Vivid Seats Inc. · NASDAQ:SEAT
Vivid Seats — Investor Day (September 2021)
51 slides from Vivid Seats's investor day presentation, Sep 8, 2021
Slide 1: Analyst Day Presentation: Vivid Seats (Nasdaq: SEAT)
Analyst Day Presentation: Vivid Seats (Nasdaq: SEAT) September 8, 2021
Slide 2: Disclaimer
Disclaimer This confidential presentation (the “presentation”) is being delivered to you by Vivid Seats Inc. (the “Company” or “Vivid Seats”) an indirect parent of Vivid Seats L.L.C. and contains information related to the proposed business combination of Vivid Seats with Horizon Acquisition Corpora
Slide 3: Disclaimer (continued)
Disclaimer (continued) Financial and Other Information This presentation includes certain non-GAAP financial measures (including on a forward-looking basis) such as EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin., Contribution Margin These non-GAAP measures are an addition, and not a
Slide 4: Agenda
01 Transaction & Sponsor Summary 02 Company Overview 03 Product & Technology Review 04 Brand & Marketing Overview 05 Financials 06 Q&A
Slide 5: Sponsor & Transaction Summary
Sponsor & Transaction Summary
Slide 6: Horizon Acquisition Corporation Investment Highlights
Horizon Acquisition Corporation Investment Highlights Key Investment Highlights for Horizon Todd L. Boehly CEO, CFO and Director - Horizon Acquisition Corp. Rule of 40: Growth & Profitability • Co-Founder, Chairman and CEO of Eldridge Strong Market Share Momentum - Eldridge has over $40 billion(1) i
Slide 7: Transaction Summary
Transaction Summary Opportunity Leadership • Vivid Seats is a scaled, growing and highly profitable secondary ticketing marketplace Stan Chia • $39 billion growing ticketing industry(1) serving the sports and entertainment markets CEO • Well-positioned for both significant immediate growth in post-p
Slide 8: Investment Highlights
Investment Highlights 12+ Million Cumulative VS Customers 1 Two-Sided Marketplace With Powerful Network Efficiencies 3,400+ Sellers (2019) 2 Leading Player In Large Market Poised For Significant Recovery $39bn TAM (2019) 2.5 Million New Customers in 2019 3 Outpacing Market Growth with Efficient Cust
Slide 9: Illustrative Transaction Overview
Illustrative Transaction Overview ($million) Sources & Uses Pro Forma Valuation Sources Amount % PF Shares Outstanding (2) 195.1 $544 28% Share Price $10.00 SPAC Cash(1) ($155m Held by Sponsor) PF Equity Value $1,951 PIPE (incl. Sponsor Co-investment) 225 12% (+) PF Net Debt / (Cash) (0) Equity Roll
Slide 10: SPAC Timing Update
SPAC Timing Update April 21, April 22, May 28, July 7, August Week of Late ~30 2021 2021 2021 2021 16, 2021 Sept. 6th September Days Horizon Announcement S-4 filed Amended Amended Amended Estimated proxy Shareholder Acquisition that VS would S-4 filed S-4 filed S-4 to be filing date after vote, Corp
Slide 11: Company Overview
Company Overview vividseats
Slide 12: Experienced Management Team Poised to Drive Continued Growth
Experienced Management Team Poised to Drive Continued Growth Today’s Presenters Stan Chia Lawrence Fey Jon Wagner Riva Bakal CEO CFO CTO SVP, Strategy & Product Senior Leadership Team Sarah Doll Geoff Lester David Morris Dan Timm Tyra Neal Chief People Chief General Chief Chief Marketing Officer Com
Slide 13: Vivid Seats: Scaled, Growth and Profitable
Vivid Seats: Scaled, Growth and Profitable Optimally positioned for the return of live events Our Mission: To be the market-leading ticketing marketplace and technology partner that powers the ticketing ecosystem Our Business: We are a scaled, growing, and highly profitable secondary ticketing marke
Slide 14: Vivid Seats Is a Full-Service Marketplace…
