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Good day, everyone, and welcome to the Eventbrite, Inc. Third Quarter 2025 Earnings Conference Call. [Operator Instructions] It is now my pleasure to hand the floor over to your host, Finance Manager, Paul Bach. Sir, the floor is yours.

Good afternoon, and welcome to Eventbrite's Third Quarter 2025 Earnings Call. With us today are Julia Hartz, our Co-Founder and Chief Executive Officer; and Anand Gandhi, our Chief Financial Officer. As a reminder, this conference call is being recorded and will be available for replay on Eventbrite's Investor Relations website at investor.eventbrite.com. Please also refer to our Investor Relations website to find our press release announcing our financial results, which was released prior to the call. Before we get started, I would like to remind you that during today's call, we'll be making forward-looking statements regarding future events and financial performance. We caution that such statements reflect our best judgment as of today, November 6, based on the factors that are currently known to us and that actual future events or results could differ materially due to several factors, many of which are beyond our control. For a more detailed discussion of the risks and uncertainties affecting our future results, we refer you to the section titled Forward-Looking Statements in our press release and our filings with the SEC. We undertake no obligation to update any forward-looking statements made during the call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. During this call, we'll present adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and have limitations as an analytical tool. You should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. A reconciliation to the most directly comparable GAAP financial measure is available in our investor presentation, which is available on our Investor Relations website. We encourage you to read our investor presentation, which contains important information about GAAP and non-GAAP results. And with that, I'll now turn the call over to Julia.

