StubHub Holdings Inc.
11/14/2025 | Press release | Distributed by Public on 11/14/2025 05:06
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and our audited consolidated financial statements and related notes as disclosed in our final prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, in connection with our IPO (the "Prospectus"). The following discussion contains forward-looking statements that are based on current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those identified below and those discussed in the section titled "Risk Factors" and other sections, including the "Special Note Regarding Forward-Looking Statements" of this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Overview
Our mission is to be the global destination for consumers to access live events and experiences. We envision a future where all live event tickets are widely available to be conveniently purchased and every seat at every venue is filled.
Our journey began in 2000 when our Founder and CEO, Eric H. Baker, co-founded StubHub, the first online marketplace for secondary tickets, with the commitment to bring liquidity, transparency and trust to an opaque and inefficient category. When StubHub started, secondary ticketing was a fragmented offline market, untouched by technology and data, with complicated problems to solve. To win in secondary ticketing, StubHub had to create a technology-enabled marketplace where tickets were sourced and priced dynamically and all types of live events could be supported.
Today, we believe we operate a leading global ticketing marketplace for live events. Our business model has achieved scale with high growth and generated significant revenue, profit and cash flow. We connect fans around the world with sellers who use our marketplace to reach passionate fans and price tickets efficiently. We operate our global ticketing marketplace through two brands: StubHub in North America and viagogo internationally.
Recent Developments
Initial Public Offering
Our IPO was completed on September 18, 2025. Our condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025 reflect the sale by us of an aggregate of 34,042,553 shares in our IPO, at the public offering price of $23.50 per share, for net proceeds to us of approximately $758.0 million after deducting underwriting discounts and commissions of $42.0 million.
Upon our IPO, we recognized $1,400.7 million of stock-based compensation expense, net of $27.1 million capitalized for internally developed software, associated with restricted stock units ("RSUs"), stock options and restricted stock for which the service-based and performance-based vesting conditions, as applicable, were fully or partially satisfied in connection with the IPO.
Key Factors Affecting Our Performance
We believe that the growth and future success of our business depend on many factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must continue to successfully address in order to sustain our growth and improve our results of operations.
Attract Buyers Efficiently
In order to drive transaction activity on our marketplace, we must attract buyers efficiently. Our ability to do this relies on leveraging the strength of our leading global brands and performance marketing expertise. By combining unpaid traffic with high-return-on-investment marketing spend, we have a multi-faceted customer acquisition strategy that is designed to drive high-intent users to our marketplace and deliver superior buyer acquisition efficiency. Through our performance marketing channels, we are able to achieve consistent gross profit in excess of sales and marketing expenses on transactions. We believe that the combined strength of our StubHub brand in North America and viagogo brand internationally, as well as our performance marketing expertise will continue to enable us to attract buyers to the marketplace efficiently through these channels and continue to achieve strong profitability. In addition, buyers on our marketplace tend to exhibit repeat purchasing behavior, providing durable returns to our customer acquisition strategy. For example, as of December 31, 2024, the number of buyers who made two or more purchases on our platform during the previous 12 months grew 2.0x faster, year-over-year, than the number of buyers who made only one purchase on our platform during the previous 12 months. We believe this drives efficiency and growth over the long term.
Attract More Sellers
In order to deliver a compelling value proposition to buyers, we need a large and diverse inventory of live event tickets on our marketplace. Our ability to offer sufficient inventory requires us to maintain a large base of sellers and help them efficiently sell tickets so that they continue to utilize our marketplace. StubHub's large base of individual sellers offers a unique breadth and depth of inventory that we believe sets us apart in the live event ticketing ecosystem. In addition to individual sellers, professional sellers and content rights holders also provide inventory on our marketplace. If we fail to attract new sellers, retain existing sellers or fail to provide a wide enough selection of tickets on our marketplace, the value proposition to buyers may be diminished.
Monetize Transactions Across Our Platform
In order to grow our business, we must continue to monetize the ticketing transactions that we facilitate on our platform by charging fees to buyers and sellers for the services we provide. Our service fees per transaction are generally set as a percentage of the total transaction value. While the fees we charge can vary by transaction, we have maintained a consistent ratio of average service fees per transaction to GMS (as defined below) in excess of 20% annually over our history. Our ability to maintain attractive transaction economics reflects our value proposition to buyers and sellers.
Continued Production and Popularity of Live Events
Our ability to generate revenue and achieve growth is dependent on sports leagues, teams, venues, performing artists and other content rights holders offering live events as well as the number and popularity of these events in a given period. Consequently, large-scale events and tours, such as the FIFA World Cup in 2022 and Taylor Swift's record-setting "Eras" tour in 2023 and 2024, can drive excess growth in certain periods, and if large-scale events or tours are canceled, reduced, do not repeat or do not achieve the same level of popularity, it could cause fluctuations in our year-over-year growth rates and adversely impact our financial performance in affected periods.
Investments in Our Technology, Products and Services
We plan to make focused investments in technology, products and services to support buyers and sellers on our marketplace, both to increase our market share in secondary ticketing and accelerate our traction in new initiatives, including our entry into the original issuance ticketing market and digital advertising opportunities. With over a combined 40 years of operating history across the StubHub and viagogo brands, we have already made significant investments in our marketplace to provide us with a leading market position today. We plan to continue to make targeted investments in products and services for buyers to enhance live event discovery, personalization and seamless purchase functionality. Our ambition is for all tickets to all events globally to eventually be available for purchase on our marketplace. We will also continue to invest in our marketplace for our sellers. While our seller products today are primarily focused on inventory management and pricing intelligence for the secondary market, we plan to add additional features to our seller products and tools to continue reducing friction for sellers, including content rights holders with larger ticket portfolios, to list and sell their tickets on our marketplace. In addition, as we expand into new live events and experiences categories, we may make further investments in our technology in order to continue providing a trusted, end-to-end experience for buyers and sellers on our marketplace. Our results of operations may fluctuate as we make these investments to attract buyers and sellers and drive additional growth.
Components of Results of Operations
Revenue
We generate substantially all of our revenue from fees we charge buyers and sellers for the services we provide to facilitate their transactions to buy and sell live event tickets on our marketplace. Our fees are generally set as a percentage of the GMS value of a transaction conducted on our platform. We recognize revenue for transaction facilitation net of the price of tickets sold.
We also charge shipping fees to buyers of tickets and we recognize revenue for shipping fees on a gross basis.
In addition, in limited circumstances, we recognize proceeds associated with the sale of tickets as revenue, on a gross basis, in addition to any transaction fees.