Vivid Seats Is a Full-Service Marketplace… The Vivid Seats Ecosystem Direct integrations across Skybox all major marketplaces Free-to-use ERP system with direct integrations across all Fans Sellers major marketplaces Vivid Seats Marketplace Broad consumer base Vivid Seats Infrastructure Marketplace
Slide 15: …With a Broad Portfolio of Events
…With a Broad Portfolio of Events Full spectrum of ticket choices from 50-yard line seats at the Super Bowl to standing room only tickets at small concerts Concerts Sports Theater (46% of 2019 Marketplace GOV) (42% of 2019 Marketplace GOV) (12% of 2019 Marketplace GOV) 200,000+ Unique Events Sold(1)
Slide 16: Our Multi-Sided Network: Fans and Sellers
Our Multi-Sided Network: Fans and Sellers Fans Sellers Fan Breakout: Seller Breakout: Diverse age range with millennials Broad range from the casual opportunist who representing the largest segment; no owns 10+ season tickets to large sophisticated notable gender skew brokers managing > $100 MM tick
Slide 17: Two-Sided Value Proposition Drives Powerful Network Efficiencies
Two-Sided Value Proposition Drives Powerful Network Efficiencies Benefits to Sellers Benefits to Buyers Relationship Management Efficiency Dedicated seller account management with Marketplace provides economic value + deep understanding of business needs a frictionless shopping experience Exceptiona
Slide 18: Supply / Demand Dynamics Create Favorable Market Backdrop…
Supply / Demand Dynamics Create Favorable Market Backdrop… Large and Growing Market (1) $bn Consumers Craving Live Experiences Artist Reliance on $39 + $38 Touring Income $36 $34 Demand $32 $11 Supply $11 $29 $10 Consumer Spending + $9 $8 on Live Events $7 Increasing Pre- Pandemic Sports teams, venu
Slide 19: …With Significant Pent-up Demand for Live Experiences
…With Significant Pent-up Demand for Live Experiences Elevated purchasing power after a period of record Performers Itching to Get Back on Tour consumer savings Planned Tours for Artists selling >500K $tn Cumulative U.S. Personal Savings Live Nation Tickets Since Jan-19 ~45 $4.6 $1.9 trillion of pen
Slide 20: Track Record of Growth Built on Innovation and Customer Service
Track Record of Growth Built on Innovation and Customer Service Founded in 2001, Vivid Seats scaled rapidly and is continuing to diversify its offering to drive sustained growth Announced Partnership with $3,000 $1bn in >$100mm LTM Annual GOV EBITDA Stan Chia Joined as CEO Deployed Web 2.0, $2,500 L
Slide 21: Unique Value Proposition within Ticketing Ecosystem
Unique Value Proposition within Ticketing Ecosystem(1) Profitability Circle size represents Unique combination of growth, approximate profitability and cash flow (TM+ only) GOV Well-positioned to exploit COVID-19 dislocation and competitor M&A integration Freshly capitalized balance sheet and partne
Slide 22: Positioned to Benefit Disproportionately from the Market Rebound
Positioned to Benefit Disproportionately from the Market Rebound Significant goodwill generated during pandemic amongst constituents • Provided customers option of cash refund or loyalty + charity upon event cancellations Market Sentiment • Introduced differentiated ‘net payment’ model with sellers
Slide 23: Product and Technology Review
Product and Technology Review
Slide 24: Data, Platform and Proprietary Algorithms Create Unique Value
Data, Platform and Proprietary Algorithms Create Unique Value Raw Data Platform & Algorithms Marketplace Benefits Search Data Billions of data points optimize customer Customer Traffic Data • acquisition Transaction History • Reach customers throughout buying process • Share targeted and relevant co
Slide 25: Tech Stack Enables Rapid Scaling, Integration and Innovation
Tech Stack Enables Rapid Scaling, Integration and Innovation Modernized Tech infrastructure: Accelerated tech stack auto scaling innovation Integration Public company Increased dev capabilities readiness velocity Vivid Seats • 25
