STUB — StubHub Holdings, Inc.

Summary of StubHub's Q4 and Year-End 2025 Earnings Call

1. Key Financial Results and Metrics

• Gross Merchandise Sales (GMS): $9.2 billion for 2025, up 6% year-over-year; excluding the Eras Tour, GMS grew 18%.
• Q4 GMS: $2.3 billion, down 8% year-over-year, primarily due to lapping a strong Q4 2024.
• Revenue: $1.7 billion for the full year, down from $1.8 billion in 2024; Q4 revenue was $449 million, down 16% year-over-year.
• Adjusted Gross Margin: 83% for both Q4 and full year 2025, up from 76% in Q4 2024.
• Adjusted EBITDA: $232 million for 2025 (13% margin); $63 million for Q4 (14% margin).
• Sales and Marketing Expenses: $943 million for the year, or 54% of revenue, up from 47% in 2024.
• Free Cash Flow: Nearly 70% conversion of adjusted EBITDA.
• Debt Reduction: Total debt decreased by approximately 35% to $1.5 billion.

2. Strategic Updates and Business Highlights

• StubHub maintains a leading position in the North American secondary ticketing market with approximately 50% market share.
• The company is shifting from a business development-led strategy to a product-led approach, focusing on direct issuance and leveraging AI for operational efficiency.
• StubHub is investing in building a technology-driven ecosystem to facilitate direct ticket issuance, aiming for long-term growth rather than immediate revenue.
• The advertising business is generating modest revenue, with plans to enhance its model for better customer experience.

3. Forward Guidance and Outlook

• For 2026, StubHub expects GMS to grow to between $9.9 billion and $10.1 billion (9% growth at midpoint).
• Adjusted EBITDA guidance for 2026 is between $400 million and $420 million.
• The company anticipates continued market share gains in North America and accelerated growth in international markets, which currently account for about 15% of GMS.

4. Bad News, Challenges, or Points of Concern

• Q4 GMS decline reflects challenging year-over-year comparisons due to the strong performance in Q4 2024.
• The company faces a potential regulatory environment that could impact the secondary ticketing market, although it currently operates under a favorable status quo.
• StubHub's advertising initiative is still in early stages, generating only modest revenue, and there is a cautious approach to scaling it further.

5. Notable Q&A Insights

• Management emphasized the importance of long-term strategy over immediate revenue growth, particularly regarding direct issuance and advertising.
• There was discussion around the impact of primary ticketing dynamic pricing on secondary market volumes, with management asserting no significant adverse effects observed historically.
• The company is optimistic about international growth, noting it is outpacing North American growth.
• Regulatory discussions are focused on high-demand concert ticket reselling, which constitutes about 10% of GMS, but management believes StubHub's diversified offerings provide insulation against regulatory changes.

Overall, StubHub's performance in 2025 reflects a strong market position and strategic focus on long-term growth, despite facing some short-term challenges and uncertainties in the regulatory landscape.