10-Q 1 eb-20220930.htm 10-Q eb-20220930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________
FORM 10-Q
____________________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 001-38658
_______________________________________________________________________________
EVENTBRITE, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________________________________
Delaware14-1888467
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
535 Mission Street, 8th Floor,
San Francisco, CA 94105
(Address of principal executive offices) (Zip Code)

(415) 692-7779
(Registrant's telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A common stock, $0.00001 par valueEBNew York Stock Exchange LLC
_________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒  
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  
As of October 27, 2022, 81,049,990 shares of Registrant's Class A common stock and 17,640,167 shares of Registrant's Class B common stock were outstanding.


EVENTBRITE, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 2022
TABLE OF CONTENTS

Page
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
PART I. FINANCIAL INFORMATION
Item 1.Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Stockholders' Equity
Condensed Consolidated Statements of Cash Flows
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.Exhibits



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "appears," "shall," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements related to the impacts of the COVID-19 global health pandemic, including its impact on us, our operations, or our future financial or operational results; the duration and extent of, and recovery from the COVID-19 global health pandemic, including the impact of vaccines, the introduction and spread of new variants or mutant strains of the virus, the removal or reimposition of restrictions on in-person events, the market response to the recovery, our expectations regarding the timing of recovery of paid ticket volumes and event creator and event attendees’ behavior in relation to the recovery; statements regarding our convertible senior notes, including the intended use of the net proceeds; statements about our future financial performance, including our revenue, costs of revenue and operating expenses; our anticipated growth and growth strategies and our ability to effectively manage that growth; our ability to achieve and grow profitability; changes in our business model; our advance payout program; the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; our predictions about industry and market trends; our ability to attract and retain creators; our ability to successfully operate internationally; our ability to attract and retain employees; our ability to comply with modified or new laws and regulations applying to our business; and our ability to successfully defend litigation brought against us and the potential effect of any current litigation or audits in certain jurisdictions with regard to indirect tax matters on our business, financial position, results of operations or liquidity.
The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors, including those described in the section titled "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 and this Quarterly Report on Form 10-Q. We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events.
All forward-looking statements are based on information and estimates available to the Company at the time of this Quarterly Report on Form 10-Q and are not guarantees of future performance. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.






PART I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements

EVENTBRITE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value amounts and share data)
(Unaudited)
September 30, 2022December 31, 2021
Assets
Current assets
          Cash and cash equivalents$675,817 $634,378 
          Funds receivable26,525 18,197 
          Accounts receivable, net2,009 1,110 
          Creator signing fees, net929 1,184 
          Creator advances, net825 862 
          Prepaid expenses and other current assets9,425 17,877 
                    Total current assets715,530 673,608 
Restricted cash1,344 1,781 
Creator signing fees, noncurrent1,253 2,225 
Property and equipment, net6,975 7,162 
Operating lease right-of-use assets6,175 10,940 
Goodwill174,388 174,388 
Acquired intangible assets, net24,189 31,116 
Other assets1,784 1,756 
                    Total assets$931,638 $902,976 
Liabilities and Stockholders’ Equity
Current liabilities
          Accounts payable, creators$354,941 $285,222 
          Accounts payable, trade723 1,083 
          Chargebacks and refunds reserve20,397 21,395 
          Accrued compensation and benefits11,297 10,910 
          Accrued taxes9,697 11,068 
          Operating lease liabilities3,473 4,149 
          Other accrued liabilities13,549 24,139 
                    Total current liabilities414,077 357,966 
Accrued taxes, noncurrent8,689 12,868 
Operating lease liabilities, noncurrent3,689 8,677 
Long-term debt355,067 353,564 
Other liabilities 1 
                    Total liabilities781,522 733,076 
Commitments and contingencies (Note 15)
Stockholders’ equity
Preferred stock, $0.00001 par value; 100,000,000 shares authorized, no shares issued or outstanding as of September 30, 2022 and December 31, 2021
  
Common stock, $0.00001 par value; 1,100,000,000 shares authorized; 98,679,389 shares issued and outstanding as of September 30, 2022; 97,246,465 shares issued and outstanding as of December 31, 2021
1 1 
Additional paid-in capital943,083 903,470 
Accumulated deficit(792,968)(733,571)
                    Total stockholders’ equity150,116 169,900 
                    Total liabilities and stockholders’ equity$931,638 $902,976 
(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
2


EVENTBRITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net revenue$67,472 $53,367 $189,388 $127,496 
Cost of net revenue23,450 18,238 66,465 49,966 
                    Gross profit44,022 35,129 122,923 77,530 
Operating expenses
          Product development 22,249 16,678 63,308 48,393 
          Sales, marketing and support14,455 11,360 41,866 23,357 
          General and administrative20,596 18,319 58,908 61,080 
                    Total operating expenses57,300 46,357 164,082 132,830 
                    Loss from operations(13,278)(11,228)(41,159)(55,300)
Interest expense(2,826)(2,814)(8,461)(13,200)
Loss on debt extinguishment   (49,977)
Other income (expense), net(5,100)(2,460)(9,818)(2,882)
                    Loss before income taxes(21,204)(16,502)(59,438)(121,359)
Income tax provision (benefit)(80)311 (41)885 
Net loss$(21,124)$(16,813)$(59,397)$(122,244)
Net loss per share, basic and diluted$(0.21)$(0.18)$(0.61)$(1.30)
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted98,543 94,462 98,069 93,794 
(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
3

EVENTBRITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
(Unaudited)

Common Stock-Class ACommon Stock-Class BAdditional Paid-In CapitalAccumulated DeficitTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 202179,524,112 $1 17,722,353 $ $903,470 $(733,571)$169,900 
Issuance of common stock upon exercise of stock options207,361 — — — 1,464 — 1,464 
Issuance of restricted stock awards2,515 — — — — — — 
Issuance of common stock for settlement of RSUs341,723 — — — — — — 
Shares withheld related to net share settlement(117,374)— — — (1,711)— (1,711)
Conversion of common stock from Class B to Class A3,266 — (3,266)— — —  
Stock-based compensation— — — — 12,968 — 12,968 
Net loss— — — — — (18,185)(18,185)
Balance at March 31, 202279,961,603 $1 17,719,087 $ $916,191 $(751,756)$164,436 
Issuance of common stock upon exercise of stock options156,014 — — — 1,405 — 1,405 
Issuance of restricted stock awards39,795 — — — — — — 
Issuance of common stock for settlement of RSUs559,321 — — — — — — 
Shares withheld related to net share settlement(195,195)— — — (2,084)— (2,084)
Conversion of common stock from Class B to Class A1,218 — (1,218)— — — — 
Issuance of common stock for 2018 Employee Stock Purchase Plan (ESPP) Purchase79,282 — — — 790 — 790 
Stock-based compensation— — — — 14,356 — 14,356 
Net loss— — — — — (20,088)(20,088)
Balance at June 30, 202280,602,038 $1 17,717,869 $ $930,658 $(771,844)$158,815 
Issuance of common stock upon exercise of stock options28,708 — — — 158 — 158 
Issuance of restricted stock awards7,185 — — — — — — 
Issuance of common stock for settlement of RSUs506,715 — — — — — — 
Shares withheld related to net share settlement(183,126)— — — (1,543)— (1,543)
Conversion of common stock from Class B to Class A77,702 — (77,702)— — —  
Stock-based compensation— — — — 13,810 — 13,810 
Net loss— — — — — (21,124)(21,124)
Balance at September 30, 202281,039,222 $1 17,640,167 $ $943,083 $(792,968)$150,116 