Revenue earned from transactions that occur during a financial reporting period is recorded net of incentives, refunds for actual canceled events not previously reserved as well as an estimate for future canceled events.
Costs and Expenses
Cost of Revenue (Exclusive of Depreciation and Amortization)
Cost of revenue (exclusive of depreciation and amortization) includes payment processing costs, inventory costs, ticket substitution and replacement costs, shipping costs, costs associated with the maintenance and support of our platform. Payment processing costs consist of merchant fees, expenses associated with the usage of cloud infrastructure and chargebacks. Inventory costs represent the total amount of minimum proceeds that we agreed to remit to content rights holders in exchange for their agreement to list a certain number of original issuance tickets, as well as any additional payments due to such content rights holders based on the final sale price of the tickets. Costs associated with the maintenance and support of our platform include employee-related expenses, hosting and bandwidth and allocated overhead costs. Overall, we expect our cost of revenue to continue to increase in absolute dollars as we continue to invest in our business to support revenue growth. We incurred additional cost of revenue expense during the period in which we completed the IPO as a result of the stock-based compensation expense associated with our RSUs. We also expect to continue incurring stock-based compensation expense going forward as a public company.
Operations and Support
Operations and support expense is not directly related to revenue activities and primarily consists of compensation expenses for employees and outside contractors who provide buyer and seller support and allocated overhead costs. We expect our operations and support expenditures to continue to increase in absolute dollars as we continue to support revenue growth. We incurred additional operations and support expense during the period in which we completed the IPO as a result of the stock-based compensation expense associated with our RSUs. We also expect to continue incurring stock-based compensation expense going forward as a public company.
Sales and Marketing
Sales and marketing expense primarily consists of fixed and variable marketing and advertising expenses, including sponsorship fees paid to certain content rights holders, and personnel-related costs for sales and marketing employees, including allocated overhead costs. We expect sales and marketing expense to continue to increase in absolute dollars as we accelerate our marketing strategies to grow revenue. We incurred additional sales and marketing expense during the period in which we completed the IPO as a result of the stock-based compensation expense associated with our RSUs. We also expect to continue incurring stock-based compensation expense going forward as a public company.
General and Administrative
General and administrative expense includes personnel-related costs for functions such as product development, finance and accounting, legal and human resources as well as indirect tax contingency expenses, legal expenses, information technology costs, allocated overhead costs, professional services expenses and restructuring costs. We expect our general and administrative expense to increase in absolute dollars as we continue to grow our business. We expect to incur additional general and administrative expense as a result of operating as a public company, including expenses to comply with the rules and regulations of the SEC and listing rules of NYSE, as well as higher expenses for directors and officers insurance, investor relations and professional services. We incurred additional general and administrative expense during the period in which we completed the IPO as a result of the stock-based compensation expense associated with our RSUs, stock options, warrants and restricted stock. We also expect to continue incurring stock-based compensation expense going forward as a public company.
Depreciation and Amortization
Depreciation and amortization expense primarily consists of depreciation and amortization expenses associated with our intangible assets, property and equipment and capitalized software development costs. Depreciation includes expenses associated with computer equipment and software, leasehold improvements and office furniture and equipment. Amortization includes expenses associated with our acquired intangible assets and capitalized software development costs. Depreciation and amortization are excluded from cost of revenue and operating expense line items. We also expect to continue incurring higher amortization expense related to the capitalized software development costs given the costs that were capitalized upon IPO.
Other (Expense) Income
Interest Income
Interest income consists of interest earned on bank deposits and cash held at online payment companies, which are primarily comprised of short-term, highly liquid investments with original maturities of three months or less when purchased.
Interest Expense
Interest expense consists of interest incurred on borrowings and debt issuance costs that are amortized using the effective interest method, over the term of the debt. Interest rate swaps designated and accounted for as cash flow hedges are presented within interest expense.
Foreign Currency Losses
Foreign currency losses represent the remeasurement of monetary assets to be received or liabilities to be paid for the settlement of a transaction denominated in a currency other than the functional currency.
Gains (Losses) on Derivatives
We use interest rate swaps to manage interest rate risk on future cash flows. Interest rate swaps not designated as a cash flow hedge are presented in gains (losses) on derivatives.
For derivative instruments that are not designated as hedging instruments any change in fair value during the reporting period is recognized in our condensed consolidated statements of operations. For derivative instruments that are designated as cash flow hedges, any change in fair value during the period is reported as a component of accumulated other comprehensive loss on our condensed consolidated balance sheets and subsequently reclassified into our condensed consolidated statements of operations in the same period the forecasted hedged interest payments affects earnings.
Benefit (Provision) for Income Taxes
We are subject to income taxes in the U.S. and foreign jurisdictions in which we do business. Foreign jurisdictions have different statutory tax rates than those in the U.S. Additionally, certain of our foreign earnings may also be taxable in the U.S. Accordingly, our effective tax rate is subject to significant variation due to several factors, including variability in our pre-tax and taxable income or loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in how we do business, acquisitions, investments, tax audit developments, the valuation of our net deferred tax assets, and foreign currency gains and losses. Our effective tax rate can also be sensitive to changes in statutes, regulations, case law and administrative practices, principles and interpretations related to tax, including changes to the global tax framework, and other laws and accounting rules in various jurisdictions. We continue to reassess the valuation allowance and uncertain tax positions quarterly, and if future evidence or events change this assessment, a tax benefit or provision will be recorded accordingly.
