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Good day, and thank you for standing by. Welcome to the Vivid Seats Third Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Kate Africk, Head of Investor Relations. Kate, please go ahead.

Good morning and welcome to Vivid Seats third quarter 2023 earnings conference call. I'm Kate Africa, Head of Investor Relations at Vivid Seats. Joining me today to discuss Vivid Seats results are Stan Chia, Chief Executive Officer and Larry Fey, Chief Financial Officer. By now, everyone should have accessed to our third quarter earnings press release, which we released earlier this morning. The press release as well as supplemental earnings slides are available on the Investor Relations page of Vivid Seats website at investors.vividseats.com. During the course of today's call, management may make forward-looking statements within the meaning of Federal Securities laws. These forward-looking statements are subject to risks and uncertainties, including those described in our earnings press release and other filings with the SEC. On today's call, we will refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures that provide useful information for our investors. You will find a historical reconciliation of adjusted EBITDA and adjusted EBITDA margin to the corresponding GAAP measures in our earnings press release, supplemental earnings slides and SEC filings. And now, I would like to turn the call over to Stan.

Good morning, everyone, and thank you for joining us. Today, we're pleased to share that Vivid Seats delivered another quarter of record results with our growth accelerating beyond the strong growth we saw in the first half of 2023. After delivering nearly $1 billion in Marketplace GOV, our highest quarter ever, it has never been more clear that demand for live events is strong and that we are capturing that strength at Vivid Seats. In addition, our focus on cultivating buyer loyalty continues to deliver results with repeat rates increasing and pacing ahead of expectations. Our strong quarter performance comes as we announced the acquisition of Vegas.com, our second strategic acquisition of the year. Vegas.com is a strategic asset that enhances our scale and reach in Las Vegas, the coveted entertainment capital of the U.S., while driving substantial TAM expansion and immediate accretion. I'll walk through these exciting highlights from the quarter in more detail, and then I'll turn it over to Larry, who will discuss our financials and outlook. With the industry and our business firing on all cylinders in the third quarter, we delivered $999 million of Marketplace GOV, driving outstanding 28% year-over-year growth and accelerating from 16% growth in the first half of 2023. We also delivered $188 million of revenues and $33 million of adjusted EBITDA, both growing robustly year-over-year, while deploying compelling brand investments that will continue to drive value and impact in 2024 and beyond. With strong results to date this year, we are proud to raise our 2023 guidance for the third time. With 28% GOV growth, it is evident that consumer demand for live events is healthy and vibrant and that fans increasingly favor and return to our platform. As we saw last quarter, demand strength continues to be pervasive across categories and is driven by a wide array of performers and teams. The robust demand we are seeing reflects long-term tailwinds that will drive strong growth for years to come. One of those tailwinds is the passionate fandom that drive our buyers to show up for their favorite artists and teams and to experience it live. Our engaging and innovative platform is resonating, and we see fans increasingly returning to Vivid Seats. Our repeat rates have increased significantly and are trending ahead of our forecast when we initially underwrote our investment in loyalty and brand. With repeat rate benefits that are exceeding expectations, we are excited to lean in and drive further repeat rate acceleration and buyer stickiness. Repeat orders are accretive, and as our investments continue taking hold, we anticipate leverage and margin improvements beginning in 2024. As part of our brand initiatives, we are investing in partnerships with category leaders that help ensure our brand message reaches a targeted audience of sports and music enthusiasts that are highly likely to attend live events. For example, timed with the start of this NFL season, we launched a brand campaign with our partner, ESPN, which aired on Monday Night Football and reached millions of sports fans. The ad featured 11 times Pro Bowler Larry Fitzgerald Jr. and highlighted the 11th free ticket available through Vivid Seats Rewards, the only loyalty program in the industry. The campaign also included digital takeovers on both the ESPN and Bleacher Report apps. We have seen campaigns like this drive long-term brand recognition and affinity along with immediate returns as our brand partners direct their users to our platform. As we spoke about last quarter, we are also growing our roster of team partnerships, which offer a unique and premium experiences that drive differentiation. In addition to our numerous partnerships across teams from the MLB, the NFL and