StubHub Holdings, Inc. (STUB) Q3 2026 Earnings Call Transcript

Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to StubHub's third quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. Please note that this conference call is being recorded today, November 10, 2026. I will now turn the call over to Jonathan Schaffer, senior vice president, investor Relations with StubHub. Jonathan? Please go ahead.

Jonathan Schaffer: Thank you. Good afternoon, and thank you for joining us to discuss StubHub's third quarter 26 results. For reference, our third quarter earnings release and presentation are available under the Quarterly Results section of our Investor Relations website at investors.stubhub.com. Before we begin, note that today's call will include forward-looking These forward-looking statements are based on the company's current expectations and are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can make no assurance related to its expectations. We refer you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results. and financial condition. We will also refer to non-GAAP measures on today's call. Unless otherwise noted, our profitability and EBITDA discussion today refer to non-GAAP adjusted EBITDA. Reconciliation of these non-GAAP measures to the most directly comparable GAAP measures are contained in today's earnings release available on our Investor Relations site. All financial comparisons, unless noted otherwise, are based on the prior year period. Joining me today are Eric Baker, our Founder, Chairman, and Chief Executive Officer and Connie James, our Chief Financial Officer. They will provide remarks before opening the call to your questions. And with that, I will turn it over to Eric.

Operator: Eric? You may begin.

Eric H. Baker: Thanks, Jonathan. and welcome, everyone, joining us today. We delivered a strong third quarter growing GMS 7% to $2.6 billion and adjusted EBITDA 84% to $124 million at a 25% margin. Our highest EBITDA margin quarter as a public company. As a result of our positive third quarter performance, we are raising our full year GMS outlook to 11% to 13% growth for the full year and reiterating our adjusted EBITDA outlook of $400 million to $420 million Our Q3 results reinforce 3 themes that define our business. First, the continued strength of consumer demand for live experiences. Second, StubHub's leadership in the resale market. Third, improved operating efficiency at scale across the business. We operate in a very healthy end market for live events. That strength was on display in the third quarter at the World Cup, which drew extraordinary levels of fan enthusiasm. A tremendous signal for the live-event consumer. The event also exemplified many of the broader trends shaping our industry. And driving the growth of our end market. Some are well known, such as the multi decade trend of consumers increasingly allocating spending to experiences over goods. I also want to take this opportunity to call out a few dynamics that are less widely discussed. Reaching fan bases through social media has allowed artists to build larger and larger followings. And allowed consumers to become fans of more types of content. Like Americans' growing interest in soccer and international artists, Women's sports is another clear example Rapidly growing fan bases are driving more events and more ticket sales. And that has translated to many first time buyers of women's sports tickets on our platform. This has all led to more acts supporting more events at a larger scale. And a major trend of globalization across the industry, which in turn has fueled a fast growing category of event tourism. there is also significant investment in new live-event content and infrastructure taking place. Everything from sports leagues expansion to new event formats and new venue construction. Both here in the US and around the world. All growing the number of events available to fans. This points to something broader about what fans increasingly expect across categories. The ability to find and access the events they want instantly wherever they are. The World Cup demonstrated this at its most demanding. Fans following their team from city to city with only days notice which requires a deep, liquid global marketplace That can match the right fan to the right seat in the right city in real time. Consumers continue to look at StubHub as the market leader because our global reach, catalog breadth, deep liquidity, and trusted reliable experience allow us to deliver this in a way others cannot match. As we look forward, we believe our competitive position will only strengthen over time. As we have grown this year, we have also driven meaningful efficiencies across marketing channels like Google, have supported both margin expansion and growth. We are not seeing material traffic from AI based referrals to date. But we do expect this to increase over time and we believe we are well positioned as consumers' usage of Agentic technologies grows. Operate a complex marketplace that delivers real world product. A fan in their seat on event day. That means aggregating a vast, fragmented supply chain and standing behind every transaction with trusted fulfillment payments, and fraud protection. This