All right, let's get started. Welcome everybody to the Eventbrite Fireside Chat. Before we start, I wanna note that important disclosures, including my personal holdings disclosures and Morgan Stanley disclosures, all appear as a handout available in the registration area and on the Morgan Stanley public website. With that, please welcome Julia Hartz, Co-Founder and Chief Executive Officer of Eventbrite, and Lanny Baker, Chief Financial Officer. Julia, Lanny, thanks for joining us. Thanks for having us. Julia, let's start with you. You announced some pretty meaningful changes to the organization last week. What do those changes say about your longer-term focus for the business and your strategic priorities? Well, I think that the changes we enumerated in our earnings call last week are really about creating efficiency in our core business and investing faster into the future. You know, our legacy core business has been this scaled mid-market creator ticketing platform that served last year, hundreds of thousands of creators hosting millions of events. We've done a great job of not only rebuilding that from, I would say ground zero of COVID, but also tailoring the product experience to meet the needs of frequent creators who are about 30% of our creator base, and they produce about 60% of our ticketing volume today, of our revenue. The number one job to be done by these valuable creators on Eventbrite's part is to help them gain greater exposure and to sell more tickets to their event. I'll break down kind of what an event means on Eventbrite because I think it's important in terms of understanding the landscape. These event creators are oftentimes solo entrepreneurs, small business owners. They have small teams, not very large budgets to produce these events. They're producing events at least once a month for a community that they've already established, and they have found content or a format that really works. Yoga festivals, salsa workshops, food and art, you know, and wine festivals. They are looking to gain a greater number of people at that event because not only is it meaningful to them in terms of ticket sales, much more importantly, it's meaningful to the total revenue of their business, whether that's the food and beverage that they're selling at the event, the merchandise, the brand awareness, the lead gen. If you think about our position in that, we have a unique advantage point to be able to help them gain a greater following as well as sell more tickets faster because Eventbrite is a scaled consumer destination. We're leaning much more into that evolution of Eventbrite as a two-sided marketplace. In order to do that, we needed to change the way we were structured. I mean, I think anybody could attest to the fact that great businesses are constantly rethinking about how to get to their goal faster, and that was really the headline of what we announced in terms of our team restructuring, as well as our focus for the future. Great. You mentioned, you know, more of a focus on marketplace, and I think two of the products that you guys have developed to help push that have been the Eventbrite Ads and Boost products. You disclosed that those generated $1.7 million of revenue collectively in 4Q. What makes you confident in an opportunity for those products, and what does success look for you? Yeah ... look like for you over time? The core ticketing business is based on a transaction fee. We're paid about 8% of the face value of the ticket for the tickets that are sold on Eventbrite. Historically, free events, which is two-thirds of the volume on Eventbrite, have not been monetized at all. The opportunity is that we step into this market by offering creators a way to actionably take advantage of the scale that we have to become better marketers of their events through Eventbrite Boost, which is a way for them to be posting paid social advertising and email marketing in a much more effective manner for two reasons. One is that we're the first party transaction platform, so they have a faster feedback loop. Two, they could use our aggregate consumer data to build lookalike audiences. The second thing that they can do now is that they can sponsor a listing. They can buy ad space on Eventbrite to promote their events. That's a unique capability that we haven't had before that firmly steps us into marketplace dynamics. When an event creator thinks about Eventbrite, they're typically thinking about Eventbrite for the ticketing capability and maybe reporting and some promotion. Now we're starting to really turn the table and put forth to them these products and features that make it very clear that they can now use Eventbrite to actually reach a wider audience and sell more tickets. The reason why that is advantageous for the business is because they're paying that 8% take rate on the face value of the ticket. Well, they're spending about 20%-50% of the face value of the ticket on marketing. Prior to this launch of Eventbrite Boost and Ads, they weren't spending that on Eventbrite. Now, we've given them a really tight feedback loop to be testing different marketing tactics and really understanding the value of Eventbrite as a marketplace. What kind of investment does it take to drive success with those products? It's mostly product and, you know, I'm really proud of how we've scaled our product and development teams both in India and Spain, and a lot of our restructuring was around consolidating and simplifying our development hubs in addition to the United States. The second thing is that the reason why product is so important is that giving creators the signal beyond just the marketing message that