4

EVENTBRITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
(Unaudited)
Common Stock-Class ACommon Stock-Class BAdditional Paid-In CapitalAccumulated DeficitTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 202069,475,511 $1 23,179,274 $ $913,115 $(597,544)$315,572 
Cumulative effect adjustment upon adoption of ASU 2020-06— — — — (45,452)3,053 (42,399)
Issuance of common stock upon exercise of stock options589,978 — — — 4,680 — 4,680 
Issuance of restricted stock awards4,137 — — — — — — 
Issuance of common stock for settlement of RSUs386,894 — — — — — — 
Shares withheld related to the net share settlement(140,325)— — — (2,611)— (2,611)
Conversion of common stock from Class B to Class A2,702,492 — (2,702,492)— — — — 
Purchase of 2026 Capped Calls on 2026 Notes— — — — (18,509)— (18,509)
Stock-based compensation— — — — 11,450 — 11,450 
Net loss— — — — — (84,891)(84,891)
Balance at March 31, 202173,018,687 $1 20,476,782 $ $862,673 $(679,382)$183,292 
Issuance of common stock upon exercise of stock options446,032 — — — 3,111 — 3,111 
Cancellation of restricted stock awards(73,829)— — — — — — 
Issuance of common stock for settlement of RSUs517,686 — — — — — — 
Issuance of common stock for ESPP Purchase52,227 — — — 730 — 730 
Shared withheld related to the net share settlement(170,698)— — — (3,981)— (3,981)
Conversion of common stock from Class B to Class A1,741,362 — (1,741,362)— — — — 
Stock-based compensation— — — — 12,508 — 12,508 
Net loss— — — — — (20,540)(20,540)
Balance at June 30, 202175,531,467 $1 18,735,420 $ $875,041 $(699,922)$175,120 
Issuance of common stock upon exercise of stock options285,502 — — — 2,460 — 2,460 
Issuance of restricted stock awards5,063 — — — — — — 
Issuance of common stock for settlement of RSUs430,127 — — — — — — 
Shares withheld related to net share settlement(155,573)— — — (2,767)— (2,767)
Conversion of common stock from Class B to Class A4,469 — (4,469)— — — — 
Stock-based compensation— — — — 12,458 — 12,458 
Net loss— — — — — (16,813)(16,813)
Balance at September 30, 202176,101,055 $1 18,730,951 $ $887,192 $(716,735)$170,458 
(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
5

EVENTBRITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended September 30,
20222021
Cash flows from operating activities
Net loss$(59,397)$(122,244)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization11,059 14,492 
Stock-based compensation expense40,618 35,985 
Amortization of debt discount and issuance costs1,503 3,421 
Loss on debt extinguishment 49,977 
Payment in kind interest 2,178 
Non-cash operating lease expenses2,361 3,830 
Amortization of creator signing fees955 2,252 
Adjustments related to creator advances, creator signing fees, and allowance for credit losses(1,792)2,762 
Provision for chargebacks and refunds10,909 2,253 
Other618 607 
Changes in operating assets and liabilities:
Accounts receivable(1,728)(834)
Funds receivable(8,328)(8,396)
Creator signing fees and creator advances2,930 4,525 
Prepaid expenses and other assets8,424 (11,048)
Accounts payable, creators69,719 136,461 
Accounts payable(363)(1,117)
Chargebacks and refunds reserve(11,907)(12,499)
Accrued compensation and benefits387 5,232 
Accrued taxes(6,048)1,162 
Operating lease liabilities(3,260)(4,326)
Other accrued liabilities(9,389)20,528 
Payment in kind interest (8,962)
                         Net cash provided by operating activities47,271 116,239 
Cash flows from investing activities
Purchases of property and equipment(1,254)(516)
Capitalized internal-use software development costs(2,305)(1,142)
Cash paid for acquisitions(1,125) 
                         Net cash used in investing activities(4,684)(1,658)
Cash flows from financing activities
Proceeds from issuance of debt 212,750 
Debt issuance costs (5,738)
Purchase of convertible notes capped calls (18,509)
Principal repayment of debt obligations and prepayment premium (143,247)
Proceeds from exercise of stock options3,027 10,250 
Taxes paid related to net share settlement of equity awards(5,338)(9,359)
Proceeds from issuance of common stock under ESPP790 730 
Principal payments on finance lease obligations(64)(243)
                         Net cash (used in) provided by financing activities(1,585)46,634 
                         Net increase in cash, cash equivalents and restricted cash41,002 161,215 
Cash, cash equivalents and restricted cash
Beginning of period636,159 508,430 
End of period$677,161 $669,645 
Supplemental cash flow data
Interest paid$5,486 $5,678 
Income taxes paid, net of refunds234 155 
Non-cash investing and financing activities
Reduction of right of use asset due to modification2,163  
(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
6