Results of Operations
The following tables set forth our results of operations for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenue | $ | 468,113 | $ | 433,779 | $ | 1,296,015 | $ | 1,237,230 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
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Cost of revenue (exclusive of depreciation and amortization shown separately below) (1)
|
100,514 | 79,562 | 238,102 | 205,919 | |||||||||||||||||||
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Operations and support (1)
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22,508 | 15,584 | 48,634 | 44,379 | |||||||||||||||||||
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Sales and marketing (1)
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281,136 | 220,964 | 735,246 | 606,664 | |||||||||||||||||||
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General and administrative (1)
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1,425,733 | 99,355 | 1,571,161 | 296,929 | |||||||||||||||||||
| Depreciation and amortization | 6,411 | 6,168 | 19,167 | 18,139 | |||||||||||||||||||
| Total costs and expenses | 1,836,302 | 421,633 | 2,612,310 | 1,172,030 | |||||||||||||||||||
| (Loss) income from operations | (1,368,189) | 12,146 | (1,316,295) | 65,200 | |||||||||||||||||||
| Interest income | 12,912 | 11,045 | 31,579 | 31,286 | |||||||||||||||||||
| Interest expense | (35,360) | (47,548) | (121,665) | (134,569) | |||||||||||||||||||
| Other income, net | 4,904 | 1,907 | 4,552 | 1,907 | |||||||||||||||||||
| Foreign currency losses | (1,133) | (19,519) | (86,303) | (5,388) | |||||||||||||||||||
| Loss on extinguishment of debt | (15,454) | - | (15,454) | (8,216) | |||||||||||||||||||
| Gains (losses) on derivatives | 1,471 | (7,858) | 637 | 2,380 | |||||||||||||||||||
| Total other expense, net | (32,660) | (61,973) | (186,654) | (112,600) | |||||||||||||||||||
| Loss before income taxes | (1,400,849) | (49,827) | (1,502,949) | (47,400) | |||||||||||||||||||
| Benefit (provision) for income taxes | 106,240 | 16,815 | 132,328 | (9,590) | |||||||||||||||||||
| Net loss | $ | (1,294,609) | $ | (33,012) | $ | (1,370,621) | $ | (56,990) | |||||||||||||||
(1) Includes stock-based compensation as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | $ | 23,356 | $ | - | $ | 23,356 | $ | - | |||||||||||||||
| Operations and support | 5,938 | - | 5,938 | - | |||||||||||||||||||
| Sales and marketing | 26,462 | - | 26,462 | - | |||||||||||||||||||
| General and administrative | 1,349,492 | 1,426 | 1,357,023 | 4,356 | |||||||||||||||||||
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Total stock-based compensation expense
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$ | 1,405,248 | $ | 1,426 | $ | 1,412,779 | $ | 4,356 | |||||||||||||||
Upon the Company's IPO, we recognized $1,400.7 million of stock-based compensation expense, net of $27.1 million capitalized for internally developed software, associated with RSUs, stock options and restricted stock for which the service-based and performance-based vesting conditions, as applicable, were fully or partially satisfied in connection with the IPO.
Comparison of the Three and Nine Months Ended September 30, 2025 and 2024
Revenue
| Three Months Ended September 30, |
$ Change
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% Change
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Nine Months Ended September 30, |
$ Change
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| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
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(in thousands, except percentages)
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| Revenue | $ | 468,113 | $ | 433,779 | $ | 34,334 | 7.9% | $ | 1,296,015 | $ | 1,237,230 | $ | 58,785 | 4.8% | |||||||||||||||||||||||||||||||||
The overall increase in our revenue in the amount of $34.3 million for the three months ended September 30, 2025 as compared to the same period in 2024 is attributable to growth in GMS, which was primarily due to an increase in transaction volume on our platform and a decrease of$11.0 million in refunded transaction fees as compared to the same period in 2024 primarily driven by fewer cancellations by top-tier artists. This is partially offset by a decrease of $8.5 million in sales of tickets for which we assumed inventory risk.
The overall increase in our revenue in the amount of $58.8 million for the nine months ended September 30, 2025 as compared to the same period in 2024 is attributable to growth in GMS, which was primarily due to an increase in transaction volume on our platform. This is partially offset by a decrease of $13.0 million in sales of tickets for which we assumed inventory risk.
Cost of Revenue (Exclusive of Depreciation and Amortization)
| Three Months Ended September 30, |
$ Change |
% Change |
Nine Months Ended September 30, |
$ Change
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% Change
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| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
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Cost of revenue (exclusive of depreciation and amortization)
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$ | 100,514 | $ | 79,562 | $ | 20,952 | 26.3% | $ | 238,102 | $ | 205,919 | $ | 32,183 | 15.6% | |||||||||||||||||||||||||||||||||
The overall increase in our cost of revenue (exclusive of depreciation and amortization) in the amount of $21.0 million for the three months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $23.4 million related to stock-based compensation expense recognized as a result of our IPO and an increase of $15.6 million in payment processing costs related to the increase in the volume of transactions we facilitated during the three months ended September 30, 2025. This is partially offset by a reduction of $12.5 million in ticket substitution and replacement costs and a decrease of $5.3 million in inventory costs.
The overall increase in our cost of revenue (exclusive of depreciation and amortization) in the amount of $32.2 million for the nine months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $33.6 million in payment processing costs related to the increase in the volume of transactions we facilitated during the nine months ended September 30, 2025 and an increase of $23.4 million related to stock-based compensation expense recognized as a result of our IPO. This is partially offset by a reduction of $21.1 million in ticket substitution and replacement costs.
Operations and Support
| Three Months Ended September 30, |
$ Change |
% Change |
Nine Months Ended September 30, |
$ Change
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% Change
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(in thousands, except percentages)
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| Operations and support | $ | 22,508 | $ | 15,584 | $ | 6,924 | 44.4% | $ | 48,634 | $ | 44,379 | $ | 4,255 | 9.6% | |||||||||||||||||||||||||||||||||
The overall increase in operations and support expenses in the amount of $6.9 million for the three months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $5.9 million related to stock-based compensation expense recognized as a result of our IPO.
The overall increase in operations and support expenses in the amount of $4.3 million for the nine months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $5.9 million related to stock-based compensation expense recognized as a result of our IPO.
Sales and Marketing
| Three Months Ended September 30, |
$ Change |
% Change |
Nine Months Ended September 30, |
$ Change
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% Change
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| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 281,136 | $ | 220,964 | $ | 60,172 | 27.2% | $ | 735,246 | $ | 606,664 | $ | 128,582 | 21.2% | |||||||||||||||||||||||||||||||||
The overall increase in sales and marketing expenses in the amount of $60.2 million for the three months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $30.3 million in advertising expenses driven by an increase in transaction volume and increased customer acquisition costs to drive relative market share gains and an increase of $26.5 million related to stock-based compensation expense recognized as a result of our IPO.
The overall increase in sales and marketing expenses in the amount of $128.6 million for the nine months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $91.9 million in advertising expenses driven by an increase in transaction volume and increased customer acquisition costs to drive relative market share gains and an increase of $26.5 million related to stock-based compensation expense recognized as a result of our IPO.
General and Administrative
| Three Months Ended September 30, |
$ Change |
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Nine Months Ended September 30, |
$ Change
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% Change
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| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | 1,425,733 | $ | 99,355 | $ | 1,326,378 | 1,335.0% | $ | 1,571,161 | $ | 296,929 | $ | 1,274,232 | 429.1% | |||||||||||||||||||||||||||||||||
The overall increase in general and administrative expense in the amount of $1,326.4 million for the three months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $1,348.1 million related to stock-based compensation expense recognized as a result of our IPO. This is partially offset by a decrease of $15.6 million related to litigation reserves for probable losses.