you'll sell more tickets, actually putting in their hands tools that they can use to be a part of that equation and really drive their business is the most meaningful thing we can do to prove out this thesis and the value proposition. The second thing we need to do is we need to really help consumers understand that Eventbrite is a place where you can go to find great things to do. I'm sure if you looked in your phone today, you'd find a whole host of events that you've attended on Eventbrite that sort of make up your life, right? What you spend your time doing. You don't think about Eventbrite as the first place to go when you wanna rally a group of friends to go do something on a Thursday night. I think that's an obvious opportunity for us. The benefit is that we don't have to go out and just pour a bunch of money into consumer marketing. We actually can utilize the creators and how they're using Eventbrite Boost, how they're adopting Eventbrite Ads, as well as natural benefits that we have through SEO to boost that consumer reach and really draw more consumers in. Where we're net new investing in the product is around search and discovery. I think there's so many exciting things that we can use to scale efficiently in personalization, you know, not least of it, which some of the latest discoveries in AGI to help somebody come to Eventbrite, tell us exactly what they wanna find it quickly, and be able to buy tickets. You mentioned, you know, highlighting these products to creators. How do Ads and Boost change or evolve the way that you interact with creators? Do you wanna speak to that? I think first and foremost, we wanna change the conversation to be, "Hey, you're coming to Eventbrite, you're listing on Eventbrite because this is the place where your confidence level about selling out that event, finding new attendees is highest." I think the presence of these two products, as Julia said, they really are a very visceral way to show creators, we can help you market your event, and we have consumers on our property coming to Eventbrite, not yet concluded on which New Year's Eve event they're going to attend, which business conference they're going to attend, and using Eventbrite to discover that kind of inventory, and we can put your event in front of them on a sponsored basis, and you'll sell incremental tickets. I think that the presence of these products is really important in changing the perception of Eventbrite from kind of that ticketing utility that Julia talked about to being a demand generation marketplace, where it's kind of like, I can't afford not to have my event listed on Eventbrite. I think success for us will look like, you know, creators coming to us first and foremost for the consumer demand rather than coming for ticketing and then also buying consumer demand. Then recognizing that, yeah, I'm gonna stay with Eventbrite because it is the place where I'm being introduced to new audiences and incremental growth. I think one of the things we're so excited about is that competitively, our audience reach across the live events attendance business is really unmatched in the middle market. We had 1 billion visits to our website last year. We had 90 million different consumers purchasing tickets for free and paid events. We had over 200 million searches where they didn't know the name of the event, they're searching a category, or they're searching a locality. Those numbers are literally an order of magnitude larger than the competitor set, you know, any one of the competitor set, not to mention putting a bunch together. Most of the competitors that we face are very category-specific, and they've tailored their ticketing technology to that category. That also means that their user base is everybody in that category. Their knowledge of consumers is limited to that category. Yet while creators tend to be kind of category-specific, consumers are really broad, that's an advantage that I think it's like kind of the sleeping giant of Eventbrite is our audience reach. That is exactly what we're trying to awaken. We've been focusing mostly on helping creators sell more tickets, post more events. you know, another growth opportunity for you guys is just growing the creator base, which is one of the more frequent questions I get from investors, which is sizing the TAM in terms of how many creators you guys can reach. How do you think about that internally? Well, we've sized the ticket fee market globally at about $3.2 billion based on third-party research that we've done. We have a level of confidence we can grow our creator count at a high single digit, low double digit rate year-over-year. The way that we do that is by not only solving their core ticketing needs, but by being really the destination where they can find incremental audiences. That does a couple things. One, we can foster the growth of successful creators by introducing them to incremental audiences. As creators see other creators being successful on our platform, that helps us acquire them. As we become really instrumental partners in their relationship with their audiences, there's a stickiness, kind of a CRM-type stickiness, like, "I got these customers on Eventbrite, I'm gonna go back to Eventbrite for them." Some of those things are key to driving that growth in the creator volume. We also know that there's a huge TAM opportunity for Eventbrite sitting right next door to, as Julia talked about, the ticketing, where we make our 8% on the face value of the ticket. There's another 20%-40% plus of that face value that's going into marketing, which is a really exciting incremental revenue opportunity for us. We like to say