EVENTBRITE, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Overview and Basis of Presentation
Description of Business
Eventbrite, Inc. (Eventbrite or the Company) has built a powerful, broad technology platform to enable creators to solve the challenges associated with creating in-person and online live experiences. The Company’s platform integrates components needed to seamlessly plan, promote and produce live events. To further enhance the value of the creators’ self-service experience, the Company is working to reframe the Eventbrite product around the ongoing operational needs of creators in addition to the requirements of individual events. To this end, the Company has improved events calendaring, streamlined the event creation process and launched tools to assist creators in promoting multiple events and increasing audience size for their events.
Impact of COVID-19 and Macroeconomic Conditions on our Business
The Company continues to be significantly impacted by the COVID-19 pandemic. The full extent and duration of the impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition remain uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the introduction and spread of new variants or mutant strains of the virus, the continuation of existing or implementation of new government restrictions, and the extent of containment actions taken on event gatherings in general, and the impact of these and other factors on the Company’s business in particular, which may result in a reduction in events and an increase in event cancellation losses. The effect of and uncertainties surrounding the COVID-19 pandemic have caused the Company to make significant estimates in its consolidated financial statements as of and for the three and nine months ended September 30, 2022, specifically related to chargebacks and refunds due to cancelled or postponed events, which impact net revenue, advance payouts, creator signing fees and creator advances.
The COVID-19 pandemic is ongoing in nature and the Company will continue to revise such estimates in future reporting periods to reflect management's best estimates of future outcomes. Significant uncertainty remains regarding the extent and duration of the impact that the COVID-19 pandemic will have on the Company’s business, and the impact of COVID-19 may persist for an extended period of time or become more pronounced.
Furthermore, as a result of economic pressures, including inflation, labor challenges, rising interest rates, economic recession and other factors, creators may scale back events which could materially and adversely affect our paid ticket volume, and consequently our net revenue and financial results.
Basis of Presentation
The accompanying condensed consolidated financial statements of the Company are unaudited. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal and recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations and cash flows for the interim periods. All intercompany transactions and balances have been eliminated. The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other future annual or interim period.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K).
Significant Accounting Policies
7

There have been no changes to our significant accounting policies described in our 2021 Form 10-K that have had a material impact on our unaudited condensed consolidated financial statements and related notes.
Use of Estimates
In order to conform with U.S. GAAP, the Company is required to make certain estimates, judgments and assumptions when preparing its consolidated financial statements. These estimates, judgments and assumptions affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reported periods. These estimates include, but are not limited to, the recoverability of creator signing fees and creator advances, chargebacks and refunds reserve, certain assumptions used in the valuation of equity awards, assumptions used in determining the fair value of business combinations, the allowance for credit losses, and indirect tax reserves. The Company evaluates these estimates on an ongoing basis. Actual results could differ from those estimates and such differences could be material to the Company’s consolidated financial statements.
Comprehensive Loss
For all periods presented, comprehensive loss equaled net loss. Therefore, the condensed consolidated statements of comprehensive loss have been omitted from the unaudited condensed consolidated financial statements.
Segment Information
The Company’s Chief Executive Officer (CEO) is the chief operating decision maker. The Company's CEO reviews discrete financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates as a single operating segment and has one reportable segment.
2. Revenue Recognition
The Company derives its revenues primarily from ticketing and payment processing. The Company also derives a smaller portion of revenues from marketing services. The Company's customers are event creators who use the Company's platform to sell tickets and market events to attendees. Revenue is recognized when or as control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.
Transaction Revenue
For ticketing services, the Company's service provides a platform to the event creator and attendee to transact. The Company's performance obligation is to facilitate and process that transaction and issue the ticket, and revenue is recognized by the Company when the ticket is sold. The amount that the Company earns for its services is fixed which typically consists of a flat fee and a percentage based fee per ticket. As a result, the Company records revenue on a net basis related to its ticketing service fees.
For payment processing services, the Company's service provides the event creator with the choice of whether to use Eventbrite Payment Processing (EPP) or to use a third-party payment processor, referred to as Facilitated Payment Processing (FPP).
Under the EPP option, the Company is the merchant of record and is responsible for processing the transaction and collecting the face value of the ticket and all associated fees at the time the ticket is sold. The Company is also responsible for remitting these amounts collected, less the Company's fees, to the event creator. For EPP services, the Company determined that it is the principal in providing the service as the Company is responsible for fulfilling the promise to process the payment and has discretion in establishing the price of its service. As a result, the Company records revenue on a gross basis related to its EPP service fees. Costs incurred for processing the ticketing transactions are included in cost of net revenues in the consolidated statements of operations. Under the FPP option, the Company is not responsible for processing the transaction or collecting the face value of the ticket and associated fees. In this case, the Company records revenue on a net basis related to its FPP service fees.
Revenue is presented net of indirect taxes, customer refunds, payment chargebacks, estimated uncollectible amounts, creator royalties, and amortization of creator signing fees. Previously, the Company offered upfront payments to creators entering into new or renewed ticketing arrangements. However, the Company is shifting from upfront payment incentives to performance based incentives on a limited basis.
8