Slide 26: App Provides a Holistic Engagement & Transactional Experience
App Provides a Holistic Engagement & Transactional Experience Native Apps on iOS and Android span all critical customer moments Discovery Engagement Rewards Program Transactional Path Simplified Purchase Personalized Content across genres & The most generous Streamlined shopping Purchase and recomme
Slide 27: App Experience and Loyalty Program Increase Retention
App Experience and Loyalty Program Increase Retention Tiered rewards system for every fan with in-app perks App GOV has increased ~4x since 2017 and accounted for 40%+ of 2020 GOV (1) Auto-enrollment with app download Material increase in App traffic since v2.0 and loyalty launch App v3.0 launched i
Slide 28: Several Major Consumer Facing Launches in 2021
Several Major Consumer Facing Launches in 2021 Positioning our consumer experience + brand as demand returns 1 2 3 4 App 3.0 Web 2.0 Loyalty 2.0 Brand (re)Launch iOS & Android mWeb & Desktop Vivid Seats • 28
Slide 29: New Launches Cascade Across Consumer Experience
New Launches Cascade Across Consumer Experience A new foundation to drive engagement through discovery, loyalty and content Discovery Engagement Rewards Program Transactional Path Simplified Purchase Personalized Content across genres & The most generous loyalty Streamlined shopping Purchase and rec
Slide 30: Best-in-class Seller Technology with Skybox Platform
Best-in-class Seller Technology with Skybox Platform Relationships + business-enabling tech positions Vivid Seats as marketplace of choice Cloud-based POS solution adopted by large share of seller base Rich feature set across key seller activities – inventory management, pricing, fulfillment, report
Slide 31: Brand & Marketing Overview
Brand & Marketing Overview vividseats
Slide 32: Foundation Brand Tenets
Foundation Brand Tenets Experience Trust Value Authoritative Selection Innovation Community It Live! We believe 100% Buyer Scale and Our partnerships Industry leading Native apps Community and everyone should Guarantee and structural with category seller technology across all charity experience it l
Slide 33: Aided Brand Awareness
Brand Opportunity Aided Brand Awareness: <10% For Vivid Seats Aided brand awareness is low Pre-Covid brand awareness metrics Aided Brand Awareness 75% were also <10% (early 2020) 54% Opportunity to craft a brand 33% narrative which resonates with consumers and builds mindshare 16% <10% Source: YouGo
Slide 34: The new brand shines across all consumer touch points
The new brand shines across all consumer touch points We are bringing the passion and energy we have for live events to all fans mWeb Emails Visual Corp Site Voice & Tone Speak to the fan in all of us Celebratory. Relatable. Chat > In-the-Know. Vivid Seats • 34
Slide 35: Our revamped loyalty program delivers even more value
Our revamped loyalty program delivers even more value Launched in July 2021 with Partner Perks + Surprise Upgrade at Lollapalooza Buzz & media pick up from launch: & • Free tickets for every fan Surprise & Delight at Lollapalooza After Party • Every purchase counts: Collect for Icon members 10 stamp
Slide 36: Ready to invest across channels in brand marketing
Ready to invest across channels in brand marketing New brand visual + verbal identity in place • Capitalizes on the current desire for live events – passion, excitement and Brand energy resonates with all fans Identity • Safety and trust threaded through the visual and verbal identity: “informed” an
Slide 37: Financials
Financials vividseats
Slide 38: Vivid Seats Financial Highlights