there's TAM within th tickets that we're already delivering. And then we have for every one paid event ticket that we support on the platform, there are two free event tickets that are running through our platform. Often, I think people kind of dismiss the free events as if there's nothing going on there, but that's not the case. These are, you know, maybe it's free to get in through the front door, and they wanna make sure that you're 21 before you get in and take advantage of everything that's going on, food and beverage and merchandise, as Julia said. There's a advertising and marketing imperative behind those free events that we're already seeing 25% of the customers adopting Eventbrite Ads are creators of free events. Even amongst the paid event advertisers, we're drawing ad dollars that aren't just the ticket value, they're the value of the whole event. You have international opportunities that we really have not focused upon. As we hone this two-sided marketplace model, we think our engine will be a lot more efficient to go look at international expansion. As far as we see, we see TAM in a bunch of different directions. The other really common question I get from investors is the one around competition. You guys have characterized your competitive environment as being highly fractured or fragmented. How has the competitive environment changed recently, if at all? I think we've broadened our perspective on competition, I think that the pressure has increased, that makes us very excited. We look at beyond just the sub-scale ticketing platforms that are focused, as Lanny said, on categories or geos and kind of play a niche market, and just don't have the economics or the scale that we have, and certainly can't provide the demand generation that we provide. We look at things like marketing tools, you know, with Eventbrite Boost being something that we know creators want, we know they need. They're seeing success. Same store sales is 63% increase for our creator who use Boost for their events versus not. We see there being a whole host of competitive pressures or threats in that. We're looking to unseat whatever they've been using prior to marketing tools, whether it's a DIY approach or they're using some other software. We also map our competitive landscape against things like distribution platforms and audience aggregators. You know, we've been deeply integrated with platforms like Facebook for many, many years. Facebook was one of our first integration partners in 2008, and we actually see that as a great benefit to using Eventbrite. We're not building a closed wall garden, you know? We're building a place where distribution and destination can coexist because it benefits the event, right, and the event creator. We always are looking at, you know, how we can stay close to the big guys and continue to reap the reward while also understanding that competitive pressure. I'd say the newer one would be online event streaming, that came into the market during COVID with a vengeance, and we saw it ourselves. We integrated with Zoom within probably like a month or six weeks after COVID really starting to tamp down live event gathering. We integrated deeply with them, eventually using their SDK to make it easier for event creators to host an online event using Eventbrite because effectively we're the front door, and we wanna make it easy to any type of format, and we're pretty agnostic. We've seen, you know, that grew to be 90% of our business at the height of COVID, and now has come down to single digits. The competitive threat there is some categories, especially like business and professional and wellness, they took their businesses online, you know? We're aware of the fact that some of those businesses may not come back to Eventbrite because they're actually using an integrated streaming partner. I think competition is all around us. We are up for the challenge. We look at, you know, what we do as being primarily and historically creator centric, but I can't stress enough how much there is to do on the consumer side of our marketplace as well as just how much benefit we can reap from that. Makes sense. I wanna move from kind of talking more broadly and longer term to moving into the outlook that you guys provided for 2023. You got it to $312 million-$330 million of revenue this year, growth of about 20%-26%, I think. What elements of your revenue model do you see driving that growth this year? Well, when you said short term, I'm impressed you went for the year, not the quarter. Let's see. This is the first time we've provided an annual outlook in three years. I think there's a little bit of a message behind that, which is things have stabilized a bit. I think, you know, we really had, you know, it was hard to look beyond 90 days for a period there in 2020 and in 2021. Some visibility has returned to the business. I think things have stabilized and we've got product momentum, and we've made such progress on customer retention and acquisition that we feel good about providing that full year outlook. I would say that we talk often about, and we think, we run our business against sort of five levers that drive our revenue, and really four of them that we influence. Those five levers are the number of creators on the platform, the frequency with which they're holding events, so events per creator. The attendance at those events, so tickets per event. And then the ticket price, and then the take rate. You multiply those five like a DuPont formula, and you get our revenue. The one that we don't have so much influence over is the ticket price. That's set by the creator, and they have great knowledge of what