STUB Q3 2026 earnings call transcript, November 10, 2026

Good day, ladies and gentlemen, and thank you for standing by. Welcome to StubHub's third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's 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 Schaefer, Senior Vice President, Investor Relations with StubHub. Jonathan, please go ahead.

Thank you.

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 is 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 to $420 million. Q3 results reinforce three themes that define our business. First, the continued strength of consumer demand for live experiences. Second, StubHub's leadership. 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 it 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 women's sports tickets on our platform. This has all led to more apps 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's also significant investment in new live event content and infrastructure taking place. Everything from sports leagues expansion to new event formats and new venues. 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 day's 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 meaning.

Full efficiencies across marketing channels like Google, which have supported both margin expansion and growth. We're not seeing material traffic from AI based referrals today, but we do expect this to increase over time. And we believe we are well positioned as consumers usage of agentic technologies grows. We operate a complex marketplace that delivers a 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 two decades. Functions at unmatched scale and cannot easily be replicated, positioning us well for a more agent-driven world. We're 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'll pay, 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 one of the most exciting areas of innovation. Head for StubHub. The regulatory environment remains constructive across key markets. We continue to operate within a generally favorable status quo that supports open functioning resale 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. And we've 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's also important to recognize that in most instances, proposed legislation carves out sizable portions of the market, including sporting events and larger venues or diversification across event type and categories provides us with the level of. Estillation from potential regulatory changes related to any single subset of the market. As we've discussed previously, the specific sub segment we believe regulators are focused on resellers listing large quantities of inventory for very high demand concerts at price. This is 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 TAMX. 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 than where they discover and purchase tickets. Rightsholders benefit from expanded distribution.

And access to StubHub's global demand and pricing data. We're 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 integrations with primary ticketing providers. We are also making progress with advertising on our platform, as we build on the 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. It also helps fans discover relevant inventory more effectively. Adoption and engagement continue to build, and we've 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 in 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 the content. 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, and 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 Branded 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. 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 her partnership and contributions to StubHub, and we wish her well in her future endeavors. With that, I'll turn it over to Connie to discuss our financial results and outlook in more detail.

Thanks, Eric, to you and the board. It has been a rewarding experience working with the entire staff. Hub team. We've 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% 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 three and a half years to October 2033, while also reducing borrowing costs. Our net leverage was further reduced by half a turn to two and a half times. 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 gap 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 two percentage points year over year, and three 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 nine 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... ...relects 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... ...which 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 cash flow is the most appropriate amount of cash flow is the most appropriate amount of cash flow. 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 approximately $11 million, or 2% of revenue, which was partially offset by $9 million of interest income. We continue to benefit from approximately $1.2 billion of NOLs. Please see slide 14 in the earnings presentation posted on our IR website for information on our cash flow conversion. Turning to the balance sheet, we entered the quarter with approximately $1.2 billion of cash and cash equivalents, or approximately $470 million net. Seller obligations. Net leverage was two and a half times, trailing 12-month adjusted EBITDA at quarter end, compared with four and a half times at year-end 2025, reflecting both earnings growth and continued strength in cash generation. In September, Moody's rating 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 three and a half years to October, 2033. We reduced our borrowing costs on the term loans by 25%. 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 deleveraging. Including repayment of $100 million of our USD term loan in July, which followed $100 million in debt reduction in May. Total debt repayment since our IPO stands at $1.1 billion.

Total outstanding gross debt at the 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. 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 2020. 27 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 significant expanded margins. 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. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw. your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by while we compile. The Q&A roster.

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

Your next question comes from the line of Doug Anmuth with J.P. Morgan. Your line is open. Please go ahead.

Your next question comes from Jed Kelly with Oppenheimer. Your line is open. Please go ahead.

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

Your next question is from

Thank you. Excuse me.

Thank you for taking my question. Would you please talk to the guidance for the for the full year? So you raised the. GMS guide, but not the EBITDA guide. Just how what the composition is in terms of how you're 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 does the schedule look compared to a year ago?

Thank you very much.

Sure.

Thanks for the question.

Let me give a couple comments to start here. First, I think asking about the concert schedule. So I think again, as we mentioned before, what's important for we look at it annually in the timing and one of the things with concert on sales is that. It's 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 don't get the benefit 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 want to put these tickets on sale. They oftentimes 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 know it's 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's a very robust pipeline. Consumers are very excited about it. And whenever it does go on sale. It's going to be very vibrant, robust, and we're very excited about the opportunity we can capture and 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's the rest of the year? How are we guiding you? We want to take an approach of just what we believe is in our control and what we know.

So this is just something that we were just telling you what we know. We'll know what you do when they decide what does and doesn't go on sale. And that really impacts, I think, both the GMS and obviously can also impact some of the. EBITDA stuff, but I'll let let Connie address that. Yeah, thanks. Again, I kind of step back and look at the overall guide and we can talk into the fourth quarter, as you mentioned, again, healthy top line growth. And when you look at it on a year. Berger year basis, really substantial EBITDA margin. As Eric mentioned, there are a couple knowns that will happen in the quarter against some of these laughing elements. But the key unknown is really in relation to these concert on sales and the timing of those. Hence why we've kind of given you a bit of a larger range than perhaps you're traditionally used to in the fourth quarter as we're sitting here today. That being said, what I can tell you is when you look at the fundamentals of the business, as we've 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've made for the full year. Okay.

Thanks, Connie.

Thanks, Eric.

Your next question is from Lloyd Walmsley.

As a reminder, if you would like to ask a question, please press star one on your telephone keypad now to raise your hand.

Hey, good afternoon, Eric, Connie.

Staying on open distribution, the NFL announced an open distribution initiative allowing season ticket. Sell tickets across a larger number of marketplaces. StubHub, I don't believe, was included in that. Here's how you think about the cost of something like that or see incremental supply opportunity.

Oh, sure.

Thank you for your question, Ryan. Appreciate it. I think. So the NFL, I think this is a great example. First off, we talk about open distribution. So what the NFL has basically done is embraced open distribution. It's really a big thing. People probably years ago when they thought this has happened, but they're going to say. Look, what's best for our season ticket holder? What's best for our fans is to have this distributed to as many marketplaces as possible to reach people, to use data, et cetera. So first thing I just want to say we were, 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, great proof point for open distribution in terms of the specifics of their economics and whether or not we'll, you know, how we think about joining or not. joining their specific proposal. You know, that's really just a matter of, of course, we always evaluate and speak with partners like that to see if the fit is right for our users and our fans. But so we'll see how that plays out. But I just want to be very clear. that we are, I certainly, and I think all of us over here at Team StubHub, we're very excited to see that the National Football League, which is arguably, you know, the premier sports property in North America, came out. out and actually embraced open distribution. So we think that's a phenomenal day. How, how it works out that we do or don't work specifically with the NFL, I'll have to leave for a later date. Helpful. Just one 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 a world cup impact on that, but can you quantify what the world cup was and then anything else in there? 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 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's important to note is on a TTM basis, we generated close to $200 million of free cash flow, a 53% conversion. And just stepping back, if you think about the fundamentals of this business and why it accretes so much cash. Remember, we've got healthy top line growth, we've got expanding margins, where 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 lastly, we've got over $1.2 billion of NOL. So, all of that, again, continues to ladder up to robust cash generation.

Thanks, Eric.

Connie, good luck, guys. Thank you. And your final question is coming from Andrew Boone with Citizens. Your line is open. Please go ahead.

This concludes today's call.

Thank you for attending.

You may now disconnect.