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Eventbrite Needs to Find Acquisitions

Posted on Friday, Nov 15th 2019

According to an IBIS World report, the online event ticket sales in the US market are expected to grow 6% to $10.3 billion this year. San Francisco-based, Eventbrite (NYSE:EB) recently reported its third quarter performance that delivered mixed results.

Eventbrite’s Financials

Revenues for the third quarter grew 11% over the year to $82.1 million, ahead of the market’s estimated $77 million. GAAP net loss was $30.2 million, or $0.36 per share, compared with $35.5 million, or $1.24 a share a year ago. On an adjusted basis, loss was $0.34 per share, significantly worse than the Street’s estimated loss of $0.26 per share.

Among key metrics, Paid ticket volume grew 13% to 26.9 million driven by growth in their Self Sign-On channel which reported a 23% improvement over the year.

Eventbrite forecast revenues of $75-$79 million for the fourth quarter and revenues of $319-$329 million for the year. The company does not anticipate to turn profitable in the current year. The Street was looking for revenues of $76.28 million with a loss of $0.20 per share for the quarter and revenues of $315.26 million and a loss of $0.77 per share for the year.

Eventbrite’s Growth Focus

Eventbrite is looking to drive market expansion by improving functionality for the venues. To help cater to the needs of the large market of high-value creators who operate venues and host frequent events, it recently introduced improvements to its reserved seating functionality. The changes have made it easier for creators to build custom floorplans and for attendees to select specific seats on the web or from their mobile devices. These improvements have helped accelerate the platform speed as well. Eventbrite believes that these capabilities will help it attract venue-based and high-frequency creators to its platform.

Eventbrite is leveraging data analytics and machine learning capabilities to improve pricing for its creators. By providing creators with access to real-time data on ticketing and attendance, creators can take decisions that impact their event pricing. Recently, it allowed creators using their Essentials and Professionals packages in the United States, Canada, Australia and the United Kingdom to get access to personalized pricing insights that help them price events more intelligently to maximize ticket sales and revenue.

Eventbrite is also helping with discovery of events. It has created a selection of curated events that help creators reach out to target audiences and help audiences quickly, and easily, select the event of their interest. Its properties and distribution network help consumers with the discovery of events. It has also curated more than 75 new event collections, such as Can’t Miss Concerts in Chicago, Upcoming Job Fairs in Philadelphia, Editors Picks: Halloween Events in London and many more.

Over the past few years, Eventbrite has acquired several other smaller ticketing platforms. Acquisitions have not only helped it grow in the domestic markets but also expand its presence in UK, Argentina, Spain, Canada, and even the Netherlands. While Eventbrite may be among the big names in the space, there are are still plenty of smaller options for acquisitions.

It could look at acquiring companies focused on niche events such as New York-based TodayTix that offers discounted, last-minute theater tickets for Broadway shows in select cities. Earlier this year, TodayTix announced a funding round of $73 million led by private equity firm Great Hill Partners at an undisclosed sum. TodayTix claims to have sold more than 4 million tickets, accounting for 8% of annual Broadway ticket sales and 4% for London’s West End.

Then there is rival TicketSpice that offers an easy to use ticketing platform for a flat ticket fee along with access to advanced analytics, fund management and branding tools. Within international markets, there are players like the London-based Ticket Tailor that offers ticketing services on a subscription basis. The service works well for smaller event organizers as it does not charge a per ticket fee, but a monthly subscription service instead and boasts of a much simpler user interface.

Eventbrite has maintained that acquisitions are important to its growth. It says cultural fit of the acquired entity is a key criteria for selection. It hasn’t added anything this past year. Maybe it is time to look up some potential acquisitions to drum up some interest, and growth.

It has been just over two years since Eventbrite went public. But the stock hasn’t delivered a stellar performance. It is currently trading at $20.01 with a market cap of $1.7 billion. It was trading at a 52-week high of $33.82 in December last year and had fallen to a 52-week low of $15.30 in May this year. Prior to listing, Eventbrite was venture funded and had raised $332.2 million from investors including Tiger Global Management, T. Rowe Price, 137 Ventures, DAG Ventures, Tenaya Capital, Sequoia Capital, SV Angel, and several other individual investors. In September 2017, it went public and listed at $23 apiece and raised $230 million at a valuation of $1.8 billion.

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