Skift Take
Eventbrite continues to operate at a net loss. However, its financial outlook has significantly improved. Despite the latest Covid-related cancelations the company is confident that its strong execution and improved operating model will enable it to progress toward profitability.
Eventbrite, the global self-service ticketing and experience technology platform is one of the most prominent companies operating in the event tech sector. Despite posting a net loss of $20.5 million for the second quarter of 2021, it believes that the flexibility of its model will drive it to profit once again, even as its users navigate changing public health and safety conditions.
The numbers shared by the company help to paint a detailed picture of the fragile recovery across the event industry, particularly in the U.S. While the company is looking to further develop its virtual event offering, it is clear that it cannot rely on virtual events to drive it back to profitability.
There are signs that a return to profitability is possible, although this is something that it has not been able to do since the start of the pandemic. In Eventbrite’s Q2 2021 Shareholder Letter, the company makes it clear that it is confident in its ability to progress toward profitability, despite the latest covid-related cancelations and tighter regulations across much of the U.S.
“Our strong financial results reflect the demand for live gathering, as well as the benefits of our strategic focus and increased operating leverage,” said Eventbrite CEO Julia Hartz.
While the latest numbers are encouraging, Eventbrite is still working hard to recoup its significant losses in 2020. Despite Eventbrite’s flexible offering, the platform performs just as well for both virtual and in-person events, it is clear that the lower average ticket price of virtual events makes profitability extremely challenging where in-person events are not an option.
Eventbrite is not alone. Companies across the event industry that pivoted from in-person to virtual events have struggled with the lower ticket prices and general lower value to participation associated with virtual events. With many virtual events featuring free registration, there is added pressure on sponsorship and other ways to generate revenue from virtual events. Eventbrite is clearly not immune to this, particularly as it continues to offer the basic version of its platform at no cost for free-to-attendee events.
Nevertheless, 16 million paid tickets were sold on the platform in the last quarter, an increase of 57 compared to the first quarter of 2021, and an increase of 241 percent compared to the same period last year. It also shares the U.S. market accounted for 66 percent of all paid tickets, a number that was at 60 percent in the previous quarter. This is another figure that exemplifies the value of the resurgence of in-person events for the company and industry as a whole.
Australia operated in a covid zero environment for a lot of the second quarter of 2021. Here Eventbrite registered a new all-time quarterly record in paid tickets, and a 10x increase in paid tickets for in-person events compared with one year ago; a strong indication of pent-up demand for in-person events globally.
Eventbrite also shared that high-frequency creators are now hosting more than twice as many events as a year ago. This striking effect of the pandemic may also reflect a market saturation driven by the lower barrier to entry of virtual events.
Eventbrite continues to fine-tune its offering including integrating streaming technology, enabling the product to operate as a simple virtual event platform. When matched with the company’s renowned event marketplace and future developments in demand generation, there could be plans to disrupt virtual event technology vendors.
Hartz said, “heading into the second half of the year, we plan to continue our investment in product development to address creators’ needs and lay the foundation for long-term growth”.
There is clearly a push towards boosting its product, with the company spending 9 percent more on product development in the last quarter compared to the previous. While investment in technical infrastructure and platform is up, sales, marketing, and support expenses were down 2 percent compared to the previous quarter, perhaps reflecting the continuing need to cut costs across the board.
IN CONCLUSION
Eventbrite’s latest numbers are encouraging, but it’s not out of trouble just yet. With uncertain conditions returning to the U.S. in recent weeks, it remains to be seen whether it, along with much of the event industry, can continue the upward trend toward being sustainable once more.