The overall increase in general and administrative expense in the amount of $1,274.2 million for the nine months ended September 30, 2025 as compared to the same period in 2024 is primarily attributable to an increase of $1,352.7 million related to stock-based compensation expense recognized as a result of our IPO. This is partially offset by a decrease of $29.6 million related to litigation reserves for probable losses, a decrease of $25.6 million of one-time expenses in connection with our loan extension in 2024, and a decrease of $20.2 million in professional services fees.
Depreciation and Amortization
| Three Months Ended September 30, |
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Nine Months Ended September 30, |
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| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 6,411 | $ | 6,168 | $ | 243 | 3.9% | $ | 19,167 | $ | 18,139 | $ | 1,028 | 5.7% | |||||||||||||||||||||||||||||||||
Depreciation and amortization expenses increased $0.2 million for the three months ended September 30, 2025 as compared to the same period in 2024 primarily due to increased depreciation and amortization for new assets placed into service.
Depreciation and amortization expenses increased $1.0 million for the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to increased depreciation and amortization for new assets placed into service.
Interest Income
| Three Months Ended September 30, |
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| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 12,912 | $ | 11,045 | $ | 1,867 | 16.9% | $ | 31,579 | $ | 31,286 | $ | 293 | 0.9% | |||||||||||||||||||||||||||||||||
Interest income increased $1.9 million for the three months ended September 30, 2025 as compared to the same period in 2024 primarily due to higher cash and cash equivalent balances throughout the quarter, partially offset by lower interest rates.
Interest income increased $0.3 million for the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to higher cash and cash equivalent balances throughout the year, partially offset by lower interest rates.
Interest Expense
| Three Months Ended September 30, |
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Nine Months Ended September 30, |
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| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | $ | (35,360) | $ | (47,548) | $ | 12,188 | (25.6)% | $ | (121,665) | $ | (134,569) | $ | 12,904 | (9.6)% | |||||||||||||||||||||||||||||||||
Interest expense decreased $12.2 million for the three months ended September 30, 2025 as compared to the same period in 2024 primarily due to a one-time reclassification of $18.4 million from accumulated other comprehensive income to interest expense as a reduction of interest expense due to the partial termination of an interest rate swap and a decrease of $7.3 million due to lower variable interest rates for our outstanding term loans. This is partially offset by an increase of $8.1 million in fair value change for redeemable preferred stocks and redeemable preferred stock bifurcated derivatives and an increase of $5.4 million on settlement from an interest rate swap.
Interest expense decreased $12.9 million for the nine months ended September 30, 2025 as compared to the same period in 2024 primarily due to a one-time reclassification of $18.4 million from accumulated other comprehensive income to interest expense as a reduction of interest expense due to the partial termination of an interest rate swap and a decrease of $17.2 million due to lower variable interest rates for our outstanding term loans. This is partially offset by an increase of $14.1 million on settlement from an interest rate swap and an increase of $8.7 million in fair value change for redeemable preferred stocks and redeemable preferred stock bifurcated derivatives.
Foreign Currency Losses
| Three Months Ended September 30, |
$ Change |
% Change |
Nine Months Ended September 30, |
$ Change
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% Change
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| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency losses | $ | (1,133) | $ | (19,519) | $ | 18,386 | (94.2)% | $ | (86,303) | $ | (5,388) | $ | (80,915) | 1,501.8% | |||||||||||||||||||||||||||||||||
Foreign currency losses decreased $18.4 million for the three months ended September 30, 2025 as compared to the same period in 2024, which is primarily attributable to the remeasurement of our 2024 Euro Term Loan obligation due to changes in the U.S. dollar to euro exchange rate.
Foreign currency losses increased $80.9 million for the nine months ended September 30, 2025 as compared to the same period in 2024, which is primarily attributable to the remeasurement of our 2024 Euro Term Loan obligation, indirect tax contingencies and litigation reserves due to changes in the U.S. dollar to euro exchange rate.
Loss on Extinguishment of Debt
| Three Months Ended September 30, |
$ Change |
% Change |
Nine Months Ended September 30, |
$ Change
|
% Change
|
||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | $ | (15,454) | $ | - | $ | (15,454) | * | $ | (15,454) | $ | (8,216) | $ | (7,238) | 88.1% | |||||||||||||||||||||||||||||||||
* Not meaningful
Loss on extinguishment of debt increased $15.5 million for the three months ended September 30, 2025 as compared to the same period in 2024 primarily due to debt paydown in the third quarter of 2025. This resulted in the partial write-off of the remaining original issuance discount and unamortized debt issuance costs.
Loss on extinguishment of debt increased $7.2 million for the nine months ended September 30, 2025 as compared to the same period in 2024. The debt paydown in third quarter of 2025 resulted in a $15.5 million of loss on extinguishment of debt due to partial write-off of the remaining original issuance discount and unamortized debt issuance costs. The debt refinancing in the first quarter of 2024 resulted in an $8.2 million loss on extinguishment of debt due to partial write-off of the remaining original issuance discount and unamortized debt issuance costs for those lenders who did not participate in the debt refinancing or had their loans partially redeemed for cash.
Gains (Losses) on Derivatives
| Three Months Ended September 30, | $ Change | % Change | Nine Months Ended September 30, |
$ Change
|
% Change
|
||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on derivatives | $ | 1,471 | $ | (7,858) | $ | 9,329 | * | $ | 637 | $ | 2,380 | $ | (1,743) | (73.2)% | |||||||||||||||||||||||||||||||||
* Not meaningful
Gains on derivatives increased $9.3 million for the three months ended September 30, 2025 as compared to the same period in 2024, primarily as a result of an increase in the fair value of an interest rate swap derivative, which is not designated as a cash flow hedge, due to changes in interest rates during the period.
Gains on derivatives decreased $1.7 million for the nine months ended September 30, 2025 as compared to the same period in 2024, primarily as a result of a decrease in the settlement received of an interest rate swap derivative, which is not designated as a cash flow hedge, due to changes in interest rates during the period.
Benefit (Provision) for Income Taxes
| Three Months Ended September 30, | $ Change | % Change | Nine Months Ended September 30, |
$ Change
|
% Change
|
||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Benefit (provision) for income taxes | $ | 106,240 | $ | 16,815 | $ | 89,425 | 531.8% | $ | 132,328 | $ | (9,590) | $ | 141,918 | * | |||||||||||||||||||||||||||||||||
* Not meaningful
Benefit for income taxes increased $89.4 million for the three months ended September 30, 2025 as compared to the same period in 2024 primarily due to an increase in pre-tax loss. The tax benefit from the increase in pre-tax loss for the three months ended September 30, 2025 was partially offset by the tax impact of non-deductible employee compensation.
