SEAT - NASDAQ

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Vivid Seats Fourth Quarter 2025 Earnings Webcast and Conference Call. [Operator Instructions]. I would now like to introduce your host for today's presentation, [ Mr. Austin Arnett ]. Sir, please begin.

Good morning, and welcome to the Vivid Seat's Fourth Quarter 2025 Earnings Call. I'm Austin Arnett, Vivid Seat's General Counsel. I'm joined today by Larry Fey, Chief Executive Officer; and Joe Thomas, Chief Financial Officer. By now, everyone should have access to the earnings press release we issued earlier this morning. The release as well as supplemental earnings slides are available on our Investor Relations website at investors.vividseats.com. Today's call will include forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including those discussed in our earnings release, our annual report on Form 10-K and our other filings with the SEC. Today's call will also include references to adjusted EBITDA and net debt, which are non-GAAP financial measures that provide useful information to investors. To the extent reasonably available, A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures can be found in our earnings release and supplemental earnings slides. And now I'll turn the call over to Larry.

Good morning, everyone, and thank you for joining us today. I'm excited to share what we are working on as we chart a refreshed course for Vivid Seats in 2026 and beyond. We believe we have the right team and the right strategy to drive innovation, thought leadership and profitable growth in the coming quarters and years. I'd like to begin with an update on our leadership team. Austin Arnett who provided opening remarks for this call was named General Counsel in December. Austin previously led our corporate legal team after prior roles at Latham & Watkins and McDonald's. Austin steps into the GC role with extensive legal expertise and substantial familiarity with our business. I'd also like to introduce Joe Thomas, our new Chief Financial Officer. Joe, who joined us in January is an accomplished executive with a strong track record of driving financial discipline through data-driven decisions while supporting long-term growth initiatives. I'm excited to join forces with both of them as we embark on this new chapter for Vivid Seats. I'd also like to thank Ted Pikes, who served as our interim CFO during this transition. Ted's deep institutional knowledge and steady hand were critical during a pivotal period for the company. I'm grateful for his continued partnership as our Chief Accounting Officer. With our new team in place, we have refined our long-term strategy and have quickly begun executing against it. Our strategy builds and expands upon visits foundational strength, our leading technology our unique data, a relentless focus on efficiency and an increasingly compelling and differentiated value proposition to customers. I will spend a few minutes touching on our efforts across each of these foundational elements. Starting with our technology and product, we are redoubling our focus on product innovation and efficiency and expect this to benefit our results as we move through 2026. Across both our web and app properties, we are bringing a renewed focus on our core customer funnel to ensure a seamless user experience. Beyond this foundational focus, we are continuing to innovate in an increasingly AI world. In 2023, Vivid Seats became the first company in the live events industry to launch a live events plug-in for open AI's ChatGPT. That early partnership underscored our commitment to innovating at the intersection of technology and live entertainment. Building on that foundation, we recently introduced a dedicated Vivid Seats app within ChatGPT, further advancing our AI-driven shopping capabilities. This new app is designed to capture real-time consumer intent and transform event discovery by making it more personalized, intuitive and efficient while reinforcing our position as a leader, shaping the future of how fans discover and access live events. This launch is an example of our continuous efforts to evolve our platform in a highly dynamic environment. Our path forward will combine innovation with a disciplined focus on efficiency. As previously announced, we significantly expanded our cost reduction program increasing our initial fixed cost savings target from $25 million to $60 million. We have now achieved our increased target of $60 million of annualized savings with reductions in spanning marketing, G&A and stock-based compensation. These savings position us to reinvest selectively in growth initiatives such as our enhanced app value proposition while improving our operating leverage as we return to growth. We also executed our corporate simplification early in the fourth quarter, which included the termination of our tax receivable agreement and the collapse of our dual-class share structure. This meaningfully reduces complexity, improves transparency and generates both immediate and long-term financial benefits. Taken together, our cost reduction program and corporate simplification are creating a more efficient, agile organization that can invest strategically for growth, while maintaining financial discipline. Moving to the compelling and differentiated value proposition we present to customers. Vivid Seats is the most rewarding ticket company. We are centering the Vivid Seats message and experience around that simple but powerful fact. No one rewards fans more than we do. We're sharpening our messaging to highlight how Vivid Seats delivers more value at every step of the journey from rewarding prices to a seamless, stress-free shopping experience to tangible rewards that deepen loyalty over time. By delivering the most rewarding experience in ticketing, we seek to build long-term relationships with our customers and our app ecosystem. App users return more frequently, convert at higher rates and rely less on paid performance marketing channels. We believe the combination of our rewards program and our lowest price guarantee represents the most compelling value proposition in ticketing. We are seeing encouraging trends as we pursue this strategy. App GOV is up over 20% year-over-year through the first 2 months of 2026. Since launching our enhanced app value proposition during Q3 of last year, we have seen app share of GOV increase by more than 500 basis points. We also remain confident that information transparency will only increase as AI continues to reshape how consumers discover and evaluate offerings across the Internet. We believe we are well positioned to benefit as AI-guided consumers increasingly gravitate towards platforms that are delivering the most value to consumers. While we are early in our execution journey, the trends we are seeing thus far in Q1 indicate we are making substantial progress and that our strategy is gaining traction. Accordingly, we are reaffirming our 2026 outlook. We continue to expect marketplace GOV in the range of $2.2 billion to $2.6 billion and adjusted EBITDA in the range of $30 million to $40 million. In addition, we are providing Q1 2026 guidance of $570 million to $620 million of GOV, $8 million to $10 million of adjusted EBITDA and a cash balance of $125 million to $135 million. Turning to the fourth quarter. While our results were challenging, they were largely in line with what we anticipated as we work through a transitional period for the business. As we shared last quarter, a softer Q4 industry backdrop, private label declines and ongoing execution of our strategic realignment were expected to pressure results. While these pressures played out as expected, we were encouraged by emerging momentum across our own properties. In particular, our app performance remained a bright spot, reflecting the impact of our ongoing product investments and enhanced value proposition. The trends we are seeing thus far in the first quarter confirm the actions taken by this new team are translating to tangible progress. These indicators reinforce our belief that the path forward we have put in place is the right one. and that the investments we are making will enable us to return to growth in the second half of 2026 and deliver sustainable, profitable growth for many years to come. With that, I'll turn it over to Joe to walk through our fourth quarter financial results and outlook in more detail.

