In addition, our platform relies on third-party partners for the development tool chain, managed infrastructure, and platform services.
Even if unsuccessful, a claim brought against us by any creators would likely be time-consuming and costly to defend and could harm our business, financial condition and results of operations. In addition, our platform relies on third-party partners for the development tool chain, managed infrastructure and platform services.
Any of the above circumstances or events may harm our reputation, cause creators to stop using our platform, impair our ability to increase revenue, impair our ability to grow our business, subject us to financial penalties and liabilities under our service level agreements and otherwise harm our business, results of operations and financial condition.
Any of the above circumstances or events may harm our reputation, cause creators to stop using our platform, impair our ability to increase revenue, impair our ability to grow our business, subject us to financial penalties and liabilities under our service level agreements and otherwise harm our business, financial condition and results of operations.
If we cannot adequately control the risk of fraudulent activity on our platform, it could harm our business, results of operations and financial condition. The pricing and composition of our packages may affect our ability to attract or retain creators. Our event creators can select from different pricing packages based on the features required, service level desired and budget.
If we cannot adequately control the risk of fraudulent activity on our platform, it could harm our business, financial condition and results of operations. The pricing and composition of our pricing packages may affect our ability to attract or retain creators. Our event creators can select from different pricing packages based on the features required, service level desired and budget.
For recoupable creator advances we are entitled to recoup the entire advance by withholding all or a portion of the ticket sales sold by the creator to whom the advance was previously paid until we have fully recouped the advance.
For recoupable advances we are entitled to recoup the entire advance by withholding all or a portion of the ticket sales sold by the creator to whom the advance was previously paid until we have fully recouped the advance.
If a creator does not comply with the terms of the contract or perform an event, generally the creator is obligated to repay all or a portion of the upfront payment to us, although there is no guarantee that we will be able to collect such repayment.
A creator is generally obligated to repay all or a portion of the upfront payment to us if such creator does not comply with the terms of the contract or perform an event, although there is no guarantee that we will be able to collect such repayment.
Our inability to license such technology on commercially reasonable terms could adversely affect our ability to compete, and harm our business, results of operations and financial condition. We use open source software in our platform, which could subject us to litigation or other actions.
Our inability to license such technology on commercially reasonable terms could adversely affect our ability to compete, and harm our business, financial condition and results of operations. We use open source software in our platform, which could subject us to litigation or other actions.
Litigation could be costly for us to defend, harm our business, results of operations or financial condition or require us to devote additional research and development resources to change our platform.
Litigation could be costly for us to defend, harm our business, financial condition and results of operations or require us to devote additional research and development resources to change our platform.
In addition, if we were to combine our proprietary software with open source software in a certain manner, we could, under certain of the open source licenses, be required to release the source code of our proprietary software.
In addition, if we were to combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software.
Any violation of the FCPA, the Bribery Act or other applicable anti-corruption and anti-bribery laws could subject us to significant sanctions, including civil or criminal fines and penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as related stockholder lawsuits and other remedial measures, all of which could harm our reputation, business, results of operations and financial condition.
Any violation of the FCPA, the Bribery Act or other applicable anti-corruption and anti-bribery laws could subject us to significant sanctions, including civil or criminal fines and penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as related stockholder lawsuits and other remedial measures, all of which could harm our reputation, business, financial condition and results of operations.
In addition, to the extent that Google, Facebook or other leading large technology companies that have a significant presence in our key markets disintermediate ticketing or event management providers, whether by offering their own comprehensive event-focused or shopping capabilities, or by referring leads to suppliers, other favored partners or themselves directly, there could be harm to our business, results of operations and financial condition.
In addition, to the extent that Google, or other leading large technology companies that have a significant presence in our key markets disintermediate ticketing or event management providers, whether by offering their own comprehensive event-focused or shopping capabilities, or by referring leads to suppliers, other favored partners or themselves directly, there could be harm to our business, financial condition and results of operations.
If we were subject to a claim of infringement, regardless of the merit of the claim or our defenses, the claim could: • require costly litigation to resolve and the payment of substantial damages; • require significant management time; • cause us to enter into unfavorable royalty or license agreements; • require us to discontinue the sale of products and solutions through our platform; • require us to indemnify creators or third-party service providers or partners; and/or • require us to expend additional development resources to redesign our platform.
If we were subject to a claim of infringement, regardless of the merit of the claim or our defenses, the claim could: • require costly litigation to resolve and the payment of substantial damages; • require significant management time; • cause us to enter into unfavorable royalty or license agreements; • require us to discontinue the sale of solutions through our platform; • require us to indemnify creators or third-party service providers or partners; and/or • require us to expend additional development resources to redesign our platform.
Other risks relating to long-term indebtedness include: • increased vulnerability to general adverse economic and industry conditions; • a need to divert a significant portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of cash to fund working capital, capital expenditures, acquisitions, investments and other general corporate purposes; • limited ability to obtain additional financing, on terms we find acceptable, if needed, for working capital, capital expenditures, expansion plans and other investments, which may adversely affect our ability to implement our business strategy; • limited flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate or to take advantage of market opportunities; • diluting the interests of our existing stockholders as a result of issuing shares of our Class A common stock upon conversion of the Convertible Notes; and • a competitive disadvantage compared to our competitors that have less debt or have better access to capital.
Other risks relating to long-term indebtedness include: • increased vulnerability to general adverse global and regional economic and industry conditions; • a need to divert a significant portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of cash to fund working capital, capital expenditures, acquisitions, investments and other general corporate purposes; • limited ability to obtain additional financing, on terms we find acceptable, if needed, for working capital, capital expenditures, expansion plans and other investments, which may adversely affect our ability to implement our business strategy; • limited flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate or to take advantage of market opportunities; • diluting the interests of our existing stockholders as a result of issuing shares of our Class A common stock upon conversion of the Convertible Notes; and • a competitive disadvantage compared to our competitors that have less debt or have better access to capital.
The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, results of operations, financial condition and prospects could be harmed. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.
The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, financial condition and results of operations could be harmed. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.
Some of our competitors have existing relationships or may develop relationships with potential creators or the venues or facilities used by those creators, which have in the past caused and may in the future cause those creators to be unwilling or unable to use our platform and this may limit our ability to successfully compete in certain markets where such relationships are common.
Some of our competitors for creators have existing relationships or may develop relationships with potential creators or the venues or facilities used by those creators, which have in the past caused and may in the future cause those creators to be unwilling or unable to use our platform and this may limit our ability to successfully compete in certain markets where such relationships are common.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • provide that our board of directors be classified into three classes of directors with staggered three-year terms; • permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the Chairperson of our board of directors, our Chief Executive Officer, or a majority of our board of directors is authorized to call a special meeting of stockholders; • provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority 35 Table of Contents of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and • advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • provide that our board of directors be classified into three classes of directors with staggered three-year terms; • permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the Chairperson of our board of directors, our Chief Executive Officer, or a majority of our board of directors is authorized to call a special meeting of stockholders; • provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and • advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our platform or solutions, impair the functionality of our platform or solutions, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform or solutions, or injure our reputation.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further implementation of our platform or solutions, impair the functionality of our platform or solutions, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform or solutions, or injure our reputation.
If such a disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates and reduced cash flows and may harm our results of operations and financial condition.
If such a disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates and reduced cash flows and may harm our business, financial condition and results of operations.
Certain provisions in the Convertible Notes and the indentures governing the Convertible Notes could make a third-party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change (as defined in the indenture governing the Convertible Notes), then noteholders will have the right to require us to repurchase their Convertible Notes for cash.
Certain provisions in the Convertible Notes and the indentures governing the Convertible Notes could make a third-party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change (as defined in the indentures governing the Convertible Notes), then noteholders will have the right to require us to repurchase their Convertible Notes for cash.
The market price of our Class A common stock has in the past, and may in the future, fluctuate significantly in response to numerous factors, many of which are beyond our control, including, but not limited to: • overall performance of the equity markets and/or publicly-listed technology companies; • actual or anticipated fluctuations in our net revenue or other operating metrics; • changes in the financial projections we provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations of investors; • the economy as a whole and market conditions in our industry; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • lawsuits threatened or filed against us; • recruitment or departure of key personnel; and • other events or factors, including those resulting from war, public health concerns and epidemics, incidents of terrorism or responses to these events.
The market price of our Class A common stock has in the past, and may in the future, fluctuate significantly in response to numerous factors, many of which are beyond our control, including, but not limited to: • overall performance of the equity markets and/or publicly listed technology companies; • actual or anticipated fluctuations in our net revenue or other operating metrics; 32 Table of Contents • changes in the financial projections we provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations of investors; • the economy as a whole and market conditions in our industry; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • lawsuits threatened or filed against us; • recruitment or departure of key personnel; and • other events or factors, including those resulting from war, public health concerns and epidemics, incidents of terrorism or responses to these events.
In the event that our AWS service agreements are terminated, or there is a lapse of service, interruption of Internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as delays and additional expense in arranging new facilities and services.
In the event that our AWS service agreements are terminated, or there is a lapse of service, interruption of Internet service provider connectivity or damage to AWS facilities, we could experience interruptions in access to our platform as well as delays and additional expense in arranging new facilities and services.
We have identified a material weakness in our internal control over financial reporting and, as a result, determined that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2022, which resulted in the restatement of our previously issued unaudited condensed consolidated financial statements.
We identified a material weakness in our internal control over financial reporting and, as a result, determined that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2022, which resulted in the restatement of our previously issued unaudited condensed consolidated financial statements.
The success of any new solution or enhancement to our platform depends on several factors, including timely completion and delivery, competitive pricing, adequate quality testing, integration with our platform, creator and consumer awareness and overall market acceptance and adoption.
The success of any new solution or enhancement to our platform depends on several factors, including timely completion and delivery, competitive pricing, adequate quality testing, integration with our platform, creator and consumer awareness, efficacy and overall market acceptance and adoption.
We have in the past experienced breaches of our security measures, and our platform and systems are at risk for future breaches as a result of third-party action or employee, service provider, partner or contractor error or malfeasance.