Benefit for income taxes increased $141.9 million for the nine months ended September 30, 2025 as compared to the same period in 2024, primarily due to an increase in pre-tax loss. The tax provision for the nine months ended September 30, 2024 was primarily attributable to the tax expense incurred in connection with our legal entity restructuring completed in 2024.
Key Business Metric and Non-GAAP Financial Measures
We regularly review the following key business metric and non-GAAP financial measures to evaluate our business, measure our performance, identify trends, prepare financial projections and make business decisions. The measures set forth below should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these measures differently or not at all, which reduces their usefulness as comparative measures. A reconciliation of the non-GAAP financial measures, Adjusted EBITDA and free cash flow, to the most directly comparable financial measures calculated in accordance with GAAP is set forth below under "-Non-GAAP Financial Measures."
The following table summarizes our key business metric and non-GAAP financial measures (along with the most directly comparable GAAP measures) for the periods indicated:
|
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
|
|
2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
|
|
(in thousands) | ||||||||||||||||||||||||||||||||||
|
Key Business Metric
|
|
|
|||||||||||||||||||||||||||||||||
|
GMS(1)
|
$ | 2,434,796 | $ | 2,188,890 | 11% | $ | 6,814,814 | $ | 6,133,284 | 11% | |||||||||||||||||||||||||
|
Non-GAAP Financial Measures
|
|||||||||||||||||||||||||||||||||||
|
Net loss (GAAP)
|
$ | (1,294,609) | $ | (33,012) | 3,822% | $ | (1,370,621) | $ | (56,990) | 2,305% | |||||||||||||||||||||||||
|
Adjusted EBITDA(2)
|
$ | 67,493 | $ | 55,750 | 21% | $ | 169,781 | $ | 194,309 | (13)% | |||||||||||||||||||||||||
|
Net cash provided by operating activities (GAAP)
|
$ | 3,795 | $ | 12,357 | (69)% | $ | 181,436 | $ | 410,935 | (56)% | |||||||||||||||||||||||||
|
Free cash flow(3)
|
$ | (4,600) | $ | 10,602 | (143)% | $ | 156,226 | $ | 405,735 | (61)% | |||||||||||||||||||||||||
(1) See "-Key Business Metric-Gross Merchandise Sales" below for more information.
(2) See "-Non-GAAP Financial Measures-Adjusted EBITDA" below for more information.
(3) See "-Non-GAAP Financial Measures-Free Cash Flow" below for more information.
Key Business Metric
Gross Merchandise Sales
Gross Merchandise Sales ("GMS") represents the total dollar value paid by buyers for ticket transactions and fulfillment. GMS includes fees we charge buyers and sellers that can vary by transaction, as well as the net proceeds we remit to sellers. Our definition of GMS does not include applicable sales, value-added and other indirect taxes, shipping costs and the impact of discounts and coupons as well as event cancellations or expected cancellations after the initial transaction on our platform. We believe it is useful to exclude these items, primarily refunds due to event cancellations, as GMS is a key metric used by management to measure business performance.
Our revenue depends significantly on the dollar value of GMS flowing through our platform and our ability to generate fees from such transactions. We believe that GMS is useful to management and investors as it serves as an important indicator of our ability to attract and satisfy buyers and sellers, the overall health of our marketplace and the scale and growth of our business.
Other marketplaces may not present GMS or may calculate this measure differently, which would reduce its usefulness as comparative measure. GMS is an operating metric and does not represent revenue earned by us calculated in accordance with GAAP.
During the three months ended September 30, 2025, our GMS grew 11% year-over-year due to ongoing market share growth in the North American secondary market, and continued growth in international markets and direct issuance. Excluding the impact of Taylor Swift's "Eras" tour in the prior year period, our year-over-year GMS growth was 24%. We believe our GMS growth was also impacted by the implementation of the federally mandated all-in pricing regulation, which we estimate had a one-time 10% impact on the growth of the North American secondary ticketing market when it came into effect in May.
During the nine months ended September 30, 2025, our GMS grew 11% year-over-year due to ongoing market share growth in the North American secondary market, and continued growth in international markets and direct issuance. Excluding the impact of Taylor Swift's "Eras" tour in the prior year period, our year-over-year GMS growth was 22%.
Non-GAAP Financial Measures
Adjusted EBITDA
We calculate Adjusted EBITDA as net (loss) income excluding results from non-operating sources including interest income and expense, benefit (provision) for income taxes, other (expense) income, net, foreign currency losses, gains (losses) on derivatives, depreciation and amortization, acquisition-related costs, stock-based compensation expense, employee relocation costs, debt refinancing costs and loss on extinguishment of debt, indirect tax contingency costs, litigation reserves and other costs and expenses.
Adjusted EBITDA is a key performance measure that our management team uses to assess our operating performance. We present Adjusted EBITDA because management believes it is helpful in highlighting trends in our operating results as it excludes certain items, such as stock-based compensation expense, which are non-cash or whose fluctuations from period-to-period do not necessarily correspond to changes in the operating results of our business. Moreover, it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry.
Adjusted EBITDA has limitations as an analytical measure and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net (loss) income and our other GAAP results.
The following table presents a reconciliation of net loss, the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA.