operational expertise has been built over more than 2 decades. Functions at unmatched scale and cannot easily be replicated. Positioning us well for a more agent-driven world. We are excited about the opportunity to deploy these technologies within StubHub to enhance the fan experience and drive even better outcomes. Buying a live event ticket is a considered, personal purchase. Fans have real preferences that matter. Where they sit, what they will pay, and the specific experience that they want. We see a real opportunity to build rich AI augmented experiences to help fans search for and discover event tickets. We believe our proprietary domain specific data uniquely positions us to deliver this in the future. And makes it 1 of the most exciting areas of innovation ahead for StubHub. The regulatory environment remains constructive across key markets. We continue to operate within a generally favorable status quo that supports open, functioning resell markets across jurisdictions. We believe regulators are generally focused on expanding fan access to live experiences, making it easier, more transparent, and more trustworthy to buy and sell tickets. We share this aim and we have been encouraged that price caps have not advanced in key markets. Including in California, where price cap legislation failed to move forward in August following New York's decision earlier this year not to advance a similar proposal. We believe this reflects a growing recognition among lawmakers that price caps actually reduce consumer access and drive activity into less transparent channels. It is also important to recognize that in most instances, proposed legislation carves out sizable portions of the market including sporting events and larger venues. Our diversification across event type and categories provides us with a level of insulation from potential regulatory changes related to any single subset of the market. As we have discussed previously, the specific subsegment we believe regulators are focused on resellers listing large quantities of inventory for very high demand concerts, at prices significantly above the original sale price represented approximately 10% of our global GMS in 2025 across all jurisdictions. Beyond our core resale business, we continue to advance our TAM expansion initiatives. Open distribution, and advertising on our platform. Open distribution works to ensure broad transparent access to live events for fans, with greater choice in where they discover and purchase tickets. Rights holders benefit from expanded distribution and access to StubHub's global demand and pricing data. Encouraged by the momentum on the supply side, with breadth growing across categories, venues, and events, as more partners join the ecosystem and we expand our integration with primary ticketing providers. We are also making progress with advertising on our platform. As we build on existing engagement across StubHub's marketplace. Sponsored listings provide sellers another lever to compete on the marketplace and sell inventory that becomes increasingly time sensitive as an event approaches. It also helps fans discover relevant inventory more effectively. Adoption and engagement continue to build, and we have begun testing the offering with fan sellers in addition to our professional point of sale users. Together, open distribution and advertising represent attractive long term opportunities to expand our addressable market and further monetize activity across our marketplace. And we look forward to sharing more as they develop. In closing, we are on track to deliver a year of double digit top line growth with significant margin expansion resulting from our market leadership and scale advantages. Consumers continue to prioritize live events, and we are seeing greater globalization of content that reinforces the importance of our global reach. As a competitive advantage. We continue to invest in opportunities that enhance the fan experience through greater access and transparency and to build on the engagement already taking place across our platform. Our vision is to be the global destination for fans to access live entertainment and we look forward to reporting to you on our progress to discussing our expectations for the coming year when we report our fourth quarter results. Before I turn it over to Connie, we also announced today a CFO transition plan, Connie will be stepping down as CFO early next year. And Mike Noonan will join us from his current role as CFO of TripAdvisor. Mike brings extensive finance and capital markets experience and a proven track record as CFO of Brandon Consumer Companies. We are excited to welcome Mike to StubHub in January. I want to thank Connie for leading our finance organization and several capital markets transactions for the company. She brought real discipline to how we manage our balance sheet and position the business for long term growth. Today, StubHub is stronger than ever, generating healthy profit margins with a well capitalized balance sheet. I sincerely appreciate your partnership and contributions to StubHub and we wish her well in her future endeavors. With that, I will turn it over to Connie to discuss our financial results and outlook in more detail.