the NBA, we are excited to share that we have expanded into the NHL for the first time as we are now the official ticket Marketplace partner for the LA Kings. We are also excited to add the LA Galaxy to our list of partners. Our first MLS partner in some time. With these partnerships, we will benefit from co-branded on-site activation and Vivid Seats customers will have unique access to premium seating areas bundled with experiences and perks. Our initiatives driving repeat rates higher go beyond our brand and team partnerships. We are reaching fans through numerous channels, including social networks, connected TV and influencers to cultivate awareness and affinity with bands. A crucial part of brand loyalty lies within our award winning customer service. This quarter, we were thrilled to once again be recognized by Newsweek for our track record of providing excellence in customer service. We continue to foster engagement in our ecosystem through both our Vivid Picks app and Vivid Seats Game Center, which is available directly within the Vivid Seats app. With Vivid Seats Game Center, users play daily games to score points and earn credits towards drawings for free tickets. Game Center engagement and pricing between ticket purchases is resonating and driving desired repeat behavior. We've already found that Game Center users purchase tickets at a rate 36% higher than non-Game Center app users, and Game Center unique player account continues to grow and accelerate already reaching 175,000 users since launch over the summer. Stickiness on both sides of our Marketplace is high and continues to grow. We continuously innovate our best-in-class seller tools like SkyBox, which is the ERP of choice for the majority of professional sellers. Our beta phase for SkyBox Drive, our innovative pricing tool continues to drive insights and garner excitement and we look forward to launching the product in early 2024. Sellers are eager to plug into SkyBox Drive, which will leverage the most robust data in the industry and generate valuable insights for sellers. Turning to our two strategic acquisitions. First, a brief update on Wavedash. We closed the acquisition in early September and are excited to use learnings from Wavedash as we look to expand our TAM in other attractive international markets. Next, I'm thrilled to announce our acquisition of Vegas.com, which we purchased in early November for $240 million using a mix of cash on hand and equity. Vegas.com is uniquely positioned in the coveted Las Vegas market. As the local market authority with the most comprehensive event inventory of shows, attractions and tours, Vegas.com is a top destination for millions of Las Vegas tourists every year. As a two-sided Marketplace, Vegas.com connect those tourists to popular local events such as Cirque du Soleil and magic and comedy shows. Las Vegas is benefiting from multiple tailwinds including new venues, new teams and successful artists residencies. Additional upcoming supply tailwinds include the inaugural Formula 1 Las Vegas Grand Prix later this month and the Super Bowl in 2024. With $89 million of 2022 revenues, the addition of Vegas.com will increase our scale and reach in this key market, bring incremental unique inventory through strategic partnerships and offer long-term synergistic upside. We are thrilled to acquire such a strategic asset at an accretive multiple that offers a compelling financial profile with robust EBITDA margin. Vegas.com brings a TAM of $6 billion plus that spans a diverse portfolio of shows, tours and attractions in Las Vegas, the entertainment capital of the country. With millions of live event enthusiasts flocking to and from Las Vegas each year, we anticipate a nationwide awareness benefit as tourists return to their home markets with the awareness of Vivid Seats and enrollment in our loyalty program as we integrate the Vivid Seats brand into the Vegas.com customer experience. With our recent acquisitions of Vegas.com and Wavedash, we are building a track record of using our cash flow to invest in strategically accretive, TAM accretive and financially accretive assets. Each business is a leader in its market, and when combined with our leading platform will drive synergistic value that will accelerate our profitable growth, both domestically and internationally. We are excited to integrate these businesses and expand our reach and capabilities as a leading global marketplace. The combination of our organic and inorganic investments have driven a fundamental trajectory shift of the business leading us to provide a strong preliminary view of 2024, which Larry will go into detail on shortly. With new growth vectors now in place internationally and domestically, as well as the valuable differentiation we continue to develop through our platform, we will enter next year prepared to deliver a step function increase both strategically and financially. Turning back to this quarter, our excellent results reflect the foundational strength of our business and the growing affinity and demand for our platform. We are excited to finish the year strong and remain focused on building that strength and creating long-term shareholder value. With that, I will turn it over to Larry.