Thank you, Larry, and good morning, everyone. I'm excited to join Vivid Seats and help shape the company's next phase of growth. The business is a strong foundation and significant opportunity. I look forward to working closely with Larry and the leadership team to deliver long-term value. Turning to the results. In Q4 2025, we generated $581 million of marketplace GOV compared with $994 million in the prior year period. Q4 2025 total marketplace orders were down 32% year-over-year with average order size down to $329 from $380 in Q4 2024. According to our SkyBox data, industry volumes were down double digits in Q4, primarily due to less content on sales and a difficult world series comparison, which pressured results when combined with the loss of a large private label customer that occurred in early Q3 2025. Q4 2025 revenues were $127 million, compared to prior year revenues of $200 million. Our Q4 2025 marketplace take rate was 16.8%, up slightly from 16.6% in Q4 2024. We expect our near-term take rates to stay in the 16% range. Adjusted EBITDA for the quarter was $1 million, reflecting the impact of lower volume and negative operating leverage. Importantly, we achieved our annualized cost reduction target of $60 million during the quarter. While we saw a partial benefit from these efforts in Q4 2025, we anticipate full benefit starting in Q1 2026 and with a more agile cost structure, allowing for improved operating leverage moving forward. We ended the fourth quarter with $103 million of cash and $390 million of debt resulting in net debt of $287 million. As a reminder, the fourth quarter brings seasonally lower working capital flow with that flood reduction accounting for a majority of our cash outflows in the quarter. Q1 2026 is seasonally stronger in terms of cash inflow, which supports our guidance for a cash balance range of $125 million to $135 million by the end of Q1 2026. We expect Q1 2026 marketplace GOV in the range of $570 million to $620 million. This GOV level is consistent with Q4 2025 and despite the fourth quarter traditionally being the strongest volume quarter of the year, which reflects sequential improvement in share. We expect Q1 2026 adjusted EBITDA in the range of $8 million to $10 million. This represents a substantial improvement relative to Q4 2025 EBITDA and reflects consistent volumes, improved unit economics and the full impact of our cost reduction efforts. For fiscal year 2026, we continue to expect marketplace GOB in the range of $2.2 billion to $2.6 billion and adjusted EBITDA in the range of $30 million to $40 million. This outlook reflects an expectation of modest industry growth and continued competitive pressures, but also benefits from our cost reduction program and strategic investments and an enhanced customer value proposition. Back to you, Larry.