Constance James: Good afternoon, everyone. Thanks, Eric, to you and the board. It has been a rewarding experience working with the entire StubHub team. We have built a very talented group and I look forward to ensuring a seamless transition. Now turning to the quarter. In the third quarter, we delivered GMS of $2.6 billion, an increase of 7% year over year while driving significant margin expansion through greater operating efficiency. Adjusted EBITDA margin expanded to 25% an increase of 10 percentage points year over year, and 6 percentage points compared to the second quarter. In addition, we further strengthened our balance sheet by repaying $100 million of debt in July and subsequently extending the maturities of our term loans by 3.5 years to October 2033 while also reducing borrowing costs. Our net leverage was further reduced by half a turn to 2.5x at quarter end Turning to the income statement, My remarks are on an adjusted basis excluding stock based compensation and non recurring items. Full reconciliations to the comparable GAAP measures are available in our earnings release. Revenue for the third quarter increased 7% year over year to $502 million GMS to revenue conversion was 19%, comparable to the prior year and up more than 60 basis points from the second quarter. Due in part to the conclusion of the World Cup which had impacted our overall pricing and catalog mix. Gross margin increased to 85% up 2 percentage points year over year and 3 percentage points compared to the second quarter including the benefit of lower fulfillment costs following the World Cup. Sales and marketing expense was 45% of revenue, an improvement of 9 percentage points year over year. Our market leadership, and resulting scale have enabled us to drive continued customer acquisition efficiency following last year's sales and marketing investments. Operations and support costs were 3% of revenue. Consistent with prior periods and inclusive of continued investment in customer support. G&A expense was 13% of revenue, an improvement of approximately 2 percentage points from the second quarter. This was in line with our expectations and reflects lower advocacy and other operating costs in the third quarter. Adjusted EBITDA increased 84% year over year to $124 million Adjusted EBITDA margin was 25% representing expansion of 10 percentage points year over year and more than 6 percentage points compared to the second quarter. Net income for the third quarter was $34 million. Net income includes stock based compensation expense as well as non recurring items, foreign exchange and derivative gains and losses, interest income and expenses, and taxes all which can introduce variability relative to our adjusted results. We believe adjusted EBITDA helps highlight trends in our operating results by excluding these items and the reconciliation to net income is available in our earnings release. As a scaled asset light business with favorable working capital dynamics, we generate strong and durable operating cash flow. We collect cash from buyers at the time of transaction and remit to sellers at a later date typically after the event occurs. This generates a natural float between collection and payment and can occasionally result in quarters of lumpy net inflows or outflows. This is visible in our year to date results. We collected $472 million of cash inflows net of our fees in the first half of the year due in large part to the World Cup. These inflows were then remitted to sellers during the third quarter resulting in significant net working capital outflow of $447 million Because our business is inherently seasonal and individual quarters can reflect meaningful timing related swings in working capital, We believe trailing 12 month free cash flow is the most appropriate lens through which to evaluate our cash generation. We generated $192 million of free cash flow on a trailing 12 month basis representing a 53% conversion of our trailing 12 month adjusted EBITDA. This includes $1 million of net benefit from our timing of buyer receipts and seller payments and approximately $89 million of interest costs. Excluding these items, we generated $280 million of free cash flow, representing 77% conversion of our trailing 12 month adjusted EBITDA. During the quarter, capital expenditures were $11 million or 2% of revenue, which was partially offset by $9 million of interest income. We also continue to benefit from $1.2 billion of NOLs. Please see slide 14 in the earnings posted on our IR website for information on our cash flow conversion. Turning to the balance sheet, We ended the quarter with approximately $1.2 billion of cash and cash equivalents or approximately $417 million net of seller obligations. Net leverage was 2.5x trailing 12-month adjusted EBITDA at quarter-end compared with 4.5x at year-end 2025 reflecting both earnings growth and continued strength in cash generation. In September, Moody's Ratings upgraded the corporate family rating of StubHub from B3 to B2 and in October we announced the extension of our senior credit facilities As part of the transaction we extended the maturities of our USD and Euro Term Loan B by 3.5 years to October 2033. We reduced our borrowing costs on the term loans by 25 basis points and strengthened our foreign exchange risk profile by increasing the USD term loan and reducing the Euro term loan. The transaction follows a period of significant deleverage including repayment of $100 million of our U. S. Dollar term loan in July, which followed a $100 million in debt reduction in May. Total debt repayment since our IPO stands at $1.1 billion. Total outstanding gross debt at quarter-end was approximately $1.3 billion with no maturities until October 2033 as a result of the recent extension. We are maintaining meaningful balance sheet flexibility to execute against our capital allocation priorities including organic investment, continued deleveraging and disciplined dilution management. Turning to our full year 2026 outlook, We are raising our GMS guidance and reiterating our adjusted EBITDA outlook. Reflecting our positive third quarter results and anticipated performance for the remainder of the year. We are increasing our full year GMS guidance to a range of $10.175 billion to $10.375 billion representing year over year growth of 11% to 13% versus our prior expectations of 10% to 12%. We are reiterating our full year adjusted EBITDA outlook in the range of $400 million to $420 million Our full year outlook reflects a range of scenarios for when 2027 concerts go on sale and we will provide an update when we report our fourth quarter results. In closing, we delivered third quarter GMS and revenue growth of 7%, with significantly expanded margin. These results demonstrate the operating leverage in our marketplace model as we benefit from our market leadership and scale while investing in long term growth. With that, we are ready to take your questions. Operator?