We have in the past experienced breaches of our security measures, and our platform and systems are at risk for future breaches and incidents as a result of third-party action or employee, service provider, partner or contractor error or malfeasance.
The anticipated conversion of the Convertible Notes into shares of our Class A common stock could also depress the price of our Class A common stock. We also expect to grant equity awards to employees, directors and consultants under our stock incentive plans.
The anticipated conversion of the Convertible Notes into shares of our Class A common stock could also depress the price of our Class A common stock. We also grant equity awards to employees, directors and consultants under our stock incentive plans.
For the fiscal year beginning January 1, 2021, we have elected to early adopt new accounting guidance that was recently released that simplifies the accounting for convertible debt that may be settled in cash.
For the fiscal year beginning January 1, 2021, we elected to early adopt new accounting guidance that was recently released that simplifies the accounting for convertible debt that may be settled in cash.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended (Code), a corporation that undergoes an “ownership change” (generally, a greater than 50 percentage point change in our equity ownership by certain stockholders or groups of stockholders) is subject to limitations on its ability to utilize its pre-change net operating losses ("NOLs") to offset future taxable income.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended (Code), a corporation that undergoes an “ownership change” (generally, a greater than 50 percentage point change in our equity ownership by certain stockholders or groups of stockholders) is subject to limitations on its ability to utilize its pre-change net operating losses (“NOLs”) to offset future taxable income.
Alternatively, if a court were to find the choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition. 36 Table of Contents Item 1B. Unresolved Staff Comments None.
Alternatively, if a court were to find the choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition and results of operations. 35 Table of Contents Item 1B. Unresolved Staff Comments None.
When we provide advance payouts, we assume significant risk that the event may be cancelled, postponed, fraudulent, materially not as described or removed from our platform due to its failure to comply with our terms of service, merchant agreement or community guidelines, resulting in significant chargebacks, refund requests and/or disputes between attendees and creators.
When we provide advance payouts, we assume significant risk that the event may be cancelled, postponed, fraudulent, materially not as described or removed from our platform due to its failure to comply with our terms of service, merchant agreement or community guidelines, resulting in significant chargebacks, refund requests and/or disputes between consumers and creators.
Any real or perceived errors, failures, bugs or other vulnerabilities discovered in our code could result in negative publicity and damage to our reputation, loss of creators and attendees, loss of or delay in market acceptance of our platform, loss of competitive position, loss of revenue or liability for damages, overpayments and/or underpayments, any of which could harm the confidence of creators and attendees on our platform, our business, results of operations and financial condition.
Any real or perceived errors, failures, bugs or other vulnerabilities discovered in our code could result in negative publicity and damage to our reputation, loss of creators and consumers, loss of or delay in market acceptance of our platform, loss of competitive position, loss of revenue or liability for damages, overpayments and/or underpayments, any of which could harm the confidence of creators and consumers on our platform, our business, financial condition and results of operations.
At the same time, if the measures we have taken to guard against these activities are too restrictive and inadvertently screen proper transactions, or if we are unable to apply and communicate these measures fairly and transparently, or we are perceived to have failed to do so, this could diminish the experience of creators and attendees, which could harm our business, results of operations and financial condition.
At the same time, if the measures we have taken to guard against these activities are too restrictive and inadvertently screen proper transactions, or if we are unable to apply and communicate these measures fairly and transparently, or we are perceived to have failed to do so, this could diminish the experience of creators and consumers, which could harm our business, financial condition and results of operations.
Additional risks include our ability to effectively manage growth, responsibly use the data that creators and attendees share with us, process, store, protect and use personal data in compliance with governmental regulation, contractual obligations and other legal obligations related to privacy and security and avoid interruptions or disruptions in our service or slower than expected load times for our platform.
Additional risks include our ability to effectively manage growth, responsibly use the data that creators and consumers share with us, process, store, protect and use personal data in compliance with governmental regulation, contractual obligations and other legal obligations related to privacy and security and avoid interruptions or disruptions in our service or slower than expected load times for our platform.
We outsource our cloud infrastructure to Amazon Web Services (AWS), which hosts our platform, and therefore we are vulnerable to service interruptions at AWS, which could impact the ability of creators and attendees to access our platform at any time, without interruption or degradation of performance. Our customer agreement with AWS will remain in effect until July 31, 2025.
We outsource our cloud infrastructure to Amazon Web Services (AWS), which hosts our platform, and therefore we are vulnerable to service interruptions at AWS, which could impact the ability of creators and consumers to access our platform at any time, without interruption or degradation of performance. Our customer agreement with AWS will remain in effect until July 31, 2025.
Financial and operational risks related to acquisitions, investments and significant commercial arrangements that may have an impact on our business include: • use of cash resources and the incurrence of debt and contingent liabilities in funding acquisitions may limit other potential uses of our cash, including for retirement of outstanding indebtedness and any future stock repurchases or dividend payments; • difficulties and expenses in assimilating the operations, products, data, technology, privacy, data protection systems and information security systems, information systems or personnel of the acquired company; • failure of the acquired company to achieve anticipated benefits, revenue, earnings or cash flows or our failure to retain key employees from an acquired company; • the assumption of known and unknown risks, debt and liabilities of the acquired company, deficiencies in systems or internal controls and costs associated with litigation or other claims arising in connection with the acquired company; • potential accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, customer relationships, developed technology or intellectual property, are later determined to be impaired and written down in value; • failure to properly and timely integrate acquired companies and their operations, reducing our ability to achieve, among other things, anticipated returns on our acquisitions through cost savings and other synergies; • adverse market reaction to acquisitions; • failure to consummate such transactions; and • other expected and unexpected risks with pursuing acquisitions, including, but not limited to, litigation or regulatory exposure, such as our shareholder lawsuit related to disclosures about the migration of Ticketfly customers, unfavorable accounting treatment, increases in taxes due, a loss of anticipated tax benefits, costs or delays to obtain governmental approvals, diversion of management’s attention or other resources from our existing business and other adverse effects on our business, results of operations or financial condition.
Financial and operational risks related to acquisitions, investments and significant commercial arrangements that may have an impact on our business include: • use of cash resources and the incurrence of debt and contingent liabilities in funding acquisitions may limit other potential uses of our cash, including for retirement of outstanding indebtedness and any future stock repurchases or dividend payments; • difficulties and expenses in assimilating the operations, products, data, technology, privacy, data protection systems and information security systems, information systems or personnel of the acquired company; • failure of the acquired company to achieve anticipated benefits, revenue, earnings or cash flows or our failure to retain key employees from an acquired company; • the assumption of known and unknown risks, debt and liabilities of the acquired company, deficiencies in systems or internal controls and costs associated with litigation or other claims arising in connection with the acquired company; • potential accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, customer relationships, developed technology or intellectual property, are later determined to be impaired and written down in value; • failure to properly and timely integrate acquired companies and their operations, reducing our ability to achieve, among other things, anticipated returns on our acquisitions through cost savings and other synergies; • adverse market reaction to acquisitions; • failure to consummate such transactions; and • other expected and unexpected risks with pursuing acquisitions, including, but not limited to, litigation or regulatory exposure, unfavorable accounting treatment, increases in taxes due, a loss of anticipated tax benefits, costs or delays to obtain governmental approvals, diversion of management’s attention or other resources from our existing business and other adverse effects on our business, financial condition and results of operations.
An increasing number of jurisdictions have enacted laws or are considering enacting laws requiring marketplaces to report user activity or collect and remit taxes on certain items sold on the marketplace. Imposition of an information reporting or tax collection requirement could decrease creator or attendee activity on our platform, which would harm our business.
An increasing number of jurisdictions have enacted laws or are considering enacting laws requiring marketplaces to report user activity or collect and remit taxes on certain items sold on the marketplace. Imposition of an information reporting or tax collection requirement could decrease creator or consumer activity on our platform, which would harm our business.
Any changes, bugs or technical issues in such systems, devices, protocols or web browsers that degrade the functionality of our platform, make it difficult for creators or attendees to access or use our platform, impose fees related to our platform or give preferential treatment to competitive products or services could adversely affect usage of our platform.
Any changes, bugs or technical issues in such systems, devices, protocols or web browsers that degrade the functionality of our platform, make it difficult for creators or consumers to access or use our platform, impose fees related to our platform or give preferential treatment to competitive products or services could adversely affect usage of our platform.
We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. As a result, Class A common stockholders may only receive a return on your investment in our Class A common stock if the market price of our Class A common stock increases.
We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. As a result, Class A common stockholders may only receive a return on their investment in our Class A common stock if the market price of our Class A common stock increases.
If currency exchange rates remain at current levels, currency translation could continue to negatively affect net revenue growth for events that are not listed in U.S. dollars and could also reduce the demand for U.S. dollar denominated events from attendees outside of the United States.
If currency exchange rates remain at current levels, currency translation could continue to negatively affect net revenue growth for events that are not listed in U.S. dollars and could also reduce the demand for U.S. dollar denominated events from consumers outside of the United States.
Our ability to attract and retain creators and consumers depends in large part on our ability to provide a user-friendly and effective platform, develop and improve our platform and introduce compelling new solutions and enhancements. Our industry is characterized by rapidly changing technology, new service and product introductions and changing demands of creators and consumers.
Our ability to attract and retain creators and consumers depends in large part on our ability to provide a user-friendly, safe and effective platform, develop, improve and maintain our platform and introduce compelling new solutions and enhancements. Our industry is characterized by rapidly changing technology, new service and product introductions and changing demands of creators and consumers.
New legislation could require us or creators to incur substantial costs in order to comply, including costs associated with tax calculation, collection and remittance and audit requirements, which could make using our platform less attractive and could adversely affect our business and results of operations.
New legislation could require us or creators to incur substantial costs in order to comply, including costs associated with tax calculation, collection and remittance and audit requirements, which could make using our platform less attractive and could adversely affect our business, financial condition and results of operations.
If our efforts to reduce the complexity of our code do not result in the improvement of our platform or if the diversion of our engineering staff prevents us from developing successful new solutions and enhancements, our business, results of operations and financial condition could be harmed.