In closing, the positive trends we are seeing in the first quarter support our belief that we are now on the right path. We are seeing encouraging progress across numerous leading indicators. Pointing to a return to volumetric growth across the business outside of private label. We are particularly excited about the app trajectory and believe the combination of a return to growth, a streamlined cost structure and more efficient tax profile positions us to deliver growing profitability and cash flow as we execute our strategy. We are confident that visits foundational advantages our leading technology, unique data, best-in-class efficiency and the differentiated customer value proposition remains. And with disciplined execution, will support our return to profitable growth. With that, operator, please open the call for questions.

[Operator Instructions]. Our first question or comment comes from the line of Ryan Sigdahl from Craig-Hallum Capital Group.

Welcome, Joe. Larry, I want to start, you've dealt with unfavorable competitive dynamics for the better part of 2 years now. We've heard from that may appear that they plan to focus more on customer acquisition efficiency in 2026, nice change, a fairly big change, I guess, in statement versus the user acquisition Blitz Creek, that they've been going under. I guess curious if you've seen any of that and then how you think about the competitive dynamics heading into 2026 or as we start and how you plan to balance your customer acquisition efficiency versus the value proposition, the app, direct traffic, et cetera, et cetera?

Yes. Thanks, Ryan. In terms of competitive landscape and competitive intensity, I think we have seen a degree of moderation, particularly as it relates to some of the peak intensity from StubHub in particular. I think others in the space continue to be pretty aggressive, and I think there continues to be a meaningful priority placed on GOV and volume across a number of our competitors relative to fundamental unit economics and profitability. But I think we continue to see that over time economics play out, financial realities ultimately win. And so I think we will stay the course that we've been on for the last couple of years where -- there is certainly inherent tension between volume and profitability, but we're going to stay true to our unit economics. And in particular, the focus on the app ecosystem, the focus on the app value proposition is trying to enhance our lifetime value which enables you -- if you know you are keeping people in your ecosystem longer with a longer relationship with more repeat rates, you can still solve your unit economic question while being more aggressive on the customer acquisition front. So we think we can try to accomplish both, right, stay true to our unit economic frameworks and enable ourselves to drive better volumetric performance as we continue to execute against that.

Very good. Then just you mentioned ChatGPT plug-in in '23. Your main competitor press released, I guess, a relationship and partnership with ChatGPT a few months ago. So I guess curious kind of how you fit with your competitive set within there. I think you also have perplexity that you didn't mention, but just talk broadly speaking about LLM if you're willing to quantify kind of the percentage of whether it's customers or GMV or anything there, that would be helpful.

