StubHub (STUB) Q4 2025 Earnings Call Transcript

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Date

Wednesday, March 4, 2026 at 5 p.m. ET

Call participants

• Founder, Chairman, and Chief Executive Officer — Eric Baker
• Chief Financial Officer — Constance James
• Chief Corporate Communications Officer — Clinton Hooks

Takeaways

• Gross merchandise sales (GMS) -- $9.2 billion for the year, representing 6% year-over-year growth; excluding the Eras Tour, growth was 8% year over year.
• North America market share -- Approximately 50% in secondary ticketing, driven by share gains and deliberate investments in core resale.
• International expansion -- Growth outpaced North America, and international GMS represented approximately 15% of total GMS.
• Revenue -- $1.7 billion for the year, down from $1.8 billion in 2024, reflecting direct-issuance minimum guarantee structures in 2024 and intentional take-rate reductions to drive share gains.
• Fiscal Q4 2025 revenue -- $449 million, or 19% of GMS, down 16% year over year, with the decline primarily due to lower GMS and the removal of prior-year principal revenue structures. (Fiscal year ended Dec. 31, 2025.)
• Adjusted gross margin -- 83% for the year, up 200 basis points from 2024, and 83% in fiscal Q4 2025, up from 76% in the prior-year quarter, reflecting the elimination of costly minimum guarantees.
• Adjusted EBITDA -- $232 million for the year, equivalent to a 13% margin, with fiscal Q4 at $63 million, or 14% margin, both reflecting aggressive market share and product investments.
• Adjusted sales and marketing expenses -- $943 million for the year, or 54% of revenue, versus $828 million and 47% of revenue in 2024, reflecting a deliberate sales and marketing ramp to accelerate market share.
• Debt reduction -- Total debt was reduced by approximately 35%, repaying $900 million to end at $1.5 billion.
• Cash position -- Year-end cash and equivalents of $1.2 billion, or $494 million net of amounts due to sellers.
• Free cash flow conversion -- Nearly 70% of adjusted EBITDA was converted into free cash flow for the year.
• Guidance for 2026 GMS -- $9.9 billion to $10.1 billion forecasted, with 9% growth at the midpoint; international is expected to accelerate, and no material revenue is assumed from direct issuance or advertising.
• Guidance for 2026 adjusted EBITDA -- $400 million to $420 million, supported by improved operating leverage and increased acquisition efficiency.
• Direct issuance strategy -- Management explicitly shifted to a product-led, AI-enabled technology approach in 2026; revenue impact from direct issuance is not included in guidance.
• Advertising revenue -- Fourth quarter launch generated modest revenue, with "tens of millions" expected in 2026; not material to guidance.
• Nonrecurring GAAP charges -- $1.4 billion noncash stock-based compensation expense linked to IPO, and $480 million noncash income tax expense from a deferred tax asset valuation allowance.
• High-demand concerts exposure -- Approximately 10% of GMS attributed to high-demand reseller concert tickets, indicating low concentration risk to potential regulatory action.
• AI and operational efficiency -- AI initiatives are positioned to deliver cost savings and customer experience enhancements; Reach Pro deployment helped secure incremental market share among sellers.
• Seasonality of revenue and margin -- Revenue and cash flow demonstrate significant intra-year variability due to event timing, motivating the exclusive use of annual guidance.
• Regulatory environment -- Resale remains "generally favorable" with no anticipated direct impact to StubHub's operations; management continues active regulatory engagement.

Risks

• Adjusted sales and marketing expenses rose to 54% of revenue for the year, increasing from 47% in 2024, as management acknowledged, "an elevated period of sales and marketing," directly reflecting higher spending to capture market share at the expense of near-term profitability.
• Fourth quarter GMS declined 8% year over year, which CFO James explained as a result of "lapping an unusually strong fourth quarter of 2024," highlighting clear volatility in quarter over quarter financial performance.
• Management does not expect short-term revenue growth from direct issuance or advertising in 2026, stating intentionally, "value in the long term rather than focusing on the short-term revenue creation this year."
• The core take-rate was intentionally lowered during 2025 to accelerate share gains, impacting revenue as a percentage of GMS, potentially indicating risk if such investments fail to deliver sustainable margin or share benefits in the future.

Summary

StubHub (NYSE:STUB) reported a decisive shift in strategic focus for 2026, prioritizing AI-enabled product development over immediate monetization of direct issuance and advertising initiatives. Management emphasized that annual revenue guidance excludes material contributions from these new products, underscoring the core marketplace as the primary earnings driver. Nonrecurring noncash charges, including $1.4 billion in stock-based compensation and a $480 million deferred tax asset valuation allowance, materially impacted GAAP net income but had no effect on cash flow or adjusted EBITDA. The company highlighted its asset-light model, strong cash generation, and improved operating leverage as key factors supporting its 2026 adjusted EBITDA guidance.

• Management projected adjusted EBITDA growth to $400 million-$420 million in 2026, relying on increased operating leverage and marketing efficiency without assuming significant upside from new initiatives.
• Net free cash flow for 2025 reached nearly 70% of adjusted EBITDA, illustrating strong cash generation inherent to the asset-light business model.
• Only 10% of GMS involved high-demand resellers, which may limit regulatory or operational downside from potential changes in ticketing rules.
• CEO Baker said, "AI will help us as the largest player with the most data excel at providing the best experience for customers," supporting the rationale for strategic product investment rather than near-term revenue pursuit in 2026.

