Eventbrite’s share price fell 30% after hours trading on Wednesday (May 1) following a weak first quarter earnings report that showed widening losses, lower than expected second-quarter guidance and growth issues tied to their continued focus on integrating Ticketfly after purchasing the company in 2017. After closing at $24.15 per share following a solid week of gains for the tech stock, share price plummeted to $17.20 after the company’s investor call wrapped at 5:30 p.m. Eastern.
For the first quarter, Eventbrite reported a loss of 13 cents per share on revenues of $81.3 million, with $74 to $78 million in revenue forceast for the second-quarter. Analysts forecast a loss of 9 cents per share with $82.4 million in revenue for Q2 and the disparity prompted an after hours selloff that’s pushing the share price down.
Net revenue was up 9.1% to $81.3 million for the first quarter and paid tickets grew by 14.5% to 27 million. But much of the growth came from Eventbrite’s self sign-on technology with the company’s music division slowed down by complications associated with the development of its music platform and the migration of Ticketfly customers.
Chief executive Julia Hartz could not disclose the number of Ticketfly clients that still needed to be converted to Eventbrite, but acknowledged that the company has lost clients as a result of the migration. Billboard has learned that the Wynn in Las Vegas left Ticketfly after the May 30 hack in 2018, as well as long time clients like the Burning Man festival and Chain Reaction in Anaheim, California.
“I can tell you that we’ve seen an acceleration in migration cases in Q1 that’s closely linked to the capabilities that we now launched on the platform and we’ll continue to see that momentum increase as we get to the second half of the year” when the company will officially sunsets the Ticketfly brand, Hartz said.
In the longterm, Hartz said Eventbrite Music will make “the platform stronger overall or for all high frequency creators (Eventbrite calls its promoter and event organizer clients “creators”) and we do think there is value that goes beyond music as a category in the work that we’re doing.”
That includes podcasts and newer events by retailers like Macys, as well as the company’s sign-on platform which is driving revenue growth much higher than the competitive live entertainment space.
“In the music space, we see more challenging competitive dynamics play out, especially in the upper end of the venue market in the medium-to-large size venues. However, our focus is and will remain on small-to-medium sized venues.” Hartz said.
They’ll also continue to focus on independents within the mid-market, a business that remains “large, global and has many different types of event creators. Eventbrite uniquely solves the problems that they have on one single platform. Well the dynamic in music is more challenging than other categories, we feel very strong about our strategy to serve the small and medium size venues that fit within our broader strategy of the mid market.”
Operating loss was mored than triple the same period last year, with $10.1 million in losses reported in 2019 compared to $3.1 million in the first quarter of 2018. But there were bright spots for international growth, with net revenue up by 15.2% to $21.5 million, and while not complete, the company’s shareholder letter said t”he pace of integration and migration efforts and outcomes” from Ticketfly to Eventbrite has accelerated.
“We also saw the rate at which venues were being migrated increase over the course of the quarter, with velocity in March roughly two times where we started in January,” the letter reads
Hartz said the conclusion of the migration will allow the company to refocus on growth and announced that CFO Randy Befumo will be transititoned into a new role at the company as chief strategy officer in the coming months. The comapany will begin looking for a new CFO in the coming days.