Prospectus Summary
PROSPECTUS SUMMARY This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms “Eventbrite,” “the company,” “we,” “us” and “our” in this prospectus refer to Eventbrite, Inc. and its consolidated subsidiaries.EVENTBRITE, INC.
We founded Eventbrite to bring the world together through live experiences. We believe live experiences are fundamental to fulfilling a human desire to connect. Our company serves event creators—the people who bring others together to share their passions, artistry and causes through live experiences—and we empower their success.
We built a powerful, broad technology platform to enable creators to solve many challenges associated with creating live experiences. Our platform integrates components needed to seamlessly plan, promote and produce live events, thereby allowing creators to reduce friction and costs, increase reach and drive ticket sales. By reducing risk and complexity, we allow creators to focus their energy on producing compelling and successful events.
We succeed when creators succeed. Our business model is simple: we charge creators on a per-ticket basis when an attendee purchases a paid ticket for an event. We grow with creators as they plan, promote and produce more events and grow attendance. In 2017, we helped more than 700,000 creators issue approximately 203 million tickets across approximately three million events in over 170 countries.
We designed our platform for all creators, regardless of the category, country, size, frequency or type of event. We enable events ranging from fundraisers, seminars, wellness activities and music festivals to classes and cultural celebrations all over the world. Anyone can create or discover events on Eventbrite. This allows more creators to produce original and compelling experiences, attracting more attendees to these experiences. As a consequence, we believe we are expanding the global market for live experiences.
Our platform meets the complex needs of creators through a modular and extensible design. It can be accessed from Eventbrite.com, our mobile apps and through other websites. This modularity facilitates rapid product development and allows third-party developers to integrate features and functionality from Eventbrite into their environments. Our platform also allows developers to seamlessly integrate services from third-party partners such as Salesforce, Facebook and Hubspot. Importantly, we have designed our platform to produce consistent and reliable performance, handling both surges in traffic and transaction volume associated with high-demand on-sales and the load associated with supporting millions of events each year. This approach gives creators a platform that can scale to their needs, offering everything from basic registration and ticketing to a fully-featured event management platform.
This platform approach has allowed us to pioneer a powerful business model that drives our go-to-market strategy and allows us to efficiently serve a large number and variety of creators. We believe our business model will enable us to achieve and grow profitability as we increase our scale. We attract creators to our platform through multiple means, including prior experience as attendees, word of mouth from other creators, our prominence in search engine results, the ability to try our platform for free events and our library of content.
More than 95% of creators who used our platform in 2017 signed themselves up for Eventbrite. In 2017, we derived 54% of our net revenue from these creators. We augment this model with a highly-targeted sales team that focuses on acquiring creators with events in specific categories or countries. Substantially all creators who use our platform create and manage events without the need for service or support.
In 2017, our net revenue was $201.6 million, up from $133.5 million in 2016, representing year-over-year net revenue growth of 51.0%. Our net revenue for the six months ended June 30, 2018 was $142.1 million, up from $88.2 million for the six months ended June 30, 2017, representing period-over-period net revenue growth of 61.2%. The growth over these periods was primarily the result of paid ticket growth, fueled in part by recent acquisitions. Our net loss was $40.4 million and $38.5 million in 2016 and 2017, respectively, and $8.3 million and $15.6 million for the six months ended June 30, 2017 and 2018, respectively. Our Adjusted EBITDA was $(17.6) million and $4.2 million in 2016 and 2017, respectively, and $3.7 million and $10.0 million for the six months ended June 30, 2017 and 2018, respectively. In 2017, our net cash provided by operating activities was $29.8 million, and free cash flow was $21.1 million. Our net cash provided by operating activities was $48.8 million for the six months ended June 30, 2018. Our free cash flow, which is computed on a trailing twelve months basis, was $13.2 million for the twelve months ended June 30, 2018.
For more information about Adjusted EBITDA and free cash flow, including the limitations of such measures, and a reconciliation to the most directly comparable measures calculated in accordance with GAAP, see the section titled “Selected Consolidated Financial Data and Other Data—Non-GAAP and Other Data.”