Operator: We will now begin the question-and-answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star then 1 to raise your hand. To withdraw your question, press star then 1 again. We ask that you pick up your handset when asking a question allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open. Please go ahead.

Eric Sheridan: Thanks so much for taking the questions, and thanks for all the detail in the results. And Connie, wishing you the best going forward. Thanks for all the help since before the public listing. Maybe 2-parter, if I can. You have seen a lot of marketing leverage this year, which I think was really an output of lapping some of the dynamics from a year ago. How should we be thinking about the ability to continue to drive marketing leverage through the business over the medium to long term when measured against your growth goals? And the second part of the question would be, clearly, there is a lot of volatility in the consumer Internet space right now around SEO and changes with respect to the search product canvas. How are you thinking about planning for those types of broad industry changes how they might inform the priorities of your marketing spend against the first part of the question, elements of creating either leverage or deleverage on marketing overall? Thanks so much.

Eric H. Baker: Thanks for the question, Eric. Appreciate it. Maybe let me frame how I would about it a bit, and then I will hand it over to Connie. So the first question you have is about, yes. Thanks for recognizing the leverage we have gotten in sales and marketing and how that is become more efficient. I think if you recall, that is, what we had set out to do and sort of we made investments a while back to create the leadership position that we have, more liquidity, better product, etcetera. With the belief that allows you in a marketplace business to then grow while continuing to inflect and increase your margins. And so we see that really happening. You know, again, that happens when you become, again, more efficient, when you have these scale advantages to channels. As well as, when you have people coming directly and more people using your repeats. So those are, we are we are very happy to see the fruits of our labor coming through, and we think that those are a great, great durable setup. I think your second question if I understand it, is around. there is lot of things going on with AI, particularly people about what does that mean, for search and Google. And the trends on that. So the first thing I want to say, just to everybody, is our Google channels remained extremely healthy. Our efficiencies improved, on that channel. As we go for many of the reasons we talked about. And, again, we are unique in that we are a commerce platform fulfilling a very complex real world transaction. So tickets have to be delivered with trust and fulfillment behind it. Very different than if you are aggregating information or and creates a different dynamic, I would imagine, for people who are using that channel. So I think the way we do see it, though, is as things continue down, a path of people using agents and Agentic, it is really creating more opportunities at the top of the funnel. They are bringing more people in. there is more for that. And, again, we really think that the key thing is if you are the leader, there is a huge incentive for people to direct to the best place to fulfill these transactions. that is why we work so hard to build our position and we are very proud that we have it.

Constance James: Yeah. I would just build on what you said in relation to the sales and marketing efficiency. What we know to be true is that in marketplace businesses, once you reach that, call it, key scale of being clearly the market leader, you naturally start to see some of these benefits that Eric outlined. We were really intentional this year when we outlined our key financial objectives growing the top line. Again, really excited to be able to lift the guide by a point. While continuing to expand margin. Clearly, our sales and marketing efficiency is a key element of that. You would have seen it expanded 9 percentage points year over year And for all the reasons that Eric mentioned, we are really pleased with that momentum, we think there is some real structural benefits. Having reached, again, this clear market leadership position.

Eric H. Baker: Great.

Constance James: Thank you.

Operator: Your next question comes from the line of Mark Stephen Mahaney with Evercore ISI. Your line is open. Please go ahead.

Mark Stephen Mahaney: Okay. I just wanted to ask 1 on advertising revenue. And if you could just drill down on that a little bit more goals maybe over the next year or 2 where you think you can get advertising intensity where you think you are seeing particular pockets of interest in advertising on StubHub, where you are in terms of the ad formats that, you know, you think can be optimal for marketers and advertisers. Thank you very much.

Eric H. Baker: For the question, Mark. Appreciate it. Touching on advertising. And, again, as we have said, to level set for everyone, we really believe that consistent with if you have a very passionate audience like we do in a scale marketplace, that there are a lot of ways to harness that for people to reach that audience over time. And we think, as we have mentioned before, Mark, that 1 of the easiest or most value accretive in all respects is sponsored listings, which is the concept that when sellers, have expiring inventory, they are going to want to get that in front of the right consumer in the right way. And as long as you do that and present the correct listing to the consumer in the right format, that creates value for them as well. That being said, as said before, we are really focused on optimizing the auction mechanics, the pricing conversion rates. The user experience. We have a pretty high bar for then ramping that up. In terms of what that means beyond this year, again, we said this year was really getting it right, trying to get the fit right, which we are very encouraged by. And think that is going in the right direction. But, respectfully, we will talk about 2027 and beyond when we have our next phone call. Connie, anything to add?

Constance James: No. I think that is right. Again, we mentioned it would be an immaterial amount, call it in the tens of millions of dollars. All that continues to be on track. The most important thing is really focusing on the product. And as Eric mentioned, the good news is we are seeing some real positive signs. So more to come on future outlook in relation to the financial opportunity.

Eric H. Baker: Okay. Thank you.

Operator: Your next question comes from the line of Douglas Anmuth with JPMorgan. Your line is open. Please go ahead.