Industry glossary

• GMS (Gross merchandise sales): The total dollar value of all tickets transacted through the platform before deducting refunds, cancellations, or platform fees.
• Direct issuance: A ticketing model in which rights holders distribute original tickets through nonexclusive, open-access channels (such as StubHub), as opposed to exclusive distribution through primary ticket sellers.
• Take rate: The average percentage of gross merchandise sales retained by the platform as revenue, typically through transaction fees.

Full Conference Call Transcript

Clinton Hooks: Thank you, Operator. And thank you for joining us to discuss StubHub Holdings, Inc.'s fourth quarter and year-end 2025 results. For reference, our fourth quarter and year-end 2025 earnings release, shareholder letter, and presentation are available under the Quarterly Results section of our Investor Relations website at investors.stubhub.com. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements, which are usually identified by use of words such as “will,” “expect,” “anticipate,” “should,” or other similar phrases, are not guarantees of future performance.

These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore you should exercise caution when interpreting and relying on them. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can make no assurance related to its expectations. The company undertakes no obligation to update any forward-looking statement whether as a result of new information, future events, or otherwise, unless otherwise required by law. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.

We encourage investors to review our regulatory filings, including the annual report on Form 10-K for the year ended 12/31/2025, when it is filed with the SEC. During today's call, we will also be discussing non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Reconciliations of these measures to the most directly comparable GAAP measures are available in our earnings release, shareholder letter, and investor presentation as applicable, available on the StubHub Holdings, Inc. Investor Relations website.

Please note that unless otherwise noted, our profitability and EBITDA discussions today refer to non-GAAP adjusted EBITDA. Joining me today are Eric Baker, our Founder, Chairman, and Chief Executive Officer, and Constance James, our Chief Financial Officer. They will provide opening remarks, then take questions. With that, I will turn it over to Eric.

Eric Baker: Good afternoon, everyone, and thank you for joining us today. 2025 was a pivotal year for StubHub Holdings, Inc. We grew our marketplace, further strengthened our competitive position, transformed our balance sheet, and became a public company. As we enter 2026, StubHub Holdings, Inc. remains a leading global ticketing marketplace for live events, with durable advantages: scale and liquidity, structurally strong financial fundamentals, and a diversified global footprint. These fundamentals are built on our core strengths, which continue to drive our competitive advantage. First, our leading marketplace position with a category-defining brand and approximately 50% share of secondary ticketing market in North America. Second, our proven network effects that create durable competitive advantages.

As we attract more buyers through our leading distribution and global reach, sellers add more inventory and selection to our platform, which in turn draws more buyers and further expands our distribution. Third, our asset-light online marketplace model, which delivers consistent take rates, over 80% adjusted gross margins, and strong free cash flow conversion. As an online marketplace, we generally do not take inventory risk and incur limited variable costs with each transaction, allowing us to reach large global audiences and generate substantial revenue with modest ongoing capital requirements. Fourth, an extensive dataset across millions of global events.

Our data on supply, demand, pricing, and user behavior enables differentiated product innovation, marketing optimization, and pricing intelligence that reinforce our market leadership. Fifth, scale is the defining advantage in our category. As the scale leader in secondary ticketing, our superior liquidity, trusted brand, and operational excellence create sustainable competitive advantages. And finally, an exceptional team with leadership experience built through decades of building and operating our business. I am grateful to work alongside a group of high-caliber employees who show up every day for our customers, improving the product, strengthening trust, and delivering operational excellence at scale.

We are also fortunate to have a deeply experienced management team, leaders who helped build this company from the ground up, raising the bar for StubHub Holdings, Inc. year after year. Together, these strengths position us to capitalize on the expanding live event industry. We sit in a unique position at the intersection of technology and live events as we pursue our vision to be the global destination for fans to access live entertainment. We remain relentlessly focused on improving every part of the StubHub Holdings, Inc. experience, from discovery and pricing transparency to fulfillment and support, because a better fan experience strengthens trust, drives conversion, and reinforces the marketplace flywheel.

Before I touch on longer-term initiatives, I want to be clear about what is driving our business today. Our results and outlook are driven by our resale marketplace, which constitutes the vast majority of our revenue. In 2025, we delivered $9,200,000,000 of GMS, continued to grow, gained share, and strengthened our competitive position. We expect that in 2026, StubHub Holdings, Inc.'s financial performance will continue to be driven by this core resale marketplace. Building on this foundation, our first several months as a public company have provided valuable perspective on our strategy to unlock new market opportunities.

We believe direct issuance—nonexclusive, open distribution of originally issued tickets—remains a transformational long-term opportunity for StubHub Holdings, Inc. and the broader live event ecosystem. We have made progress through business development with marquee content rights holders across sports and music in multiple geographies, and we believe demand for this distribution model has been validated. Our experience has reinforced that the largest market potential will come from making direct issuance frictionless to adopt across a much broader range of rights holders. That requires reducing operational friction for partners with varying levels of technological sophistication. And advances in artificial intelligence are materially expanding what is now possible to build on the supply side.