Yes. AI, as you can imagine, top of mind an incredibly dynamic space. We haven't yet seen consumer behavior in our space reflects the height, right? It's still a pretty small percentage, very small percentage, probably 1% is the best estimate I would put out there for what we're seeing in terms of direct traffic through the AI channel today. That said, I think we are fundamentally of the belief that this is a one-way street where AI will have more, not less impact and that there are fundamental unlocks that AI can bring for the benefit of consumers in our space, the benefit of consumers across e-commerce with better information transparency. And so we've been in a space where, for many years, being at the top of a search was critical to driving customer awareness and you could charge in many instances, premium pricing to facilitate that. So it hasn't changed yet, but we are making the bet that there will be evolution there where customers will be better able to surface differentiated value propositions over time, better able to research and compare. We do think there's still a place in ticketing where the seat you're in, the angle of your view, the size of the stadium there's a lot of deeply personal preferences. So the desire to do detailed shopping, detailed comparisons in an app, we think will be a longer-term home for a lot of customers, but AI at the top of the funnel when people are researching their options, understanding the choices out there we think will be meaningfully disruptive over the coming quarters.

Our next question comment comes from the line of Cameron Mansson-Perrone from Morgan Stanley.

One follow-up on the industry trends. Just curious, there's a competitive dynamic, but then there's also been some potentially favorable dynamics happening as well. Wondering if you've seen any benefit or seen anything in the marketplace in conjunction with the changes that Ticketmaster has made around its resale platform and activity. And then as we look forward to 2026, wondering what -- how you guys are framing your thinking about the World Cup and any expectations around participating in that resale activity this summer.

Yes. Thanks, Cameron. On the industry front, Q4, not a great quarter. We saw it down double digits I think we mentioned tough MLP comp, but in particular, concert on sales were down dramatically year-over-year. Those on sales picked back up in Q1, whether that was just normal variation in timing or something reflective of some other planning or considerations on the Ticketmaster side, not clear to us. We haven't seen any meaningful impact beyond that in terms of Ticketmaster's overall posture level of aggressiveness in the space. So I'd say those kind of rumored changes or adjustments not to a degree that we could say we've seen, felt or can measure, but we'll continue to keep an eye on it. for broader industry overall, the last time when we gave guidance, we had pointed to expectations of flat over the year. I think with the Q1 on sales, we continue to feel equally as good, if not a little bit better with World Cup volumes equally as good, if not a little bit better. So I think stable to slight growth in the industry is our new estimate. And as we look at the World Cup, I think if you think of the benchmarks or the goalpost -- goalpost as a typical A-List tour would be 1% of GOV for the year. Taylor Swift be the other side of that, that's ever mid- to high single digits as a percentage of I think World Cup is an event will end up somewhere in between. Where in between will be, I think, dictated by do you have great matchups, does the U.S. play Mexico and the semifinals. So that would be a dream. But we think it will be substantial, a couple of hundred basis points of GOVs our best guess.

Our next question comment comes from the line of Dan Kurnos from Benchmark.

Great. Thanks. Good morning. Welcome, Joe. For -- I guess, Larry, just as we think about your customer acquisition strategy around app, I know we've talked about it a little bit, but I don't know if you want to take a second to kind of maybe flesh out obviously, without giving away any trade secrets, how you're thinking about driving incremental traffic beyond just pointing to the value prop? Like are you thinking about different marketing channels, you thinking about better more efficient ways to kind of get people to understand the message there? And then I have a follow-up for you.

Yes. I think the last thing you said, having people clearly understand the value prop is a critical threshold element where if we don't do that successfully, we have no reason to believe people will come back more often. We'll build a lifetime relationship. So we're mid-flight on it, but you should see continued improvements in the journey as an app customer. So your onboarding experience. How do we build that initial report if you make it feel like a win-win where you're providing us your information, and we're providing you something of value and return to kick off on the right foot. Well-situated messaging to drive home not only the everyday pricing, but this idea of ongoing rewards, ongoing benefits for loyalty and repeat purchasers, such that if you are a customer who has intentions of going to multiple live events per year for presumably decades to come, you can get peace of mind that you've completed your research, right? You'll do the research and depth, you'll compare the pricing, you'll validate the claims and once that validation is complete, you can with peace of mind buy from us. I think the second dimension beyond making sure that once you arrive at the app, it's very clear what we're doing and why we are making claims about our value proposition. We have a very large database of people who have purchased from us over the years. And so really thoughtfully targeting and messaging that database of folks continuing to use growing AI capabilities to have personalized messages that could resonate right message at the right time. I think that's the second major dimension. And then over time, I think we'll continue to explore complementary marketing channels that are outside of that core paid search funnel, right, whether it's social or other adjacencies. There continues to be an opportunity there, but it has been a relatively long-term play to build that awareness. And so that will be a steady as she goes element.