the right product market fit is with their audience. The other four we really drive. As we look at our growth this year, we raised prices for our platform on January third by what is effectively about 10% price change. That applies today to about 70% of our ticket volume. There's a 30% that's under longer term contracts, and we'll see as that rolls off how prices adjust. You could think of that as feeding directly into the take rate. That'll be a big driver for us. One of the components as you think about getting to that 20%-26% revenue growth rate, pricing is a large portion of that. With the investments we're making in the consumer experience, search and discovery, personalization, we think we're gonna achieve our sort of long-term goal, which is mid-single-digit growth in tickets per event and events per creator. As those things are playing out, you know, our health of the market, the strength of our product is also gonna give some growth and some lift in the creator number in our expectations. One thing we like about our model is that there are multiple levers to pull, you know, this year, 2023 compared to 2022, the take rate will be bigger. There's a price change. Also, as the ad dollars grow, that feeds into the take rate. As the subscription dollars grow, that feeds into the take rate. A little bit different growth profile this year than last year, but very consistent with the long-term targets that we've laid out. The first factor that you mentioned was the price hike, which I'd like to dig into a little bit more. How should we think about just the timing of how that will come into numbers? When should we expect to see it really moving the needle, and over what timeframe will we see it kind of run through the P&L? Yeah. Well, the price increase went into effect, we tested it a little bit in the fourth quarter in some smaller markets, but it went into effect kinda globally. I would call it an elegant price adjustment kind of price hike. Yeah. Okay. It went into effect on January third. you know, events that were on the calendar prior to January third are gonna be continued to ticket under the prior pricing. As I said a moment ago, we didn't adjust the long-term pricing in the middle of you know, the pricing on the longer term contracts in the middle of those contracts stays the same. I think by the time we exit the first quarter, I would anticipate that probably 80% or 90% of the tickets that we're selling will be under the newly established pricing levels. It'll climb up a little bit from there over the course of the year, We'll see what happens with those longer term contracts. To Julia's point, I think, as we thought about it, the investment that we've made in our product to really suit the needs of frequent creators has shown up in customer retention, customer success, Net Promoter Scores, and that made us feel, "Hey, you know, we're delivering value, and we should have that conversation with creators." We also wanted to signal that Eventbrite has been, you know, frankly, Eventbrite-driven tickets have been growing faster than the non-Eventbrite-driven tickets over the last couple years. We wanna use that moment to introduce the idea that, hey, as we drive more and more of the value in the marketplace, that's gonna be priced for. There were some competitive things where we looked at what we were charging, like, on just some of the very basics within that pricing structure, like processing credit cards, and we were a little bit off where the market was. Those are some of the factors we considered. I would say just, like, as we look ahead, I don't think we'll become a company that raises prices on some date every year. It'll be this nice balance of what's going on competitively, how much are we adding value to the product, and in the longer term, being able to really drive that demand generation as a pricing opportunity that we think is the biggest one in the long term. I wanna make sure that we get back to the reorg. Before we get into the financial impact of that, why was now the right time? Well, I would say it's never a great time to do any sort of restructuring. It's difficult in a company like Eventbrite with a culture that we've been known for and that we've worked really hard on. You know, it takes a lot of cognitive sweat to have this go right. For instance, instead of sending a company-wide email announcing that people would be losing their jobs, I did a live all hands, and then we had every single employee notified live one-on-one or in a small group conversation within the first eight hours. That kind of heavy lift is what it takes to be a people-centric company. I obviously take pride in that, even in difficult times. You know, when we looked at where we're going, we could either restrain growth and, you know, add incrementally as we culled the base of the core business, or we can make a much bigger change. I would say the signal of the much bigger change is you can correlate it to the opportunity that we see ahead and how clearly we can see where we're going and the acceleration benefit of that. You know, this is what great businesses do. They constantly look at how they can be running more efficiently in order to invest some of those savings into the future and, you know, we'll also see some of it drop to the bottom line. I think that's appropriate for a company like Eventbrite, but again, it's a, it's not an easy thing to do. I think it's easy to imagine it from this perspective, and certainly, you know, as I see the shape of the business, it was easier said than done. We've done a good job of bringing the company through it, and we're gonna be okay. You mentioned it dropping