Niyaz: Oh, hi. This is Niyaz on for Doug. Thanks for taking the questions. I have a couple. So first is just if you could talk about what you are seeing in terms of consumer demand in 4Q, the on. On sale activity since September, and how much of the impact on 4Q revenue was from the shorter, small market world series. And the second 1 is just if you think about the Facebook 27, how should we think about the normal industry growth x World Cup? And how to compare that? Thanks.

Eric H. Baker: Thank you for the question. Appreciate it. And I will take a first crack at it and then let Connie add. I think if I understand the 2 questions you had, 1 is, understanding sort of Q4 demand and growth and how do we think about that with various things that have gone on. And then you had some questions about 2027. So I think in, when we. When you look at Q4 and obviously what is implied, we have a full year guide, course, not a quarterly guide. Again, as we always say, you need to understand our We think of it on an annual basis because you have the seasonality of the events calendar and a lot of consumer spending shifts and things that can happen. So the backdrop is we have a very healthy robust market see people loving to go live events. it is it is been great. But there are, and I think you may have alluded to, a few of what we call supply side comp dynamics in Q4. 1 is the World Series. World Cup And that is World Cup. Well, 1 is the World Cup. Excuse me, which is the first general release of World Cup tickets took place in December last year. So at the end of the quarter, we will have a comp on that. The second, which I meant to say, you did mention is the MLB playoffs. So the MLB playoffs, this past year was really between 2 very small market teams. So when you looked at the league championship series in each league, outside the Dodgers, the other 3 clubs that were playing Cleveland, Milwaukee, and Tampa are on the very bottom of the size of market demand spectrum. In general, the World Series itself was between the 2 smallest market teams. And unlike a 7 game series between Blue Jays and the Dodgers last year, it was only 5 games. So again, that is just sort of a structural issue with that. And in terms of the last thing that happens on the calendar sort of the concert on sales that happened in the fourth quarter. So, generally, that is the second half of November into December, and we will see what the big concert on sales are. So while we believe there is a very robust pipeline of tourists coming, we do not control when they go on sale, and Live Nation and other promoters may put them on sale before the beginning of the year, or they may not and we will see. So that is, that is really the way we think about it. Very strong underlying growth in live events, but with the things that I mentioned sort of impacting we are talking about. And the underlying growth, I think, if you looked at it x the World Cup on sale lapping and the MLB comparison, factors would be the high single digit. So it is still a nicely growing market. In terms of going forward, as I said to the other question, you know, we will talk about 2012 to 2027 specifically, on our next call. But generally, we see. You know, we believe, again, we have a very healthy backdrop with tailwinds. Things continue to grow nicely. We are very fortunate and glad that we are in the live events market, so we are excited about it. Connie?

Constance James: Yeah. I would just echo a couple things again. You know, as we look at the fourth quarter, the great news is we are seeing really healthy underlying growth To Eric's point, I would call it high single digits. We know there can be some variability quarter-to-quarter just given various pumps. that is why, again, we try and get folks to really think about our business on an annualized basis. You can see that when we started this year, we said we wanted to we had really healthy top line growth, Again, pleased that we were able to lift the GMS guide to 11% to 13% growth while importantly continuing to expand margins. So, the good news is that, you know, underlying demand healthy and really pleased with the outlook.

Eric H. Baker: Thanks, Niyaz.

Operator: Your next question. Comes from Jed Kelly with Oppenheimer. Your line is open. Please go ahead.

Jed Kelly: Just. Can you kind of touch on how we should be thinking about the normalized take rate? I think you know, you called out 20% Last quarter. Does that still hold up? Then can you give us an update on the health of the consumer You know, I think, LIVE Nation, you know, they just had their investor day. Sounds like, you know, their trends seem pretty healthy. So can you give us an update there? Thank you.

Eric H. Baker: Sure. Thank you for the question, Jed. I will take a first crack at sort of the high level before giving it to Connie again. So in terms of the health of the consumers, you put it, look. We only have our own perch. For our industry and our, marketplace live events business as I say. People are as a passion about live events, spending money on live events, want to go to live events. As I have said many times before, I do not know where people may decide to make certain cuts or not in their budget. But generally, if you are a big Chicago bears fan, I think you are going to the Chicago bears. You can give up a lot of things. Before you before you cut that. So from where we sit, and, again, we can only, comment on the strength of our consumers, so to speak. it is all very positive, and we would echo it looks good and not surprised at what you said Live Nation said about what they are seeing. And then I will let Connie talk a bit about take rate and how that how that works.