By leveraging these advancements, we believe we can bring capabilities to market that would have been difficult to deliver even a year ago, including AI-assisted tools that automate workflows and simplify inventory management. For 2026, we are prioritizing building the product foundation required to scale direct issuance broadly. Accordingly, we are shifting from a primarily business-development-led strategy to a more product-led strategy, building an AI-enabled, technology-driven ecosystem that enables inventory to be contributed and managed with minimal operational burden. Development is underway to bring these supply-side products to market. We believe this approach positions direct issuance to become a durable growth engine when the self-serve capability is in place.

This strategy shift means we will not be optimizing for immediate revenue growth but for maximizing our revenue opportunity over the long term. Similarly, our efforts to build our advertising business are showing promising early results as we leverage our unique advantages. Early partnerships have helped validate the opportunity and are helping inform how we will scale advertising in a way that is truly additive by enhancing relevance and utility for customers. Our advertising business is generating modest revenue today; we are continuing to iterate toward a model that enhances the seller and buyer experience. We are taking a disciplined approach to both initiatives, prioritizing scalable execution.

This measured path forward reflects our commitment to maintaining the marketplace experience that defines our competitive advantage while compounding shareholder value over the long term. Finally, a quick note on the regulatory environment. We continue to operate within a generally favorable status quo that supports open, functioning resale markets across jurisdictions. That said, public discussion around ticketing has increased in recent months. We want to be clear about why we believe the secondary ticketing market and StubHub Holdings, Inc. as a scale leader are defensible and durable over the long term. The secondary market solves durable ecosystem needs across a broad diversity of live event content. It is not dependent on any single event type or narrow set of behaviors.

A liquid resale market supports the ecosystem in foundational ways by: one, improving the category experience for consumers through trusted, fraud-protected ways to buy and sell tickets with ease and providing flexibility when plans change; two, improving sell-through and pricing confidence in the primary market—consumers are more willing to buy earlier when they know they have a trusted option to resell; three, enabling risk and cash flow management for content rights holders, teams, promoters, and event organizers by providing liquidity and a pathway for inventory to be redistributed through power sellers and season ticket holders; and lastly, improving attendance, utilization, and venue economics by helping ensure tickets end up with someone who will attend, driving meaningful ancillary revenue through concessions, parking, merchandise, and a better in-venue experience.

Even if well-intentioned, we believe altering this vital link in the live event value chain ultimately harms the fan experience and the live event ecosystem overall. Regulatory change in live events is inherently complex. The live events ecosystem is a vast global surface of content and demand profiles, spanning everything from lower-demand community events and small club shows to global music tours and the world's largest sporting moments, across countless jurisdictions and market structures. Any framework that seeks to broadly reshape the resale market would need to account for a wide range of event types, seller profiles, consumer use cases, and enforcement realities, and would need to be implemented across many jurisdictions where live events occur.

With that context, we believe public discussion tends to focus on a certain subset of the resale market: resellers that list large quantities of inventory on marketplaces for very high-demand concerts, at high prices significantly above the original sale price. Based on our internal data, we estimate that approximately 10% of our GMS in 2025 was attributable to these types of high-demand concert ticket sales by resellers. Importantly, we believe that StubHub Holdings, Inc.'s durability is reinforced by our diversification and lack of concentration across sellers, content rights holders, buyers, event types, and geographies, providing a level of insulation from potential regulatory changes that may affect any single subset of the market or any single jurisdiction.

Finally, we have a responsibility to continue educating policymakers on the consumer protections and structural benefits that our marketplace provides, and are continuing to bolster our government relations efforts to support this. We intend to engage constructively while operating responsibly to best serve fans around the globe. We are entering 2026 with a scaled, resilient core resale business, an improved competitive position that supports growth and scaling margins, and a transformed balance sheet. We are also continuing to progress towards longer-term upside opportunities. Our commitment is straightforward: set expectations we can deliver upon and execute consistently. We intend to deliver results that reflect the strength and durability of the business.

I will now turn the call over to Constance to discuss our financial results and guidance.

Constance James: Thanks, Eric. In 2025, we delivered $9,200,000,000 of GMS, 6% year-over-year. Excluding the Eras Tour, our GMS grew 8% year-over-year, reflecting the underlying performance of the business. Our growth was driven by continued market share gains in North America, where we expanded our share to approximately 50% of the secondary market. Internationally, our expansion outpaced growth in North America. Turning to our income statement. As a reminder, I will discuss our financials on an adjusted basis, excluding stock-based compensation and other one-time items. Full reconciliations are available in our earnings release. First, on the fourth quarter. In the fourth quarter of 2025, we generated $2,300,000,000 of GMS, down 8% year-over-year.

This reflected lapping an unusually strong fourth quarter of 2024, which benefited from several favorable dynamics including the conclusion of the Eras Tour, a particularly strong MLB World Series, and the timing of major concert on-sales shifting across quarters. Excluding Eras-related comparability, fourth quarter GMS growth was approximately 6%. Revenue was $449,000,000, or 19% of GMS, down 16% year-over-year. The change was primarily due to lower GMS, partially offset by lapping prior-year direct-issuance-related minimum guarantee structures that were treated as principal revenue and that we have since reduced. Additionally, our revenue as a percentage of GMS reflects our deliberate market share investments through take-rate adjustments, consistent with our full-year 2025 operating strategy to prioritize competitive positioning.

