Vivid Seats Inc. [SEAT] Filings

10-Q 1 seat-20230331.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐	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: 001-40926

Vivid Seats Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	86-3355184
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
24 E. Washington Street Suite 900 Chicago, Illinois	60602
(Address of principal executive offices)	(Zip Code)

(312) 291-9966

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	SEAT	The Nasdaq Stock Market LLC
Warrants to purchase one share of Class A common stock	SEATW	The Nasdaq Stock Market 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, 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 April 30, 2023, the registrant had 77,676,300 shares of Class A common stock, $0.0001 par value per share, outstanding, net of treasury shares and 118,200,000 shares of Class B common stock, $0.0001 par value per share, outstanding.

table of contents


		Page

	Forward-Looking Statements	1
PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Deficit	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION	31

Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	33
Signatures		35

forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements regarding future events and the future results of Vivid Seats Inc. that are based on our current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in 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"). Words such as “expect,” “anticipate,” “target,” “goal,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “likely,” “may,” “designed,” “would,” “future,” “can,” “could,” and other similar expressions which are predictions of, indicate future events and trends or which do not relate to historical matters, are intended to identify such forward-looking statements. These statements are based on our current expectations and beliefs and involve a number of risks, uncertainties and assumptions that are difficult to predict.

For example, we may use forward-looking statements when addressing topics such as:

•

our ability to raise financing in the future;

•

our future financial performance;

•

our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

•

our ability to pay dividends on our Class A common stock on the terms currently contemplated or at all; and

•

factors relating to our business, operations and financial performance, including, but not limited to:

the impact of the pandemic on our business and the industries in which we operate;

our ability to compete in the ticketing industry;

our ability to maintain relationships with ticket buyers, sellers and distribution partners;

our ability to continue to improve our platform and maintain and enhance our brand;

the impact of extraordinary events or adverse economic conditions on discretionary consumer and corporate spending or on the supply and demand of live events;

our ability to comply with domestic regulatory regimes;

our ability to successfully defend against litigation;

our ability to maintain the integrity of our information systems and infrastructure, and to mitigate possible cyber security risks;

our ability to generate sufficient cash flows or raise additional capital necessary to fund our operations; and

other factors detailed under the section entitled “Risk Factors.”

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements are predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document, or in the case of statements incorporated by reference, on the date of the document incorporated by reference. While we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

Factors that might cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, under the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2023, under the section entitled “Risk Factors,” in our press releases, and in our other filings with the SEC.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of new information, future events, or risks. New information, future events, or risks may cause the forward-looking events we discuss in this report not to occur.

VIVID SEATS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data) (Unaudited)


	March 31,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	303,319		$	251,542
Restricted cash		675			748
Accounts receivable – net		46,531			36,531
Inventory – net		24,153			12,783
Prepaid expenses and other current assets		33,329			29,912
Total current assets		408,007			331,516
Property and equipment – net		10,308			10,431
Right-of-use assets – net		7,710			7,859
Intangible assets – net		81,800			81,976
Goodwill		715,258			715,258
Other non-current assets		4,432			4,391
Total assets	$	1,227,515		$	1,151,431
Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable	$	218,138		$	161,312
Accrued expenses and other current liabilities		183,765			181,970
Deferred revenue		25,920			31,983
Current maturities of long-term debt		2,750			2,750
Total current liabilities		430,573			378,015
Long-term debt – net		264,384			264,898
Long-term lease liabilities		14,850			14,911
Other liabilities		13,118			13,445
Total long-term liabilities		292,352			293,254
Commitments and contingencies (Note 11)
Redeemable noncontrolling interests		901,866			862,860

Shareholders' deficit
Class A common stock, $0.0001 par value; 500,000,000 shares authorized at March 31, 2023 and December 31, 2022; 82,902,276 and 82,410,774 issued and outstanding at March 31, 2023 and December 31, 2022, respectively		9			8
Class B common stock, $0.0001 par value; 250,000,000 shares authorized, 118,200,000 issued and outstanding at March 31, 2023 and December 31, 2022		12			12
Additional paid-in capital		644,759			663,908
Treasury stock, at cost, 5,291,497 and 4,342,477 shares at March 31, 2023 and December 31, 2022, respectively		(40,106	)		(32,494	)
Accumulated deficit		(1,001,950	)		(1,014,132	)
Total Shareholders' deficit		(397,276	)		(382,698	)
Total liabilities, Redeemable noncontrolling interests, and Shareholders' deficit	$	1,227,515		$	1,151,431

The accompanying notes are an integral part of these financial statements.

VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share data) (Unaudited)


	Three Months Ended March 31,
	2023			2022
Revenues	$	161,063		$	130,772
Costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)		37,760			32,164
Marketing and selling		54,772			54,228
General and administrative		32,389			29,275
Depreciation and amortization		2,598			1,385
Change in fair value of contingent consideration		34			—
Income from operations		33,510			13,720
Other (income) expense:
Interest expense – net		3,280			3,942
Loss on extinguishment of debt		—			4,285
Other (income) expense		(327	)		2,279
Income before income taxes		30,557			3,214
Income tax expense		285			76
Net income		30,272			3,138
Net income attributable to redeemable noncontrolling interests		18,090			1,879
Net income attributable to Class A Common Stockholders	$	12,182		$	1,259

Income per Class A common stock:
Basic	$	0.16		$	0.02
Diluted	$	0.15		$	0.02
Weighted average Class A common stock outstanding:
Basic		77,410,820			79,151,929
Diluted		195,823,982			198,414,147

The accompanying notes are an integral part of these financial statements.

VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands) (Unaudited)


	Three Months Ended March 31,
	2023		2022
Net income	$	30,272	$	3,138
Other comprehensive income:
Comprehensive income, net of taxes	$	30,272	$	3,138
Comprehensive income attributable to redeemable noncontrolling interests		18,090		1,879
Comprehensive income attributable to Class A Common Stockholders	$	12,182	$	1,259

The accompanying notes are an integral part of these financial statements.

VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF DEFICIT

(in thousands, except for share data) (Unaudited)


			Class A Common Stock				Class B Common Stock							Treasury Stock
	Redeemable noncontrolling interests		Shares		Amount		Shares		Amount		Additional paid-in capital			Shares		Amount		Accumulated deficit			Total shareholders' deficit
Balances at January 1, 2022	$	1,286,016		79,091,871	$	8		118,200,000	$	12	$	182,091			—	$	—	$	(1,042,794	)	$	(860,683	)
Net income		1,879		—		—		—		—		—			—		—		1,259			1,259
Issuance of shares		—		75,072		—		—		—		—			—		—		—			—
Deemed contribution from former parent		691		—		—		—		—		463			—		—		—			463
Equity-based compensation		—		—		—		—		—		2,443			—		—		—			2,443
Subsequent remeasurement of Redeemable noncontrolling interests		18,706		—		—		—		—		(18,706	)		—		—		—			(18,706	)
Balances at March 31, 2022	$	1,307,292		79,166,943	$	8		118,200,000	$	12	$	166,291			—	$	—	$	(1,041,535	)	$	(875,224	)


				Class A Common Stock				Class B Common Stock							Treasury Stock
	Redeemable noncontrolling interests			Shares		Amount		Shares		Amount		Additional paid-in capital			Shares			Amount			Accumulated deficit			Total shareholders' deficit
Balances at January 1, 2023	$	862,860			82,410,774	$	8		118,200,000	$	12	$	663,908			(4,342,477	)	$	(32,494	)	$	(1,014,132	)	$	(382,698	)
Net income		18,090			—		—		—		—		—			—			—			12,182			12,182
Issuance of shares		—			491,502		1		—		—		—			—			—			—			1
Deemed contribution from former parent		577			—		—		—		—		391			—			—			—			391
Equity-based compensation		—			—		—		—		—		4,615			—			—			—			4,615
Repurchases of common stock		—			—		—		—		—		—			(949,020	)		(7,612	)		—			(7,612	)
Distributions to non-controlling interest		(3,816	)		—		—		—		—		—			—			—			—			—
Subsequent remeasurement of Redeemable noncontrolling interests		24,155			—		—		—		—		(24,155	)		—			—			—			(24,155	)
Balances at March 31, 2023	$	901,866			82,902,276	$	9		118,200,000	$	12	$	644,759			(5,291,497	)	$	(40,106	)	$	(1,001,950	)	$	(397,276	)

The accompanying notes are an integral part of these financial statements.

VIVID SEATS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (Unaudited)


	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities
Net income	$	30,272		$	3,138
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,598			1,385
Amortization of deferred financing costs and interest rate cap		226			329
Equity-based compensation expense		5,530			3,597
Loss on extinguishment of debt		—			4,285
Change in fair value of warrants		(327	)		2,279
Amortization of leases		150			490
Loss on asset disposals		7			—
Change in fair value of contingent consideration		34			—
Change in assets and liabilities:
Accounts receivable		(10,000	)		(17,854	)
Inventory		(11,370	)		(6,126	)
Prepaid expenses and other current assets		(3,417	)		(3,252	)
Accounts payable		56,826			45,094
Accrued expenses and other current liabilities		444			(10,599	)
Deferred revenue		(6,063	)		3,094
Other assets and liabilities		201			(2,326	)
Net cash provided by operating activities		65,111			23,534
Cash flows from investing activities
Purchases of property and equipment		(215	)		(693	)
Investments in developed technology		(2,027	)		(2,748	)
Purchases of personal seat licenses		(365	)		—
Net cash used in investing activities		(2,607	)		(3,441	)
Cash flows from financing activities
Payments of February 2022 First Lien Loan		(688	)		—
Repurchase of common stock as treasury stock		(7,612	)		—
Cash paid for milestone payments		(2,500	)		—
Payments of June 2017 First Lien Loan		—			(465,712	)
Proceeds from February 2022 First Lien Loan		—			275,000
Payments of deferred financing costs and other debt-related costs		—			(4,856	)
Net cash used in financing activities		(10,800	)		(195,568	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		51,704			(175,475	)
Cash, cash equivalents, and restricted cash – beginning of period		252,290			489,810
Cash, cash equivalents, and restricted cash – end of period	$	303,994		$	314,335
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,941		$	3,612
Cash paid for operating lease liabilities	$

Vivid Seats Inc. [SEAT] Filings
10-Q	[2023-05-09]
10-K	[2023-03-07]
10-Q	[2022-11-08]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-15]
10-Q	[2021-11-15]
S-1	[2021-11-05]