Constance James: Yeah. Thanks, Eric, and appreciate being on the call, Jed. If you step back and look at our business, I will call it over a longer term, you can see that it typically hovers over this 20% range. What we know to be true is that when we had the World Cup, we expected a little bit of what I will call temporary compression on the take rate last quarter. Think it was about 18.5. You can see it ticked over 19% for this quarter and to the point I think we were specific about saying we expected that to approach 20% for the full year. We would I would call out, you know, that probably still consistent with what we see today. We know that, again, there can be this mixed variability, a great highlight of that was the world Cup that can call it tweak that a little bit upwards or downwards from time to time, but it naturally, again, nears this 20% range.

Jed Kelly: Thank you, and good luck, Connie, and thanks for all your help.

Constance James: Yeah. Thanks.

Eric H. Baker: Thanks. Appreciate it.

Operator: Your next question is from Justin Post with Bank of America. Your line is open. Please go ahead.

Justin Post: Great. Thanks for taking my questions. Live Nation mentioned some scalping efforts. anti-scalping efforts Any impact on your business, or is that just something not really affecting secondary? And then can you tell us anything about international versus U. S. Trends in third quarter? Thank you.

Eric H. Baker: Sure, Justin. Thank you for your questions. Appreciate it. Give you a couple things. First, in terms of whatever things they are talking about, no. We see no impact on our business at all. So that is an easy question to answer. Guess in terms of international, Connie can comment a little bit further, but it is because we have always said international. it is a huge opportunity. You can see sort of people traveling more for live events. Before it is going international. I think speaking of Live Nation, I think they did mention, if I recall, the booming international aspect of business, which also was not surprising to us. But with that backdrop, I will hand over to Connie.

Constance James: Yeah. Thanks, and thanks, Justin, for joining us. As we think about international, as Eric mentioned, it continues to be just a huge opportunity for us. We have seen significant growth year to date and as we move forward, we expect that to be a tremendous opportunity. So, overall, we are really well positioned, not only for North America growth, but also international expansion over the medium term.

Justin Post: Great. Thank you.

Operator: Your next question is from Shweta Khajuria with Wolfe Research. Your line is open. Please go ahead.

Shweta Khajuria: Thank you. Excuse me. Thank you for taking my question. Could you please talk to the guidance for the for the full year? You raised the GMS guide, but not the EBITDA guide. Just how. What the composition is in terms of how you are thinking about it. And then my follow-up question is, how from your vantage point, how is the concert schedule looking like? It sounds like the demand is holding up nicely. How is. How does the schedule look compared to a year ago? Thank you very much.

Eric H. Baker: Sure. Thanks for the question, Shweta. Let me. I will give a couple comments to start here. First, I think you asked me about the concert schedule. So I think, again, as we mentioned before, what is important for. We look at it annually and the timing. And 1 of the things with concert on sales is that it is too early in the quarter for us to know exactly how the timing will play out. Let me explain what I mean by that. For those who do not, get the of living in this world all the time. When these artists are going out, Live Nation, AEG, whoever the promoter may be, decides when they wanna put these tickets on sale. They often will put these tickets on sale in, the second half of November, December for a lot of big tours. But last year, they actually waited and put stuff on sale, in January and in the first quarter. We just. it is not our choice. We have no better information than you do. In terms of when those will go on sale. What we do know is that we believe there is a very robust pipeline. Consumers are very excited about it. And whenever it does go on sale, it is gonna be very vibrant, robust, and we are very excited about the opportunity we can capture. All the different fans that we can serve. What it does mean though, which I think is part of your question, is that, when we have to come forward and say, hey. what is the rest of the year? How are we guiding you? We wanna take an approach of just what we believe is in our control and what we know. So this is just something that we. We are just telling you what we know. We will know what you do when they decide what does and does not go on sale. And that really impacts, I think, both the GMS and, obviously, can also impact some of the EBITDA stuff, but I will let Connie address that.

Constance James: Yeah. Thanks. Again, I. I would kind of step back and look at the overall guide and we can talk into the 4 quarter, as you mentioned, again, healthy top line growth and when you look at it on a year-over-year basis, really substantial EBITDA margin. As Eric mentioned, there are a couple of knowns that will happen in the quarter against some of these lapping elements, but the key unknown is really in relation to these concert on sales and the timing associated with it. Hence, why we have kind of given you a bit of a larger range than perhaps your traditionally used to in the fourth quarter. As we are sitting here today. That being said, what I can tell you is when you look at the fundamentals of the business, as we have talked about on the call already, healthy underlying growth, We continue to see an opportunity to look at sales and marketing efficiency when you look at a year-over-year comparative and the rest of the metrics relatively in line. Again, overall, really pleased with the financial profile, It plays right into, again, the commitments that we have made for the full year.