If our efforts to reduce the complexity of our code do not result in the improvement of our platform or if the diversion of our engineering staff prevents us from developing successful new solutions and enhancements, our business, financial conditions and results of operations could be harmed.
The material weakness resulted in a restatement of the Company’s previously filed consolidated financial statements as of and for each of the periods ended June 30, 2022 and September 30, 2022 and a revision to the consolidated financial statements as of and for the year ended December 31, 2021, including the quarterly periods therein, as of and for the year ended December, 31 2020 and for the quarterly period ended March 31, 2022.
The material weakness resulted in a restatement of our previously filed consolidated financial statements as of and for each of the periods ended June 30, 2022 and September 30, 2022 and a revision to the consolidated financial statements as of and for the year ended December 31, 2021, including the quarterly periods therein, as of and for the year ended December, 31 2020 and for the quarterly period ended March 31, 2022.
As we continue to expand the volume of creators and attendees using the platform and the solutions available to those creators and attendees, we may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in service.
As we continue to expand the volume of creators and consumers using the platform and the solutions available to those creators and consumers, we may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in service.
In addition, other large companies with large user-bases that have substantial event-related activity, such as Facebook, Spotify and Zoom, have products in the events space. These competitors may be better able to undertake more extensive marketing campaigns, build products and features faster than we can and/or offer their solutions and services at a discount to ours.
In addition, other large companies with large user-bases that have substantial event-related activity, such as Meta and Spotify, have products in the events space. These competitors may be better able to undertake more extensive marketing campaigns, build products and features faster than we can and/or offer their solutions and services at a discount to ours.
The application of indirect taxes, such as sales and use tax, amusement tax, value-added tax, goods and services tax, business tax and gross receipts tax, to businesses like ours and to creators and attendees is a complex and evolving issue.
The application of indirect taxes, such as sales and use tax, amusement tax, value-added tax, goods and services tax, business tax and gross receipts tax, to businesses like ours and to creators and consumers is a complex and evolving issue.
However, if any or some of these providers do not perform adequately, determine certain types of transactions as prohibitive for any reason or fail to identify fraud, if these providers’ technology does not interoperate well with our platform, or if our relationships with these providers were to terminate unexpectedly, creators may find our platform more difficult to use and the ability of creators using our platform to sell tickets could be adversely affected, which could cause creators to use our platform less and harm our business.
However, if any or some of these providers do not perform adequately, determine certain types of transactions as prohibitive for any reason or fail to identify fraud, if these providers’ technology does not interoperate well with our platform, or if our relationships with these providers were to terminate unexpectedly, creators may find our platform more difficult to use and the ability of creators using our platform to sell tickets could be adversely affected, which could cause creators to use our platform less and harm our business, financial condition and results of operations.
We have substantial outstanding debt, and we may incur additional indebtedness to meet future financing needs. Our substantial levels of indebtedness increase the possibility that we may not generate enough cash flow from operations to pay, when due, the principal of, interest on or other amounts due in respect of, these obligations.
We have substantial outstanding debt, and we may incur additional indebtedness to meet future financing needs. Our substantial levels of indebtedness increase the possibility that we may not generate enough cash flow from operations to pay, 30 Table of Contents when due, the principal of, interest on or other amounts due in respect of, these obligations.
As a result, we expect to record the Convertible Notes entirely as a liability on our balance sheet, net of issuance costs incurred, with interest expense reflecting the cash coupon plus the amortization of the capitalized issuance costs.
As a result, we record the Convertible Notes entirely as a liability on our balance sheet, net of issuance costs incurred, with interest expense reflecting the cash coupon plus the amortization of the capitalized issuance costs.
We would also be subject to examination and oversight by applicable state licensing authorities.
We would also be subject to examination and oversight by applicable state licensing regulatory authorities.
In either case, and in other cases, our obligations under the Convertible Notes and the indentures governing the Convertible Notes could increase the cost of 20 Table of Contents acquiring us or otherwise discourage a third-party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.
In either case, and in other cases, our obligations under the Convertible Notes and the indentures governing the Convertible Notes could increase the cost of acquiring us or otherwise discourage a third-party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.
In addition, the authorities in these jurisdictions could review our tax returns and impose additional tax, interest and penalties, and the authorities could claim that various withholding requirements apply to us or assert that benefits of tax treaties are not available to us, any of which could have a negative impact on us or our results of operations.
In addition, the authorities in these jurisdictions could review our tax returns and impose additional tax, interest and penalties, and the authorities could claim that various withholding requirements apply to us or assert that benefits of tax treaties 28 Table of Contents are not available to us, any of which could have a negative impact on us or our results of operations.
As we earn an increasing portion of our revenue and accumulate a greater portion of our cash flow in foreign jurisdictions, we could face a higher effective tax rate and incremental cash tax payments. 31 Table of Contents Additionally, our intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions.
As we earn an increasing portion of our revenue and accumulate a greater portion of our cash flow in foreign jurisdictions, we could face a higher effective tax rate and incremental cash tax payments. Additionally, our intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions.
To enhance our acceptance in certain international markets we have in the past adopted, and may in the future adopt, locally-preferred payment methods and integrate such payment methods into EPP, which may increase our costs and also require us to understand and protect against unique fraud and other risks associated with these payment methods.
To enhance our acceptance in certain international markets we have in the past adopted, and may in the future adopt, locally-preferred payment methods and integrate such payment methods into our payments system, which may increase our costs and also require us to understand and protect against unique fraud and other risks associated with these payment methods.
For example, if we are deemed to be a money transmitter as defined by applicable regulation, we could be subject to certain laws, rules and regulations enforced by multiple authorities and governing bodies in the United States and numerous state and local agencies who may define money transmitter differently.
For example, if we are deemed to be a money transmitter or money services business as defined by applicable regulation, we could be subject to certain laws, rules and regulations enforced by multiple authorities and governing bodies in the United States and numerous state and local agencies who may define money transmitter and money services business differently.
If any such third-party services become incompatible with our platform or the use of our platform and solutions on such third-party platforms are restricted in the future, our business will be harmed.
If any such third-party services become incompatible with our platform or the use of our platform and solutions on such third-party platforms are restricted in the future, our business may be harmed.
In either case, we would be required to either redesign our platform to function with software or services available from other parties or develop these components ourselves, which would result in increased costs and could result in delays in the release of new solutions and services on our 26 Table of Contents platform.
In either case, we would be required to either redesign our platform to function with software or services available from other parties or develop these components ourselves, which would result in increased costs and could result in delays in the release of new solutions and services on our platform.
The interpretation and application of many privacy and data protection laws are, and will likely remain, uncertain, and it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or product features.
The interpretation and application of many privacy, data protection, consumer protection and e-marketing laws are, and will likely remain, uncertain, and it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or product features.
Although it is difficult to determine what harm may directly result from any specific interruption or breach, any actual or perceived failure to maintain performance, reliability, security and availability of our network infrastructure, or of any third-party networks or systems used or supplied by our third-party service providers or partners, to the satisfaction of creators and attendees may harm our reputation and our ability to retain existing creators and attendees and attract new creators and attendees.
Although it is difficult to determine what harm may directly result from any specific interruption or incident, any actual or perceived failure to maintain performance, reliability, security and availability of our network infrastructure, or of any third-party networks or systems used or supplied by our third-party service providers or partners, to the satisfaction of creators and consumers may harm our reputation and our ability to retain existing creators and consumers and attract new creators and consumers.
The global stock markets have experienced, and may continue to experience, significant volatility, and the price of our Class A common stock has been volatile and has decreased significantly.
In addition, the global stock markets have experienced, and may continue to experience, significant volatility, and the price of our Class A common stock has been volatile and has decreased significantly.
Adverse weather and climate conditions could impact the number, size and success of events and disrupt our operations in any of our offices or the operations of creators, third-party providers, vendors or partners. If fewer events are held because of adverse weather and climate conditions, our results of operations may be harmed.
Adverse weather and climate conditions could impact the number, size and success of events and disrupt our operations in any of our offices or the operations of creators, third-party providers, vendors or partners. If fewer events are held because of adverse weather and climate conditions, our business, financial condition and results of operations may be harmed.
We may also compete with potential entrants into the market that currently do not offer the same services but could potentially leverage their networks in the market in which we operate. For instance, large e-commerce companies such as eBay and Amazon have in the past operated, or currently operate, within the ticketing space.
We may also compete with potential entrants into the market that currently do not offer the same services but could potentially leverage their networks in the market in which we operate. For instance, large e-commerce companies such as eBay 19 Table of Contents and Amazon have in the past operated, or currently operate, within the ticketing space.
While we employ security measures to prevent, detect, and mitigate potential for harm to our users from the theft of or misuse of user credentials on our network, these security measures may not be effective in every instance and may require significant costs. Furthermore, the prevalent use of mobile devices increases the risk of data security incidents.
While we employ security measures intended to prevent, detect, and mitigate potential for harm to our users from the theft of or misuse of credentials on our network, these security measures may not be effective in every instance and may require significant costs. Furthermore, the prevalent use of mobile devices increases the risk of cybersecurity incidents.
We may not have sufficient funds to satisfy all amounts due under such existing or future indebtedness and repurchase the Convertible Notes or make cash payments due, if any, upon conversions thereof. 19 Table of Contents The accounting method for the Convertible Notes could adversely affect our reported financial condition and results.
We may not have sufficient funds to satisfy all amounts due under such existing or future indebtedness and repurchase the Convertible Notes or make cash payments due, if any, upon conversions thereof. The accounting method for the Convertible Notes could adversely affect our reported financial condition and results.
Furthermore, if we discover material inaccuracies in our metrics, we may not be able to accurately assess the health of our business and our reputation and our business may be harmed. Creator and attendee acquisition and retention depend upon effective interoperation with operating systems, networks, protocols, devices, web browsers and standards that we do not control.
Furthermore, if we discover material inaccuracies in our metrics, we may not be able to accurately assess the health of our business and our reputation and our business may be harmed. Creator and consumer attraction and retention depend upon effective interoperation with operating systems, networks, protocols, devices, web browsers and standards that we do not control.
The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our platform.
The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our provision of our platform.