Thanks, Paul, and thank you all for joining today's call. In Q3, we delivered revenue in line with our outlook. Net revenue was $71.7 million, and we saw a solid sequential improvement in paid tickets, down 3% year-over-year versus down 7% last quarter. Eventbrite Ads revenue grew 38% year-over-year and paid events grew while paid creators were essentially flat, reflecting meaningful stabilization after several quarters of volatility. We also executed with discipline. The adjusted EBITDA margin was 11.7%, well above our 7% guidance as structural cost actions flowed through while we continue to invest in line with our growth plan. The cost actions we took this year are structural, and we're allocating a portion of that benefit to areas where Eventbrite has clear advantages, including creator acquisition, event discovery, and key verticals to set up both revenue and margin expansion in 2026. As we enter the fourth quarter, our outlook reflects the steady operational progress we've made this year, balanced against a few near-term factors that modestly temper top line growth. The ongoing mix shift towards smaller creators continues to serve as a modest revenue headwind. Even so, engagement, paid creator acquisition and paid event activity are strengthening, underscoring the improving health of our marketplace. We remain focused on disciplined execution and expect this foundation to support renewed revenue growth and margin expansion as we move into 2026. Turning back to this year. We entered 2025 with a clear objective to stabilize paid ticket volumes and creator activity. Our third quarter results show the progress we've made. We've strengthened reliability, reporting, and foundational systems, and we've made real gains in creator retention by improving user experience, support, and success tools. At the same time, we've launched a refreshed consumer app and brand, advanced trust and safety through stronger authentication and fraud protection, and reignited our sales engine with a larger category-focused team. Encouragingly, the work we've done over the course of this year has resulted in a nearly 4% increase in new paid creator acquisition in Q3, while meaningfully improving creator retention over the same time frame. Together, these efforts form a strong foundation that positions Eventbrite to capture even more of the opportunity ahead as we move into next year. To build on the momentum we are generating in the second half, we're shifting from rebuilding to laying the groundwork for growth. On the consumer side, we're making Eventbrite the go-to destination to discover live experiences by improving discovery and search and by connecting more consumers with the creators they love. For creators, we're simplifying our event creation tools, so it's easier to publish and promote events. We believe these initiatives reinforce our position at the center of the experience economy and set us up for success in the year ahead by delivering for creators, offering experiences consumers love to attend and continuing to bring people together through live events. Eventbrite sits at the heart of the thriving experience economy where generations of event goers are choosing connection, creativity, and community. With 92 million average monthly users in Q3, consumers and creators across 180 countries and nearly 5 million events each year. Eventbrite is the platform that democratizes live experiences at scale. As our communities continue to grow, we will continue to invest in our platform to ensure that Eventbrite remains the go-to global marketplace, empowering millions of creators to transform their passions into real-world experiences from wellness and culinary gatherings to music and cultural events, fueling a movement that celebrates belonging and discovery. To reaccelerate growth in the year ahead, we plan to build upon the foundation we've laid this year by executing targeted strategic initiatives designed to empower creators, engage consumers, and expand our market. For years, we've been recognized as a powerful and innovative platform for creators, and we're continuing to raise that bar by investing in our platform. Our work focuses on helping creators sell more tickets, operate more efficiently and grow their businesses by improving the conversion of their listings and leveraging our deep insights to inform how they market their events on our and our partners' platforms. In 2026, our product road map is designed to drive creator success by increasing visibility, enhancing conversion, and achieving better outcomes across the Eventbrite marketplace. For example, we'll integrate AI-powered recommendations throughout the event creation journey, leveraging our unique insights into consumer purchase behavior to help creators craft more impactful listings that drive higher ticket sales. We're also applying AI to our rich data set to deliver deeper insights and expand analytics that improve marketing performance and ROI for our creators. Expanding our offerings for our larger and most prolific creators will be a top priority for 2026, and the reason is simple. Today, 13% of paid creators drive nearly 60% of paid tickets and about half of gross ticket fees. Importantly, these creators have the potential to meaningfully improve tickets per creator in the year ahead. To strengthen our product market fit for this segment, we're investing in a more cohesive, modern Eventbrite experience, simplifying product flows, unifying design and navigation and improving mobile ticket access. We're enhancing support through AI-powered automation and reinforcing security with advanced authentication, and we're continuing to enhance core features like waitlist, reserve seating, and timed entry to help large creators operate seamlessly at scale. These initiatives will help high-volume creators sell out faster, expand audiences, and deliver exceptional attendee experiences, further positioning Eventbrite as the trusted platform for their biggest and most ambitious events. And as these creators grow, they power the marketplace flywheel, fueling growth in key categories like music, immersive events, food and drink and festivals. That leads directly to how we plan to engage consumers in the year ahead. Our consumer initiatives are designed to leverage our marketplace flywheel and drive consumer lifetime value by efficiently attracting new attendees and increasing repeat ticket purchases. To grow our consumer audience, we're refining our performance marketing strategy to focus on smarter targeting, stronger campaign optimization and higher quality acquisition. Early results this quarter are encouraging, showing that we can achieve both efficiency and growth. Consumer paid orders driven by performance marketing grew 28% quarter-over-quarter while optimizing for our acquisition cost to keep a positive ROI. Together, these efforts will expand our reach, deepen loyalty and increase the lifetime value of consumers on our platform. To drive repeat purchases, we're taking the consumer experience to the next level. Building on the discovery features we introduced this year, we'll deliver more personalized recommendations and make finding and engaging with relevant events and creators faster and easier. We're also working to optimize our unique event inventory for Agentic tools, paving the way for smarter, more dynamic ways for consumers to connect with the events they love. As our strategy continues to gain momentum, we're identifying and pursuing opportunities to further expand our market share. Our ambition is to achieve this by expanding the power of Eventbrite globally. In the year ahead, we plan to strengthen our foothold in markets with strong creator and consumer demand while increasing localization and monetization in our existing regions through the addition of more payment options and expanded creator tools. We will also continue to expand the reach of our successful Eventbrite ads offering to more countries while enhancing its effectiveness and return on investment for creators. As we advance our strategy, we'll continue to execute with focus and discipline. In the year ahead, every dollar we spend will be intentional, aimed at strengthening leverage, efficiency and our long-term financial foundation. Our significantly improved structural economics will better enable us to drive lasting value for our creators, consumers, and shareholders as we capitalize on the momentum ahead. We're entering an exciting year with building momentum and a solid foundation. Our core business continues to demonstrate resilience and opportunity, and we're executing with focus in the areas where Eventbrite has clear advantages. The work we've done this year positions us to scale our strength and accelerate growth, supported by a clear road map for 2026 that will drive both expansion and efficiency. I would like to thank our Brightlings and shareholders for your continued commitment and confidence. Together, we're shaping the future of live experiences, and I look forward to sharing more as we build on this momentum in the year ahead. And now I'll turn it over to Anand to review our financials.