Thanks, Stan. Our third quarter 2023 Marketplace GOV of $999 million increased 28% year-over-year, total Marketplace orders increasing 19% year-over-year, and average order size increasing 9%. We delivered our highest quarterly Marketplace GOV to-date reflecting strong Vivid Seats execution against the market backdrop of broad-based demand strength spanning performers and teams. Our third quarter 2023 revenues of $188 million increased 20% year-over-year driven by Marketplace GOV growth. Our Q3 take rate of 15.5% is consistent with expectations. We generated $33 million of adjusted EBITDA in the third quarter, up 18% year-over-year. We have seen improved efficiency and performance marketing on a year-over-year basis against a stable competitive backdrop. With repeat rates trending higher and above expectations, we are seeing results from our brand and loyalty initiatives and continue to invest accordingly. Our third quarter offline marketing expense thus reflects brand and partnership investments that we expect will further improve awareness of our value proposition, drive brand affinity and in turn increase repeat rates. We have delivered exceptional cash flow generation with over $110 million in cash from operations year-to-date. As we look at our balance sheet following the Vegas.com acquisition, we remain flexible and can capitalize on additional compelling growth opportunities as they arise. Our post-acquisition cash balance of $117 million is healthy, our debt principal outstanding at $274 million is low and our revolver of $100 million is undrawn. Our net leverage is less than 1 times our forward adjusted EBITDA and we anticipate continued strong cash generation. Our acquisitions this year demonstrate our ability to identify strategic assets and our willingness to deploy our cash to drive long-term value. Turning to our updated outlook for 2023. We are raising our guidance to account for our outperformance in Q3, continued strong demand trends thus far in Q4 and contribution from Vegas.com in the last two months of the year. We now anticipate 2023 Marketplace GOV in the range of $3.75 billion to $3.9 billion, revenues in the range of $685 million to $705 million and adjusted EBITDA in the range of $136 million to $142 million. Our guidance continues to reflect brand and partnership investments that we believe will drive attractive long-term returns. We now expect 20% Marketplace GOV growth in 2023 on top of greater than 30% GOV growth in 2022 as broad-based demand strength continues well beyond the post-pandemic surge, we are leaning into these compelling secular trends and seeing our flywheel accelerate. While we do not typically provide next year guidance until our Q4 call, we are making an exception this year in light of our Vegas.com acquisition and the impact it will have on our financial profile in 2024. We expect 2024 Marketplace GOV in the range of $4.2 billion to $4.5 billion, approximately double our GOV from 2019. We also expect 2024 revenues in the range of $810 million to $840 million and 2024 adjusted EBITDA in the range of $170 million $180 million. At the midpoint, this represents mid-teens Marketplace GOV and revenue growth and 26% adjusted EBITDA growth. Underlying our initial 2024 outlook is high single-digit revenue growth, excluding our Vegas.com acquisition with operating leverage and incremental contribution from Vegas.com contributing to 26% projected adjusted EBITDA growth. To wrap, between strong operational results and strategic acquisitions, it was a great quarter. We are excited for a strong close to 2023 as we gather momentum for another great year in 2024. Back to you, Stan.

Thanks, Larry. There has never been a more exciting time for Vivid Seats, between vibrant industry growth, continued strategic and operational excellence as well as accelerating progress in driving long-term stickiness. The core Vivid Seats business is in a great position strengthened by not one, but two strategically accretive, TAM accretive and financially accretive acquisitions in 2023, we are teed up for yet another outstanding year in 2024. With that, operator, let's open it up for questions.

Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from Jason Bazinet with Citi. Jason, please go ahead with your question.