Adjusted gross margin was 83%, up from 76% in the prior-year period, reflecting the lapping of those minimum guarantee structures. Adjusted sales and marketing expenses were $234,000,000, or 52% of revenue, compared to $221,000,000 in the prior-year period, or 41% of revenue. The change reflects our investments to accelerate market share in core resale. Adjusted EBITDA was $63,000,000, representing a 14% margin. This reflects the impact of our market share investments as we deliberately prioritize capturing market share and our continued investment in direct issuance capabilities during their early partnership development phase. For the full year 2025, revenue was $1,700,000,000, 19% of GMS, compared to $1,800,000,000 in 2024.

The performance was impacted primarily due to direct-issuance-related minimum guarantee structures in the prior period and the impact of our market share investments on take rates. Adjusted gross margin for the year was 83%, up 200 basis points from 2024. The improvement reflects the lapping of the costs associated with minimum guarantee structures. The full-year gross margin is representative of our current operational profile and demonstrates the structural advantages of our asset-light marketplace model where we facilitate transactions. Adjusted sales and marketing expenses were $943,000,000, or 54% of revenue, compared to $828,000,000, or 47% of revenue, in 2024.

The increase reflected two primary drivers: first, our investments to accelerate market share in core resale, where we deliberately prioritized market share capture; second, our continued investment in building direct issuance capabilities during the early partnership development phase. Adjusted operations and support costs were $57,000,000, down from $59,000,000, flat as a percentage of revenue at 3%, reflecting improved operating efficiency. Adjusted G&A costs were $223,000,000, 13% of revenue, down from $250,000,000, or 14% of revenue, in 2024. The reduction reflects improved operating leverage as we continue to scale the business, including a reduction in professional service fees. Adjusted EBITDA was $232,000,000, equal to 13% of revenue.

This result reflects two primary factors: first, the deliberate investments we made during the year both in market share acceleration and in building longer-term initiatives. These investments successfully positioned us to achieve approximately 50% of North American secondary ticketing market share, establishing a foundation that supports fiscal 2026 margin expansion. Finally, I want to highlight two items impacting our net income. Our GAAP results for the full year include a nonrecurring, noncash expense of $1,400,000,000 related to stock-based compensation granted prior to our IPO. The expense was triggered by the completion of our IPO. Accounting standards require recognition of these previously granted awards when their IPO-related performance conditions are satisfied.

In addition, we incurred a noncash income tax expense of $480,000,000 related to the establishment of a valuation allowance on a deferred tax asset. Both stock-based compensation and valuation allowance expenses are excluded from our adjusted EBITDA calculations and have no impact on our cash flow or cash position. Turning to cash flow. I want to spend a minute on how cash is generated in our marketplace model. First, our cash conversion cycle benefits from the timing mechanics of ticketing. We collect funds from buyers at checkout while seller payouts occur later, often closer to or after the event date. This timing difference creates a recurring balance of seller proceeds on our balance sheet and contributes to our cash generation.

Our business is also structurally asset-light. We do not generally take inventory risk, and capital expenditures remain modest relative to the size of our business. We also benefit from net operating losses that reduce cash taxes in the medium term. Finally, because of the seasonality of live events and the timing of major tours and sports calendars, free cash flow can be variable quarter to quarter. For this reason, we evaluate free cash flow on full-year and trailing twelve-month periods rather than any single quarter. In 2025, our free cash flow represented nearly 70% conversion of adjusted EBITDA. This figure also includes interest costs during the period, which have since been reduced as a result of our debt repayments.

Turning to the balance sheet. In 2025, we reduced our total debt by approximately 35% through the repayment of $900,000,000 of our U.S.-denominated term loan, bringing our total debt down to $1,500,000,000 at year-end. We also ended the year with approximately $1,200,000,000 of cash and cash equivalents, or $494,000,000 net of payments due to sellers. As we scale, we expect the business to continue generating strong cash flow, and our priority remains maintaining a strong balance sheet and reducing leverage over time. Turning to our fiscal year 2026 guidance. Before I discuss the specifics, I want to address why we are providing annual rather than quarterly guidance.

The live event market is seasonal and can be variable quarter to quarter, where the timing of major concert on-sales and event schedules can shift across quarters from year to year. This can create lumpiness in quarterly growth rates even when underlying business momentum is steady. Fourth quarter 2024 and fourth quarter 2025 GMS illustrate this dynamic clearly. Fourth quarter 2024 benefited from unusually favorable timing, including the finale of the Eras Tour and a concentrated set of major concert on-sales, contributing to an exceptionally strong period and year-over-year GMS growth of 47%. Fourth quarter 2025 reflected the inverse.

Our GMS was down 8% year-over-year, driven by the lapping of this unusually strong comparison and by major concert on-sales being more spread across quarters. Neither quarter on its own provides a representative view of the business. In fact, our market share was higher in the period GMS declined than in the period GMS grew significantly. For these reasons, we believe our business is best evaluated on an annual and last-twelve-month basis. Our guidance is grounded in what we control and what we believe we can execute with high confidence.

For 2026, this reflects the earnings power of our core resale marketplace and includes disciplined operating expenses to support direct issuance and advertising without assuming any material revenue contribution from either initiative. For 2026, we expect to grow GMS to between $9,900,000,000 and $10,100,000,000, representing 9% growth at the midpoint, and expand adjusted EBITDA to between $400,000,000 and $420,000,000 as our marketplace flywheels strengthen and operating leverage increases at scale. Our GMS growth formula is straightforward: North American market growth, incremental market share gains, plus international growth. Let me dive into each of these segments. First, North American secondary market growth. This market has historically grown at low double-digit rates.