Vivid Seats Financial Highlights Connecting millions of buyers with thousands of sellers Growth at Scale • $2.2 billion of 2019 Marketplace Gross Order Value (‘Marketplace GOV’) • 17 million tickets sold by 3,000+ sellers across 200,000+ unique events in 2019 Established history of generating signif
Slide 39: Our P&L (2019 Figures)
Our P&L (2019 Figures) • Marketplace segment generates robust margins and accounts for significant majority of Net Contribution Marketplace $mm % Resale $mm % Revenue 403.6 100% Revenue 65.3 100% Less: Cost of Revenues (52.9) (13%) Less: Cost of Revenues (53.1) (81%) Gross Profit 350.8 87% Gross Pro
Slide 40: Return to Pre-Pandemic GOV in 2022 & Steady Growth Thereafter
Return to Pre-Pandemic GOV in 2022 & Steady Growth Thereafter Projections prepared during early Q1 2021 Marketplace GOV ($mm)(1) Revenues ($mm) Adjusted EBITDA ($mm)(2) $3,090 $591 $189 $2,728 $525 $2,364 $2,280 $469 $459 $147 $119 $110 $781 $168 $7 -$80 $347 $35 2019 2020 2021E 2022E 2023E 2024E 20
Slide 41: Key Metrics Underpinning the Forecast
Key Metrics Underpinning the Forecast Projections prepared during early Q1 2021 Marketplace Gross Order Value ($mm)(1) Total Marketplace Orders (000s)(2) 9,422 8,366 • Marketplace GOV and Total $3,090 $2,728 7,185 7,292 Marketplace Orders return to $2,280 $2,364 2019 levels in 2022 with long- term d
Slide 42: Multiple Drivers of Potential Upside Beyond the Forecast
Multiple Drivers of Potential Upside Beyond the Forecast ($million) Illustrative Adj. EBITDA Impact of Potential Upside Levers Structural Market Rebound Illustrative $15-$45 Adjusted EBITDA 5-15% Increase $20-$50 in AOS 10-25% Industry $25-$70 Order Growth 2022E Adjusted $35-$70 Marketing Efficiency
Slide 43: 2021 Outperformance Relative to Projections
2021 Outperformance Relative to Projections ($million) Marketplace GOV(1) Revenues Adjusted EBITDA(2) $810 $168 $40 $140 $781 $7 2021E 2021 six months ended 2021E 2021 six months ended 2021E 2021 six months ended 6/30/21 6/30/21 6/30/21 (1) Marketplace GOV represents the total transactional amount o
Slide 44: Q2 Financial Performance
Q2 Financial Performance $693mm of Marketplace GOV and 1.7mm Total Marketplace Orders Marketplace GOV and • Meaningful ramp in Marketplace GOV and Total Marketplace Orders over the Total Marketplace Orders course of the quarter • Average Order Size (“AOS”) of $400+ driven by (1) pent-up demand and (
Slide 45: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow • Cash balance: $461mm as of 6/30/21 - Cash balance reflects quarterly interest payment and quarterly amortization payment • Net debt: Significantly deleveraged pro forma balance sheet post business combination - Result of rapid right sizing of cost structure during pande
Slide 46: Comparable Company Benchmarking
Comparable Company Benchmarking Vivid Seats Marketplaces Ticketing (1) 67.2% Median: 46.5% Revenue 56.1% 52.5% 50.5% 44.0% 47.3% growth plus 42.4% 46.5% EBITDA margin 27.4% 33.6% 33.4% (‘23E) 20.1% Median: 22.3% Revenue YoY 32.1% 29.9% 29.6% growth 22.2% 22.0% 22.3% 25.9% 26.9% ’22E–’23E 17.4% 18.1%
Slide 47: Comparable Company Benchmarking (continued)
Comparable Company Benchmarking (continued) Vivid Seats Marketplaces Ticketing (1) EV ($bn) 2.1(2) 47.4 5.4 33.1 12.9 105.2 70.8 18.7 17.4 1.7 22.2 1.7 2022 Median: 43.7x EV / EBITDA 66.4x 68.5x 65.6x 2023 Median: 36.2x 53.1x 50.4x 49.6x 49.8x 42.3x 43.7x ’22E 39.6x 36.2x 35.0x 32.6x ’23E 28.1x 25.6
Slide 48: Q&A
Q&A
Slide 49: Thank You!
Thank You! vividseats
Slide 50: Appendix
Appendix vividseats
Slide 51: GAAP Net Income to Adjusted EBITDA Reconciliation
GAAP Net Income to Adjusted EBITDA Reconciliation ($million) Years Ended December 31 Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2020 2021 2020 2021 Net (loss) income ($53.8) ($774.2) ($662.1) $2.6 ($700.6) ($17.6) Interest expense 41.5 57.5 13.5 16.8 22.8 33.2 Depreciation and a