If our net revenue or results of operations fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the 33 Table of Contents price of our Class A common stock could decline substantially.
If our net revenue or results of operations fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our Class A common stock could decline substantially.
Our competitors, as well as a number of other entities, including non-practicing entities and individuals, may own or claim to own intellectual property rights relating to our industry 27 Table of Contents and may challenge the validity or scope of our intellectual property rights.
Our competitors, as well as a number of other entities, including non-practicing entities and individuals, may own or claim to own intellectual property rights relating to our industry and may challenge the validity or scope of our intellectual property rights.
Various countries also regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit our customers’ ability to import our services into those countries.
Various countries also regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit our creators’ and consumers' ability to import our services into those countries.
The existence of these legacy platforms within a shifting landscape regarding privacy, data protection and data security may result in regulatory liability or exposure to fines. A significant data incident on a legacy platform may harm our reputation and our brand and may adversely affect the migration of existing creators to our platform.
The existence of these legacy platforms within a shifting landscape regarding privacy, data protection and data security may result in regulatory liability or exposure to fines. A cybersecurity incident on a legacy platform may harm our reputation and our brand and may adversely affect our business, including the migration of existing creators to our platform.
Further, we have experienced fraudulent activity on our platform in the past, including fake events in which a person sells tickets to an event but does not intend to hold an event or fulfill the ticket, email spam being sent through our platform, a third-party taking over the account of a creator to receive payments owed to such creator or orders placed with fraudulent or stolen credit card data and other erroneous transmissions.
Further, at times we experience fraudulent activity on our platform, including fake events in which a person sells tickets to an event but does not intend to hold an event or fulfill the ticket, email spam being sent through our platform, a third-party taking over the account of a creator to receive payments owed to such creator or orders placed with fraudulent or stolen credit card data and other erroneous transmissions.
Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our platform or solutions. In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights.
Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our platform or solutions. 23 Table of Contents In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights.
Furthermore, our failure to successfully manage our search engine optimization could result in a substantial decrease in traffic to our websites, as well as increased costs if we were to replace free traffic with paid traffic, which may harm our business, results of operations and financial condition.
Furthermore, our failure to successfully manage SEO could result in a substantial decrease in traffic to our websites, as well as increased costs if we were to replace free traffic with paid traffic, which may harm our business, financial condition and results of operations.
In addition, payment card networks and payment processing partners could increase the fees they charge us for their services, including in connection with an attendee’s use of certain payment cards or other payment methods, which would increase our operating costs and reduce our margins.
In addition, payment card networks and payment processing partners could increase the fees they charge us for their services, including in connection with a consumer's use of certain payment cards or other payment methods, which would increase our operating costs and reduce our margins.
If one or more of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, our Class A common stock price would likely 34 Table of Contents decline.
If one or more of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, our Class A common stock price would likely decline.
In addition, any noncompliance with anti-money laundering or payments regulations or laws by our third-party payment services providers or other partners in performing services for us could impact our reputation, divert substantial resources, result in liabilities, force us to restructure, or require changes in payments options, which may harm our business and results of operations.
Any noncompliance with anti-money laundering or payments regulations or laws by our payment services providers or other partners in performing services for us could impact our reputation, divert substantial resources, result in liabilities, force us to restructure, or require changes in payments options, which may harm our business, financial condition and results of operations.
Such disruptions in our vendor supply chain would be time-consuming and costly for multiple departments, especially engineering, and result in delays in our product delivery and business strategy. Further, over the past decade, we have continued to build complex code to evolve our product offerings.
Such disruptions in our vendor supply chain would be time-consuming and costly for multiple departments, especially engineering, and result in delays in our product delivery and business strategy. Further, we have continued to build complex code to evolve our product offerings.
Our platform and solutions are accessed by a large number of creators and attendees often at the same time.
Our platform and solutions are accessed by a large number of creators and consumers often at the same time.
Any change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential customers with international operations.
Any change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential creators and consumers with international operations.
If we are found to be a money transmitter under any applicable regulation and we are not in compliance with such regulations, we may be subject to fines or other penalties in one or more jurisdictions levied by federal or state or local regulators, including state Attorneys General, as well as those levied by foreign regulators.
If we are found to be a money transmitter or money services business under any applicable regulation and we are not in compliance with such regulations, we may be subject to investigations by regulators and to fines or other penalties in one or more jurisdictions levied by federal or state or local regulators, including state Attorneys General, as well as those levied by foreign regulators and governmental bodies.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties We lease approximately 13,335 square feet of space in San Francisco, California for our headquarters under a lease agreement that expires in September 2023. We also lease facilities in Nashville, Tennessee and Los Angeles, California, as well as offices in Argentina, Australia, India, Ireland, Spain and the United Kingdom to support our global team.
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Item 2. Properties We lease all our facilities and do not own any real property. We are a remote-first company, meaning that for the vast majority of roles, our employees have the option to work remotely.
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As a result of this strategy, we maintain our corporate headquarters in San Francisco, California and lease physical offices in major cities around the world for purposes of collaboration and team building.
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We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Incentive Plans See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information regarding securities authorized for issuance. 38 Table of Contents Stock Performance Graph The following stock performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, and shall not be deemed to be incorporated by reference into any filing of Eventbrite, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Biggest changeStock Performance Graph The following stock performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, and shall not be deemed to be incorporated by reference into any filing of Eventbrite, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. 38 Table of Contents The following graph compares the cumulative total return to stockholders on our Class A common stock relative to the cumulative total returns of the Standard & Poor’s 500 Index, or S&P 500, and the S&P North American Technology Index.
Any future determination relating to our dividend policy will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant. Unregistered Sale of Equity Securities None. Issuer Purchases of Equity Securities None.
Any future determination relating to our dividend policy will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant. Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on September 20, 2018, the date our Class A common stock began trading on the NYSE, and its relative performance is tracked through December 31, 2022.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on September 20, 2018, the date our Class A common stock began trading on the NYSE, and its relative performance is tracked through December 31, 2023.
Our Class B common stock is not listed or traded on any stock exchange. Holders of Record As of February 21, 2023, there were 51 holders of record of our Class A common stock and 59 holders of record of our Class B common stock.
Our Class B common stock is not listed or traded on any stock exchange. Holders of Record As of February 20, 2024, there were 48 holders of record of our Class A common stock and 57 holders of record of our Class B common stock.
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The following graph compares the cumulative total return to stockholders on our Class A common stock relative to the cumulative total returns of the Standard & Poor’s 500 Index, or S&P 500, and the S&P North American Technology Index.
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Securities Authorized for Issuance Under Equity Incentive Plans See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information regarding securities authorized for issuance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAdjusted EBITDA should not be considered as an alternative to net loss or any other measure of financial performance calculated and presented in accordance with GAAP. 41 Table of Contents The following table presents a reconciliation of our Adjusted EBITDA to the most comparable GAAP measure, net loss, for each of the periods indicated: Year Ended December 31, 2022 2021 2020 (in thousands) Net loss $ (55,384) $ (139,080) $ (224,718) Add: Depreciation and amortization 14,860 18,716 22,610 Stock-based compensation 53,356 47,523 40,215 Interest expense 11,269 16,267 24,586 Loss on debt extinguishment — 49,977 — Direct and indirect acquisition related costs (1) — — 190 Employer taxes related to employee equity transactions 849 2,544 1,190 Other (income) expense, net (2,753) 3,630 1,932 Income tax provision (benefit) 126 1,428 (80) Adjusted EBITDA $ 22,323 $ 1,005 $ (134,075) (1) Direct and indirect acquisition related costs consist primarily of transaction and transition related fees and expenses incurred within one year of the acquisition date, including legal, accounting, tax and other professional fees as well as personnel-related costs such as severance and retention bonuses for completed, pending and attempted acquisitions.
Biggest changeAdjusted EBITDA should not be considered as an alternative to net loss or any other measure of financial performance calculated and presented in accordance with GAAP. 40 Table of Contents The following table presents our Adjusted EBITDA for the periods indicated and a reconciliation of our Adjusted EBITDA to the most comparable GAAP measure, net loss, for each of the periods indicated: Year Ended December 31, 2023 2022 2021 (in thousands) Net loss (1) $ (26,479) $ (55,384) $ (139,080) Add: Depreciation and amortization 13,760 14,860 18,716 Stock-based compensation 55,056 53,356 47,523 Interest income (27,495) (6,432) (60) Interest expense 11,185 11,269 16,267 Loss on debt extinguishment — — 49,977 Employer taxes related to employee equity transactions 972 849 2,544 Other (income) expense, net (335) 3,679 3,690 Income tax provision (benefit) 1,991 126 1,428 Adjusted EBITDA $ 28,655 $ 22,323 $ 1,005 (1) Restructuring related costs are included in Net Loss and Adjusted EBITDA.
Cash Flows from Financing Activities The net cash used in financing activities of $2.1 million during the year ended December 31, 2022 was primarily due to $3.1 million proceeds from the exercise of stock options, offset by $6.6 million taxes paid related to net share settlement of equity awards.
Net cash used in financing activities of $2.1 million during the year ended December 31, 2022 was primarily due to $6.6 million in taxes paid related to net share settlement of equity awards, offset by $3.1 million in proceeds from the exercise of stock options.
Other Income (Expense), Net Other income (expense), net consists primarily of interest income and foreign exchange rate remeasurement gains and losses recorded from consolidating our subsidiaries each period-end. The primary driver of our other income (expense), net is fluctuation in the value of the U.S. dollar against the local currencies of our foreign subsidiaries.
Other Income (Expense), Net Other income (expense), net consists primarily of foreign exchange rate remeasurement gains and losses recorded from consolidating our subsidiaries each period-end. The primary driver of our other income (expense), net is fluctuation in the value of the U.S. dollar against the local currencies of our foreign subsidiaries.
When evaluating our performance, you should consider Adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results. 42 Table of Contents Results of Operations The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
When evaluating our performance, you should consider Adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results. 41 Table of Contents Results of Operations The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Significant judgment and estimates are required in assessing impairment of long-lived assets, and goodwill including identifying whether events or changes in circumstances require an impairment assessment, estimating future cash flows, and determining appropriate discount rates. There was no impairment loss recorded on goodwill and acquired intangible assets for the years ended December 31, 2022 and 2021.