While there will continue to be a comparability impact from the all-in pricing transition until we lap its implementation in May, we believe underlying growth in the market remains strong. Second, market share gains in North America. We have a demonstrated track record of outgrowing the market in recent years. For 2026, we expect to continue gaining share while reducing these investments and increasing customer acquisition efficiency. Last, international growth. International markets account for approximately 15% of our GMS. We expect GMS in international markets to grow at an accelerated rate, benefiting from earlier-stage market development.

Overall, our adjusted EBITDA guidance assumes the economic engine that has long defined StubHub Holdings, Inc. remains consistent: take rates in the 20% range, over 80% adjusted gross margin, and improving operating efficiency as we scale. Given the structural strength of our unit economics, an important driver of earnings power is how efficiently we scale operating expenses, particularly adjusted sales and marketing, our largest expense line. To that end, our 2026 plan reflects two key strategic refinements. First, we are evolving our direct issuance strategy toward a more scalable, technology-enabled model, which naturally reduces investment intensity. And second, we are raising customer acquisition efficiency in core resale.

Acquisition efficiency is an input we control, and our improved scale and conversion allows us to earn higher returns on marketing spend while growing. In 2025, we deliberately lowered acquisition efficiency, spending more per transaction to accelerate market share gain. The goal was to strengthen the marketplace in durable ways. As our share of transactions increased, our competitive position improved, and we created advantages that continue to compound through improved conversion. Higher conversion means each marketing dollar generates more transactions and more gross profit than it did previously. As a result, in 2026, we believe that we can raise acquisition efficiency while continuing to grow and take share. Together, these refinements reflect how a scaled marketplace model inflects.

As conversion improves and our competitive position strengthens, we can allocate marketing dollars more efficiently while growing, expanding EBITDA through operating leverage, and generating strong free cash flow. We will now open for questions. I will turn the call over to the Operator to begin the Q&A.

Operator: Thank you. The first question comes from Doug Anmuth with JPMorgan.

Doug Anmuth: Thanks for taking the questions. You are gaining share in resale; you talked about hitting kind of around the 50% level. Does the 9% growth in GMS suggest the core resale market is growing slower than you?

Eric Baker: Sure, Doug, thank you for the question. I appreciate it. Around growth, let me revisit the general framework around growth and how we think about it, and then I will hand it to Constance to get into some of the specifics. As we have said, our market has been very strong. More people are going to live events. They are going to a greater breadth of events. They are doing it all across the world. So the North American market has been strong. As we have said too, we continue to gain share in the market as we are inflecting margins. So that is happening.

And then we are seeing increased throughput internationally with these global events that are taking place and traveling. So there are a lot of great tailwinds in the market that are allowing us to grow and grow while we take share. With that, let me turn it over to Constance for the details.

Constance James: Yeah, thanks, Doug. Good to be with you. I will just touch on the GMS drivers. There are really three key ones, which you have picked up on a couple of them. The market growth, as Eric mentioned. We benefit from operating in a really healthy overall North America secondary market that has consistently grown low double digits. That said, what we know to be true is that we are going to continue to have this all-in pricing overhang for the first five months. We do anticipate continuing to accrete some modest share gains and then layer on top of that international growth.

All of that ladders up to 8% to 10% GMS, and what I would also add is, it is anchored in what we are seeing today. The good news is, quarter-to-date, we are seeing really healthy top-line growth and expanding margins, all supporting our full-year guide.

Doug Anmuth: If I could just follow up on direct issuance, you have talked in the past about 2026 being a potentially industry inflection point, and now obviously there is a strategy shift that is taking place. What has changed most here in your view on the outlook and progress for direct issuance?

Eric Baker: Sure. Thank you for the question, Doug. Let me walk you through what has evolved on direct issuance and why we have made this deliberate decision to shift to product development for this year. To set the context, direct issuance for us is this belief in open distribution: content is going to want to come sell their tickets directly over StubHub Holdings, Inc., and use our data and distribution to do so. We have had great success with folks like the Yankees and Bass Theater Group, and others, to prove this out.

In the past six months, as we have gone out and we have been excited about it, there is a lot of demand and enthusiasm for it, and quite frankly we have been very excited about how broad and deep that is—by which I mean there is a long tail of different types of events and a great breadth of them. What we have found, Doug, in going through it with the team is that we think one of the keys to unlock it even faster is eliminating friction on the product side: make it easy for people to use the product and technology because the will is there; everything makes sense.

That really unlocks more of what we talked about with the number of customers we had seen where you have this self-serve ecosystem, which is a great solution for the customer. It is also a great business model that scales very nicely. As we looked at it and sat down, we said, with what is going on, we should focus in 2026 on developing that product, particularly given everything going on with AI—there is a real chance to advance those tools quickly and to get them to a good place. As a result, that does mean that we are deliberately shifting to a longer-term focus.

We think we will create more value in the long term rather than focusing on the short-term revenue creation this year.

Operator: Thank you. Your next question is from Eric Sheridan from Goldman Sachs.

Eric Sheridan: Maybe a two-parter, if I can. In terms of learning on some of the key dynamics from ramping marketing and gaining share in 2025, can you talk a little bit about what the key lessons learned from that were and how it informs the theme you are talking about tonight with respect to being more effective with acquisition and growth investments in 2026? And if possible, a way to frame that effectiveness either quantitatively or qualitatively, 2026 relative to maybe some of the return profile in 2025. Thanks so much.