Got it. That's super helpful. And then I'll just ask if you care to opine on -- I know we've already had sort of the competitive question, but clearly, while you guys aren't in primary, we've had movement from DOJ and live now, and there's always knock-on effects to the competitors that are maybe hybrid or trying to get in there. Into that space, you guys have tested the waters in primary and small doses in the past. Just curious if how you think about regulatory either from that perspective or the bulk seller stuff might just impact overall industry dynamics, consolidation, just anything that you would like to opine on how you think kind of the broader group adjusts to some of the regulatory stuff.

Yes. I mean, we've certainly been through the term sheet. I think devil in the details is probably the operative phrase here. So we'll wait for more to come out and probably premature for us to comment in too much depth given the lack of detail on some pretty important provisions in the term sheet. From everything we've seen, I can't see anything that would be deemed or even considered potentially adverse to our position in the marketplace. And at least from our position, I don't see a lot that will change anything meaningfully. But put the [indiscernible] for devil in the details, and we'll see if there's more to it.

Our next question comment comes from the line of Maria Ripps from Canaccord.

Welcome, Joe. First, I just wanted to follow up on your within. Can you maybe just talk about sort of the type of consumer that you're attracting within ChatGPT and sort of conversion rate? And then do you maintain sort of the customer profile or customer data after that initial engagement?

Yes. Thanks, Maria. I think the ChatGPT app is a good example of you need to play in traffic while this world situates itself. As it sits today, finding apps in the LOM journey requires someone who's looking for the app or you need to come in with a targeted search and seek out, whether it's ours or a competitor's app and that open up a different use case, but I don't think it's gone mainstream. I don't think most people have unlocked how to access apps within the LLM journey. And so as a result, what you do see is folks who come through LLM and folks who come through that app convert at structurally higher rates. What is probably too early to tell. Is that because you have a selection bias or the folks who are doing that are the most intent thoughtful tech savvy users and thus you're just revealing that their intent versus tool is fundamentally changing their behavior journey. So we're looking at all the data with eager anticipation. But I don't think we have clear answers yet on that. separately to the broader question on customer personalization, the more interactions you have with someone, right, where you can see if they're logging in, in Chicago, and they're searching cubs tickets. And then 6 months later, they search their tickets, you can start to create a profile of a Chicago-based sports fan and make sure that they see content aligned with those sports preferences and you perhaps deemphasize comedy shows, if they've never shown any interest and over time, figuring out ways to round out that profile, right? There's numerous sources that I think we're increasingly focused on capturing more customer information to create a more bespoke experience. And one of the exciting elements over the intermediate term that we think AI offers aside from the top of the funnel, as you ingest more of this customer information, how do you create a fundamentally better experience for your users. And at the core of that, I think is thoughtful personalization built around a growing dataset.

Got it. That's very helpful. And then can you maybe give us a little bit more color on what you're seeing on the supply side in concert sort of this year? And to what extent that's a factor for sort of improving trends and returning to growth in the second half of the year?