to the bottom line. What you've said is that the midpoint of your guidance kind of underlines a path to 10%-ish adjusted EBITDA margin in 2023, and then a exit rate in 2024 of around the 20% adjusted EBITDA low. Can you elaborate on what that trajectory looks like for us? You know, is it just kinda gradual improvement over the next 8 quarters or? Yeah. I think it'll be fairly steady. We've given you a full year target, and part of the reason that we gave a full year target rather than each one of the quarters this year is we've got a lot going on. As Julia mentioned, we're exiting 8% of our team in this first quarter. We are also moving 30% of our roles to new locations. As much as we will, you know, endeavor to make it seamless that the role stops on this day and the next day starts, that's not gonna happen. There's gonna be some overlapping expenses this way as we set up those centers in the new locations. You know, I think the, the progression should be fairly steady throughout the year, but, like, there's a lot of execution in that, as soon as we get the teams in place, we'll make the moves to wind down other parts. It's, it'll be fairly steady through this year. As we get into next year, I think We'll be in really good position to get the full benefits of everything we're doing this year. It's probably the case that the things we're undertaking have more economic, like, to the bottom line impact that you're gonna see this year, but that'll start to show up next year, being in stabler environments where we believe there are deeper pools of the kind of talent that we need and lower cost as well. You talked about hitting the 20% margin level at the Investor Day last year, as part of that outlined kind of where you expected to see operating leverage in the business across the OpEx line. As we look to the exit rate next year and hitting that threshold, are the ingredients for achieving that similar to, you know, what you laid out last year at the Investor Day? Very much. Very much. That would be, you know, I think, in the quarter we just reported, there was 300+ basis points of leverage on the G&A line, We'll continue to keep the general administrative costs fairly controlled. Focus more where we are investing more, it'll be on the things that go to market that meet the consumers and meet the creators, and really deliver value and impact to them. That'll be product, as Julia said, first and foremost, backed by marketing. What about on the gross margin side? You've talked to that reaching into the high sixties over time as ticket volumes and revenues ramp. Any help in terms of thinking about the scale of revenue or paid tickets that you need to reach in order. Sure to move into that range? Sure. you know, the way to think about it, I think last quarter, we were at a 66% gross margin. That was about 7 points better than the same quarter of 2019 on less revenue. That speaks to how we've improved the take rate, how we've improved the cost of goods and the efficiency of our model. I think incremental revenues, just in the core ticketing business, have probably between a 70%-75% incremental gross margin. You can use those numbers to back into, like, how much more ticket volume you need, and it's not a whole lot more to get the margins from 66 up to the very high 60% range, just on the core ticketing business. Now, what's going to become more important over time, by the time we get later this year and into next year, is that those advertising dollars and subscription dollars, which you said were a little bit less than $2 million last quarter, as those grow, those have a very positive effect on gross margins, because they have probably 20 percentage points higher gross margins than the core ticketing business. Because within our 8% ticketing fee, we also pay a 2% credit card processing fee associated with the face value of the ticket. That's why I said it's about 75% is the incremental margin there. But the margin on the advertising side and on the subscription side is really great because there isn't that dynamic. You know, the more the model blends to those being meaningful and larger revenue streams, that will be buoyancy for the gross margins as well. Great. maybe to wrap, there's always been a decent amount of debate amongst investors as to whether or not to deduct stock-based comp. In 2022, that came in for you guys around 20% of revenue. In the years leading up to the pandemic, I think it was broadly in the 5%-10-ish% of revenue intensity, range. As we think about that path to 20%, should we expect to see SBC intensity kind of moderate back to those pre-pandemic levels, or how should we think about that? I think it'll back moderate back toward those, yeah. I mean, we've put in place cash bonus programs and shrunk the eligibility, you know, the sort of the breadth of participation in equity programs. We think our equity is precious at these levels and wanna make sure that, you know, we're using that judiciously with, like, the talent that has both the most interest in equity compensation, the most influence on the equity value of the company, and where we really wanna use the retentive benefits of that currency. Then, you know, we'll manage the size and shape of those, of those activities. I think competitively, the market has eased off a little bit in terms of new sign-on, you know, equity grants and the like. We also look at the rate of dilution on the share count, and we, you know, we'd like to get that number into a low- to mid-single-digit annual kinda dilution rate over time. Makes sense. I think we're out of time. Thank you both for joining us. Thank you. Thanks, Jeremy. Thanks, everyone.