Thanks so much, I appreciate the 2024 initial take. I was wondering, Larry, if you could just spend a second and maybe parse out sort of the M&A contribution from that growth as opposed to your expectations for sort of underlying category growth and market share, any sort of broad color would be helpful.

Yeah. So I think a combination is certainly contributing to the aggregate results. As we've briefly noted, I think we're expecting excluding contribution from Viva, high single-digit top line growth and then some incremental operating leverage beyond that on the EBITDA side, against which we believe will be a growing industry environment, but muted growth relative to this year. So, still robust and generally consistent with the long-term trends. The last few years have meaningfully outperformed our long-term trend guidance, and so, we're expecting a reversion back to the long-term trends.

Okay. And just one quick follow-up. You described the competitive environment as stable. I'm assuming that's year-over-year. Is it sort of still elevated, but stable, you described the sort of competitive dynamic as sort of stable from a backward-looking long-term base?

Hey Jason. It's Stan. Look, I think the competitive environment has always been there, and I think what you'll see in our results and certainly what we're confident about next year, is that our investments, both organic and inorganic, are certainly yielding results that I think will continue to allow us to deliver, hence putting out what we think next year is going to look like, which to us, I think is more reflective of our investments taking hold, whether it's in the form of repeat rates, whether it's in the form of some of our brand investments coming through, I think we're pretty optimistic about what we've seen so far and certainly about our ability to continue to deliver next year.

Okay. That's great. Thank you guys.

Please stand-by for next question. Our next question comes from Maria Ripps with Canaccord. Maria, please go ahead with your question.

Great. Good morning and thanks for taking my questions. First, so within the context of your guidance, is there any color you can share in terms of how you're thinking about sort of the level of investment next year, what would be your key investment priorities and to what extent is your investment cadence predicated on the macro environment? And then I have a quick follow-up.

Yeah. I would characterize the investment as consistent with what we've previously put forward, a focus on driving brand awareness, brand affinity and compelling folks to become repeat users on the platform. We called out last quarter some incremental opportunities that we saw across some team partnerships. I think you saw a couple of new ones. This quarter as well, so some modest incremental dollar investment, but generally, it's the same quantum of investment, same form of investment and what we're really focused on is continuing to see that yield that we've been seeing all of the forward leaning metrics and expect to continue seeing progress accordingly.

Got it. That's very helpful. And then, can you maybe talk about your partnership with PayPal for the Pay Later functionality? And maybe just talk about how consumers are engaging with it and whether this is leading to high AOV, or more frequent purchases?

Yeah. Hey, Maria. It's Stan. I think, look, I think we're always looking for great partnerships that will enable consumers to transact and transact seamlessly and easily, and I think PayPal is certainly just another example. We partnered with Klarna as well and we continue to look to expand wallet and checkout capabilities so that again consumers can check out with their preference. And we're excited by what we're seeing so far in our partnership with PayPal and are looking forward to expanding that in the future.

Got it. Thank you so much.

Stand-by for our next question. Our next question comes from Curtis Nagle of Bank of America. Curtis, please go ahead with your question.

Terrific. Thanks very much. So maybe I'll start with just going back to Vegas. Just kind of curious how the deal came to you, and I guess why Vivid is the best partner for Vegas and kind of vice versa? And then I have a follow-up.