Our Market
The global market for live experiences is large and rapidly increasing in size and diversity. We believe that a significant portion of our market opportunity is represented by categories that were previously not well served by event management technology. The landscape of services to manage the complexities of planning, promoting and producing events is highly fragmented. Creators use a variety of approaches and solutions to achieve these goals. We believe that the breadth of functionality on our platform, combined with its ease of use, has enabled creators to build businesses and introduce new types of live experiences.
Based on market data prepared in conjunction with a third party, we believe that in 2018, our platform will address a current market opportunity in our top 12 markets that is estimated to be 1.1 billion paid tickets generating $3.2 billion in gross ticket fees, along with an additional 1.9 billion free tickets. Fees associated with the sale of tickets on our platform are gross ticket fees, which are the total fees generated from paid ticket sales, before adjustments for refunds, credits and amortization of non-recoupable signing fees.
This reflects our target market: the millions of events that happen all over the world that lie between the two ends of the spectrum of live events. Specifically, we address the broad range of events between those where the venue dictates the ticketing relationship, like professional sports and blockbuster concerts, and those where there are often no formal venue or event management needs, like small, personal gatherings.
Trends in Our Favor
A combination of trends in consumer behavior and technology is increasing the role and importance of live experiences and provides a tailwind for our market opportunity. We call this the “experience economy.”
Consumer Preferences Shifting to Experiences
decades, even during periods of economic recession. In a proprietary report that we commissioned, over 70% of adults surveyed in our top four geographic markets in April 2017 reported they would rather spend money on experiences as compared to material goods.
Rising Importance of Experiential Marketing
Content Owners Extending Monetization
Technology Acting as an Enabler
Our Value Proposition
Our platform supports a wide range of creators through a simple interface with capabilities that are powerful and reliable and scale with their needs, delivering the following benefits:
Streamlined Creator Experience
Reduced Cost to Manage Events
Real-Time Insights
Trusted Attendee Experience
Extended Creator Reach
Our Strengths
We believe we have multiple competitive strengths, including:
Our Comprehensive Platform Serves Any Creator
Our Business Model Has Cost Advantages in Creator Acquisition and Operations
Our Commitment to Creators Shapes Our Culture
Our Growth Strategy
Key elements of our growth strategy include our plans to:
Attract New Creators to Our Platform
Add Capabilities to Better Serve Specific Categories
Add Capabilities to Better Serve Specific Countries
Develop New Revenue Streams Based on Complementary Offerings
Selectively Acquire Businesses Focused on Serving Creators
Risks Affecting Us
Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include:
If we are unable to adequately address these and other risks we face, our business, results of operations, financial condition and prospects may be harmed.
Channels for Disclosure of Information
Following the completion of this offering, we intend to announce material information to the public through filings with the SEC, the investor relations page on our website (eventbrite.com), press releases, public conference calls and public webcasts.
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. Information contained on or accessible through our website is not incorporated by reference into this prospectus, and inclusion of our website address in this prospectus is an inactive textual reference only. You should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our Class A common stock.
Corporate Information
Mollyguard Corporation was incorporated in 2003. We launched operations as part of Mollyguard Corporation in 2006, and in 2009, we changed our name to Eventbrite, Inc. In October 2009, we reincorporated as a Delaware corporation. Our principal executive offices are located at 155 5th Street, 7th Floor, San Francisco, California 94103, and our telephone number is (415) 692-7779.
“Eventbrite” is our registered trademark in the United States and Argentina, Brazil, Chile, China, Canada, European Union, Hong Kong, India, Israel, Japan, South Korea, Mexico, Australia, New Zealand, Russia, Singapore, Switzerland and Turkey. Other trademarks and trade names referred to in this prospectus are the property of their respective owners.
Emerging Growth Company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise generally applicable to public companies. These reduced reporting requirements include:
We may take advantage of these provisions until we are no longer an emerging growth company. We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify as a large accelerated filer, with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have, in any three- year period, issued more than $1.0 billion in non-convertible debt securities and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.
The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
For certain risks related to our status as an emerging growth company, see the section titled “Risk Factors—Risks Related to Our Business—We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors.”