Significant judgment and estimates are required in assessing impairment of long-lived assets, and goodwill including identifying whether events or changes in circumstances require an impairment assessment, estimating future cash flows, and determining appropriate discount rates. There was no impairment loss recorded on goodwill and acquired intangible assets for the years ended December 31, 2023 and 2022.
We estimate forfeitures in order to calculate stock-based compensation expense. Assumptions and judgment. Refer to Note 12, "Stockholders' Equity", of our Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for the range of assumptions used to estimate the fair value of stock options granted to employees.
We estimate forfeitures in order to calculate stock-based compensation expense. Assumptions and judgment. Refer to Note 11, "Stockholders' Equity", of our notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for the range of assumptions used to estimate the fair value of stock options granted to employees.
Our payment processing costs for credit and debit card payments are generally lower outside of the United States due to a number of factors, including lower card network fees and lower cost alternative payment networks. Consequently, if we generate more revenue internationally, we expect that our payment processing costs will decline as a percentage of revenue.
Our payment processing costs for credit and debit card payments are generally lower outside of the United States due to a number of factors, including lower card network fees and lower cost alternative payment networks. Consequently, if we generate more revenue internationally, we expect that our overall payment processing costs will decline as a percentage of total revenue.
Recent Accounting Pronouncements Refer to Note 2, "Significant Accounting Policies", of our Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information. 52 Table of Contents
Recent Accounting Pronouncements Refer to Note 2, "Significant Accounting Policies", of our notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information. 51 Table of Contents
Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Actual future operating results and the remaining economic lives of our intangible assets could differ from the estimates used in assessing the recoverability of these assets.
Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Actual future operating results and the remaining 50 Table of Contents economic lives of our intangible assets could differ from the estimates used in assessing the recoverability of these assets.
Impact if actual results differ from assumptions. As a result of the goodwill impairment assessment, management concluded goodwill was not impaired as of December 31, 2022 and does not believe that its reporting unit is at risk of failing the impairment test since the fair value of the reporting unit substantially exceeded the carrying value.
Impact if actual results differ from assumptions. As a result of the goodwill and intangibles impairment assessment, management concluded goodwill was not impaired as of December 31, 2023 and does not believe that its reporting unit is at risk of failing the impairment test since the fair value of the reporting unit substantially exceeded the carrying value.
We hold our cash with high-credit-quality financial institutions and manages credit risk of its short-term investments by investing its cash in high quality and highly liquid money market instruments and U.S. Treasury bills.
We hold our cash with high-credit-quality financial institutions and manage credit risk of our short-term investments by investing our cash in high quality and highly liquid money market instruments and U.S. Treasury bills.
For a discussion and comparison of the years ended December 31, 2021 and 2020, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2021 Annual Report on Form 10-K filed with the SEC on February 18, 2022.
For a discussion and comparison of the years ended December 31, 2022 and 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2022 Annual Report on Form 10-K filed with the SEC on February 28, 2023.
In addition to revenue, net loss, and other results under GAAP, the following tables set forth key business metrics and non-GAAP financial measures we use to evaluate our business. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business performance.
In addition to revenue, net loss, and other results under generally accepted accounting principles (GAAP), the following tables set forth key business metrics and non-GAAP financial measures we use to evaluate our business. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business performance.
If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of the asset group is reduced to the fair value. 51 Table of Contents Assumptions and judgment.
If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of the asset group is reduced to the fair value. Assumptions and judgment.
Our fixed costs consist primarily of expenses associated with the operation and maintenance of our platform, including website hosting fees and platform infrastructure costs, amortization of capitalized software development 44 Table of Contents costs, on-site operations costs and customer support costs.
Our fixed costs consist primarily of expenses associated with the operation and maintenance of our platform, including website hosting fees and platform infrastructure costs, amortization of capitalized software development 43 Table of Contents costs, and customer support costs.
As of December 31, 2022, reserves relating to creator signing fees and creator advances were $6.9 million and $9.2 million, respectively. Impact if actual results differ from assumptions. Creator signing fees and creator advances are presented net of reserves on the consolidated balance sheets.
As of December 31, 2023, reserves relating to creator signing fees and creator advances were $4.8 million and $4.9 million, respectively. Impact if actual results differ from assumptions. Creator signing fees and creator advances are presented net of reserves on the consolidated balance sheets.
Our gross margin improved during the year ended December 31, 2022 compared to 2021 primarily due to improved fixed cost absorption as ticket volume and revenue increased. Operating Expenses Operating expenses consist of product development, sales, marketing and support and general and administrative expenses.
Our gross margin improved during the year ended December 31, 2023 compared to 2022 primarily due to revenue growth from marketplace and advertising revenue, as well as improved fixed cost absorption as ticket volume increased. Operating Expenses Operating expenses consist of product development, sales, marketing and support and general and administrative expenses.
Refer to Note 11, "Commitments and Contingent Liabilities", of the Notes to Consolidated Financial Statements under Part II, Item 8 of this Annual Report on Form 10-K for more details, including a table of our contractual obligations.
Refer to Note 10, "Commitments and Contingent Liabilities", of the Notes to Consolidated Financial Statements under Part II, Item 8 of this Annual Report on Form 10-K for more details.
When an advance payout is made, we reduce the cash and cash equivalents held for creators with a corresponding decrease to our accounts payable, creators, which reflects the release of the amount due to creators after ticket proceeds are remitted to the creator. As of December 31, 2022, advance payouts outstanding was approximately $193.1 million.
When an advance payout is made, we reduce the cash and cash equivalents held for creators with a corresponding decrease to our accounts payable, creators, which reflects the release of the amount due to creators after ticket proceeds are remitted to the creator.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in this Annual Report on Form 10-K. Our fiscal year ends December 31.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in this Annual Report on Form 10-K. Our fiscal year ends December 31. Overview Eventbrite’s mission is to bring the world together through live experiences.
We evaluate these estimates on an ongoing basis. Actual results could differ from those estimates and such differences could be material to our consolidated financial statements. Chargebacks and Refunds Reserve Critical estimates . The terms of our standard merchant agreement obligate creators to reimburse attendees who are entitled to refunds.
Actual results could differ from those estimates and such differences could be material to our consolidated financial statements. Chargebacks and Refunds Reserve Critical estimates . The terms of our standard merchant agreement obligate creators to reimburse attendees who are entitled to refunds. We record estimates for refunds and chargebacks of our fees as contra-revenue.
We record estimates for refunds and chargebacks of our fees as contra-revenue. When we provide advance payouts, we assume risk that the event may be cancelled, fraudulent, or materially not as described, resulting in significant chargebacks and refund requests.
When we provide advance payouts, we assume risk that the event may be cancelled, fraudulent, or materially not as described, resulting in significant chargebacks and refund requests.
We will adjust our recorded reserves in the future to reflect our best estimates of future outcomes, and we may pay in cash a portion of, all of, or a greater amount than the $13.1 million provision recorded as of December 31, 2022. In June 2020, we issued the 2025 Notes and received aggregate net proceeds of $144.3 million.
We will adjust our recorded reserves in the future to reflect our best estimates of future outcomes, and we may pay in cash a portion of, all of, or a greater amount than the $8.1 million provision recorded as of December 31, 2023. In June 2020, we issued the 2025 Notes, and in March 2021, we issued the 2026 Notes.
The decrease in the reserve balance during the year ended December 31, 2022 was the result of lower estimated losses from the advance payout program and estimated future refunds of fees, which were previously higher at the onset of the COVID-19 pandemic.
The decrease in the reserve balance during the year ended December 31, 2023 was the result of lower estimated losses from the advance payout program and estimated future refunds of fees, which reflects the continued recovery from the COVID-19 pandemic.
Paid Ticket Volume Our success in serving creators is measured in large part by the number of tickets sold on our platform that generate ticket fees, referred to as paid ticket volume. We consider paid ticket volume an important indicator of the underlying health of our business.
Paid Ticket Volume Paid ticket volume is measured by the number of tickets sold on our platform that generate ticketing fees. We consider paid ticket volume an important indicator of the underlying health of our ticketing business.
Creator signing fees and creator advances are presented net of reserves on the consolidated balance sheets and were $1.7 million and $0.7 million respectively, as of December 31, 2022. Assumptions and judgment.
Creator signing fees (current and noncurrent portions) and creator advances are presented net of reserves on the consolidated balance sheets and were $1.9 million and $2.8 million respectively, as of December 31, 2023. Assumptions and judgment.
The following tables set forth our consolidated results of operations data and such data as a percentage of net revenue for the periods presented: Year Ended December 31, 2022 2021 2020 (in thousands) Consolidated Statements of Operations Net revenue $ 260,927 $ 187,134 $ 106,006 Cost of net revenue 90,746 70,294 62,330 Gross profit 170,181 116,840 43,676 Operating expenses: Product development 86,346 66,303 54,551 Sales, marketing and support 49,292 35,916 84,259 General and administrative 81,285 82,399 103,146 Total operating expenses 216,923 184,618 241,956 Loss from operations (46,742) (67,778) (198,280) Interest expense (11,269) (16,267) (24,586) Loss on debt extinguishment (49,977) — Other income (expense), net 2,753 (3,630) (1,932) Loss before income taxes (55,258) (137,652) (224,798) Income tax provision (benefit) 126 1,428 (80) Net loss $ (55,384) $ (139,080) $ (224,718) 43 Table of Contents Year Ended December 31, 2022 2021 2020 Consolidated Statements of Operations, as a percentage of net revenue Net revenue 100 % 100 % 100 % Cost of net revenue 35 38 59 Gross profit 65 62 41 Operating expenses: Product development 33 35 51 Sales, marketing and support 19 19 79 General and administrative 31 44 97 Total operating expenses 83 98 227 Loss from operations (18) (36) (186) Interest expense (4) (9) (23) Loss on debt extinguishment — (27) — Other income (expense), net 1 (2) (2) Loss before income taxes (21) (74) (211) Income tax provision (benefit) — 1 — Net loss (21) % (73) % (211) % Comparison of the years ended December 31, 2022 and 2021 Net Revenue We generate revenues primarily from service fees and payment processing fees from the sale of paid tickets on our platform.