Yes. Yes. Pretty nice lineup of on sales that has come out in Q1. BTS was -- is probably the highest profile of those, but steady stream of meaningful artists coming out in January and February, Harry Styles, Noah Khan, et cetera, which was welcome because the Q4 lineup was underwhelming. When you sum up Q4 and Q1, and we've seen this before where timing moves a little bit between the quarters. It was a solid concert lineup. And so I think maybe consistent with what we've heard Auto Live Nation, where they continue to point to steady growth perhaps double digits for them across their global footprint, but still continued growth in North America on the lower end of that range. I think everything we've seen from the supply side continues to support that perspective. And we had a little bit of hesitation based on how Q4 industry trends were shaping up, and it's been refreshing to see Q1 strengthen from there.

Our next question comment comes from the line of Thomas Forte from Maxim Group.

So I also want to welcome Joe to the call. One question, one follow-up. Can you talk about your ability to capitalize record recurring sporting events that are not always held on an annual basis, including World Cup, Olympics and World Baseball Classic, in particular, when this type of event is in 1 of your geographies, how confident are you in your ability to get a similar share of GOV as in other sports, baseball, football, et cetera?

Yes. Thanks, Tom. Those intermittent sporting events. They're really interesting hybrid because as a general statement, if you were to look at sports versus our concert and theater customer journey, sports. If you're a Cubs fan, you're a Cub's fan, right? You're going to a Cub's game this year, you're probably going to Cub's next year, you'll probably go in the year after that. Same with baseball, football, pick your sport a preference. And so the proclivity for repeat is just higher on sports, whereas concerts are more episodic. Even if you're a lifelong die hard Taylor Swift fan. She's in town once every 5 years, right? And maybe you're going to take it one time and you're not a town the next time so you see our once in a lifetime, right, once every 10 years. And the interest in Taylor Swift may or may not map to Sabrina Carpenter or Pop Star X. And so it's a different relationship, right? It's a bit more intermittent on all things concert comedy theater relative to that more continuous sports relationship. And these intermittent events kind of straddle those. It's pretty hard to say like what on any individual customer basis, their soccer preferences or their World Cup preferences in particular, would be. And whatever we learn about them, it's probably not going to be that valuable going forward as what is going to be 30 years before we get the World Cup here again. But we can leverage folks who are MLSs are soccer fans and target those folks in a thoughtful way. But we actually see the nits of World Cup folks who it ends up being more new customers than you would see in a typical sports league because there is that intermittent element. But less so than concerts because you do have that stable base of sports fans who knows where they want to come and buy a ticket from.

And then for a follow-up, can you give your thoughts on cash conversion and free cash flow generation for full year '26?

Yes. I appreciate that question. So our major cash obligations or CapEx, interest expense and taxes. The sum of those, we think, will fall between $35 million and $40 million. And so a majority of that amount would be our net interest expense. Our CapEx and cap software we think will be in the $15-ish million range. And then post tax simplification, taxes will be quite a bit lower to low single-digit millions. And thus, we need $35 million to $40 million of EBITDA before considering working capital to be cash flow neutral to generative. And then I think as we've demonstrated in spades this past few quarters, if you are growing GOV, working capital can be a source of cash, the inverse is also true. So as we project a return to growth, which we're feeling quite good about as we approach the second half of the year on a year-over-year basis and equally good earlier in the year on a sequential basis. Within working capital shift to being a source of cash and thus, we expect to be modestly but cash generative in 2026. Thank you.

Our next question comes from the line of Andrew Marok from Raymond James.

One on the comps. I know you called out a difficult world series. This year as a headwind. I guess as we're looking forward into the 2026 trajectory, how are the 2025 championships and maybe special events and sports playing out from a comp perspective as we look into the model?

Yes. Great question, Andrew. I think if we were to just go through the calendar, we've already seen some benefit when you had the, call it, up down up in the Super Bowl. So 2024 sort of peak experience with Vegas 2025 with the kind of repeat participants in New Orleans was been underwhelming, much stronger performance, Super Bowl in 2026. As we look at the rest of the year, I'd say there's nothing daunting. I'd say, it ranges from, call it, slightly below -- slightly above average matchups. NCAA tournament was relatively strong last year. We'll see how that goes in the next few weeks. Nothing I would say of note in terms of NDA or NHL I love that Oklahoma City has 47 traffics over the next couple of years, except for the fact that Oklahoma City is not the most dynamic market from a secondary standpoint. So we'll see if anyone topples them on the MBA side. And MLB was off of the peak Yankees Dodgers levels, but Yankee Blueray wasn't bad. So I'd say that was still above average last year. So the MLB comp is probably the most daunting of the remaining major championships coming through the rest of the year.