|
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
|
|
2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
|
|
(in thousands) | ||||||||||||||||||||||
|
Net loss
|
$ | (1,294,609) | $ | (33,012) | $ | (1,370,621) | $ | (56,990) | |||||||||||||||
| Add (deduct) | |||||||||||||||||||||||
| Interest income | (12,912) | (11,045) | (31,579) | (31,286) | |||||||||||||||||||
| Interest expense | 35,360 | 47,548 | 121,665 | 134,569 | |||||||||||||||||||
| (Benefit) provision for income taxes | (106,240) | (16,815) | (132,328) | 9,590 | |||||||||||||||||||
| Other income, net | (4,904) | (1,907) | (4,552) | (1,907) | |||||||||||||||||||
| Foreign currency losses | 1,133 | 19,519 | 86,303 | 5,388 | |||||||||||||||||||
| (Gains) losses on derivatives | (1,471) | 7,858 | (637) | (2,380) | |||||||||||||||||||
| Depreciation and amortization | 6,411 | 6,168 | 19,167 | 18,139 | |||||||||||||||||||
|
Debt refinancing costs and loss on extinguishment of debt(1)
|
15,454 | - | 15,454 | 33,886 | |||||||||||||||||||
|
Acquisition-related costs(2)
|
- | 125 | 250 | 1,249 | |||||||||||||||||||
|
Stock-based compensation expense(3)
|
1,405,248 | 1,426 | 1,412,779 | 4,356 | |||||||||||||||||||
|
Indirect tax contingency costs(4)
|
12,992 | 11,755 | 34,938 | 38,024 | |||||||||||||||||||
|
Litigation reserves(5)
|
7,000 | 22,379 | 7,000 | 38,756 | |||||||||||||||||||
|
Other costs and expenses(6)
|
4,031 | 1,751 | 11,942 | 2,915 | |||||||||||||||||||
|
Adjusted EBITDA
|
$ | 67,493 | $ | 55,750 | $ | 169,781 | $ | 194,309 | |||||||||||||||
|
Revenue
|
468,113 | 433,779 | 1,296,015 | 1,237,230 | |||||||||||||||||||
|
Net loss as a percentage of revenue
|
(277)% | (8)% | (106)% | (5)% | |||||||||||||||||||
|
Adjusted EBITDA as a percentage of revenue
|
14% | 13% | 13% | 16% | |||||||||||||||||||
1.During the three and nine months ended September 30, 2025, we incurred $15.5 million of loss on extinguishment of debt as a result of our early principal payment related to the 2024 USD Term Loan of $750.0 million in connection with, and using proceeds from the IPO, which is a non-recurring transaction. During the nine months ended September 30, 2024, we incurred $25.7 million of professional service fees related to our debt refinancing in 2024, which is a non-recurring transaction, and $8.2 million of loss on extinguishment of debt. As such, we do not consider these associated costs to be representative of the ongoing financial performance of our core business.
2.During the three months ended September 30, 2025 and 2024, we incurred zero and $0.1 million of transaction and integration costs, and during the nine months ended September 30, 2025 and 2024, we incurred $0.3 million and $1.2 million of transaction and integration costs, respectively, attributable to activities associated with our acquisition of the StubHub business from eBay Inc. (the "StubHub Acquisition"), including for certain personnel-related integration costs for certain StubHub employees we retained following the StubHub Acquisition, significant legal and other consultative fees in connection with the U.K. Competition and Markets Authority's (the "U.K. CMA") approval proceedings and efforts to integrate acquired information technology infrastructure. We do not consider these costs to be representative of the ongoing financial performance of our core business, and we do not expect these costs to be significant going forward.
3.Upon our IPO, we recognized $1,400.7 million of stock-based compensation expense, net of $27.1 million capitalized for internally developed software, associated with RSUs, stock options and restricted stock for which the service-based and performance-based vesting conditions, as applicable, were fully or partially satisfied in connection with the IPO.
4.During the three months ended September 30, 2025 and 2024, we incurred $12.8 million and $11.4 million of expenses, respectively, associated with potential indirect tax contingencies for withholding obligations and $0.2 million and $0.4 million of professional service costs, respectively. During the nine months ended September 30, 2025 and 2024, we incurred $33.7 million and $31.0 million of expenses, respectively, associated with potential indirect tax contingencies for withholding obligations and $1.3 million and $7.0 million of professional service costs, respectively.
5.During the three months ended September 30, 2025 and 2024 we incurred $7.0 million and $22.4 million, respectively, and during the nine months ended September 30, 2025 and 2024, we incurred $7.0 million and $38.8 million, respectively, for expenses due to a litigation-related loss contingency for specific matters for which we deemed loss to be probable as described in Note 12, "Commitments and Contingencies" to our interim condensed consolidated financial statements. We do not consider these costs to be representative of ordinary course litigation or the ongoing financial performance of our core business.
6.Represents (a) a one-time expense to terminate an intellectual property rights licensing agreement of $7.7 million for the nine months ended September 30, 2025, (b) personnel-related costs related to our customer service office closure of zero and $1.7
million for the three months ended September 30, 2025 and 2024, respectively, and $0.2 million and $1.7 million for the nine months ended September 30, 2025 and 2024, respectively, (c) a one-time expense related to our IPO of $4.0 million for the three and nine months ended September 30, 2025, respectively, and (d) entity restructuring costs associated with the transfer of certain intangible assets and restructuring of our wholly owned subsidiaries of $0.1 million for the three months ended September 30, 2024 and $1.2 million for the nine months ended September 30, 2024. We do not consider these expenses to be representative of the ongoing financial performance of our core business.
During the three months ended September 30, 2025, the increase in Adjusted EBITDA, compared to the same period in the prior year, was driven by increased net transaction fees on our platform due to higher transaction volume, partially offset by increased customer acquisition spend to accelerate our relative market share gains and lower personnel-related costs largely related to greater capitalized software development costs.
During the nine months ended September 30, 2025, the decrease in Adjusted EBITDA, compared to the same period in the prior year, was driven by increased customer acquisition spend to accelerate our relative market share gains, partially offset by increased transaction fees from higher platform volume and operational savings from lower professional fees.
Free Cash Flow
We define free cash flow as net cash provided by (used in) operating activities less capital expenditures, which includes purchases of property and equipment, purchases of intangible assets and capitalized software development costs (excluding capitalized stock-based compensation expense). We believe that free cash flow is a meaningful indicator of liquidity for management and investors and, in particular, the amount of cash generated from operations that, after capital expenditures, can be used for strategic initiatives, including continuous investment in our business and strengthening our balance sheet. A limitation of the use of free cash flow is that it does not represent the total increase or decrease in our cash balance for the period. Free cash flow should not be considered in isolation or as an alternative to cash flows from operations and should be considered alongside our other financial liquidity measures, such as net cash provided by (used in) operating activities and our other GAAP results.
The following table presents a reconciliation of net cash provided by operating activities, the most directly comparable financial measure presented in accordance with GAAP, to free cash flow:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
|
Net cash provided by operating activities(1)
|
$ | 3,795 | $ | 12,357 | $ | 181,436 | $ | 410,935 | ||||||||||||||||||
| Less: Purchases of property and equipment | (372) | (646) | (1,170) | (1,326) | ||||||||||||||||||||||
| Less: Purchases of intangible assets | (256) | (588) | (1,198) | (1,770) | ||||||||||||||||||||||
| Less: Capitalized software development costs | (7,767) | (521) | (22,842) | (2,104) | ||||||||||||||||||||||
|
Free cash flow
|
$ | (4,600) | $ | 10,602 | $ | 156,226 | $ | 405,735 | ||||||||||||||||||
|
TTM free cash flow(2)
|
$ | 5,601 | $ | 501,492 | $ | 5,601 | $ | 501,492 | ||||||||||||||||||
(1) Includes $39.6 million, $40.1 million, $115.0 million and $108.6 million of interest payments on our outstanding debt, net of cash received on the settlement of interest rate swap derivatives for the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, respectively.