Sure, Curtis. It's Stan. Look, I think it starts from and we've talked a lot about this you know in the past, I think we're pretty -- we stand in a really good spot with the balance sheet, that has been strong on the cash front, great public currency. And I think we've always been aggressive on the inorganic front looking for opportunities that our TAM accretive, strategically accretive, financially accretive. We deployed some of that capital earlier in this year with Wavedash, which we're very excited about and continue looking for assets that again meet our criteria for acquisitions. We ran into the team at Vegas.com and that asset, which again checked all of our boxes, and in fact had us really excited. When you look at the nature of that business as we look at it, you know, Vegas.com, market authority, massively comprehensive event inventory of shows, primarily shows, I might add, attractions tours, top destination for millions and millions of tourists every year, we think great tailwinds in Vegas with, if you look at the inaugural Formula 1 race that's happening there this month, you look at the Super Bowl coming next year, new venue, standing up artists residencies, we love the tailwinds there. And when you think about the nature of the consumers that come, they're visiting, and as we look at a lot of the benefits that our platform brings from a Vivid Seats perspective, you've heard us talk quarters now about I think our investments in the platform and driving increased conversion and driving increase repeat rates and engagement. We think that's just a wonderful synergistic opportunity where we can use Vegas as a domain authority in Vegas to acquire all of these visitors, introduce them to the Vivid Seats brand, the Vivid Seats loyalty program and have them go back to their home markets and redeem that credit. So all in all, I'd say we're really excited again. The rationale is there and it certainly fits all of our criteria on increasing TAM strategically and financially accretive at the same time.

Okay. That makes that makes sense. So maybe just kind of -- just following up on that question. So get the point in terms of, I mean to increase national awareness for Vivid, get all the tailwinds in terms of Vegas into next year. I guess in terms of anything else in mind to grow end market Vegas revenue, whether it's customer acquisition or marketing or just integration with your own platform to grow, I think you said it's a $6 billion TAM, something like that?

Yeah. Look, I think one, we're real early, right, we just closed on the deal last week, so I think we are right at the starting line in terms of driving all of the hypothetical synergies, but I think we look at it and we say, what a great asset again, lots of tailwinds, we look at it in terms of accelerating customer acquisition, we look at all the multiple strategic partnerships that Vegas.com has and are excited to add that to our portfolio of partnerships. And I think when you look at that certainly we are going to be aggressive in terms of what we can drive there, and we'll be happy to provide an update as we start to execute on some of the synergies that we see in market.

Okay. Thank you.

Please stand-by for our next question. Our next question comes from Thomas Forte of DA Davidson. Thomas, please go ahead with your question.

Great. So Stan and Larry, congrats on the quarter and the transaction. I've one question and one follow-up. So, for the question, wanted to ask a question, I'm often asked by investors, what is your current buyback authorization, what are your thoughts on increasing it given where shares are trading in today's strong results and guidance? And then lastly, what are your thoughts on always having a buyback authorization in place given where shares are trading?

Yeah. Thanks, Tom. We don't currently have an authorization in place. It's certainly a concept that we are always considering as a form of investment or returning of capital. I think in this period, Stan outlined the criteria we have for strategic M&A, which is a high bar and there are many periods where that bar is not met, it happens to be the case, but in each of the last two quarters we've had that bar with both international and now domestic TAM expansion opportunity that was financially accretive. And so in that environment, we chose to lean into a couple of assets that we think will drive a lot of long-term cash flow, long-term growth opportunity and platforms for further growth, above and beyond repurchasing of our shares. We're going to generate a lot of cash flow next year assuming we're able to achieve our guidance, and so the keg shall refill powder quickly in which case I think your questions will come to the forefront again.

Great. And then for my follow-up, Etsy called out You Only Live Once for YOLO, has something pressuring spending on this Marketplace when it reported the third quarter. So I think you're currently uniquely qualified to answer the following. So when you look at what's going on in live events, how do you think about YOLO versus FOMO, if YOLO is consumer spending for thousands Taylor Swift concert tickets and FOMO is consumer spending hundreds of thousands for chief tickets because Taylor Swift is attending the game. How do you think about YOLO versus FOMO in today's trends in live events?

Hey, Tom. I mean, first I'd say we are substantially impressed by your command of the acronyms that exist out there, and you know look, I think they apply strongly to our category both the YOLO and FOMO as we continue to see strength. When you look at our average order size, which we always demark it as a great indicator of how much demand is outpacing supply, you can look at this quarter and we're still 10% up on a year-over-year basis. You look at that long term CAGR which we provided in our investor presentation, you can see it's really retracted to the mean. And that's in the face of I think a lot of sentiment around consumer spending. We're certainly seeing, I think last quarter we had questions on student loan, debt repayment and all of these. So we understand, I think some of the challenges that are out there in terms of consumers and where they are choosing to spend their dollars. But as it pertains to our category, I think we have continued to see really strong resiliency and I think we can attribute that to a combination of YOLO and FOMO both working towards I think all the live events that are occurring today.