If an event is cancelled by a creator, then any obligations to provide refunds to event attendees are the responsibility of that creator. If a creator is unwilling or unable to fulfill their refund obligations, the Company may, at its discretion, provide attendee refunds.
Marketing Revenue
Revenue from marketing services is derived from providing creators with access to various marketing tools and functionalities for a monthly subscription fee. The Company considers that it satisfies its performance obligation as it provides the services to customers and recognizes revenue ratably over the service term which varies from one month to a year.
3. Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents includes bank deposits and money market funds held with financial institutions with an original maturity of three months or less at the date of purchase.
Cash and cash equivalents balances include the face value of tickets sold on behalf of creators and their share of service charges, which are to be remitted to the creators. Such balances were $330.6 million and $268.6 million as of September 30, 2022 and December 31, 2021, respectively. Creator cash is legally unrestricted, and while generally the Company has not utilized creator cash for its own financing or investing activities in the past, the Company may invest a portion of creator cash in short-term investments in future periods. These amounts due to creators are included in accounts payable, creators on the consolidated balance sheets. See Note 8, "Accounts Payable, Creators", for more details.
The Company has issued letters of credit relating to contracts entered into with other parties under lease agreements and other agreements which have been collateralized with cash. This cash is classified as noncurrent restricted cash on the consolidated balance sheets. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows (in thousands):
September 30,
2022
December 31,
2021
September 30,
2021
Cash and cash equivalents$675,817 $634,378 $667,868 
Restricted cash 1,344 1,781 1,777 
Total cash, cash equivalents and restricted cash $677,161 $636,159 $669,645 
4. Funds Receivable
Funds receivable represents cash-in-transit from third-party payment processors that is received by the Company within approximately five business days from the date of the underlying ticketing transaction. The funds receivable balances include the face value of tickets sold on behalf of creators and their share of service charges, which amounts are to be remitted to the creators. Such amounts were $24.3 million and $16.7 million as of September 30, 2022 and December 31, 2021, respectively.
5. Accounts Receivable, Net
Accounts receivable, net is comprised of invoiced amounts to customers who use FPP for payment processing as well as other invoiced amounts. In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers various factors including the age of the balance, the creditworthiness of the customer and the customer’s current financial condition. Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. The following table summarizes the Company’s accounts receivable balance (in thousands):
September 30,
2022
December 31,
2021
Accounts receivable, customers$2,866 $2,085 
Allowance for credit losses(857)(975)
Accounts receivable, net$2,009 $1,110 
9