The following tables set forth our consolidated results of operations data and such data as a percentage of net revenue for the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Consolidated Statements of Operations Net revenue $ 326,134 $ 260,927 $ 187,134 Cost of net revenue 103,130 90,746 70,294 Gross profit 223,004 170,181 116,840 Operating expenses: Product development 98,294 86,346 66,303 Sales, marketing and support 74,574 49,292 35,916 General and administrative 91,269 81,285 82,399 Total operating expenses 264,137 216,923 184,618 Loss from operations (41,133) (46,742) (67,778) Interest income 27,495 6,432 60 Interest expense (11,185) (11,269) (16,267) Loss on debt extinguishment — — (49,977) Other income (expense), net 335 (3,679) (3,690) Loss before income taxes (24,488) (55,258) (137,652) Income tax provision (benefit) 1,991 126 1,428 Net loss $ (26,479) $ (55,384) $ (139,080) 42 Table of Contents Year Ended December 31, 2023 2022 2021 Consolidated Statements of Operations, as a percentage of net revenue Net revenue 100 % 100 % 100 % Cost of net revenue 32 35 38 Gross profit 68 65 62 Operating expenses: Product development 30 33 35 Sales, marketing and support 23 19 19 General and administrative 28 31 44 Total operating expenses 81 83 98 Loss from operations (13) (18) (36) Interest Income 8 2 — Interest expense (3) (4) (9) Loss on debt extinguishment — — (27) Other income (expense), net — (1) (2) Loss before income taxes (8) (21) (74) Income tax provision (benefit) 1 — 1 Net loss (7) % (21) % (73) % Comparison of the years ended December 31, 2023 and 2022 Net Revenue We currently generate revenues primarily from service fees and payment processing fees from the sale of paid tickets on our platform.
Year Ended December 31, 2022 2021 2020 (in thousands) Paid ticket volume 87,056 67,427 47,092 Paid ticket volume change (%) 29 % 43 % (57) % Our paid ticket volume for events outside of the United States represented 39%, 35% and 39% for the years ended December 31, 2022, 2021 and 2020, respectively.
The table below sets forth the paid ticket volume for the periods indicated: Year Ended December 31, 2023 2022 2021 (in thousands) Paid ticket volume 93,443 87,056 67,427 Paid ticket volume change (%) 7 % 29 % 43 % Our paid ticket volume for events outside of the United States represented 40%, 39% and 35% for the years ended December 31, 2023, 2022 and 2021, respectively.
We record estimates for losses related to chargebacks and refunds based on various factors, including the amounts paid and outstanding to creators in conjunction with the advance payout program, the nature of future events, the remaining time to event date, macro-economic conditions and current events, and actual chargeback and refund activity during the current year.
We record estimates for losses related to chargebacks and refunds based on various factors, including the amounts paid and outstanding to creators in conjunction with the advance payout program, macroeconomic conditions, and actual chargeback and refund activity trends.
Cash Flows Our cash flow activities were as follows for the periods presented: Year Ended December 31, 2022 2021 2020 (in thousands) Net cash provided by (used in): Operating activities $ 8,610 $ 85,834 $ (157,957) Investing activities (89,502) (2,533) (12,657) Financing activities (2,079) 51,181 255,039 Effect of exchange rate changes on cash, cash equivalents and restricted cash $ (13,014) $ (6,753) $ 1,065 Net increase (decrease) in cash, cash equivalents and restricted cash $ (95,985) $ 127,729 $ 85,490 For a discussion and comparison of the years ended December 31, 2021 and 2020, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2021 Annual Report on Form 10-K filed with the SEC on February 18, 2022.
However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. 47 Table of Contents Cash Flows Our cash flow activities were as follows for the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by (used in): Operating activities $ 19,018 $ 8,610 $ 85,834 Investing activities (69,330) (89,502) (2,533) Financing activities (4,908) (2,079) 51,181 Effect of exchange rate changes on cash, cash equivalents and restricted cash $ 4,246 $ (13,014) $ (6,753) Net increase (decrease) in cash, cash equivalents and restricted cash $ (50,974) $ (95,985) $ 127,729 For a discussion and comparison of the years ended December 31, 2022 and 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2022 Annual Report on Form 10-K filed with the SEC on February 28, 2023.
As our total net revenue increases or decreases and to the extent our operating expenses are not equally affected, our operating expenses as a percentage of net revenue will similarly fluctuate. Product development.
Direct and indirect personnel costs, including stock-based compensation expense, are the most significant recurring component of operating expenses. As our total net revenue increases or decreases and to the extent our operating expenses are not equally affected, our operating expenses as a percentage of net revenue will similarly fluctuate. Product development.
Interest Expense Interest expense for the year ended December 31, 2022 consists primarily of cash interest expense and amortization of debt issuance costs on our 2025 Notes and 2026 Notes.
Interest Expense Interest expense consists primarily of cash interest expense, amortization of debt discount, and issuance costs on our 2025 Notes and 2026 Notes.
Over the long term, we anticipate our product development expenses will decrease as a percentage of net revenue, as we expect our revenue to grow at a faster pace compared to product development expenses and as we continue to expand our development staff in lower cost markets.
We expect our revenue to grow at a faster pace compared to product development expenses as we plan to continue to expand our development staff in lower cost markets.
Over the long-term, we anticipate general and administrative expenses to decline as a percentage of net revenue as we expect to grow our net revenues and scale our business.
Our general and administrative expenses also include accruals for sales and business taxes, as well as reserves and impairment charges related to creator upfront payments. Over the long-term, we anticipate general and administrative expenses to decline as a percentage of net revenue as we expect to grow our net revenues and scale our business.
Creator signing fees are incentives that we offer and pay in order to secure exclusive ticketing and payment processing rights with certain creators. Creator advances are incentives that we offer, which provide the creator with funds in advance of the event.
Recoverability of Creator Signing Fees and Creator Advances Critical estimates . We offer incentives such as creator signing fees and creator advances, which are intended to increase ticket sales and revenue. Creator signing fees are incentives that we offer and pay in order to secure exclusive ticketing and payment processing rights with certain creators.
The chargebacks and refunds reserve was $13.1 million and $21.4 million which primarily includes reserve balances for estimated advance payout losses of $11.2 million and $18.5 million as of December 31, 2022 and 2021, respectively.
Impact if actual results differ from assumptions. The chargebacks and refunds reserve was $8.1 million and $13.1 million which primarily includes reserve balances for estimated advance payout losses of $6.0 million and $11.2 million as of December 31, 2023 and 2022, respectively.
Treasury bills, is designed to preserve principal and provide liquidity. Our funds receivable represents cash-in-transit from credit card processors that is received to our bank accounts within five business days of the underlying ticket transaction. As of December 31, 2022, approximately 27% of our cash was held outside of the United States.
Our funds receivable represents cash-in-transit from credit card processors that is received to our bank accounts within five business days of the underlying ticket transaction. As of December 31, 2023, approximately 21% of our cash was held outside of the United States. We do not expect to incur significant taxes related to these amounts.
We calculate Adjusted EBITDA as net loss adjusted to exclude depreciation and amortization, stock-based compensation expense, interest expense, loss on debt extinguishment, direct and indirect acquisitions related costs, employer taxes related to employee equity transactions, other income (expense), net, which consisted of interest income, foreign exchange rate gains and losses and changes in fair value of term loan embedded derivatives, and income tax provision (benefit).
We calculate Adjusted EBITDA as net loss adjusted to exclude depreciation and amortization, stock-based compensation expense, interest income, interest expense, loss on debt extinguishment, employer taxes related to employee equity transactions, other income (expense), net, and income tax provision (benefit).
Overview Our mission is to bring the world together through live experiences, and since inception, we have been at the center of the experience economy, helping to transform the way people organize and attend events. Eventbrite connects event creators - the people who bring others together to share their passions, artistry and causes through live experiences - with their audiences.
Since inception, we have been at the center of the experience economy, helping transform the way people discover and organize events. Our two-sided marketplace connects millions of creators and consumers every month to share their passions, artistry, and causes through live experiences.
When we provide advance payouts, we assume risk that the event may be cancelled, fraudulent or materially not as described, resulting in significant chargebacks and refund requests. The terms of our standard merchant agreement obligate creators to repay us for ticket sales advanced under such circumstances.
When we provide advance payouts, we assume significant risk that the event may be cancelled, postponed, fraudulent, materially not as described or removed from our platform due to its failure to comply with our terms of service, merchant agreement or community guidelines, resulting in significant chargebacks and refund requests.
Year Ended December 31, Change 2022 2021 $ % (in thousands, except percentages) Net revenue $ 260,927 $ 187,134 $ 73,793 39 % The increase in net revenue during 2022 compared to 2021 was primarily driven by an increase in revenue from service fees and payment processing fees attributed to the growth in our paid ticket volume which increased by 19.6 million or 29%.
Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Net revenue $ 326,134 $ 260,927 $ 65,207 25 % The increase in net revenue during 2023 compared to 2022 was primarily driven by an increase in service fees and payment processing fees attributed to growth in our paid ticket volume, and related pricing increases implemented since January 2023 to reflect enhanced product features.
These are subsequently recovered by withholding amounts due to us from the sale of tickets for the event until the creator payment has been fully recovered. We record a reserve for creator signing fees and creator advances taking into consideration the recoverability of outstanding balances and changing facts and circumstances for each reporting period.
We record a reserve for creator signing fees and creator advances taking into consideration the recoverability of outstanding balances and changing facts and circumstances for each reporting period.
However, due to the nature of the COVID-19 pandemic and ongoing variants, there is a high degree of uncertainty around these reserves and our actual losses could be materially different from our current estimates.
Due to the nature of macroeconomic events, including but not limited to shifts in consumer behavior, inflation, and interest rate movements, there is a high degree of uncertainty around these reserves and our actual losses could be materially different from our current estimates.