Thank you, Stan. Thank you, Larry.

Thanks, Tom.

Please stand-by for our next question. Our next question comes from Dan Kurnos of The Benchmark Company. Dan, please go ahead with your question.

Thanks. Good morning. I'll echo my congrats on the strong quarter guys. Just maybe a couple, like Larry, since no one's asked it yet, I mean we obviously saw crazy strong outlook from Live Nation last week, and an incredibly strong conference laid for a -- conference. Okay, let's try that again. And certainly, strong concert slate for next year and I guess just trying to think about how you're thinking about maybe ticket prices given that you're going to comp against beyond say in Taylor in 2Q and 3Q of next year? And I know that you guys are always conservative and its Q3, given your 2024 outlook, but just any kind of color as we should be thinking given what should be a lot more events and you guys expanding frankly your TAM both in sports and in concerts?

Yeah. Thanks, Dan. I think as we noted, we have seen consistent strength in both the supply and demand side, particularly in concerts. Nothing that would give us a reason for concern in our performance to-date, we certainly see the headlines, but it's not flowing through to numbers that we can see that are different than what any other macro forecast would be looking at. Yeah. You have touched on this before Live Nation will generally have their finger on the pulse of the following year's pipeline before we will. We'll find out a lot more in Q4, as it relates to specific acts and names, but we do hear the same strength that you hear, which gives us confidence heading into next year. I could probably reiterate, it was awesome having Taylor Swift and beyond say performing, it was great to see strength in their tours like Taylor was record setting, I would still characterize. We have a really robust portfolio and so long as there are continued A-list performers going out there, that portfolio strength we think will help us, it's not to say that there won't be any impact as we lap year-over-year comparisons, but we think we'll be able to grow and deliver robust results against that.

And Stan, one fair question, since you just announced Vegas acquisition, but a lot of the -- competitor sites, but the tangential sites feature a lot of hotel and destination stuff, and obviously you guys also have Vivid Picks, I don't know if you noticed, they do a little bit of gambling in Vegas. So just kind of your thoughts on adjacent opportunities or partnerships and kind of is that in your thought process with this or is this really more just focused on, hey, this is not some way to get TAM expansion in our core tickets business than anything else that comes on top of that as greatly?

Yeah. Hey, Dan. Look, I think -- I think it's a great question and it's opportunity for us to kind of set the stage, again. I would say, look, we looked at Vegas.com, which is predominantly shows, attractions, right, like it is primarily ticket volume within that sector, but we are very excited about the fact that the capability that adds to our platform include flight and hotels. So certainly, I think as we look through how to drive more comprehensive offerings to users, that will certainly be within our thoughts. But we are in the near-term, I think really focused on driving a lot of the benefit into our core business, not similar as you talked about Vivid Picks and the launch of Game Center, right, Game Center now, I think we've accelerated our adoption of users in our free-to-play product. I think we talked about earlier and the performance there that our users who are on Game Center are purchasing at a 36% higher or faster clip than non-Game Center users. So like you said, I think we've got a lot of opportunity, but a lot of that opportunity that we see is where we are going to drive that into our core business and look for benefits, and frankly look at that as really synergistic upside to where the acquisition could take us.

Got it. Okay. Thanks, and congrats again.

Stand-by for our next question. Our next question comes from Cameron Mansson-Perrone with Morgan Stanley. Cameron, go ahead with your question.