6. Creator Signing Fees, Net
Creator signing fees are incentives that are offered and paid by the Company to secure exclusive ticketing and payment processing rights with certain creators. The benefit the Company receives by securing exclusive ticketing and payment processing rights with certain creators from creator signing fees is inseparable from the customer relationship with the creators and accordingly the amortization of these fees is recorded as a reduction of revenue in the consolidated statements of operations.
As of September 30, 2022, the balance of creator signing fees, net is being amortized over a weighted-average remaining contract life of 3.4 years on a straight-line basis. The following table summarizes the activity in creator signing fees for the periods indicated (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Balance, beginning of period $2,538 $5,523 $3,409 $9,495 
Creator signing fees paid   5 18 
Amortization of creator signing fees (281)(652)(955)(2,252)
Write-offs and other adjustments (75)(515)(277)(2,905)
Balance, end of period $2,182 $4,356 $2,182 $4,356 
Creator signing fees are classified as follows on the condensed consolidated balance sheet as of the dates indicated (in thousands):
September 30,
2022
September 30,
2021
Creator signing fees, net$929 $1,739 
Creator signing fees, noncurrent1,253 2,617 
Total creator signing fees$2,182 $4,356 
7. Creator Advances, Net
Creator advances are incentives that are offered by the Company which provide the creator with funds in advance of the event. These are subsequently recovered by withholding amounts due to the Company from the sale of tickets for the event until the creator payment has been fully recovered.
The following table summarizes the activity in creator advances for the periods indicated (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Balance, beginning of period$1,150 $3,670 $862 $6,651 
Creator advances paid  335 75 
Creator advances recouped(325)(1,488)(2,247)(3,448)
Write-offs and other adjustments  1,875 (1,096)
Balance, end of period
$825 $2,182 $825 $2,182 
8. Accounts Payable, Creators
Accounts payable, creators consists of unremitted ticket sale proceeds, net of Eventbrite service fees and applicable taxes. Amounts are remitted to creators within five business days subsequent to the completion of the related event. Creators may apply to receive a portion of these proceeds prior to completion of their events.
For qualified creators, the Company passes ticket sales proceeds to the creator prior to the event, subject to certain limitations. Internally, the Company refers to these payments as advance payouts. When an advance payout is made, the Company reduces its cash and cash equivalents with a corresponding decrease to its accounts payable, creators. As of September 30, 2022 and December 31, 2021, advance payouts outstanding was approximately $394.0 million and $319.3 million, respectively.
10

9. Chargebacks and Refunds Reserve
The terms of the Company's standard merchant agreement obligate creators to reimburse attendees who are entitled to refunds. The Company records estimates for refunds and chargebacks of its fees as contra-revenue. When the Company provides advance payouts, it assumes risk that the event may be cancelled, fraudulent, or materially not as described, resulting in significant chargebacks and refund requests. See Note 8, “Accounts Payable, Creators”. If the creator is insolvent or has spent the proceeds of the ticket sales for event-related costs, the Company may not be able to recover its losses from these events, and such unrecoverable amounts could equal the value of the transaction or transactions settled to the creator prior to the event that is disputed, plus any associated chargeback fees not assumed by the creator. The Company records reserves for estimated advance payout losses as an operating expense classified within sales, marketing and support.
Reserves are recorded based on the Company's assessment of various factors, including the amounts paid and outstanding to creators in conjunction with the advance payout program, the nature of future events, the remaining time to event date, macro-economic conditions and current events, and actual chargeback and refund activity during the current year. The chargebacks and refunds reserve was $20.4 million and $21.4 million which primarily includes reserve balances for estimated advance payout losses of $18.2 million and $18.5 million as of September 30, 2022 and December 31, 2021, respectively.
Due to the nature of the COVID-19 situation and the limited amount of currently available data, there is a high degree of uncertainty around the outcome of events that are currently postponed or rescheduled and the remaining advance payouts balance. It is possible that this amount will not be sufficient and the Company's actual losses could be materially different from its current estimates. The Company will adjust reserves in the future to reflect best estimates of future outcomes. The Company cannot predict the outcome of or estimate the possible recovery or range of recovery from these matters.
10. Property and Equipment, Net
Property and equipment, net consisted of the following as of the dates indicated (in thousands):
September 30,
2022
December 31,
2021
Capitalized internal-use software development costs $54,113 $51,292 
Furniture and fixtures 893 1,298 
Computers and computer equipment 7,971 6,854 
Leasehold improvements 4,809 4,841 
Finance lease right-of-use assets605 605 
Property and equipment68,391 64,890 
Less: Accumulated depreciation and amortization (61,416)(57,728)
Property and equipment, net $6,975 $7,162 
The Company recorded the following amounts related to depreciation of fixed assets and capitalized internal-use software development costs during the periods indicated (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Depreciation expense$704 $373 $1,475 $1,550 
Amortization of capitalized internal-use software development costs822 1,235 2,657 4,555 
11. Leases
Operating Leases
The Company has operating leases primarily for office space. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Right-of-use assets also include adjustments related to prepaid or deferred lease payments and lease incentives. In calculating the present value of the lease payments, the Company utilizes its incremental borrowing rate, as the rates implicit in the leases were not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.
11