Our next question comment comes from the line of Benjamin Black from Deutsche Bank.

This is Jeff on for Ben. Can you just talk a little bit about the puts and takes to getting to the high and the low end of your guidance, particularly in GLD, would you need to see the competitive dynamics kind of continue to soften from here? Or could you get to the high end with just better performance from events in the industry?

Yes, it's a great question. Our presumption is that we can get to the high end of our GOV and EBITDA range. through our own execution. So steady performance from industry volumes consistent with current competitive intensity and continued delivery of a pipeline of product enhancements that we're really excited about that we think will start coming out over the next couple of months and have a meaningful portion of the year to benefit in terms of the back half contribution. And if we deliver in those enhancements flow through as expected. That's the path to the top end of the range. cure if there's better industry volume and/or a further shift in competitive landscape that would make it easier and/or create a path to outperforming.

Understood. Got it. And then maybe just one quick follow-up on sort of the app share growth in the gains. You talked about the increase in the FPD. Is that more driven by bringing new customers to the app? Or is it sort of just increasing the velocity or the repeat purchases of existing customers already using the app.

I'm happy to say yes to that. So it is across both dimensions, we are seeing app sessions increasing year-over-year. We are seeing app repeat rates increased double digits when we're looking at our cohort subsequent to these changes. And one of the things we talk about a lot over here that when you're playing a longer game with trying to build lifetime relationships to drive long-term repeat, the toughest day of that journey is the first day because you feel all the pain on the enhanced value proposition. We haven't given folks an opportunity to come back and repeat. So we feel like we started the snowball down the hill, and now as we move through subsequent quarters and years, that benefit will compound. And we're seeing all the underlying -- we talk about leading indicators that are flash and positive. That's a perfect example. These repeat rates, the growing size of the cohort and the growing proclivity to repeat within them. are the types of leading indicators that if you could stack over time, become a really powerful trend.

Next question or comment comes from the line of Ralph Schackart from William Blair.

Larry, you talked about sort of entering Q2 with a refined strategy. Maybe talk about, I guess, maybe your top 1 or 2 key priorities or adjustments to that strategy? I know you talked about the APRA new focus, I'm not sure if that's [indiscernible] two of them. But just maybe if you could sort of highlight or underscore what those are in progress to date and kind of how that progresses through 2026. That would be great.

Yes. Thanks, Ralph. I think as you noted, parts of the strategy were starting to be rolled out back half of last year, executed throughout Q4 and will continue. And so the efficiency, the cost reduction program was the starting point of that, reinvesting some of those savings into the structurally enhanced at value proposition was a part of that. I think when you look at what incrementally we're pursuing, I think there's a refreshed focus on the core customer journey, where you need -- when someone has decided that they want to attend an event, a relentless focus on making that journey as quick, efficient and pleasurable as possible for the customer. Don't distract them with superfluous information, but make sure all of the relevant information is in front of them, make sure every step of the journey works efficiently, you aren't introducing undue friction. And that's been an area where I think we were pursuing a lot of different paths and distracting a little bit. So ultimately, that will manifest in, I think, an enhanced conversion profile, particularly on our web journey. We're very excited about that. I won't go into too much detail on this. I think there's some enhancements to our private label philosophy and approach that we're working on that get that business line returning to growth as we lap the tough comps starting in Q3. They're a little more operational in nature. But if I were to say it in a word, getting back to being operationally elite, it's the core focus in addition to the cost efficiency and the app value proposition, each which has their own sub elements where we'll continue to build on the early gains and wins.