Revenue is recognized when control of promised goods or services is transferred to the creator, which is when the ticket is sold for service fees and payment processing fees. Net revenue excludes sales taxes and value-added taxes (VAT) and is presented net of estimated customer refunds, chargebacks and amortization of creator signing fees.
Net revenue excludes sales taxes and value-added taxes (VAT) and is presented net of estimated customer refunds, chargebacks and amortization of creator signing fees.
These cash assets held for creators are directly offset by a corresponding liability to creators. During the year ended December 31, 2022 and 2021, the effect of exchange rate changes on cash, cash equivalents, and restricted cash, resulted in reductions of $13.0 million and $6.8 million, respectively, primarily due to the strengthening of the U.S. dollar against certain currencies.
These cash assets held for creators are directly offset by a corresponding liability to creators. During the year ended December 31, 2023 we recorded a $4.2 million increase in cash and cash equivalents primarily due to the weakening of the U.S. dollar.
If the creator is insolvent or has spent the proceeds of the ticket sales for event-related costs, we may not be able to recover our losses from these events. The COVID-19 pandemic has increased the likelihood that we will not recover the losses from ticket sales advanced prior to the COVID-19 pandemic.
The terms of our standard merchant agreement obligate creators to repay us for ticket sales advanced under such circumstances. If the creator is insolvent, has spent the proceeds of the ticket sales for event-related costs, has cancelled the event, or has engaged in fraudulent activity, we may not be able to recover our advance payout losses from these events.
Additionally, we recorded a $7.0 million reserve decrease during the year ended December 31, 2022, compared to a $10.0 million decrease recorded in 2021, which resulted in a $3.0 million increase in our expense driven by the advance payout reserve.
We recorded a $4.4 million release to our chargebacks and refunds reserve during the year ended December 31, 2023, compared to a $7.0 million release recorded in 2022, due to the continued resolution of our advanced payout exposure, which resulted in a $2.6 million increase in expense.
Collectively, our cash and cash equivalents, short term investments and funds receivable balances represent a mix of cash that belongs to us and cash that is due to creators. The amounts due to creators, which was $309.3 million as of December 31, 2022, are captioned on our consolidated balance sheets as accounts payable, creators.
The cash was held primarily to fund our foreign operations and on behalf of, and to be remitted to, creators. Collectively, our cash and cash equivalents, short term investments and funds receivable balances represent a mix of cash that belongs to us and cash that is due to creators.
Reserves are recorded based on our assessment of various factors, including the amounts paid and outstanding to creators in conjunction with the advance payout program, the nature of future events, the remaining time to event date, macro-economic conditions and current events, and actual chargeback and refund activity during the current year. Impact if actual results differ from assumptions.
We record reserves for estimated advance payout losses as an operating expense classified within sales, marketing and support. Assumptions and judgment. Reserves are recorded based on our assessment of various factors, including the amounts paid and outstanding to creators in conjunction with the advance payout program, macroeconomic conditions and current events, and actual chargeback and refund activity.
The Plan also includes a real estate reduction to reflect the geographic distribution of our employees as well as reductions in vendor and other costs. 40 Table of Contents Key Business Metrics and Non-GAAP Financial Measures We monitor key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions.
Key Business Metrics and Non-GAAP Financial Measures We monitor key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions.
Year Ended December 31, Change 2022 2021 $ % (in thousands, except percentages) Cost of net revenue $ 90,746 $ 70,294 $ 20,452 29 % Percentage of total net revenue 35 % 38 % Gross margin 65 % 62 % The increase in cost of net revenue during the year ended December 31, 2022 compared to 2021 was primarily due to an increase of $20.7 million in payment processing costs associated with the increase in paid ticket volume and an increase in website hosting fees of $1.8 million, partially offset by a $2.2 million decrease in amortization of capitalized internal-use software development costs.
Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Cost of net revenue $ 103,130 $ 90,746 $ 12,384 14 % Percentage of total net revenue 32 % 35 % Gross margin 68 % 65 % The increase in cost of net revenue during the year ended December 31, 2023 compared to 2022 was primarily due to an increase in payment processing costs associated with the increase in ticket sales volume.
Liquidity and Capital Resources As of December 31, 2022, we had cash and cash equivalents of $539.3 million, short-term investments of $84.2 million and funds receivable of $43.5 million. Our cash and cash equivalents includes bank deposits, U.S. Treasury bills, and money market funds held by financial institutions. Our short-term investment portfolio, which consists of U.S.
Our cash and cash equivalents include bank deposits, U.S. Treasury bills, and money market funds held by financial institutions. Our short-term investment portfolio, which consists of U.S. Treasury bills, is designed to preserve principal and provide liquidity.
Year Ended December 31, Change 2022 2021 $ % (in thousands, except percentages) Other income (expense), net $ 2,753 $ (3,630) $ 6,383 176 % Percentage of total net revenue 1 % (2) % The increase in other income during 2022 compared to 2021 was driven by a $6.4 million increase in interest income primarily due to rising interest rates in 2022.
Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Other income (expense), net $ 335 $ (3,679) $ 4,014 109 % Percentage of total net revenue — % (1) % The increase in other income during 2023 compared to 2022 was driven by a $5.8 million decrease in foreign currency rate remeasurement loss fluctuations, offset by a $1.8 million decrease in other income primarily related to a COVID-19 employee retention credit recorded during the year ended December 31, 2022.
Comparison of Years Ended December 31, 2022 and 2021 Cash Flows from Operating Activities The net cash provided by operating activities for the year ended December 31, 2022 was $8.6 million, which primarily resulted from our net loss of $55.4 million, adjusted for noncash charges primarily consisting of $53.4 million stock-based compensation expense, $14.9 million depreciation and amortization, and $3.4 million noncash operating lease expense.
The net cash provided by operating activities of $8.6 million for the year ended December 31, 2022, was primarily due to our net loss of $55.4 million, adjusted for non-cash charges of $86.8 million primarily driven by stock-based compensation expense and changes to our operating assets and liabilities that used $22.8 million in cash, primarily driven by timing of funds receivable.
These ticketing proceeds are legally unrestricted, and beginning in the fourth quarter we invested a portion of creator cash in high quality U.S. Treasury bills. For qualified creators, we pass ticket sales proceeds to the creator prior to the event, subject to certain limitations. Internally, we refer to these payments as advance payouts.
Treasury bills with original maturities greater than three months and less than one year. For qualified creators, we pass ticket sales proceeds to the creator prior to the event, subject to certain limitations. Internally, we refer to these payments as advance payouts.
We believe that our existing cash and short-term investments, together with cash generated from operations, will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect.
Upon conversion, the notes may be settled in cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at our election. We believe that our existing cash, together with cash generated from operations, will be sufficient to meet our anticipated cash needs for at least the next 12 months.
The reductions are primarily attributed to the effect of exchange rate changes on cash balances held on behalf of creators, which can serve as a natural hedge for the effect of exchange rates on Accounts payable, creators presented within operating activities.
The impact of the effect of exchange rate changes are primarily attributed to creator cash balances, which can serve as a natural hedge for the effect of exchange rates on accounts payable, creators presented within operating activities. 48 Table of Contents Concentrations of Credit Risk There were no customers (creators) that represented 10% or more of our accounts receivable or exceeded 10% of our net revenue balance during the years ended December 31, 2023 and 2022.
Year Ended December 31, Change 2022 2021 $ % (in thousands, except percentages) Income tax provision (benefit) $ 126 $ 1,428 $ (1,302) (91) % Percentage of total net revenue — % 1 % The provision for income taxes decreased by $1.3 million in 2022 compared to 2021 and was primarily attributable to insignificant non-routine tax benefits and changes in our year-over-year jurisdictional mix of taxable earnings.
Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Income tax provision $ 1,991 $ 126 $ 1,865 1480 % Percentage of total net revenue 1 % — % The provision for income taxes increased by $1.9 million in 2023 compared to 2022 and was primarily attributable to year-over-year business growth and changes in taxable earnings mix. 46 Table of Contents Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of $489.2 million, short-term investments of $153.7 million and funds receivable of $48.8 million.
Through our highly-scalable self-service platform, we enable event creators to plan, promote and sell tickets to their events. Our consumer-facing experiences enable event seekers to find experiences they love and serve as a demand generating engine for event creators.
Creators use our highly-scalable self-service ticketing and marketing tools to plan, promote, and sell tickets to their events and event seekers use our website and mobile application to discover and purchase tickets to experiences they love.
Under certain circumstances, holders may surrender their 48 Table of Contents notes of a series for conversion prior to the applicable maturity date. Upon conversion, the notes may be settled in cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at our election.
The 2025 Notes mature on December 1, 2025 and the 2026 Notes mature on September 15, 2026. Under certain circumstances, holders may surrender their notes of a series for conversion prior to the applicable maturity date.
Year Ended December 31, Change 2022 2021 $ % (in thousands, except percentages) Interest expense $ 11,269 $ 16,267 $ (4,998) (31) % Percentage of total net revenue 4 % 9 % The decrease in interest expense during 2022 compared to 2021 was primarily due to a $5.4 million decrease in interest on the term loans which were repaid in the first quarter of 2021.
Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Interest expense $ 11,185 $ 11,269 $ (84) (1) % Percentage of total net revenue 3 % 4 % Interest expense remained relatively consistent for the year ended December 31, 2023 compared to the year ended December 31, 2022.
General and administrative expenses consist of personnel costs, including stock-based compensation, and professional fees for finance, accounting, legal, risk, human resources and other corporate functions. Our general and administrative expenses also include accruals for sales and business taxes, as well as reserves and impairment charges related to creator upfront payments.
For information on the costs associated with the restructuring, see Note 1 - Overview and Basis of Presentation in the notes to the consolidated financial statements. General and administrative. General and administrative expenses consist of personnel costs, including stock-based compensation, and professional fees for finance, accounting, legal, risk, human resources and other corporate functions.
The net cash provided by financing activities of $51.2 million during the year ended December 31, 2021 was primarily due to $207.0 million proceeds from issuing the 2026 Notes, net of issuance costs, and $18.5 million proceeds from the exercise of stock options, partially offset by $143.2 million repayment of term loans including prepayment premium, $18.5 million 49 Table of Contents purchase of the 2026 Capped Calls in connection with the issuance of the 2026 Notes and $13.7 million in taxes paid related to the net share settlement of equity awards.
