Eventbrite Suffers Deeply from COVID-19

Earlier this year, an IBIS World research report had projected online event ticket sales in the country to grow 9.5% to $13.2 billion in 2020. But like several other industries, the global pandemic has upended those forecasts significantly. San Francisco-based Eventbrite (NYSE:EB), a leading player in the industry, is struggling with its results as events and large gatherings continue to get cancelled.

Eventbrite’s Financials

Revenues for the second quarter dropped 90% over the year to $8.4 million, missing the market’s estimated $11 million. GAAP net loss was $38.6 million. Among key metrics, paid ticket volume declined 82% to 5 million. Self Sign-On channel also reported a 72% drop over the year.

Given the current pandemic conditions, Eventbrite did not release a forecast for the current quarter or the fiscal year.

Eventbrite’s Growth Focus

But the recent pandemic is creating new opportunities. Eventbrite has seen an increase in sales for tickets to online events. It reported a 2000+% year-over-year increase in online events in April 2020. The lockdown restrictions helped it report a 9x increase in searches for “online events”. During the last quarter, it processed over 40 million total event tickets with nearly 5 million paid event tickets. Tickets to online events increased more than 30 times from last year, as creators used its platform to extend their reach and host more frequent events.

Creators are also using Eventbrite to engage their audiences with free events. During the quarter, free event ticket volume increased 70% over the year. Many of these events are being hosted online by creators to keep their audiences and fans engaged. Eventbrite is leveraging these times to attract new creators. During the quarter, about half of the creators releasing events online were brand-new to Eventbrite.

But as revenues continue to fall, Eventbrite is looking at expense management to get through these difficult times. In April this year, as a response to the losses incurred, it announced plans that will help it deliver at least $100 million in annualized expense savings. As part of the plan, it announced the reduction of its global workforce by 45%.

It will be a while before the events and entertainment industry returns to the pre-Covid normal. Concerts continue to get canceled, games are being played in quarantine settings and cinema halls are shuttering in the absence of both new movies and willing customers.

Eventbrite’s stock is currently trading at $9.89 with a market cap of $870.3 million. It was trading at a 52-week high of $22.90 in January this year and had fallen to a 52-week low of $5.71 in April this year.