The Company subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease income is recorded as a reduction of operating expenses.
The components of operating lease costs were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Operating lease costs$798 $646 $2,361 $3,830 
Sublease income(48)(57)(154)(1,372)
Total operating lease costs, net$750 $589 $2,207 $2,458 
As of September 30, 2022, the Company's operating leases had a weighted-average remaining lease term of 2.7 years and a weighted-average discount rate of 3.4%.
As of September 30, 2022, maturities of operating lease liabilities were as follows (in thousands):
Operating Leases
The remainder of 2022$1,072 
20233,033 
20241,653 
20251,696 
2026141 
Thereafter 
Total future operating lease payments7,595 
Less: Imputed interest(433)
Total operating lease liabilities$7,162 
Reconciliation of lease liabilities as shown in the consolidated balance sheets
Operating lease liabilities, current$3,473 
Operating lease liabilities, noncurrent3,689 
Total operating lease liabilities$7,162 

12. Goodwill and Acquired Intangible Assets, Net
The carrying amounts of the Company's goodwill was $174.4 million as of September 30, 2022 and December 31, 2021. The Company tests goodwill for impairment at least annually, in the fourth quarter, or whenever events or changes in circumstances would more likely than not reduce the fair value of its single reporting unit below its carrying value. We did not record any goodwill impairment during the nine months ended September 30, 2022.
Acquired intangible assets consisted of the following (in thousands):
September 30, 2022December 31, 2021
CostAccumulated
Amortization
Net Book
Value
CostAccumulated
Amortization
Net Book
Value
Developed technology $22,396 $20,646 $1,750 $22,396 $20,029 $2,367 
Customer relationships 74,884 52,448 22,436 74,884 46,157 28,727 
Tradenames1,650 1,647 3 1,650 1,628 22 
Acquired intangible assets, net $98,930 $74,741 $24,189 $98,930 $67,814 $31,116 
The following tables set forth the amortization expense recorded related to acquired intangible assets for the three and nine months ended September 30, 2022 and 2021 (in thousands):
12

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Cost of net revenue $208 $208 $617 $617 
Sales, marketing and support2,071 2,606 6,291 7,751 
General and administrative 6 6 19 19 
Total amortization of acquired intangible assets $2,285 $2,820 $6,927 $8,387 
As of September 30, 2022, the total expected future amortization expense of acquired intangible assets by year is as follows (in thousands):
The remainder of 20222,282 
20238,593 
20248,300 
20255,014 
2026 
Thereafter 
    Total expected future amortization expense$24,189 
13. Fair Value Measurement
The Company measures its financial assets and liabilities at fair value at each reporting date using a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – Other inputs that are directly or indirectly observable in the marketplace.
Level 3 – Unobservable inputs that are supported by little or no market activity.
The Company’s cash equivalents, funds receivable, accounts receivable, accounts payable and other current liabilities approximate their fair value. All of these financial assets and liabilities are Level 1, except for debt. See Note 14, “Debt”, for details regarding the fair value of the Company's convertible senior notes.
14. Debt
As of September 30, 2022 and December 31, 2021, long-term debt consisted of the following (in thousands):
September 30, 2022December 31, 2021
2026 Notes2025 NotesTotal2026 Notes2025 NotesTotal
Outstanding principal balance$212,750 $150,000 $362,750 $212,750 $150,000 $362,750 
Less: Debt issuance costs(4,157)(3,526)(7,683)(4,915)(4,271)(9,186)
Carrying amount, long-term debt$208,593 $146,474 $355,067 $207,835 $145,729 $353,564 
13

The following tables set forth the total interest expense recognized related to the term loans and the convertible notes for the three and nine months ended September 30, 2022 and 2021 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Cash interest expense$2,274 $2,274 $6,801 $7,511 
Payment in kind interest   </