Net cash used in investing activities of $89.5 million for the year ended December 31, 2022 primarily consisted of $83.9 million in purchases of short-term investments Cash Flows from Financing Activities Net cash used in financing activities of $4.9 million during the year ended December 31, 2023 was primarily due to $7.3 million in taxes paid related to net share settlement of equity awards, offset by $1.3 million in proceeds from the exercise of stock options and $1.1 million in proceeds from issuance of Class A common stock under our Employee Stock Purchase Plan.
Year Ended December 31, Change 2022 2021 $ % (in thousands, except percentages) Product development $ 86,346 $ 66,303 $ 20,043 30 % Percentage of total net revenue 33 % 35 % The increase in product development costs during 2022 compared to 2021 was primarily driven by $19.1 million employee-related costs, of which $3.2 million related to increased stock-based compensation.
Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) General and administrative $ 91,269 $ 81,285 $ 9,984 12 % Percentage of total net revenue 28 % 31 % The increase in general and administrative expenses during 2023 compared to 2022 was primarily driven by restructuring related costs of $4.9 million, consisting of $3.3 million in severance and other employee termination benefits and $1.6 million in lease abandonment and related costs.
We recognized foreign currency rate remeasurement losses during the year ended December 31, 2022, as a result of the strengthening of the U.S. dollar compared to the currencies with which we operate and process transactions. 47 Table of Contents Income Tax Provision (Benefit) Income tax provision consists primarily of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business.
Income Tax Provision Income tax provision consists primarily of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business.
Revision of Previously Issued Consolidated Financial Statements This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” gives effect to the revision of our consolidated statements of cash flows for the years ended December 31, 2021 and 2020, as more fully described in Note 1 to the Notes to Consolidated Financial Statements – Revision of Previously Issued Consolidated Financial Statements, included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
For further information, refer to Note 1 - Overview and Basis of Presentation included in Part II, Item 8, "Notes to Consolidated Financial Statements," of this Annual Report on Form 10-K.
Cash Flows from Investing Activities The net cash used in investing activities of $89.5 million for the year ended December 31, 2022 consisted of $83.9 million purchases of short-term investments $3.0 million capitalized internal-use software development costs, $1.4 million purchases of property and equipment and $1.1 million holdback consideration associated with ToneDen acquisition.
Cash Flows from Investing Activities Net cash used in investing activities of $69.3 million for the year ended December 31, 2023 primarily consisted of $370.2 million in purchases of short-term investments, offset by a $308.0 million increase in maturity of short-term investments.
The net cash provided by operating activities for the year ended December 31, 2021 was $85.8 million, which primarily resulted from our net loss of $139.1 million, adjusted for noncash charges primarily consisting of $50.0 million loss on debt extinguishment, $47.5 million stock-based compensation expense, $18.7 million depreciation and amortization, and $4.6 million noncash operating lease expense.
Comparison of Years Ended December 31, 2023 and 2022 Cash Flows from Operating Activities The net cash provided by operating activities of $19.0 million for the year ended December 31, 2023, was primarily due to our net loss of $26.5 million, adjusted for non-cash charges of $79.2 million primarily driven by stock-based compensation expense and changes in our operating assets and liabilities that used $33.7 million in cash, primarily driven by refunds and chargebacks.
Year Ended December 31, Change 2022 2021 $ % (in thousands, except percentages) Sales, marketing and support $ 49,292 $ 35,916 $ 13,376 37 % Percentage of total net revenue 19 % 19 % The increase in sales, marketing and support expenses during 2022 compared to 2021 consisted of increases of $6.7 million employee-related costs of which $2.7 million related to increased stock-based compensation, primarily due to headcount growth.
Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Sales, marketing and support $ 74,574 $ 49,292 $ 25,282 51 % Percentage of total net revenue 23 % 19 % The increase in sales, marketing and support expenses during 2023 compared to 2022 was primarily driven by a $11.0 million increase in marketing spend associated with our consumer marketing campaigns, search engine marketing, and advertising.
The remainder of the increase in net revenue during 2022 consisted of a $1.6 million decrease in amortization of creator signing fees and $1.3 million increase in revenue from marketing services. Net revenue per paid ticket was $3.00 in the year ended December 31, 2022 compared to $2.78 in 2021.
Net revenue per paid ticket was $3.49 in the year ended December 31, 2023 compared to $3.00 in 2022. The increase in net revenue per paid ticket during the year was primarily driven by pricing increases implemented since January 2023.
Due to the ongoing COVID-19 pandemic, along with other geopolitical and macroeconomic events, including inflation, rising interest rates and economic recession, there is uncertainty and significant disruption in the global economy and financial markets. We have had to make significant estimates in our consolidated financial statements, specifically related to chargebacks and refunds reserves due to cancelled or postponed events.
As the impact of ongoing macroeconomic conditions continues to evolve, including inflation and interest rate movements, there is inherent uncertainty about future events and their effects which may require significant judgment in our estimates and assumptions, specifically related to chargebacks and refunds reserves due to cancelled or postponed events. We evaluate these estimates on an ongoing basis.
Due to the nature of the COVID-19 pandemic and ongoing variants, it is possible that the reserve will not be sufficient and our actual losses could be materially different from our current estimates. We will adjust our reserves in the future to reflect our best estimates of future outcomes.
To the extent actual results differ materially from our current estimates and assumptions, the Company’s future financial statements could be affected. We will adjust our reserves in the 49 Table of Contents future to reflect our best estimates of future outcomes. We cannot predict the outcome of macroeconomic conditions, nor the likelihood and impact of event cancellations and postponements.
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In 2022, more than 800,000 creators held over five million free and paid events using Eventbrite, issuing nearly 285 million tickets to consumers on our global marketplace. Our event creators are entrepreneurs who express their passions and skills through live events.
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In 2023, Eventbrite creators hosted over 5 million free and paid events, issuing over 300 million tickets on our global marketplace which resulted in over $3.5 billion dollars in gross ticket sales for the year.
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To meet creators’ most pressing needs, we are focused on delivering products that grow their audience reach and generate demand for their events. We are also investing in an enhanced event discovery experience for consumers.
Added
Our ticketing fee structure typically consists of a flat fee and a percentage of the price of each ticket sold by a creator. Revenue is recognized when control of promised goods or services is transferred to the creator, which is when the ticket is sold for service fees and payment processing fees.
Removed
As more creators and consumers view Eventbrite as a trusted place for live events, we believe we can drive more ticket sales and enhance our market position as a leading live events marketplace. The Eventbrite platform empowers creators of free and paid events.
Added
We also derive a portion of revenues from fees associated with advertising and other marketplace services for creators to publish and promote events. In the second quarter of 2023, we launched new pricing plans and subscription packages, which may include an organizer fee to creators in order to publish an event on the Eventbrite marketplace.
Removed
Creators of free events currently use our ticketing features for free, and we charge creators of paid events on a per-ticket basis when an attendee purchases a ticket for an event. Today, we derive substantially all of our revenues from ticketing services.
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Revenue from marketplace activities included $8.1 million from the launch of organizer fees in June 2023, with expansion to existing Eventbrite creators continuing throughout the six months ended December 31, 2023. Additionally, there was a $5.6 million increase in revenue from advertising services during year ended December 31, 2023, compared to December 31, 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+2 added−1 removed3 unchanged
Biggest changeOur primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of interest rates in the United States. A 10% change in the level of market interest rates would not have a material effect on our business, financial conditions or results of operations.
Biggest changeA 10% change in the level of market interest rates would not have a material effect on our business, financial conditions or results of operations. In addition, our 2025 Notes and 2026 Notes (collectively referred to as "Notes") are subject to fixed annual interest charges.
If our foreign-currency denominated assets, liabilities, revenues, or expenses increase, our results of operations may be more significantly impacted by fluctuations in the exchange rates of the currencies in which we do business. A 10% increase or decrease in individual currency exchange rates would not have a material impact on our consolidated results of operations. 53 Table of Contents
If our foreign-currency denominated assets, liabilities, revenues, or expenses increase, our results of operations may be more significantly impacted by fluctuations in the exchange rates of the currencies in which we do business. A 10% increase or decrease in individual currency exchange rates would not have a material impact on our consolidated results of operations. 52 Table of Contents
However, the fair value of these Notes may fluctuate when interest rates change or can be affected when the market price of our Class A common stock fluctuates. We carry the convertible senior notes at face value less unamortized issuance cost on our balance sheet, and we present the fair value for required disclosure purposes only.
We carry the convertible senior notes at face value less unamortized issuance cost on our balance sheet, and we present the fair value for required disclosure purposes only.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Sensitivity We are exposed to market risk for changes in interest rates related primarily to balances of our financial instruments including cash and cash equivalents and short-term investments.
Interest Rate Sensitivity We are exposed to market risk for changes in interest rates related primarily to balances of our financial instruments including cash and cash equivalents and short-term investments. As of December 31, 2023, we had cash and cash equivalents of $489.2 million and short-term investments of $153.7 million, which consisted primarily of money market funds and U.S.
In addition, our 2025 Notes and 2026 Notes (collectively referred to as "Notes") are subject to fixed annual interest charges. These Notes therefore are not exposed to financial or economic risk associated with changes in interest rates.
These Notes therefore are not exposed to financial or economic risk associated with changes in interest rates. However, the fair value of these Notes may fluctuate when interest rates change or can be affected when the market price of our Class A common stock fluctuates.
Removed
As of December 31, 2022, we had cash and cash equivalents of $539.3 million and short-term investments of $84.2 million, which consisted primarily of money market funds and U.S. Treasury bills. The primary objective of our investment approach is to preserve capital principal and provide liquidity.
Added
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations both within the United States and internationally and we are exposed to market risks in the ordinary course of our business, including the effects of foreign currency fluctuations. Information relating to quantitative and qualitative disclosures about these market risks is described below.
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Treasury bills. The primary objective of our investment approach is to preserve capital principal and provide liquidity. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of interest rates in the United States.

Other EB 10-K year-over-year comparisons