Thanks. Hi guys. Two on there, if I can. One Stan, I was wondering if you could just flesh out a little bit more, when you talk about the $6 billion increased TAM opportunity there, exactly what you're capturing within that opportunity? And then as we think about, obviously, we can see in your '24 guidance how you're thinking about the impact to your business on the revenue and adjusted EBITDA side, but would love some additional clarity in terms of whether we should think about this as being take rate accretive, what the GOV contribution is, unit economics better or worse, obviously, it looks like adjusted EBITDA nicely accretive, but just some -- a little bit more on the financial profile. And then finally, if I can, sorry, any -- would love to hear just the logic around the financing in terms of using a combination of cash and equity? Thanks guys.

Hey, Cameron. It's Stan. Yeah. I think one of the things we put out there which has as excited as you said is we, through our process and through our diligence I think have the opportunity to size the Vegas market, and that $6 billion from our third-party analysis is $6 billion of just Vegas geographical shows and attractions, right. So I think just in that core area, which makes up the majority of that business, which again is the big overlap and where we see lots of opportunity to drive national brand awareness, customer acquisition, synergies within the platforms, just that alone is $6 billion in the Vegas area. And so, then I think as you start to go beyond that and you think about the other things that we've talked about whether it is in bundling flights and hotels, whether it is in taking users back to their home markets and leveraging the power of Vivid Seats platform and engagement platform there, I think that's all on top of that. So $6 billion as we looked at it is just Vegas and just ticket shows and attractions.

And in terms of a little more detail on the financial profile. First, it will be reported through our Marketplace segment moving forward, so you won't be seeing any explicit breakout beyond this commentary, because it's a very similar business and model to our current business. I think it will blend in nicely. As you would expect, given the similarities, I'd say the P&Ls lineup quite well. That said it is somewhat accretive to our take rates and somewhat accretive to our margins. So I think we've -- after Q2 referenced the 15.5% take rate, I think we can now point to the 15.5% to 16% as a range with the benefit of that modest tailwind from the accretion of this transaction.

So maybe anything on the -- on the combo of cash and equity for the acquisition there?

Yes. Thanks. I think it's the best of answers where the sellers, I think shared some of our enthusiasm, and so the opportunity from their perspective to participate in some of the shared upside, I think the opportunity from our standpoint of alignment moving forward, but against the backdrop where the majority of the proceeds were cash unless we are able to accrue the accretion to the shareholders benefit for the most part.

Got it. Thanks, Stan.

The only other thing I'd add on that it was very comfortable with our capital structure pro forma for this transaction less than one turn of net leverage and with the cash flow that we expect to generate next year, I think that we will pretty quickly approach net debt neutral over the course of the next year or so.

Awesome. Thanks.

One moment for our next question. Our next question comes from Logan Reich with RBC. Logan, please go ahead with your question.

Good morning, guys. Thanks for taking the question and congrats on the results. Just one quick question, just on the marketing spend across the industry. I know you had mentioned that the backdrop is relatively stable, but I was just wondering if you could unpack what you're seeing from competitors on the marketing side? It looks like your sales and marketing expense ticked up a bit quarter-over-quarter. Just wondering if that's -- you guys leading into overall demand strength or if that's somewhat related to what you're seeing on the competitive backdrop? Thanks.

Yeah. Hey, Logan. It's Stan. Yes. I think I'd start with, I think the competitive environment certainly, as we said, stable, but I think everybody is out there, I think as they see strength in the industry. I think I'd start with when you look at what comes through in P&L, I think we've talked about, we've had some opportunistic elements and some timing elements that just reflect marketing in the quarter, and you've seen some of the partnerships that we've announced I think that we're really excited about that you're seeing there. Perhaps more importantly, and I think as we continue to call out a lot of our investments that will have really long-term leverage are pacing well ahead of our expectations in terms of our loyalty program and the repeat rate behavior that we're seeing amongst users. I think our repeat rates, we're now eight quarters from when we first talked about our repeat rate in 2021, and our repeat rates are the highest they've ever been in every single category across every cohort of users. So I think we are really excited about our differentiated platform and the ability to continue driving value into that ecosystem and not have to go out there and go head-to-head on what I would say are the acquisition channels. We've also talked about our engagement platform, which continues to be a great spot for us, and as we provided Game Center already up closer to 200,000 users in the first four months with almost no marketing and we've already seen that purchase behavior on that category of engaged users, it's 30% -- 36% faster than people who aren't using Game Center. So while the environment, like I said, is certainly stable, but still competitive, I think we are really excited and bullish on the elements that we control, and our platform continues to resonate with users as shown through the metrics that we're -- that we've disclosed here.