Shweta Khajuria: Okay. Thanks, Connie. Thanks, Eric.

Operator: Your next question is from Lloyd Walmsley with Mizuho. Your line is open. Please go ahead.

Lloyd Walmsley: Thanks. I am wondering if you can just give us an update around, you know, open distribution efforts. Are you guys spending more time looking to sort of expand deeper into Teams within an existing sport? Are you looking to more expand in the in the new sports or ticketing types? Like, what is the latest, on the on the go to market there? And, where do you see the most opportunity over the next couple of years there?

Eric H. Baker: Thanks for the question, Lloyd. Appreciate it. On open distribution, and again, just to level set, this is the concept we believe that content owners should be able to sell directly over StubHub in a nonexclusive basis. We do not charge them, and they can use our data and distribution. Therefore, reaching more customers pricing more effectively and filling seats. As I think we have mentioned prior, we realized it is really about trying to get the product fit so that self-serve as much as possible and it is easy to use because what we realized is it really works across the board for almost anybody, whether you are the Dodgers all the way down to smaller folks. And we think that the market is inevitably heading in this direction of nonexclusive open distribution. It just benefits everyone across the board. And we are seeing that happen. So what we have been shifting on this year rather than trying to just drive GMS and top line through it is using the partnerships we have to experiment, to see how we can make this more self-serve, to improve the product and to do that. As well as some of those things to mention is there. And I think we have announced a number of these things, working on integrations with different primary ticketing providers, not Ticketmaster, but other people to show how seamless it can be and how easy for the content owners And so that is how we really look at it to get that surface. We are also going to be announcing a partnership with the big 12 conference where we will be servicing their football and basketball event. So but, again, it is really in a mode where the focus has been to get the fit right, get the product right, make sure we have it right before we scale. And, obviously, we will talk more about what the future looks like on our next call.

Lloyd Walmsley: Alright. Thank you. Thanks for all your help, Connie.

Constance James: Thanks so much.

Operator: As a reminder, if you would like to ask a question, please press star then 1 on your telephone keypad now to raise your hand. Your next question is coming from Ryan Sigdahl with Craig Hallum. Your line is open. Please go ahead.

Ryan Sigdahl: Hey, good afternoon, Eric and Connie. Staying on open distribution, the NFL announced an open distribution allowing season ticket holders to sell tickets across a larger number of marketplaces. StubHub, I do not believe, was included in that. Curious how you think about the cost of something like that or see incremental supply opportunity.

Eric H. Baker: Sure. Thank you. For your question, Ryan. Appreciate it, I think. So the NFL, so I think this is a great example. First off, talk about open distribution. So what the NFL has basically done, is embraced open distribution. it is really a big thing. People probably years ago would not have thought this has happened, but they are gonna say, look. what is best for our season ticket order? what is best for our fans is to have this distributed to as many marketplaces as possible. To reach people to use data, etcetera. So first thing I just wanna say, we are. you know, kudos to the NFL. For, for really again stepping up to do this type of thing. And to further open up as they join folks that have done it. So we think this is a great proof point for open distribution. In terms of the specifics of their economics and whether or not we will you know, how we think about joining or not joining their specific proposal, you know, that is really just a matter of, of course, we always evaluate speak with partners like that to see if the fit is right for our users and our fans. But we will see how that plays out. But I just wanna be very clear that we are I certainly, and I think all of us over here at Team StubHub, we are very excited to see that the National Football League which is arguably, you know, the premier sports property, in North America, came out and actually embraced open distribution. So we think that is a phenomenal day. How it works out that we do or do not work specifically with the NFL will have to leave for a later date.

Ryan Sigdahl: Helpful. Just 1 quick follow-up from a balance sheet standpoint. Payments due to sellers, net of buyer fees, it decreased $447 million sequentially. I know big kind of World Cup impact on that, but can you quantify what the World Cup was and then anything else in there?

Constance James: Yeah. Thanks, Ryan. And first, you know, if we just step back, the good news about our business is we generate a tremendous amount of free cash flow. Again, there can be variability quarter to quarter, which is why we get folks to really look at it on an annualized basis. But to your point, in the first half, we did see about $472 million of outflows or sorry, inflows. And then in the third quarter, we had $447 million of outflows. Again, the World Cup a key driver. I think what is important to note is on a TTM basis, we generated close to $200 million of free cash flow of 53% conversion. And just stepping back, if you think about fundamentals of this business and why it accretes so much cash, just remember we have got healthy top line growth, we have got expanding margins, we are asset light CapEx, you can see was only $11 million in the quarter call it 2% of revenue. And then our interest income of $9 million in the quarter nearly offset that. And then lastly, we have got over $1.2 billion of NOLs. So all of that again continues to ladder up to robust cash generation.