Eric Baker: Sure, Eric. Thank you for the question. Let me give you an overview about how we think about this core secondary engine and what that means in terms of getting this inflection, and then Constance can give you more of the financial detail as well. Our fundamental thesis from our lived experience is that if you have the StubHub Holdings, Inc. asset and you run it the right way, you can get the market share back and hit the right point of relative market share; you accelerate all these different flywheels that you get and network effects because you are in a marketplace business. Whether that is more data, conversion going up, the liquidity flywheel—all these good things happen.

Therefore, what we have seen, and what you see in marketplace businesses, is that you are able to hit a point where you get this beautiful thing: you are able to grow and take share while increasing your margins, which is why it is such a great business to be in. That is not just something that we have observed about the Airbnbs and others of the world; that is our lived experience that we saw in building these businesses and what we saw at Viagogo. In 2025, we were really focused on finishing off and pushing this concept of the market share and doing some of those things.

We really believe, as our thesis was, that we would get to this relative share—be three times greater than other people—and start seeing this virtuous cycle occur. As Constance will walk you through in our guidance, we are seeing that we will be able to grow, continue to take share, and inflect the margins. We sit here now in March observing that this is in fact happening. With that, let me turn it over to Constance.

Constance James: Yeah, that is exactly right, Eric, and thanks, Eric, for joining the call today. If you step back, we were explicit that 2025 would be a period of accelerated investment, in particular into relative market share, and we were really pleased with the outcome, having secured about half of the market. You would have seen an elevated period of sales and marketing. Late December, we decided to turn the dials given the flywheel and the benefits that Eric explained. It started to show up, and that has continued. We are seeing better efficiency coming through, which is resulting in these expanded margins, which Eric mentioned we are seeing as we sit here two-thirds of the way through the first quarter.

So all of that gives us confidence in the stickiness and the benefits that we have seen and supports the full-year guide.

Eric Sheridan: Great. Thank you.

Operator: Thank you. We will now go to Justin Post from Bank of America.

Justin Post: Great. Just wondering what you are thinking about for the concert season this year. You mentioned you had some comments on that in November. And also the World Cup impact, and how that is incorporated in your guidance.

Eric Baker: Sure. I will give you a couple comments generally, Justin, and thank you for being on the call, and then Constance can talk. In terms of the concert season, we have seen a number of very exciting concerts going on sale in January, and that has been great. Obviously, the World Cup is a wonderful event that epitomizes the fact that we have this global platform. I do think, as Constance will walk you through some of the guidance thoughts, she will probably also touch on why we guide annually. There is sometimes a bit of lumpiness of when things go on sale. With that, let me turn it over to Constance.

Constance James: Yeah, thanks, Eric, and appreciate you jumping on the call, Justin. As we sit here today, things look really healthy. We typically look at the overall opportunity for the year, and we call it Tier 1, Tier 2, Tier 3 events. In relation to your question specifically around World Cup, what we have seen in terms of our forecast assumptions is that we have decided to include that as a Tier 1 category. To be explicit, the Eras Tour was in a league of itself. As and when the World Cup continues to progress, we will continue to keep you updated.

In addition, I think you had a question around how some seasonality or, as Eric talked about, lumpiness occurs from the concerts perspective and how that relates to what we saw in the fourth quarter. You are absolutely right: there can be movement, but the good news is when you look at it on an annualized basis, it tends to normalize. Where we sit today, the overall market looks really healthy.

Justin Post: Great. I would love to hear any updates on the U.S. secondary regulatory environment. And have you learned anything so far from the Ticketmaster trial and opening arguments? Anything you might have learned from that? Thank you.

Eric Baker: Thank you for the question, Justin. Let me walk you through how we think about regulatory, and then I can touch on the trial that is going on. I started this business 25 years ago to give consumers a safe, secure way to buy tickets so that you would not have fraud or problems. We serve the consumer; we serve the fan, and that is what we do. We try to work cooperatively with regulators because I believe in good faith they have the same thing in mind. They work for their citizens; they want people to have a good experience.

They are working for the fans to make sure they can get into their events and get in without having any problems. All-in pricing is a great example where we worked and lobbied for that because we believe it is great for the fan and the consumer—even if it was a short-term headwind, as Constance said—because in the long term anything that is good for the fan and the consumer is good for StubHub Holdings, Inc., and that is how we think about it. On the general regulatory environment today, we are in a very positive environment. It is legal to resell tickets. People are enthused about it.

There is no issue today that is hindering that in any meaningful way. Why is that the case and why has it been the case for decades? One, we are providing a service that is great for fans to give them access and eliminate fraud. Two, it is very good for the content ecosystem: if people have a safe, secure way to resell what they cannot use, it makes it easier to sell the ticket in the first place; and if you can unload tickets and put them in the hands of someone who can use them, you are more likely to fill the seats in the arena.

On the public discussion, it is really focused on a narrow set of the market: very high-demand concerts where people are concerned there are people who buy up tickets in bulk and then sell them at a markup. To give you a sense of how we think about this surface for our company as we approximate it, that is about 10% of our global GMS for those types of events—across jurisdictions, locations, types of concerts, and different primary ticketing companies. We have a very diverse catalog; that is to give people a sense of surface, which I know is important to them.