Yeah. I'd only add, we're continuing to make investments and what I would love to tell you that we knew everything about every incremental channel the day we started, reality is that we've been learning, we get great data and great opportunity to learn from these investments. And I think inherent in guidance that we're putting forward next year, it's deployment of those learnings, continued refinement of those investments and that's helping that continue to push the return on these meaningful brand investments higher.

Great. Thanks for the color. I really appreciate it.

One moment for our last question. Our next question comes from Ralph Schackart with William Blair. Ralph, please go ahead with your question.

Good morning, and thanks for taking the questions. Stan, maybe sort of a follow-up to your last answer, the previous question, kind of pulling together. How do you view some of your biggest advantages you have versus say the competition? Maybe if you can sort of frame these -- the biggest opportunities going forward and the sustainability of these advantages, especially in the context of the recent acquisitions, your ability to build a brand and drive repeat rates? Thanks.

Yeah. Sure thing Ralph, and thanks for the question. I mean -- I think I'd start with when you look at what and why we put out kind of a preliminary view of next year, I think, what we want to show everybody is that there is a good combination of organic strength in that growth combined with obviously now the acquisition of Vegas.com, ultimately leading to I think a pretty transformative profile of the business next year. When you look at organically, where we've continued to differentiate and invest, our platform has the loyalty program that we always talk about that is really a combination of the economic benefits from a Buy 10 Get 1 Free Program to all the experiences that we try to tack on that are really above and beyond, we talk about really cool unique things and I don't think we've talked about it here. But when you look at our newly announced partnership with the LA Kings, for example, that includes guaranteed Jumbotron time, right, so you buy ticket on Vivid Seats, the loyalty member, you make sure you're on the Jumbotron which I think is a really cool experience. So all of those things I think leading to again what can see as really strong platform engagement retention and growth which is fully within our control, and you see that as increased repeat rates every quarter where they are again pacing now beyond our expectations and the highest that they've ever been. We then add to that the engagement platform that is a combination of Vivid Picks and Game Center now keeping users engaged through the entries in games that we have between their transactions so that when that time comes to purchase both through the discovery and the purchase that propensity on our platform is just so much higher than it would have been. And then you turn it to, we're also investing in incremental channels, which are acquisitions that then bring users into our ecosystem with all of the retention benefits that we have, our brand investments, our partnership investments are wonderful ways to continue to diversify and acquire users. And when you look at Vegas.com again, you tick down that list, what a great market to be in with the market leader. I think both Wavedash and Vegas.com are market leaders in their specific markets. And you think about Vegas.com again as in profitable acquisition engine given the strength of that business we can now profitably acquire high-value customers and bring them into our engagement platform and Vivid Seats ecosystem that has continued to drive the behavior that I think is indicative of long-term retention of customers and that really when you look at that together are the benefits that our platform I think just provides that nobody else out there provides. I'll pass it over to Larry who can give you the kind of that financial benefit is that again flows through everything that we just said.

Yeah. Really excited about the combination of organic growth plus the inorganic contribution. I think with Vegas contributing what we think will be 10% to 12% of our top line next year, I think that frames out that we're going to have a wonderful -- a realization of top line growth, operating leverage, contribution from strategic acquisitions and probably most exciting because those acquisitions were later in the year, I think we'll be able to layer in continued synergistic benefits as we hit our stride in the middle and back half of next year, and hopefully set us up for a strong performance into 2025.

Great. Thanks, Stan. Thanks, Larry.