Eventbrite 2Q: Operating Loss Widens As Ticketfly Integration Continues, Roxodus Fans Refunded $4M

Eventbrite’s 2Q earnings release and letter to shareholders Aug. 7 notes a $14.5 million operating loss in the second quarter compared to $13.2 million over last year, adding that it paid $4 million in refunds after the failed Roxodus festival in Canada, which will be included in the third quarter financials. 

CEO Julia Hartz mentioned on the earnings call that the company is at fewer than 100 Ticketfly clients left to migrate to the Eventbrite platform, which is scheduled to be complete by Oct. 1 as planned.
The release notes net revenue growing 19.6% to $80.8 million over the period last year, with paid tickets growing 14.9% to 26.5 million in the second quarter.  Meanwhile, net loss per share, basic and diluted was 18 cents on the quarter, with adjusted EBITDA $.9 million, down from $1.2 million in the same period last year.
Free cash flow for the trailing 12 months ended June 30, 2019, was $2.4 million compared to $13.2 million for last year.
“We anticipate continued growth from self sign-on and international channels for the third quarter of 2019, offset by challenges related to platform migration as we look to sunset the Ticketfly platform at the end of the third quarter,” the release states.  
“Of note, we did not see as much churn in the second quarter as we expected. Therefore, we expect to see this churn in the third quarter. In addition, during July, an event creator, MF Live, cancelled their Roxodus Music Festival, an event for which Eventbrite provided ticketing and payment processing services. While we were not legally obligated, we issued refunds for the face value of tickets totaling $4.0 million. This amount will be recorded as an operating expense in the third quarter.”   
A third quarter forecast predicts total net revenue of $74 million to $78 million and adjusted EBITDA of negative $9 million to negative $5 million. 
Investors responded positively to the news and guidance, with shares up about 2% the following day, although Eventbrite’s share price is down 38% on the year, after dropping 30% in May after a disappointing earnings report. The company is valued at $1.38 billion by market capitalization. 
Roxodus Festival, a first-time event scheduled to take place July 11-15 in Stayner, Ontario, was abruptly canceled when organizers MF Live blamed weather, canceling just weeks ahead. It was to feature major artists including Aerosmith, Kid Rock, Nickelback, Alice Cooper and many others. 
“After multiple attempts to communicate and secure funds back from the Roxodus organizers, they have provided no indication that they will be issuing refunds to ticket holders,” Eventbrite said in a statement at the time. “We believe attendees deserve to get their money back now, so we have set up an Eventbrite-funded Fan Relief Program to make all Roxodus ticket holders whole while we continue to aggressively pursue the return of funds from the festival’s creators.  If you purchased a ticket to Roxodus on Eventbrite, there is no action necessary on your end. We are transferring funds back to you immediately and you can expect to see them reflected on your credit card or bank statement within seven business days.”
Eventbrite acquired the festival and club-focused Ticketfly platform in 2017 after it was sold to music streaming service Pandora. The company has planned to sunset the Ticketfly platform and fully integrate all ticketing into the Eventbrite platform.
Ticketfly co-founder and former CEO Andrew Dreskin, a champion in the indie concert space, stepped down as president of music at Eventbrite, although is to remain in a multi-year advisory role. The company provides a multitude of services for event creators, and recently launched its own Eventbrite App Marketplace featuring app partners including ToneDen, Prism.fm, and Lendd.