(2) Seasonal trends in our GMS and the timing of major events throughout the year impact free cash flow for any given quarter and can vary year to year. For example, in 2024 an atypical concentration of seller payments resulted in negative free cash flow for the fourth quarter. As a result, we track our trailing 12 months ("TTM") free cash flow to account for the timing difference in when we receive cash, which is at the time of transaction, and when we remit cash to sellers, which is at a later date. TTM free cash flow provides a longer-term view of our business that is less impacted by the seasonality of GMS and seller payments. See below for a reconciliation of free cash flow to net cash provided by (used in) operating activities, the most comparable U.S. GAAP financial measure, for each of the periods presented.
During the three months ended September 30, 2025, the decrease in free cash flow, compared to the same periods in the prior year, primarily reflects changes in the timing of payments to vendors.
During the nine months ended September 30, 2025, the decrease infree cash flow, compared to the same period in the prior year, primarily reflects changes in the timing of cash receipts and payments associated with ticket sales as well as timing of payments to vendors.
During the period ended September 30, 2025, the decrease in TTM free cash flow, compared to the same period in the prior year, primarily reflects changes in the timing of cash receipts and payments associated with ticket sales as well as timing of payments to vendors.
The following table presents a reconciliation of free cash flow to net cash provided by (used in) operating activities, the most comparable U.S. GAAP financial measure, for each of the periods presented:
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||||||||||||||||||
|
|
September 30,
2025 |
June 30,
2025 |
March 31,
2025 |
December 31,
2024 |
September 30,
2024 |
June 30,
2024 |
March 31,
2024 |
December 31,
2023 |
|||||||||||||||||||||||||||||||||||||||
|
|
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net cash provided by (used in) operating activities
|
$ | 3,795 | $ | 19,320 | $ | 158,321 | $ | (149,448) | $ | 12,357 | $ | 138,221 | $ | 260,357 | $ | 98,638 | |||||||||||||||||||||||||||||||
|
Less: Purchases of property and equipment
|
(372) | (291) | (507) | (340) | (646) | (319) | (361) | (372) | |||||||||||||||||||||||||||||||||||||||
|
Less: Purchases of intangible assets
|
(256) | (467) | (475) | (316) | (588) | (756) | (426) | (1,706) | |||||||||||||||||||||||||||||||||||||||
|
Less: Capitalized software development costs
|
(7,767) | (8,846) | (6,229) | (521) | (521) | (704) | (879) | (803) | |||||||||||||||||||||||||||||||||||||||
|
Free cash flow
|
$ | (4,600) | $ | 9,716 | $ | 151,110 | $ | (150,625) | $ | 10,602 | $ | 136,442 | $ | 258,691 | $ | 95,757 | |||||||||||||||||||||||||||||||
|
TTM free cash flow
|
$ | 5,601 | $ | 20,803 | $ | 147,529 | $ | 255,110 | $ | 501,492 | |||||||||||||||||||||||||||||||||||||
|
Net interest payment(1)
|
$ | 39,629 | $ | 37,989 | $ | 37,362 | $ | 38,524 | $ | 40,128 | $ | 48,763 | $ | 19,730 | $ | 37,309 | |||||||||||||||||||||||||||||||
|
Change in payments due to buyers and sellers(2)
|
$ | (29,555) | $ | (30,832) | $ | 191,552 | $ | (251,412) | $ | (37,612) | $ | 68,751 | $ | 250,433 | $ | 42,591 | |||||||||||||||||||||||||||||||
(1) Includes interest payments on our outstanding debt, net of cash received on the settlement of interest rate swap derivatives.
(2) Includes change in payments due to buyers and sellers as noted in the condensed consolidated statement of cash flows.
Liquidity and Capital Resources
As of September 30, 2025, we had cash and cash equivalents of $1,392.5 million. Cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less when purchased, and are primarily comprised of bank deposits and cash held at online payment companies, which excludes $16.6 million of restricted cash.
On September 29, 2025, we made an early principal payment related to the 2024 USD Term Loan of $750.0 million in connection with, and using proceeds from the IPO. Due to the paydown, we are no longer required to repay 0.25% of the aggregate $1,154.2 million of principal amount remaining on a quarterly basis beginning on September 30, 2025.
We expect our existing cash and cash equivalents will be sufficient to fund anticipated cash requirements for at least the next 12 months. We amended our Credit Facilities (as defined below) in March 2024 to extend their maturities. Our Credit Facilities mature in 2030. We expect we will be required to refinance our Credit Facilities at some point in the future. There is no assurance we would be able to obtain such funding or refinancing on acceptable terms and conditions, or at all. If we are unable to raise additional capital when desired, our business, results of operations and financial condition will be adversely affected.
Our primary requirements for liquidity are for general corporate purposes and servicing our indebtedness. To date, we have financed our operations principally through cash from operations, private placements of our redeemable preferred stock and proceeds from our credit facilities.
Credit Facilities
On March 15, 2024, we entered into the fourth amendment to the Credit Agreement to refinance the USD Term Loan B, USD Term Loan B2, Euro Term Loan B and Revolving Credit Facility (the "Refinancing"). As a result of the Refinancing, the refinanced Euro Term Loan B (the "2024 Euro Term Loan") has a maturity date of March 2030, aggregate principal balance €452.4 million and an
interest rate equal to EURIBOR, subject to a floor of 0.00%, plus 5.00%. As of September 30, 2025, the interest rate for the 2024 Euro Term Loan was 6.91%. In addition, as a result of the Refinancing, the outstanding principal balance of each of the USD Term Loan B and USD Term Loan B2 were consolidated into one loan (the "2024 USD Term Loan" and together with the 2024 Euro Term Loan and the Revolving Credit Facility, the "Credit Facilities"). The 2024 USD Term Loan has a maturity date of March 2030, aggregate principal balance of $1,952.6 million and an interest rate equal to SOFR, subject to a floor of 0.00%, plus 4.75%. As of September 30, 2025, the interest rate for the 2024 USD Term Loan was 8.91%. After six months following the effective date of the Refinancing, we have an option to prepay part or all of both the 2024 USD Term Loan and the 2024 Euro Term Loan prior to maturity without penalty. On June 24, 2024, we repaid $24.0 million of the outstanding principal of the 2024 USD Term Loan. On September 29, 2025, we made an early principal payment related to the 2024 USD Term Loan of $750.0 million in connection with, and using proceeds from the IPO. Due to the paydown, we are no longer required to repay 0.25% of the aggregate $1,154.2 million of principal amount remaining on a quarterly basis beginning on September 30, 2025.