Thanks, Julia. In the third quarter, we delivered top line results in line with our outlook and once again exceeded expectations on the bottom line. We delivered meaningful trending improvements in paid tickets, paid creators, and paid events. At the same time, we made solid progress on our key strategic initiatives, which position us well for growth in the year ahead. I'll walk you through our Q3 results and then discuss our outlook. Note that all comparisons refer to year-over-year changes unless otherwise indicated. In Q3, we delivered net revenue of $71.7 million, down 8% as expected, driven by lower ticketing revenue as well as the continued impact from the elimination of organizer fees. These were partially offset by a 38% increase in revenue from Eventbrite ads. Paid ticket volume totaled $19.1 million, down 3%, reflecting a 400 basis points improvement from the 7% decline in Q2. This represents our fourth consecutive quarter of year-over-year trending improvement. We also saw meaningful inflection points this quarter with new paid creator acquisition and total paid events both returning to year-over-year growth. Gross margin was 67.9%, down 60 basis points year-over-year as expected due to the elimination of high-margin organizer fees. Sequentially, this was a 40 basis points improvement from Q2, driven by the growth of high-margin Eventbrite ads. On the cost side, operating expenses were $49.6 million, down 20% year-over-year. Note that the prior year included $5.4 million of reduction in force costs. Excluding this, on a non-GAAP basis, operating expenses were down 13%. Notably, Q3 operating expenses were our lowest in 4 years with double-digit reductions across the board. Product development expense was down 26% sales, marketing and support down 17%, and G&A down 16%. Overall stock-based compensation was down 42% year-over-year due to disciplined management of equity awards. As Julia noted, these expense reductions have improved the structural economics for the business going forward and also serve as a source to fund growth investments for the future. Q3 net income was $6.4 million, up from a net loss of $3.8 million last year. Note that Q3 benefited from a gain of $5.8 million on the early paydown of $125 million of our 2026 converts. We delivered adjusted EBITDA of $8.4 million, up 58% year-over-year, representing an 11.7% margin. The current and prior year quarters included adjustments to annual incentive compensation. This provided a $1.5 million benefit this quarter and a $3.7 million benefit in Q3 last year. Now turning to the balance sheet. We ended the quarter with $511 million of cash, cash equivalents and restricted cash. Available liquidity was $196 million compared to $248 million at the end of Q2. $60 million related to our term loan will be held in escrow until we retire our remaining converts outstanding. The quarter-over-quarter decrease in available liquidity reflects the repurchase of $125 million of our 2026 converts, reducing our total debt to $175 million, down from $241 million at the end of Q2. We plan to retire the remaining $30 million of our 2025 converts this December and the remaining $88 million of our 2026 converts by next September, at which point, our only debt outstanding will be the $60 million term loan maturing in 2029. Now turning to our financial outlook. We have delivered meaningful trending improvements over the past 4 consecutive quarters. And in Q3, as Julia noted, we made strong progress in acquiring new creators and improving creator retention. These clearly demonstrate the operational momentum we're building, and we expect the revenue and retention of these new cohorts to continue to build over the coming year. At the same time, as we noted in Q2, average tickets sold per creator has been slower to recover. Hosts of smaller events and lower volume creators are still growing faster than larger ones, and the resulting mix shift continues to serve as a modest headwind relative to our expectations. Accordingly, we're slightly adjusting our guidance for the remainder of 2025. For Q4, we expect to deliver net revenue between $71.5 million and $74.5 million and adjusted EBITDA margin of 8% to 9%. Based on this Q4 guidance, for fiscal year 2025, we anticipate net revenue between $290 million and $293 million and adjusted EBITDA margin of 8% to 9%. We now expect to return to monthly year-over-year paid ticket volume growth within the first few months of 2026. And by Q2 of 2026, we project to return to quarterly year-over-year growth for paid tickets, ticketing revenue, and total net revenue. With 4 consecutive quarters of solid recovery and strong execution across the business, we're well-positioned to drive durable revenue growth and margin expansion in 2026 going forward. And now the operator will open it up for questions.

[Operator Instructions] Your first question is coming from Justin Patterson from KeyBanc.

You've made some really nice progress this year with stabilizing creators and improving the cost structure. As you look ahead, how are you thinking about the right level of investment to build upon that and drive that return to growth you just outlined in 2026?

Thanks, Justin. I appreciate the question. As we're looking at the year, we're -- as you know, we're focused on bringing down OpEx in a very disciplined and consistent way. And part of that is really to focus on getting the most return on where we choose to allocate those dollars. So the goal isn't purely just to continue to bring down OpEx by itself. It's also to reallocate some of those funds in areas that we find can drive growth. So part of this is through experimentation, like Julia mentioned, performance marketing, we've seen some strength and others are tied to product features in different areas that we have a lot of faith that meet what consumers, creators are looking for. So overall, it's a balance, and we do believe that we can continue to keep operating expenses in line and potentially continue to reduce them over time while still having enough to fund areas for growth. So it's a balance. It's something that we're focused on closely, but we'll continue to always be focused on that balance, but we feel pretty good about right now where we're positioned.

Got it. That's helpful. And if I could squeeze in one more, just a product question for Julia. You outlined some really compelling initiatives for 2026. If you just step back and consider a lot of the changes we've seen around GenAI, how do you think that influences just the pace of product innovation you're doing for both creators and consumers?