Ryan Sigdahl: Thanks, Eric, Connie. Good luck, guys.

Operator: And your final question is coming from Andrew Boone with Citizens. Your line is open. Please go ahead.

Andrew Boone: Thanks so much for taking the questions. Eric, you mentioned earlier direct traffic and repeat traffic increasing. Can you double click on that and maybe talk about loyalty and building cohorts on the platform and what you guys are seeing there? And then Connie, this may be a tough question in terms of kind of walking away from the business. But how do we think about uses of capital going forward? You guys have done a great job of deleveraging the balance sheet. How do we think about the potential for that to start to transition maybe towards the equity side in the future? Thank you.

Eric H. Baker: Sure. Thank you for the questions, Andrew. I appreciate it. I think the 2 things you had are around repeat usage and cohorts and our customers and all that and how that relates to marketing. And then some capital allocation questions. So I will take my first stab at them and let Connie, come in as well. So, yes, what I think I was saying, and wanna come back to you, when you look at. We have obviously made huge improvements in sales and marketing, and we had made investments, as everyone knows, to, claim the leadership position to sort of get flywheel going so that we would be the leading firm out there in our market. The belief was always that once you do that, you can have a very durable position where you can, grow while increasing your margins. And I think what I was trying to say is. And, again, because we do not break everything out to a certain level, but 1 could imagine that if you are going to get that type of efficiency, it is usually a combination of 2 things. 1 is you just have to be more efficient on the money that you are spending, which means you convert better You are better at targeting people and doing all of that. that is number 1. Number 2 is generally you are able to get people who are coming direct, and repeating and using your site. Those generally would be the 2 levers that, would lead to that, I believe. And as you can see, the proof is how much we have improved sales and marketing. We are seeing very positive effects across the board, and that is probably extent to which I can delineate it. right now for you. On your second question around capital allocation, before handing it to Connie, I will give you a sense. I think the way we think about it, again, I am trying to drive free cash flow per share over the medium to long term and maximize that. In order to do that, obviously, in the numerator is cash flow and the denominator is shares. If you are gonna increase your cash flow, you either need to be investing in the business that generates tremendous increase your operating cash flow or reduce your debt, so that you are not having money go out to the door of the banks. And then on the bottom, obviously, which you alluded to is if you can even shrink the share count, maybe look at stock buybacks. So the best I could explain it is, obviously, and I appreciate it as you know, extended our debt and reduced it tremendously. I think as Connie, pointed out, I think about $1.1 billion debt. The net leverage down to 2.5x, which puts us in a world where we can start thinking about the full menu. So we are always gonna try and be as, logical and analytical as possible. It means that we can think about everything across the board and try and determine what is going to be in the interest of our shareholders and what is going to be in the best interest of generating maximal cash flow per share over the long haul. So that is how we think about it. Hopefully, that is helpful, and I will hand it over to Connie.

Constance James: Yeah, I would echo what Eric said. And as you pointed out, we have just had tremendous balance sheet transformation, and the business is incredibly well positioned today. And that creates a lot of flexibility. At the top of the list, we know what creates long term value is investing in the business, and so that continues to be top of mind. We have significantly delevered, so pleased to be able to report that at 2.5x, again, a 2-turn step down from the full year. And then also, I will just call out, because I do think it actually even provides incremental opportunity, but we were able to extend our debt by another 3.5 years with no maturities now due till October 2033. I will call out to the point, you know, Eric's North Star is this free cash flow per share. We have been really focused on how do we manage dilution. We have mentioned before this year, we expect that to be in the low mid-single digits. That remains on track, and then as we look forward, that to be, call it, in the low-single digits. So, again, tremendous opportunity. Well positioned. The business is in a great place. More to come on how we think about all of those priorities in the next year.

Andrew Boone: Thank you.

Operator: At this time, we have reached the end of the Q&A session. I will now turn the call back over to Eric H. Baker, founder, chairman, and CEO for closing remarks.

Eric H. Baker: Thanks, everyone, for joining today's call. We are pleased to have delivered another quarter of growth and significant margin expansion through greater operating efficiency. it is clear that our market leadership and scale are delivering returns for our business. We are also excited about the progress we have made in further strengthening our balance sheet. Fans love live events, and we will keep working to expand access around the world. We look forward to advancing our strategic objectives and reporting our progress in the New Year. Thank you all and have a good night.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.