The Revolving Credit Facility initially allowed for an initial aggregate principal amount of $125.0 million, including: (i) a $30.0 million letter of credit sublimit and (ii) a $30.0 million swingline loans sublimit. On March 13, 2023, as part of the SOFR Amendment, the interest rate per annum for the Revolving Credit Facility was amended to equal to SOFR, subject to a floor of 0.00%, plus 3.61448%. On March 15, 2024, as part of the Refinancing, we extended the maturity date of the Revolving Credit Facility from February 2025 to March 2028. On June 27, 2024, we entered into the fifth amendment (as amended) to the Credit Agreement to increase the commitment under the Revolving Credit Facility, subject to certain conditions, including the occurrence of an initial public offering. On September 29, 2025, the Company met the conditions, including the occurrence of a Qualified IPO, under Amendment No. 5 related to the Revolving Credit Facility that increased the aggregate principal amount to $565.0 million, including: (i) a $120.0 million letter of credit sublimit, and (ii) a $60.0 million swingline loan sublimit until its maturity date. The maturity date was also extended from March 2028 to September 2030. As of September 30, 2025, there were outstanding standby letters of credit in an aggregate amount of $43.1 million under the Revolving Credit Facility that we issued in connection with our appeal bond for a litigation matter and office leases. During and as of the nine months ended September 30, 2025, no amounts have been drawn on the letters of credit. The available balance under the letter of credit sublimit for Revolving Credit Facility was $76.9 million as of September 30, 2025.
In connection with the Refinancing, we incurred underwriting fees of 1.00% on the principal balance and other issuance costs of $4.1 million and each of the extended loans had an original issue discount of 1.00% of the principal balances.
The Credit Facilities contain customary representations and warranties, affirmative covenants, reporting obligations and negative covenants. The Credit Facilities are secured by (i) a first priority lien on substantially all of our and our domestic subsidiaries' tangible and intangible personal property, including but not limited to intellectual property and accounts receivable and (ii) a first priority pledge of 100% of our equity interests and each of our material direct, wholly owned subsidiaries limited to 65% of the voting capital stock and 100% of the non-voting stock of certain foreign subsidiaries, in each case, subject to certain exceptions.
As of September 30, 2025, we had $1,685.6 million outstanding under our term loan Credit Facilities. As of September 30, 2025, there were no outstanding amounts drawn on the Revolving Credit Facility.
Our Credit Facilities are subject to variable interest rates. Recent high levels of inflation in the U.S. and interest increases by the Federal Reserve and other central banks to combat inflation have resulted in a high interest rate environment, which has caused the interest rates of our Credit Facilities to increase. Although we believe our interest rate risk management strategy will continue to mitigate any potential material impacts on our liquidity and capital resources, future interest rate increases could materially impact our business, financial condition and results of operations. For more information, see "Risk Factors-Risks Relating to Our Financial Condition and Indebtedness-Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly."
Cash Flows
The following table summarizes our cash flows for the periods presented:
| Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
|
(in thousands)
|
||||||||||||||
| Net cash provided by operating activities | $ | 181,436 | $ | 410,935 | ||||||||||
| Net cash used in investing activities | $ | (25,210) | $ | (5,200) | ||||||||||
| Net cash provided by (used in) financing activities | $ | 224,542 | $ | (38,496) | ||||||||||
Cash Flows from Operating Activities
For the nine months ended September 30, 2025, net cash provided by operating activities was $181.4 million, primarily resulting from a net loss of $1,370.6 million, after consideration of non-cash charges of $1,412.5 million. Net cash inflows from the change in net operating assets and liabilities of $139.6 million were primarily due to a $131.2 million increase in payments due to buyers and sellers driven by improvements in GMS. The non-cash items included in our net loss for the nine months ended September 30, 2025 relate primarily to stock-based compensation charges of $1,412.8 million.
For the nine months ended September 30, 2024, net cash provided by operating activities was $410.9 million, which consisted of a net loss of $57.0 million, after consideration of non-cash charges of $79.9 million. Net cash inflows from the change in net operating assets and liabilities of $388.0 million were primarily due to a $281.6 million increase in payments due to buyers and sellers driven by improvements in GMS and an increase in accrued expenses and other current liabilities of $127.9 million. The non-cash charges included in our net loss for the nine months ended September 30, 2024 relate primarily to amortization of intangible assets of $16.5 million, deferred income taxes of $15.9 million, losses on derivates of $11.2 million, unrealized foreign exchange losses of $9.3 million, loss on extinguishment of debt of $8.2 million and amortization of debt issuance costs of $7.2 million.
Cash Flows from Investing Activities
Net cash used in investing activities during the nine months ended September 30, 2025 was $25.2 million, which was primarily related to capitalized software development costs.
Net cash used in investing activities during the nine months ended September 30, 2024 was $5.2 million, which was primarily related to capitalized software development costs as well as purchases of property and intangible assets.
Cash Flows from Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2025 was $224.5 million, which was primarily comprised of proceeds of $758.0 million from the issuance of common stock in the IPO, net of underwriting discounts and commissions, proceeds from the issuance of Series O redeemable preferred stock of $254.9 million and proceeds from the issuance of Series N redeemable preferred stock of $50.0 million. This is partially offset by the repayment of long-term debt obligations of $759.8 million and payment of tax withholding obligations on vested equity awards of $81.6 million.
Net cash used in financing activities during the nine months ended September 30, 2024 was $38.5 million, which was primarily comprised of repayment of long-term debt obligations of $501.7 million which were partially offset by proceeds from issuance of long-term debt obligations of $443.5 million in connection with the Refinancing, as well as $24.0 million proceeds from the issuance of Series M redeemable preferred stock.
Contractual Obligations
There were no material changes in commitments under contractual obligations, compared to the contractual obligations disclosed in the Prospectus.
Off-Balance Sheet Arrangements
As of September 30, 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected.
There have been no material changes to our critical accounting policies and estimates as described in our Prospectus as well as Note 2, "Basis of Presentation and Summary of Significant Accounting Policies" in the notes to the condensed consolidated financial statements included in Part I, Item 1, of this Quarterly Report.
Recent Accounting Pronouncements
See Note 2, "Basis ofPresentation and Summary of Significant Accounting Policies" to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.
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