Finally, in terms of the Live Nation trial that is going on, the DOJ is talking about Ticketmaster being a monopoly in primary tickets primarily. They have also talked about whether or not they tie things together, but the monopoly power is the main focus. To us, that is really fundamentally the need for more open distribution. They are basically talking about what we have called direct issuance and open distribution, which is that the best outcome for any consumer and, quite frankly, for content is to allow them to take a ticket and distribute it ubiquitously, nonexclusively, and have the outlets compete to give the best service to the fan. We are all for that. We support that.

We are obviously working for the fan the same way other people do. All that being said, we do not bake in or anticipate any changes to the status quo. I am in no position to predict what may or may not happen in a courtroom or between the government and Live Nation. We will see how it plays out. If anything was to come to pass that pushed forward more of this open distribution agenda, that would only be great for fans and, therefore, great for StubHub Holdings, Inc., but we will see. Thank you.

Operator: Next up is Mark Stephen Mahaney from Evercore ISI.

Mark Stephen Mahaney: Hey. I will just ask one question. On the advertising initiatives that you have had, you started rolling that out in the fourth quarter. Can you talk about what kind of traction you have— you just mentioned it briefly in your opening remarks—how much revenue you have been able to generate so far, what the demand looks like in 2026, how much you are baking into your outlook for 2026? I know it is helpful on the top line, but particularly on the bottom line too. How much contribution you expect from there, and when do you think you will have fully rolled out, the way you would like it to be, the advertising option?

Is that this year, or is that more like a 2027 event? Thank you.

Eric Baker: Thank you, Mark. I appreciate the question. Let me first talk about what has evolved and how we have made some deliberate decisions in terms of strategy and timing. Advertising is a big opportunity for us. We know that we have a great group of users on the site that have very clear intent that people want to reach. We also know we have a bunch of sellers on the platform who have a need, and they want to get their ticket in front of the right buyer. So there is a lot of demand and interest for that.

We have always said that we have to get that right in terms of the customer experience for the buyer and seller and how it fits in our business before we are going to scale it up. Therefore, we did what we said we were going to do, which is, in the fourth quarter, we started rolling out ad products—sponsored listings—and we saw good reaction from sellers to that. We started generating revenue and testing.

What we realized is it is very important that we get this right to maximize the experience for the long term and maximize the business model for the long term so that we create maximum value for the participants in our ecosystem as well as for our shareholders. In doing that, we have determined that we want to spend more time working the product through and experimenting with it in this coming year. That is the conscious decision we made, which we think will drive more value over the long term, even with the sacrifice of near-term revenue. With that backdrop, I will turn it over to Constance, who can address how that filters through guidance.

Constance James: Thanks, Eric, and appreciate you jumping on the line, Mark. In relation to how much revenue we had in the fourth quarter, again, a very small amount, as Eric mentioned. We are still in testing mode on a small portion of the surface, albeit, again, we are super excited about the longer-term opportunity. We have been explicit about ensuring that our guide is anchored in what we see today, and so we have taken the approach to have a very modest amount of revenue flowing through. You can think tens of millions for this year. That being said, as that continues to progress and change, we will provide you with updates.

Mark Stephen Mahaney: Okay. Thank you very much.

Operator: Thanks. John Blackledge from TD Cowen is up next.

Logan Wally: Hi there. Thanks for the question. It is Logan Wally on for John. A question around agentic commerce. Could you discuss early learnings from your partnership with OpenAI and ChatGPT? And then looking forward, how do you expect to compete with other marketplaces in a world where people could be using chatbots to purchase tickets and other goods? Thank you.

Eric Baker: Thank you for the question, Logan. Let me start by setting the table for how we are thinking about AI and how we think we are positioned. AI is a transformational technological development across the world and society. There will be a lot of disruption, and with disruption comes risk and opportunity. We spend a lot of time thinking about how we mitigate risks and how we seize opportunities. We think we are very well positioned if we innovate appropriately. First, we are in the live event end market. That is a good end market to be in.

We are very optimistic that it will be a long time before you are watching an AI robot participate in the Super Bowl, and people want to go to live events. Second, we are a marketplace business, and with the complexity that we have operationally, that is also a good place to be. On the marketplace operations layer, we think it is not something that is easily replicable just by an agent. You have very fragmented supply. You have to have trusted fulfillment, payments, fraud prevention, customer and financial protections. Quite frankly, AI will help us as the largest player with the most data excel at providing the best experience for customers in that.

On the experience layer, as you note, there will be people making purchases through chat and agent-based interfaces with us, and we have been at the forefront of doing a number of things with some of our partners. What we are excited about is that by having the most data on our platform about you as a user, if we are able to weave AI into the product, we can create a great experience for you at StubHub Holdings, Inc. that is unmatched anywhere else. We also think it is a unique emotive experience where humans are more likely to want to have the experience of even looking at what event they want to go to and discovering those things.

It is not like “find me the cheapest toilet paper,” so to speak. For all those reasons, we think there is a lot of opportunity. On that discovery layer, it is creating more demand at the top of the funnel. You are adding more ways to get people in, in a great fashion. At the top of the funnel, what we have found is they want to make sure they are directing people to a trusted brand that has the customer service and execution, which is key because it is not just driving someone to content where, if you consume the content, you are done and there is nothing else to it. We think there are a lot of tailwinds.