Great question. Thank you so much. When we think about the investments for 2026, they're really in four different areas. The first is premium tools for larger creators. We think that the market is shifting, and there's an opening for us in 2026 in particular, to go upmarket and actually address the needs of these creators that are either not being well served by technology platforms today or aren't able to access the transparency and independence that a tool in a marketplace like Eventbrite can offer them. So it's a pretty hefty undertaking for us to think about how we can help these creators expand their market share, but we're really excited to do that. So things like, first and foremost, helping them run their businesses more efficiently, increasing the functionality of the ticketing tools that we offer today, but also introducing some really interesting tools for them to be able to make smarter choices like dynamic pricing, for instance. The second thing is that we're thinking about how we can help use AI to drive creator success. So where they're spending their marketing dollars, how can we help them lean in even more to create greater success from any type of marketing budget. Today, our largest creators that are using our ads product are seeing an over 200% ROAS through Eventbrite ads. And we want to lean in and make them even better and smarter and more effective. So we're looking at marketing performance. We're looking at listing quality and conversion, all areas ripe for innovation through our product and the use of AI. The third thing that we're looking at is consumer engagement and personalization. So advancing discovery of the great inventory that's in our marketplace and making sure that we're putting the right event in front of the right person at the right time and really balancing both sides of that marketplace. So we're helping not only consumers find the exact right event and suggesting those events to them, but also helping our creators increase the conversion of their events through content coaching and really helping in a way to create a better event listing in a very interactive way as they're building out their events. And then the fourth area is really around global and monetization expansion. We know that Eventbrite is used in 180 countries every year. We want to lean into the globalization opportunity once again and really help elevate the experience within markets that we're really not focused on today. And we know that AI has given us this wonderful breadth of tools to use to efficiently be able to expand our offering, but then also be able to go deeper in really important markets and make sure we're meeting our creators where they are to help them expand their businesses and be able to create more events. So I think we're able to make these investments because our cost structure is stronger and more efficient than it's ever been. I'm sure you've noted that our operating expense is the lowest it's been in 4 years, and that's structural. That's really focused on helping us be the strongest, most sustainable business, but also be able to innovate in both product and service and operate with discipline and leverage.

Your next question is coming from Cameron Mansson-Perrone from Morgan Stanley.

Julia, there's been obviously a lot of discussion this week about the ticketing industry, the last couple of months around the ticketing industry following the FTC lawsuit, which obviously focuses more on secondary ticketing, so a little bit of a different area of the industry. But I'd still appreciate your thoughts on kind of where you see Eventbrite fitting into this conversation around the ticketing ecosystem and whether some of these potential changes have any knock-on effects for your business that investors should be aware of. And then as part of that, just wondering kind of how you approach Eventbrite's philosophy around balancing monetization of the platform and also being transparent and consumer-friendly.

Absolutely. Thanks so much for the question. At Eventbrite, our founding principle is to democratize the ticketing industry. And over the last 20 years, we have shown that we can be the most broad-reaching accessible, transparent, and fair ticketing partner that is out there, just full stop. So when we look at the market across the board, we think that the consumer deserves fair prices. They deserve transparency, and we work with our creators to make sure that we're helping them bring to market unique live experiences that are priced fairly and transparently. So we have been a part of different movements to drive transparency in ticketing fees and have advocated for fair pricing practices across the board in the primary ticketing space. In terms of the future, I think that our customers, especially on the creator side, they deserve to have fairness and choice. They deserve to have flexibility and transparency. And they deserve to have the best technology that will help them build their businesses over time. And that's really what we're focused on. So as the industry evolves and the market becomes more fair in competition, we look forward to really being able to go into bigger venues where we've previously played and helping those business owners grow their audiences, fill their rooms and be able to continue expanding their businesses through adjacent revenue opportunities. And regardless of outcomes of different lawsuits, our strategy doesn't change. We are going to invest in premium creator tools. We're going to be continuing to push transparent high conversion checkout for our creators and consumers. And competitive openings is really for us an opportunity to be able to better serve customers that we know will thrive on Eventbrite.

I appreciate the thoughts. And one housekeeping one for Anand, if I can. On the sequential gross margin improvement this quarter, you called out the ads benefit. I was wondering if you could provide some color around kind of sequentially thinking through the end of the year and whether that momentum can continue and just whether we should think that the guidance reflects the opposite. So trying to marry the unit economic improvement with the adjusted EBITDA guidance for next quarter.

Thanks, Cameron. Good to chat again. So just to clarify, for the -- it sounds like two pieces, the gross margin piece and then the OpEx piece. Is that right? So growth...

No, just -- yes, I mean if you're -- I don't know if 40 bps is like if there's other stuff going on there. And so maybe extrapolating that sequential momentum is not what we should do. But if you were going to get another 40 bps of gross margin, it just trying to make sense of that with the downtick in adjusted EBITDA margins.

Got you. Got you. I think that's a good question. So we do expect to have, I guess, modest continued improvement sequentially on gross margin, particularly just as you call out, as the ads revenue increasingly ticks up and drives a greater share of our overall revenue, that is higher margin. So I would say that we do expect that trend to continue. We're not guiding exactly on how many basis points that is. But yes, it's going to improve proportionately as ad revenue proportionately contributes more and more of our total revenue.