The last thing I would say, and Constance may add something here, is there are tremendous cost efficiencies and productivity gains for anyone who applies this the right way, which we are very focused on. We take it extremely seriously because anytime there is a big disruption there is big opportunity, but if you do not work with purpose and with innovation, of course there is risk. We are working hard every day to do that. Maybe on the efficiency side, I will let Constance add a couple of things.

Constance James: Absolutely. I am happy to build on what Eric said. We are excited about the technology—there are a huge number of benefits across the board, one of them clearly being cost efficiency. The team has already done a phenomenal job in terms of operations and support, really thinking about how we can create a level of efficiency, but perhaps even more importantly, how we can continue to delight the customer with a better way to interact. We are seeing really early traction there and obviously more to come. More broadly, even from an engineering perspective, we know there is huge opportunity. There are a tremendous number of benefits. We are excited about the technology and how it plays out.

Operator: Next question is from Brian Pitz, BMO Capital Markets.

Brian Pitz: Thanks for the question. Eric, more broadly, with primary ticketers pushing initial prices ever higher via dynamic pricing, can you comment on whether this is squeezing the volumes or margin spreads historically available to you in the secondary market? And then, number two, apologies if I missed this, but can you quantify the GMS growth and progress made in international markets during the fourth quarter? Are there any specific remaining regulatory hurdles regarding Viagogo's global presence? Thanks.

Eric Baker: Thank you for the question. A couple of different things in there. First, on the primary ticketers and dynamic pricing and how that may impact the business. Doing this for 25 years, we have been competing with Ticketmaster and other primary companies for decades. They have always had an interest in trying to control more of that system and capture things. They do not work for the fan the same way that we do—and there is nothing wrong with that; they just have a different business. The concept of dynamic pricing and other things has been around for a long, long time. Both historically and today, we have not seen any impact from those types of policies on our business.

We have a broad and deep catalog. We are serving a real need for consumers and, we think, a real need for the ecosystem. Internationally, it is a phenomenal opportunity for us. Viagogo, which I started, was an international company. We have a heritage in our DNA of servicing things internationally. We had to be able to service the languages, the jurisdictions, the payments. As events become more and more international, it is phenomenal. As things move to Asia and Latin America, it is phenomenal. There is tremendous opportunity in those markets, and we think that is great. We are bullish on it. For more specifics, I will throw it over to Constance.

Constance James: Great. Thanks. To address your question in relation to the fourth quarter growth rate in the international business, we do not break it out specifically, but what I can tell you is that it was growing at multiples of North America. As Eric mentioned, we have a phenomenal footprint, operating in over 200 countries, and we continue to be excited about the opportunity.

Operator: Thank you. Everyone, we have time for one final question. It comes from Andrew Boone, Citizens.

Andrew Boone: I wanted to go back to marketing efficiency. As we think about the EBITDA guide for 2026, should we compare margin levels for 2026 to 2024? Is that the right level of normalization? Or can you provide us with any other clues as we think about that expense normalizing? And then you made gains in 2025 with Reach Pro. Can you help us better understand the benefits of that? How do you approach making additional gains? How aggressive do you want to be with that product this year? Thank you so much.

Eric Baker: Thank you for the question. It sounds like you had some questions about the guide around marketing and some questions around Reach Pro. Let me address the product side and Reach Pro a bit, and then I will give it over to Constance. For everyone’s understanding, Reach Pro is a point-of-sale system that sellers can use to manage their tickets and manage their flow. It is software tools. It is not anything that we are selling, but it becomes a default for people to use. When you get that default in the operating system, it has tremendous benefits data-wise.

People make you the first port of call, so it is very helpful in terms of getting some permanent benefit in terms of share and whatnot. As part of the share gains we got, we were able to deploy Reach Pro, and I think Constance will talk about how we have accreted tremendous share in that and have a great trajectory. That is also in a good place where, once you become three times larger than someone else and more efficient and you have a superior tool, you can get continued acceleration of people adopting it, which has continued benefits for our system and for our customers. Let me throw it over to Constance to tie out on marketing.

Constance James: Before we go into the details of marketing, it is worthwhile to step back and think about the broader building blocks of the guide that might help provide a bit more context. We touched on growth, which has three drivers: again, operating in a really healthy overall North America secondary market, but noting the overhang of all-in pricing in the first five months; in addition, we anticipate continuing to accrete modest share gains; and we have a tremendous international business that you can layer on top. It is also important to recall that last year we were explicit about taking a point of take rate and investing it in order to accelerate market share.

We are incredibly pleased with the progress made in capturing nearly half of the market. As we move forward, we would expect to be more consistent with what we have seen historically, in that 20% range. Specifically on marketing efficiency, last year was a period where we made a deliberate decision to invest, which ran sales and marketing as a percentage of revenue at a bit of an elevated rate. You would have seen the first quarter we were at 55%; by the end of Q4, we were about 52% normalized. You should continue to see increased benefits flowing through. All of that ladders up into expanding margins at the bottom line.

Operator: Thank you. And everyone, that does conclude our question and answer session. I would like to hand the call back to Eric Baker for any additional or closing remarks.

Eric Baker: I just want to say thank you to everyone. I appreciate folks making the time and taking the interest. We appreciate it greatly. Thank you very much.

Operator: That does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.

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